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苏常柴Ｂ：2021年年度报告（英文版） （下载公告）
公告日期:2022-04-13

CHANGCHAICOMPANY,LIMITED

ANNUALREPORT2021

April2022

TableofContents

PartIImportantNotes,TableofContentsandDefinitions ...... 3

PartIICorporateInformationandKeyFinancialInformation ...... 6

PartIIIManagementDiscussionandAnalysis ...... 11

PartIVCorporateGovernance ...... 46

PartVEnvironmentalandSocialResponsibility ...... 67

PartVISignificantEvents ...... 68

PartVIIShareChangesandShareholderInformation ...... 79

PartVIIIPreferredShares ...... 89

PartIXBonds ...... 90

PartXFinancialStatements ...... 91

PartIImportantNotes,TableofContentsandDefinitionsTheBoardofDirectors(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-lookingstatementsmentionedinthisReportshallNOTbeconsideredasabsolutepromisesoftheCompanytoinvestors.Therefore,investorsarekindlyremindedtopayattentiontopossibleinvestmentrisks.TheCompanyhasdescribedindetailtherisksitmightfacein“XIProspects”in“PartIIIManagementDiscussionandAnalysis”herein.TheBoardhasapprovedafinaldividendplanasfollows:basedonthe705,692,507shares,acashdividendofRMB0.26(taxinclusive)per10sharesistobedistributedtotheshareholders,withnobonusissuefromeitherprofitorcapitalreserves.

DocumentsAvailableforReference

1.ThefinancialstatementssignedandsealedbytheCompany’slegalrepresentative,GeneralManagerandheadofthefinancialdepartment.

2.TheoriginalcopyoftheIndependentAuditor’sReportsignedandsealedbytheCPAs,aswellassealedbytheCPAfirm.

3.TheoriginalsofalltheCompany’sdocumentsandannouncementswhichweredisclosedonSecuritiesTimeandTaKungPao(HK)(newspapersdesignatedbytheCSRCforinformationdisclosure)duringtheReportingPeriod.

4.TheAnnualReportdisclosedinothersecuritiesmarkets.Theabove-mentioneddocumentsavailableforreferenceareallkeptintheSecretariatoftheBoardofDirectorsoftheCompanyandtheShenzhenStockExchange.ThisReporthasbeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.

Definitions

TermDefinition
“Changchai”,the“Company”or“we”ChangchaiCompany,Limitedanditsconsolidatedsubsidiaries,exceptwherethecontextotherwiserequires
ChangchaiBenniuChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.
ChangchaiWanzhouChangchaiWanzhouDieselEngineCo.,Ltd.
HorizonInvestmentChangzhouHorizonInvestmentCo.,Ltd.
HorizonAgriculturalEquipmentChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.
ChangchaiRobinChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.
XingshengRealEstateManagementChangzhouXingshengRealEstateManagementCo.,Ltd.
ChangchaiMachineryJiangsuChangchaiMachineryCo.,Ltd.
RMB,RMB’0,000ExpressedintheChinesecurrencyofRenminbi,expressedintensofthousandsofRenminbi
The“ReportingPeriod”or“CurrentPeriod”Theperiodfrom1January2021to31December2021

PartIICorporateInformationandKeyFinancialInformation

ICorporateInformation

StocknameChangchai,Changchai-BStockcode000570,200570
StockexchangeforstocklistingShenzhenStockExchange
CompanynameinChinese常柴股份有限公司
Abbr.苏常柴
CompanynameinEnglish(ifany)CHANGCHAICOMPANY,LIMITED
Abbr.(ifany)CHANGCAHICO.,LTD.
LegalrepresentativeShiXinkun
Registeredaddress123HuaideMiddleRoad,Changzhou,Jiangsu,China
Zipcode213002
Officeaddress123HuaideMiddleRoad,Changzhou,Jiangsu,China
Zipcode213002
Companywebsitehttp://www.changchai.com.cn
Emailaddresscctqm@public.cz.js.cn

IIContactInformation

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

IIIMediaforInformationDisclosureandPlacewherethisReportIsLodged

NewspapersdesignatedbytheCompanyforinformationdisclosureSecuritiesTimes,TaKungPao(HK)
WebsitedesignatedbyCSRCforpublicationofthisReporthttp://www.cninfo.com.cn
PlacewherethisReportislodgedBoardSecretariatoftheCompanyandtheShenzhenStockExchange

IVChangetoCompanyRegisteredInformation

Unifiedsocialcreditcode91320400134792410W
ChangetoprincipalactivityoftheCompanysincegoingpublicNochange
EverychangeofcontrollingshareholdersinceincorporationOn22November2018,theState-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernmenttransferreditsentireholdingsof170,845,236sharesintheCompany(astakeof30.43%)toChangzhouInvestmentGroupCo.,Ltd.fornocompensation.Thesesharesarenon-restrictedpublicshares.

VOtherInformation

TheindependentauditfirmhiredbytheCompany:

NameGongzhengTianyeCertifiedPublicAccountantsLLP
OfficeaddressYingtongCommerceBuilding,Changzhou,Jiangsu,China
AccountantswritingsignaturesWangWenkai,QinZhijun

TheindependentsponsorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:

√Applicable□Notapplicable

NameOfficeaddressRepresentativesSupervisionperiod
ChinaIndustrialSecuritiesCo.,Ltd.10/F,ChinaIndustrialSecuritiesPlaza,36ChangliuRoad,PudongNewDistrict,ShanghaiWangLingxiao,LiLihong5July2021-31December2022
DonghaiSecuritiesCo.,Ltd.6/F,DonghaiSecuritiesPlaza,1928DongfangRoad,PudongNewDistrict,ShanghaiWangJiangqin,XuQin5July2021-31December2022

TheindependentfinancialadvisorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:

□Applicable√NotapplicableVIKeyFinancialInformationIndicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow.

□Yes√No

202120202021-over-2020change(%)2019
Operatingrevenue(RMB)2,452,430,515.602,296,464,711.246.79%2,045,820,801.10
Netprofitattributabletothelistedcompany’sshareholders(RMB)103,006,232.5452,432,443.0596.46%24,966,526.85
Netprofitattributabletothelistedcompany’sshareholdersbeforeexceptionalgainsand5,329,092.8725,483,147.57-79.09%14,405,485.64
losses(RMB)
Netcashgeneratedfrom/usedinoperatingactivities(RMB)-266,323,779.30251,796,654.53---20,325,189.56
Basicearningspershare(RMB/share)0.16570.093477.41%0.0445
Dilutedearningspershare(RMB/share)0.16570.093477.41%0.0445
Weightedaveragereturnonequity(%)3.86%2.40%1.46%1.21%
31December202131December2020Changeof31December2021over31December2020(%)31December2019
Totalassets(RMB)4,860,382,961.263,952,954,464.4522.96%3,488,820,324.60
Equityattributabletothelistedcompany’sshareholders(RMB)3,077,550,018.332,273,349,347.0235.38%2,110,892,767.58

Indicatebytickmarkwhetherthelowerofthenetprofitattributabletothelistedcompany’sshareholdersbeforeandafterexceptionalgainsandlosseswasnegativeforthelastthreeaccountingyears,andthelatestindependentauditor’sreportindicatedthattherewasuncertaintyabouttheCompany’sabilitytocontinueasagoingconcern.

□Yes√NoIndicatebytickmarkwhetherthelowerofthenetprofitattributabletothelistedcompany’sshareholdersbeforeandafterexceptionalgainsandlosseswasnegative.

□Yes√NoVIIAccountingDataDifferencesunderChina’sAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards

1.NetProfitandEquityunderCASandIFRS

□Applicable√NotapplicableNodifferencefortheReportingPeriod.

2.NetProfitandEquityunderCASandForeignAccountingStandards

□Applicable√NotapplicableNodifferencefortheReportingPeriod.

3.ReasonsforAccountingDataDifferencesAbove

□Applicable√Notapplicable

VIIIKeyFinancialInformationbyQuarter

Unit:RMB

Q1Q2Q3Q4
Operatingrevenue774,218,489.69722,951,966.11484,183,670.58471,076,389.22
Netprofitattributabletothelistedcompany’sshareholders24,571,254.83104,617,810.77-23,478,352.18-2,704,480.88
Netprofitattributabletothelistedcompany’sshareholdersbeforeexceptionalgainsandlosses23,604,960.003,555,454.58-9,073,885.20-12,757,436.51
Netcashgeneratedfrom/usedinoperatingactivities-184,484,392.4591,930,272.39-223,631,620.0549,861,960.81

IndicatebytickmarkwhetheranyofthequarterlyfinancialdatainthetableaboveortheirsummationsdiffersmateriallyfromwhathavebeendisclosedintheCompany’squarterlyorinterimreports.

□Yes√No

IXExceptionalGainsandLosses

√Applicable□Notapplicable

Unit:RMB

Item202120202019Note
Gainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)155,515.49263,408.531,914,137.47
Governmentgrantsthroughprofitorloss(exclusiveofgovernmentgrantsconsistentlygivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsaspergovernmentalpoliciesorstandards)4,268,950.187,763,215.655,312,295.51
Capitaloccupationchargesonnon-financialenterprisesthatarerecognizedinprofitorloss344,842.86536,504.84
Gainorlossonfair-valuechangesonheld-for-tradingfinancialassetsandliabilities114,738,153.5427,526,935.85-49,255.00Increaseinthefairvalueofwholly-ownedsubsidiaryHorizon
&incomefromdisposalofheld-for-tradingfinancialassetsandliabilitiesandavailable-for-salefinancialassets(exclusiveoftheeffectiveportionofhedgesthatariseintheCompany’sordinarycourseofbusiness)Investment’sinterestsinJiangsuLianceElectromechanicalTechnologyCo.,Ltd.,andGuilinStarsScienceandTechnologyCo.,Ltd.,aswellasoftheCompany’sinterestinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.
Impairmentofreceivablestestedseparatelyisreadytoberolledback147,611.25
Non-operatingincomeandexpenseotherthantheabove2,400,863.71-1,571,453.49375,943.68
Reversedportionsofimpairmentallowancesforentrustmentloanswhicharetestedindividuallyforimpairment4,000,000.00
Less:Incometaxeffects24,027,164.567,122,148.631,521,028.42
Non-controllinginterestseffects(netoftax)6,789.94255,505.297,556.87
Total97,677,139.6726,949,295.4810,561,041.21--

Particularsaboutotheritemsthatmeetthedefinitionofexceptionalgain/loss:

□Applicable√NotapplicableNosuchcasesfortheReportingPeriod.ExplanationofwhytheCompanyreclassifiesasrecurrentanexceptionalgain/lossitemlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—ExceptionalGain/LossItems:

□Applicable√NotapplicableNosuchcasesfortheReportingPeriod.

PartIIIManagementDiscussionandAnalysis

IIndustryOverviewfortheReportingPeriod

Weareamanufacturerofinternalcombustionenginesandfittingsingeneralequipmentmanufacturing.Accordingtotheclassificationoffuelused,internalcombustionenginesaremainlydividedintodieselenginesandgasolineengines.Ourdieselenginesandgasolineenginesaremainlyusedinnon-roadmobilemachineryfieldssuchasagricultureandengineeringrepresentedbytractors,plantprotectionmachinery,andsmallconstructionmachinery.

(1)BasicinformationontheindustryTheinternalcombustionengineisanimportantsupportforChina'smanufacturingindustrysecurity,energysecurityandnationaldefensesecurity,andanimportantbasicindustryofnationaleconomyandnationaldefenseconstruction.Theinternalcombustionengineisthemostpower-dense,thermallyefficientandwidelyusedheatenginepowerunit.Forsometimetocome,theinternalcombustionenginewillstillbethedominantpowerforautomobiles,constructionmachinery,agriculturalmachinery,shipsandgeneratorsets,motorcycles,gardenmachinery,andmilitaryequipment.Inordertoimplementthenationaloveralldevelopmentstrategyofenergyconservation,emissionreduction,transformation,andupgrading,theinternalcombustionengineindustryandagriculturalmachineryindustrywillstrengthenindependentinnovationandresearchanddevelopment,acceleratetheconstructionofacommonbasictechnologyplatform,optimizetheconstructionoftheupstreamanddownstreamindustrychain,implementintelligentmanufacturing,andactivelycarryoutinternationalexchangeandcooperationtoacceleratetherealizationofindustrialtechnologyupgrading.

(2)DevelopmentpatternandtrendoftheindustryChina'sdieselengineandgasolineengineindustriespresentapatternofmultiplecompetitions.Asthestateadoptsincreasinglystrictenvironmentalprotectionpolicyandtheemissionstandardscontinuetoupgrade,especiallyasChinaVIemissionregulationsforgasolineenginesandChinaIVemissionregulationsfornon-roadmobilemachinerydieselenginesareorwillbeimplemented,thecoretechnologyandkeypartsofinternalcombustionengineswillberapidlydevelopedandapplied,andtheresearch,development,promotingandapplicationofenvironmentallyfriendlyandefficientdieselenginesandgasolineengineswillbecomethemainstreamtrend,whichpromotesthewideuseofthefuelinjectionsystem,high-efficiencysuperchargerandhigh-efficiencyafter-treatment.Inthenewnormal,theinternalcombustionengineindustryandagriculturalmachineryindustrywillimprovetheindustry'scapabilityofindependentinnovation,supportthewholemachinedevelopment,andorganizeandimplementgreenmanufacturingandintelligentmanufacturing,soastoimprovetheoverallstrengthoftheindustry.Themarketshareofdieselandgasolineenginesisgraduallyconcentratedinafewlarge-scaleenterpriseswithtechnicalandcapitalstrength.Thepresentdevelopmenttrendofinternalcombustionengineindustryisasfollows:(1)energysavingandemissionreduction;(2)intelligentmanufacturing;(3)lightweight.Medium-andlow-endinternalcombustionengineswithlowtechnicalcontentandlowaddedvaluewillbegraduallysqueezedoutofthemarket.Theupgradeofemissionstandardsandthemarket'sdemandforhigh-endproductswilleliminatethosesmallenterpriseswithlowlevelofresearchanddevelopmentorlesstechnologyreserves.Theindustryleaderswillshowthetrendofincreasingmarketshareandrisinggrossprofitmargincenter,andhavethepowertofixthemarketpriceofcoreproducts.

(3)Salesofinternalcombustionengineindustryin2021

Thetotalsalesofinternalcombustionenginesin2021were50,473,600units,anincreaseof7.82%comparedto2020and6.97%comparedto2019.Thetotalpowerfortheyearwas2,752,177,900kilowatts,up5.71%year-on-year.Thetotalsalesofdieselenginesfortheyearwere6,108,400units,down3.67%year-on-year.Specifically,1,048,100enginesforconstructionmachinery,1,464,800enginesforagriculturalmachinery,40,200enginesforshipbornemachinery,and317,500enginesforelectricitygenerationweresold.Thesalesofgasolineinternalcombustionengineswere44,350,600,anincreaseof9.67%year-on-year.Theoverallsituationofgasolineengineswasgood.SinceSeptember,theautomotivemarketwhichaccountsforalargerproportionhasgraduallyrebounded,leadingtoanoverallimprovementintheindustry.However,duetothecontradictionbetweensupplyanddemandofrawmaterials,recurrentepidemicsandotherfactors,themarketdemandwasstillsuppressed.Also,dieselengineshavedecreasedyear-on-yearforeightconsecutivemonths.Intermsofthesegmentsoftheinternalcombustionenginemarket,in2021,1,135,800unitsforconstructionmachineryweresold,up12.64%year-on-year;5,369,200unitsforagriculturalmachineryweresold,up27.44%year-on-year;40,200unitsforshipbornemachineryweresold,up19.69%year-on-year;1,547,300unitsforgeneratorsetsweresold,up30.24%year-on-year;2,498,800unitsforgardenmachineryweresold,up18.35%year-on-year.Enginesforgeneratorsetsandagriculturalmachineryperformedwell,bothwithanincreaseofaround30%.Construction,shipborne,andgardenmachineryalsogrewby10-20%.

IIPrincipalActivityoftheCompanyintheReportingPeriod

1.PrincipalOperationsoftheCompanyWemainlyspecializeintheR&D,manufactureandsalesofdieselenginesunderthebrand"Changchai"andgasolineenginesunderthebrand"Robin".Ourproductsaremainlyusedinagriculturalmachinery,smallconstructionmachinery,lightcommercialvehicles,generatorsetsandshipbornemachineryandotherfieldscloselyrelatedtopeople'slivelihood.IntheReportingPeriod,therewerenomajorchangesintheCompany'scorebusinessandmainproducts.

2.MainProductsoftheCompanyOurmainproductsaredividedintotwocategories:dieselenginesandgasolineengines.Thedetailsareasfollows:

MainproductsGraphicdisplayProductdescriptionProductfeaturesApplicationfields
DieselengineOurdieselengineproductsincludesingle-cylinderdieselenginesandmulti-cylinderengines,coveringpowerrangefrom1.62kWto117.6kW,andcylinderdiametersfrom65mmto135mm,withoneormorecylinders.Besidessaleindomesticmarket,ourdieselenginesaresoldtoSoutheastAsia,SouthAmerica,theMiddleEastandAfrica.Highpower,lowoilconsumption,lownoise,compactstructure,lowemission,goodreliabilityAgriculturalmachinery,constructionmachinery,generatorsets,shipbornemachinery
GasolineengineOurgasolineenginesaremainlygeneral-purposesmallgasolineengines,coveringthepowerrangefrom1.5kWto7.0kW.Besidessaleindomesticmarket,ourgasolineenginesaresoldtoSoutheastAsia,theMiddleEast,EuropeandAmerica,Africa,Japanandothercountriesandregions.Simplestructure,goodreliability,easymaintenanceAgriculturalmachinery,smallconstructionmachinery

3.MajorBusinessModels

(1)R&DmodelWehaveestablishedaninnovativetechnologymanagementsystemforinternalcombustionenginebasedonmarketdemandandforward-lookingtechnologies.Priortothenewproductsornewtechnologiesdevelopment,themarketingdepartmentfirstconductsmarketassessmentandcustomerresearch,andtheninitiatesaprojectaccordingtotheforecastedmarketdemand;thetechnologycenterconductsdevelopmentaccordingtotheprojectmaterials,andcollectsfeedbackinformationfromthemarketandcustomersinrealtimeduringthedevelopmentprocesstoensuretechnologyleadershipandproductsuitability.

(2)PurchasingmodelWeadoptthe"purchase-to-order"purchasingmodel.TheERPsystemconvertsthesalesorders,thesalesplandevelopedbythesalesdepartmentandtheproductionplandrawnupbytheproductiondepartmentintothedemandofpartsneeded,andthepurchasingdepartmentorganizesthepurchaseaccordingtosuchdemand.Meanwhile,thepurchasingdepartmentmakesaplantoguidepartsprocurementaccordingtothesalesdepartment'ssalesplan,andprovideittothesupplier,andurgethesuppliertoprepareforthegoods.

(3)ProductionmodelWeadoptthe"make-to-order"productionmanagementmodel.Thesalesdepartmentmakessalesplansfordifferentstagesaccordingtotheordersinhand,salesdatainpreviousyears,marketdemandjudgmentandfeedbackofexistingcustomers'purchasingintentions.TheCompany'sproductiondepartmentmakestheproductionplanaccordingtothesalesordersdisplayedintheERPsystem,thesalesplanmadebythesalesdepartmentandthereserveinventorydemand,andorganizestheproductiontaskinstrictaccordancewiththeplan.Duringtheproductionprocess,thequalityassurancedepartmentarrangesregularinspectiontoensuretheproductquality.

(4)SalemodelWeadoptthesalesmodelof"directselling+distribution",i.e.thedirectsellingmodelforthemainenginefactory,andthedistributionmodelfortheindividualcirculationmarketrepresentedbyfarmersandoverseasmarket.

4.TheCompany'spositioninthemarketWemainlyspecializeintheR&D,manufactureandsalesofdieselenginesunderthebrand"Changchai"andgasolineenginesunderthebrand"ChangchaiRobin".Uptonow,wehavesuccessfullydevelopedanumberofadvancedcoretechnologieswithindependentintellectualpropertyrights.Intermsofdieselengine,accordingtothestatisticsofChinaInternalCombustionEngineIndustryAssociation(CICEIA),asthelargestsmall-andmedium-sizedsingle-cylinderdieselenginemanufacturerintheagriculturalmachineryindustryofChina,wehavemaintainedahighmarketshareofsingle-cylinderengines,andourmarketshareofsingle-cylinderdieselenginesofsomepowerrangeshasrankedfirstinChina.Formanyyears,intheprocessofachievingsteadyeconomicdevelopmentoftheenterprise,wedevelopedinasoundmannerandcultivatedthe"Changchai"brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights.

5.KeyPerformanceDrivers

(1)NationalpolicydriverInrecentyears,variousdepartmentsofthestatehaveintroducedaseriesofpreferentialpoliciestoencouragethedevelopmentofinternalcombustionengineindustry.Intermsofagriculturalmachinery,thecentralgovernmenthastakensolvingtheproblemsrelatingto"agriculture,ruralareasandfarmers"asthetoppriorityoftheworkofthePartyandthegovernment,andissuedaseriesofpoliciestobenefitfarmers,creatingagoodatmosphereforpromotingthedevelopmentofagricultureandeconomyandsocietyinruralareas;intermsofconstructionmachinery,thestrategyof"westerndevelopment",the"eightverticalandeighthorizontal"high-speedrailwaynetworkplanandthepolicyof"newruralconstruction"haveallcreatedagoodpolicyenvironmentfortheapplicationofinternalcombustionengineindownstreamconstructionmachinery.

(2)IndustrialchainsynergyempowersthesustainabledevelopmentoftheCompanyWehavebuiltourowncastingmanufacturingandprocessingplantstomeettheuserequirementsofsomedieselengineparts.Intermsofproductionandquality,wehaveformedasignificantsynergywithitsowninternalcombustionengineassemblyteam.OurcastingmanufacturingteamandinternalcombustionengineassemblyteamworktogethertoformamutuallyreinforcingpositivefeedbacklooptoassisttheCompanyinintegratingtheinternalcombustionengineindustrychainandbuildingdifferentiatedindustrybarriers.Intermsofcollaborativeproduction,thereductionofexternalpurchaseisofgreatsignificancefortheCompanytoreduceprocessflow,reduceintermediateloss,improveproductionefficiency,shortendeliverytimeandincreasepurchasingbargainingpower.Intermsofqualitycoordination,theself-builtfoundrycanimproveourqualitycontrolofpartstoimprovetheyieldandreliabilityofinternalcombustionengines.

(3)StableandefficientR&DteamWehaveexperiencedtechnicalmanagementteamandperfecttechnicalsupportteam.OurkeytechnicalpersonnelandR&DmanagementpersonnelhavebeenengagedininternalcombustionengineR&Ddesign,productionandmanufacturingforalongtime.Withprofoundprofessionalknowledgeandrichpracticalexperience,theycanmakestrongforward-lookingandscientificjudgmentinthemarketdirectionandtechnicalroute.Also,wehaveestablishedaneffectivetrainingmechanismtofostertalentedpersonsforthefollow-upR&D.

(4)Well-knownbrandwithmanywell-knowncustomersTheCompany,formerlyknownasChangzhouDieselEngineFactory,isanationalindustrialenterprisewithahistoryofahundredyearsandoneoftheearliestprofessionalinternalcombustionenginemanufacturersinChina.Ourdieselandgasolineengines,aspowersourcesofagriculturalmachinery,constructionmachineryandcommercialvehicles,showexcellentperformanceinpowerrange,reliability,powerperlitre,noisecontrolandemissionstandards,andhavebeenrecognizedbycustomers.Wemaintainedalong-termpartnershipwithmajorcustomers,withcumulativepartnershiptimeexceeding15years.ManymainengineplantcustomersoftheCompanyarewell-knownenterprisesintheagriculturalmachineryindustry,withtheirmarketsharesbeingattheforefrontofthemarket.IIICoreCompetitivenessAnalysis

1.AdvantagesinBrandChangchaiisanationalindustrialenterprisewithahistoryofoveronehundredyears.ItisoneoftheearliestprofessionalmanufacturersofinternalcombustionenginesinChina.Thebrand"Changchai"istheearliestdomestictrademarkofproductiongoodsknownasChina'swell-knowntrademarks.Thedieselengineof"Changchai"brandisChina'sbrand-nameproduct.TheenterprisehasbeencertifiedbyISO9001andIATF16949qualitysystems,ISO14001environmentalmanagementsystem,IATF16949automotiveproductqualitymanagementsystem,andaccessedtothenationalexport-freeenterprisequalification.Changchaiwashonorably

rankedamong“theTopOneHundredChineseEnterprisesinEngineeringIndustry”and“ChinaPacesetterEnterpriseofIndustrialIndustry”forseveraltimes,andwasawardedthehonorarytitleof“State-levelEnterpriseofObservingContractsandKeepingPromise”,“China'sAgriculturalMachineryPartsandComponentsLeadingEnterprises”,“China'sAgriculturalMachineryAAACreditEnterprise”,“QualityManagementExcellenceAwardofJiangsuProvince”and“MayorQualityAwardofChangzhouCity”.TheCompanyhasbeenamongthe10users’mostsatisfiedleadingbrandsin“JingGeng”competitionformanyyears.In2021,theCompanywasawardedhonorarytitlessuchasNationalTop100EnterprisesofMachineryIndustry,NationalDemonstrationEnterpriseofProductandServiceQualityIntegrity,NationalQualityLeaderofInternalCombustionEngineIndustry,NationalQualityLeadingBrandofInternalCombustionEngineIndustry,Top100InnovativeEnterprisesofJiangsuProvince,DemonstrationInstitutionofIntelligentAgriculturalMachineryManufacturingofJiangsuProvince,"Five-starEnterpriseintheCloud"ofJiangsuProvince.Formanyyears,intheprocessofachievingsteadyeconomicdevelopmentoftheenterprise,wedevelopedinasoundmannerandcultivatedthe“Changchai”brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights.

2.AdvantagesinTechnologyTheCompanyhasastate-leveltechnologycenterandpost-doctoralresearchstation,andaresearchcenterofsmallandmedium-powerinternalcombustionengineengineeringandtechnologyinJiangsuProvince.Currently,itismainlyengagedinproductionofsmallandmedium-powersingle-cylinderandmulti-cylinderdieselengine.Ithasacompleteproductrange,awidepowerlevelcoverage,ahighreputationandintellectualpropertyrightsforitsmainproducts.DuringtheReportingPeriod,twoQCachievementswonthefirstandsecondprizesoftheAchievementsof2021ExcellentNationalQualityControlTeam'sActivityofNationalMachineryIndustry,the4G33V16dieselenginewasawardedthetitleofNationalMachineryIndustryCustomerSatisfactionProduct,theprojectofKeyTechnologyandEquipmentforDesignandManufactureofLowFrictionFunctionalSurfaceofPowerAssemblywonthesecondprizeofScienceandTechnologyAwardofJiangsuProvince,the4G33Tand4G33V16dieselengineswererecognizedasHigh-techProductsofChangzhouCity,theprojectofDieselOutboardEnginePowerandAssemblyDevelopmentwaslistedinScienceandTechnologyPlanofChangzhouCityin2021,andtheprojectofDevelopmentofLightweightLowEmissionDieselEngineofCommonRailSerieswonthethirdprizeinthecity'sinnovationandentrepreneurshipcompetitionin2021.DuringtheReportingPeriod,atotalof22patentsweredeclaredand19patentsweregranted.Currently,theCompanyhasatotalof152patentsgrantedbyauthoritiesathomeandabroad,including12inventionpatents.

3.AdvantagesinMarketingChangchaihasbuiltupasalesservicenetworkcoveringthewholecountry,with5salesbusinessunits,26salesservicecenters,and709designatedmaintenancestations.Inaddition,inordertomeettheNationalEmissionStandardIVforNon-RoadVehiclesandprovidebetterafter-salesserviceforcustomers,aservicemonitoringplatformwithChangchaicharacteristicshasbeenputinplace.Withaperfectdieselsalesservicenetworksystem,theCompanyisabletoprovidehighquality,efficientandtimelyservicesforcustomers.IVCoreBusinessAnalysis

1.OverviewIn2021,infaceofcomplexandseveresituationssuchasadjustmentstotheagriculturalmachinerysubsidypolicy,recurrentdomesticandoverseasepidemics,priceincreaseofrawmaterials,impactonthesupplychainandindustrychain,andshrinkingmarketdemand,theCompanyfocusedontheimplementationofannualpolicyandtarget,andpromotedworkinallrespectswiththemainlineof"strengtheningthemainbusiness,accelerating

transformation,expandingtheareas,andimprovingqualityandefficiency".TheCompanymaintainedgoodeconomicoperation,achievedgoodbusinessperformance,andwonaseriesofhonorsbyfocusingontechnologyinnovationandqualityimprovementandadheringtothedualdrivebymainbusinessandcapitaloperation.DuringtheReportingPeriod,theCompanysold749,300dieselengines,gasolineenginesandrelatedgeneratorsets,including153,000gasolineengines,generatingtotalsalesrevenueofRMB2,452million,anincreaseof

6.79%year-on-year.Intermsofproductdevelopmentandsupport,theCompanymadeeffortsinsegments,developedtheCC12Mdieselengineforthemotorcyclearea,andmettheemissionrequirementsthroughtheplanofcommonrail,EGR,andDOC.Lightpowermadeabreakthroughincoldchainandconstructionmachinerysupport,andmultiplevarietiesofdieselenginescompletedtheperformancetestsandreliabilityverification,withorderlycarryingandsupporting;intheareaofshipbornegeneratorsets,carryingofnewproductswasconductedinsmallbatches.Foradvantageousproducts,adaptivequalityimprovementandoptimizationanddevelopmentofsupportingcomponentswerecarriedout.Intermsofmarketservices,theCompanymademulti-dimensionaleffortsinbothinternalandexternalmarkets,continuouslyoptimizedthedistributionnetwork,activelyrespondedtotheforeigntrademarketenvironment,andimplementedadual-brandandintegratedsalesstrategyforwholemachinesandaccessories,fullyguaranteeingthecontinuousgrowthofproductsales.Themarketservicesatisfactionof2021was85.36%,asteadyincreaseyear-on-year.Theserviceresponseandtimelinessduringthefarmingseasonwerebasicallythesameaslastyear.Ayear-on-yearincreaseinrevenuefromsalesofaccessoriesandoilwasachieved.Intermsofqualitymanagement,theCompanystrictlyenforcedthequalityresponsibilitysystem,strengthenedthequalitycontrolprocessmanagement,andeffectivelyreducedqualitylosswhileimprovingproductreliability.TheCompanyconductedqualityimprovementfocusingonqualityproblemsofkeyproductsandmajormarketfailureproblems,improvedtherapidresponsemechanismandprocedureforbatchproblems,andcontinuouslyreducedtheon-sitezero-kilometerfailurerateofthewholevehicleenterprise.Intermsofinternalmanagement,theCompanycontinuouslystrengthenedrefinedmanagementandcomprehensivelyimprovedtheefficiencyofproduction,operationandmanagement.TheCompanymadesolideffortstoreducecostsandcutexpenses,strengthenedstandardized,normalizedandinstitutionalizedsafetymanagement,andcontinuedtocarryoutthethree-yearactionofspecialsafetyrectificationofsafetyproduction,withanoverallstablesafetyproductionsituation.TheCompanystrengthenedenvironmentalprotectionrectificationwork.Theenvironmentalmanagementwaseffective,andtheCompanysuccessfullypassedtheISO14001environmentalsystemsupervisionandreviewduringtheyear.DuringtheReportingPeriod,theCompany'snon-publicshareissuanceprojectwassuccessfullyissued,theraisedfundswereremittedtotheCompany'sspecialaccountforfundraisingandunderwentcapitalverification,andtheadditionalshareswerelistedonJuly5.ChangchaiMachinery,theimplementationentityoftherelocationprojectoflightenginesandcastinginthefund-raisingproject,iscurrentlyintheequipmentinstallationandcommissioningstage,andisexpectedtohaveconditionsforpilotproductioninMay2022.Thedevelopmentprojectofthedieseloutboardenginefortheinnovationcapacitybuildingprojectofthetechnicalcenterisprogressingsmoothly.Thereliabilityverificationoftheoutboardengineassemblyhasbeenimplemented,andtheusercarryingtestoftheprototypehasbeenorganized,whichwasrecognizedbyusers.Smallbatchproductionhasbeenarrangedtoexpandtheusertestandfurtherexpandthemarketofdieseloutboardengine.

2.RevenueandCostAnalysis

(1)BreakdownofOperatingRevenue

Unit:RMB

20212020Change(%)
OperatingrevenueAs%oftotaloperatingrevenue(%)OperatingrevenueAs%oftotaloperatingrevenue(%)
Total2,452,430,515.60100%2,296,464,711.24100%6.79%
Byoperatingdivision
Internalcombustionengines2,404,119,747.0698.03%2,252,479,553.5198.08%6.73%
Other48,310,768.541.97%43,985,157.731.92%9.83%
Byproductcategory
Dieselengines2,241,032,641.0591.38%2,112,251,290.7391.98%6.10%
Gasolineengines149,717,934.826.10%132,735,777.755.78%12.79%
Other61,679,939.732.52%51,477,642.762.24%19.82%
Byoperatingsegment
Domestic2,038,317,678.9783.11%1,922,972,122.7483.74%6.00%
Overseas414,112,836.6316.89%373,492,588.5016.26%10.88%
Bymarketingmodel
Distribution689,413,386.9728.11%617,839,609.2026.90%11.58%
Directsales1,763,017,128.6371.89%1,678,625,102.0473.10%5.03%

(2)OperatingDivision,ProductCategory,OperatingSegmentorMarketingModelContributingover10%ofOperatingRevenueorOperatingProfit

√Applicable□Notapplicable

Unit:RMB

OperatingrevenueCostofsalesGrossprofitmarginYoYchangeinoperatingrevenue(%)YoYchangeincostofsales(%)YoYchangeingrossprofitmargin(%)
Byoperatingdivision
Internalcombustionengines2,404,119,747.062,051,932,677.4214.65%6.73%6.96%-0.18%
Byproductcategory
Dieselengines2,241,032,641.051,925,495,245.1914.08%6.10%7.02%-0.74%
Gasolineengines149,717,934.82128,977,618.8613.85%12.79%19.13%-4.58%
Byoperatingsegment
Domestic2,038,317,678.971,685,403,460.0017.31%6.00%6.15%-0.12%
Overseas414,112,836.63402,517,677.202.80%10.88%10.93%-0.05%
Bymarketingmodel
Distribution689,413,386.97572,431,613.4316.97%11.58%11.95%-0.27%
Directsales1,763,017,128.631,515,489,523.7714.04%5.03%5.30%-0.22%

CorebusinessdataoftheprioryearrestatedaccordingtothechangedstatisticalcaliberfortheReportingPeriod:

□Applicable√Notapplicable

(3)WhetherRevenuefromPhysicalSalesIsHigherthanServiceRevenue

√Yes□No

OperatingdivisionItemUnit20212020Change(%)
DieselenginesUnitsalesUnit596,279627,331-4.95%
OutputUnit601,253657,917-8.61%
InventoryUnit83,56378,5896.33%

Anyover30%YoYmovementsinthedataaboveandwhy:

□Applicable√Notapplicable

(4)ExecutionProgressofMajorSignedSalesandPurchaseContractsintheReportingPeriod

□Applicable√Notapplicable

(5)BreakdownofCostofSales

Unit:RMB

ProductcategoryItem20212020Change(%)
CostofsalesAs%oftotalcostofsales(%)CostofsalesAs%oftotalcostofsales(%)
DieselenginesRawmaterials1,659,710,451.0779.61%1,526,191,466.6378.24%8.75%
DieselenginesLaborcost240,110,930.7811.52%222,248,951.3111.39%8.04%
DieselenginesDepreciation71,198,110.783.42%71,562,851.513.67%-0.51%
DieselenginesEnergy30,044,125.271.44%34,214,195.381.75%-12.19%

(6)ChangesintheScopeofConsolidatedFinancialStatementsfortheReportingPeriod

□Yes√No

(7)MajorChangestotheBusinessScopeorProductorServiceRangeintheReportingPeriod

□Applicable√Notapplicable

(8)MajorCustomersandSuppliersMajorcustomers:

Totalsalestotopfivecustomers(RMB)1,163,820,018.04
Totalsalestotopfivecustomersas%oftotalsalesoftheReportingPeriod(%)47.46%
Totalsalestorelatedpartiesamongtopfivecustomersas%oftotalsalesoftheReportingPeriod(%)0.00%

Informationabouttopfivecustomers:

No.CustomerSalesrevenuecontributedfortheReportingPeriod(RMB)As%oftotalsalesrevenue(%)
1Customer1562,503,236.0622.94%
2Customer2233,708,017.399.53%
3Customer3157,425,933.386.42%
4Customer4105,465,470.214.30%
5Customer5104,717,361.004.27%
Total--1,163,820,018.0447.46%

Otherinformationaboutmajorcustomers:

□Applicable√NotapplicableMajorsuppliers:

Totalpurchasesfromtopfivesuppliers(RMB)327,640,433.65
Totalpurchasesfromtopfivesuppliersas%oftotalpurchasesoftheReportingPeriod(%)16.88%
Totalpurchasesfromrelatedpartiesamongtopfivesuppliersas%oftotalpurchasesoftheReportingPeriod(%)0.00%

Informationabouttopfivesuppliers:

No.SupplierPurchaseintheReportingPeriod(RMB)As%oftotalpurchases(%)
1Supplier1153,851,839.507.93%
2Supplier270,110,846.633.61%
3Supplier346,115,577.302.38%
4Supplier429,257,550.551.51%
5Supplier528,304,619.671.46%
Total--327,640,433.6516.88%

Otherinformationaboutmajorsuppliers:

□Applicable√Notapplicable

3.Expense

Unit:RMB

20212020Change(%)Reasonforanysignificantchange
Sellingexpense117,242,290.32128,372,278.62-8.67%
Administrativeexpense98,890,284.2287,446,195.7413.09%
Financecosts1,203,615.8015,768,310.32-92.37%Decreasedexchangelosses
R&Dexpenses82,390,284.1472,258,781.0814.02%

4.R&DInvestments

√Applicable□Notapplicable

MajorR&DprojectPurposeProgressSpecificobjectivesExpectedimpactontheCompany
Developmentof12KWdieselenginesilentinvertergeneratorsetDevelopingahigher-performancesilentinvertergeneratorsettomeetmarketdemandInprogressImprovingtheautomationandintelligencelevelofthegeneratorset,enhancingtheperformanceandreliabilityoftheset,andachievingsetoperationwithlownoiseandlowfuelconsumptiontomeettheemissionrequirements.Aftertheimplementationoftheproject,thetechnologyandmarketcompetitivenessoftheproductwillbeenhanced.
DevelopmentofV402dieselengineDevelopingahigher-performancelightmulti-cylinderdieselenginethatmeetstheemissionrequirementsInprogressConductingstructuraloptimizationofdieselenginecomponentstoimproveproductperformanceandreliability.Aftertheimplementationoftheproject,theproductwillmeettherequirementsofnon-roadChinaIVvehicleemissionregulations,thesupportingrequirementsof
machinery,andmarketdemand.
DevelopmentofD15dieseloutboardengineDevelopingmoreefficient,environmentallyfriendlyandenergy-savingdiesel-poweredproductsInprogressConductingmajordesignoptimizationoftheenginestructureandperformancetoimprovethereliability,fuelconsumption,emissionsandotherindicatorsoftheproduct,soastoreachtheadvancedlevelofsimilarforeignproducts.Aftertheimplementationoftheproject,theproductwillmeettherequirementsofnon-roadChinaIVvehicleemissionregulationsandopenupthemarketofshipmachinery.
Developmentofdiesel-electrichybridproductsDevelopingefficientandenvironmentallyfriendlydiesel-poweredproductsInprogressImprovingtheemissioncharacteristicsandeconomiccharacteristicsofdiesel-electrichybriddieselenginestoenhancetheenergyefficiency,enduranceandreliability.Aftertheimplementationoftheproject,theproductmeetsthemarketdemandandmakesthegoodsqualityandlogisticsefficiencyofthecoldchaintimely,safeandefficient,providingawhole-proceduretemperatureandqualitymanagementsolution.
Developmentofamulti-cylinderseriesofdieselenginesthatmeetnon-roadEuropeanVstandardsImprovingproductperformanceanddevelopingmulti-cylinderdieselenginesthatbettermeetemissionstandardsCompletedConductingmajordesignoptimizationofthestructureandperformanceofthedieselenginetoimprovethereliability,fuelconsumption,emissionsandotherindicatorsoftheproduct,soastomeettheEuropeanVemissionstandards.Itmeetsthesupportingrequirementsofvarioustypesofsmallagriculturalmachineryandbroadensthemarket.
Developmentofsingle-cylinderair-cooleddieselenginesthatmeetDevelopmentofcontroltechnologyofemissionreductionandsingle-cylinderair-cooleddieselCompletedOptimizingcomponentsrelatedtoemissionperformancetoimprovethereliability,fuelconsumption,emissionsandotherindicatorsofItenrichestheproductseries,meetsthesupportingrequirementsofnon-roadmachinery,andfurtherexpandsand
non-roadEuropeanVstandardsenginesthataremorecompliantwithemissionstandardstheproduct,soastomeettheEuropeanVemissionstandards.consolidatesthemarketshare.

DetailsaboutR&Dpersonnel:

20212020Change(%)
NumberofR&Dpersonnel2642534.35%
R&Dpersonnelas%oftotalemployees9.55%8.84%0.71%
EducationalbackgroundofR&Dpersonnel——————
Bachelor’sdegree1171170.00%
Master’sdegree13130.00%
AgestructureofR&Dpersonnel——————
Below3034326.25%
30~409598-3.06%

DetailsaboutR&Dinvestments:

20212020Change(%)
R&Dinvestments(RMB)82,390,284.1472,258,781.0814.02%
R&Dinvestmentsas%ofoperatingrevenue3.36%3.15%0.21%
CapitalizedR&Dinvestments(RMB)0.000.00---
CapitalizedR&Dinvestmentsas%oftotalR&Dinvestments0.00%0.00%---

ReasonsforanysignificantchangeinthecompositionofR&Dpersonnelandtheimpact:

□Applicable√NotapplicableReasonsforanysignificantYoYchangeinthepercentageofR&Dexpenseinoperatingrevenue:

□Applicable√NotapplicableReasonsforanysharpvariationinthepercentageofcapitalizedR&Dexpenseandrationale:

□Applicable√Notapplicable

5.CashFlows

Unit:RMB

Item20212020Change(%)
Subtotalofcashgeneratedfromoperatingactivities1,878,728,640.472,281,623,334.91-17.66%
Subtotalofcashusedinoperatingactivities2,145,052,419.772,029,826,680.385.68%
Netcashgeneratedfrom/usedinoperatingactivities-266,323,779.30251,796,654.53--
Subtotalofcashgeneratedfrominvestingactivities385,966,151.68564,355,776.61-31.75%
Subtotalofcashusedininvestingactivities851,480,343.34717,612,880.1118.54%
Netcashgeneratedfrom/usedin-465,514,191.66-153,257,103.50--
investingactivities
Subtotalofcashgeneratedfromfinancingactivities711,844,747.7922,000,000.003,135.66%
Subtotalofcashusedinfinancingactivities45,328,892.6527,732,890.3863.45%
Netcashgeneratedfrom/usedinfinancingactivities666,515,855.14-5,732,890.38--
Netincreaseincashandcashequivalents-67,537,318.9183,979,542.30--

Explanationofwhyanyofthedataabovevariessignificantly:

√Applicable?NotapplicableThesignificantchangeinnetcashflowfromoperatingactivitiesoverthesameperiodismainlycausedbytheincreaseintheproportionofbankacceptancebillsinthepaymentforgoodsreceivedbythecompanyduringthereportingperiod,andthesupportoflargepurchasepaymentforsuppliersduetotherisingpriceofrawmaterialsandtheimpactoftheepidemicThesignificantyear-on-yearchangeinnetcashgeneratedfrom/usedininvestingactivitieswasprimarilyduetotheinputoftheCompany’sraisedfundstoChangchaiMachinery’sconstructioninprogress,andtheuseofcertainidleraisedfundsforcashmanagement.Thesignificantyear-on-yearchangeinnetcashgeneratedfrom/usedinfinancingactivitieswasprimarilybecausetheCompanyraisedagrossamountofRMB634,999,936.40(netamount:RMB620,665,733.97)inaprivateplacementof144,318,181RMB-denominatedordinaryshares(A-stock)duringtheReportingPeriod.ReasonforanybigdifferencebetweenthenetoperatingcashflowandthenetprofitforthisReportingPeriod

√Applicable?NotapplicableThesignificantdifferencebetweenthenetcashflowgeneratedbythecompany'soperatingactivitiesduringthereportingperiodandtheannualnetprofitismainlycausedbytheincreaseintheproportionofbankacceptancebillsandtheincreaseofoperatingreceivablesinthepaymentforgoodsreceivedbythecompanyduringthereportingperiod.VAnalysisofNon-CoreBusinesses

□Applicable√NotapplicableVIAnalysisofAssetsandLiabilities

1.SignificantChangesinAssetComposition

Unit:RMB

31December20211January2021Changeinpercentage(%)Reasonforanysignificantchange
AmountAs%oftotalassetsAmountAs%oftotalassets
Monetaryassets707,966,678.7414.57%760,728,222.8519.24%-4.67%
Accountsreceivable375,209,126.487.72%397,154,016.4910.05%-2.33%
Inventories651,083,758.1813.40%606,680,340.5515.35%-1.95%
Investmentproperty44,597,255.210.92%46,239,326.031.17%-0.25%
Fixedassets402,915,521.658.29%454,181,555.6811.49%-3.20%
Constructioninprogress270,305,690.915.56%66,502,432.411.68%3.88%Wholly-ownedsubsidiaryChangchaiMachinerywasinaconstructionperiodduringtheReportingPeriod.
Short-termborrowings73,971,466.651.52%22,000,000.000.56%0.96%IncreaseddiscountedbankacceptancenotesthatwereundueattheendoftheReportingPeriod.
Contractliabilities26,864,081.970.55%35,944,517.150.91%-0.36%

2.AssetsandLiabilitiesatFairValue

√Applicable□Notapplicable

Unit:RMB

ItemBeginningamountGain/lossonfair-valuechangesintheReportingPeriodCumulativefair-valuechangeschargedtoequityImpairmentallowancefortheReportingPeriodPurchasedintheReportingPeriodSoldintheReportingPeriodOtherchangeEndingamount
Financialassets
1.Held-for-tradingfinancialassets(derivativefinancialassetsexclusive)11,500,272.0074,810,411.810.00844,889,944.71572,790,216.7145,642,849.76404,053,261.57
2.Derivativefinancialassets
3.Otherdebtinvestment
4.Investmentinotherequityinstruments685,137,950.87595,307,646.530.000.000.000.00779,877,646.53
Subtotaloffinancialassets696,638,222.8774,810,411.81595,307,646.530.00844,889,944.71572,790,216.7145,642,849.761,183,930,908.10
Investmentproperty
Productivelivingassets
Other98,732,938.6333,750,000.000.000.0064,148,226.39590,088.87-45,642,849.76150,398,226.39
Totalofabove795,371,161.50108,560,411.81595,307,646.530.00909,038,171.10573,380,305.580.001,334,329,134.49
Financialliabilities0.000.00

SignificantchangestothemeasurementattributesofthemajorassetsintheReportingPeriod:

□Yes√No

3.RestrictedAssetRightsasatthePeriod-End

ItemEndingcarryingvalueReasons
Monetaryassets145,564,457.15Securitydepositsassociatedwithbankacceptancenotes,environment,etc.
Houseconstructions1,760,577.22Collateralforbankloan
Landuseright911,388.42Collateralforbankloan
Machineryequipment30,560,526.26Collateralforbankloan
Paymentobligationsinrelationtodiscountednotes61,971,466.65
thatwereundue
Unduetransferredbillpaymentobligation72,391,302.15
Total313,159,717.85--

VIIInvestmentsMade

1.TotalInvestmentAmount

√Applicable□Notapplicable

InvestmentsmadeinReportingPeriod(RMB)Investmentsmadeinsameperiodoflastyear(RMB)+/-%
160,000,000.00154,786,000.003.37%

2.MajorEquityInvestmentsMadeintheReportingPeriod

√Applicable□Notapplicable

Unit:RMB

InvesteeMainbusinessInvestmentmethodInvestmentamountShareholdingpercentageCapitalresourcesPartnerInvestmenttermTypeofproductsProgressasofthebalancesheetdateEstimatedincomeProfitsorlossesofinvestmentintheReportingPeriodInvolvinginlawsuitornotDisclosuredate(ifany)Disclosureindex(ifany)
JiangsuChangchaiMachineryCo.,Ltd.Internalcombustionengine,relatedgeneratorsetsandpartsCapitalcontribution160,000,000.00100.00%Self-fundedNoneLong-termInternalcombustionengine,relatedgeneratorsetsandpartsTheinputhasbeenmade0.00-1,868,343.80Not26February20192019-004
Total----160,000,000.00------------0.00-1,868,343.80------

3.MajorNon-EquityInvestmentsOngoingintheReportingPeriod

□Applicable√Notapplicable

4.FinancialInvestments

(1)SecuritiesInvestments

√Applicable□Notapplicable

Unit:RMB

VarietyofsecurityCodeofsecurityNameofsecurityInitialinvestmentcostAccountingmeasurementmethodBeginningcarryingamountGain/lossonfairvaluechangesintheReportingPeriodAccumulatedfairvaluechangesrecordedinequityPurchasedintheReportingPeriodSoldintheReportingPeriodGain/lossintheReportingPeriodEndingcarryingamountAccountingtitleFundingsource
Domestic/foreignstock600166FotonMotor41,784,000.00Fairvaluemethod455,175,000.000.00455,296,000.000.000.000.00497,080,000.00InvestmentinotherequitSelf-funded
yinstruments
Domestic/foreignstock600919BankofJiangsu42,786,000.00Fairvaluemethod127,764,000.000.0093,636,000.000.000.000.00136,422,000.00InvestmentinotherequityinstrumentsSelf-funded
Domestic/foreignstock300912KailongHighTechnology20,001,268.00Fairvaluemethod38,282,105.00-14,145,766.000.000.000.00-14,145,766.0024,136,339.00Held-for-tradingfinancialassetsSelf-funded
Domestic/foreignstock688113LianceTechnology7,200,000.00Fairvaluemethod7,200,000.0080,640,000.000.000.000.0080,640,000.0087,840,000.00Held-for-tradingfinancialassetsSelf-funded
Domestic/foreignstock605368LantianGas160,744.76Fairvaluemethod160,744.76128,255.240.000.000.00128,255.24289,000.00Held-for-tradingfinancialassetsSelf-funded
Domestic/foreignstock832885StarsScienceandTechnology3,600,000.00Fairvaluemethod3,600,000.006,075,000.000.000.000.006,075,000.009,675,000.00Held-for-tradingfinancialassetSelf-funded
s
Total115,532,012.76--632,181,849.7672,697,489.24548,932,000.000.000.0072,697,489.24755,442,339.00----
Disclosuredateoftheannouncementontheboard’sapprovalofthesecuritiesinvestmentsN/A

(2)InvestmentsinDerivativeFinancialInstruments

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

5.UseofRaisedFunds

√Applicable□Notapplicable

(1)OverallUseofRaisedFunds

√Applicable□Notapplicable

Unit:RMB’0,000

Yearforfund-raisingMethodoffund-raisingTotalraisedfundsTotalraisedfundsthathavebeenusedinthecurrentperiodTotalraisedfundsthathavebeenusedaccumulativelyTotalraisedfundswithalteredpurposesduringtheReportingPeriodTotalaccumulativeraisedfundswithalteredpurposesProportionoftotalaccumulativeraisedfundswithalteredpurposesTotalraisedfundsthathavenotbeenusedyetUseandownershipchangeofunusedraisedfundsraisedfundsthathavebeenleftunusedforovertwoyears
2021Non-publicofferin634,999,996.40257,383,601.02257,383,601.020.000.000.00377,616,395.38Specialaccou0.00
gntfordepositingraisedfunds
Total--634,999,996.40257,383,601.02257,383,601.020.000.000.00377,616,395.38--0.00
Explanationoftheoveralluseofraisedfunds
On17December2020,theCompanyreceivedtheReplyConcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCo.,Ltd.(CSRCPermit[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.OnJune11,2021,thesubscribersofthisnon-publicofferinghavefullyremittedthesubscriptionfundstothebankaccountdesignatedbythesponsorinstitution,andthetotalamountoffundsraisedwasRMB634,999,996.40.AfterthecapitalverificationbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),theCapitalVerificationReportoftheFundsRaisedbytheNon-publicIssuanceofChangchaiCo.,Ltd.(S.G.W[2021]B061)wasissued.Withtheissuanceexpensesdeducted,theactualnetfundsraisedwereRMB620,665,733.97.OnJune15,2021,theaforementionedraisedfundswereremittedtothespecialaccountsetupbytheCompanyforraisedfundsfromthenon-publicofferingofshares.AfterthecapitalverificationbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),theCapitalVerificationReportoftheFundsRaisedbytheNon-publicIssuanceofChangchaiCo.,Ltd.(S.G.W[2021]B062)wasissued.Theraisedfundshaveallbeendepositedinthespecialaccountfortheraisedfundsandatripartitesupervisionagreementhasbeensignedwiththesponsorinstitutionandtheaccountopeningbankforthefundsraised.ThereisnomaterialdifferencebetweenthetripartitesupervisionagreementandthemodeltripartitesupervisionagreementofShenzhenStockExchange,andtheCompanystrictlycomplieswithitwhenusingtheraisedfunds.

(2)CommittedProjectsofRaisedFunds

√Applicable□Notapplicable

Unit:RMB’0,000

CommittedinvestmentprojectsandinvestmentofexcessiveraisedfundsWhetherprojectshavebeenaltered(includingpartialalternation)TotalcommittedinvestmentwithraisedfundsAdjustedtotalinvestmentamount(1)TheinvestmentamountduringtheReportingPeriodAccumulativeinvestmentamountasoftheendoftheReportingPeriod(2)InvestmentprogressasoftheendoftheReportingPeriod(3)=(2)/(1)DatewhentheprojectsarereadyfortheirintendeduseBenefitsrecordedduringtheReportingPeriodWhethertheestimatedbenefitsarereachedWhethertherearematerialchangesintheprojectfeasibility
Committedinvestmentprojects
RelocatioNo547,667,547,667,241,071,241,071,44.02MayNotNotNo
nprojectoflightenginesandcasting100.00100.00542.28542.28%2022applicableapplicable
InnovationcapacitybuildingprojectofthetechnicalcenterNo87,332,900.0072,998,600.001,259,250.001,259,250.001.73%December2023NotapplicableNotapplicableNo
Subtotalofcommittedinvestmentprojects--635,000,000.00620,665,700.00242,330,792.28242,330,792.28---------
Investmentofexcessiveraisedfunds
Notapplicable
Total--635,000,000.00620,665,700.00242,330,792.28242,330,792.28---------
Casesandreasonsforfailingtoreachtheplannedprogressorpredictedreturn(byspecificprojects)Notapplicable
ExplanationsofthematerialchangesintheNotapplicable
projectfeasibility
Amount,use,anduseprogressofexcessiveraisedfundsNotapplicable

Implementationoflocationchangesintheinvestmentprojectswiththeraisedfunds

ImplementationoflocationchangesintheinvestmentprojectswiththeraisedfundsNotapplicable

Implementationofmethodadjustmentstotheinvestmentprojectswiththeraisedfunds

ImplementationofmethodadjustmentstotheinvestmentprojectswiththeraisedfundsNotapplicable

Earlyinvestmentandplacementconcerningtheinvestmentprojectswiththe

EarlyinvestmentandplacementconcerningtheinvestmentprojectswiththeApplicable
Priortotheavailabilityoftheraisedfunds,inordertoensurethesmoothimplementationoftheinvestmentprojectswithraisedfunds,theCompanyuseditsownfundstoinvestinpartoftheinvestmentprojectswithraisedfundsandpaidpartoftheissuanceexpenses.AsofJune17,2021,thecumulativeamountoftheCompany'sself-financingfundspre-investedintheinvestmentprojectswithraisedfundswasRMB181,803,327.94,theamountofissuanceexpensesadvancedwasRMB2,358,490.56,totalingRMB184,161,818.50,andtheproposedreplacementamountwasRMB184,161,818.50.ThecapitalswereverifiedbytheGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),andtheVerificationReportonthePre-investmentofSelf-financingFundsintotheInvestmentProjectwithRaisedFundsandthePaymentofIssuanceExpensesbySelf-financingFundsofChangchaiCo.,Ltd.(S.G.W[2021]E1347)wasissuedonJune25,2021.OnJune28,2021,
raisedfundstheThirdInterimMeetingoftheBoardofDirectorsoftheCompanyin2021deliberatedandapprovedtheProposalonReplacingtheFundsPre-investedintheProjectandAdvancedIssuanceExpenseswiththeRaisedFunds,agreeingtousetheraisedfundsfromthenon-publicofferingofsharestoreplacetheself-financingfundstotalingRMB184,161,818.50thathadbeenpre-investedintheprojectpriortotheavailabilityoftheraisedfunds.Inaddition,XingyeSecuritiesCo.,Ltd.andDonghaiSecuritiesCo.,Ltd.issuedaverificationopinionontheuseofraisedfundstoreplaceself-financingfundsthathadbeeninvestedinadvanceintheprojectswithraisedfunds.Fordetails,seetheAnnouncementontheUseofRaisedFundstoReplacePre-investedProjectFundsandAdvancedIssueExpenses(AnnouncementNo.2021-036)publishedonCninfo(http://www.cninfo.com.cn)onJune30,2021.
TemporaryreplenishmentofworkingcapitalwiththeidleraisedfundsNotapplicable

Surplusraisedfundsforprojectimplementationandreasonsforthesurplus

SurplusraisedfundsforprojectimplementationandreasonsforthesurplusNotapplicable

Useandownershipchangeofunusedraisedfunds

UseandownershipchangeofunusedraisedfundsDepositedinthespecialaccountforraisedfunds
Problemsintheuseofraisedfundsanddisclosure,orOnJuly13,2021,theFourthInterimMeetingoftheBoardofDirectorsoftheCompanyin2021deliberatedandapprovedtheProposalonChangingtheImplementationEntityofSomeInvestmentProjectswithRaisedFunds,agreeingtochangetheimplementationentityoftheCompany'sinvestmentprojectswithfundsraisedthroughnon-publicofferingofshares,the"relocationprojectoflightenginesandcasting",fromChangchaiMachinery,awholly-ownedsubsidiaryoftheCompany,totheparentcompanyofChangchaiCo.,Ltd.Thematterdidnotchangetheuseandimplementationofthefundsraisedandwasnotasignificantchangeintheinvestmentprojectswithraisedfunds.
othercasesThe"relocationprojectoflightenginesandcasting"wasoriginallyindependentlyconstructedbyChangchaiMachineryandoperatedindependentlyaftertheconstructionwascompleted.Currently,themainprojectofChangchaiMachineryhasbeencompleted,andsomeoftheequipmentwillberelocatedfromthecurrentlightengineandcastingbasetoChangchaiMachinerysuccessively.AftertheequipmentinvestedbyChangchaiMachineryisinstalled,commissionedandformallyputintooperation,theimplementationentityoftheprojectwillchangetoChangchai'sparentcompany.Basedonthescaleandbrandeffectofthelistedcompany,theaforementionedchangeswillbemorebeneficialtotheactualoperationoftheprojectinthefutureandwillnothaveasignificantimpactontheconsolidatedstatementsofthelistedcompany.

(3)AlteredProjectsofRaisedFunds

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

VIIISaleofMajorAssetsandEquityInterests

1.SaleofMajorAssets

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.SaleofMajorEquityInterests

□Applicable√NotapplicableIXMajorSubsidiaries

√Applicable□NotapplicableMajorfully/majority-ownedsubsidiariesandthoseminority-ownedsubsidiarieswithanover10%effectontheCompany’snetprofit:

Unit:RMB

NameRelationshipwiththeCompanyPrincipalactivityRegisteredcapitalTotalassetsNetassetsOperatingrevenueOperatingprofitNetprofit
ChangchaiBenniuSubsidiaryProductionofdieselengineaccessories55,063,000.00189,600,396.8688,373,637.91229,098,137.332,312,364.882,318,945.21
ChangchaiWanzhouSubsidiaryDieselengine85,000,000.0072,342,232.6749,916,215.9242,629,379.24491,150.73386,567.27
assembly
HorizonInvestmentSubsidiaryExternalinvestmentandconsulting40,000,000.00137,604,313.27111,368,910.560.0068,830,821.6551,654,376.43
HorizonAgriculturalEquipmentSubsidiaryagriculturalmachineryproductofricetransplanteretc.10,000,000.0014,830,191.37-10,845,107.8014,362,872.77-4,579,701.60-4,579,701.60
ChangchaiRobinSubsidiaryGasolineenginesassembly37,250,000.00119,883,552.5599,931,461.70149,717,934.823,035,835.663,228,906.53
ChangchaiMachinerySubsidiaryInternalcombustionengineandrelatedaccessories300,000,000.00362,508,931.98296,143,655.390.00-2,428,707.63-1,868,343.80
XingshengRealEstateManagementSubsidiaryRealestatemanagementservice1000,000.006,356,175.894,217,440.405,858,835.76894,857.18808,767.74

SubsidiariesobtainedordisposedintheReportingPeriod:

□Applicable√NotapplicableOtherinformationaboutprincipalsubsidiariesandjointstockcompanies:

ChangzhouHorizonInvestmentCo.,Ltd.(HorizonInvestment),awholly-ownedsubsidiaryoftheCompany,reportedanetprofitofRMB51.6544millionin2021,up342.06%yearonyear.ThisismainlybecauseJiangsuLianceElectromechanicalTechnologyCo.,Ltd.(LianceTechnology),whereHorizonInvestmentownsastake,wentpublicontheSSESTARMarketinMay2021,andtheCompany’sinterestinLianceTechnologyisrecognizedas“financialassetsatfairvaluethroughprofitorloss”.ItisalsoaresultoftheincreasedfairvalueofequityinterestsheldinLianceTechnology,andGuilinStarsScienceandTechnologyCo.,Ltd.duringtheReportingPeriod.

XStructuredBodiesControlledbytheCompany

□Applicable√Notapplicable

XIProspects

1.DevelopmentstrategyoftheCompanyTheCompany’sdevelopmentstrategyistobaseonfarmmachinery,becomestrongerintheenginebusiness,exploremoremarketsanddevelopinascientificway.TheCompanywillmakefulluseofthepolicy-baseddividendofstrongnationalsupportforagriculturalproductionanddevelopmentofagriculturalmachinerytoacceleratethetechnologicalupgradeoftraditionalpowerproducts,andalsotoachievediversifieddevelopmentoftheindustry.TheCompanywillacceleratethetechnologicalupgradeoftraditionalpowerproductsandalsoachievediversifieddevelopmentoftheindustry.TheCompanywillstartrefinancingprojectsinduecoursebasedonthecapitaldemandandproductplanning.Themaindevelopmentdirectionsareasfollows:

(1)AcceleratingtechnologicalupgradingandareaexpansionfortraditionalproductsFirst,traditionalproductswillbedevelopedinthedirectionofintelligentandnetworkedhigh-endproducts.Basedonthethreecharacteristicsofagriculturalmachineryproductswillhave,namelyelectronic,networkedandintelligent,theCompanywillpromotetheapplicationofadvancedtechnologiessuchastheInternet,bigdata,artificialintelligenceandnewmaterialstoproductdevelopment,andmaketheproductswithintelligentcontrol,real-timemonitoringandbigdatacollectionandanalysisfunctionswhilepursuingenergysavingandemissionreduction,soastonotonlyenhancethetechnicalstrengthofproductsandstrengthentheexistingadvantageousproducts,butalsopursueusersatisfactionandmakeChangchaiproductsappreciateinvalue.Second,traditionalproductswillbedevelopedintheterminaldirection.Thedieselengineisanintermediateproductandacoreproducttodevelopintheterminaldirection.Atpresent,theCompany'smainproductsaresmallandmediumpowerdieselenginesandgeneralgasolineengines,themarketofsupportingfacilitiesismainlydistributedinagriculturalmachinery,plantprotectionmachinery,shipsandothernon-roadareas,andalsointheautomobilearea.Theupstreamanddownstreamoftheindustrychaincontaingreaterdevelopmentspaceandopportunities.Currently,Changchaiisfocusingongeneratorsets,outboardengines,coldchains,fishingboats,towersandotherterminalareas,withbroadprospects.TheCompanycanmakefulluseofthecapitalplatformofthelistedcompanytocutinattherighttimethroughjointventurecooperation,mergersandacquisitions,restructuring,etc.,toacceleratetheextensionoftheindustrialchainandbuildnewcompetitiveadvantages.

(2)PromotingindustrialtransformationanddevelopmentinthedirectionofcombinationwithnewenergyTheunstoppabledevelopmentofnewenergyhasimpactedinternalcombustionengineproducts,buttheopportunityexistsforalongtime.Whiletappingtheadvantagesoftraditionalindustries,internalcombustionenginesshoulddevelopwiththedevelopmentofnewenergyaswell.Atpresent,theCompanyhasinvestedinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.throughequityparticipationandinvestedinaprojectofwet-processseparatorfilmforlithiumbatteries.Inthefuture,theCompanywillincreaseitseffortstoexplorenewenergyareassuchaslithiumbatteryandhydrogenfuel,andpromotethedevelopmentoftheenterprisetowardthenewenergyindustrythroughcapitaloperation.

2.OperationplanfortheYear2022:

TheCompanywillconsolidatethetraditionalmarketofagriculturalmachinery,exploretheemergingareaofpower,paycloseattentiontoqualitytocreatefineproducts,innovatemanagementtohighlightefficiency,promotethesoundoperationofthepark,andleveragecapitaltopromotedevelopment.In2022,salesrevenueisexpectedtobeRMB2.3billion,andtheCompanywillensurethatnewproductssaleswillexceed10,000units.TheaboveoperationplandoesnotrepresenttheprofitforecastofY2022bythelistedcompany,andwhethercanberealizeddependsonvariousfactorsonthechangesofmarketconditionsandtheeffortlevelofthemanagementteam.Thereisalotofuncertainty,andinvestorsshouldpayspecialattentiononit.

3.PossiblefuturerisksandcountermeasuresoftheCompany

(1)Marketrisk:

Inrecentyears,theagriculturalindustryhasstillbeeninaperiodofdeepadjustment,subjecttocontinuedlowfoodprices,marketdemandsaturation,upgradesofChinaIVvehicleemissionstandardsandotheruncertainties.Theuserpurchasedemandisalsochanging,fromtheoriginalrigiddemandtoastock-basedrenewal,whilethereductioninuserrevenuehaslengthenedtherenewalcycle.Meanwhile,theprevalenceofglobaltradeprotectionism,thespreadofCOVID-19,abnormalfluctuationsininternationalfinancialmarketsandotherfactorshavebroughtsomeuncertaintytotheglobalmacroeconomicoutlook,whichhasanimpactontheareaofnon-roadmobilemachinery.Countermeasures:First,theCompanysolidifiesthetraditionalsupportingfieldsandfurtherexpandstheCompany'sadvantagesinthefieldofagriculturalmachinery.Second,theCompanyexpandsmorepossibilitiesforapplicationsinshipbornegeneratorsets,high-speedricetransplanters,coldchainvehicles,excavatorsandothersmallconstructionmachinery,conductsin-depthresearchanddevelopmentinnewareasanddevelopmentandsupportingofkeyproducts.Third,theCompanymakesactiveuseofthecapitalplatformtopushaheadcapitaloperationprojectsinasteadyandorderlymannertoservetheCompany'sdevelopment.

(2)Industrialrisk:

Inrecentyears,thestateadvocatesenergyconservationandemissionreduction.Newenergypowerrepresentedbypureelectric,hybridpowerandhydrogenfuelpowerhasgrabbedthemarketshareofdieselenginetoacertainextent.Atpresent,newenergypowerismainlyusedinvehicles.Itsuseinagriculturalmachineryisstillfacingproblemssuchashighcostandcomplexoperatingenvironment.However,asbreakthroughshavebeenmadeinnewenergybatterytechnology,thelocalapplicationscenarioofdieselenginemaybereplacedbynewenergypower.Countermeasures:Withregardtothelayoutofnewenergyindustry,theCompanyintensifieseffortsinexploringthenewenergyareaandactivelypromotesprojectconstructionanddevelopment.Meanwhile,theCompanymakespropereffortsinproductR&Dandexpandsnewdevelopmentdirectionsandsupportingareas.

(3)TheriskofrawmaterialpricefluctuationsTheCompany'srawmaterialpurchasepriceismainlyaffectedbyfactorssuchasmacroeconomiccycle,industrialpolicyadjustment,marketsupplyanddemandchanges.PricefluctuationsofrawmaterialsmayaffectCompany'sbusinessperformance.Countermeasures:Bystrengtheninginventoryandplanmanagement,costcontrolandothermeasures,theCompanyfurtherimprovesouroperatingefficiencyandreducetheupwardpressureoncosts.

(4)ForeigntraderiskAgainstthebackgroundsofcomplexandchangeableglobaleconomicenvironment,theepidemicbringsmoretoughchallengestotheoperationofforeigntrades.Theexportofproductscouldbeaffectedtosomeextentduetounstablefactors.Countermeasures:TheCompanyactivelyrespondstotheforeigntrademarketenvironment,implementsthedual-brandandintegratedsalesstrategyforwholemachinesandaccessories,andseeksprogresswhilemaintainingstability;theCompanystrengthensthemaintenanceandmanagementofoverseaskeymarketsandcustomers,intensifieseffortsinthedevelopmentofemergingmarketsandnewusers,andstrivestoimprovethesalesofhighvalue-addedproducts.

(5)Talentrisk:

TheCompanyneedshigh-leveltalents,highlyskilledtalentsandlackstalentstohelptheCompanyimproveitsoperationalefficiencyandstrengthentechnologicalinnovationtocopewiththeincreasinglyfiercemarketcompetitionandindustrydevelopmenttrend.Therefore,thedemandforprofessionaltalentsandsenior

managementtalentshasincreasedsignificantly.Countermeasures:First,theCompanyinsistsontakingtheinitiativetopromotetheimplementationandeffectivenessofstafftrainingandtalentintroduction.Second,theCompanystrengthensthemanagementofcompensationandbenefits,andimprovestheperformanceappraisalpolicyandcompensationandbenefitspolicy.Third,theCompanyincreasesthetrainingoftalentsandimprovesthecareermanagementsystemofemployees.Fourth,theCompanypromotestheinformationizationofhumanresourcemanagementandfurtherimprovestheefficiencyofhumanresourcemanagement.

XIICommunicationswiththeInvestmentCommunitysuchasResearches,InquiriesandInterviewsduringtheReportingPeriod

√Applicable□Notapplicable

DateofvisitPlaceofvisitWayofvisitTypeofvisitorVisitorContentsandmaterialsprovidedIndextomaininquiryinformation
2021-12-29EasyIROtherIndividualIndividualinvestorCustomersandoperationofHorizonNewEnergyEasyIR
2021-12-29EasyIROtherIndividualIndividualinvestorCapacityofHorizonNewEnergyEasyIR
2021-12-27EasyIROtherIndividualIndividualinvestorZhenjiangSiyangequitybiddingtransactionfollow-upEasyIR
2021-12-27EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-12-26EasyIROtherIndividualIndividualinvestorR&DprogressofthehybridpowerplatformoftheCompanyEasyIR
2021-12-24EasyIROtherIndividualIndividualinvestorDevelopmentplanofHorizonNewEnergyEasyIR
2021-12-23EasyIROtherIndividualIndividualinvestorSuggestionsforsynergisticdevelopmentbetweentheCompanyandthecontrollingshareholderEasyIR
2021-12-23EasyIROtherIndividualIndividualinvestorProgressoftheCompany'sparticipationintheequityauctionofZhenjiangSiyangEasyIR
2021-12-09EasyIROtherIndividualIndividualinvestorCapacityofHorizonNewEnergyEasyIR
2021-12-01EasyIROtherIndividualIndividualinvestorProductR&DoftheCompanyEasyIR
2021-11-30EasyIROtherIndividualIndividualinvestorProductR&DoftheCompanyEasyIR
2021-11-23EasyIROtherIndividualIndividualinvestorSegmentoftheCompanyEasyIR
2021-11-22EasyIROtherIndividualIndividualinvestorProgressoftherelocationprojectoftheCompanyEasyIR
2021-11-22EasyIROtherIndividualIndividualinvestorCustomersofHorizonNewEnergyEasyIR
2021-11-09EasyIROtherIndividualIndividualinvestorApplicationofproductsoftheCompanyEasyIR
2021-11-02EasyIROtherIndividualIndividualinvestorConstructionprogressofHorizonNewEnergyEasyIR
2021-11-01EasyIROtherIndividualIndividualinvestorCapacityplanningofHorizonNewEnergyEasyIR
2021-10-28EasyIROtherIndividualIndividualinvestorCapacityandconstructionprogressofHorizonNewEnergyEasyIR
2021-10-26EasyIROtherIndividualIndividualinvestorShareholders'shareholdingofHorizonNewEnergyEasyIR
2021-10-25EasyIROtherIndividualIndividualinvestorShareholders'shareholdingofHorizonNewEnergyEasyIR
2021-10-20EasyIROtherIndividualIndividualinvestorDevelopmenttrendoftheindustryanddevelopmentplanoftheCompanyEasyIR
2021-10-20EasyIROtherIndividualIndividualinvestorCompany'sparticipationinChinaInternationalExhibitiononInternalCombustionEnginesandPartsEasyIR
2021-10-19EasyIROtherIndividualIndividualinvestorCapacityofHorizonNewEnergy,progressoftherelocationprojectoftheCompany,andsuggestionsoftheofficialwebsiteEasyIR
2021-10-19EasyIROtherIndividualIndividualinvestorCapacityofHorizonNewEnergy,progressoftherelocationprojectoftheCompanyEasyIR
2021-10-18EasyIROtherIndividualIndividualinvestorImpactofclimateandenvironmentontheCompany'sbusinessdevelopmentEasyIR
2021-10-15EasyIROtherIndividualIndividualinvestorR&DofnewenergyagriculturalmachineryEasyIR
2021-10-14EasyIROtherIndividualIndividualinvestorApplicabilityofnewenergytotheCompany'sproductsEasyIR
2021-10-13EasyIROtherIndividualIndividualinvestorResultsforecastreleaseoftheCompanyEasyIR
2021-10-13EasyIROtherIndividualIndividualinvestorSuggestionsforinteractionbetweenthesecretaryoftheEasyIR
BoardofDirectorsandinvestors
2021-10-09EasyIROtherIndividualIndividualinvestorCompany'sproductsEasyIR
2021-10-04EasyIROtherIndividualIndividualinvestorSuggestionsforexpansionoftheCompany'sproductsEasyIR
2021-09-30EasyIROtherIndividualIndividualinvestorSuggestionsforinvestmentandcooperationintheagriculturalmachineryindustrychainoftheCompanyEasyIR
2021-09-30EasyIROtherIndividualIndividualinvestorDevelopmentoftheCompanyafterthestrategicreorganizationofstate-ownedcapitalandsubsequentplanningEasyIR
2021-09-27EasyIROtherIndividualIndividualinvestorCompany'sgeneratorsetbusinessEasyIR
2021-09-27EasyIROtherIndividualIndividualinvestorCompany'sgeneratorsetbusinessEasyIR
2021-09-27EasyIROtherIndividualIndividualinvestorCompany'sgeneratorsetbusinessEasyIR
2021-09-24EasyIROtherIndividualIndividualinvestorCompany'sgeneratorsetbusinessEasyIR
2021-09-22EasyIROtherIndividualIndividualinvestorConstructionprogressoftheseparatorfilmprojectofHorizonNewEnergyEasyIR
2021-09-13EasyIROtherIndividualIndividualinvestorSuggestionsforCompany'sdevelopmentEasyIR
2021-09-13EasyIROtherIndividualIndividualinvestorConstructionoftheseparatorfilmprojectofHorizonNewEnergyEasyIR
2021-09-09EasyIROtherIndividualIndividualinvestorSuggestionsforCompany'sdevelopmentEasyIR
2021-09-09EasyIROtherIndividualIndividualinvestorSuggestionsforCompanytransformationanddevelopmentEasyIR
2021-09-09EasyIROtherIndividualIndividualinvestorSuggestionsforCompany'sdevelopmentEasyIR
2021-09-09EasyIROtherIndividualIndividualinvestorConstructionandcapacityoftheproductlineoftheseparatorfilmprojectofHorizonNewEnergyEasyIR
2021-08-27EasyIROtherIndividualIndividualinvestorIssuancetimeofAandBSharesoftheCompanyEasyIR
2021-08-18EasyIROtherIndividualIndividualSuggestionsfordevelopmentofEasyIR
investorthenewenergyindustry
2021-08-17EasyIROtherIndividualIndividualinvestorOperationstatusofthesubsidiaryChangchaiMachineryEasyIR
2021-08-11EasyIROtherIndividualIndividualinvestorTechnologyreserveoftheCompanyEasyIR
2021-07-28EasyIROtherIndividualIndividualinvestorProgressoftheCompany'srelocationprojectandtheimpactontheCompanyEasyIR
2021-07-27EasyIROtherIndividualIndividualinvestorFollow-upplanningontheoriginalbaseoftheCompany'srelocationprojectEasyIR
2021-07-26EasyIROtherIndividualIndividualinvestorCapitalincreaseplanandcapacityandproducttechnologyoftheseparatorfilmprojectofHorizonNewEnergyEasyIR
2021-07-20EasyIROtherIndividualIndividualinvestorEquitystructureofHorizonNewEnergyEasyIR
2021-07-20EasyIROtherIndividualIndividualinvestorApplicationoftheseparatorfilmofHorizonNewEnergyEasyIR
2021-07-18EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-07-13EasyIROtherIndividualIndividualinvestorCustomersoftheseparatorfilmprojectofHorizonNewEnergyEasyIR
2021-07-13EasyIROtherIndividualIndividualinvestorMainbusinessesofthesubsidiaryHorizonAgriculturalEquipmentEasyIR
2021-07-02EasyIROtherIndividualIndividualinvestorReasonsandprogressoftherelocationprojectoflightenginesandcastingEasyIR
2021-06-29EasyIROtherIndividualIndividualinvestorProjectresultsofthenon-publicofferingofsharesEasyIR
2021-06-29EasyIROtherIndividualIndividualinvestorNumberofshareholdersEasyIR
2021-06-27EasyIROtherIndividualIndividualinvestorProjectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-06-27EasyIROtherIndividualIndividualinvestorCompany'sshareholdinginHorizonNewEnergyEasyIR
2021-06-21EasyIROtherIndividualIndividualinvestorCompany'sexternalcooperationEasyIR
2021-06-17EasyIROtherIndividualIndividualinvestorProjectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-06-12EasyIROtherIndividualIndividualinvestorCapacityandshareholders'shareholdingofHorizonNewEasyIR
Energy
2021-06-11EasyIROtherIndividualIndividualinvestorOperationstatusofHorizonNewEnergyEasyIR
2021-06-07EasyIROtherIndividualIndividualinvestorRelatedrelationshipoftheCompanyEasyIR
2021-06-05EasyIROtherIndividualIndividualinvestorProjectoftheseparatorfilmforlithiumbatteriesinoperationEasyIR
2021-06-04EasyIROtherIndividualIndividualinvestorProgressoftheprojectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-06-02EasyIROtherIndividualIndividualinvestorNumberofshareholdersoftheCompanyEasyIR
2021-05-30EasyIROtherIndividualIndividualinvestorReasonsfortheCompany'snetincomegrowthinthefirstquarterof2020and2021EasyIR
2021-05-28EasyIROtherIndividualIndividualinvestorProjectofthenon-publicofferingofsharesoftheCompanyEasyIR
2021-05-27EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyEasyIR
2021-05-27EasyIROtherIndividualIndividualinvestorImpactofrawmaterialpriceincreaseEasyIR
2021-05-27EasyIROtherIndividualIndividualinvestorIssuanceoftheprojectofthenon-publicofferingofsharesoftheCompanyEasyIR
2021-05-25EasyIROtherIndividualIndividualinvestorCompany'sshareholdinginHorizonNewEnergyEasyIR
2021-05-24EasyIROtherIndividualIndividualinvestorApplicabilityoftheseparatorfilmforlithiumbatteriestosodiumbatteriesEasyIR
2021-05-19EasyIROtherIndividualIndividualinvestorCompany'sgeneratorbusinessEasyIR
2021-05-12EasyIROtherIndividualIndividualinvestorDevelopmentoftheCompany'sproductelectrificationEasyIR
2021-05-11EasyIROtherIndividualIndividualinvestorReasonsforthelocationchoiceofHorizonNewEnergy'ssubsidiaryEasyIR
2021-05-11EasyIROtherIndividualIndividualinvestorMixed-ownershipreformoftheCompanyEasyIR
2021-05-11EasyIROtherIndividualIndividualinvestorCountermeasuresoftheCompanyforthepriceincreaseofrawmaterialsEasyIR
2021-04-25EasyIROtherIndividualIndividualinvestorCompanysalesoverviewEasyIR
2021-04-21EasyIROtherIndividualIndividualinvestorCompany'sobjectivesEasyIR
2021-04-21EasyIROtherIndividualIndividualinvestorSupportandhelpofChangzhouInvestmentGrouptotheCompanyEasyIR
2021-04-21EasyIROtherIndividualIndividualinvestorCompany'sobjectivesEasyIR
2021-04-21EasyIROtherIndividualIndividualinvestorCompany'spurchaseandstorageoflandplotsEasyIR
2021-04-15EasyIROtherIndividualIndividualinvestorCompany'sdividendsEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorInvestmentandR&DoftheCompanyinthenewenergyindustryEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorTransformationandupgradingoftheCompanyEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorCompany'spurchaseandstorageofplantsEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorCompany'sproductionandoperationstatusEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorQ1resultsforecastoftheCompanyEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorProjectoftheseparatorfilmforlithiumbatteriesinoperationEasyIR
2021-04-08EasyIROtherIndividualIndividualinvestorCompany'splanfordisposalofBankofJiangsusharesEasyIR
2021-03-30EasyIROtherIndividualIndividualinvestorCompany'soperationanddividendsEasyIR
2021-03-12EasyIROtherIndividualIndividualinvestorProjectprogressofthenon-publicofferingofsharesoftheCompanyEasyIR
2021-03-05EasyIROtherIndividualIndividualinvestorSupportingofagriculturalproductsoftheCompanyEasyIR
2021-03-05EasyIROtherIndividualIndividualinvestorAgriculturalproductsoftheCompanyEasyIR
2021-03-04EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-03-02EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-03-01EasyIROtherIndividualIndividualinvestorOperationmeasuresoftheCompanyEasyIR
2021-02-25EasyIROtherIndividualIndividualinvestorCompensationandbonusesforCompany'semployeesEasyIR
2021-02-24EasyIROtherIndividualIndividualSuggestionsforCompany'sEasyIR
investordevelopment
2021-02-22EasyIROtherIndividualIndividualinvestorSuggestionsforinvestmentoftheCompanyEasyIR
2021-02-22EasyIROtherIndividualIndividualinvestorProjectprogressofthenon-publicofferingofsharesoftheCompanyEasyIR
2021-02-22EasyIROtherIndividualIndividualinvestorImpactofpoliciesonproductsoftheCompanyEasyIR
2021-02-22EasyIROtherIndividualIndividualinvestorCompany'sprofitsin2020EasyIR
2021-02-21EasyIROtherIndividualIndividualinvestorImpactofpoliciesontheCompanyEasyIR
2021-02-21EasyIROtherIndividualIndividualinvestorSalesofagriculturalmachineryoftheCompanyEasyIR
2021-02-21EasyIROtherIndividualIndividualinvestorSalesofdieselgeneratorsetsoftheCompanyEasyIR
2021-02-19EasyIROtherIndividualIndividualinvestorNumberofshareholdersoftheCompanyEasyIR
2021-02-18EasyIROtherIndividualIndividualinvestorProjectoftheseparatorfilmforlithiumbatteriesinoperationEasyIR
2021-02-18EasyIROtherIndividualIndividualinvestorCompany'sexternalcooperationEasyIR
2021-02-03EasyIROtherIndividualIndividualinvestorSuggestionsfortheCompany'sexternalcooperationanddevelopmentEasyIR
2021-02-03EasyIROtherIndividualIndividualinvestorCompensationandbonusesforCompany'semployeesEasyIR
2021-02-03EasyIROtherIndividualIndividualinvestorInformationdisclosureoftheCompanyEasyIR
2021-02-02EasyIROtherIndividualIndividualinvestorBusinessscopeoftheCompanyEasyIR
2021-01-25EasyIROtherIndividualIndividualinvestorSuggestionsforCompany'sdevelopmentEasyIR
2021-01-25EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-01-22EasyIROtherIndividualIndividualinvestorCustomersoftheprojectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-01-22EasyIROtherIndividualIndividualinvestorNumberofemployeesoftheCompanyEasyIR
2021-01-18EasyIROtherIndividualIndividualinvestorOperationandprofitsoftheprojectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-01-06EasyIROtherIndividualIndividualCompany'sexternalEasyIR
investorcooperation
2021-01-05EasyIROtherIndividualIndividualinvestorPhaseIIConstructionoftheprojectoftheseparatorfilmforlithiumbatteriesEasyIR
2021-01-05EasyIROtherIndividualIndividualinvestorInvestmentandequityparticipationoftheCompanyinKailongHigh-techEasyIR
2021-01-05EasyIROtherIndividualIndividualinvestorInvestmentoftheCompanyinthenewenergyindustryEasyIR
2021-01-05EasyIROtherIndividualIndividualinvestorPhaseIIConstructionoftheprojectoftheseparatorfilmforlithiumbatteriesEasyIR

PartIVCorporateGovernance

IGeneralInformationofCorporateGovernanceIntheReportingPeriod,theCompanywasstrictlyinlinewithlaws,statutessuchasCompanyLaw,SecuritiesLaws,CodeofCorporateGovernanceofListedCompanies,GuideOpiniononEstablishmentofIndependentDirectorSystembyListedCompaniesandGuidelinesonInternalControlsofListedCompaniesandsoon,continuouslyperfectedcorporategovernance,establishedandaccomplishedinternalmanagementandcontrolsystem,consistentlyanddeeplyputforwardcorporategovernanceactivities,soastofurthernormalizedoperationoftheCompany,raisingcorporategovernancelevel,layingaguardforsteadyandhealthydevelopmentoftheCompany,protectlegalrightsandinterestsoftheCompanyandallshareholders.TheCompanypromulgatedorrevisedaseriesofinternalcontrolsystemthroughallaspectsofnormaloperationandmanagementactivitiesinaccordancewitheachnationallawsandregulations,characteristicsoftheindustry,operationandself-managingbusiness,andimproveditcontinuously,andfinallyformedanormativemanagementsystem.Andformulatedaseriesofmanagementsystem,processandstandardcoveredeachoperationlinkandlevelofthefinancialassetscontrol,humanresourcesmanagement,qualityenvironmentmanagementandinternalauditsupervisoretc.,whichensuredalltheworkhadrulestofollow.Indicatebytickmarketwhetherthereisanymaterialincompliancewiththeapplicablelaws,administrativeregulationsandregulationsissuedbytheCSRCgoverningthegovernanceoflistedcompanies.

□Yes√NoNosuchcasesintheReportingPeriod.

IITheCompany’sIndependencefromItsControllingShareholderandActualControllerinAsset,Personnel,FinancialAffairs,OrganizationandBusiness

TheCompanywasindependentfromthecontrollingshareholderChangzhouInvestmentGroupCo.,Ltdintermsofassets,business,personnel,organizationandfinancing,withindependent&completebusinessandcapabilitytooperateindependently.

1.Assets:ThepropertyrightsrelationshipbetweentheCompanyandthecontrollingshareholderisclear,assetsareclearlydefined,andtherearenofunds,assetsandotherresourcesbeingoccupiedorusedwithoutcompensationbetweenthem.

2.Personnel:TheCompanyandthecontrollingshareholderareindependentofeachotherintermsoflabor,personnelandsalarymanagement,andeachhasanindependentmanagementorganization,asoundmanagementpolicy,andanindependentpersonnelappraisalandassessmentsystem.

3.Finance:TheCompanyhassetupaspecialfinancedepartment,establishedanindependentaccountingsystemandfinancialmanagementpolicy,openedanindependentbankaccount,andimplementedindependentaccountingandindependenttaxpayments.ThereisnointerferenceinthefinancialactivitiesoftheCompanybythecontrollingshareholder.

4.Institution:TheCompanyhasacompleteandindependentcorporategovernancestructureandhasestablishedasoundorganizationalsystemthatmeetsitsownproductionandoperationneeds,whichoperatesindependentlyandwell,andthereisnosubordinaterelationshipwiththefunctionaldepartmentsofthecontrollingshareholder.

5.Business:TheCompanyhasanindependentandcompletebusinesssystemwithindependentandautonomous

productionandoperationalcapability.TheCompanyconductsrelatedtransactionsreasonablyontheprincipleofindependence.IIIHorizontalCompetition

□Applicable√NotapplicableIVAnnualandSpecialGeneralMeetingsConvenedduringtheReportingPeriod

1.GeneralMeetingConvenedduringtheReportingPeriod

MeetingTypeInvestorparticipationratioDateofthemeetingDisclosuredateResolution
The2020AnnualGeneralMeetingAnnualGeneralMeeting32.04%7May20218May2021Allproposalswereapproved.SeeAnnouncementNo.2021-028onResolutionsofthe2020AnnualGeneralMeeting.
The1stExtraordinaryGeneralMeetingof2021ExtraordinaryGeneralMeeting32.26%2September20213September2021Allproposalswereapproved.SeeAnnouncementNo.2021-061onResolutionsofthe1stExtraordinaryGeneralMeetingof2021.

2.SpecialGeneralMeetingsConvenedattheRequestofPreferredShareholderswithResumedVotingRights

□Applicable√Notapplicable

VDirectors,SupervisorsandSeniorManagement

1.GeneralInformation

NameOfficetitleIncumbent/FormerGenderAgeStartoftenureEndoftenureEndingshareholding(share)
ShiXinkunChairmanoftheBoardIncumbentMale5818October2016Uptonow0
ZhangXinDirector,GeneralManagerIncumbentMale5618October2016Uptonow0
LinTianDirectorIncumbentMale5917December2018Uptonow0
XuYiDirector,Vice-generalManagerIncumbentMale5816April2020Uptonow0
JiangHeDirector,ChiefAccountantIncumbentMale5016April2020Uptonow0
YangFengDirectorIncumbentMale5016April2020Uptonow0
WangMancangIndependentdirectorIncumbentMale5916April2020Uptonow0
XingMinIndependentdirectorIncumbentMale6816April2020Uptonow0
ZhangYanIndependentdirectorIncumbentFemale5216April2020Uptonow0
YinLihouVice-generalManagerIncumbentMale5818October2016Uptonow0
XieGuozhongVice-generalManagerIncumbentMale5316April2020Uptonow0
SunJianzhongVice-generalManagerIncumbentMale5016April2020Uptonow0
HeJianjiangVice-generalManagerandSecretaryoftheBoardIncumbentMale4318October2016Uptonow0
HeJianguangChairmanoftheSupervisoryCommitteeIncumbentMale5817December2020Uptonow0
LuZhongguiSupervisorIncumbentMale5518October2016Uptonow0
LiuYiSupervisorIncumbentMale5318October2016Uptonow0
ChenLijiaSupervisorIncumbentFemale3916April2020Uptonow0
GeJiangliSupervisorIncumbentFemale5216April2020Uptonow0
Total------------0

Indicatewhetheranydirector,supervisororseniormanagementresignedbeforetheexpiryoftheirtenureduring

theReportingPeriod.

□Yes√NoChangeofdirectors,supervisorsandseniormanagement:

√Applicable□Notapplicable

NameOfficetitleTypeofchangeDateofchangeReasonforchange
HeJianjiangVice-generalManagerAppointed13December2021AppointedbytheBoard

2.BiographicalInformationProfessionalbackgrounds,majorworkexperienceandcurrentdutiesintheCompanyoftheincumbentdirectors,supervisorsandseniormanagement:

ShiXinkun:Nowheactsasvice-presidentofChangzhouInvestmentGroupCo.,Ltd.,theChairmanoftheBoardandPartySecretaryintheCompanyandtheChairmanoftheBoardinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.ZhangXin:HesuccessivelytookthepostsofSalesManager,GeneralManagerAssistant,andvice-generalmanagerinourcompany.Now,heactsasDirector,GeneralManager,deputyPartySecretaryoftheCompanyandexecutivedirectorofJiangsuChangchaiMachineryCo.,Ltd.LinTian:HesuccessivelyworkedasdeputydirectorofenterprisedevelopmentDept.,GMofinvestmentmanagementDept.IIandI,assistantpresidentinChangzhouInvestmentGroupCo.,Ltd.Nowheisthevicepresident,directorofChangzhouInvestmentGroupCo.,Ltd.,andthedirectoroftheCompany.XuYi:successivelyservedasthedirectorandassistanttotheGMoftheCompany’stechnologycenter,andcurrentlyservesasthedirectoranddeputyGMoftheCompany.JiangHe:successivelyservedastheaccountant,assistanttotheminister,andviceministerofthefinancialdepartmentoftheCompany.Heiscurrentlyadirector,chiefaccountantandministerofthefinancialdepartmentoftheCompany.YangFeng:successivelyservedasthebusinessmanageroftheShanghaiInvestmentBankingDepartmentofChinaEconomicDevelopmentTrustandInvestmentCo.,Ltd.,businessdirectoroftheinvestmentbankingdepartmentofOrientSecuritiesCo.,Ltd.,GMofandassistantchairmanofAJSecurities’investmentbankingdepartment,operationmanagementheadquarters,workedinthedevelopmentfinancedepartmentandinvestmentbankingdepartment,andservedastheEGMintheequipmentgroup,investmentrecommendationgroup,NEEQbusinessdepartmentandcomprehensivegroupofCITICSecuritiesCo.,Ltd.CurrentlyservingasthedirectorandGMofShanghaiLingheAssetManagementPartnership(LP),DaiwaSecuritiesChinaCo.,Ltd.,andthedirector

oftheCompany.WangMancang:successivelyservedasateacher,lecturer,lecturerandprofessorintheDepartmentofFinanceoftheSchoolofEconomicsandManagementofNorthwestUniversity,andcurrentlyservesasthedirectoroftheDepartmentofFinanceoftheSchoolofEconomicsandManagementofNorthwestUniversity,andthedirectorofInstituteofPublicEconomics,counselorofXi'anmunicipalgovernment,expertofthe"financialgroup"ofthegovernmentdecisionadvisorycommittee,independentdirectorofXi'anChenxiAviationTechnologyCorp.,Ltd.,ShaanxiConstructionMachineryCo.,Ltd,Chang'anInternationalTrustCo.,Ltd.,FocuslightTechnologiesInc.andtheCompany.XingMin:successivelyservedassecretaryofthePartyCommitteeandadministrativeassistantgeneralmanager(AGM)ofChinaNationalHeavyMachineryCorporation;secretaryofthePartyCommitteeandGMofChinaNationalMachineToolSalesandTechnicalServiceCorporation(CNMTC);currentlySecretary-GeneralofChinaInternalCombustionEngineIndustryAssociation(CICEIA),directorofActBlueCo.,Ltd.,IndependentDirectorofZhejiangZhongjianTechnologyCo.,Ltd.,JiangsuYunyiElectricCo.,Ltd.,WeifuHigh-TechnologyGroupCo.,Ltd.,ZhejiangXinchaiCo.,Ltd.,andtheCompany.ZhangYan:successivelyservedaschiefaccountantofChangzhouZhengdaCertifiedPublicAccountantsCo.,Ltd.,executivedeputychiefaccountantofJiangsuGongzhengCertifiedPublicAccountantsCo.,Ltd.,currentlyassociateprofessorofBusinessSchoolofJiangsuUniversityofTechnology,independentnon-executivedirectorofS-EnjoyServiceGroupCo.,Limited,independentdirectorofJiangsuChanghaiCompositeMaterialsCo.,Ltd.,WuxiSAHATElectricTechnologyCo.,Ltd.,JiangsuTianmuLakeTourismCo.,Ltd.,andtheCompany.YinLihou:HeworkedasMinisterofHumanResourcesDepartmentandGeneralManagerAssistant.NowheactsasDeputyGeneralManageroftheCompany,andtheChairmanoftheBoardofChangchaiRobin.XieGuozhong:successivelyactsasGeneralManagerAssistantoftheCompany,SupervisorandSecretaryofPartyGeneralBranch.NowheisDeputyGMoftheCompany,GeneralManageroftheSalesCompanyandChairmanoftheBoardofChangchaiWanzhou.SunJianzhong:successivelyservedasthedirectorofthetechnicalcenterandassistanttothegeneralmanageroftheCompany.HeiscurrentlythedeputygeneralmanageroftheCompany.HeJianjiang:HesuccessivelyactedastheStaffMember,AssistanttotheChief,andDeputyChiefoftheInvestmentandDevelopmentDepartment,andSecuritiesRepresentativeoftheCompany.NowheisDeputyGeneralManager,SecretaryoftheBoard,andChiefoftheInvestmentandDevelopmentDepartmentoftheCompany,aswellasDirector&GMofHorizonInvestment,DirectorofHorizonAgriculturalEquipmentandChangchaiWanzhou.HeJianguang:successivelyservedasdeputychiefofDesignSectionofChangzhouDieselEngineFactory,engineerofProductDevelopmentDepartment,deputydirectoroftheCompany’sJointVentureOffice,deputydirectorofTechnologyCenter,chiefengineer,director,generalmanager,vicechairmanofChangzhouDieselEngineFactory,amemberofthePartycommittee,secretaryoftheDisciplineInspectionCommissionandsupervisorofChangzhouInvestmentGroupCo.,Ltd.,currentlyamemberofthePartyCommitteeofChangzhouInvestmentGroupCo.,Ltd.,andchairmanoftheboardofsupervisorsoftheCompany.ChenLijia:vicepresidentandgeneralmanagerofriskcontrollegaldepartmentofChangzhouInvestmentGroup

Co.,Ltd.andsupervisoroftheCompany.GeJiangli:directorandsupervisorofHumanResourcesDepartmentoftheCompany.LuZhonggui:NowheactsasMinisterofpoliticalDepartmentoftheCompany,OfficeDirector,SecretaryofOrganPartyGeneralBranchaswellasemployeesupervisoroftheCompanyandDirectorofXingshengRealEstateManagement.LiuYi:HesuccessivelytookthepostsofAssistantMinisterofEnterpriseManagementDepartment.NowheactsasDirectorofAuditDepartmentandEmployeeSupervisoroftheCompany,SupervisorofChangchaiWanzhou,ChangchaiBenniu,HorizonInvestment,HorizonAgriculturalEquipment,ChangchaiRobin,ChangchaiMachineryandXingshengRealEstateManagement.Officesheldconcurrentlyinshareholdingentities:

√Applicable□Notapplicable

NameShareholdingentityOfficeheldintheshareholdingentityStartoftenureEndoftenureRemunerationorallowancefromtheshareholdingentity
LinTianChangzhouInvestmentGroupCo.,Ltd.Vicepresident,directorDecember2017Yes
ChenLijiaChangzhouInvestmentGroupCo.,Ltd.VicePresident,GMofRiskControlLegalDepartmentMarch2018Yes
ShiXinkunChangzhouInvestmentGroupCo.,Ltd.VicepresidentNo
HeJianguangChangzhouInvestmentGroupCo.,Ltd.MemberofthePartyCommitteeJanuary2019Yes
NotesN/A

Officesheldconcurrentlyinotherentities:

√Applicable□Notapplicable

NameOtherentityOfficeheldintheentityStartoftenureEndoftenureRemunerationorallowancefromtheentity
ShiXinkunJiangsuHorizonNewEnergyTechnologyCo.,Ltd.ChairmanoftheBoard19November2021No
YangFengDaiwaSecurities(China)Co.Ltd.ManagingDirector1January2021Yes
WangMancangFinanceDepartmentofSchoolofEconomics&ManagementNorthwestUniversityTeacher1October1996Yes
Xi’anGovernmentConsultant1October2015
Decision-makingAdvisoryCommitteeofXi’anGovernmentFinancegroupleader1April2017
ShaanxiSecuritiesResearchAssociationPresident1October2017
Chang'anInternationalTrustCo.,Ltd.IndependentDirector1July2018
ShaanxiConstructionMachineryCo.,Ltd.IndependentDirector16November2018
Xi’anFocuslightTechnologyCo.,Ltd.IndependentDirector1October2018
XingMinChinaInternalCombustionEngineIndustryAssociationStandingViceChairmanandSecretary-general1August2008Yes
TianjinUniversityFull-timeprofessor1June2019April2021
ZYNPCorporationIndependentDirector29January201621May2021
ZhongjianTechnologyCo.,LtdIndependentDirector20June2017
JiangsuYunyiElectronicCo.,Ltd.IndependentDirector15July2019
WeifuHigh-TechnologyGroupCo.,Ltd.IndependentDirector20May2021
ZhejiangXinchaiCo.,Ltd.IndependentDirector6December2019
ActBlueCo.,Ltd.Director22November2021
ZhangYanJiangsuUniversityofTechnologyAssociateprofessor1August2008Yes
JiangsuChanghaiCompositeMaterialsCo.,Ltd.IndependentDirector16February2016
S-EnjoyServiceGroupCo.,LimitedIndependentnon-executivedirector20October2018
WuxiSAHATElectricTechnologyCo.,Ltd.IndependentDirector2November2020
JiangsuTianmuLakeTourismCo.,Ltd.IndependentDirector8February2021
NotesNone

Punishmentsimposedintherecentthreeyearsbythesecuritiesregulatorontheincumbentdirectors,supervisorsandseniormanagementaswellasthosewholeftintheReportingPeriod:

□Applicable√Notapplicable

3.RemunerationofDirectors,SupervisorsandSeniorManagementDecision-makingprocedure,determinationbasisandactualpaymentsofremunerationfordirectors,supervisorsandseniormanagement:

In2021,themonthlysalariesofdirectors,supervisorsandseniorexecutivesintheCompanywereinlinewiththestipulationsofrelevantsalarymanagementandgradestandards,andthebenefitsoftheCompanyandassessmentresults.DirectorLinTianandSupervisorsHeJianguangandChenLijiaobtainedsalariesinshareholders'entities.Remunerationofdirectors,supervisorsandseniormanagementfortheReportingPeriod

Unit:RMB’0,000

NameOfficetitleGenderAgeIncumbent/FormerTotalbefore-taxremunerationfromtheCompanyAnyremunerationfromrelatedparty
ShiXinkunChairmanoftheBoardMale58Incumbent93.46No
ZhangXinDirector,GeneralManagerMale56Incumbent93.46No
LinTianDirectorMale59Incumbent0Yes
XuYiDirector,Vice-generalManagerMale58Incumbent82.19No
JiangHeDirector,ChiefAccountantMale50Incumbent81.28No
YangFengDirectorMale50Incumbent0No
WangMancangIndependentdirectorMale59Incumbent10No
XingMinIndependentdirectorMale68Incumbent10No
ZhangYanIndependentdirectorFemale52Incumbent10No
YinLihouVice-generalManagerMale58Incumbent80.98No
XieGuozhongVice-generalManagerMale53Incumbent81.89No
SunJianzhongVice-generalManagerMale50Incumbent81.58No
HeJianjiangVice-generalManagerandSecretaryoftheMale43Incumbent80.87No
Board
HeJianguangChairmanoftheSupervisoryCommitteeMale58Incumbent0Yes
ChenLijiaSupervisorFemale39Incumbent0Yes
LuZhongguiSupervisorMale55Incumbent20.45No
GeJiangliSupervisorFemale52Incumbent20.20No
LiuYiSupervisorMale53Incumbent20.37No
Total--------766.73--

VIPerformanceofDutybyDirectorsintheReportingPeriod

1.BoardMeetingsConvenedintheReportingPeriod

MeetingDateofmeetingDisclosuredateResolution
The1stExtraordinaryMeetingoftheBoardofDirectorsin20212021-01-202021-01-21ThemeetingdeliberatedonandapprovedtheObligationsonConductingForwardForeignExchangeSettlement
The7thMeetingofthe9thBoardofDirectors2021-01-29--ThemeetingdeliberatedonandapprovedtheReportontheWorkoftheGeneralManagerfortheYear2020,theBusinessPolicyObjectivesoftheCompanyfortheYear2021,theResultsofthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2020,theContractonthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2021,andtheProposalonApplicationforBankCreditLine
The8thMeetingofthe9thBoardofDirectors2021-04-132021-04-15ThemeetingdeliberatedonandapprovedtheAnnualReportfor2020andItsSummary,theAnnualWorkReportoftheBoardofDirectorsfor2020,theAnnualSelf-EvaluationReportonInternalControlfor2020,theProposalontheProvisionofReservesforAssetImpairment,theProposalontheProvisionofGuaranteesforBankCreditforSubsidiaries,theProposalonExtendingtheValidityPeriodofResolutionsoftheCompany'sNon-publicOfferingofSharesattheGeneralMeeting,theProposalontheRequestfortheGeneralMeetingtoExtendtheValidityPeriodofResolutionsoftheCompany'sNon-publicOfferingofSharesattheGeneralMeeting,theProposalonAmendingtheArticles
ofAssociationoftheCompany,theProposalonAmendingtheRulesofProcedureoftheGeneralMeeting,theProposalonAmendingthePolicyofIndependentDirectors,andtheProposalonConveningtheAnnualGeneralMeetingoftheCompanyfor2020.
The9thMeetingofthe9thBoardofDirectors2021-04-272021-04-28ThemeetingdeliberatedonandapprovedtheReportfortheFirstQuarterof2021,theProposalonAmendingtheRulesofImplementationoftheAuditCommitteeoftheBoardofDirectors,theProposaltoAmendtheImplementationRulesoftheRemunerationandEvaluationCommittee,theProposalonAmendingtheWorkPolicyoftheSecretaryoftheBoardofDirectors,theProposalonAmendingtheManagementPolicyofInformationDisclosureMatters,theProposalonAmendingtheRegistrationPolicyofInsideInformationInsider,theProposalonAmendingtheManagementPolicyofExternalInformationUsers,theProposalonAmendingtheInternalAuditPolicy,andtheProposalonAmendingtheDecision-makingPolicyofRelatedTransactions.
The2ndExtraordinaryMeetingoftheBoardofDirectorsin20212021-05-182021-05-19ThemeetingdeliberatedonandapprovedtheProposalontheProposedOpeningofaSpecialAccountfortheFundsRaisedfromtheNon-publicOfferingofSharesandAuthorizationtoEnterintoaSupervisionAgreementfortheFundsRaised
The3rdExtraordinaryMeetingoftheBoardofDirectorsin20212021-06-282021-06-30ThemeetingdeliberatedonandapprovedtheProposalonUsingRaisedFundstoReplacePre-investedProjectFundsandAdvancedIssueExpenses
The4thExtraordinaryMeetingoftheBoardofDirectorsin20212021-07-132021-07-15ThemeetingdeliberatedonandapprovedtheProposalonAmendingtheArticlesof<AssociationoftheCompany>,ProposalonAmendingthe<ManagementPolicyofWealthManagementProducts>,ProposalonUsingOwnIdleFundstoPurchaseWealthManagementProducts,ProposalonUsingIdleFundstoPurchaseWealthManagementProducts,andProposalonChangingtheImplementationEntityofSomeInvestmentProjectswithRaisedFunds
The5thExtraordinaryMeetingoftheBoardofDirectorsin20212021-07-262021-07-28ThemeetingdeliberatedonandapprovedtheProposalonRelated-PartyTransactionregardingtheUseofIdleRaisedFundsforPurchaseofReturnCertificateofDonghaiSecurities
The10thMeetingofthe9thBoardofDirectors2021-08-162021-08-18ThemeetingdeliberatedonandapprovedtheSemi-annualReportfor2021andItsSummary,ProposalonChangeofAccountingPolicy,ProposalonProvisionofReservesforAssetImpairment,ProposalonWrite-offofCertainAccountsReceivable,SpecialReportontheDepositandUseofRaisedFundsfortheSemi-annualPeriodof2021,ProposalontheRe-appointmentoftheFinancialAuditInstitutionfor2021andItsAuditExpenses,ProposalontheRe-appointmentoftheInternalControlAuditInstitutionfor2021,andProposalonConveningtheFirstExtraordinaryGeneralMeetingofShareholdersfor2021
The6thExtraordinaryMeetingoftheBoardofDirectorsin20212021-10-282021-10-29ThemeetingdeliberatedonandapprovedtheReportoftheThirdQuarterof2021andProposalonParticipatinginthePublicListedTransferof41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.
The7thExtraordinaryMeetingoftheBoardofDirectorsin20212021-12-132021-12-14ThemeetingdeliberatedonandapprovedtheProposalontheProposedAppointmentofMr.HeJianjiangasDeputyGeneralManageroftheCompany

2.AttendanceofDirectorsatBoardMeetingsandGeneralMeetings

Attendanceofdirectorsatboardmeetingsandgeneralmeetings
DirectorTotalnumberofboardmeetingsthedirectorwaseligibletoattendBoardmeetingsattendedonsiteBoardmeetingsattendedbywayoftelecommunicationBoardmeetingsattendedthroughaproxyBoardmeetingsthedirectorfailedtoattendThedirectorfailedtoattendtwoconsecutiveboardmeetings(yes/no)Generalmeetingsattended
ShiXinkun115600No2
ZhangXin115600No2
LinTian115600No2
JiangHe115600No2
YangFeng115600No2
WangMancang115600No2
XingMin114610No2
ZhangYan115600No2

Explanationofwhyanydirectorfailedtoattendtwoconsecutiveboardmeetings:

N/A

3.ObjectionsRaisedbyDirectorsonMattersoftheCompanyIndicatebytickmarkwhetheranydirectorsraisedanyobjectionsonanymatteroftheCompany.

□Yes√NoNosuchcasesintheReportingPeriod.

4.OtherInformationaboutthePerformanceofDutybyDirectorsIndicatebytickmarkwhetheranysuggestionsfromdirectorswereadoptedbytheCompany.

√Yes□NoSuggestionsfromdirectorsadoptedornotadoptedbytheCompany:

TheindependentdirectorsoftheCompanyinlinewiththelaw,rules,normativedocumentsandobligationsgivenbytheCompanyoftheCompanylaw,ArticleofAssociationsandIndependentDirectorsWorkRules,comprehensivelyfocusedonthedevelopmentandoperationoftheCompany,activelyattendedthegeneralmeetingofshareholderandmeetingofboardofdirectors,andgivenindependentopinionsforthesignificanteventsoftheCompany,andeffectivelymaintainedtheprofitsoftheCompanyandalltheshareholders.TheCompanyactivelylistenedtothesuggestionsfromtheindependentdirectorsuponthesignificanteventsandadoptedthem.

VIISpecialCommitteesundertheBoardofDirectorsduringtheReportingPeriod

NameofcommitteeMembersNumberofmeetingsconvenedDateofmeetingContentsImportantcommentsandsuggestionsOtherperformanceofdutiesSpecificdisputedmatters(ifany)
AuditCommitteeZhangYan,WangMancang,LinTian318January2021ThemeetingdiscussedandapprovedtheReportonFinancialPre-auditin2020,ReportonAuditPlanArrangementfor2020,andReportonInternalAuditWorkin2020andInternalAuditPlanfor2021TheCompany'sfinancialstatementshavebeenpreparedinaccordancewiththenewAccountingStandardsforBusinessEnterprisesandtheprovisionsoftheCompany's
relevantfinancialpoliciesandpresentedfairly,inallmaterialrespects,thefinancialstatusoftheCompanyasof31December2020andtheoperatingresultsandcashflowsfor2020.TheCompany'sfinancialandaccountingstatementsareauthenticandaccurate.
6April2021ThemeetingreviewedandapprovedtheauditedannualfinancialstatementsoftheCompanyfor2020TheCompany'sstatementspresentedfairly,inallmaterialrespects,thefinancialstatusoftheCompanyasof31December2020andtheoperatingresultsandcashflowsfor2020.Itwasconsentedthattheyshallbe
submittedtotheBoardofDirectorsforreviewandapproval
13August2021ThemeetingdeliberatedonandapprovedtheSemi-annualWorkSummaryoftheAuditDepartmentfor2021,ProposalonProvisionofReservesforAssetImpairment,ProposalontheWrite-offofCertainAccountsReceivable,SpecialReportontheDepositandUseofRaisedFundsfortheSemi-annualPeriodof2021,ProposalontheRe-appointmentoftheFinancialAuditInstitutionfor2021andItsAuditExpenses,andProposalontheRe-appointmentoftheInternalControlAuditInstitutionfor2021ItwasconsentedthatboththeproposalsshallbesubmittedtotheBoardofDirectorsfordiscussion
StrategyCommitteeShiXinkun,XingMin,129January2021ThemeetingdeliberatedonandapprovedtheOperationPolicyItwasconsentedthatboththeproposals
YangFengandObjectivesfor2021shallbesubmittedtotheBoardofDirectorsfordiscussion
RemunerationandEvaluationCommitteeXingMin,WangMancang,ShiXinkun120January2021ThemeetingdeliberatedonandapprovedtheEncashmentofAppraisaloftheSeniorManagementin2020andAppraisalContractoftheSeniorManagementfor2021ItwasconsentedthatboththeproposalsshallbesubmittedtotheBoardofDirectorsfordiscussion

VIIIPerformanceofDutybytheSupervisoryCommittee

IndicatebytickmarkwhethertheSupervisoryCommitteefoundanyrisktotheCompanyduringitssupervisionintheReportingPeriod.

□Yes√NoTheSupervisoryCommitteeraisednoobjectionsintheReportingPeriod.IXEmployees

1.Number,FunctionsandEducationalBackgroundsofEmployees

Numberofin-serviceemployeesoftheCompanyastheparentattheperiod-end2240
Numberofin-serviceemployeesofmajorsubsidiariesattheperiod-end524
Totalnumberofin-serviceemployeesattheperiod-end2764
TotalnumberofpaidemployeesintheReportingPeriod2764
NumberofretireestowhomtheCompanyastheparentoritsmajorsubsidiariesneedtopayretirementpensions0
Functions
FunctionEmployees
Production1845
Sales205
Technical362
Financial37
Administrative294
Other21
Total2764
Educationalbackgrounds
EducationalbackgroundEmployees
Juniorhighschoolgraduatesandbelow1198
Highschoolgraduates776
Collegegraduatesandtechnicalsecondaryschoolgraduates508
Bachelors263
Mastersandabove19
Total2764

2.EmployeeRemunerationPolicyTheCompanyalwaysadheredtotheprincipleoftiltingtheremunerationincentivemechanismtowardsexcellenttalents,soastodisplaytherolesofvariousprofessionaltechnicians,managementstaffsandskilledbackbones.Besides,itadheredtotheprincipleofincreasingtheemployee’sincomeintegratedwithincreasinglaborproductionefficiencyandproduction&operationefficiency,soastoperfectthesalarystructureandfurtherincreaseemployees’incomesteadily.

3.EmployeeTrainingPlansTheCompanyestablishedtheManagementRulesontheEducation&TrainingforEmployees,aimingtoenhanceemployees’qualityandtryitsbesttocultivateateamoffaithfulandhighlyprofessionaltalents.Besides,itinnovatedthetrainingmechanism,optimizedthetrainingenvironment,andreinforcedtoencourageemployeestoattendvarioustraining,soastoinspiretheemployees’potentialtothemaximumextentandfurtherpromotethesustainabledevelopmentoftheCompany.

4.LaborOutsourcing

□Applicable√NotapplicableXProfitDistributions(intheFormofCashand/orStock)Howtheprofitdistributionpolicy,especiallythecashdividendpolicy,wasformulated,executedorrevisedintheReportingPeriod:

√Applicable□NotapplicableInArticlesofAssociation,whichhadconfirmedthespecificprofitsdistributionandclearedouttheconditions,standardsandproportionofthecashbonus,stipulatedthedecision-makingprogressoftheformulationand

alternationoftheprofitsdistributionpoliciesandthechaptersaswellastheregulationsfullyensuretheopportunitiesforthemediumandsmallshareholderstoexertthefunctionsandtoprovideadvicesaswellasappeals.Thecashbonusofrecent3yearsoftheCompanymetwiththeregulationsoftheArticlesofAssociationandduringthedecision-makingprocessoftheprofitsdistributionproposal,theIndependentDirectorsstatedtheindependentadvicesandfullyrespectedtheadvicesfromthemediumandsmallshareholders.TheprofitsdistributionpreplanandtheturningcapitalreserveintosharecapitalpreplanoftheCompanywerebothmetwiththerelevantregulationsoftheArticlesofAssociationandsoon.

Specialstatementaboutthecashdividendpolicy
IncompliancewiththeCompany’sArticlesofAssociationandresolutionofgeneralmeetingYes
SpecificandcleardividendstandardandratioYes
Completedecision-makingprocedureandmechanismYes
IndependentdirectorsfaithfullyperformedtheirdutiesandplayedtheirdueroleYes
Non-controllinginterestsareabletofullyexpresstheiropinionanddesireandtheirlegalrightsandinterestsarefullyprotectedYes
Incaseofadjustingorchangingthecashdividendpolicy,theconditionsandproceduresinvolvedareincompliancewithapplicableregulationsandtransparentN/A

IndicatebytickmarkwhethertheCompanyfailstoputforwardacashdividendproposaldespitethefactsthattheCompanyhasmadeprofitsintheReportingPeriodandtheprofitsoftheCompanyastheparentdistributabletoshareholdersarepositive.

□Applicable√NotapplicableFinaldividendplanfortheReportingPeriod:

√Applicable□Notapplicable

Bonussharesforevery10shares(share)0
Dividendforevery10shares(RMB)(taxinclusive)0.26
Additionalsharestobeconvertedfromcapitalreserveforevery10shares(share)0
Totalsharesasthebasisfortheprofitdistributionproposal(share)705,692,507
Cashdividends(RMB)(taxinclusive)18,348,005.18
Cashdividendsinotherforms(suchassharerepurchase)(RMB)0
Totalcashdividends(includingthoseinotherforms)(RMB)18,348,005.18
Distributableprofit(RMB)756,037,052.58
Totalcashdividends(includingthoseinotherforms)as%oftotalprofitdistribution100%
Cashdividendpolicy
Other
Particularsaboutthedividendplan
TheBoardhasapprovedafinaldividendplanasfollows:basedonthetotalsharecapitaloftheCompanyat31December2021,acashdividendofRMB0.26(taxinclusive)per10sharesistobedistributedtotheshareholders,withnobonusissuefromeitherprofitorcapitalreserves.

XIEquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XIIFormulationandImplementationofInternalControlSystemduringtheReportingPeriod

1.InternalControlFormulationandImplementationDuringtheReportingPeriod,theCompanystrictlycompliedwithnationallawsandregulationsandrelevantregulationssuchastheBasicCodeforInternalControlofEnterprisesandtheGuidelinesforApplicationofEnterpriseInternalControl,aswellastheprovisionsandrequirementsoftheCompany'sinternalcontrolstandards,andoptimizedimportantbusinessprocessesandimprovedandperfectedtheinternalcontrolsystemthroughcontinuoussupervisionandeffectiveevaluationoftheoperationoftheCompany'sinternalcontrol,soastoadapttothechangingexternalenvironmentandinternalmanagementrequirementsandimprovetheefficiencyoftheCompany'soperationandmanagement.Bydoingso,theCompanyeffectivelypreventedrisksinoperationandmanagement,andpromotedtheachievementofinternalcontrolobjectives.TheCompany'sinternalcontrolsystemcancoverthemajoraspectsoftheCompany'soperationandmanagement,andtheinternalcontroldesignissoundandreasonable,withnomaterialomissions.

2.MaterialInternalControlWeaknessesIdentifiedfortheReportingPeriod

□Yes√No

XIIIManagementofSubsidiariesbytheCompanyduringtheReportingPeriod

SubsidiaryIntegrationplanProgressonintegrationProblemsfoundinintegrationSolutionstakenSolutionprogressSubsequentsolution
N/AN/AN/AN/AN/AN/AN/A

XIVSelf-EvaluationReportorIndependentAuditor’sReportonInternalControl

1.InternalControlSelf-EvaluationReport

Disclosuredateoftheinternalcontrolself-evaluationreport13April2022
Indextothedisclosedinternalcontrolself-evaluationreport2022-019
Evaluatedentities’combinedassetsas%ofconsolidatedtotalassets100.00%
Evaluatedentities’combined100.00%
operatingrevenueas%ofconsolidatedoperatingrevenue
Identificationstandardsforinternalcontrolweaknesses
TypeWeaknessesininternalcontroloverfinancialreportingWeaknessesininternalcontrolnotrelatedtofinancialreporting
NaturestandardTheCompanyclassifiedthedefectsasseriousdefect,importantdefectandgeneraldefectaccordingtotheinfluencedegreefromtheinternalcontrol:(1)Seriousdefect:referstooneormultiplegroupswithcontroldefectwhichmayleadtheenterpriseseriouslydeviatesthecontroltarget;(2)Importantdefect:referstooneormultiplegroupswithcontroldefectwiththeseverityandtheeconomicresultslowerthanthegreatdefectbutmaystillleadtheenterpriseseriouslydeviatesthecontroltarget;(3)Generaldefect:referstootherdefectexceptforthegreatdefectandsignificantdefect.Naturestandards:defectswiththefollowingrandomcharacteristicsshouldberecognizedasseriousdefect:1)thedefectinvolveswiththemalpracticeoftheDirectors,SupervisorsandSeniorExecutives;2)revisedthedisclosedfinancialreport;3)CPAsdiscoveredthegreatmisstatementamongthecurrentfinancialstatementwhilewhichcouldnotbefoundduringtheoperatingprocessoftheinternalcontrol;4)thesupervisionfromtheAuditCommitteeandtheinternalauditinstitutionoftheenterprisewasinvalid.Defectswiththefollowingrandomcharacteristicsshouldberecognizedasseriousdefect:1)Seriouslyviolatedthenationallawsandadministrativeregulationsandthenormativedocuments;2)“threesignificantonegreat”eventhadnotbeenthroughthecollectivedecision-makingprocess;3)thesignificanteventsinvolvedwiththeproductionandoperationoftheCompanylackedofsystematiccontrolortheinstitutionalsystemwasinvalid;4)theinternalcontroloftheinformationdisclosurewasinvalid,whichledtheCompanybeopencondemnedbythesupervisiondepartment;5)theseriousdefectfromtheassessmentresultsoftheinternalcontrolhadnotbeenrevised.
QuantitativestandardQuantitativestandards:Thequantitativestandardsofrecognizingthesignificantdegreeofthemisstatement(includingthefalsenegatives)oftheconsolidatedfinancialreportoftheCompanybasedonthedatafromthe2020consolidatedstatementswasas:Seriousdefect:misstatement≥5%oftheannualprofitsRefertothequantitativecriteriaoftheinternalcontroldefectofthefinancialreport,torecognizethequantitativecriteriaofthesignificantdegreeoftheinternalcontroldefectofthenon-financialreportoftheCompanyas:Seriousdefect:possiblycauseddirectlylosses≥0.1%ofthenet
Importantdefect:2.5%oftheannualprofits≤misstatement＜5%oftheannualprofitsGeneraldefect＜2.5%oftheannualprofitsassetsImportantdefect:0.05%ofthenetassets≤possiblycauseddirectlylosses＜0.1%ofthenetassetsGeneraldefect:possiblycauseddirectlylosses＜0.05%ofthenetassets
Numberofmaterialweaknessesininternalcontroloverfinancialreporting0
Numberofmaterialweaknessesininternalcontrolnotrelatedtofinancialreporting0
Numberofseriousweaknessesininternalcontroloverfinancialreporting0
Numberofseriousweaknessesininternalcontrolnotrelatedtofinancialreporting0

2.IndependentAuditor’sReportonInternalControl

√Applicable□Notapplicable

Opinionparagraphintheindependentauditor’sreportoninternalcontrol
WebelievedthatChangchaiCompany,LimitedmaintainedeffectiveinternalcontrolofthefinancialreportinsignificantaspectsaccordingtotheBasicNormsofInternalControlandrelevantregulationson31December2021.
Independentauditor’sreportoninternalcontroldisclosedornotDisclosed
Disclosuredate13April2022
IndextosuchreportdisclosedSGW[2022]ENo.1139
Typeoftheauditor’sopinionUnmodifiedunqualifiedopinion
MaterialweaknessesininternalcontrolnotrelatedtofinancialreportingNone

Indicatebytickmarkwhetheranymodifiedopinionisexpressedintheindependentauditor’sreportontheCompany’sinternalcontrol.

□Yes√NoIndicatebytickmarkwhethertheindependentauditor’sreportontheCompany’sinternalcontrolisconsistentwiththeinternalcontrolself-evaluationreportissuedbytheCompany’sBoard.

√Yes□No

XVRemediationofProblemsIdentifiedbySelf-inspectionintheSpecialActionontheGovernanceofListedCompaniesAccordingtothedeploymentofChinaSecuritiesRegulatoryCommission,theCompanyorganizedaself-inspectionofthespecialactionofgovernanceoflistedcompanies,inwhichitwasidentifiedthat:RegardingtheBoardofDirectors,theSupervisoryCommittee,andthegeneralmeetingoftheCompany,thetermofofficeoftheEighthBoardofDirectorsexpiredon17October2019withoutre-election,andthere-electionwascompletedon16April2020.

PartVEnvironmentalandSocialResponsibilityIMajorEnvironmentalIssues

IndicatebytickmarkwhethertheCompanyoranyofitssubsidiarieswasidentifiedasakeypolluterbytheenvironmentauthorities.

□Yes√NoAdministrativepunishmentsreceivedintheReportingPeriodduetoenvironmentalissues:

CompanyorsubsidiaryReasonforpunishmentViolationPunishmentImpactontheCompanyRectificationmeasuresoftheCompany
N/AN/AN/AN/AN/AN/A

ActionstakenduringtheReportingPeriodtoreducecarbonemissionsandtheimpact:

√Applicable□NotapplicableSeethe2021SocialResponsibilityReportofChangchaiCompany,Limiteddisclosedonhttp://www.cninfo.com.cndated13April2022.Reasonsfornotdisclosingotherenvironment-relatedinformation:

N/A

IISocialResponsibilitySeethe2021SocialResponsibilityReportofChangchaiCompany,Limiteddisclosedonhttp://www.cninfo.com.cndated13April2022.IIIEffortsinPovertyAlleviationandRuralRevitalizationTheFifthPlenumofthe17thCPCCentralCommitteelisted“consolidatingpovertyalleviationresultandoverallimplementationofruralrevitalizationstrategy”themajortargetsoftheeconomicandsocialdevelopmentinthe“fourteenthfive-yearplan”.TheCompanywillactivelyparticipateinpovertyalleviationworkaccordingtothecalloftheCommunistPartyofChinaandthegovernmentalplanningandmakeitsowncontributionforrealizingcommonprosperityinChina.

PartVISignificantEvents

IFulfillmentofCommitments

1.CommitmentsoftheCompany’sDeFactoController,Shareholders,RelatedPartiesandAcquirers,aswellastheCompanyItselfandOtherEntitiesFulfilledintheReportingPeriodorOngoingatthePeriod-End

√Applicable□Notapplicable

CommitmentPromisorTypeofcommitmentDetailsofcommitmentDateofcommitmentmakingTermofcommitmentFulfillment
CommitmentsmadeinrefinancingChangzhouInvestmentGroupCo.,Ltd.Aboutshareholdingreduction1.ThecompanyanditscontrolledrelatedpartieshavenotreducedtheirholdingsofsharesofChangchaiCompanyfromthesixmonthspriortotheannouncementofthedecisionoftheBoardofDirectorsofChangchaiCompany,Limited("ChangchaiCompany")concerningtheproposaltoconsiderthenon-publicofferingofsharestothedateofissuanceofthisLetterofCommitment.2.ThecompanyanditscontrolledrelatedpartieshavenoplantoreducetheirholdingsofsharesofChangchaiCompanyfromthedateofissuanceofthisLetterofCommitmenttosixmonthsafterthecompletionofthisissuance.29September202010October2019-30June2022Ongoing
ChangzhouInvestmentGroupCo.,Ltd.Other1.Thecompany'sfundsforsubscribingforthesharesprivatelyofferedbyChangchaiCompany,Limited(ChangchaiCompany)arethecompany'sownfundsorfundsraised29September21September2020-21Expired
bythecompanyinlegalforms.Thesourcesofthefundsarelegalandthecompanyhasfullandeffectivedisposalrights.Thereisnopublicoffering,proxyholding,structuredarrangementordirectorindirectuseoffundsofChangchaiCompanyanditsaffiliatesforthissubscription.ThereisnoviolationoftherelevantprovisionsoftheDetailedImplementingRulesfortheNon-publicOfferingofStocksofListedCompaniesortheMeasuresfortheAdministrationoftheOfferingandUnderwritingofSecurities.2.ThecompanyisresponsiblefortheauthenticityoftheforegoingcommitmentsandguaranteestobearthelossescausedtoChangchaiCompanyduetothebreachoftheforegoingcommitments.2020September2021
ChangzhouInvestmentGroupCo.,Ltd.AboutsharetradingrestrictionItwillnottransferthesharesithasobtainedintheprivateplacementofChangchaiwithin36monthsstartingfromthedatewhentheprivateplacementofA-sharesisallowedforpublictrading.5July20215July2021-5July2024Ongoing
ChangzhouInvestmentGroupCo.,Ltd.Other1.ItundertakesnottointerfereintheCompany'soperationandmanagementactivitiesbeyonditsauthorityandnottoencroachontheCompany'sinterests;2.Itundertakesnottotransferbenefitstootherentitiesorindividualsfreeofchargeoronunfairterms,nortoimpairtheinterestsoftheCompanybyanyothermeans;3.AftertheissuanceofthisLetterofCommitmentandbeforethecompletionoftheCompany's11April202011April2020-31December9999Ongoing
non-publicofferingofshares,iftheChinaSecuritiesRegulatoryCommission(CSRC)makesothernewregulatoryprovisionsonthereturnfillingmeasuresandcommitments,andtheaforesaidcommitmentscannotmeetsuchprovisionsoftheCSRC,itundertakestoissuesupplementarycommitmentsinaccordancewiththelatestprovisionsoftheCSRC;4.ItundertakestoeffectivelyimplementtheCompany'smeasurestofillthereturnandanycommitmentsmadethereon.IftheCompanybreachessuchcommitmentsandcauseslossestotheCompanyortheinvestors,theCompanyiswillingtocompensatetheCompanyortheinvestorsaccordingtolaw.
UBSAG,CaitongFundManagementCo.,Ltd.,ChangzhouTrafficConstructionInvestmentDevelopmentGeneralCompany,ChenBeiwen,GuotaiAssetManagementCo.,Ltd.,JiangxiJintouIndustrialDevelopmentCo.,Ltd.,LiXueqin,NanhuaFundCo.,Ltd.,Enjoy(Ningbo)AssetManagementL.P.,NuodeAssetManagementCo.,Ltd.,SunMeichun,MinmetalsSecuritiesCo.,Ltd.,YaoJianquan,ChinaNationalGoldGroupAssetManagementCo.,Ltd.,andZhouAboutsharetradingrestrictionI/WeundertakethatI/wewillnottransferthesharesI/wehaveobtainedintheprivateplacementofChangchaiwithin6monthsstartingfromthedatewhentheprivateplacementofA-sharesisallowedforpublictrading.5July20215July2021-5January2022Completed
Zhiheng
OthercommitmentsmadetominorityshareholdersChangchaiCompany,LimitedAboutdividendsRewardsPlanforShareholdersinNextThreeYears(2020-2022)Underthepremiseofpositivedistributiveprofit(remainingafter-taxprofitsaftermakingupforthelossandextractingforthecommonreserves)inthisyearorhalfyearandabundantmoneyflowandnoinfluenceonthefollowing-upgoingconcernaftercashbonus,theprofitsallocatedbycasheveryyearshouldn’tbelowerthan10%oftheallocableprofitsfromparentcompany.Meanwhile,theaccumulatedallocableprofitsbycashinthearbitrarycontinuousthreeaccountingyearsshouldnotbelowerthan30%oftheannualaverageallocableprofitsinthosethreeyears.8May2020Year2020-2022Ongoing
FulfilledontimeornotYes
Specificreasonsforfailingtofulfillcommitmentsontimeandplansfornextstep(ifany)N/A

2.WheretherehadbeenanearningsforecastforanassetorprojectandtheReportingPeriodwasstillwithintheforecastperiod,explainwhytheforecasthasbeenreachedfortheReportingPeriod.

□Applicable√Notapplicable

IIOccupationoftheCompany’sCapitalbytheControllingShareholderoranyofItsRelatedPartiesforNon-OperatingPurposes

□Applicable√NotapplicableDuringthereportingperiodofthecompany,therewasnononoperatingoccupationoffundsbythecontrollingshareholdersandotherrelatedpartiesofthelistedcompany.IIIIrregularitiesintheProvisionofGuarantees

□Applicable√Notapplicable

NosuchcasesintheReportingPeriod.

IVExplanationsGivenbytheBoardofDirectorsRegardingtheIndependentAuditor's“ModifiedOpinion”ontheFinancialStatementsoftheLatestPeriod

□Applicable√Notapplicable

VExplanationsGivenbytheBoardofDirectors,theSupervisoryBoardandtheIndependentDirectors(ifany)RegardingtheIndependentAuditor's“ModifiedOpinion”ontheFinancialStatementsoftheReportingPeriod

□Applicable√NotapplicableVIYoYChangestoAccountingPolicies,EstimatesandCorrectionofMaterialAccountingErrors

√Applicable□Notapplicable

ChangestotheaccountingpoliciesandwhyApprovalprocess
TheMinistryofFinanceissuedtheAccountingStandardsforBusinessEnterprisesNo.21-Leases(Revised)in2018,requiringthatenterpriseslistedbothdomesticallyandabroadandoverseaslistedenterprisespreparingfinancialstatementsinaccordancewiththeInternationalFinancialReportingStandardsortheAccountingStandardsforBusinessEnterprisesshallimplementitsince1January2019andthatotherscarryitoutsince1January2021.On16August2021,the10thMeetingofthe9thBoardofDirectorsandthe10thMeetingofthe9thSupervisoryCommitteewereheldbytheCompanyonwhichtheProposalonChangesofAccountingPolicieswasapprovedandtheCompanywasallowedtoimplementthenewstandardsgoverningleasessince1January2021.

VIIYoYChangestotheScopeoftheConsolidatedFinancialStatements

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.VIIIEngagementandDisengagementofIndependentAuditorCurrentindependentauditor:

NameofthedomesticindependentauditorGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)
TheCompany’spaymenttothedomesticindependentauditor(RMB’0,000)60
HowmanyconsecutiveyearsthedomesticindependentauditorhasprovidedauditservicefortheCompany20
NamesofthecertifiedpublicaccountantsfromthedomesticindependentauditorwritingsignaturesonWangWenkai,QinZhijun
theauditor’sreport
HowmanyconsecutiveyearsthecertifiedpublicaccountantshaveprovidedauditservicefortheCompanyOneyearforWangWenkai,oneyearforQinZhijun

IndicatebytickmarkwhethertheindependentauditorwaschangedfortheReportingPeriod.

□Yes√NoIndependentauditor,financialadvisororsponsorengagedfortheauditofinternalcontrols:

√Applicable□NotapplicableInthisyear,theCompanyretainedGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)astheauditinstitutionforitsinternalcontrolattheauditfeesofRMB120,000

IXPossibilityofDelistingafterDisclosureofthisReport

□Applicable√NotapplicableXInsolvencyandReorganization

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIMajorLegalMatters

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIIPunishmentsandRectifications

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIIICreditQualityoftheCompanyaswellasItsControllingShareholderandActualController

√Applicable□NotapplicableThedefactocontrolleroftheCompanyisSASACofChangzhouPeople’sGovernmentandthecontrollingshareholderofitisChangzhouInvestmentGroupCo.,Ltd.Thereisnosuchcasethatthecontrollingshareholderfailstoperformanylegallyeffectivejudgmentofcourtsortopayoffmatureddebtswithalargeamount.XIVMajorRelated-PartyTransactions

1.ContinuingRelated-PartyTransactions

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.Related-PartyTransactionsRegardingPurchaseorDisposalofAssetsorEquityInvestments

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.Related-PartyTransactionsRegardingJointInvestmentsinThirdParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

4.AmountsDuetoandfromRelatedParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

5.TransactionswithRelatedFinanceCompanies

□Applicable√NotapplicableTheCompanydidnotmakedepositsin,receiveloansorcreditfromandwasnotinvolvedinanyotherfinancebusinesswithanyrelatedfinancecompanyoranyotherrelatedparties.

6.TransactionswithRelatedPartiesbyFinanceCompaniesControlledbytheCompany

□Applicable√NotapplicableThefinancecompanycontrolledbytheCompanydidnotmakedeposits,receiveloansorcreditfromandwasnotinvolvedinanyotherfinancebusinesswithanyrelatedparties.

7.OtherMajorRelated-PartyTransactions

√Applicable□NotapplicableTheProposalonUsingIdleFundstoPurchaseWealthManagementProductswasdeliberatedandapprovedattheFourthInterimMeetingoftheBoardofDirectorsin2021andtheSecondInterimMeetingoftheBoardofSupervisorsin2021heldbytheCompanyon13July2021,allowingtheCompanyanditswholly-ownedsubsidiariestousenomorethanRMB350millionofidleraisedfundstopurchasewealthmanagementproductsforcashmanagementonthepremisethattheinvestmentprojectswithraisedfundsarecarriedoutnormallyandtheuseofraisedfundsisnotaffected.On27July2021,theCompanyenteredintoasubscriptionagreementwithDonghaiSecuritiesCo.,Ltd.fortheproduct"DonghaiSecuritiesLongGainReturnCertificateJuneTypeCustomizedIssueNo.13".ThesubscriptionamountisRMB50million,andthesourceoffundsisidleraisedfunds.Thereturncertificatematuredon25January2022,withatotalofRMB50,949,300inprincipalandreturnreceived.Indextothepublicannouncementsaboutthesaidrelated-partytransactionsdisclosed

TitleofpublicannouncementDisclosuredateDisclosurewebsite
AnnouncementonProgressofUsingIdleFundstoPurchase28July2021www.cninfo.com.cn

XVMajorContractsandExecutionthereof

1.Entrustment,ContractingandLeases

(1)Entrustment

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(2)Contracting

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(3)Leases

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.MajorGuarantees

√Applicable□Notapplicable

Unit:RMB'0,000

DonghaiSecuritiesReturnCertificateandRelated-partyTransactionsGuaranteesprovidedbytheCompanyforexternalparties(exclusiveofthoseforsubsidiaries)

GuaranteesprovidedbytheCompanyforexternalparties(exclusiveofthoseforsubsidiaries)
Guarantee-receivingentityDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
GuaranteesprovidedbytheCompanyastheparentforitssubsidiaries
Guarantee-receivingentityDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
ChangzhouChangchai15April20212,0007May20212,000Jointliability1yearNoNo
HorizonAgriculturalEquipmentCo.,Ltd.
TotalapprovedlineforsuchguaranteesintheReportingPeriod(B1)2,000TotalactualamountofsuchguaranteesintheReportingPeriod(B2)2,000
TotalapprovedlineforsuchguaranteesattheendoftheReportingPeriod(B3)2,000TotalactualbalanceofsuchguaranteesattheendoftheReportingPeriod(B4)500
Guaranteesbetweensubsidiaries
Guarantee-receivingentityDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
Totalguaranteeamount(totalofthethreekindsofguaranteesabove)
TotalguaranteelineapprovedintheReportingPeriod(A1+B1+C1)2,000TotalactualguaranteeamountintheReportingPeriod(A2+B2+C2)2,000
TotalapprovedguaranteelineattheendoftheReportingPeriod(A3+B3+C3)2,000TotalactualguaranteebalanceattheendoftheReportingPeriod(A4+B4+C4)500
Totalactualguaranteeamount(A4+B4+C4)as%oftheCompany’snetassets0.16%
Ofwhich:
Balanceofguaranteesprovidedforshareholders,thedefactocontrollerandtheirrelatedparties(D)0
Balanceofdebtguaranteesprovideddirectlyorindirectlyforentitieswithanover70%debt/assetratio(E)500
Amountbywhichthetotalguaranteeamountexceeds50%oftheCompany’snetassets(F)0
Totalofthethreeamountsabove(D+E+F)500
Possibilityofhavingtoexecutejointliabilityonoutstandingguarantees(ifany)N/A
Irregularitiesintheprovisionofguaranteestoexternalparties(ifany)N/A

3.CashEntrustedforWealthManagement

(1)CashEntrustedforWealthManagement

√Applicable□NotapplicableOverviewsofcashentrustedforwealthmanagementduringtheReportingPeriod

Unit:RMB’0,000

SpecifictypeCapitalresourcesAmountincurredUnduebalanceUnrecoveredoverdueamountUnrecoveredoverdueamountwithprovisionforimpairment
BrokerfinancialproductsSelf-funded980000
BankfinancialproductsSelf-funded2,3002,00000
BrokerfinancialproductsRaised-funded5,0005,00000
BankfinancialproductsRaised-funded41,00021,00000
Total49,28028,00000

Detailsofhigh-riskentrustedfinancialmanagementwithsignificantsingleamountorlowsecurityandpoorliquidity

□Applicable√NotapplicableTheprincipalofentrustedfinancialmanagementisexpectedtobeunabletoberecoveredorthereareothersituationsthatmayleadtoimpairment

□Applicable√Notapplicable

(2)EntrustedLoans

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

4.OtherMajorContracts

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XVIOtherSignificantEvents

√Applicable□Notapplicable

1.Accomplishmentofnon-publicofferingofsharesOn17December2020,theCompanyreceivedtheReplyconcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCompany,Limited(ZJXK[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.TheCompany'soffered144,318,181RMBordinaryshares(Ashares)inanon-publicmanner.TheissuingpricewasRMB4.40pershare,totalamountraisedwasRMB634,999,936.40,andthenetamountactuallyraisedwasRMB620,665,733.97afterdeductingvariousissuanceexpenses.Thenewsharesissuedinanon-publicmannerwerelistedontheShenzhenStockExchangeon5July2021.ExceptforthesharessubscribedbytheInvestmentGroup,therestrictionhasbeenliftedon5January2022.Fordetails,pleaserefertotheReportonNon-publicOfferingbyChangchaiCompany,LimitedandListingBulletindisclosedbytheCompanyonwww.cninfo.com.cnon1July2021.

2.ParticipatinginthePublicListedTransferof41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.TheSixthInterimMeetingoftheBoardofDirectorsin2021heldbytheCompanyon28October2021deliberatedonandapprovedtheProposalonParticipatinginthePublicListedTransferof41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,authorizingtheManagementoftheCompanytoparticipateinthebiddingofthepubliclistedtransferbyJiangsuUniversityofScienceandTechnologyAssetsManagementCo.,Ltd.(hereinafterreferredtoas"ScienceUniversityAssets")ofits41.5%equityinterestinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.(hereinafterreferredtoas"ZhenjiangSiyang").On12January2022,ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.issuedtheConfirmationofTransactionontheTransferof41.5%EquityInterest(CorrespondingtoCapitalContributionofRMB830,000).TheCompanywonthe41.5%equityinterestinZhenjiangSiyangatapriceofRMB33,520,800.00.On23February2022,theCompanysignedtheContractonTransferofState-ownedPropertyRightswithScienceUniversityAssets.On9March2022,ZhenjiangSiyanghascompletedtherelevantregistrationalterationformalitieswiththecompetentindustrialandcommercialadministration.

XVIISignificantEventsofSubsidiaries

□Applicable√Notapplicable

PartVIIShareChangesandShareholderInformation

IShareChanges

1.ShareChanges

Unit:share

BeforeIncrease/decreaseintheReportingPeriod(+/-)After
NumberPercentage(%)NewissuesSharesasdividendconvertedfromprofitSharesasdividendconvertedfromcapitalreservesOtherSubtotalNumberPercentage(%)
1.Restrictedshares00.00%144,318,181144,318,181144,318,18120.45%
1.1Sharesheldbygovernment00.00%0000.00%
1.2Sharesheldbystate-ownedlegalpersons00.00%72,045,45372,045,45372,045,45310.21%
1.3Sharesheldbyotherdomesticinvestors00.00%68,863,63868,863,63868,863,6389.76%
Amongwhich:Sharesheldbydomesticlegalpersons00.00%48,818,17848,818,17848,818,1786.92%
Sharesheldbydomesticnaturalpersons00.00%20,045,46020,045,46020,045,4602.84%
1.4Sharesheldbyforeigninvestors00.00%3,409,0903,409,0903,409,0900.48%
Amongwhich:Sharesheldbyforeignlegalpersons00.00%3,409,0903,409,0903,409,0900.48%
Sharesheldbyforeignnatural00.00%0000.00%
persons
2.Unrestrictedshares561,374,326100.00%00561,374,32679.55%
2.1RMB-denominatedordinaryshares411,374,32673.28%00411,374,32658.29%
2.2Domesticallylistedforeignshares150,000,00026.72%00150,000,00021.26%
2.3Oversealistedforeignshares00.00%0000.00%
2.4Other00.00%0000.00%
3.Totalshares561,374,326100.00%144,318,181144,318,181705,692,507100.00%

Reasonsforthesharechanges:

√Applicable□NotapplicableOn17December2020,theCompanyreceivedtheReplyconcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCompany,Limited(ZJXK[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.TheCompany'soffered144,318,181RMBordinaryshares(Ashares)inanon-publicmanner.Thenewsharesissuedinanon-publicmannerwerelistedontheShenzhenStockExchangeon5July2021.Fordetails,pleaserefertotheReportonNon-publicOfferingbyChangchaiCompany,LimitedandListingBulletindisclosedbytheCompanyonwww.cninfo.com.cnon1July2021.Approvalofsharechanges:

√Applicable□NotapplicableOn17December2020,theCompanyreceivedtheReplyconcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCompany,Limited(ZJXK[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.TheCompany'soffered144,318,181RMBordinaryshares(Ashares)inanon-publicmanner.Thenewsharesissuedinanon-publicmannerwerelistedontheShenzhenStockExchangeon5July2021.Transferofshareownership:

□Applicable√NotapplicableEffectsofsharechangesonthebasicanddilutedearningspershare,equitypershareattributabletotheCompany’sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively:

√Applicable□NotapplicableDuringtheReportingPeriod,theCompanycompletedtheprivateplacementofstocks.AndthesharecapitaloftheCompanychangedinto705,692,507sharesfrom561,374,326shares.Basedontheweightedaveragesharecapital,on31December2021,thebasicearningspersharewillbeRMB0.1657pershare,thedilutedearningspersharewillbeRMB0.1657pershare,andthenetassetspersharewillbeRMB4.3610pershare.OtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatortobedisclosed:

□Applicable√Notapplicable

2.ChangesinRestrictedShares

√Applicable□Notapplicable

Unit:share

NameoftheshareholdersRestrictedsharesamountattheperiod-beginRestrictedsharesincreasedoftheperiodRestrictedsharesrelievedoftheperiodRestrictedsharesamountattheperiod-endRestrictedreasonsRestrictedsharesrelieveddate
ChangzhouInvestmentGroupCo.,Ltd.056,818,181056,818,181Additionalissuanceof56,818,181sharesthroughtheprivateplacementofshares2024-7-5
UBSAG03,409,09003,409,090Additionalissuanceof3,409,090sharesthroughtheprivateplacementofshares2022-1-5
CaitongFundManagementCo.,Ltd.07,909,09007,909,090Additionalissuanceof7,909,090sharesthroughtheprivateplacementofshares2022-1-5
JiangxiJintouIndustrialDevelopmentCo.,Ltd.04,545,45404,545,454Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares2022-1-5
GuotaiAssetManagementCo.,Ltd.08,181,81808,181,818Additionalissuanceof8,181,818sharesthroughtheprivateplacementofshares2022-1-5
Enjoy(Ningbo)AssetManagementL.P.06,818,18106,818,181Additionalissuanceof6,818,181sharesthroughtheprivateplacementofshares2022-1-5
ZhouZhiheng03,409,09003,409,090Additionalissuanceof3,409,090sharesthroughtheprivateplacementofshares2022-1-5
ChinaNationalGoldGroupAssetManagementCo.,Ltd.010,681,818010,681,818Additionalissuanceof10,681,818sharesthroughtheprivateplacementofshares2022-1-5
SunMeichun04,545,45404,545,454Additionalissuanceof4,545,454sharesthroughtheprivate2022-1-5
placementofshares
NuodeAssetManagementCo.,Ltd.011,363,636011,363,636Additionalissuanceof11,363,636sharesthroughtheprivateplacementofshares2022-1-5
MinmetalsSecuritiesCo.,Ltd.04,545,45404,545,454Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares2022-1-5
ChenBeiwen07,272,72707,272,727Additionalissuanceof7,272,727sharesthroughtheprivateplacementofshares2022-1-5
NanhuaFundCo.,Ltd.05,454,54505,454,545Additionalissuanceof5,454,545sharesthroughtheprivateplacementofshares2022-1-5
YaoJianquan04,545,45404,545,454Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares2022-1-5
ChangzhouTransportationConstructionInvestmentDevelopmentCo.,Ltd.04,545,45404,545,454Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares2022-1-5
LiXueqin0272,7350272,735Additionalissuanceof272,735sharesthroughtheprivateplacementofshares2022-1-5
Total0144,318,1810144,318,181----

II.IssuanceandListingofSecurities

1.Securities(ExclusiveofPreferredShares)IssuedintheReportingPeriod

√Applicable□Notapplicable

NameofStockandderivativesecuritiesthereofIssuedateissueprice(interest)IssueamountListingdateApprovedamountforlistingTerminationdatefortradingDisclosureindexDisclosuredate
Stock
Changchai3June2021RMB4.40pershare144,318,1815July2021144,318,181---Fordetails,pleaserefertotheReportonNon-publicOfferingbyChangchaiCompany,LimitedandListingBulletindisclosedbytheCompanyonwww.cninfo.com.cn1July2021
Convertiblecorporatebonds,convertiblecorporatebondsseparatelytradedandcorporatebonds
Otherderivativesecurities

Notes:

On17December2020,theCompanyreceivedtheReplyconcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCompany,Limited(ZJXK[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.TheCompany'soffered144,318,181RMBordinaryshares(Ashares)inanon-publicmanner.TheissuingpricewasRMB4.40pershare,totalamountraisedwasRMB634,999,936.40,andthenetamountactuallyraisedwasRMB620,665,733.97afterdeductingvariousissuanceexpenses.Thenewsharesissuedinanon-publicmannerwerelistedontheShenzhenStockExchangeon5July2021.

2.ChangestoTotalShares,ShareholderStructureandAssetandLiabilityStructures

√Applicable□NotapplicableDuringtheReportingPeriod,theCompanycompletedanon-publicofferingof144,318,181RMBordinaryshares(Ashares),changingthetotalnumberofsharesoftheCompanyfrom561,374,326sharesto705,692,507shares,including561,374,326sharesnotsubjecttotradingmoratoriumand144,318,181sharessubjecttotradingmoratorium.AttheendoftheReportingPeriod,theCompany'stotalassetsincreasedbyRMB907,428,496.81,or22.96%,andequityattributabletoownersoftheCompanyastheparentincreasedbyRMB804,200,671.31,or35.38%,comparedwiththebeginningoftheyear.ThescaleoftheCompany'stotalassetsandequityattributabletoownersoftheCompanyastheparenthasincreased,whichisconducivetofurtherenhancingthecapitalstrength.Atthesametime,theasset-liabilityratiodecreased,whichisconducivetoenhancingtheCompany'sstabilityofcapitalstructureandriskresistance.

3.ExistingStaff-HeldShares

□Applicable√NotapplicableIIIShareholdersandActualController

Unit:share

Numberofordinaryshareholders49,947Numberofordinaryshareholdersatthemonth-endpriortothedisclosureofthisReport53,650Numberofpreferredshareholderswithresumedvotingrights0Numberofpreferredshareholderswithresumedvotingrightsatthemonth-endpriortothedisclosureofthisReport0
5%orgreatershareholdersortop10shareholders
NameofshareholderNatureofshareholderShareholdingpercentageTotalsharesheldattheperiod-endIncrease/decreaseintheReportingPeriodRestrictedsharesheldUnrestrictedsharesheldSharesinpledgeorfrozen
StatusShares
ChangzhouInvestmentGroupCo.,LtdState-ownedcorporation32.26%227,663,41756,818,18156,818,181170,845,236
NuodeFund-HuazhangTiandiMediaInvestmentCo.,Ltd.-NuodeFundPujiangNo.64SingleAssetManagementPlanOther1.61%11,363,63611,363,63611,363,6360
ChinaNationalGoldGroupAssetManagementCo.,Ltd.State-ownedcorporation1.51%10,681,81810,681,81810,681,8180
ChenBeiwenDomesticindividual1.03%7,272,7277,272,7277,272,7270
Enjoy(Ningbo)AssetManagementL.P.-EnjoyYingshanhongNo.9PrivateSecuritiesInvestmentFundOther0.97%6,818,1816,818,1816,818,1810
UBSAGForeigncorporation0.66%4,631,5553,409,0903,409,0901,222,465
ChangzhouTransportationConstructionInvestmentDevelopmentCo.,State-ownedcorporation0.65%4,595,4544,545,4544,545,45450,000
Ltd.
YaoJianquanDomesticindividual0.64%4,545,4544,545,4544,545,4540
SunMeichunDomesticindividual0.64%4,545,4544,545,4544,545,4540
JiangxiJintouIndustrialDevelopmentCo.,Ltd.Domesticnon-state-ownedcorporation0.64%4,545,4544,545,4544,545,4540
Strategicinvestororgenerallegalpersonbecomingatop-10ordinaryshareholderduetorightsissue(ifany)N/A
Relatedoracting-in-concertpartiesamongtheshareholdersaboveItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresforInformationRegardingShareholdingAlteration.
Aboveshareholdersinvolvedinentrusting/beingentrustedwithvotingrightsandgivingupvotingrightsN/A
Specialaccountforsharerepurchases(ifany)amongthetop10shareholdersN/A
Top10unrestrictedshareholders
NameofshareholderUnrestrictedsharesheldattheperiod-endSharesbytype
TypeShares
ChangzhouInvestmentGroupCo.,Ltd170,845,236RMB-denominatedordinaryshare170,845,236
ChenJian3,999,400RMB-denominatedordinaryshare3,999,400
KGIASIALIMITED3,101,695Domesticallylistedforeignshare3,101,695
LiSuinan1,548,100Domesticallylistedforeignshare1,548,100
HuangGuoliang1,528,891Domesticallylistedforeignshare1,528,891
ChenXiaojing1,423,700RMB-denominatedordinaryshare1,423,700
LuZhang1,409,512Domesticallylistedforeignshare1,409,512
TaoXiaofang1,240,000RMB-denominatedordinaryshare1,240,000
XueHong1,240,000Domesticallylisted1,240,000
foreignshare
UBSAG1,222,465RMB-denominatedordinaryshare1,222,465
Relatedoracting-in-concertpartiesamongtop10unrestrictedpublicshareholders,aswellasbetweentop10unrestrictedpublicshareholdersandtop10shareholdersItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresforInformationRegardingShareholdingAlteration.
Top10ordinaryshareholdersinvolvedinsecuritiesmargintrading(ifany)ShareholdersChenJianandChenXiaojingrespectivelyheld2,473,000sharesand1,194,000sharesoftheCompanythroughtheircreditaccounts.

Indicatebytickmarkwhetheranyofthetop10ordinaryshareholdersorthetop10unrestrictedordinaryshareholdersoftheCompanyconductedanypromissoryrepoduringtheReportingPeriod.

□Yes√NoNosuchcasesintheReportingPeriod.

2.ControllingShareholderNatureofthecontrollingshareholder:Controlledbyalocalstate-ownedlegalpersonTypeofthecontrollingshareholder:Legalperson

NameofcontrollingshareholderLegalrepresentative/personinchargeDateofestablishmentUnifiedsocialcreditcodePrincipalactivity
ChangzhouInvestmentGroupCo.,LtdChenLimin20June200291320400467283980XPropertyinvestmentandmanagement
Controllingshareholder’sholdingsinotherlistedcompaniesathomeorabroadintheReportingPeriodNone

ChangeofthecontrollingshareholderintheReportingPeriod:

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.ActualControllerandItsActing-in-ConcertPartiesNatureoftheactualcontroller:Localinstitutionforstate-ownedassetsmanagementTypeoftheactualcontroller:Legalperson

NameofactualcontrollerLegalrepresentative/personinDateofestablishmentUnifiedsocialcreditcodePrincipalactivity
charge
State-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernmentWangWenzhuo01411025-1Notapplicable
OtherlistedcompaniesathomeorabroadcontrolledbytheactualcontrollerintheReportingPeriodNone

ChangeoftheactualcontrollerduringtheReportingPeriod:

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.OwnershipandcontrolrelationsbetweentheactualcontrollerandtheCompany:

IndicatebytickmarkwhethertheactualcontrollercontrolstheCompanyviatrustorotherwaysofassetmanagement.

□Applicable√Notapplicable

4.NumberofAccumulativePledgedSharesheldbytheCompany’sControllingShareholderortheLargestShareholderaswellasItsActing-in-ConcertPartiesAccountsfor80%ofallsharesoftheCompanyheldbyThem

□Applicable√Notapplicable

5.Other10%orGreaterCorporateShareholders

□Applicable√Notapplicable

6.LimitationsonShareholdingDecreasebytheCompany’sControllingShareholder,ActualController,ReorganizerandOtherCommitmentMakers

√Applicable□NotapplicableChangzhouInvestmentGroupCo.,Ltd.,thecontrollingshareholderoftheCompany,participatedinthenon-publicofferingofsharesoftheCompanyandwasallotted56,818,181shareswithasubscriptionamountof

RMB249,999,996.40.Theshareswerelistedon5July2021,witha36-monthlock-upperiodandareleasedateof5July2024.IVSpecificImplementationofShareRepurchaseduringtheReportingPeriodProgressonanysharerepurchase

□Applicable√NotapplicableProgressonreducingtherepurchasedsharesbymeansofcentralizedbidding

□Applicable√Notapplicable

PartVIIIPreferenceShares

□Applicable√NotapplicableNopreferencesharesintheReportingPeriod.

PartIXBonds

□Applicable√Notapplicable

PartXFinancialStatementsIIndependentAuditor’sReport

Typeoftheindependentauditor’sopinionUnmodifiedunqualifiedopinion
Dateofsigningthisreport11April2022
NameoftheindependentauditorGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)
No.oftheauditor’sreportSGW[2022]ANo.315
NameofthecertifiedpublicaccountantsWangWenkai,QinZhijun

TextoftheIndependentAuditor’sReport

TotheShareholdersofChangchaiCompany,Limited,

IOpinionWehaveauditedtheaccompanyingfinancialstatementsofChangchaiCompany,Limited.(togetherwithitsconsolidatedsubsidiariesincludedintheconsolidatedfinancialstatements,the“Company”),whichcomprisetheparent’sandconsolidatedbalancesheetsasat31December2021,theparent’sandconsolidatedincomestatements,theparent’sandconsolidatedcashflowstatements,theparent’sandconsolidatedstatementsofchangesinowners’equityfortheyearthenended,aswellasthenotestothefinancialstatements.Inouropinion,thefinancialstatementsattachedwerepreparedinlinewiththeregulationsofAccountingStandardsforBusinessEnterprisesinallsignificantaspectswhichgaveatrueandfairviewoftheconsolidatedandparentfinancialpositionofChangchaiCompany,Limited.Asat31December2021andtheconsolidatedandparentbusinessperformanceandcashflowfor2021.IIBasisforOpinionWeconductedourauditsinaccordancewiththeAuditStandardsforChineseRegisteredAccountants.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sResponsibilitiesforAuditofFinancialStatementssectionofourreport.WeareindependentoftheCompanyinaccordancewiththeChinaCodeofEthicsforCertifiedPublicAccountants,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththesaidCodeofEthics.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.IIIKeyAuditMattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Andkeyauditmatteridentifiedinourauditissummarizedasfollows:

(I)Recognitionofrevenue

1.DescriptionoftheitemFordetailsandanalysisoftheaccountingpoliciesforrevenuerecognition,pleaserefertotheaccountingpoliciesdescribedinnotes3,30,Revenueand5,37,OperatingRevenueandOperatingcoststothefinancialstatements.In2021,theoperatingrevenueofChangchaiStockisRMB2,452,430,500.SincetheoperatingrevenueisoneofkeyperformanceindicatorsoftheCompany,andthereistheinherentriskthatthemanagementmaymanipulatethetimingofrevenuerecognitionforthepurposeofachievingcertaingoalsorexpectations,soweidentifytherevenuerecognitionasakeyaudititem.

2.Responseforaudit

(1)Knowthekeyinternalcontrolrelatedtorevenuerecognition,evaluatewhetheritsdesignandexecutionarevalidornot,andtesttheoperationeffectivenessoftherelatedinternalcontrol.

(2)Interviewthemanagement,knowabouttherecognitionpoliciesregardingrevenueoftheCompany,getandcheckcontractsoragreementsoftheCompanysignedwithcustomers,identifycontracttermsrelatedtotherecognitionofsalesrevenueofproductsandevaluatewhethertherevenuerecognitionoftheCompanymeetstherequirementsofaccountingstandardsforbusinessenterprises.

(3)Applysamplingtestforsalesrevenue,checkthesupportingdocumentsrelatedtorevenuerecognition,checktheprovisionofgoodstransfercontroltothesalescontractandsupportingmanufacturersrecipientsandconfirmthereceivingofdocumentsandothersupportingdocuments(includingbutnotlimitedtosalescontracts,orders,salesinvoices,invoices,exportcustomsdeclaration).

(4)Checktheoperatingrevenuerecognizedbeforeandafterthebalancesheetdatetothesupportingdocuments,suchasshippingorder,declarationforexportation,andetcbysamplingmethodtoassesswhethertheoperatingrevenueisrecognizedwithinappropriateperiod.

(5)Implementtheconfirmationbydrawingsampletorecognizethebalanceofaccountsreceivableandtheamountofsalesrevenueaccordingtothefeaturesandnaturesofcustomertransaction.(II)Baddebtprovisionforaccountsreceivable

1.DescriptionoftheitemAsdescribedintheaccountingpoliciesdescribedin"3,10,Impairmentoffinancialinstruments"and"5,4,Accountsreceivable"inthenotestothefinancialstatements.OnDecember31,2021,thebookbalanceofaccountsreceivableofChangchaiStockwas554,530,200yuan,theallowanceforbaddebtswas179,321,100yuan,andthebookvaluewas375,209,100yuan,accountingfor7.72%ofthetotalassetsattheendoftheperiod.Becausetheaccountsreceivablebalanceissignificantandtheprovisionfordoubtfulaccountsreceivabletakesmanagement'sjudgmentinconsideration,weidentifieditasakeyaudititem.

2.Responseforaudit

(1)AccessChangchai’sinternalcontrolsystemsofsalesandaccountsreceivablemanagementtounderstandandevaluatethedesignofinternalcontrol,andcarryoutwalk-throughtesttoconfirmtheimplementationofinternalcontrolsystems.

(2)AnalyzeandconfirmthereasonablenessofChangchai’saccountingestimatesofbaddebtprovisionforaccountsreceivable,includingthebasisfordeterminingthecombinationofaccountsreceivable,theexpectedcreditlossrateandthejudgmentofimpairmenttestofaccountsreceivableevaluatedindividually.

(3)Combinedwiththepolicyofaccountsreceivablebaddebtprovision,reviewtodeterminewhetherthebasisofaccountsreceivablecombinationisaccurate,andwhetherthejudgmentofindividualbaddebtprovisionisreasonable;

(4)Accessandchecktheaccountreceivabledetails,agingschedule,statementofprovisionsforbaddebts,andconfirmthereasonablenessofbaddebtprovisionforaccountsreceivablebycombiningwiththerequestofconfirmationofbalanceandsubsequentcollectioninspection;

(5)Fortheaccountsreceivabledividedintoindividualprovisionforbaddebt,refertothecorrespondingcontractandotherinformation,understanditssalesandpaymentcollection,andjudgewhethertheprovisionforbaddebtissufficient;

(6)Sendrequestforconfirmationofbalance,andconfirmtheauthenticityandaccuracyoftheamountofaccountsreceivableonthebalancesheetdatebycombiningwithsubsequentinspectionandotherprocedures.IVOtherInformationTheCompany’smanagement(hereinafterreferredtoas“management”)isresponsiblefortheotherinformation.

TheotherinformationcomprisesalloftheinformationincludedintheCompany’s2020AnnualReportotherthanthefinancialstatementsandourauditor’sreportthereon.Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation;wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.VResponsibilitiesofManagementandThoseChargedwithGovernanceforFinancialStatementsThemanagementisresponsibleforthepreparationofthefinancialstatementsthatgiveafairviewinaccordancewithCAS,andfordesigning,implementingandmaintainingsuchinternalcontrolasthemanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,themanagementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,mattersrelatedtogoingconcern(ifapplicable)andusingthegoingconcernbasisofaccountingunlessthemanagementeitherintendstoliquidatetheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingtheCompany’sfinancialreportingprocess.VIAuditor’sResponsibilitiesforAuditofFinancialStatementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithCASwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.AspartofanauditinaccordancewithCAS,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.Wealso:

(1)Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

(2)Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances.

(3)Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythemanagement.

(4)Concludeontheappropriatenessofthemanagement’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredbyCAStodrawusers’attentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatements.Ifsuchdisclosuresareinadequate,weneedtomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.

(5)Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

(6)ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheCompanytoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceoftheCompanyaudit.Weremainsolelyresponsibleforourauditopinion.Wecommunicatewiththosechargedwithgovernanceregardingtheplannedscopeandtimingoftheauditandsignificantauditfindings,includinganynoteworthydeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andcommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.GongzhengTianyeCertifiedPublicAccountantsChineseCPA:WangWenkai

(SpecialGeneralPartnership)(EngagementPartner)

ChineseCPA:QinZhijunWuxi·China11April2022IIFinancialStatementsCurrencyunitforthefinancialstatementsandthenotesthereto:RMB

1.ConsolidatedBalanceSheetPreparedbyChangchaiCompany,Limited

31December2021

Unit:RMB

Item31December202131December2020
Currentassets:
Monetaryassets707,966,678.74760,728,222.85
Settlementreserve
Interbankloansgranted
Held-for-tradingfinancialassets404,053,261.5711,500,272.00
Derivativefinancialassets
Notesreceivable334,311,236.78600,140,938.05
Accountsreceivable375,209,126.48397,154,016.49
Accountsreceivablefinancing497,388,826.02
Prepayments8,197,418.399,357,840.75
Premiumsreceivable
Reinsurancereceivables
Receivablereinsurancecontractreserve
Otherreceivables19,515,350.526,212,062.80
Including:Interestreceivable
Dividendsreceivable
Financialassetspurchasedunderresaleagreements
Inventories651,083,758.18606,680,340.55
Contractassets
Assetsheldforsale
Currentportionofnon-currentassets
Othercurrentassets44,060,822.5727,299,362.72
Totalcurrentassets3,041,786,479.252,419,073,056.21
Non-currentassets:
Loansandadvancestocustomers
Investmentsindebtobligations37,898,226.39
Investmentsinotherdebtobligations
Long-termreceivables
Long-termequityinvestments
Investmentsinotherequityinstruments779,877,646.53685,137,950.87
Othernon-currentfinancialassets112,500,000.0098,732,938.63
Investmentproperty44,597,255.2146,239,326.03
Fixedassets402,915,521.65454,181,555.68
Constructioninprogress270,305,690.9166,502,432.41
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets155,154,745.91158,870,631.71
Developmentcosts
Goodwill
Long-termprepaidexpense110,345.3013,693.20
Deferredincometaxassets10,693,809.234,231,873.15
Othernon-currentassets4,543,240.8819,971,006.56
Totalnon-currentassets1,818,596,482.011,533,881,408.24
Totalassets4,860,382,961.263,952,954,464.45
Currentliabilities:
Short-termborrowings73,971,466.6522,000,000.00
Borrowingsfromthecentralbank
Interbankloansobtained
Held-for-tradingfinancialliabilities
Derivativefinancialliabilities
Notespayable550,774,400.00595,346,000.00
Accountspayable666,186,668.82612,757,392.46
Advancesfromcustomers660,965.62661,612.17
Contractliabilities26,864,081.9735,944,517.15
Financialassetssoldunderrepurchaseagreements
Customerdepositsandinterbankdeposits
Payablesforactingtradingofsecurities
Payablesforunderwritingofsecurities
Employeebenefitspayable45,385,667.4850,127,161.47
Taxespayable5,306,378.822,869,485.41
Otherpayables148,361,373.29197,545,076.08
Including:Interestpayable
Dividendspayable3,891,433.833,891,433.83
Handlingchargesandcommissionspayable
Reinsurancepayables
Liabilitiesdirectlyassociatedwithassetsheldforsale
Currentportionofnon-currentliabilities
Othercurrentliabilities88,938,192.795,233,947.12
Totalcurrentliabilities1,606,449,195.441,522,485,191.86
Non-currentliabilities:
Insurancecontractreserve
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termemployeebenefitspayable
Provisions
Deferredincome39,615,355.4056,949,737.60
Deferredincometaxliabilities117,344,161.1180,671,598.82
Othernon-currentliabilities
Totalnon-currentliabilities156,959,516.51137,621,336.42
Totalliabilities1,763,408,711.951,660,106,528.28
Owners’equity:
Sharecapital705,692,507.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves640,676,218.40164,328,665.43
Less:Treasurystock
Othercomprehensiveincome506,011,499.55425,482,758.24
Specificreserve18,812,950.0418,812,986.55
Surplusreserves334,144,488.46325,451,531.14
Generalreserve
Retainedearnings872,212,354.88777,899,079.66
TotalequityattributabletoownersoftheCompanyastheparent3,077,550,018.332,273,349,347.02
Non-controllinginterests19,424,230.9819,498,589.15
Totalowners’equity3,096,974,249.312,292,847,936.17
Totalliabilitiesandowners’equity4,860,382,961.263,952,954,464.45

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

2.BalanceSheetoftheCompanyastheParent

Unit:RMB

Item31December202131December2020
Currentassets:
Monetaryassets615,184,387.01682,322,659.41
Held-for-tradingfinancialassets262,004,030.14
Derivativefinancialassets
Notesreceivable312,118,296.88581,230,938.05
Accountsreceivable349,135,255.42317,828,161.25
Accountsreceivablefinancing497,388,826.02
Prepayments2,727,652.236,592,567.26
Otherreceivables26,497,081.3424,327,355.36
Including:Interestreceivable
Dividendsreceivable
Inventories516,588,187.24475,688,026.57
Contractassets
Assetsheldforsale
Currentportionofnon-currentassets
Othercurrentassets21,292,211.4617,521,203.46
Totalcurrentassets2,602,935,927.742,105,510,911.36
Non-currentassets:
Investmentsindebtobligations37,898,226.39
Investmentsinotherdebtobligations
Long-termreceivables
Long-termequityinvestments535,752,730.03375,752,730.03
Investmentsinotherequityinstruments779,877,646.53685,137,950.87
Othernon-currentfinancialassets112,500,000.0052,500,000.00
Investmentproperty44,597,255.2146,239,326.03
Fixedassets325,034,679.67369,194,314.03
Constructioninprogress15,557,418.7626,195,189.06
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets66,621,426.2668,088,982.37
Developmentcosts
Goodwill
Long-termprepaidexpense
Deferredincometaxassets9,613,375.324,179,544.86
Othernon-currentassets
Totalnon-currentassets1,927,452,758.171,627,288,037.25
Totalassets4,530,388,685.913,732,798,948.61
Currentliabilities:
Short-termborrowings58,971,466.655,000,000.00
Held-for-tradingfinancialliabilities
Derivativefinancialliabilities
Notespayable544,444,400.00589,534,000.00
Accountspayable546,689,207.59550,360,564.07
Advancesfromcustomers660,965.62661,612.17
Contractliabilities24,730,270.4432,344,514.86
Employeebenefitspayable37,861,577.5042,455,158.67
Taxespayable2,955,053.821,099,861.63
Otherpayables135,773,368.98184,513,545.20
Including:Interestpayable
Dividendspayable3,243,179.973,243,179.97
Liabilitiesdirectlyassociatedwithassetsheldforsale
Currentportionofnon-currentliabilities
Othercurrentliabilities63,535,570.112,426,575.40
Totalcurrentliabilities1,415,621,880.711,408,395,832.00
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termemployeebenefitspayable
Provisions
Deferredincome39,615,355.4056,949,737.60
Deferredincometaxliabilities95,034,251.5075,460,192.63
Othernon-currentliabilities
Totalnon-currentliabilities134,649,606.90132,409,930.23
Totalliabilities1,550,271,487.611,540,805,762.23
Owners’equity:
Sharecapital705,692,507.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves659,418,700.67183,071,147.70
Less:Treasurystock
Othercomprehensiveincome506,011,499.55425,482,758.24
Specificreserve18,812,950.0418,812,986.55
Surplusreserves334,144,488.46325,451,531.14
Retainedearnings756,037,052.58677,800,436.75
Totalowners’equity2,980,117,198.302,191,993,186.38
Totalliabilitiesandowners’equity4,530,388,685.913,732,798,948.61

3.ConsolidatedIncomeStatement

Unit:RMB

Item20212020
1.Revenue2,452,430,515.602,296,464,711.24
Including:Operatingrevenue2,452,430,515.602,296,464,711.24
Interestincome
Insurancepremiumincome
Handlingchargeandcommissionincome
2.Costsandexpenses2,399,524,185.522,267,289,166.18
Including:Costofsales2,084,671,762.081,950,573,991.27
Interestexpense
Handlingchargeandcommissionexpense
Surrenders
Netinsuranceclaimspaid
Netamountprovidedasinsurancecontractreserve
Expenditureonpolicydividends
Reinsurancepremiumexpense
Taxesandsurcharges15,125,948.9612,869,609.15
Sellingexpense117,242,290.32128,372,278.62
Administrativeexpense98,890,284.2287,446,195.74
R&Dexpense82,390,284.1472,258,781.08
Financecosts1,203,615.8015,768,310.32
Including:Interestexpense5,907,625.427,302,086.80
Interestincome7,921,535.625,467,634.76
Add:Otherincome6,633,332.387,808,732.52
Returnoninvestment(“-”forloss)9,327,296.956,545,826.85
Including:Shareofprofitorlossofjointventuresandassociates
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Exchangegain(“-”forloss)
Netgainonexposurehedges
(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)104,570,498.3620,981,109.00
Creditimpairmentloss(“-”forloss)-52,017,151.822,378,630.68
Assetimpairmentloss(“-”forloss)-8,676,024.20-11,155,930.76
Assetdisposalincome(“-”forloss)155,515.49229,121.29
3.Operatingprofit(“-”forloss)112,899,797.2455,963,034.64
Add:Non-operatingincome4,037,896.761,047,114.21
Less:Non-operatingexpense1,637,033.052,629,797.33
4.Profitbeforetax(“-”forloss)115,300,660.9554,380,351.52
Less:Incometaxexpense12,368,786.582,085,600.33
5.Netprofit(“-”fornetloss)102,931,874.3752,294,751.19
5.1Byoperatingcontinuity
5.1.1Netprofitfromcontinuingoperations(“-”fornetloss)102,931,874.3752,294,751.19
5.1.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.2Byownership
5.2.1NetprofitattributabletoshareholdersoftheCompanyastheparent103,006,232.5452,432,443.05
5.2.1Netprofitattributabletonon-controllinginterests-74,358.17-137,691.86
6.Othercomprehensiveincome,netoftax80,528,741.31108,771,351.91
AttributabletoownersoftheCompanyastheparent80,528,741.31108,771,351.91
6.1Itemsthatwillnotbereclassifiedtoprofitorloss80,528,741.31108,771,351.91
6.1.1Changescausedbyremeasurementsondefinedbenefitschemes
6.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossundertheequitymethod
6.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments80,528,741.31108,771,351.91
6.1.4Changesinthefair
valuearisingfromchangesinowncreditrisk
6.1.5Other
6.2Itemsthatwillbereclassifiedtoprofitorloss
6.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
6.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
6.2.3Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
6.2.4Creditimpairmentallowanceforinvestmentsinotherdebtobligations
6.2.5Reserveforcashflowhedges
6.2.6Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
6.2.7Other
Attributabletonon-controllinginterests
7.Totalcomprehensiveincome183,460,615.68161,066,103.10
AttributabletoownersoftheCompanyastheparent183,534,973.85161,203,794.96
Attributabletonon-controllinginterests-74,358.17-137,691.86
8.Earningspershare
8.1Basicearningspershare0.16570.0934
8.2Dilutedearningspershare0.16570.0934

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

4.IncomeStatementoftheCompanyastheParent

Unit:RMB

Item20212020
1.Operatingrevenue2,267,232,119.782,123,200,238.11
Less:Costofsales1,944,820,462.591,823,443,404.79
Taxesandsurcharges11,893,439.3810,349,672.15
Sellingexpense106,770,873.83110,774,087.06
Administrativeexpense80,635,862.3670,342,720.73
R&Dexpense75,021,386.3667,074,041.38
Financecosts-2,350,968.3910,879,173.24
Including:Interestexpense3,932,469.125,197,914.71
Interestincome8,354,523.546,017,663.50
Add:Otherincome5,810,480.105,478,200.87
Returnoninvestment(“-”forloss)8,352,714.265,437,925.05
Including:Shareofprofitorlossofjointventuresandassociates
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Netgainonexposurehedges(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)35,754,030.142,500,000.00
Creditimpairmentloss(“-”forloss)-16,143,004.022,599,053.83
Assetimpairmentloss(“-”forloss)-3,866,890.01-18,384,759.06
Assetdisposalincome(“-”forloss)6,642.4780,014.23
2.Operatingprofit(“-”forloss)80,355,036.5928,047,573.68
Add:Non-operatingincome3,441,588.57542,506.89
Less:Non-operatingexpense1,086,173.24262,488.62
3.Profitbeforetax(“-”forloss)82,710,451.9228,327,591.95
Less:Incometaxexpense-4,219,121.23-3,554,013.58
4.Netprofit(“-”fornetloss)86,929,573.1531,881,605.53
4.1Netprofitfromcontinuingoperations(“-”fornetloss)86,929,573.1531,881,605.53
4.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.Othercomprehensiveincome,netoftax80,528,741.31108,771,351.91
5.1Itemsthatwillnotbereclassifiedtoprofitorloss80,528,741.31108,771,351.91
5.1.1Changescausedbyremeasurementsondefinedbenefitschemes
5.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossunder
theequitymethod
5.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments80,528,741.31108,771,351.91
5.1.4Changesinthefairvaluearisingfromchangesinowncreditrisk
5.1.5Other
5.2Itemsthatwillbereclassifiedtoprofitorloss
5.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
5.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
5.2.3Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
5.2.4Creditimpairmentallowanceforinvestmentsinotherdebtobligations
5.2.5Reserveforcashflowhedges
5.2.6Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
5.2.7Other
6.Totalcomprehensiveincome167,458,314.46140,652,957.44
7.Earningspershare
7.1Basicearningspershare
7.2Dilutedearningspershare

5.ConsolidatedCashFlowStatement

Unit:RMB

Item20212020
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices1,806,075,487.792,230,952,492.49
Netincreaseincustomerdepositsandinterbankdeposits
Netincreaseinborrowingsfromthecentralbank
Netincreaseinloansfromotherfinancialinstitutions
Premiumsreceivedonoriginalinsurancecontracts
Netproceedsfromreinsurance
Netincreaseindepositsandinvestmentsofpolicyholders
Interest,handlingchargesandcommissionsreceived
Netincreaseininterbankloansobtained
Netincreaseinproceedsfromrepurchasetransactions
Netproceedsfromactingtradingofsecurities
Taxrebates50,016,426.4933,693,741.46
Cashgeneratedfromotheroperatingactivities22,636,726.1916,977,100.96
Subtotalofcashgeneratedfromoperatingactivities1,878,728,640.472,281,623,334.91
Paymentsforcommoditiesandservices1,648,743,526.281,571,967,433.96
Netincreaseinloansandadvancestocustomers
Netincreaseindepositsinthecentralbankandininterbankloansgranted
Paymentsforclaimsonoriginalinsurancecontracts
Netincreaseininterbankloansgranted
Interest,handlingchargesandcommissionspaid
Policydividendspaid
Cashpaidtoandforemployees323,020,547.09294,472,502.80
Taxespaid31,276,348.4439,853,712.33
Cashusedinotheroperatingactivities142,011,997.96123,533,031.29
Subtotalofcashusedinoperatingactivities2,145,052,419.772,029,826,680.38
Netcashgeneratedfrom/usedinoperatingactivities-266,323,779.30251,796,654.53
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment373,180,033.58557,198,253.76
Returnoninvestment11,396,891.866,545,826.85
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets589,226.24275,546.00
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits
Cashgeneratedfromotherinvestingactivities336,150.00
Subtotalofcashgeneratedfrominvestingactivities385,166,151.68564,355,776.61
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets139,772,849.33133,737,262.64
Paymentsforinvestments709,038,171.10579,733,766.76
Netincreaseinpledgedloansgranted
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities1,869,322.914,141,850.71
Subtotalofcashusedininvestingactivities850,680,343.34717,612,880.11
Netcashgeneratedfrom/usedininvestingactivities-465,514,191.66-153,257,103.50
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived633,873,281.14
Including:Capitalcontributionsbynon-controllingintereststosubsidiaries
Borrowingsraised19,000,000.0022,000,000.00
Cashgeneratedfromotherfinancingactivities58,971,466.65
Subtotalofcashgeneratedfromfinancingactivities711,844,747.7922,000,000.00
Repaymentofborrowings29,000,000.0022,000,000.00
Interestanddividendspaid1,707,729.023,232,890.38
Including:Dividendspaidby
subsidiariestonon-controllinginterests
Cashusedinotherfinancingactivities14,621,163.632,500,000.00
Subtotalofcashusedinfinancingactivities45,328,892.6527,732,890.38
Netcashgeneratedfrom/usedinfinancingactivities666,515,855.14-5,732,890.38
4.Effectofforeignexchangerateschangesoncashandcashequivalents-2,215,203.09-8,827,118.35
5.Netincreaseincashandcashequivalents-67,537,318.9183,979,542.30
Add:Cashandcashequivalents,beginningoftheperiod629,939,540.50545,959,998.20
6.Cashandcashequivalents,endoftheperiod562,402,221.59629,939,540.50

6.CashFlowStatementoftheCompanyastheParent

Unit:RMB

Item20212020
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices1,721,407,332.481,963,288,154.66
Taxrebates39,451,775.6725,903,016.36
Cashgeneratedfromotheroperatingactivities16,788,453.399,006,278.01
Subtotalofcashgeneratedfromoperatingactivities1,777,647,561.541,998,197,449.03
Paymentsforcommoditiesandservices1,632,770,616.351,388,644,147.32
Cashpaidtoandforemployees267,953,154.75247,717,051.40
Taxespaid21,295,926.1726,755,852.89
Cashusedinotheroperatingactivities129,115,999.33110,744,198.57
Subtotalofcashusedinoperatingactivities2,051,135,696.601,773,861,250.18
Netcashgeneratedfrom/usedinoperatingactivities-273,488,135.06224,336,198.85
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment500,487.00
Returnoninvestment10,222,037.175,437,925.05
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets124,954.89183,890.00
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits
Cashgeneratedfromotherinvestingactivities9,718,669.72
Subtotalofcashgeneratedfrominvestingactivities10,346,992.0615,840,971.77
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets5,665,400.944,071,225.07
Paymentsforinvestments484,148,226.39154,786,000.00
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities1,869,322.919,000,000.00
Subtotalofcashusedininvestingactivities491,682,950.24167,857,225.07
Netcashgeneratedfrom/usedininvestingactivities-481,335,958.18-152,016,253.30
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived633,873,281.14
Borrowingsraised5,000,000.005,000,000.00
Cashgeneratedfromotherfinancingactivities58,971,466.65
Subtotalofcashgeneratedfromfinancingactivities697,844,747.795,000,000.00
Repaymentofborrowings10,000,000.005,000,000.00
Interestanddividendspaid160,362.101,027,748.70
Cashusedinotherfinancingactivities14,621,163.632,500,000.00
Subtotalofcashusedinfinancingactivities24,781,525.738,527,748.70
Netcashgeneratedfrom/usedinfinancingactivities673,063,222.06-3,527,748.70
4.Effectofforeignexchangerateschangesoncashandcashequivalents-1,401,721.22-6,995,969.85
5.Netincreaseincashandcashequivalents-83,162,592.4061,796,227.00
Add:Cashandcashequivalents,beginningoftheperiod559,573,331.81497,777,104.81
6.Cashandcashequivalents,endoftheperiod476,410,739.41559,573,331.81

7.ConsolidatedStatementsofChangesinOwners’Equity2021

Unit:RMB

Item2021
EquityattributabletoownersoftheCompanyastheparentNon-controllinginterestsTotalowners’equity
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesGeneralreserveRetainedearningsOtherSubtotal
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00164,328,665.43425,482,758.2418,812,986.55325,451,531.14777,899,079.662,273,349,347.0219,498,589.152,292,847,936.17
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Adjustmentforbusinesscombinationundercommoncontrol
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00164,328,665.43425,482,758.2418,812,986.55325,451,531.14777,899,079.662,273,349,347.0219,498,589.152,292,847,936.17
3.Increase/decreaseintheperiod(“-”fordecrease)144,318,181.00476,347,552.9780,528,741.31-36.518,692,957.3294,313,275.22804,200,671.31-74,358.17804,126,313.14
3.1Totalcomprehensiveincome80,528,741.31103,006,232.54183,534,973.85-74,358.17183,460,615.68
3.2Capitalincreasedandreducedbyowners144,318,181.00476,347,552.97620,665,733.97620,665,733.97
3.2.1Ordinarysharesincreasedbyowners144,318,181.00476,347,552.97620,665,733.97620,665,733.97
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution8,692,957.32-8,692,957.32
3.3.1Appropriationtosurplusreserves8,692,957.32-8,692,957.32
3.3.2Appropriationtogeneralreserve
3.3.3Appropriationtoowners(orshareholders)
3.3.4Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve-36.51-36.51-36.51
3.5.1Increaseintheperiod4,023,200.244,023,200.244,023,200.24
3.5.2Usedintheperiod4,023,236.754,023,236.754,023,236.75
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00640,676,218.40506,011,499.5518,812,950.04334,144,488.46872,212,354.883,077,550,018.3319,424,230.983,096,974,249.31

2020

Unit:RMB

Item2020
EquityattributabletoownersoftheCompanyastheparentNon-contTotal
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesGeneralreserveRetainedearningsOtherSubtotalrollinginterestsowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00164,328,665.43317,059,775.0017,560,202.07322,226,700.34726,689,929.102,109,239,597.9419,636,281.012,128,875,878.95
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror1,833.381,651,336.261,653,169.641,653,169.64
Adjustmentforbusinesscombinationundercommoncontrol
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00164,328,665.43317,059,775.0017,560,202.07322,228,533.72728,341,265.362,110,892,767.5819,636,281.012,130,529,048.59
3.Increase/decreaseintheperiod(“-”fordecrease)108,422,983.241,252,784.483,222,997.4249,557,814.30162,456,579.44-137,691.86162,318,887.58
3.1Totalcomprehensiveincome108,771,351.9152,432,443.05161,203,794.96-137,691.86161,066,103.10
3.2Capitalincreasedandreducedbyowners
3.2.1Ordinarysharesincreasedbyowners
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution3,222,997.42-3,222,997.42
3.3.1Appropriationtosurplusreserves3,222,997.42-3,222,997.42
3.3.2Appropriationtogeneralreserve
3.3.3Appropriationtoowners(orshareholders)
3.3.4Other
3.4Transferswithinowners’equity-348,368.67348,368.67
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other-348,368.67348,368.67
3.5Specificreserve1,252,784.481,252,784.481,252,784.48
3.5.1Increaseintheperiod3,766,291.743,766,291.743,766,291.74
3.5.2Usedintheperiod2,513,507.262,513,507.262,513,507.26
3.6Other
4.Balanceasattheendoftheperiod561,374,326.00164,328,665.43425,482,758.2418,812,986.55325,451,531.14777,899,079.662,273,349,347.0219,498,589.152,292,847,936.17

8.StatementsofChangesinOwners’EquityoftheCompanyastheParent2021

Unit:RMB

Item2021
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00183,071,147.70425,482,758.2418,812,986.55325,451,531.14677,800,436.752,191,993,186.38
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00183,071,147.70425,482,758.2418,812,986.55325,451,531.14677,800,436.752,191,993,186.38
3.Increase/decreaseintheperiod(“-”fordecrease)144,318,181.00476,347,552.9780,528,741.31-36.518,692,957.3278,236,615.83788,124,011.92
3.1Totalcomprehensiveincome80,528,741.3186,929,573.15167,458,314.46
3.2Capitalincreasedandreducedbyowners144,318,181.00476,347,552.97620,665,733.97
3.2.1Ordinarysharesincreasedbyowners144,318,181.00476,347,552.97620,665,733.97
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution8,692,957.32-8,692,957.32
3.3.1Appropriationtosurplusreserves8,692,957.32-8,692,957.32
3.3.2Appropriationtoowners(orshareholders)
3.3.3Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve-36.51-36.51
3.5.1Increaseintheperiod4,023,200.244,023,200.24
3.5.2Usedintheperiod4,023,236.754,023,236.75
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00659,418,700.67506,011,499.5518,812,950.04334,144,488.46756,037,052.582,980,117,198.30

2020

Unit:RMB

Item2020
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00183,071,147.70317,059,775.0017,560,202.07322,226,700.34648,776,959.532,050,069,110.64
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror1,833.3816,500.4418,333.82
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00183,071,147.70317,059,775.0017,560,202.07322,228,533.72648,793,459.972,050,087,444.46
3.Increase/decreaseintheperiod(“-”fordecrease)108,422,983.241,252,784.483,222,997.4229,006,976.78141,905,741.92
3.1Totalcomprehensiveincome108,771,351.9131,881,605.53140,652,957.44
3.2Capitalincreasedandreducedbyowners
3.2.1Ordinarysharesincreasedbyowners
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution3,222,997.42-3,222,997.42
3.3.1Appropriationtosurplusreserves3,222,997.42-3,222,997.42
3.3.2Appropriationtoowners(orshareholders)
3.3.3Other
3.4Transferswithinowners’equity-348,368.67348,368.67
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings-348,368.67348,368.67
3.4.6Other
3.5Specificreserve1,252,784.481,252,784.48
3.5.1Increaseintheperiod3,766,291.743,766,291.74
3.5.2Usedintheperiod2,513,507.262,513,507.26
3.6Other
4.Balanceasattheendoftheperiod561,374,326.00183,071,147.70425,482,758.2418,812,986.55325,451,531.14677,800,436.752,191,993,186.38

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

nd

ExtraordinaryGeneralMeetingof2009inSeptember2009,basedonthetotalsharecapitalof374,249,551sharesasat30June2009,theCompanyimplementedtheprofitdistributionplan,i.e.todistribute5bonussharesandcashofRMB0.80forevery10shares,withregisteredcapitalincreasedbyRMB187,124,775.00,aswellasregisteredcapitalofRMB561,374,326.00afterchange,whichverifiedbyJiangsuGongzhengTianyeCertifiedPublicAccountantsCompanyLimitedwithissuingCapitalVerificationReportSGC[2010]No.B002.Anon-publicofferingofupto168,412,297newshareswasdeliberatedonandapprovedasaresolutionofthe2020AnnualGeneralMeetingheldon7May2021andapprovedbytheApprovaloftheNon-publicOfferingofSharesofChangchaiCo.,Ltd.(CSRCPermit[2020]No.3374)issuedbyChangchaiCompanyLimitedtheChinaSecuritiesRegulatoryCommission.On16June2021,thecapitalverificationreport"S.G.W[2021]B062"wasissuedbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),confirmingthattheCompanyhadissued144,318,181RMBordinaryshares(Ashares)inanon-publicoffering,withanadditionalpaid-incapital(sharecapital)ofRMB144,318,181.ThetotalamountraisedwasRMB634,999,996.40;thenetamountraisedwasRMB620,665,733.97,whichincreasedthecapitalreserve(sharecapitalpremium)byRMB476,347,552.97.Asof31December2021,thetotalsharecapitaloftheCompanywasRMB705,692,507.Theunifiedsocialcreditcodeofthecompany'sbusinesslicenseis91320400134792410W.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’smainbusinessremainedunchangedintheReporting

Period.TheCompanyestablishedtheShareholders’GeneralMeeting,theBoardofDirectorsandtheSupervisoryCommittee,Corporateoffice,FinancialDepartment,PoliticalDepartment,InvestmentandDevelopmentDepartment,AuditDepartment,HumanRecoursesDepartment,ProductionDepartment,ProcurementDepartment,SalesCompany,ChiefEngineerOffice,TechnologyCenter,QADepartment,FoundryBranch,MachineProcessingBranch,Single-cylinderEnginebranch,Multi-cylinderEngineBranchandOverseasBusinessDepartmentintheCompany.ThefinancialreporthasbeenapprovedtobeissuedbytheBoardofDirectorson11April2022.TheconsolidatedscopeoftheCompanyoftheReportingPeriodincludestheCompanyastheparentand7subsidiaries.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.ImportantAccountingPoliciesandEstimations

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.FinancialInstruments

(1)ClassificationofFinancialInstrumentsTheCompanyclassifiesthefinancialassetswheninitiallyrecognizedintothefollowingthreecategoriesbasedonthebusinessmodelforfinancialassetsmanagementandcharacteristicsofcontractualcashflowoffinancialassets:

financialassetsmeasuredatamortizedcost,financialassetsatfairvaluethroughothercomprehensiveincome

(debtinstruments)andfinancialassetsatfairvaluethroughprofitorlossFinancialliabilitieswereclassifieswheninitiallyrecognizedintofinancialliabilitiesatfairvaluethroughprofitorlossandfinancialliabilitiesmeasuredatamortizedcost.

(2)RecognitionBasisandMeasurementMethodforFinancialInstruments

①FinancialassetsmeasuredatamortizedcostFinancialassetsatamortizedcostincludenotesreceivable,accountsreceivable,otherreceivables,long-termreceivables,andinvestmentindebtobligationswhichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.ForaccountsreceivableexcludingsignificantfinancingandaccountsreceivablethattheCompanydecidesnottoconsiderfinancingcomponentslessthanoneyear,theinitialmeasurementshallbemadeatthecontracttransactionprice.Theinterestcalculatedwithactualratesfortheholdingperiodshallberecordedintothecurrentprofitorloss.Whenrecoveredordisposed,thedifferencebetweenthepriceobtainedandthecarryingvalueofthefinancialassetsshallberecordedintothecurrentprofitorloss.

②Financialassetsatfairvaluethroughothercomprehensiveincome(debtinstruments)Financialassetsatfairvaluethroughothercomprehensiveincome(debtinstruments)includeaccountsreceivablefinancingandinvestmentinotherdebtobligationswhichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandchangesoffairvalueexceptforinterestcalculatedwithactualrates,impairmentlossesorgainsandexchangegainsorlossesshallberecordedintoothercomprehensiveincome.Whenderecognized,theaccumulatedgainsorlossesoriginallyrecordedintoothercomprehensiveincomeshallbetransferredintothecurrentprofitorloss.

③Financialassetsatfairvaluethroughothercomprehensiveincome(equityinstruments)Financialassetsatfairvaluethroughothercomprehensiveincome(equityinstruments)includeinvestmentinotherequityinstruments,etc.whichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandchangesoffairvalueshallberecordedintoothercomprehensiveincome.Thedividendsobtainedshallberecordedintothecurrentprofitorloss.Whenderecognized,theaccumulatedgainsorlossesoriginallyrecordedintoothercomprehensiveincomeshallbetransferredintoretainedearnings.

④FinancialassetsatfairvaluethroughprofitorlossFinancialassetsatfairvaluethroughprofitorlossincludeheld-for-tradingfinancialassets,derivativefinancialassetsandothernon-currentfinancialassetswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintothecurrentprofitorloss.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandthechangesoffairvalueshallberecordedintothecurrentprofitorloss.

⑤FinancialliabilitiesatfairvaluethroughprofitorlossFinancialliabilitiesatfairvaluethroughprofitorlossincludeheld-for-tradingfinancialliabilitiesandderivativefinancialliabilitieswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintothecurrentprofitorloss.Thesubsequentmeasurementofthefinancialliabilitiesshallbeatfairvalueandthechangesoffairvalueshallberecordedintothecurrentprofitorloss.Whenderecognized,thedifferencebetweenthecarryingvalueandthepaidconsiderationshallberecordedintothecurrentprofitorloss.

⑥FinancialliabilitiesatamortizedcostFinancialliabilitiesatamortizedcostincludeshort-termborrowings,notespayable,accountspayable,otherpayables,long-termborrowings,bondspayableandlong-termpayableswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Theinterestcalculatedwithactualratesfortheholdingperiodshallberecordedintothecurrentprofitorloss.Whenderecognized,the

differencebetweenthepaidconsiderationandthecarryingvalueofthefinancialliabilitiesshallberecordedintothecurrentprofitorloss.

(3)RecognitionBasisandMeasurementofTransferofFinancialAssetsWheretheCompanyhastransferrednearlyalloftherisksandrewardsrelatedtotheownershipofthefinancialassettothetransferee,itshallstoprecognizingthefinancialassetandseparatelyrecognizetherightsandobligationsgeneratedretainedfromthetransferasassetsorliabilities.Ifitretainednearlyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itshallcontinuetorecognizethetransferredfinancialasset.WheretheCompanydoesnottransferorretainnearlyalloftherisksandrewardsrelatedtotheownershipofafinancialasset,itshalldealwithitaccordingtothecircumstancesasfollows,respectively:(1)Ifitgivesupitscontroloverthefinancialasset,itshallstoprecognizingthefinancialassetandseparatelyrecognizetherightsandobligationsgeneratedretainedfromthetransferasassetsorliabilities;(2)Ifitdoesnotgiveupitscontroloverthefinancialasset,itshall,accordingtotheextentofitscontinuousinvolvementinthetransferredfinancialasset,recognizetherelatedfinancialassetandrecognizetherelevantliabilityaccordingly.Ifthetransferofanentirefinancialassetsatisfiestheconditionsforstoppingrecognition,thedifferencebetweentheamountsofthefollowing2itemsshallberecordedintheprofitsandlossesofthecurrentperiod:(1)Thecarryingvalueofthetransferredfinancialassetonthederecognitiondate;(2)Thesumofconsiderationreceivedfromthetransferoffinancialassets,andderecognitionamountamongtheaccumulativeamountofthechangesofthefairvalueoriginallyrecordedintheothercomprehensiveincome(thefinancialassetsinvolvetransferareinvestmentsindebtinstrumentsatfairvaluethroughothercomprehensiveincome.Ifthetransferofpartialfinancialassetsatisfiestheconditionstostoptherecognition,theentirecarryingvalueofthetransferredfinancialassetshall,betweentheportionwhoserecognitionhasbeenstoppedandtheportionwhoserecognitionhasnotbeenstopped,beapportionedaccordingtotheirrespectiverelativefairvalueonthetransferdate,andthedifferencebetweentheamountsofthefollowingtwoitemsshallbeincludedintotheprofitsandlossesofthecurrentperiod:(1)Thecarryingvalueoftheportionwhoserecognitionhasbeenstopped;(2)Thesumofconsiderationoftheportionwhoserecognitionhasbeenstopped,andderecognitionamountamongtheaccumulativeamountofthechangesofthefairvalueoriginallyrecordedintheothercomprehensiveincome(thefinancialassetsinvolvetransferareinvestmentsindebtinstrumentsatfairvaluethroughothercomprehensiveincome.

(4)DerecognitionBasisofFinancialLiabilitiesAfinancialliabilityorpartofitcanbederecognizedafteritscurrentobligationhasbeenrelievedinfullorinpart.

(5)RecognitionofFairValueofFinancialAssetsandFinancialLiabilitiesThefairvalueoffinancialinstrumentswithanactivemarketisdeterminedbythequotedpriceintheactivemarket.Forfinancialinstrumentswithoutactivemarket,thefairvalueisdeterminedbyvaluationtechniques.TheCompanyadoptsthevaluationtechniquesapplicabletothecurrentconditionswhicharesupportedbysufficientdataandotherinformationforvaluation,andselectstheinputvaluesconsistentwiththecharacteristicsofassetsorliabilitiesconsideredbymarketparticipantsinassetorliabilitytransactions,withprioritytoobservableinputvalues.Unobservableinputvaluesareusedonlywhenrelevantobservableinputvaluesarenotavailableorpractical.

(6)Impairmentoffinancialinstrument

①ImpairmentmeasurementandaccountinghandlingoffinancialinstrumentBasedonexpectedcreditloss,theCompanyconductsimpairmenthandlingandconfirmscreditimpairmentlossforfinancialassetswhichismeasuredbyamortizedcost,debtinstrumentinvestmentwhichismeasuredbyfairvalueandwhosechangeiscalculatedintoothercomprehensiveprofits,financialguaranteecontract.Expectedcreditlossreferstoweightedaverageofcreditlossoffinancialinstrumentwhichtakestheriskof

contractbreachoccurrenceastheweight.Creditlossreferstothedifferencebetweenallcontractcashflowwhichisconvertedintocashaccordingtoactualinterestrateandreceivableaccordingtocontractandallcashflowwhichtobechargedasexpected,i.e.currentvalueofallcashshortage.Amongit,asforfinancialassetpurchasedororiginalwhichhashadcreditimpairment,itshouldbeconvertedintocashaccordingactualinterestrateofthisfinancialassetaftercreditadjustment.Lifetimeexpectedcreditlossesrefertothosecausedbypossibledefaultsduringtheentireexpecteddurationofafinancialinstrument.Theexpectedcreditlossesinthenext12monthsreferstothosecausedbythedefaulteventsofthefinancialinstrumentthatmayoccurwithin12months(ortheexpecteddurationiftheexpecteddurationofthefinancialinstrumentislessthan12months)afterthebalancesheetdate,andispartoftheexpectedcreditlossesintheentireduration.Oneachbalancesheetdate,theCompanyrespectivelymeasuredtheexpectedcreditlossesoffinancialinstrumentsindifferentstages.Ifthecreditriskofafinancialinstrumenthashadnosignificantincreasesinceitsinitialrecognition,theinstrumentshallfallinthefirststage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesinthefuture12months.Ifthecreditriskofafinancialinstrumenthashadasignificantincreasesinceitsinitialrecognitionbutnocreditimpairmenthasoccurred,theinstrumentshallfallinthesecondstage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesintheentiredurationoftheinstrument.Ifthecreditimpairmenthasoccurredsinceitsinitialrecognition,thefinancialinstrumentshallfallinthethirdstage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesintheentiredurationoftheinstrument.Asforafinancialinstrumentwithlowcreditrisksonthebalancesheetdate,theCompanymeasuredthelossreservesaccordingtotheexpectedcreditlossesinthefuture12months,assumingthatitscreditriskhashadnosignificantincreasesinceitsinitialrecognition.Forfinancialinstrumentswithlowcreditrisksinstages1and2,theCompanycalculatedtheinterestincomeattheeffectiveinterestrateandonthecarryingamountoftheinstrumentswithoutdeductionsforprovisionsforassetimpairment.Forfinancialinstrumentsinstage3,interestincomewascalculatedattheeffectiveinterestratesandontheamortizedcostbyreducingtheprovisionsforassetimpairmentfromthecarryingamount.Fornotesreceivables,accountsreceivables,andfinancingreceivables,whethertherewasasignificantfinancialcomponentornot,theCompanymeasuredthelossreservesbasedontheexpectedcreditlossesfortheentireduration.A.AccountsreceivableFornotesreceivable,accountsreceivable,otherreceivablesandaccountsreceivablefinancingwithobjectiveevidenceindicatingimpairmentandthosesuitableforindividualevaluation,theCompanycarriesoutimpairmenttestseparatelytoconfirmexpectedcreditlossandprepareprovisionforimpairmentofsingleitems.Fornotesreceivable,accountsreceivable,otherreceivables,accountsreceivablefinancing,contractassetsandlong-termreceivableswithoutobjectiveevidenceofimpairment,orasinglefinancialassetwithexpectedcreditlossimpossibletobeassessedatareasonablecost,theCompanydividesthenotesreceivable,accountsreceivable,otherreceivablesandaccountsreceivablefinancingintogroupsaccordingtothecharacteristicsofcreditrisk,andcalculatestheexpectedcreditlossbasedonreceivablegroups.Thebasisforrecognizinggroupsisasfollows:

ItemRecognitionbasisMethodofmeasuringexpectedcreditlosses
Group1ofnotesreceivableAllcommercialbillsConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpected
Group2ofnotesreceivableBank’sacceptancebillswithlowcreditrating
creditlossrateovertheentirelife
AccountsreceivablefinancingBank’sacceptancebillswithhighcreditratingConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossrateovertheentirelife
Accountsreceivable-creditriskcharacteristicsgroupAccountsreceivableportfoliowithcreditperiodPreparethecomparativelistbetweenagingofaccountsreceivableandexpectedcreditlossrateovertheentirelifeandcalculatetheexpectedcreditlossbyconsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation.TheCompanytakesagingascreditriskcharacteristicsgroupsandcalculatestheexpectedcreditlossforaccountsreceivable.
Accountsreceivable-intercoursefundsamongrelatedpartygroupwithintheconsolidationscopeRelatedpartywithintheconsolidationscopeConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossrateovertheentirelife

Basisforrecognizinggroupsofotherreceivablesisasfollows:

ItemRecognitionbasisMethodofmeasuringexpectedcreditlosses
Group1ofotherreceivablesOtherreceivablesexcludingthosefromrelatedparties-aginggroupConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossratewithinthenext12monthsorovertheentirelife
Group2ofotherreceivablesRelatedpartywithintheconsolidationscopeConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossratewithinthenext12monthsorovertheentirelife

11.AccountsReceivableSee“10.FinancialInstruments”.

12.AccountsReceivableFinancingSee“10.FinancialInstruments”.

13.OtherReceivablesSee“10.FinancialInstruments”.

14.Inventory

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

(2)PricingmethodPurchasingandstorageofthevariousinventoriesshouldbevaluedaccordingtotheplanedcostandthedispatchbecalculatedaccordingtotheweightedaveragemethod;carriedforwardthecostofthefinishedproductsaccordingtotheactualcostofthecurrentperiodandthesalescostaccordingtotheweightedaveragemethod.

(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.

15.ContractAssetsContractAssetsmeansthattheCompanyisendowedwiththerighttochargetheconsiderationthroughtransferringanycommodityorservicetotheclient,andsuchrightdependsonotherfactorsexceptthepassingoftime.TheCompany’sunconditionalright(onlydependingonthepassingoftime)ofchargingtheconsiderationfromtheclientshallbeseparatelypresentedasreceivables.TherecognitionmethodandaccountingtreatmentmethodoftheestimatedcreditlossofcontractassetsareconsistentwiththatspecifiedinNotesV.11.

16.ContractCosts

(1)CostsfromAcquiringContractIftheincrementalcostresultingfromtheCompany’sacquiringofcontract(namelycostsmerelyresultingfromtheacquiringofcontract)ispredictedtoberetrieved,itshallberecognizedasanassets,amortizedbyadoptingthesamebasiswiththerecognitionofcommoditiesorservicerevenuesrelatedtotheassetsandincludedintothecurrentprofitandloss.Iftheassets’amortizationperioddoesnotexceedoneyear,itshallbeimmediatelyincludedintothecurrentprofitandloss.OtherexpensesresultingfromtheCompany’sacquiringofcontractshallalsobeincludedintothecurrentprofitandlossunlessitisexplicitlybornebytheclient.

(2)CostsfromExecutingContractTheCompany’scostsfromexecutingcontractisnotcoveredbyotherASBEexceptforRevenueStandards,andwhenthefollowingsituationsaremet,suchcostscanberecognizedasanassets:①thecostsaredirectlyrelatedtoacurrentorpredictedcontract;②thecostsincreasetheCompany’sresourcesappliedtofulfillperformanceobligationsinthefuture;③thecostsarepredictedtoberetrieved.Therecognizedassetsshallbeamortizedbyadoptingthesamebasiswiththerecognitionofcommoditiesorservicerevenuesrelatedtotheassetsandincludedintothecurrentprofitandloss.Ifthebookvalueofcontractcostsishigherthanthedifferenceofthefollowingtwoitems,correspondingdepreciationreservesshallbecountedandwithdrawnanditshallberecognizedastheassetsdepreciationloss:①theresidualconsiderationpredictedtobeacquiredbytransferringcommoditiesrelatedtotheassets;②thecostspredictedtooccurduetothetransferofrelatedcommodities.Ifthedifferencebetween①and②ishigherthanthebookvalueofcontractcostsduetoanychangeinvariousfactorscausingdepreciationinpreviousperiods,itshallberestitutedtothewithdrawnassetsdepreciationreservesandincludedinthecurrentprofitandloss.However,thebookvalueofrestitutedcontractcostsshallnotexceedthebookvalueoftheassetsonthedayofrestitutionbasedonthehypothesisthatdepreciationreservesarenotcountedandwithdrawn.

17.AssetsHeldforSaleTheCompanyrecognizesthecomponents(orthenon-currentassets)whichmeetwiththefollowingconditionsasassetsheldforsale:

(1)Thecomponentsmustbeimmediatelysoldonlyaccordingtotheusualtermsofsellingthiskindofcomponentsunderthecurrentconditions;

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

(3)TheCompanyhadsignedtheirrevocabletransformationagreementwiththetransferee;

(4)Thetransformationshouldbecompletedwithin1year.

18.Long-termEquityInvestments

(1)JudgmentstandardofjointcontrolandsignificantinfluencesJointcontrol,referstothecontroljointlyownedaccordingtotherelevantagreementonanarrangementbytheCompanyandtherelevantactivitiesofthearrangementshouldbedecidedonlyaftertheparticipantswhichsharethecontrolrightmakeconsensus.SignificantinfluencereferstothepoweroftheCompanywhichcouldanticipateinthefinanceandtheoperationpolicesoftheinvestees,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-termequityinvestmentobtainedonthebasisofissuingequitysecuritiesshallbethefair

valueoftheequitysecuritiesissued.Theinitialcostofalong-termequityinvestmentofaninvestorshallbethevaluestipulatedintheinvestmentcontractoragreement,theunfairvaluestipulatedinthecontractoragreementshallbemeasuredatfairvalue.Asforlong-terminvestmentobtainedbytheexchangeofnon-monetaryassets,whereitiscommercialinnature,thefairvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived;whereitisnotcommercialinnature,thebookvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived.Theinitialcostofalong-termequityinvestmentobtainedbyrecombinationofliabilitiesshallberecognizedatfairvalueoflong-termequityinvestment.

(3)Subsequentmeasurementandrecognitionofprofitsandlosses

1)AninvestmentinthesubsidiarycompanyshallbemeasuredbyemployingthecostmethodWheretheCompanyhold,andisabletodoequityinvestmentwithcontroloveraninvestedentity,theinvestedentityshallbeitssubsidiarycompany.WheretheCompanyholdsthesharesofanentityover50%,or,whiletheCompanyholdsthesharesofanentitybelow50%,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.IftheaccountingpolicyadoptedbytheinvesteesisnotaccordwiththatoftheCompany,shouldbeadjustedaccordingtotheaccountingpoliciesoftheCompanyandthefinancialstatementoftheinvesteesduringtheaccountingperiodandaccordingwhichtorecognizetheinvestmentincomeaswellasothercomprehensiveincome.ForthetransactionhappenedbetweentheCompanyandassociatedenterprisesaswellasjointventures,iftheassetslaunchedorsoldnotformintobusiness,theportionoftheunrealizedgainsandlossesoftheinternaltransaction,whichbelongstotheCompanyaccordingtothecalculationoftheenjoyedproportion,shouldrecognizetheinvestmentgainsandlossesonthebasis.ButthelossesoftheunrealizedinternaltransactionhappenedbetweentheCompanyandtheinvesteeswhichbelongstotheimpairmentlossesofthetransferredassets,shouldnotbeneutralized.TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseaccordingtothefollowingsequence:firstofall,towritedownthebookvalueofthelong-termequityinvestment.Secondly,ifthebookvalueofthelong-term

equityinvestmentisinsufficientforwrittendown,shouldbecontinuedtorecognizedtheinvestmentlosseslimitedtothebookvalueofotherlong-termequitywhichformsofthenetinvestmentoftheinvesteesandtowrittendownthebookvalueofthelong-termaccountsreceivableetc.Lastly,throughtheabovehandling,forthoseshouldstillundertaketheadditionalobligationsaccordingtotheinvestmentcontractsortheagreements,itshallberecognizedastheestimatedliabilitiesinaccordancewiththeestimateddutiesandthenrecordedintoinvestmentlossesatcurrentperiod.Iftheinvestedentityrealizesanynetprofitslater,theCompanyshall,aftertheamountofitsattributableshareofprofitsoffsetsagainstitsattributableshareoftheun-recognizedlosses,resumerecognizingitsattributableshareofprofits.Inthepreparationforthefinancialstatements,thebalanceexistedbetweenthelong-termequityinvestmentincreasedbyacquiringsharesofminorityinterestandtheattributablenetassetsonthesubsidiarycalculatedbytheincreasedsharesheldsincethepurchasedate(orcombinationdate),thecapitalreservesshallbeadjusted,ifthecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted;theCompanydisposedpartofthelong-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.FortheothercomprehensiveincomerecognizedbyadoptingequitymethodformeasurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforetheCompanyacquiredthecontroloftheinvestees,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenlosethecontrolofthem,whilethechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedby

adoptingtheequitymethodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.Ofwhich,forthedisposedremainedequitywhichadoptedtheequitymethodformeasurement,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardaccordingtotheproportion;forthedisposedremainedequitywhichchangedtoexecutetheaccountingdisposalaccordingtotherecognitionandmeasurementstandardsoffinancialinstrument,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardinfullamount.ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestment,thedisposedremainedequityshouldchangetocalculateaccordingtotherecognitionandmeasurementstandardsoffinancialinstrument,anddifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthecurrentgainsandlosses.Fortheothercomprehensiveincomerecognizedfromtheoriginalequityinvestmentbyadoptingtheequitymethod,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenterminatetheequitymethodformeasurement,whilefortheowners’equityrecognizedowningtothechangesoftheotherowner’sequityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionoftheinvestees,shouldbetransferredintothecurrentinvestmentincomewithfullamountwhenterminateadoptingtheequitymethod.

19.InvestmentRealEstateMeasurementmodeofinvestmentrealestate:

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

20.FixedAssets

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

(2)DepreciationMethod

CategoryoffixedassetsMethodUsefullifeAnnualdeprecation
HousingandbuildingAveragemethodofusefullife20-402.50%-5%
MachineryequipmentAveragemethodofusefullife6-156.67%-16.67%
TransportationequipmentAveragemethodofusefullife5-1010%-20%
OtherequipmentAveragemethodofusefullife5-1010%-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

21.ConstructioninProgress

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

(2)StandardizationonconstructioninprocesstransferredintofixedassetsandtimepointTheconstructioninprocess,ofwhichthefixedassetsreachtothepredictedconditionforuse,shallcarryforwardfixedassetsonschedule.Theonethathasnotauditedthefinalaccountingshallrecognizethecostandmake

depreciationinlinewithvaluationvalue.Theconstructioninprocessshalladjusttheoriginalvaluationvalueatitshistoricalcostbutnotadjustthedepreciationthathasbeenmadeafterauditingthefinalaccounting.

22.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.

23.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&DCostsTheinternalresearchanddevelopmentprojectsofanenterpriseshallbeclassifiedintoresearchphaseanddevelopmentphase:theterm“research”referstothecreativeandplannedinvestigationtoacquireandunderstandnewscientificortechnologicalknowledge;theterm“development”referstotheapplicationofresearchachievementsandotherknowledgetoacertainplanordesign,priortothecommercialproductionoruse,soastoproduceanynewmaterial,deviceorproduct,orsubstantiallyimprovedmaterial,deviceandproduct.TheCompanycollectsthecostsofthecorrespondingphasesaccordingtotheabovestandardofclassifyingtheresearchphaseandthedevelopmentphase.Theresearchexpendituresforitsinternalresearchanddevelopmentprojectsofanenterpriseshallberecordedintotheprofitorlossforthecurrentperiod.Thedevelopmentcostsforitsinternalresearchanddevelopmentprojectsofanenterprisemaybecapitalizedwhentheysatisfythefollowingconditionssimultaneously:itisfeasibletechnicallytofinishintangibleassetsforuseorsale;itisintendedtofinishanduseorselltheintangibleassets;theusefulnessofmethodsforintangibleassetstogenerateeconomicbenefitsshallbeproved,includingbeingabletoprovethatthereisapotentialmarketfortheproductsmanufacturedbyapplyingtheintangibleassetsorthereisapotentialmarketfortheintangibleassetsitselfortheintangibleassetswillbeusedinternally;itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthesupportofsufficienttechnologies,financialresourcesandotherresources;thedevelopmentcostsoftheintangibleassetscanbereliablymeasured.

24.ImpairmentofLong-termAssetsFornon-currentfinancialAssetsoffixedAssets,projectsunderconstruction,intangibleAssetswithlimitedservicelife,investingrealestatewithcostmodel,long-termequityinvestmentofsubsidiaries,cooperativeenterprisesandjointventures,theCompanyshouldjudgewhetherdecreaseinvalueexistsonthedateofbalancesheet.Recoverableamountsshouldbetestedfordecreaseinvalueifitexists.OtherintangibleAssetsofreputationanduncertainservicelifeandothernon-accessibleintangibleassetsshouldbetestedfordecreaseinvaluenomatterwhetheritexists.Iftherecoverableamountislessthanbookvalueinimpairmenttestresults,theprovisionforimpairmentofdifferencesshouldincludeinimpairmentloss.Recoverableamountswouldbethehigherofnetvalueofassetfair

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

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

26.ContractLiabilitiesContractliabilitiesrefertotheCompany’sobligationsintransferringcommoditiesorservicestotheclientforthereceivedorpredictedconsideration.Contractassetsandcontractliabilitiesunderthesamecontractshallbepresentedbasedonthenetamount.

27.EmployeeBenefits

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

(2)AccountingTreatmentoftheWelfareafterDemissionTheCompanyclassifiesthewelfareplansafterdemissionintodefinedcontributionplansanddefinedbenefitplans.Welfareplansafterdemissionreferstotheagreementonthewelfareafterdemissionreachesbetweenthe

Companyandtheemployees,ortheregulationsormethodsformulatedbytheCompanyforprovidingthewelfareafterdemissionfortheemployees.Ofwhich,definedcontributionplansreferstothewelfareplansafterdemissionthattheCompanynomoreundertakethefurtherpaymentobligationsafterthepaymentofthefixedexpensesfortheindependentfunds;definedbenefitplans,referstothewelfareplansafterdemissionexceptforthedefinedcontributionplans.DefinedcontributionplansDuringtheaccountingperiodthattheCompanyprovidingtheservicefortheemployees,theCompanyshouldrecognizetheliabilitiesaccordingtothedepositedamountcalculatedbydefinedcontributionplans,andshouldbeincludedinthecurrentgainsandlossesortherelevantassetscost.

(3)AccountingTreatmentoftheDemissionWelfareTheCompanyshouldrecognizethepayrollpaymentliabilitiesoccurfromthedemissionwelfareaccordingtotheearlierdatebetweenthefollowingtwoconditionsandincludewhichinthecurrentgainsandlosseswhenprovidingthedemissionwelfarefortheemployees:theCompanycouldnotunilaterallywithdrawthedemissionwelfareowningtotherelieveplansofthelaborrelationshiporreduction;whentheCompanyrecognizingthecostsorexpensesrelatedtothereorganizationinvolveswiththedemissionwelfarepayments.

28.LeaseLiabilitiesOnthecommencementdateoftheleaseterm,theCompanyrecognizesthepresentvalueofoutstandingleasepaymentsasleaseliabilities.Theamountofleasepaymentincludesthefollowingfivecontents:fixedamountandsubstantialfixedamount.Ifthereisleaseincentive,theamountrelatedtoleaseincentivewillbededucted.Variableleasepaymentssubjecttoanindexorratio,whichatthetimeofinitialmeasurementisbasedontheindexorratioofthecommencementdateoftheleaseterm;Theexercisepriceofthepurchaseoptionprovidedthatthelesseeisreasonablycertainthattheoptionwillbeexercised;TheamountpayableforexercisingtheterminationoptionprovidedthattheleasetermreflectsthattheLesseewillexercisetheterminationoption;Theamountexpectedtobepaidbasedontheresidualvalueofthesecurityprovidedbythelessee.Whencalculatingthepresentvalueoftheleasepayment,theleaseembeddedinterestrateisusedasthediscountrate;iftheleaseembeddedinterestratecannotbedetermined,thecompany'sincrementalloaninterestrateisusedasthediscountrate.Thecompanycalculatestheinterestexpenseoftheleaseliabilityineachperiodoftheleasetermaccordingtothefixedperiodicinterestrateandrecordsitintotheprofitandlossofthecurrentperiod,exceptotherwisestipulatedtorecorditintothecostofrelatedassets.Variableleasepaymentsthatarenotincludedinthemeasurementofleaseliabilitiesshallbeincludedincurrentprofitandlosswhenactuallyincurred,unlessotherwisestipulatedtobeincludedinthecostofrelatedassets.Leasetermbegan,inthefuturewhensubstantialchangesoccurredinthefixedpayment,theguaranteedresidualvalueisexpectedtocopewiththeamountofchange,isusedtodeterminetheleasepaymentratioindexorchange,calloptions,renewaloptionsorterminatetheoptionevaluationresultsortheactualexercisechanges,thecompanyinaccordancewiththechangesoftheleasethepresentvalueofthepaymentstomeasureleaseliability.

29.Provisions

(1)CriteriaofprovisionsOnlyiftheobligationpertinenttoacontingenciesshallberecognizedasanestimateddebtswhenthefollowingconditionsaresatisfiedsimultaneously:

1)ThatobligationisacurrentobligationoftheCompany;

2)ItislikelytocauseanyeconomicbenefittoflowoutoftheCompanyasaresultofperformanceoftheobligation;

3)Theamountoftheobligationcanbemeasuredinareliableway.

(2)MeasurementofprovisionsTheCompanyshallmeasuretheprovisionsinaccordancewiththebestestimateofthenecessaryexpensesfortheperformanceofthecurrentobligation.TheCompanyshallcheckthebookvalueoftheprovisionsontheBalanceSheetDate.Ifthereisanyconclusiveevidenceprovingthatthesaidbookvaluecan’ttrulyreflectthecurrentbestestimate,theCompanyshall,subjecttochange,makeadjustmenttocarryingvaluetoreflectthecurrentbestestimate.

30.RevenueAccountingpoliciesforrecognitionandmeasurementofrevenue:

WhentheCompanyfulfillsitsdueperformanceobligations(namelywhentheclientobtainsthecontroloverrelatedcommoditiesorservices),revenuesshallberecognizedbasedontheobligation’samortizedtransactionprice.PerformanceObligationreferstotheCompany’spromiseoftransferringcommoditiesorservicesthatcanbeclearlydefinedtotheclient.TransactionPricereferstotheconsiderationamountdulychargedbytheCompanyfortransferringcommoditiesorservicestotheclient,excludinganyamountchargedbythethirdpartyandanyamountpredictedtobereturnedtotheclient.ControlOverRelevantCommoditiesmeansthattheuseofcommoditiescanbecontrolledandalmostalleconomicinterestscanbeobtained.Onthecontractcommencementday,theCompanyshallevaluatethecontract,recognizeindividualperformanceobligationandconfirmthatindividualperformanceobligationisfulfilledinacertainperiod.Whenoneofthefollowingconditionsismet,suchperformanceobligationshallbedeemedasfulfilledinacertainperiod,andtheCompanyshallrecognizeitasrevenuewithinacertainperiodaccordingtotheperformanceschedule:(1)theclientobtainsandconsumestheeconomicinterestsresultingfromtheCompany’sperformanceofcontractwhileperformingthecontract;(2)theclientisabletocontrolthecommoditiesunderconstructionduringtheperformance;(3)commoditiesproducedbytheCompanyduringtheperformancepossesstheirreplaceablepurpose,andtheCompanyhastherighttochargeallfinishedpartsduringthecontractperiod;otherwise,theCompanyshallrecognizetherevenuewhentheclientobtainsthecontroloverrelevantcommoditiesorservices.TheCompanyshalladopttheInputMethodtodeterminethePerformanceSchedule.Namely,thePerformanceScheduleshallbedeterminedaccordingtotheCompany’sinputforfulfillingperformanceobligations.WhenthePerformanceSchedulecannotbereasonablydeterminedandallresultingcostsarepredictedtobecompensated,theCompanyshallrecognizetherevenuebasedontheresultingcostamounttillthePerformanceSchedulecanbereasonablydetermined.Whenthecontractinvolvestwoormorethantwoperformanceobligations,thetransactionpriceshallbeamortizedtoeachsingleperformanceobligationonthecontractcommencementdayaccordingtotherelativeproportionoftheindependentsellingpriceofcommoditiesorservicesundereachsingleperformanceobligation.Ifanysolidevidenceprovesthatthecontractdiscountorvariableconsiderationonlyrelatestooneormorethanone(notall)performanceobligationunderthecontract,theCompanyshallamortizethecontractdiscountorvariableconsiderationtooneormorethanonerelatedperformanceobligations.IndependentsellingpricereferstothepriceadoptedbytheCompanytoindependentlysellcommoditiesorservicestotheclient.However,independentsellingpricecannotbedirectlyobserved.TheCompanyshallestimatetheindependentsellingpricebycomprehensivelyconsideringallrelatedinformationthatcanbereasonablyobtainedandmaximallyadopting

theobservableinputvalue.VariableConsiderationIfanyvariableconsiderationexistsinthecontract,theCompanyshalldeterminetheoptimalestimationofthevariableconsiderationbasedontheexpectedvaluesorthemostpossibleamount.Thevariableconsideration’stransactionpriceshallbeincludedwithoutexceedingthetotalrevenueamountrecognizedwithouttheriskofsignificantrestitutionwhenalluncertaintiesareeliminated.Oneachbalancesheetday,theCompanyshallre-estimatethevariableconsiderationamounttobeincludedinthetransactionprice.ConsiderationPayabletotheClientIfanyconsiderationpayabletotheclientexistsinthecontract,theCompanyshallusesuchconsiderationtooffsetthetransactionpriceunlesssuchconsiderationispaidforacquiringotherclearly-definedcommoditiesorservicesfromtheclient,andwritedownthecurrentrevenueatthelatertimebetweenthetimeofrecognizingrelevantrevenuesandthetimeofpaying(orpromisingthepayment)theconsiderationtotheclient.SaleswiththeQualityAssuranceForsaleswiththeQualityAssurance,iftheQualityAssuranceinvolvesanotherseparateserviceexceptfortheguaranteeofallsoldcommoditiesorservicesmeetingallestablishedstandards,theQualityAssuranceshallconstituteasinglePerformanceObligation;otherwise,theCompanyshallmakecorrespondingaccountingtreatmenttotheQualityAssuranceaccordingtoASBENo.13--Contingency.MainResponsibilityPerson/AgentAccordingtowhetherthecontrolovercommoditiesorservicesisobtainedbeforetheyaretransferredtotheclient,theCompanycanjudgewhetheritisMainResponsibilityPersonorAgentbasedonitsstatusduringthetransaction.IftheCompanycancontrolcommoditiesorservicesbeforetheyaretransferredtotheclient,theCompanyshallbeMainResponsibilityPerson,andrevenuesshallberecognizedaccordingtothetotalconsiderationamountreceivedortobereceived;otherwise,theCompanyshallbeAgent,andrevenuesshallberecognizedaccordingtothecommissionorservicefeespredictedtobedulycharged.However,suchamountshallbedeterminedbasedonthenetamountafterdeductingotheramountspayabletootherrelatedpartiesfromthetotalconsiderationreceivedortobedulyreceivedorthefixedcommissionamountorproportion.SpecificmethodsThespecificmethodsoftheCompany'srevenuerecognitionareasfollows:

ThesalecontractbetweentheCompanyanditscustomersusuallycontainsonlytheperformanceobligationforthetransferofgoods,whichissatisfiedatapointintime.Thefollowingrequirementsmustbemettoconfirmtherevenueofdomesticproducts:TheCompanyhasdeliveredthegoodstothecustomerinaccordancewiththecontractandthecustomerhasacceptedthegoods.Thepaymenthasbeenrecoveredorthereceiptvoucherhasbeenobtained,andtherelevanteconomicbenefitsarelikelytoflowin.Thecustomerhasobtainedcontroloftherelevantgoods.Themainrisksandrewardsofproductownershiphavebeentransferred.Thelegalownershipofthegoodshasbeentransferred.Thefollowingrequirementsmustbemettoconfirmtherevenueofexportproducts:TheCompanyhasdeclaredtheproductsinaccordancewiththecontract,obtainedthebillsoflading,andreceivedthepaymentorobtainedthereceiptvoucherandtherelatedeconomicbenefitsarelikelytoflowin.Themainrisksandrewardsofproductownershiphavebeentransferred.Thelegalownershipofthegoodshasbeentransferred.InterestRevenueInterestRevenueshallbedeterminedaccordingtothetimeoftheCompany’suseofmonetarycapitalandtheactualinterestrate.

RentalIncomeTherentalincomefromoperatingleaseshallberecognizedduringeachleaseperiodaccordingtothestraight-linemethod,andthecontingentrentshallbeincludedintothecurrentprofitandlosswithoutdelay.

31.GovernmentGrants

(1)TypeAgovernmentgrantmeansthemonetaryornon-monetaryassetsobtainedfreebyanenterprisefromthegovernment.Governmentgrantsconsistofthegovernmentgrantspertinenttoassetsandgovernmentgrantspertinenttoincomeaccordingtotherelevantgovernmentdocuments.Forthosethegovernmentdocumentsnotdefinitestipulatetheassistanceobject,thejudgmentbasisoftheCompanyclassifiesthegovernmentgrantspertinenttoassetsandgovernmentsubsidiespertinenttoincomeis:

whetherareusedforpurchasingorconstructingorforformingthelong-termassetsbyothermethods.

(2)RecognitionofGovernmentSubsidiesThegovernmentsubsidiesshouldberecognizedonlywhenmeetwiththeattachedconditionsofthegovernmentgrantsaswellascouldbeacquired.Ifthegovernmentgrantsarethemonetaryassets,shouldbemeasuredaccordingtothereceivedorreceivableamount;andforthegovernmentgrantsarethenon-monetaryassets,shouldbemeasuredbyfairvalue.

(3)AccountingTreatmentThegovernmentgrantspertinenttoassetsshallberecognizedasdeferredincome,andincludedinthecurrentgainsandlossesoroffsetthebookvalueofrelatedassetswithintheusefullivesoftherelevantassetswithareasonableandsystematicmethod.Governmentgrantspertinenttoincomeusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyinthesubsequentperiodshallberecognizedasdeferredincome,andshallbeincludedinthecurrentprofitandlossduringtheperiodofconfirmingtherelevantcosts,expensesorlosses;thoseusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyalreadyhappenedshallbeincludedinthecurrentgainsandlossesorusedtooffsetrelevantcostsdirectly.Forgovernmentgrantsthatincludebothassets-relatedandincome-relatedparts,theyshouldbedistinguishedseparatelyforaccountingtreatment;forgovernmentsubsidiesthataredifficulttobedistinguished,theyshouldbeclassifiedasincome-related.GovernmentgrantsrelatedtothedailyactivitiesoftheCompanyshallbeincludedintootherincomeorusedtooffsetrelevantcostsbythenatureofeconomicbusiness;thoseunrelatedshallbeincludedintonon-operatingincome.Thegovernmentgrantsrecognizedwithrelevantdeferredincomebalancebutneedtoreturnshallbeusedtooffsetthebookbalanceofrelevantdeferredincome,theexcessivepartshallbeincludedinthecurrentgainsandlossesoradjustingthebookvalueofassetsforthegovernmentgrantsassets-relatedthatoffsetthebookvalueofrelevantassetswhentheyareinitiallyrecognized;thosebelongtoothercasesshallbedirectlyincludedinthecurrentgainsandlosses.

32.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)BasisofrecognizingthedeferredincometaxassetsAccordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,adeferredtaxassetshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.

TherecognitionofthedeferredincometaxassetsislimitedbytheincometaxpayablethattheCompanyprobablygainsfordeductingthedeductibletemporarydifferences.Atthebalancesheetdate,wherethereisstrongevidenceshowingthatsufficienttaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,thedeferredtaxassetunrecognizedinpriorperiodshallberecognized.TheCompanyassessesthecarryingamountofdeferredtaxassetatthebalancesheetdate.Ifit’sprobablethatsufficienttaxableprofitwillnotbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,theCompanyshallwritedownthecarryingamountofdeferredtaxasset,orreversetheamountwrittendownlaterwhenit’sprobablethatsufficienttaxableprofitwillbeavailable.

(2)BasisofrecognizingthedeferredincometaxliabilitiesAccordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,Adeferredtaxliabilityshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.

33.LeaseLeasereferstoacontractwherebythelessorassignstherighttouseanassettothelesseeforconsiderationwithinacertainperiodoftime.Onthecommencementdateofthecontract,thecompanyevaluateswhetherthecontractisaleaseorincludesalease.Thecontractisaleaseorincludesaleaseifapartyinthecontractcedestherighttocontroltheuseofoneormoreidentifiedassetsforaspecifiedperiodinexchangeforconsideration.Ifthecontractcontainsmultipleseparateleasesatthesametime,thecompanywilldividethecontractandconductaccountingtreatmentforeachseparatelease.Ifthecontractcontainsboththeleasedpartandthenon-leasedpart,thelesseeandthelessorshalldividetheleasedpartandthenon-leasedpart.

(1)TheCompanyactsasthelesseeThegeneralaccountingtreatmentoftheCompanyasalesseeisshowninNote28,LeaseLiabilities.Forshort-termleaseswithaleasetermoflessthan12monthsandlow-valueassetleaseswithalowvaluewhenasingleassetisbrand-new,theCompanychoosesnottorecognizetherighttouseassetsandleaseliabilities,andwillrecordtherelevantrentalexpensesintocurrentprofitsandlossesorthecostofrelevantassetsineachperiodoftheleasetermaccordingtothestraight-linemethod.Iftheleasechangesandthefollowingconditionsaremet,thecompanywilltreattheleasechangeasaseparatelease:theleasechangeexpandsthescopeoftheleasebyaddingtherighttouseoneormoreleasedassets;Theincreasedconsiderationisequivalenttotheamountoftheseparatepricefortheextendedportionoftheleaseadjustedforthecircumstancesofthecontract.Iftheleasechangeisnotaccountedforasaseparatelease,ontheeffectivedateoftheleasechange,theCompanyshallre-apportiontheconsiderationofthecontractafterthechange,re-determinetheleaseterm,andre-measuretheleaseliabilityaccordingtothepresentvaluecalculatedfromtheleasepaymentafterthechangeandthereviseddiscountrate.

(2)TheCompanyactsasthelessorOntheleasecommencementdate,theCompanyclassifiestheleasesthatsubstantiallytransferalmostallrisksandrewardsrelatedtotheownershipoftheleasedassetsasfinancialleases,andallotherleasesasoperatingleases.

1)OperatingleaseDuringeachperiodoftheleaseterm,theCompanyrecognizesrentalincomeasrentalincomeinaccordancewiththestraight-linemethod,andtheinitialdirectexpensesincurredarecapitalizedandapportiononthesamebasisasrentalincomerecognition,andrecordedintocurrentprofitandlossbystages.Thevariableleasepaymentsobtainedbythecompanyrelatedtooperatingleasesandnotincludedintheleasereceiptsshallbeincludedinthe

currentprofitandlosswhenactuallyincurred.

2)FinanceleaseOnthebeginningdateoftheleaseterm,thecompanyrecognizesthefinanceleasereceivablesandterminatestherecognitionoffinanceleaseassetsinaccordancewiththenetamountofleaseinvestment(thesumoftheunguaranteedresidualvalueandtheamountofleasereceiptsnotreceivedonthebeginningdateoftheleaseterm).Duringeachperiodoftheleaseterm,thecompanycalculatesandrecognizestheinterestincomeinaccordancewiththeinherentinterestrateofthelease.Thevariableleasepaymentsobtainedbythecompany,whicharenotincludedinthenetleaseinvestmentmeasurement,shallbeincludedinthecurrentprofitandlosswhenactuallyincurred.

(3)After-salesleasebackTheCompanyevaluatesanddetermineswhetherthetransferofassetsinasale-and-leasebacktransactionisasaleinaccordancewiththeaccountingStandardsforBusinessEnterprisesNo.14-Revenue.

1)TheCompanyactsasthelesseeIfthetransferofassetsinthesaleandleasebacktransactionisasale,theCompanyshallmeasuretherighttouseassetsformedbythesaleandleasebackaccordingtothepartofthebookvalueoftheoriginalassetrelatedtotherighttouseacquiredbyleaseback,andshallonlyrecognizetherelevantgainsorlossesinrespectoftherighttransferredtothelessor.Ifthetransferofassetsinasale-and-leasebacktransactionisnotasale,theCompanyshallcontinuetorecognizethetransferredassetsandatthesametimerecognizeafinancialliabilityequaltothetransferincome,andconductaccountingtreatmentforthefinancialliabilityinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments.

2)TheCompanyactsasthelessorIfthetransferofassetsinasale-and-leasebacktransactionisasale,theCompanyshallprovideaccountingtreatmentforthepurchaseofassetsinaccordancewithotherapplicableaccountingstandardsforenterprisesandtheleaseofassetsinaccordancewithaccountingStandardsforBusinessEnterprisesNo.21-Lease.Ifthetransferofassetsinasale-leasebacktransactionisnotasale,theCompanydoesnotrecognizethetransferredasset,butrecognizesafinancialassetequaltothetransferincome,andconductsaccountingtreatmentonthefinancialassetinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments.

34.OtherSignificantAccountingPoliciesandAccountingEstimatesTheCompanyevaluatestheimportantaccountingestimatesandkeyassumptionsadoptedonanongoingbasis,basedonhistoricalexperienceandotherfactors,includingreasonableexpectationsoffutureevents.Importantaccountingestimatesandcriticalassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfiscalyeararelistedasfollows:

(1)ClassificationoffinancialassetsThesignificantjudgmentsinvolvedwhentheCompanydeterminestheclassificationoffinancialassetsincludeanalysisofbusinessmodelsandcontractualcashflowcharacteristics.TheCompanydeterminesthebusinessmodelformanagingfinancialassetsatthelevelofthefinancialassetportfolio,takingintoaccountfactorssuchastheapproachofevaluatingandreportingtheperformanceoffinancialassetstokeymanagementpersonnel,therisksaffectingtheperformanceoffinancialassetsandthemannerinwhichtheyaremanaged,andwayinwhichtherelevantbusinessmanagementpersonnelarecompensated.Thefollowingmainjudgmentsexistinassessingwhetherthecontractualcashflowsoffinancialassetsare

consistentwiththebasiclendingarrangements:

Whetherthetimedistributionoramountoftheprincipalamountduringthedurationmaychangeduetoearlyrepaymentorforotherreasons;whethertheinterestincludesonlythetimevalueofmoney,creditrisk,otherbasiclendingrisksandconsiderationagainstcostsandprofits.Forexample,whethertheamountofearlyrepaymentreflectsonlytheoutstandingprincipalandinterestbasedontheoutstandingprincipal,aswellasreasonablecompensationpaidforearlyterminationofthecontract.

(2)MeasurementofexpectedcreditlossesofaccountsreceivableTheCompanycalculatestheexpectedcreditlossofaccountsreceivableusingtheexposuretodefaultriskofaccountsreceivableandtheexpectedcreditlossratio,anddeterminestheexpectedcreditlossratiobasedontheprobabilityofdefaultandthedefaultlossratio.Whendeterminingtheexpectedcreditlossratio,theCompanyusesdatasuchasinternalhistoricalcreditlossexperienceandadjustshistoricaldatatotakeintoaccountcurrentconditionsandforward-lookinginformation.Whenconsideringforward-lookinginformation,theCompanyusesindicatorssuchastheriskofeconomicdownturnandchangesintheexternalmarketenvironment,technologicalenvironmentandcustomerprofile.TheCompanyregularlymonitorsandreviewstheassumptionsrelatedtothecalculationofexpectedcreditlosses.

(3)InventoryfallingpricereservesTheCompanyfollowstheinventoryaccountingpolicyandcarriesoutmeasurementbasedonwhichissmallerbetweenthecostandthenetrealizablevalue.Ifthecostofinventoriesishigherthanitsnetrealizablevalue,thentheinventoryfallingpricesreserveswereimplemented.Theimpairmentofinventoriestonetrealizablevalueisbasedonanassessmentofthemarketabilityoftheinventoriesandtheirnetrealizablevalue.Themanagementshalldeterminetheimpairmentofinventoriesafterobtainingreliableevidencewhiletakingintoaccountthepurposeofholdinginventories,theeffectofitemsafterthebalancesheetdate,andotherfactors.Differencesbetweenactualresultsandoriginalestimateswillaffectthecarryingvalueofinventoriesandtheprovisionorreversalofreversesforfallingpricesofinventoriesintheperiodinwhichtheestimatesarechanged.

(4)DeterminationoffairvalueofunlistedequityinvestmentThefairvalueofunlistedequityinvestmentistheexpectedfuturecashflowsdiscountedatthecurrentdiscountrateforitemswithsimilartermsandriskcharacteristics.SuchvaluationrequirestheCompanytoestimateexpectedfuturecashflowsanddiscountratesandisthereforesubjecttouncertainty.Underlimitedcircumstances,iftheinformationusedtodeterminefairvalueisinsufficient,oriftherangeofpossibleestimatesoffairvalueiswideandthecostrepresentsthebestestimateoffairvaluewithinthatrange,thecostmayrepresentitsappropriateestimateoffairvaluewithinthatrangeofdistribution.

(5)Reservesforlong-termassetsimpairmentTheCompanydeterminesatthebalancesheetdatewhetherthereisanyindicationthatanon-currentasset,otherthanafinancialasset,maybeimpaired.Forintangibleassetswithanuncertainusefullife,impairmenttestsshallbeconductedwhenthereisanindicationofimpairmentbesidestheannualimpairmenttest.Othernon-currentassetsotherthanfinancialassetsshallbetestedforimpairmentwhenthereisanindicationthatthecarryingamountisirrecoverable.Animpairmentisindicatedwhenthecarryingamountofanassetorassetgroupisgreaterthantherecoverableamount,whichisthehigherofthefairvalueminusdisposalexpensesandthepresentvalueofestimatedfuturecashflows.Thenetvalueofthefairvalueminusdisposalexpensesisdeterminedbyreferringtothenegotiablesalepriceorobservablemarketpriceofsimilarassetsinafairtransactionanddeductingincrementalcostsdirectlyattributabletothedisposaloftheasset.Estimatingthepresentvalueoffuturecashflowsrequiressignificantjudgmentswithrespecttotheproduction

volumeoftheasset(orassetgroup),thesellingprice,therelatedoperatingcostsandthediscountrateusedincalculatingthepresentvalue.TheCompanyusesallavailablerelevantinformationinestimatingrecoverableamounts,includingprojectionsofvolumes,sellingpricesandrelatedoperatingcostsbasedonreasonableandsupportableassumptions.

(6)DepreciationandamortizationTheCompanydepreciatesandamortizesinvestmentproperties,fixedassetsandintangibleassetsonastraight-linebasiswithintheirservicelivesaftertakingintoaccounttheirresidualvalues.TheCompanyregularlyreviewsservicelivestodeterminetheamountofdepreciationandamortizationexpensestobeincludedineachreportingperiod.TheservicelifeisdeterminedbytheCompanybasedonpastexperiencewithsimilarassetsandexpectedtechnologicalupdates.Depreciationandamortizationexpenseswillbeadjustedinthefutureperiodifthereisasignificantchangeinpreviousestimates.

(7)DeferredincometaxassetsTotheextentthatitisprobablethatsufficienttaxableprofitwillbeavailabletooffsetthelosses,theCompanyrecognizesdeferredincometaxassetsforallunusedtaxlosses.ThisrequirestheCompany'smanagementtousemanyjudgmentstoestimatethetimingandamountoffuturetaxableprofits,takingintoaccounttaxplanningstrategies,soastodeterminetheamountofdeferredincometaxassetstoberecognized.

(8)IncometaxInthenormaloperatingactivitiesoftheCompany,theultimatetaxtreatmentandcalculationofcertaintransactionsaresubjecttocertainuncertainties.Whethersomeitemscanbedisbursedbeforetaxrequirestheapprovalofthetaxauthorities.Ifthefinaldeterminationofthesetaxmattersdiffersfromtheamountsinitiallyestimated,thedifferencewillhaveanimpactoncurrentanddeferredincometaxesintheperiodinwhichtheyarefinallydetermined.

35.ChangesinMainAccountingPoliciesandEstimates

(1)ChangeofAccountingPolicies

√Applicable□Notapplicable

ChangestotheaccountingpoliciesandwhyApprovalprocessRemark
TheMinistryofFinanceissuedtheAccountingStandardsforBusinessEnterprisesNo.21-Leases(Revised)in2018,requiringthatenterpriseslistedbothdomesticallyandabroadandoverseaslistedenterprisespreparingfinancialstatementsinaccordancewiththeInternationalFinancialReportingStandardsortheAccountingStandardsforBusinessEnterprisesshallimplementitsince1January2019andthatotherscarryitoutsince1January2021.The10thmeetingofthe9thBoardofDirectorsheldonAugust16,2021

In2018,theMinistryofFinanceissuedtherevisedAccountingStandardsforBusinessEnterprisesNo.21--Leases(referredtoasthe"NewLeaseStandards").Thenewleasestandardsrequirethelesseetorecognizetherighttouseassetsandleaseliabilities,aswellasdepreciationandinterestexpenses,forallleasesexceptshort-termleasesandlow-valueassetleases.SinceJanuary1,2021,theCompanyhasconductedaccountingtreatmentinaccordancewiththenewlyrevisedleasestandards.Forcontractsexistingpriortothefirstexecution,theCompanyhaschosennottore-evaluate

whethertheyareleasesorincludeleases,andwillnotadjusttheinformationforcomparableperiodsinaccordancewiththecohesionprovisions.AdoptingthenewlyrevisedleasingstandardsThenewlyrevisedleasingstandardshavenosignificantimpactonthecompany'snetprofit,totalassetsandnetassetsofthecurrentandearlyperiod,andthereisnoadjustmentoftheamountofretainedearningsatthebeginningoftheperiodandotherrelevantitemsinthefinancialstatements.

(2)ChangesinAccountingEstimates

□Applicable√Notapplicable

(3)AdjustmentstotheFinancialStatementsattheBeginningoftheFirstExecutionYearofanyNewStandardsGoverningRevenueorLeasessince2020

□Applicable√Notapplicable

(4)RetroactiveAdjustmentstoComparativeDataofPriorYearswhenFirstExecutionofanyNewStandardsGoverningRevenueorLeasessince2020

□Applicable√Notapplicable

VI.Taxation

1.MainTaxesandTaxRate

CategoryoftaxesTaxbasisTaxrate
VATPayabletosalesrevenue13%,9%,6%,5%
UrbanmaintenanceandconstructiontaxTaxableturnoveramountTaxpaidinaccordancewiththetaxregulationsoftaxunitslocation
EnterpriseincometaxTaxableincome25%、15%、2.5%
EducationsurchargeTaxableturnoveramount5%

Notesofthedisclosuresituationofthetaxpayingbodieswithdifferententerprisesincometaxrate

NameIncometaxrate
ChangchaiCompany,Limited15%
ChangchaiWanzhouDieselEngineCo.,Ltd.15%
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.25%
ChangzhouHorizonInvestmentCo.,Ltd.25%
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.25%
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.15%
JiangsuChangchaiMachineryCo.,Ltd.25%
ChangzhouXingshengRealEstateManagementCo.,Ltd.2.5%

2.TaxPreferenceOn30November2021,theCompanyobtainedtheCertificatesforHigh-techEnterprisesagain,anditstillenjoys15-percentpreferentialrateforcorporateincometaxduringtheReportingPeriod;theCompany’scontrollingsubsidiary-ChangchaiWanzhouDieselEngineCo.,Ltd.,thecontrollingsubsidiarycompany,shallpaythe

corporateincometaxattaxrate15%from1January2011to31December2030inaccordancewiththeNoticeoftheMinistryofFinance,theGeneralAdministrationofCustomsofPRCandtheNationalAdministrationofTaxationaboutthePreferentialTaxPoliciesfortheWesternDevelopmentandMinistryofFinanceAnnouncementNo.23[2020]AnnouncementoftheMinistryofFinance,theStateAdministrationofTaxationandtheNationalDevelopmentandReformCommissiononContinuingtheEnterpriseIncomeTaxPolicyfortheGreatWesternDevelopment.On2December2020,thewholly-ownedsubsidiaryChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.obtainedthe"High-techEnterpriseCertificate"andenjoyeda15%preferentialcorporateincometaxrateduringtheReportingPeriod;Thewholly-ownedsubsidiaryChangzhouXingshengRealEstateManagementCo.,Ltd.iseligiblesmallenterprisewithlowprofitsandshallpaythecorporateincometaxattaxrate2.5%forsmallenterpriseswithlowprofitsduringtheReportingPeriod.

VII.NotestoMajorItemsintheConsolidatedFinancialStatementsoftheCompany

1.MonetaryAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Cashonhand145,594.98287,505.91
Bankdeposits561,746,767.12620,966,786.57
Othermonetaryassets146,074,316.64139,473,930.37
Total707,966,678.74760,728,222.85
Ofwhich:Totalamountdepositedoverseas
Totalamountofrestrictioninusebymortgage,pledgeorfreeze145,564,457.15130,788,682.35

Attheperiod-end,therestrictedmonetaryassetsoftheCompanywasRMB145,564,457.15,ofwhichRMB141,773,647.60wasthecashdepositforbankacceptancebills,RMB2,993,220.00wascashdepositforL/G,andRMB797,589.55wascashdepositforenvironment.

2.TradingFinancialAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Financialassetsatfairvaluethroughprofitorloss404,053,261.5711,500,272.00
Ofwhich:Stocks121,940,343.76
Forwardsettlement200,272.00
Financialproducts282,112,917.8111,300,000.00
Total404,053,261.5711,500,272.00

3.NotesReceivable

(1)NotesReceivableListedbyCategory

Unit:RMB

ItemEndingbalanceBeginningbalance
Bankacceptancebill334,311,236.78600,140,938.05
Total334,311,236.78600,140,938.05

Ifthebaddebtprovisionfornotesreceivablewaswithdrawninaccordancewiththegeneralmodelofexpectedcreditlosses,informationrelatedtobaddebtprovisionshallbedisclosedbyreferencetothedisclosuremethodofotherreceivables:

□Applicable√Notapplicable

(2)ThereWereNoNotesReceivablePledgedbytheCompanyatthePeriod-end

(3)NotesReceivablewhichHadEndorsedbytheCompanyorhadDiscountedbuthadnotDueontheBalanceSheetDateatthePeriod-end

Unit:RMB

ItemAmountofrecognitionterminationattheperiod-endAmountofnotterminatedrecognitionattheperiod-end
Bankacceptancebill135,391,302.15
Total135,391,302.15

(4)ThereWereNoNotesTransferredtoAccountsReceivablebecauseDraweroftheNotesFailedtoExecutetheContractorAgreementatthePeriod-end

4.AccountsReceivable

(1)AccountsReceivableClassifiedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued50,437,453.639.1044,054,367.1587.346,383,086.4833,703,039.725.98%31,807,452.8994.38%1,895,586.83
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbygroup504,092,720.0890.90135,266,680.0826.83368,826,040.00529,486,382.0994.02%134,227,952.4325.35%395,258,429.66
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup504,092,720.0890.90135,266,680.0826.83368,826,040.00529,486,382.0994.02%134,227,952.4325.35%395,258,429.66
Total554,530,173.71100.00179,321,047.2332.34375,209,126.48563,189,421.81100.00%166,035,405.3229.48%397,154,016.49

Accountreceivableswithdrawnbaddebtprovisionseparatelywithsignificantamountattheperiodend:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionReasonofwithdrawal
Customer11,470,110.641,470,110.64100.00%Difficulttorecover
Customer21,902,326.581,902,326.58100.00%Difficulttorecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,797,123.262,194,980.2878.47%Expectedtodifficultlyrecover
Customer53,633,081.232,122,165.7358.41%Expectedtodifficultlyrecover
Customer62,584,805.832,584,805.83100.00%Difficulttorecover
Customer71,523,110.591,523,110.59100.00%Difficulttorecover
Customer81,511,937.64302,387.5320.00%Expectedtodifficultlyrecover
Customer93,780,509.60720,031.7119.05%Expectedtodifficultlyrecover
Customer101,962,873.801,962,873.80100.00%Difficulttorecover
Customer112,790,920.002,790,920.00100.00%Difficulttorecover
Customer122,025,880.182,025,880.18100.00%Difficulttorecover
Customer132,589,892.742,589,892.74100.00%Difficulttorecover
Customer142,837,045.232,837,045.23100.00%Difficulttorecover
Customer155,972,101.905,972,101.90100.00%Difficulttorecover
Customer164,592,679.054,592,679.05100.00%Difficulttorecover
Total48,190,060.9141,806,974.43----

Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup:

Unit:RMB

AgingEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Within1year349,034,264.266,980,685.292.00%
1to2years22,333,500.041,116,675.005.00%
2to3years2,363,804.88354,570.7415.00%
3to4years2,689,676.16806,902.8530.00%
4to5years4,159,071.342,495,442.8060.00%
Over5years123,512,403.40123,512,403.40100.00%
Total504,092,720.08135,266,680.08--

Notesofthebasisofdeterminingthegroup:

Theaccountsreceivablewasadoptedtheaginganalysisbasedonthemonthswhentheaccountsincurredactually,amongwhichtheaccountsincurredearlierwillbeprioritytobesettledintermsofthecapitalturnover.ExplanationoftheinputvalueandassumptionadoptedtodeterminethewithdrawalamountofbaddebtprovisionontheCurrentPeriod:Withreferencetotheexperienceofthehistoricalcreditloss,combiningwiththepredictionofthepresentstatusandfuturefinancialsituation,thecomparisontablewaspreparedbetweentheagingoftheaccountsreceivableandestimatedcreditlossrateinthedurationandtocalculatetheestimatedcreditloss.Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)353,357,486.52
1to2years45,104,892.94
2to3years4,591,959.37
Over3years151,475,834.88
3to4years4,639,425.72
4to5years6,695,361.09
Over5years140,141,048.07
Total554,530,173.71

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofbaddebtprovisionwithdrawn:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-off
Baddebtprovisionwithdrawnseparately31,807,452.8924,084,034.50147,611.2511,689,508.9944,054,367.15
Baddebtprovisionwithdrawnbygroup134,227,952.4327,517,871.7026,479,144.05135,266,680.08
Total166,035,405.3251,601,906.20147,611.2538,168,653.04179,321,047.23

OfwhichbaddebtprovisionreversedorrecoveredwithsignificantamountintheReportingPeriod:No.

(3)ThereWereNoAccountsReceivablewithActualVerificationduringtheReportingPeriod.

Unit:RMB

ItemVerifiedamount
Accountsreceivablewithactualverification38,168,653.04

Ofwhichtheverificationofsignificantaccountsreceivable:

Unit:RMB

NameoftheentityNatureoftheaccountsreceivableVerifiedamountReasonforverificationVerificationproceduresperformedArisingfromrelated-partytransactionsornot
Customer1Accountsreceivable997,047.83Theaccountageofthedebtorismorethan5years,andthedebtorhasnoassetstopayoffduetothecancellationordebtrestructuringoftheotherparty,bankruptcyliquidationorjudiciallitigation.TheCompanyheldthe10thMeetingofthe9thBoardofDirectorsandthe10thMeetingofthe9thSupervisoryCommitteeon16August2021andapprovedtheProposalonVerificationofSomeAccountsReceivable；OnDecember23,2021,the30thmeetingoftheboardof2ndDirectorsofChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.decidedtoreviewandapprovetheProposalonthewrite-offofpartofreceivablesbyChangzhouChangniuMachineryCo.,LTD.Not
Customer2516,384.40
Customer35,359,381.00
Customer45,309,605.00
Customer53,662,926.13
Customer63,279,100.00
Customer72,295,898.35
Customer81,617,988.01
Customer9707,050.39
Customer10612,001.02
Customer11583,558.66
Customer12533,146.26
Customer13978,233.10
Customer141,217,860.04
Total--27,670,180.19------

(4)Top5oftheEndingBalanceoftheAccountsReceivableCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityEndingbalanceofaccountsreceivableProportiontototalendingbalanceofaccountsreceivableEndingbalanceofbaddebtprovision
Customer1174,635,898.3031.49%3,492,717.97
Customer264,375,015.9211.61%1,287,500.32
Customer337,370,796.276.74%747,415.93
Customer418,082,456.143.26%361,649.12
Customer58,152,568.831.47%163,051.38
Total302,616,735.4654.57%

5.AccountsReceivableFinancing

Unit:RMB

ItemEndingbalanceBeginningbalance
Bankacceptancebills497,388,826.02
Total497,388,826.02

ChangesofaccountsreceivablefinancingandfairvaluethereofintheReportingPeriod

√Applicable□NotapplicablePleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivablefinancing.

□Applicable√NotapplicableOthernotes:

TheCompanydiscountsandendorsesaportionofitsbankacceptancesbasedonitsroutinefundmanagementneeds,andtheconditionsforderecognitionaremet,sothebankacceptancesareclassifiedasfinancialassetsmeasuredatfairvaluewhosechangeisincludedinothercomprehensiveincome.On31December2021,therewasnobankacceptanceforwhichbaddebtprovisionaccruedseparatelyintheCompany.TheCompanymeasurestheprovisionofbaddebtprovisiononthebasisofexpectedcreditlossesthroughouttheduration.TheCompanybelievesthatthecreditriskcharacteristicsofthebankacceptancesitholdsaresimilar,andtherewasnobankacceptanceforwhichbaddebtprovisionaccruedseparately.Inaddition,therewasnosignificantcreditriskinthebankacceptance,andnosignificantlosswouldbecausedbybankdefaults.

(1)AccountsreceivablefinancingwhichhadendorsedbytheCompanyorhaddiscountedbuthadnotdueattheperiod-end

ItemAmountofrecognitionterminationattheperiod-endAmountofnotterminatedrecognitionattheperiod-end
Bankacceptancebill214,422,574.14
Total214,422,574.14

6.Prepayments

(1)ListbyAgingAnalysis

Unit:RMB

AgingEndingbalanceBeginningbalance
AmountProportionAmountProportion
Within1year6,706,970.5581.82%7,039,656.0575.23%
1to2years94,583.551.15%641,762.796.86%
2to3years362,397.674.42%673,819.297.20%
Over3years1,033,466.6212.61%1,002,602.62010.71%
Total8,197,418.39--9,357,840.75--

Therewasnoprepaymentwithsignificantamountagingoveroneyearasoftheperiod-end.

(2)Top5oftheEndingBalanceofthePrepaymentsCollectedaccordingtothePrepaymentTargetAttheperiod-end,thetotaltop5oftheendingbalanceoftheprepaymentscollectedaccordingtotheprepaymenttargetwasRMB2,411,854.81accountingfor29.42%ofthetotalendingbalanceofprepayments.

7.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestreceivable
Dividendreceivable
Otherreceivables19,515,350.526,212,062.80
Total19,515,350.526,212,062.80

(1)OtherReceivables

1)OtherReceivablesClassifiedbyAccountsNature

Unit:RMB

NatureEndingcarryingvalueBeginningcarryingvalue
Marginandcashpledge1,299,600.004,200.00
Intercoursefunds35,889,738.8022,967,220.99
Pettycashandborrowingsbyemployees1,184,204.411,359,483.08
Other13,630,284.6413,806,779.19
Total52,003,827.8538,137,683.26

2)WithdrawalofBadDebtProvision

Unit:RMB

BaddebtprovisionFirststageSecondstageThirdstageTotal
Expectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)
Balanceof1January202131,925,620.4631,925,620.46
Balanceof1January2021intheCurrentPeriod
--TransfertoSecondstage-26,783,142.1926,783,142.19
--TransfertoThirdstage-5,039,368.415,039,368.41
--ReversetoSecondstage
--ReversetoFirststage
WithdrawaloftheCurrentPeriod184,499.59674,822.50859,322.09
ReversaloftheCurrentPeriod296,465.22296,465.22
Write-offsoftheCurrentPeriod
VerificationoftheCurrentPeriod
Otherchanges
Balanceof30December2021287,609.4526,486,676.975,714,190.9132,488,477.33

Changesofcarryingamountwithsignificantamountchangedoflossprovisioninthecurrentperiod

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingEndingbalance
Within1year(including1year)17,631,994.08
1to2years1,416,120.16
2to3years116,820.58
Over3years32,838,893.03
3to4years396,819.78
4to5years1,119,890.57
Over5years31,322,182.68
Total52,003,827.85

3)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offOther
Baddebtprovisionforwhichaccruedseparately5,039,368.41674,822.505,714,190.91
Baddebtprovisionforwhichaccruedbygroup26,886,252.05111,965.6326,774,286.42
Total31,925,620.46674,822.50111,965.6332,488,477.33

4)ThereWasNoParticularsoftheActualVerificationofOtherReceivablesduringtheReportingPeriod

5)Top5oftheEndingBalanceofOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontoendingbalanceofotherreceivables%Endingbalanceofbaddebtprovision
ChangzhouCompressorFactoryIntercoursefunds2,940,000.00Over5years5.65%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years5.49%2,853,188.02
ChangzhouNewDistrictAccountingCenterIntercoursefunds1,626,483.25Over5years3.13%1,626,483.25
ChangchaiGroupSettlementCenterIntercoursefunds1,140,722.16Over5years2.19%1,140,722.16
ChangzhouHuadiEngineeringGuaranteeCo.,Ltd.Engineeringdeposit1,065,400.001-2years2.05%53,270.00
Total9,625,793.4318.51%8,613,663.43

8.InventoryWhethertheCompanyneedstocomplywiththerequirementsofrealestateindustryNo

(1)CategoryofInventory

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountFallingpricereservesCarryingvalueCarryingamountFallingpricereservesCarryingvalue
Rawmaterials148,617,321.857,260,564.47141,356,757.38134,712,519.835,559,513.66129,153,006.17
Materialsprocessedoncommission13,877,280.6013,877,280.6014,065,866.5268,876.5713,996,989.95
Goodsinprocess119,354,374.1415,534,236.35103,820,137.79134,454,109.8818,512,449.08115,941,660.80
Finishedgoods403,855,588.9413,029,104.26390,826,484.68361,975,004.8915,261,416.17346,713,588.72
Lowpricedandeasilywornarticles1,203,097.731,203,097.731,906,803.531,031,708.62875,094.91
Total686,907,663.2635,823,905.08651,083,758.18647,114,304.6540,433,964.10606,680,340.55

(2)Provisionforinventorydepreciationandprovisionforimpairmentofcontractperformancecosts

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
WithdrawalOtherReversalorwrite-offOther
Rawmaterials5,559,513.655,635,488.243,934,437.427,260,564.47
Materialsprocessedoncommission68,876.5768,876.57
Goodsinprocess18,512,449.094,137,802.167,116,014.9015,534,236.35
Finishedgoods15,261,416.172,232,311.9113,029,104.26
Lowpricedandeasilywornarticles1,031,708.621,031,708.62
Total40,433,964.109,773,290.4014,383,349.4235,823,905.08

(3)ThereWasNoCapitalizedBorrowingExpenseintheEndingBalanceofInventories

9.OtherCurrentAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
TheVATtaxcredits37,806,274.2922,534,134.72
Privateplacementofintermediaryagencyfees2,358,490.56
Prepaidcorporateincometax6,143,886.152,240,396.88
Prepaidexpense110,662.1380,070.32
Other86,270.24
Total44,060,822.5727,299,362.72

10.InvestmentsinDebtObligations

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountFallingpricereservesCarryingvalueCarryingamountFallingpricereservesCarryingvalue
Three-yearfixedtermdeposit37,898,226.3937,898,226.39
Total37,898,226.3937,898,226.39

Significantinvestmentsindebtobligations

Unit:RMB

ItemEndingbalanceBeginningbalance
ParvalueCouponrateActualinterestrateMaturitydateParvalueCouponrateActualinterestrateMaturitydate
Three-yearfixedtermdeposit37,000,000.003.80%26April2024
Total37,000,000.00————————————

Changesofcarryingamountwithsignificantamountchangedoflossprovisioninthereportingperiod

□Applicable√Notapplicable

11.Long-termEquityInvestment

Unit:RMB

InvesteesBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserves
AdditionalinvestmentReducedinvestmentGainorlossrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesinotherequityCashbonusorprofitannouncedtoissueWithdrawalofdepreciationreservesOther
II.Associatedenterprises
BeijingTsinghuaIndustrialInvestmentManagementCo.,Ltd.0.000.0044,182.50
Subtotal0.000.0044,182.50
Total0.000.0044,182.50

12.OtherEquityInstrumentInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)146,375,646.53102,198,950.87
Otherequityinstrumentinvestmentmeasuredbyfairvalue633,502,000.00582,939,000.00
Total779,877,646.53685,137,950.87

Non-tradingequityinstrumentinvestmentdisclosedbycategory

Unit:RMB

ItemDividendincomerecognizedAccumulativegainsAccumulativelossesAmountofothercomprehensivetransferredtoretainedearningsReasonforassigningtomeasurebyfairvalueofwhichchangesbeincludedtoothercomprehensiveincomeReasonforothercomprehensiveincometransferredtoretainedearnings
FotonMotorCo.,Ltd.455,296,000.00Non-tradingequityinvestment
BankofJiangsu7,394,400.0093,636,000.00Non-tradingequityinvestment
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)46,375,646.53Non-tradingequityinvestment

Othernotes:

Thecorporatesecuritiesofaccommodationbusinessstillonlendingattheperiod-end:3,276,000sharesofFotonMotorCo.,Ltd.

13.OtherNon-currentFinancialAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
JiangsuLianceElectromechanicalTechnologyCo.,Ltd.7,200,000.00
KailongHighTechnologyCo.,Ltd.38,282,105.00
GuizhouWeimenPharmaceuticalCo.,Ltd.200,104.80
GuizhouAndaTechnologyEnergyCo.,Ltd.195,297.49
HenanLantianGasCo.,Ltd.160,744.76
HebeiSongheRenewableResourcesCo.,Ltd.104,699.44
AnhuiHaofangElectromechanicalCo.,Ltd.89,987.14
JiangsuHorizonNewEnergyTechnology112,500,000.0052,500,000.00

14.InvestmentProperty

(1)InvestmentPropertyAdoptingtheCostMeasurementMode

√Applicable□Notapplicable

Unit:RMB

ItemHousesandbuildingsTotal
I.Originalcarryingvalue
1.Beginningbalance87,632,571.1487,632,571.14
2.Increasedamountoftheperiod5,444,908.385,444,908.38
(1)Outsourcing
(2)Transferfrominventories/fixedassets/constructioninprogress5,444,908.385,444,908.38
(3)Enterprisecombinationincrease
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance93,077,479.5293,077,479.52
II.Accumulativedepreciationandaccumulativeamortization
1.Beginningbalance41,393,245.1141,393,245.11
2.Increasedamountoftheperiod7,086,979.207,086,979.20
(1)Withdrawaloramortization2,208,340.802,208,340.80
(2)Transferredinto4,878,638.404,878,638.40
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance48,480,224.3148,480,224.31
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue44,597,255.2144,597,255.21
2.Beginningcarryingvalue46,239,326.0346,239,326.03

Co.,Ltd.

Co.,Ltd.
Total112,500,000.0098,732,938.63

15.FixedAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Fixedassets402,915,521.65454,181,555.68
Disposaloffixedassets
Total402,915,521.65454,181,555.68

(1)ListofFixedAssets

Unit:RMB

ItemHousesandbuildingsMachineryequipmentTransportationequipmentOtherequipmentTotal
I.Originalcarryingvalue
1.Beginningbalance465,428,975.71996,970,879.6516,939,308.0142,124,393.111,521,463,556.48
2.Increasedamountoftheperiod2,893,957.9324,394,538.81746,936.131,132,052.8029,167,485.67
(1)Purchase890,191.231,758,130.59499,325.51553,980.353,701,627.68
(2)Transferfromconstructioninprogress2,003,766.7022,636,408.22247,610.62578,072.4525,465,857.99
(3)Enterprisecombinationincrease
3.Decreasedamountoftheperiod10,947,523.688,814,883.342,176,590.761,901,608.9423,840,606.72
(1)Disposalorscrap5,502,615.308,814,883.342,176,590.761,901,608.9418,395,698.34
(2)Transferout5,444,908.385,444,908.38
4.Endingbalance457,375,409.961,012,550,535.1215,509,653.3841,354,836.971,526,790,435.43
II.Accumulativedepreciation
1.Beginningbalance298,167,122.41718,498,347.7013,464,995.7836,670,860.661,066,801,326.55

(2)ListofTemporarilyIdleFixedAssets

ItemOriginalcarryingvalueAccumulativedepreciationDepreciationreservesCarryingvalueNote
Machineryequipment561,589.5080,915.25480,674.25

16.ConstructioninProgress

Unit:RMB

2.Increasedamountoftheperiod16,282,369.0255,623,684.44937,276.731,076,506.4573,919,836.64
(1)Withdrawal16,282,369.0255,623,684.44937,276.731,076,506.4573,919,836.64
3.Decreasedamountoftheperiod4,911,488.408,529,943.082,002,885.691,882,606.4917,326,923.66
(1)Disposalorscrap32,850.008,529,943.082,002,885.691,882,606.4912,448,285.26
(2)Transferout4,878,638.404,878,638.40
4.Endingbalance309,538,003.03765,592,089.0612,399,386.8235,864,760.621,123,394,239.53
III.Depreciationreserves
1.Beginningbalance480,674.25480,674.25
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposalorscrap
4.Endingbalance480,674.25480,674.25
IV.Carryingvalue
1.Endingcarryingvalue147,837,406.93246,477,771.813,110,266.565,490,076.35402,915,521.65
2.Beginningcarryingvalue167,261,853.30277,991,857.703,474,312.235,453,532.45454,181,555.68
ItemEndingbalanceBeginningbalance
Constructioninprogress268,417,880.6644,844,896.77
Engineeringmaterials1,887,810.2521,657,535.64
Total270,305,690.9166,502,432.41

(1)ListofConstructioninProgress

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Expansioncapacityofmulti-cylinder(The2ndPeriod)1,097,435.901,097,435.901,128,887.901,128,887.90
Innovationcapacityconstructionoftechnologycenter3,714,601.763,714,601.76
Relocationprojectoflightengineandcasting254,748,122.49254,748,122.4940,307,243.3540,307,243.35
Equipmenttobeinstalledandpaymentforprojects8,857,720.518,857,720.513,408,765.523,408,765.52
Total268,417,880.66268,417,880.6644,844,896.7744,844,896.77

(2)ChangesinSignificantConstructioninProgressduringtheReportingPeriod

Unit:RMB

ItemBudgetBeginningbalanceIncreasedamountTransferredinfixedassetsOtherdecreasedamountEndingbalanceProportionofaccumulatedinvestmentinconstructioJobscheduleAccumulatedamountofinterestcapitalizationOfwhich:AmountofcapitalizedinterestsfortheReporCapitalizationrateofinterestsfortheReportingPerioCapitalresources
nstobudgettingPeriodd
Expansioncapacityofmulti-cylinder(The2ndPeriod)79,000,000.001,128,887.9031,452.001,097,435.90UncompletedSelf-raised
Innovationcapacityconstructionoftechnologycenter96,066,200.003,714,601.763,714,601.763.87%UncompletedSelf-raisedfundsandraisedfund
Relocationprojectoflightengineandcasting1,000,118,700.0040,307,243.35214,440,879.14254,748,122.4925.47%UncompletedSelf-raisedfundsandraisedfund
Noisereductionrenovationofthehouses1,972,314.701,972,314.70CompletedSelf-raised
Total1,175,184,900.043,408,445.95218,155,480.902,003,766.70259,560,160.15------

(3)EngineeringMaterials

Unit:RMB

Item

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Engineeringmaterials1,887,810.251,887,810.2521,657,535.6421,657,535.64
Total1,887,810.251,887,810.2521,657,535.6421,657,535.64

17.IntangibleAssets

(1)ListofIntangibleAssets

Unit:RMB

ItemLanduserightSoftwareLicensefeeTrademarkuserightTotal
I.Originalcarryingvalue
1.Beginningbalance206,783,546.6814,067,915.165,488,000.001,087,042.79227,426,504.63
2.Increasedamountoftheperiod1,668,804.50563,930.682,232,735.18
(1)Purchase1,668,804.50563,930.682,232,735.18
(2)InternalR&D
(3)Businesscombinationincrease
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance206,783,546.6815,736,719.665,488,000.001,650,973.47229,659,239.81
II.Accumulatedamortization
1.Beginningbalance54,545,676.0211,879,287.652,103,733.1827,176.0768,555,872.92
2.Increasedamountoftheperiod4,259,967.94977,672.47548,799.96162,180.615,948,620.98
(1)Withdrawal4,259,967.94977,672.47548,799.96162,180.615,948,620.98
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance58,805,643.9612,856,960.122,652,533.14189,356.6874,504,493.90
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue147,977,902.722,879,759.542,835,466.861,461,616.79155,154,745.91
2.Beginningcarryingvalue152,237,870.662,188,627.513,384,266.821,059,866.72158,870,631.71

18.Long-termPrepaidExpenses

ItemBeginningbalanceIncreaseAmortizedamountDecreaseEndingbalance
Furnitureofemployeedormitory,etc.13,693.2013,693.20
Trademarkrenewalfee114,257.433,912.13110,345.30
Total13,693.20114,257.4317,605.33110,345.30

19.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)DeferredIncomeTaxAssetsthatHadnotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
DeductibletemporarydifferenceDeferredincometaxassetsDeductibletemporarydifferenceDeferredincometaxassets
Baddebtprovision7,196,880.381,087,755.386,544,083.47981,314.04
Deductibleloss59,064,221.029,085,419.1421,670,394.083,250,559.11
Inventoryfallingpricereserves2,990,223.81448,533.57
Impairmentoffixedassets480,674.2572,101.14
Total69,731,999.4610,693,809.2328,214,477.554,231,873.15

(2)DeferredIncomeTaxLiabilitiesHadNotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
TaxabletemporarydifferenceDeferredincometaxliabilitiesTaxabletemporarydifferenceDeferredincometaxliabilities
Changesinfairvalueofotherequityinstrumentinvestment595,307,646.5389,296,146.98500,567,950.8775,085,192.63
Changesinfairvalueoftradingfinancialassets89,101,335.3622,064,042.0618,481,109.004,600,250.05
Changesinfairvalueofothernon-currentfinancialassets36,250,000.005,437,500.002,500,000.00375,000.00
Assetsevaluationappreciationforbusinesscombinationnotunderthesamecontrol3,643,147.16546,472.074,074,374.26611,156.14
Total724,302,129.05117,344,161.11525,623,434.1380,671,598.82

(3)ListofUnrecognizedDeferredIncomeTaxAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Baddebtprovision204,612,644.18191,416,942.31
Fallingpricereservesofinventories32,833,681.2740,433,964.10
Deductibleloss14,716,019.7813,352,584.61
Total252,162,345.23245,203,491.02

(4)DeductibleLossesofUnrecognizedDeferredIncomeTaxAssetswillDueintheFollowingYears

YearsEndingamountBeginningamountNote
20211,490,211.13
2022434,000.66769,219.70
2023940,673.562,275,610.42
20246,538,363.996,538,363.99
20252,279,179.372,279,179.37
20264,523,802.20
Total14,716,019.7813,352,584.61--

20.OtherNon-currentAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Advancespaymentofequipments4,543,240.884,543,240.8819,971,006.5619,971,006.56
Total4,543,240.884,543,240.8819,971,006.5619,971,006.56

21.Short-termBorrowings

(1)CategoryofShort-termBorrowings

Unit:RMB

ItemEndingbalanceBeginningbalance
Mortgageloans7,000,000.007,000,000.00
Guaranteedloans5,000,000.0010,000,000.00
Creditloans5,000,000.00
Obligationtopaybillsdiscountedbeforematurity61,971,466.65
Total73,971,466.6522,000,000.00

(2)ThereWasNoShort-termBorrowingsOverduebutUnpaid.

22.NotesPayable

Unit:RMB

CategoryEndingbalanceBeginningbalance
Bankacceptancebill550,774,400.00595,346,000.00
Total550,774,400.00595,346,000.00

Attheendofthecurrentperiod,therewerenonotespayabledueandnotpaid.

23.AccountsPayable

(1)ListofAccountsPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
Paymentforgoods666,186,668.82612,757,392.46
Total666,186,668.82612,757,392.46

(2)SignificantAccountsPayableAgingoverOneYear

ItemEndingbalanceUnpaid/Un-carry-overreason
Paymentforgoods12,367,497.92Supplierterminatescooperation,pendingpayment
Paymentforequipment1,845,062.03Equipmentwarranty
Total14,212,559.95

24.AdvancesfromCustomers

Unit:RMB

ItemEndingbalanceBeginningbalance
Paymentforgoods660,965.62661,612.17
Total660,965.62661,612.17

Therewerenosignificantadvancesfromcustomersagingoveroneyearattheendoftheperiod.

25.ContractLiabilities

Unit:RMB

ItemEndingbalanceBeginningbalance
Contractliabilities26,864,081.9735,944,517.15
Total26,864,081.9735,944,517.15

Therewerenosignificantcontractliabilitiesagingoveroneyearattheendoftheperiod.

26.PayrollPayable

(1)ListofPayrollPayable

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
I.Short-termsalary50,127,161.47285,683,270.01290,424,764.0045,385,667.48
II.Post-employmentbenefit-definedcontributionplans32,595,783.0932,595,783.09
III.Terminationbenefits
IV.Currentportionofotherbenefits
Total50,127,161.47318,279,053.10323,020,547.0945,385,667.48

(2)ListofShort-termSalary

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Salary,bonus,allowance,subsidy41,908,627.17240,287,147.00244,820,001.4037,375,772.77
2.Employeewelfare1,592.742,040,614.932,040,614.931,592.74
3.Socialinsurance19,165,330.6319,165,330.63
Ofwhich:Medicalinsurancepremiums15,877,310.2115,877,310.21
Work-relatedinjuryinsurance1,747,668.071,747,668.07
Maternityinsurance1,540,352.351,540,352.35
4.Housingfund19,414,745.8019,414,745.80
5.Laborunionbudgetandemployeeeducationbudget8,216,941.564,775,431.654,984,071.248,008,301.97
6.Short-termabsencewithsalary
7.Short-termprofitsharingscheme
Total50,127,161.47285,683,270.01290,424,764.0045,385,667.48

(3)ListofDefinedContributionPlans

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Basicpensionbenefits31,606,867.1631,606,867.16
2.Unemploymentinsurance988,915.93988,915.93
3.Enterpriseannuities
Total32,595,783.0932,595,783.09

27.TaxesPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
VAT372,401.11461.22
Corporateincometax470,363.07531,557.38
Personalincometax76,559.47114,208.40
Urbanmaintenanceandconstructiontax957,520.42879,346.31
Propertytax1,160,865.3394,863.50
Landusetax1,026,217.69100,135.19
Stampduty44,759.846,851.35
EducationSurcharge90,862.4635,023.81
Comprehensivefees1,075,134.761,075,134.76
Environmentalprotectiontax31,694.6731,903.49
Total5,306,378.822,869,485.41

28.OtherPayables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestpayable
Dividendspayable3,891,433.833,891,433.83
Otherpayables144,469,939.46193,653,642.25
Total148,361,373.29197,545,076.08

(1)DividendsPayable

Unit:RMB

Thereasonfornon-paymentforoveroneyear:Notgottenbyshareholdersyet.

(2)OtherPayables

1)OtherPayablesListedbyNatureofAccount

Unit:RMB

ItemEndingbalanceBeginningbalance
Margin&cashpledged5,045,246.583,406,041.83
Intercoursefundsamongunits8,364,769.419,309,617.95
Intercoursefundsamongindividuals402,661.041,256,848.49
Salesdiscountandthreeguarantees114,581,855.32147,739,746.71
Other16,075,407.1131,941,387.27
Total144,469,939.46193,653,642.25

2)SignificantOtherPayablesAgingoverOneYearThesignificantotherpayablesagingoveroneyearattheperiod-endmainlyreferredtotheunsettledtemporarycreditsandchargesowned.

29.OtherCurrentLiabilities

Unit:RMB

ItemEndingbalanceBeginningbalance
Saleservicefee460,437.94365,047.65
Transportationstoragefee870,397.06260,055.33
Electriccharge3,131,920.881,972,314.61
Taxtobetransferred2,250,515.652,636,529.53
Estimatedsharevalueaddedtax3,989,913.45

Item

ItemEndingbalanceBeginningbalance
Ordinarysharedividends3,243,179.973,243,179.97
Interestofpreferredshares/perpetualbondclassifiedasequityinstrument
Dividendsfornon-controllingshareholders648,253.86648,253.86
Other
Total3,891,433.833,891,433.83
Obligationtopaybillstransferredbeforematurity72,391,302.15
Otherwithholdingexpenses5,843,705.66
Total88,938,192.795,233,947.12

30.DeferredIncome

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalanceReasonforformation
Governmentgrants56,949,737.60-14,970,000.002,364,382.2039,615,355.40Governmentappropriation
Total56,949,737.60-14,970,000.002,364,382.2039,615,355.40--

Iteminvolvinggovernmentgrants:

Unit:RMB

ItemBeginningbalanceAmountofnewsubsidyAmountrecordedintonon-operatingincomeintheReportingPeriodAmountrecordedintootherincomeintheReportingPeriodAmountoffsetcostintheReportingPeriodOtherchangesEndingbalanceRelatedtoassets/relatedincome
Nationalmajorprojectspecialallocations-Flexibleprocessingproductionlineforcylindersofdieselengines28,770,000.00-14,770,000.00759,633.00200,000.0013,040,367.00Relatedtoassets
Removecompensation19,179,737.60665,973.6218,513,763.98Relatedtoassets
ResearchanddevelopmentandindustrializationallocationsofnationalIII/IVstandardhigh-poweredefficientdieselengineforagriculturaluse9,000,000.00938,775.588,061,224.42Relatedtoassets
Total56,949,737.60-14,770,000.002,364,382.20200,000.0039,615,355.40

Notes:Thenationalmajorspecialproject-theflexibleprocessingproductionlinefordieselenginecylinderblocksunderwentcomprehensiveperformanceevaluationbytheIndustrialDevelopmentPromotionCenteroftheMinistryofIndustryandInformationTechnology(MIIT),anditwasdeterminedthatthefinalappropriationincomewasRMB13.8million,withRMB28.77millionreceivedfromthecountryandthebalanceofRMB14.77millionreturnedtoMIIT.

31.ShareCapital

Unit:RMB

BeginningbalanceIncrease/decrease(+/-)Endingbalance
NewsharesissuedBonussharesBonusissuefromprofitOtherSubtotal
Thesumofshares561,374,326.00144,318,181.00144,318,181.00705,692,507.00

Note:Anon-publicofferingofupto168,412,297newshareswasdeliberatedonandapprovedasaresolutionofthe8th

Meetingofthe9

thBoardofDirectorsheldon13April2021andthe2020AnnualGeneralMeetingheldon7May2021andapprovedbytheApprovaloftheNon-publicOfferingofSharesofChangchaiCo.,Ltd.(CSRCPermit[2020]No.3374)issuedbyChangchaiCompanyLimitedtheChinaSecuritiesRegulatoryCommission.OnJune16,2021,thecapitalverificationreport"S.G.W[2021]B062"wasissuedbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),confirmingthattheCompanyhadissued144,318,181RMBordinaryshares(Ashares)inanon-publicoffering,withanadditionalpaid-incapital(sharecapital)ofRMB144,318,181.ThetotalamountraisedwasRMB634,999,996.40;thenetamountraisedafterdeductingrelatedissuanceexpensesofRMB14,334,262.43wasRMB620,665,733.97,whichincreasedthecapitalreserve(sharecapitalpremium)byRMB476,347,552.97.Afterthisalteration,thetotalsharecapitalwasRMB705,692,507.00.TheCompanyhascompletedcorrespondingregistrationproceduresforindustrialandcommercialchangeon17September2021.

32.CapitalReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Capitalpremium(premiumonstock)143,990,690.24476,347,552.97620,338,243.21
Othercapitalreserves20,337,975.1920,337,975.19
Total164,328,665.43476,347,552.97640,676,218.40

Othernotes,includingchangesandreasonsthereof:Theincreaseinpremiumonstockforthecurrentperiodisshowninthepaid-incapitalstatement.

33.OtherComprehensiveIncome

Unit:RMB

ItemBeginningbalanceReportingPeriodEndingbalance
IncomebeforetaxationintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinretainedearningsintheCurrentPeriodLess:IncometaxexpenseAttributabletoownersoftheCompanyastheparentaftertaxAttributabletonon-controllinginterestsaftertax
I.Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss425,482,758.2494,739,695.6614,210,954.3580,528,741.31506,011,499.55
Ofwhich:Changescausedbyre-measurementsondefinedbenefitpensionschemes
Shareofothercomprehensiveincomeofinvesteesthatwillnotbereclassifiedtoprofitorlossunderequitymethod
Changesinfairvalueofotherequityinstrumentinvestment425,482,758.2494,739,695.6614,210,954.3580,528,741.31506,011,499.55
Changesinfairvalueofcorporatecreditrisk
II.Othercomprehensiveincomethatmaysubsequentlybereclassifiedtoprofitorloss
Ofwhich:Shareofothercomprehensiveincomeof
investeesthatwillbereclassifiedtoprofitorlossunderequitymethod
Changesinfairvalueofinvestmentinotherdebtobligations
Amountoffinancialassetsreclassifiedtoothercomprehensiveincome
Creditdepreciationreservesofinvestmentinotherdebtobligations
Reservesforcashflowhedges
Differencesarisingfromtranslationofforeigncurrency-denominatedfinancialstatements
Totalofothercomprehensiveincome425,482,758.2494,739,695.6614,210,954.3580,528,741.31506,011,499.55

34.SpecificReserve

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Safetyproductioncost18,812,986.554,023,200.244,023,236.7518,812,950.04
Total18,812,986.554,023,200.244,023,236.7518,812,950.04

35.SurplusReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Statutorysurplusreserves312,294,673.248,692,957.32320,987,630.56
Discretionalsurplusreserves13,156,857.9013,156,857.90
Total325,451,531.148,692,957.32334,144,488.46

36.RetainedEarnings

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Beginningbalanceofretainedearningsbeforeadjustments777,899,079.66726,689,929.10
Totalretainedearningsatthebeginningoftheadjustmentperiod(“+”meansup,“-”meansdown)1,651,336.26
Beginningbalanceofretainedearningsafteradjustments777,899,079.66728,341,265.36
Add:NetprofitattributabletoownersoftheCompanyastheparent103,006,232.5452,432,443.05
Less:Withdrawalofstatutorysurplusreserves8,692,957.323,222,997.42
Withdrawalofdiscretionalsurplusreserves
Withdrawalofgeneralreserve
Dividendofordinarysharespayable
Dividendsofordinarysharestransferredassharecapital
RecordedinothercomprehensiveincomeinpriorperiodandtransferredinretainedprofitsintheCurrentPeriod
Endingretainedearnings872,212,354.88777,899,079.66

Listofadjustmentofbeginningretainedearnings:

1)RMB0beginningretainedearningswasaffectedbyretrospectiveadjustmentconductedaccordingtotheAccountingStandardsforBusinessEnterprisesandrelevantnewregulations.

2)RMB0beginningretainedearningswasaffectedbychangesinaccountingpolicies.

3)RMB0beginningretainedearningswasaffectedbycorrectionofsignificantaccountingerrors.

4)RMB0beginningretainedearningswasaffectedbychangesincombinationscopearisingfromsamecontrol.

5)RMB0beginningretainedearningswasaffectedtotallybyotheradjustments.

37.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations2,404,119,747.062,051,932,677.422,252,479,553.511,918,486,625.85
Otheroperations48,310,768.5432,739,084.6643,985,157.7332,087,365.42
Total2,452,430,515.602,084,671,762.082,296,464,711.241,950,573,991.27

Whethertheloweroftheauditednetprofitbeforeandafterdeductionofnon-recurringgainsandlossesisnegative

□Yes√NoRelevantinformationofrevenue:

Unit:RMB

CategoryofcontractsSegment1
ProductTypes
Ofwhich:
Single-cylinderdieselengines1,050,641,417.26
Multi-cylinderdieselengines1,091,284,576.58
Otherproducts181,798,390.14
Accessories80,395,363.08
Classifiedbybusinessarea
Ofwhich:
Salesindomesticmarket1,990,006,910.43
Exportsales414,112,836.63
Total2,404,119,747.06

Informationrelatedtoperformanceobligations:none

38.TaxesandSurtaxes

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Urbanmaintenanceandconstructiontax1,472,605.592,090,758.82
Educationsurcharge1,051,826.511,493,399.12
Propertytax6,157,554.674,573,282.78
Landusetax5,226,882.223,752,947.49
Vehicleandvesselusetax2,875.001,350.00
Stampduty969,210.59698,047.82
Environmenttax204,133.44221,775.24
Other40,860.9438,047.88
Total15,125,948.9612,869,609.15

39.SellingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Employeebenefits42,968,060.5538,670,632.17
Officeexpenses11,247,378.9415,665,504.29
Salespromotionalexpense1,435,536.256,859,494.25
Threeguarantees60,722,393.4665,108,496.52
Transportcharge320,853.84
Other548,067.282,068,151.39
Total117,242,290.32128,372,278.62

40.AdministrativeExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Employeebenefits51,646,790.8254,275,945.07
Officeexpenses9,359,397.9310,970,658.73
Depreciationandamortization9,925,872.3110,255,597.50
Safetyexpenses4,023,200.243,766,291.74
Repaircharge1,985,784.26788,498.70
Inventoryscrapandinventoryloss(profit)5,218,542.74
Other16,730,695.927,389,204.00
Total98,890,284.2287,446,195.74

41.DevelopmentCosts

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Directinputexpense49,871,973.9643,808,908.87
Employeebenefits21,059,641.4520,288,706.97
Depreciationandamortization4,240,194.244,534,946.69
Designcosts250,000.00
Entrusteddevelopmentcharges5,521,861.13430,000.00
Other1,446,613.363,196,218.55
Total82,390,284.1472,258,781.08

42.FinanceCosts

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Interestexpense5,907,625.427,302,086.80
Less:Interestincome7,921,535.625,467,634.76
Netforeignexchangegainsorlosses3,969,634.6314,491,248.00
Other-752,108.63-557,389.72
Total1,203,615.8015,768,310.32

43.OtherIncome

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Governmentgrantsdirectlyrecordedintothecurrentprofitorloss4,234,711.295,848,842.03
Governmentgrantsrelatedtodeferredincome2,364,382.201,914,373.62
Others34,238.8945,516.87

44.InvestmentIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Long-termequityinvestmentincomeaccountedbyequitymethod
Investmentincomefromdisposaloflong-termequityinvestment
Investmentincomefromholdingoftradingfinancialassets
Investmentincomefromdisposaloftradingfinancialassets450,637.63-25,036.13
Dividendincomefromholdingofotherequityinstrumentinvestment7,394,400.005,004,000.00
Incomefromre-measurementofresidualstockrightsatfairvalueafterlosingcontrolpower
Interestincomefromholdingofinvestmentindebtobligations
Interestincomefromholdingofinvestmentinotherdebtobligations
Investmentincomefromdisposalofinvestmentinotherdebtobligations
Incomefromdebtreorganization
Investmentincomefromdisposalofothernon-currentfinancialassets-221,711.92149,821.58
Dividendincomefromholdingofheld-for-tradingfinancialassets189,085.80
Dividendincomefromholdingofothernon-currentfinancialassets
Incomefromrefinancingbusiness1,028,964.68433,925.05
Investmentincomefromfinancialproducts2,292,008.67753,991.35
Forwardincomefromforeignexchangesettlement63,235.00229,125.00
Accountsreceivablefinancing-discountinterestofbankacceptancebills-1,869,322.91
Total9,327,296.956,545,826.85

45.GainonChangesinFairValue

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Held-for-tradingfinancialassets70,820,498.36200,272.00
Othernon-currentfinancialassets33,750,000.0020,780,837.00
Total104,570,498.3620,981,109.00

46.CreditImpairmentLoss

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Baddebtlossofotherreceivables-562,856.871,498,356.99
Baddebtlossofaccountsreceivable-51,454,294.95880,273.69
Total-52,017,151.822,378,630.68

47.AssetImpairmentLoss

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
I.Baddebtloss
II.Lossoninventoryvaluationandcontractperformancecost-8,676,024.20-11,155,930.76
III.Impairmentlossonlong-termequityinvestment
IV.Impairmentlossoninvestmentproperty
V.Impairmentlossonfixedassets
VI.Impairmentlossonengineeringmaterials
VII.Impairmentlossonconstructioninprogress
VIII.Impairmentlossonproductivelivingassets
IX.Impairmentlossonoilandgasassets
X.Impairmentlossonintangibleassets
XI.Impairmentlossongoodwill
XII.Other
Total-8,676,024.20-11,155,930.76

48.AssetDisposalIncome

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Disposalincomeoffixedassets155,515.49229,121.29

49.Non-operatingIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurringprofitorloss
Incomefromscrappingfixedassets5,825.245,825.24
Incomefromscrappingprojectsunderconstruction2,089,369.812,089,369.81
Incomefrompenalty398,143.00267,439.00398,143.00
Accountsnotrequiredtobepaid1,429,558.71399,049.911,429,558.71
Other115,000.00380,625.30115,000.00
Total4,037,896.761,047,114.214,037,896.76

50.Non-operatingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurringprofitorloss
Retirementlossofnon-currentassets22,405.7234,356.4422,405.72
Compensationforquality507,265.912,085,438.03507,265.91
Donation250,000.00
Other1,107,361.42260,002.861,107,361.42
Total1,637,033.052,629,797.331,637,033.05

51.IncomeTaxExpense

(1)ListofIncomeTaxExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Currentincometaxexpense443,034.91838,369.52
Deferredincometaxexpense15,999,671.861,247,230.81
Adjustmentofincometaxofprioryears-4,073,920.19
Total12,368,786.582,085,600.33

(2)AdjustmentProcessofAccountingProfitandIncomeTaxExpense

Unit:RMB

ItemReportingPeriod
Profitbeforetaxation115,300,660.95
Currentincometaxexpenseaccountedatstatutory/applicabletaxrate17,295,099.15
Influenceofapplyingdifferenttaxratesbysubsidiaries6,503,621.47
Influenceofincometaxbeforeadjustment-4,073,920.19
Influenceofnon-taxableincome-1,156,431.45
Influenceofnon-deductablecosts,expensesandlosses812,440.52
InfluenceofdeductablelossesofunrecognizeddeferredincometaxatthebeginningoftheReportingPeriod-89,988.54
InfluenceofdeductabletemporarydifferenceordeductablelossesofunrecognizeddeferredincometaxassetsintheReportingPeriod1,898,604.18
Taxpreferencefromeligibleexpenditures-8,820,638.56
Incometaxexpense12,368,786.58

52.OtherComprehensiveIncomeSeeNote33fordetails.

53.CashFlowStatement

(1)CashGeneratedfromOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Subsidyandappropriation4,240,292.035,857,679.00
Otherintercoursesincash6,603,764.285,144,619.79
Interestincome7,921,535.625,467,634.76
Other3,871,134.26507,167.41
Total22,636,726.1916,977,100.96

(2)CashUsedinOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Sellingandadministrativeexpensepaidincash101,602,750.69120,289,403.78
Handlingcharges1,220,112.471,776,237.12
Other15,807,386.22777,383.09
Othertransactions23,381,748.58690,007.30
Total142,011,997.96123,533,031.29

(3)CashGeneratedfromOtherInvestingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Depositofconstructionunit336,150.00
Total336,150.00

(4)CashUsedinOtherInvestingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Projectmargin4,141,850.71
Accountsreceivablefinancing-discountinterestfrombankacceptancebills1,869,322.91
Total1,869,322.914,141,850.71

(5)CashGeneratedfromOtherFinancialActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Discountofunduebankacceptancebillswithlowcreditrating58,971,466.65
Total58,971,466.65

(6)CashUsedinOtherFinancialActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Intermediaryagencyfeesforprivateplacement10,849,056.612,500,000.00
Discountinterestfrombankacceptancebills3,772,107.02
Total14,621,163.632,500,000.00

54.SupplementalInformationforCashFlowStatement

(1)SupplementalInformationforCashFlowStatement

Unit:RMB

SupplementalinformationReportingPeriodSameperiodoflastyear
1.Reconciliationofnetprofittonetcashflowsgeneratedfromoperatingactivities----
Netprofit102,931,874.3752,294,751.19
Add:Provisionforimpairmentofassets60,693,176.028,777,300.08
Depreciationoffixedassets,ofoilandgasassets,ofproductivelivingassets76,128,177.4480,616,241.38
Depreciationofright-of-useassets
Amortizationofintangibleassets4,711,649.345,129,822.75
Amortizationoflong-termdeferredexpenses17,605.3339,804.60
Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets(gainsby“-”)-155,515.49-229,121.29
Lossesonthescrappingoffixedassets(gainsby“-”)-2,072,789.3334,356.44
Lossesonthechangesinfairvalue(gainsby“-”)-104,570,498.36-20,981,109.00
Financialexpenses(gainsby“-”)8,122,828.5116,911,546.38
Investmentlosses(gainsby“-”)-9,327,296.95-6,545,826.85
Decreaseindeferredincometaxassets(increaseby“-”)-6,461,936.08-3,208,010.11
Increaseindeferredincometaxliabilities(decreaseby“-”)22,461,607.944,455,240.92
Decreaseininventory(increaseby“-”)-53,079,441.83-144,477,102.41
Decreaseinaccountsreceivablefromoperatingactivities(increaseby“-”)-286,670,314.4716,892,902.36
Increaseinpayablesfromoperatingactivities(decreaseby“-”)-79,052,905.74278,992,494.07
Other-36,906,635.98
Netcashflowsgeneratedfromoperatingactivities-266,323,779.30251,796,654.53
2.Investingandfinancingactivitiesthatdonotinvolvingcashreceiptsandpayment:
Debttransferredascapital
Convertiblecorporatebondduewithinoneyear
Fixedassetsfromfinancinglease
3.Netincreaseincashandcashequivalents
Endingbalanceofcash562,402,221.59629,939,540.50
Less:Beginningbalanceofcash629,939,540.50545,959,998.20
Add:Endingbalanceofcashequivalents
Less:Beginningbalanceofcashequivalents
Netincreaseincashandcashequivalents-67,537,318.9183,979,542.30

(2)CashandCashEquivalents

Unit:RMB

ItemEndingbalanceBeginningbalance
I.Cash562,402,221.59629,939,540.50
Including:Cashonhand145,594.98287,505.91
Bankdepositondemand561,746,767.12620,966,786.57
Othermonetaryassetsondemand509,859.498,685,248.02
Accountsdepositedinthecentralbankavailableforpayment
Depositsinotherbanks
Accountsofinterbank
II.Cashequivalents
Ofwhich:Bondinvestmentexpiredwithinthreemonths
III.Endingbalanceofcashandcashequivalents562,402,221.59629,939,540.50
Ofwhich:CashandcashequivalentswithrestrictioninusefortheCompanyastheparentorsubsidiariesoftheGroup

55.AssetswithRestrictedOwnershiporRighttoUse

Unit:RMB

ItemEndingcarryingvalueReasonforrestriction
Monetaryassets145,564,457.15Ascashdepositforbankacceptancebillandforenvironment
Housesandbuildings1,760,577.22Mortgagedforborrowingsfrombanks
Landuseright911,388.42Mortgagedforborrowingsfrombanks
Machineryequipment30,560,526.26Mortgagedforborrowingsfrombanks
Obligationtopaybillsdiscountedbeforematurity61,971,466.65
Unduetransferredbillpaymentobligation72,391,302.15
Total313,159,717.85

56.ForeignCurrencyMonetaryItems

(1)ForeignCurrencyMonetaryItems

Unit:RMB

ItemEndingforeigncurrencybalanceExchangerateEndingbalanceconvertedtoRMB
Monetaryassets----
Ofwhich:USD16,223,008.736.3757103,433,038.04
EUR
HKD285,401.450.8176233,344.23
SGD54,427.954.7179256,785.63
Accountsreceivable----
Ofwhich:USD10,773,556.746.375768,688,965.83
GBP-67,212.278.6064-578,455.68
Accountspayable
Ofwhich:USD302.606.37571,929.29
Contractliabilities
Ofwhich:USD784,613.156.37575,002,458.10
EUR117,145.847.2197845,757.83

(2)NotestoOverseasEntitiesIncluding:forSignificantOverseaEntities,MainOperatingPlace,RecordingCurrencyandSelectionBasisShallBeDisclosed;ifthereAreChangesinRecordingCurrency,RelevantReasonsShallBeDisclosed.

□Applicable√Notapplicable

57.GovernmentGrants

(1)BasicInformationonGovernmentGrants

Unit:RMB

CategoryAmountListeditemsAmountrecordedinthecurrentprofitorloss
Industrialandinformationindustrytransformationandupgradingsubsidies70,000.00Otherincome70,000.00
Projectfundforthefirstpurchaseofspecialinnovativeproductsforindustrialhigh-qualitydevelopmentandapplicationpromotion200,000.00Otherincome200,000.00
ChangzhouindustrialInternetspecialfund100,000.00Otherincome100,000.00
SubsidyforChangzhouStrongQualityCityAward100,000.00Otherincome100,000.00
Subsidyforstabilizingposts61,713.39Otherincome61,713.39
Businessdevelopmentfund693,000.00Otherincome693,000.00
DiscountinterestforloansfromFinanceBureauforScienceandTechnologyAchievementTransformationFundProject1,391,000.00Otherincome1,391,000.00
BenniuTown2020GasBoilerLowNitrogenCombustionReconstructionSubsidy20,000.00Otherincome20,000.00
Specialfundforhigh-qualitydevelopment37,000.00Otherincome37,000.00
Taxcontributionaward20,000.00Otherincome20,000.00
Fundingforthefirstyearofthedemonstrationbasefortrainingadvancedskilledpersonnel30,000.00Otherincome30,000.00
Subsidiesfortrainingbywork468,621.90Otherincome468,621.90
Epidemicsubsidy100,000.00Otherincome100,000.00
Post-doctoralgrants,outboundawardsandsiteestablishmentawards120,000.00Otherincome120,000.00
Financialcentersubsidy240,376.00Otherincome240,376.00
Innovation-drivenrewards30,000.00Otherincome30,000.00
SubsidyfundofNewDistrictFinanceBureauaward13,000.00Otherincome13,000.00
SubsidyfundofNewDistrictFinanceBureauaward540,000.00Otherincome540,000.00
Relocationcompensation(replaceZouVillagewithHehaiRoad13,344,397.90Deferredincome267,333.48
Relocationcompensation-MainworkshopofHehaiRoadBase11,864,289.02Deferredincome398,640.14
Nationalmajorprojectspecialallocations-Flexibleprocessingproductionlineforcylindersofdieselengine13,800,000.00Deferredincome759,633.00
AppropriationorresearchanddevelopmentandindustrializationallocationsofnationalIII/IVstandardhigh-poweredefficientdieselengineforagriculturaluse10,000,000.00Deferredincome938,775.58
Total53,243,398.216,599,093.49

ReturnofGovernmentGrants

√Applicable□Notapplicable

ItemAmountReason
Nationalmajorprojectspecialallocations-Flexibleprocessingproductionlineforcylindersofdieselengine14,770,000.00SeeNote30fordetails

VIII.EquityinOtherEntities

1.EquityinSubsidiary

(1)Subsidiaries

NameMainoperatingplaceRegistrationplaceNatureofbusinessHoldingpercentage(%)Wayofgaining
DirectlyIndirectly
ChangchaiWanzhouDieselEngineCo.,Ltd.ChongqingChongqingIndustry60.00%Set-up
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.ChangzhouChangzhouIndustry99.00%1.00%Set-up
ChangzhouHorizonInvestmentCo.,Ltd.ChangzhouChangzhouService100.00%Set-up
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.ChangzhouChangzhouIndustry70.00%25.00%Set-up
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.ChangzhouChangzhouIndustry100.00%Combinationnotunderthesamecontrol
JiangsuChangchaiMachineryCo.,Ltd.ChangzhouChangzhouIndustry100.00%Set-up
ChangzhouXingshengPropertyManagementCo.,Ltd.ChangzhouChangzhouService100.00%Set-up

(2)SignificantNon-wholly-ownedSubsidiary

Unit:RMB

NameShareholdingproportionofnon-controllinginterestsTheprofitorlossattributabletothenon-controllinginterestsDeclaringdividendsdistributedtonon-controllinginterestsBalanceofnon-controllinginterestsattheperiod-end
ChangchaiWanzhouDieselEngineCo.,Ltd.40.00%154,626.9119,966,486.37
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.5.00%-228,985.08-542,255.39

Holdingproportionofnon-controllinginterestsinsubsidiarydifferentfromvotingproportion:Notapplicable

(3)TheMainFinancialInformationofSignificantNotWholly-ownedSubsidiary

Unit:RMB

NameEndingbalanceBeginningbalance
CurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilitiesCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilities
ChangchaiWanzhouDieselEngineCo.,Ltd.48,200,342.7724,141,889.9072,342,232.6722,426,016.7522,426,016.7549,267,159.0025,044,012.1774,311,171.1724,781,522.5224,781,522.52
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.14,505,888.53324,302.8414,830,191.3725,675,299.1725,675,299.1726,356,205.03423,493.7726,779,698.8033,045,105.0033,045,105.00

Unit:RMB

NameReportingPeriodSameperiodoflastyear
OperatingrevenueNetprofitTotalcomprehensiveCashflowsfromOperatingrevenueNetprofitTotalcomprehensiveCashflowsfrom
incomeoperatingactivitiesincomeoperatingactivities
ChangchaiWanzhouDieselEngineCo.,Ltd.42,629,379.24386,567.27386,567.272,563,679.1743,143,296.52494,776.84494,776.842,183,407.36
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.14,362,872.77-4,579,701.60-4,579,701.606,216,842.7014,280,066.47-6,712,052.03-6,712,052.03-171,680.44

2.EquityintheStructuredEntityExcludedintheScopeofConsolidatedFinancialStatementsNotestothestructuredentityexcludedinthescopeofconsolidatedfinancialstatements:

In2017,theCompanysetupChangzhouXietongPrivateEquityFund(LimitedPartnership)togetherwithSynergeticInnovationFundManagementCo.,Ltd.throughjointinvestment.On18October2018and3December2020,newpartnerswereadded.InlinewiththerevisedPartnershipAgreement,thegeneralpartnerisSynergeticInnovationFundManagementCo.,Ltd.,andthelimitedpartnersareChangchaiCompany,Limited,ChangzhouZhongyouPetroleumSalesCo.,Ltd.,ChangzhouFuelCo.,Ltd.,TongYinzhu,TongYinxinandAnhuiHaiyunzhouEquityInvestmentPartnershipEnterprise(Limited).InaccordancewiththePartnershipAgreement,thelimitedpartnerdoesnotexecutethepartnershipaffairs.Thus,theCompanydoesnotcontrolChangzhouXietongPrivateEquityFund(LimitedPartnership)anddidnotincludeitintothescopeofconsolidatedfinancialstatements.

IX.TheRiskRelatedtoFinancialInstruments

ThegoaloftheCompany’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.X.TheDisclosureofFairValue

1.EndingFairValueofAssetsandLiabilitiesatFairValue

Unit:RMB

ItemEndingfairvalue
Fairvaluemeasurementitemsatlevel1Fairvaluemeasurementitemsatlevel2Fairvaluemeasurementitemsatlevel3Total
I.Consistentfairvaluemeasurement--------
1.Tradingfinancialassets121,940,343.76282,112,917.81404,053,261.57
(I)Financialassetsatfairvaluethroughprofitorloss121,940,343.76282,112,917.81404,053,261.57
(1)Equityinstrumentinvestment121,940,343.76121,940,343.76
(2Financialinvestment282,112,917.81282,112,917.81
2.Financialassetsdesignatedtobemeasuredatfairvalueandthechangesincludedintothecurrent
profitorloss
(1)Debtinstrumentinvestment
(2)Equityinstrumentinvestment
(II)Otherbondinvestment
(III)Otherequityinstrumentinvestment633,502,000.00146,375,646.53779,877,646.53
(IV)Investmentproperty
1.Landuserightforlease
2.Buildingsleasedout
3.Landuserightheldandplannedtobetransferredonceappreciating
(V)Livingassets
1.Consumptivelivingassets
2.Productivelivingassets
Receivablesfinancing497,388,826.02497,388,826.02
Othernon-currentfinancialassets112,500,000.00112,500,000.00
Totalassetsconsistentlymeasuredbyfairvalue755,442,343.76282,112,917.81756,264,472.551,793,819,734.12
(VI)Tradingfinancialliabilities
Ofwhich:Issuedtradingbonds
Derivativefinancialliabilities
Other
(VII)Financialliabilitiesdesignatedtobemeasuredatfairvalueandthechangesrecordedintothecurrentprofitorloss
Totalliabilitiesconsistentlymeasuredbyfairvalue
II.Inconsistentfairvaluemeasurement--------
(1)Assetsheldforsale
Totalassetsinconsistentlymeasuredbyfairvalue
Totalliabilitiesinconsistentlymeasuredbyfairvalue

2.MarketPriceRecognitionBasisforConsistentandInconsistentFairValueMeasurementItemsatLevel

Thecompanyshallusetheclosingpriceofthetradingmarketonthebalancesheetdateasthebasisforthefairvaluemeasurementofthestocksofthelistedcompanyheldinthetradingfinancialassetsmeasuredatfairvalue.

3.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel2Financialinvestment:Thebasicassetsoffinancialproductsincludebondassets,depositassets,fundassets,etc.Theportfolioofinvestmentisdynamicallymanaged,andthefairvalueoffinancialproductsisadjustedaccordingtothereturnrateofsimilarproductsprovidedbythecounterparty.

4.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel3

(1)Receivablesfinancing:Receivablesfinancingreferstobankacceptancebillswithhighcreditrating,thisitemfeatureswithshorttermandlowrisk,andtheparvalueisclosetothefairvalue,sotheparvalueisadoptedasthefairvalue.

(2)Othernon-currentfinancialassets:fortheinvestmentsinequityinstrumentofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,JiangsuHorizonNewEnergyTechnologyCo.,Ltd.entrustedanappraisalagencytoevaluatethevalueofallitsshareholders’equityduetotheneedforcapitalincreaseandshareexpansionin2021,andconfirmedthepremiumrateofcapitalincreasebasedontheappreciationrateoftheequityvalue.Thecompany’snewinvestorssignedtheinvestmentagreementsrespectivelyinJune2021andDecember2021.Therefore,thefairvalueoftheequityinvestmenthadbeenadjustedandconfirmedaccordinglybasedonthepremiumrateofcapitalincreasefromnewinvestors.

(3)Amongotherequityinvestmentinstruments,thetotalinvestmentinChengduChangwanDieselEngineDistributionCo.,Ltd.,ChongqingWanzhouChangwanDieselEnginePartsCo.,Ltd.,ChangzhouEconomicandTechnologicalDevelopmentCompany,ChangzhouTractorCompany,ChangzhouEconomicCommissionIndustrialCapitalMutualAidAssociation,BeijingEngineeringMachineryAgriculturalMachineryCompanywasRMB1.21million,andthefairvaluewasRMB0.00duetothedifficultyinrecoveringtheinvestment.SinceitsestablishmentinOctober2017,ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)hasinvestedinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,andthechangeinfairvalueofthecompany'sequityheldbyithadincreasedtheequityofpartnersattheendoftheyear.Inaddition,thecompany'sbusinessenvironment,operatingconditions,andfinancialstatushadnotundergonemajorchanges.Therefore,thecompanydetermineditsfairvalueonthebasisofthenetbookassetsofthepartnershipattheendoftheperiod.

5.SensitivenessAnalysisonUnobservableParametersandAdjustmentInformationbetweenBeginningandEndingCarryingValueofConsistentFairValueMeasurementItemsatLevel3Notapplicable

6.ExplaintheReasonforConversionandtheGoverningPolicywhentheConversionHappensifConversionHappensamongConsistentFairValueMeasurementItemsatDifferentLevelsNotapplicable

7.ChangesintheValuationTechniqueintheCurrentPeriodandtheReasonforSuchChangesNotapplicable

8.FairValueofFinancialAssetsandLiabilitiesNotMeasuredatFairValueThefinancialassetsandliabilitiesmeasuredatamortizationcostmainlyincludenotesreceivable,accountsreceivable,otherreceivables,short-termborrowings,accountspayable,otherpayables,etc.Thedifferencebetweenthecarryingvalueandfairvalueforfinancialassetsandliabilitiesnotmeasuredatfairvalueissmall.

9.OtherDuringtheyear,therewasnoconversionbetweenLevel1andLevel2,norwasthereanytransfertoorfromLevel3forthefairvaluemeasurementoftheCompany'sfinancialassetsandfinancialliabilities.

XI.RelatedPartyandRelated-partyTransactions

1.InformationRelatedtotheCompanyastheParentoftheCompany

NameRegistrationplaceNatureofbusinessRegisteredcapitalProportionofshareheldbytheCompanyastheparentagainsttheCompanyProportionofvotingrightsownedbytheCompanyastheparentagainsttheCompany
ChangzhouInvestmentGroupCo.,Ltd.ChangzhouInvestmentandoperationsofstate-ownedassets,assetsmanagement(excludingfinancialbusiness),investmentconsulting(excludingconsultingoninvestmentinsecuritiesandoptions),etc.RMB1.2billion32.26%32.26%

Notes:InformationontheCompanyastheparent

TheparentcompanyoftheenterpriseisChangzhouInvestmentGroupCo.,Ltd.,whichisawholly-ownedsubsidiaryofChangzhouMunicipalPeople'sGovernment.InaccordancewithChangzhouPeople’sGovernmentDocument(CZF[2006]No.62),boththeCompanyandChangzhouInvestmentGroupCo.,Ltd.areenterpriseswhichChangzhouPeople’sGovernmentauthorizesChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissiontoperformdutiesofinvestors.Thus,afterthesharertransfer,ChangzhouInvestmentGroupCo.,Ltd.isthecontrollingshareholderoftheCompanyandChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissionisstilltheactualcontrolleroftheCompany.ThefinalcontrolleroftheCompanyisChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommission.

2.SubsidiariesoftheCompanyRefertoNoteVIIIfordetails.

3.InformationonOtherRelatedParties

NameRelationshipwiththeCompany
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)Participatedinestablishingtheindustrialinvestmentfund
JiangsuHorizonNewEnergyTechnologyCo.,Ltd.ShareholdingenterpriseoftheCompany
DonghaiSecuritiesCo.,Ltd.ControlledbythesameCompanyastheparent

4.Related-partyTransactions

(1)OtherRelated-partyTransaction

1)On28June2020,the3rdMeetingofthe9thBoardofDirectorsapprovedtheProposalonSignatureofJointSponsorshipUnderwritingAgreementofthePrivatePlacementofAsharesandRelated-partyTransaction,whichallowedtheCompanysigningthejointsponsorshipunderwritingagreementwithIndustrialSecuritiesCo.,Ltd.(hereinafterreferredtoas“IndustrialSecurities”)andDonghaiSecuritiesCo.,Ltd.(hereinafterreferredtoas“DonghaiSecurities”),andappointingIndustrialSecuritiesandDonghaiSecuritiesastheco-sponsorunderwritersfortheprivateplacementofAsharesoftheCompanywithsponsorfeeofRMB3milliontoIndustrialSecuritiesandDonghaiSecuritiesandtheunderwritingfeeofnomorethanRMB11million(inclusiveofRMB11million).Asof31December2021,theCompanyhaspaidasponsorshipfeeofRMB1.5million(ofwhich,RMB0.75millionwaspaidin2021andRMB0.75millionwaspaidin2020)toDonghaiSecuritiesandpaidanunderwritingfeeofRMB6.5million(paidin2021).Allistax-inclusive.

2)TheProposalonUsingIdleFundstoPurchaseWealthManagementProductswasdeliberatedandapprovedattheFourthInterimMeetingoftheBoardofDirectorsin2021andtheSecondInterimMeetingoftheBoardofSupervisorsin2021heldbytheCompanyon13July2021,allowingtheCompanyanditswholly-ownedsubsidiariestousenomorethanRMB350millionofidleraisedfundstopurchasewealthmanagementproductsforcashmanagementonthepremisethattheinvestmentprojectswithraisedfundsarecarriedoutnormallyandtheuseofraisedfundsisnotaffected.On27July2021,theCompanyenteredintoasubscriptionagreementwithDonghaiSecuritiesCo.,Ltd.fortheproduct"DonghaiSecuritiesLongGainReturnCertificateJuneTypeCustomizedIssueNo.13".ThesubscriptionamountisRMB50million,andthesourceoffundsisidleraisedfunds.Thereturncertificatematuredon25

January2022,withatotalofRMB50,949,315.07inprincipalandreturnactuallyreceived,whichisrecognizedasgainsonchangesoffairvalueofRMB817,465.75in2021.XII.StockPayment

1.TheOverallSituationofStockPayment

□Applicable√Notapplicable

2.TheStockPaymentSettledinEquity

□Applicable√Notapplicable

3.TheStockPaymentSettledinCash

□Applicable√Notapplicable

4.ModificationandTerminationoftheStockPaymentNone

XIII.CommitmentsandContingency

1.SignificantCommitmentsSignificantcommitmentsonbalancesheetdateAsof31December2021,therewasnosignificantcommitmentfortheCompanytodisclose.

2.ContingencyApprovedonthe8

thMeetingofthe9

thBoardofDirectorsheldon13April2021,theCompanyprovidedaguaranteeforthecreditgrantedtothesubsidiaryHorizonAgriculturalEquipmentbyICBCnotexceedingRMB20million,whichwasalsoapprovedontheCompany’sAnnualGeneralMeetingofShareholdersin2020.Asof31December2021,theCompanyprovidedaguaranteefortheshort-termborrowingsofRMB5millionofthesubsidiaryHorizonAgriculturalEquipment.

XIV.EventsafterBalanceSheetDate

1.ProfitDistribution

Unit:RMB

Profitsordividendstobedistributed18,348,005.18

2.SalesReturnNone

3.NotestoOtherEventsafterBalanceSheetDateTheSixthInterimMeetingoftheBoardofDirectorsin2021heldbytheCompanyon28October2021deliberatedonandapprovedtheProposalonParticipatinginthePublicListedTransferof41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,authorizingtheManagementoftheCompanytoparticipateinthebiddingofthepubliclistedtransferbyJiangsuUniversityofScienceandTechnologyAssetsManagementCo.,Ltd.(hereinafterreferredtoas"ScienceUniversityAssets")ofits41.5%equityinterestinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.(hereinafterreferredtoas"ZhenjiangSiyang").On1January2022,ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.IssuedtheConfirmationofTransactionontheTransferof41.5%EquityInterest(CorrespondingtoCapitalContributionofRMB830,000).TheCompanywonthe41.5%equityinterestinZhenjiangSiyangatapriceofRMB33,520,800.00asofFebruary2022.On23February2022,theCompanysignedtheContractonTransferofState-ownedPropertyRightswithScienceUniversityAssets.On9March2022,ZhenjiangSiyanghascompletedthebusinesschangeregistration.

XV.OtherSignificantEvents

1.SegmentInformation

(1)DeterminationBasisandAccountingPoliciesofReportableSegmentDuetotheoperationscopeoftheCompanyandsubsidiariesweresimilar,theCompanyconductscommonmanagement,anddidnotdividebusinessunit,sotheCompanyonlymadesinglebranchreport.

2.OtherSignificantTransactionsandEventswithInfluenceonInvestors’Decision-makingNone

XVI.NotesofMainItemsintheFinancialStatementsoftheCompanyastheParent

1.AccountsReceivable

(1)AccountsReceivableClassifiedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accounts27,506.00%21,1276.806,383,33,547.29%31,64794.351,895,5
receivableforwhichbaddebtprovisionseparatelyaccrued9,745.336,658.85%086.483,441.92,855.09%86.83
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbygroup430,771,912.0394.00%88,019,743.0920.43%342,752,168.94426,300,279.2992.71%110,367,704.8725.89%315,932,574.42
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup430,771,912.0394.00%88,019,743.0920.43%342,752,168.94426,300,279.2992.71%110,367,704.8725.89%315,932,574.42
Total458,281,657.36100.00%109,146,401.9423.82%349,135,255.42459,843,721.21100.00%142,015,559.9630.88%317,828,161.25

Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedattheendoftheperiod:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionWithdrawalreason
Customer11,470,110.641,470,110.64100.00%Difficulttorecover
Customer21,902,326.581,902,326.58100.00%Difficulttorecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,797,123.262,194,980.2878.47%Expectedtodifficultlyrecover
Customer53,633,081.232,122,165.7358.41%Expectedtodifficultlyrecover
Customer62,584,805.832,584,805.83100.00%Difficulttorecover
Customer71,523,110.591,523,110.59100.00%Difficulttorecover
Customer81,511,937.64302,387.5320.00%Difficulttorecover
Customer93,780,509.60720,031.7119.05%Difficulttorecover
Total25,418,668.0119,035,581.53----

Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Within1year329,625,991.336,592,519.832.00%
1to2years17,473,471.22873,673.565.00%
2to3years1,426,271.10213,940.6715.00%
3to4years709,597.16212,879.1530.00%
4to5years3,524,628.342,114,777.0060.00%
Over5years78,011,952.8878,011,952.88100.00%
Total430,771,912.0388,019,743.09--

Notestothebasisforthedeterminationofthegroups:

Theaccountsreceivablewasadoptedtheaginganalysisbasedonthemonthswhentheaccountsoccurredactually,amongwhichtheaccountsoccurredearlierwillbeprioritytobesettledintermsofthecapitalturnover.ExplanationoftheinputvalueandassumptionadoptedtodeterminethewithdrawalamountofbaddebtprovisionontheCurrentPeriod:Withreferencetotheexperienceofthehistoricalcreditloss,combiningwiththepredictionofthepresentstatusandfuturefinancialsituation,thecomparisontablewaspreparedbetweentheagingoftheaccountsreceivableandestimatedcreditlossrateinthedurationandtocalculatetheestimatedcreditloss.Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)333,949,213.59
1to2years17,473,471.22
2to3years3,514,160.19
Over3years103,344,812.36
3to4years2,659,346.72
4to5years6,048,418.09
Over5years94,637,047.55
Total458,281,657.36

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriod

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offOther
Baddebtprovisionwithdrawnseparately31,647,855.091,315,924.00147,611.2511,689,508.9921,126,658.85
Baddebtprovisionwithdrawnbygroup110,367,704.871,595,171.8623,943,133.6488,019,743.09
Total142,015,559.962,911,095.86147,611.2535,632,642.63109,146,401.94

OfwhichbaddebtprovisionreversedorrecoveredwithsignificantamountintheReportingPeriod:No.

(3)AccountsReceivablewithActualVerificationduringtheReportingPeriod

Unit:RMB

ItemAmountverified
Accountsreceivablewithactualverification35,632,642.63

Ofwhichtheverificationofsignificantaccountsreceivable:

Unit:RMB

NameoftheentityNatureAmountverifiedReasonPerformanceofverificationproceduresWhethergeneratedfromrelated-partytransaction
Customer1Loanreceivables997,047.83Theaccountageofthedebtorismorethan5years,andthedebtorhasnoassetstopayoffduetothecancellationordebtrestructuringoftheotherparty,bankruptcyliquidationorjudiciallitigation.TheCompanyheldthe10thMeetingofthe9thBoardofDirectorsandthe10thMeetingofthe9thSupervisoryCommitteeon16August2021andapprovedtheProposalonVerificationofSomeAccountsReceivable.Not
Customer2516,384.40
Customer35,359,381.00
Customer45,309,605.00
Customer53,662,926.13
Customer63,279,100.00
Customer72,295,898.35
Customer81,617,988.01
Customer9707,050.39
Customer10612,001.02
Customer11583,558.66
Customer12533,146.26
Total25,474,087.05------

(4)Top5oftheEndingBalanceofAccountsReceivableCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityEndingbalanceofaccountsreceivableProportiontototalendingbalanceofaccountsreceivableEndingbalanceofbaddebtprovision
Customer1174,635,898.3038.11%3,492,717.97
Customer264,375,015.9214.05%1,287,500.32
Customer337,370,796.278.15%747,415.93
Customer418,082,456.143.95%361,649.12
Customer58,152,568.831.78%163,051.38
Total302,616,735.4666.04%

2.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Otherreceivables26,497,081.3424,327,355.36
Total26,497,081.3424,327,355.36

(1)OtherReceivable

1)OtherReceivablesClassifiedbyAccountNature

Unit:RMB

NatureEndingcarryingamountBeginningcarryingamount
CashdepositandMargin4,200.004,200.00
Intercoursefundsamongunits55,450,919.9339,857,085.87
Pettycashandborrowingsbyemployees613,410.65673,198.96
Other13,629,784.6413,614,585.00
Total69,698,315.2254,149,069.83

2)WithdrawalofBadDebtProvision

Unit:RMB

BaddebtprovisionFirststageSecondstageThirdstageTotal
Expectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)
Balanceof1January202129,821,714.4729,821,714.47
Balanceof1January2021intheCurrentPeriod————————
--TransfertoSecondstage-24,494,613.0924,494,613.09-24,494,613.09
--TransfertoThirdstage-5,039,368.415,039,368.41-5,039,368.41
--ReversetoSecondstage
--ReversetoFirststage
WithdrawaloftheCurrentPeriod14,143,241.3614,143,241.36
ReversaloftheCurrentPeriod78,119.44685,602.51763,721.95
Write-offsoftheCurrentPeriod
VerificationoftheCurrentPeriod
Otherchanges
Balanceof31December2021209,613.5323,809,010.5819,182,609.7743,201,233.88

ChangesofcarryingamountwithsignificantamountchangedoflossprovisionintheCurrentPeriod

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)37,544,101.26
1to2years2,067,489.45
2to3years116,820.58
Over3years29,969,903.93
3to4years392,301.53
4to5years1,113,086.11
Over5years28,464,516.29
Total69,698,315.22

3)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofbaddebtprovisionwithdrawn:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offOther
Baddebtprovisionwithdrawnseparately5,039,368.4114,143,241.3619,182,609.77
Baddebtprovisionwithdrawnbygroup24,782,346.06763,721.9524,018,624.11
Total29,821,714.4714,143,241.36763,721.9543,201,233.88

4)ParticularsoftheActualVerificationofOtherReceivablesduringtheReportingPeriod:None.

5)Top5oftheEndingBalanceofOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontototalendingbalanceofotherreceivablesEndingbalanceofbaddebtprovision
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.Intercoursefunds13,468,418.86Within1yearwithRMB11,668,418.86,1-2yearswithRMB18billion19.32%13,468,418.86
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.Intercoursefunds9,000,000.00Within1year12.91%180,000.00
ChangzhouCompressorsFactoryIntercoursefunds2,940,000.00Over5years4.22%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years4.09%2,853,188.02
ChangzhouNewDistrictAccountingCenterIntercoursefunds1,626,483.25Over5years2.33%1,626,483.25
Total--29,888,090.1342.88%21,068,090.13

6)DerecognitionofOtherReceivablesduetotheTransferofFinancialAssets:none

7)TheAmountoftheAssetsandLiabilitiesFormedduetotheTransferandtheContinuedInvolvementofOtherReceivables:none

3.Long-termEquityInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Investmenttosubsidiaries542,752,730.037,000,000.00535,752,730.03382,752,730.037,000,000.00375,752,730.03
Investmenttojointventuresandassociatedenterprises44,182.5044,182.5044,182.5044,182.50
Total542,796,912.537,044,182.50535,752,730.03382,796,912.537,044,182.50375,752,730.03

(1)InvestmenttoSubsidiaries

Unit:RMB

InvesteeBeginningIncrease/decreaseEndingEnding
balance(carryingvalue)AdditionalinvestmentReducedinvestmentWithdrawalofdepreciationreserveOtherbalance(carryingvalue)balanceofdepreciationreserve
ChangchaiWanzhouDieselEngineCo.,Ltd.51,000,000.0051,000,000.00
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.96,466,500.0096,466,500.00
ChangzhouHorizonInvestmentCo.,Ltd.40,000,000.0040,000,000.00
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.0.000.007,000,000.00
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.47,286,230.0347,286,230.03
JiangsuChangchaiMachineryCo.,Ltd.140,000,000.00160,000,000.00300,000,000.00
ChangzhouXingshengPropertyManagementCo.,Ltd.1,000,000.001,000,000.00
Total375,752,730.03160,000,000.00535,752,730.037,000,000.00

(2)InvestmenttoJointVenturesandAssociatedEnterprises

Unit:RMB

InvesteeBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserve
AdditionalinvestmentReducedinvestmentGainsandlossesrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesofotherequityCashbonusorprofitsannouncedtoissueWithdrawalofimpairmentprovisionOther
II.Associatedenterprises
BeijingTsinghuaXingyeIndustrialInvestmentManagementCo.,Ltd.0.000.0044,182.50
Subtotal0.000.0044,182.50
Total0.000.0044,182.50

4.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations2,221,914,222.251,913,817,106.362,086,035,553.151,794,202,913.98
Otheroperations45,317,897.5331,003,356.2337,164,684.9629,240,490.81
Total2,267,232,119.781,944,820,462.592,123,200,238.111,823,443,404.79

Informationonrevenue:

Unit:RMB

CategoryofcontractsSegment1
ProductTypes
Ofwhich:
Single-cylinderdieselengines1,053,647,263.06
Multi-cylinderdieselengines1,091,284,576.58
Otherproducts36,122,588.06
Accessories40,859,794.55
Classifiedbybusinessarea
Ofwhich:
Salesindomesticmarket1,898,433,419.02
Exportsales323,480,803.23
Total2,221,914,222.25

Informationrelatedtoperformanceobligations:None

5.InvestmentIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Dividendincomefromholdingofotherequityinstrumentinvestment7,394,400.005,004,000.00
Incomefromtransferringtoaccommodationbusiness1,028,964.68433,925.05
Investmentincomefromdisposalofheld-for-tradingfinancialassets1,798,672.49
Accountsreceivablefinancing-discountinterestofbankacceptancebills-1,869,322.91
Total8,352,714.265,437,925.05

XVII.SupplementaryMaterials

1.ItemsandAmountsofNon-recurringProfitorLoss

√Applicable□Notapplicable

Unit:RMB

ItemAmountNote
Gainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)155,515.49
Governmentsubsidieschargedtocurrentprofitorloss(exclusiveofgovernmentsubsidiesgivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsasperthegovernment’suniformstandards)4,268,950.18
Gain/lossfromchangeoffairvalueoftradingfinancialassetsandliabilities,andinvestmentgainsfromdisposaloftradingfinancialassetsandliabilities,andderivativefinancialassetsandliabilities,andavailable-for-salefinancialassets,otherthanvalidhedgingrelatedtotheCompany’scommonbusinesses114,738,153.54IncreaseinthefairvalueoftheequityofJiangsuLianceElectromechanicalTechnologyCo.,Ltd.andGuilinStarsScienceandTechnologyCo.,Ltd.heldbytheCompany’swholly-ownedsubsidiaryHorizonInvestmentandtheequityofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.heldbytheCompanyduringtheReportingPeriod
Impairmentofreceivablestestedseparatelyisreadytoberolledback147,611.25
Othernon-operatingincomeandexpensesotherthantheabove2,400,863.71
Less:Incometaxeffects24,027,164.56
Non-controllinginterestseffects(aftertax)6,789.94
Total97,677,139.67--

ExplainthereasonsiftheCompanyclassifiesanitemasannon-recurringgain/lossaccordingtothedefinitionintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-recurringGainsandLosses,orclassifiesanyextraordinarygain/lossitemmentionedinthesaidexplanatoryannouncementasarecurrentgain/lossitem.

□Applicable√Notapplicable

2.ReturnonEquityandEarningsPerShare

ProfitasofReportingPeriodWeightedaverageROE(%)EPS(Yuan/share)
EPS-basicEPS-diluted
NetprofitattributabletoordinaryshareholdersoftheCompany3.86%0.16570.1657
NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductionofnon-recurringprofitorloss0.20%0.00860.0086

TheBoardofDirectorsChangchaiCompany,Limited

13April2022
  附件：公告原文
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