Changchai Company, LimitedSEMI-Financial Report For the Year 2024I Independent Auditor’s ReportAre these interim financial statements audited by an independent auditor?
□ Yes √ No
These interim financial statements have not been audited by an independent auditor.II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
30 June 2024
Unit: RMB
| Item | 30 June 2024 | 1 January 2024 |
| Current assets: | ||
| Monetary assets | 791,920,099.90 | 1,083,867,966.87 |
| Settlement reserve | ||
| Loans to other banks and financial institutions | ||
| Held-for-trading financial assets | 402,900,783.53 | 225,641,429.94 |
| Derivative financial assets | ||
| Notes receivable | 115,592,564.84 | 161,632,567.94 |
| Accounts receivable | 1,183,949,152.56 | 316,543,159.91 |
| Receivables financing | 12,282,312.54 | 195,875,948.92 |
| Prepayments | 14,444,116.16 | 12,333,310.85 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 2,566,508.89 | 49,699,753.61 |
| Including: Interest receivable | ||
| Dividends |
receivable
| receivable | ||
| Financial assets purchased under resale agreements | ||
| Inventories | 619,715,018.92 | 789,220,185.68 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | 2,951,451.11 | |
| Current portion of non-current assets | 40,773,509.75 | |
| Other current assets | 13,766,702.89 | 20,910,504.84 |
| Total current assets | 3,160,088,711.34 | 2,896,498,338.31 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | ||
| Investments in other equity instruments | 917,444,025.67 | 969,488,025.67 |
| Other non-current financial assets | 412,914,576.80 | 412,914,576.80 |
| Investment property | 38,789,201.33 | 39,837,558.11 |
| Fixed assets | 637,435,729.73 | 675,596,920.95 |
| Construction in progress | 4,330,676.58 | 4,275,622.18 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 145,411,326.91 | 148,458,185.68 |
| Including: Data resource | ||
| Development costs | ||
| Including: Data resource | ||
| Goodwill | ||
| Long-term prepaid expense | 7,759,660.70 | 8,227,958.66 |
| Deferred income tax assets | 4,174,238.86 | 1,518,995.79 |
| Other non-current assets | 830,991.15 | 2,578,776.77 |
| Total non-current assets | 2,169,090,427.73 | 2,262,896,620.61 |
Total assets
| Total assets | 5,329,179,139.07 | 5,159,394,958.92 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Borrowings from the central bank | ||
| Loans from other banks and financial institutions | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 756,037,100.68 | 528,139,582.33 |
| Accounts payable | 589,863,799.52 | 641,484,184.05 |
| Advances from customers | 30,678,302.75 | 1,647,441.22 |
| Contract liabilities | 37,517,411.19 | 33,352,877.66 |
| Financial assets sold under repurchase agreements | ||
| Customer deposits and deposits from other banks and financial institutions | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 11,190,041.72 | 47,738,883.57 |
| Taxes and levies payable | 5,684,739.66 | 6,231,169.74 |
| Other payables | 206,673,763.07 | 159,023,382.81 |
| Including: Interest payable | ||
| Dividends payable | 3,891,433.83 | 3,891,433.83 |
| Fees and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 58,096,009.67 | 67,069,965.96 |
| Total current liabilities | 1,695,741,168.26 | 1,484,687,487.34 |
| Non-current liabilities: |
Insurance contract reserve
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 31,091,031.75 | 32,795,896.48 |
| Deferred income tax liabilities | 155,058,021.85 | 171,843,455.52 |
| Other non-current liabilities | ||
| Total non-current liabilities | 186,149,053.60 | 204,639,352.00 |
| Total liabilities | 1,881,890,221.86 | 1,689,326,839.34 |
| Owners’ equity: | ||
| Share capital | 705,692,507.00 | 705,692,507.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserves | 640,509,675.84 | 640,509,675.84 |
| Less: Treasury stock | ||
| Other comprehensive income | 622,942,921.82 | 667,180,321.82 |
| Specific reserve | 20,082,705.37 | 19,432,089.52 |
| Surplus reserves | 363,695,592.34 | 363,695,592.34 |
| General reserve | ||
| Retained earnings | 1,019,366,832.03 | 1,002,436,724.71 |
| Total equity attributable to owners of the Company as the parent | 3,372,290,234.40 | 3,398,946,911.23 |
| Non-controlling interests | 74,998,682.81 | 71,121,208.35 |
| Total owners’ equity | 3,447,288,917.21 | 3,470,068,119.58 |
| Total liabilities and owners’ equity | 5,329,179,139.07 | 5,159,394,958.92 |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 30 June 2024 | 1 January 2024 |
| Current assets: | ||
| Monetary assets | 684,650,508.98 | 971,143,382.52 |
| Held-for-trading financial assets | 302,000,000.00 | 100,437,916.67 |
| Derivative financial assets | ||
| Notes receivable | 100,566,078.42 | 152,906,979.84 |
| Accounts receivable | 1,156,324,634.71 | 291,996,837.94 |
| Accounts receivable financing | 14,682,312.54 | 193,679,203.92 |
| Prepayments | 10,752,337.97 | 5,850,589.29 |
| Other receivables | 253,310,648.05 | 399,142,024.92 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 379,778,666.24 | 475,538,711.10 |
| Including: Data resource | ||
| Contract assets | ||
| Assets held for sale | 2,951,451.11 | |
| Current portion of non-current assets | 40,773,509.75 | |
| Other current assets | 5,839,708.73 | |
| Total current assets | 2,905,016,638.02 | 2,637,308,864.68 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 576,443,530.03 | 576,443,530.03 |
| Investments in other equity instruments | 917,444,025.67 | 969,488,025.67 |
| Other non-current financial assets | 412,914,576.80 | 412,914,576.80 |
| Investment property | 38,789,201.33 | 39,837,558.11 |
| Fixed assets | 207,158,781.94 | 229,931,726.27 |
Construction in progress
| Construction in progress | 2,121,021.69 | 2,166,940.74 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 57,199,072.30 | 58,781,756.11 |
| Including: Data resource | ||
| Development costs | ||
| Including: Data resource | ||
| Goodwill | ||
| Long-term prepaid expense | ||
| Deferred income tax assets | 3,575,852.25 | 920,609.18 |
| Other non-current assets | 830,991.15 | 830,991.15 |
| Total non-current assets | 2,216,477,053.16 | 2,291,315,714.06 |
| Total assets | 5,121,493,691.18 | 4,928,624,578.74 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 753,437,100.68 | 524,671,742.33 |
| Accounts payable | 446,291,900.59 | 526,544,716.02 |
| Advances from customers | 30,678,302.75 | 1,647,441.22 |
| Contract liabilities | 34,394,966.41 | 26,149,334.52 |
| Employee benefits payable | 4,832,521.38 | 40,766,429.54 |
| Taxes payable | 2,247,738.26 | 2,069,482.65 |
| Other payables | 215,785,963.92 | 151,919,473.64 |
| Including: Interest payable | ||
| Dividends payable | 3,243,179.97 | 3,243,179.97 |
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 49,493,487.22 | 53,417,011.96 |
| Total current liabilities | 1,537,161,981.21 | 1,327,185,631.88 |
| Non-current liabilities: | ||
| Long-term borrowings |
Bonds payable
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 31,091,031.75 | 32,795,896.48 |
| Deferred income tax liabilities | 149,246,477.87 | 157,053,077.87 |
| Other non-current liabilities | ||
| Total non-current liabilities | 180,337,509.62 | 189,848,974.35 |
| Total liabilities | 1,717,499,490.83 | 1,517,034,606.23 |
| Owners’ equity: | ||
| Share capital | 705,692,507.00 | 705,692,507.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 659,418,700.67 | 659,418,700.67 |
| Less: Treasury stock | ||
| Other comprehensive income | 622,942,921.82 | 667,180,321.82 |
| Specific reserve | 19,193,992.27 | 19,010,793.43 |
| Surplus reserves | 363,695,592.34 | 363,695,592.34 |
| Retained earnings | 1,033,050,486.25 | 996,592,057.25 |
| Total owners’ equity | 3,403,994,200.35 | 3,411,589,972.51 |
| Total liabilities and owners’ equity | 5,121,493,691.18 | 4,928,624,578.74 |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
3. Consolidated Income Statement
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Revenue | 1,495,909,152.63 | 1,350,517,639.85 |
| Including: Operating revenue | 1,495,909,152.63 | 1,350,517,639.85 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 1,402,397,808.63 | 1,322,596,281.11 |
| Including: Cost of sales | 1,247,104,070.05 | 1,168,898,203.83 |
| Interest expense | ||
| Handling charge and commission expense | ||
| Surrenders | ||
| Net insurance claims paid | ||
| Net amount provided as insurance contract reserve | ||
| Expenditure on policy dividends | ||
| Reinsurance premium expense | ||
| Taxes and surcharges | 8,959,091.13 | 7,827,255.58 |
| Selling expense | 62,703,122.61 | 62,131,032.17 |
| Administrative expense | 53,480,629.46 | 52,877,371.06 |
| R&D expense | 38,765,247.04 | 35,839,071.42 |
| Finance costs | -8,614,351.66 | -4,976,652.95 |
| Including: Interest expense | 1,546,928.49 | 3,343,884.90 |
| Interest income | 7,969,452.65 | 4,264,102.18 |
| Add: Other income | 1,953,702.37 | 3,299,056.52 |
| Return on investment (“-” for loss) | 14,299,040.62 | 3,226,921.70 |
| Including: Share of profit or loss of joint ventures and associates | ||
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Exchange gain (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | -34,487,453.74 | 19,360,455.86 |
| Credit impairment loss (“-” for loss) | -17,838,282.66 | -14,547,351.17 |
| Asset impairment loss (“-” for loss) | -359,995.80 | -565,273.49 |
| Asset disposal income (“-” for loss) | 408,245.54 | 105,395,693.25 |
| 3. Operating profit (“-” for loss) | 57,486,600.33 | 144,090,861.41 |
| Add: Non-operating income | 1,070,935.19 | 495,538.97 |
| Less: Non-operating expense | 267,734.59 | 1,297,348.13 |
| 4. Profit before tax (“-” for loss) | 58,289,800.93 | 143,289,052.25 |
Less: Income tax expense
| Less: Income tax expense | 4,314,671.32 | 7,189,328.33 |
| 5. Net profit (“-” for net loss) | 53,975,129.61 | 136,099,723.92 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 53,975,129.61 | 136,099,723.92 |
| 5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5.2 By ownership | ||
| 5.2.1 Net profit attributable to shareholders of the Company as the parent (“-” for net loss) | 50,097,655.15 | 131,937,324.66 |
| 5.2.2 Net profit attributable to non-controlling interests (“-” for net loss) | 3,877,474.46 | 4,162,399.26 |
| 6. Other comprehensive income, net of tax | -44,237,400.00 | 73,660,150.00 |
| Attributable to owners of the Company as the parent | -44,237,400.00 | 73,660,150.00 |
| 6.1 Items that will not be reclassified to profit or loss | -44,237,400.00 | 73,660,150.00 |
| 6.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
| 6.1.3 Changes in the fair value of investments in other equity instruments | -44,237,400.00 | 73,660,150.00 |
| 6.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 6.1.5 Other | ||
| 6.2 Items that will be reclassified to profit or loss | ||
| 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 6.2.2 Changes in the fair value of investments in other debt obligations | ||
| 6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 6.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 6.2.5 Reserve for cash flow hedges | ||
| 6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 6.2.7 Other | ||
| Attributable to non-controlling interests | ||
| 7. Total comprehensive income | 9,737,729.61 | 209,759,873.92 |
| Attributable to owners of the Company as the parent | 5,860,255.15 | 205,597,474.66 |
| Attributable to non-controlling interests | 3,877,474.46 | 4,162,399.26 |
8. Earnings per share
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.0710 | 0.1870 |
| 8.2 Diluted earnings per share | 0.0710 | 0.1870 |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Operating revenue | 1,420,095,519.32 | 1,245,166,233.55 |
| Less: Cost of sales | 1,212,212,684.13 | 1,092,404,343.46 |
| Taxes and surcharges | 5,596,041.85 | 4,338,250.54 |
| Selling expense | 57,773,822.40 | 55,517,272.45 |
| Administrative expense | 38,925,179.53 | 37,544,625.71 |
| R&D expense | 34,813,766.30 | 31,151,256.18 |
| Finance costs | -12,954,483.76 | -8,436,313.24 |
| Including: Interest expense | 1,415,480.19 | 1,562,299.35 |
| Interest income | 11,403,739.83 | 7,952,110.19 |
| Add: Other income | 1,756,921.35 | 3,200,820.43 |
| Return on investment (“-” for loss) | 13,453,121.53 | 2,732,242.23 |
| Including: Share of profit or loss of joint ventures and associates | ||
| Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
| Net gain on exposure hedges (“-” for loss) | ||
| Gain on changes in fair value (“-” for loss) | 354,111.11 | |
| Credit impairment loss (“-” for loss) | -18,792,776.77 | -11,755,063.73 |
| Asset impairment loss (“-” for loss) | -349,743.48 | -410,653.17 |
| Asset disposal income (“-” for loss) | 421,678.54 | 105,393,483.13 |
| 2. Operating profit (“-” for loss) | 80,217,710.04 | 132,161,738.45 |
| Add: Non-operating income | 567,599.20 | |
| Less: Non-operating expense | 3,720.00 | 363,382.47 |
| 3. Profit before tax (“-” for loss) | 80,781,589.24 | 131,798,355.98 |
| Less: Income tax expense | 11,155,612.41 | -247,487.85 |
| 4. Net profit (“-” for net loss) | 69,625,976.83 | 132,045,843.83 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 69,625,976.83 | 132,045,843.83 |
| 4.2 Net profit from discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | -44,237,400.00 | 73,660,150.00 |
| 5.1 Items that will not be reclassified to profit or loss | -44,237,400.00 | 73,660,150.00 |
| 5.1.1 Changes caused by remeasurements on defined benefit schemes | ||
| 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method |
5.1.3 Changes in the fair value of investments in
other equity instruments
| 5.1.3 Changes in the fair value of investments in other equity instruments | -44,237,400.00 | 73,660,150.00 |
| 5.1.4 Changes in the fair value arising from changes in own credit risk | ||
| 5.1.5 Other | ||
| 5.2 Items that will be reclassified to profit or loss | ||
| 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
| 5.2.2 Changes in the fair value of investments in other debt obligations | ||
| 5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
| 5.2.4 Credit impairment allowance for investments in other debt obligations | ||
| 5.2.5 Reserve for cash flow hedges | ||
| 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
| 5.2.7 Other | ||
| 6. Total comprehensive income | 25,388,576.83 | 205,705,993.83 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 881,118,416.96 | 1,010,313,942.34 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowings from the central bank | ||
| Net increase in loans from other financial institutions | ||
| Premiums received on original insurance contracts | ||
| Net proceeds from reinsurance | ||
| Net increase in deposits and investments of policy holders | ||
| Interest, handling charges and commissions received | ||
| Net increase in interbank loans obtained | ||
| Net increase in proceeds from repurchase transactions | ||
| Net proceeds from acting trading of securities | ||
| Tax rebates | 10,606,127.65 | 69,957,787.95 |
| Cash generated from other operating activities | 12,788,451.27 | 11,524,017.72 |
| Subtotal of cash generated from operating activities | 904,512,995.88 | 1,091,795,748.01 |
| Payments for commodities and services | 748,951,967.58 | 918,215,681.86 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and in interbank loans granted | ||
| Payments for claims on original insurance contracts | ||
| Net increase in interbank loans granted | ||
| Interest, handling charges and commissions paid | ||
| Policy dividends paid | ||
| Cash paid to and for employees | 183,166,748.96 | 174,060,228.57 |
| Taxes paid | 38,069,979.90 | 23,195,064.69 |
| Cash used in other operating activities | 96,138,812.44 | 81,121,589.64 |
| Subtotal of cash used in operating activities | 1,066,327,508.88 | 1,196,592,564.76 |
| Net cash generated from/used in operating activities | -161,814,513.00 | -104,796,816.75 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 385,750,000.00 | 623,016,751.99 |
| Return on investment | 14,299,040.62 | 4,508,124.22 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 76,305,099.30 | 57,844,735.80 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities |
Subtotal of cash generated from investing activities
| Subtotal of cash generated from investing activities | 476,354,139.92 | 685,369,612.01 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 11,017,090.96 | 135,352,075.57 |
| Payments for investments | 598,044,324.00 | 595,377,614.00 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 609,061,414.96 | 730,729,689.57 |
| Net cash generated from/used in investing activities | -132,707,275.04 | -45,360,077.56 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings raised | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Interest and dividends paid | 33,167,547.83 | 8,886,489.92 |
| Including: Dividends paid by subsidiaries to non-controlling interests | ||
| Cash used in other financing activities | ||
| Subtotal of cash used in financing activities | 33,167,547.83 | 8,886,489.92 |
| Net cash generated from/used in financing activities | -33,167,547.83 | -8,886,489.92 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | -327,689,335.87 | -159,043,384.23 |
| Add: Cash and cash equivalents, beginning of the period | 971,629,523.46 | 810,350,966.05 |
| 6. Cash and cash equivalents, end of the period | 643,940,187.59 | 651,307,581.82 |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | H1 2024 | H1 2023 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 792,554,114.17 | 882,438,846.47 |
| Tax rebates | 5,571,468.42 | 20,491,423.94 |
| Cash generated from other operating activities | 10,526,359.52 | 9,587,042.20 |
| Subtotal of cash generated from operating activities | 808,651,942.11 | 912,517,312.61 |
| Payments for commodities and services | 723,988,549.96 | 774,101,281.20 |
| Cash paid to and for employees | 153,563,701.50 | 139,789,044.66 |
| Taxes paid | 28,596,026.83 | 7,394,673.54 |
| Cash used in other operating activities | 77,233,383.77 | 247,440,184.71 |
| Subtotal of cash used in operating activities | 983,381,662.06 | 1,168,725,184.11 |
| Net cash generated from/used in operating activities | -174,729,719.95 | -256,207,871.50 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 370,000,000.00 | 610,000,000.00 |
| Return on investment | 13,453,121.53 | 4,337,174.74 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 76,421,678.54 | 57,813,485.80 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 459,874,800.07 | 672,150,660.54 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 2,211,874.73 | 8,705,239.80 |
| Payments for investments | 572,000,000.00 | 580,000,000.00 |
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 574,211,874.73 | 588,705,239.80 |
| Net cash generated from/used in investing activities | -114,337,074.66 | 83,445,420.74 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings raised | ||
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | ||
| Repayment of borrowings | ||
| Interest and dividends paid | 33,167,547.83 | 8,773,914.91 |
| Cash used in other financing activities |
Subtotal of cash used in financing activities
| Subtotal of cash used in financing activities | 33,167,547.83 | 8,773,914.91 |
| Net cash generated from/used in financing activities | -33,167,547.83 | -8,773,914.91 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5. Net increase in cash and cash equivalents | -322,234,342.44 | -181,536,365.67 |
| Add: Cash and cash equivalents, beginning of the period | 899,689,740.60 | 704,659,776.14 |
| 6. Cash and cash equivalents, end of the period | 577,455,398.16 | 523,123,410.47 |
Legal representative: Xie Guozhong General Manager: Xie GuozhongHead of the accounting department: Jiang He
7. Consolidated Statements of Changes in Owners’ Equity
H1 2024
Unit: RMB
| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 705,692,507.00 | 640,509,675.84 | 667,180,321.82 | 19,432,089.52 | 363,695,592.34 | 1,002,436,724.71 | 3,398,946,911.23 | 71,121,208.35 | 3,470,068,119.58 | ||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
Adjustment for correction ofprevious error
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 705,692,507.00 | 640,509,675.84 | 667,180,321.82 | 19,432,089.52 | 363,695,592.34 | 1,002,436,724.71 | 3,398,946,911.23 | 71,121,208.35 | 3,470,068,119.58 | ||||||
| 3. Increase/ decrease in the period (“-” for decrease) | -44,237,400.00 | 650,615.85 | 16,930,107.32 | -26,656,676.83 | 3,877,474.46 | -22,779,202.37 | |||||||||
| 3.1 Total comprehensive income | -44,237,400.00 | 50,097,655.15 | 5,860,255.15 | 3,877,474.46 | 9,737,729.61 | ||||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||||
| 3.2.1 Ordinary shares increased by owners | |||||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -33,167,547.83 | -33,167,547.83 | -33,167,547.83 | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -33,167,547.83 | -33,167,547.83 | -33,167,547.83 | ||||||||||||
| 3.3.4 Other |
3.4 Transfers within owners’
equity
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | 650,615.85 | 650,615.85 | 650,615.85 | ||||||||||||
| 3.5.1 Increase in the period | 3,083,166.06 | 3,083,166.06 | 3,083,166.06 | ||||||||||||
| 3.5.2 Used in the period | 2,432,550.21 | 2,432,550.21 | 2,432,550.21 | ||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the Reporting Period | 705,692,507.00 | 640,509,675.84 | 622,942,921.82 | 20,082,705.37 | 363,695,592.34 | 1,019,366,832.03 | 3,372,290,234.40 | 74,998,682.81 | 3,447,288,917.21 |
H1 2023
Unit: RMB
Item
| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
| Preferred shares | Perpetual bonds | Other | |||||||||||||
| 1. Balance as at the end of the period of prior year | 705,692,507.00 | 640,133,963.01 | 655,341,704.07 | 18,848,856.75 | 349,197,725.72 | 915,495,909.35 | 3,284,710,665.90 | 72,464,172.67 | 3,357,174,838.57 | ||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 705,692,507.00 | 640,133,963.01 | 655,341,704.07 | 18,848,856.75 | 349,197,725.72 | 915,495,909.35 | 3,284,710,665.90 | 72,464,172.67 | 3,357,174,838.57 | ||||||
3. Increase/ decrease in the period
(“-” for decrease)
| 3. Increase/ decrease in the period (“-” for decrease) | 73,660,150.00 | 2,177,810.33 | 124,880,399.59 | 200,718,359.92 | 4,162,399.26 | 204,880,759.18 | |||||||||
| 3.1 Total comprehensive income | 73,660,150.00 | 131,937,324.66 | 205,597,474.66 | 4,162,399.26 | 209,759,873.92 | ||||||||||
| 3.2 Capital increased and reduced by owners | |||||||||||||||
| 3.2.1 Ordinary shares increased by owners | |||||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
| 3.2.4 Other | |||||||||||||||
| 3.3 Profit distribution | -7,056,925.07 | -7,056,925.07 | -7,056,925.07 | ||||||||||||
| 3.3.1 Appropriation to surplus reserves | |||||||||||||||
| 3.3.2 Appropriation to general reserve | |||||||||||||||
| 3.3.3 Appropriation to owners (or shareholders) | -7,056,925.07 | -7,056,925.07 | -7,056,925.07 | ||||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves |
3.4.2 Increase in capital (or
share capital) from surplusreserves
| 3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | 2,177,810.33 | 2,177,810.33 | 2,177,810.33 | ||||||||||||
| 3.5.1 Increase in the period | 4,598,473.04 | 4,598,473.04 | 4,598,473.04 | ||||||||||||
| 3.5.2 Used in the period | 2,420,662.71 | 2,420,662.71 | 2,420,662.71 | ||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the Reporting Period | 705,692,507.00 | 640,133,963.01 | 729,001,854.07 | 21,026,667.08 | 349,197,725.72 | 1,040,376,308.94 | 3,485,429,025.82 | 76,626,571.93 | 3,562,055,597.75 |
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2024
Unit: RMB
| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
| 1. Balance as at the end of the period of prior year | 705,692,507.00 | 659,418,700.67 | 667,180,321.82 | 19,010,793.43 | 363,695,592.34 | 996,592,057.25 | 3,411,589,972.51 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 705,692,507.00 | 659,418,700.67 | 667,180,321.82 | 19,010,793.43 | 363,695,592.34 | 996,592,057.25 | 3,411,589,972.51 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | -44,237,400.00 | 183,198.84 | 36,458,429.00 | -7,595,772.16 | ||||||||
3.1 Total comprehensive
income
| 3.1 Total comprehensive income | -44,237,400.00 | 69,625,976.83 | 25,388,576.83 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -33,167,547.83 | -33,167,547.83 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | ||||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -33,167,547.83 | -33,167,547.83 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves |
3.4.4 Changes in defined
benefit schemes transferred toretained earnings
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | 183,198.84 | 183,198.84 | ||||||||||
| 3.5.1 Increase in the period | 2,333,560.45 | 2,333,560.45 | ||||||||||
| 3.5.2 Used in the period | 2,150,361.61 | 2,150,361.61 | ||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 705,692,507.00 | 659,418,700.67 | 622,942,921.82 | 19,193,992.27 | 363,695,592.34 | 1,033,050,486.25 | 3,403,994,200.35 |
H1 2023
Unit: RMB
| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Other | ||||||||||
1. Balance as at the end of the
period of prior year
| 1. Balance as at the end of the period of prior year | 705,692,507.00 | 659,418,700.67 | 655,341,704.07 | 18,848,856.75 | 349,197,725.72 | 873,168,182.73 | 3,261,667,676.94 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | ||||||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the Reporting Period | 705,692,507.00 | 659,418,700.67 | 655,341,704.07 | 18,848,856.75 | 349,197,725.72 | 873,168,182.73 | 3,261,667,676.94 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 73,660,150.00 | 2,177,810.33 | 124,988,918.76 | 200,826,879.09 | ||||||||
| 3.1 Total comprehensive income | 73,660,150.00 | 132,045,843.83 | 205,705,993.83 | |||||||||
| 3.2 Capital increased and reduced by owners | ||||||||||||
| 3.2.1 Ordinary shares increased by owners | ||||||||||||
| 3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
| 3.2.3 Share-based payments included in owners’ equity | ||||||||||||
| 3.2.4 Other | ||||||||||||
| 3.3 Profit distribution | -7,056,925.07 | -7,056,925.07 | ||||||||||
| 3.3.1 Appropriation to surplus reserves |
3.3.2 Appropriation to
owners (or shareholders)
| 3.3.2 Appropriation to owners (or shareholders) | -7,056,925.07 | -7,056,925.07 | ||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | ||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
| 3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3.4.3 Loss offset by surplus reserves | ||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 Specific reserve | 2,177,810.33 | 2,177,810.33 | ||||||||||
| 3.5.1 Increase in the period | 4,598,473.04 | 4,598,473.04 | ||||||||||
| 3.5.2 Used in the period | 2,420,662.71 | 2,420,662.71 | ||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the Reporting Period | 705,692,507.00 | 659,418,700.67 | 729,001,854.07 | 21,026,667.08 | 349,197,725.72 | 998,157,101.49 | 3,462,494,556.03 |
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
III. Company ProfileChangchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994, which is acompany limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the StateCommission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 byway of public offering of shares. With the approved of the People’s Government of Jiangsu Province SZF [1993]No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) throughdocument ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, suchtradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Su Changchai A” forshort of stock, as well as “0570” as stock code (present stock code is “000570”).In 1996, with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH [1996]No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ [1996] No.24, and approval of the State Council Securities Commission ZWF [1996] No. 27, the Company issued 100million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting listed on 13 September1996.On 9 June 2006, the Company held a shareholders’ general meeting related to A shares market to examine andapprove share merger reform plan, and performed the share merger reform on 19 June 2006.As examined and approved at the 2
ndExtraordinary General Meeting of 2009 in September 2009, based on thetotal share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit distribution plan,i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares, with registered capital increased byRMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after change, which verified by JiangsuGongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC[2010] No. B002.A non-public offering of up to 168,412,297 new shares was deliberated on and approved as a resolution of the2020 Annual General Meeting held on 7 May 2021 and approved by the Approval of the Non-public Offering ofShares of Changchai Co., Ltd. (CSRC Permit [2020] No. 3374) issued by Changchai Company Limited the ChinaSecurities Regulatory Commission. On 16 June 2021, the capital verification report "S.G. W [2021] B062" wasissued by Gongzheng Tianye Accounting Firm (Special General Partnership), confirming that the Company hadissued 144,318,181 RMB ordinary shares (A shares) in a non-public offering, with an additional paid-in capital(share capital) of RMB144,318,181. After the capital increase,the total share capital of the Company wasRMB705,692,507.The unified social credit code of the enterprise business license of the Company is 91320400134792410W.The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as itshead office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the productionand sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of ChangchaiBrand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvestmodels, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets andshipborne machinery and equipment, etc. The Company’s main business remained unchanged in the ReportingPeriod.
The Company established the Board of Shareholders, the Board of Directors and the Supervisory Committee,Corporate office, Financial Department, Political Department, Investment and Development Department, AuditDepartment, Human Recourses Department, Production Department, Procurement Department, Sales Company,Chief Engineer Office, Technology Center, QA Department, Foundry, Machine Processing Plant, Single-cylinderEngine Plant, Multi-cylinder Engine Plant，Machine Set Business Department and Overseas Business Departmentin the Company.The financial report has been approved to be issued by the Board of Directors on 21 August 2024.The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 8subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation, pleaserefer to the changes of the consolidated scope of the notes to the financial report and the notes to the equitiesamong other entities.IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,the Group prepared financial statements in accordance with The Accounting Standards for BusinessEnterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.76, the various specific accounting standards, the Application Guidance of Accounting Standards for BusinessEnterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued andrevised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for BusinessEnterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention ofDisclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2023)by China Securities Regulatory Commission.In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adoptedthe accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, animpairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors inthe 12 months from the end of the Reporting Period that would obviously influence the continuation capability ofthe Company and predicted that the operating activities would continue in the future 12 months of the Company.The financial statement compiled base on the continuous operation.V. Important Accounting Policies and EstimationsNotification of specific accounting policies and accounting estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accordwith the regulations of the relevant ASBE, formulated certain specific accounting policies and accountingestimations, which mainly reflected in the financial instruments, withdrawal method of the bad debt provision ofthe accounts receivable, the measurement of the inventory and the depreciation of the fixed assets etc.
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Group are in compliance with in compliance with the AccountingStandards for Business Enterprises, which factually and completely present the Company’s and the Group’sfinancial positions, business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash orcash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for theliquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Methods for Determining Materiality Standards and Selection Criteria
√Applicable □ Not applicable
| Item | Materiality criteria |
| Account receivable with bad debt provision by major single item | Amount greater than or equal to RMB1,000,000.00 |
| Other receivables with bad debt provision by major single item | Amount greater than or equal to RMB1,000,000.00 |
| Significant construction in progress | Amount greater than or equal to RMB3,000,000.00 |
6. Accounting Methods for Business Combinations under the Same Control and Business Combinations notunder the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combiningenterprises are ultimately controlled by the same party or the same parties both before and after the businesscombination and on which the control is not temporary.For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makespayment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of thebook value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.The difference between the initial cost of the long-term equity investment and the payment in cash, non-cashassets transferred as well as the book value of the debts borne by the merging party shall offset against the capitalreserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of thelong-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, whilethe difference between the initial cost of the long-term equity investment and total face value of the shares issuedshall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall beadjusted.All direct costs for the business combination, including expenses for audit, evaluating and legal services shall berecorded into the profits and losses at the current period. The expenses such as the handling charges andcommission etc, premium income of deducting the equity securities, and as for the premium income wasinsufficient to dilute, the retained earnings shall be written down.Owning to the reasons such as the additional investment, for the equity investment held before acquiring thecontrol right of the combined parties, the confirmed relevant gains and losses, other comprehensive income andthe changes of other net assets since the date of the earlier one between the date when acquiring the original equityright and the date when the combine parties and combined ones were under the same control to the combinationdate, should be respectively written down and compared with the beginning balance of retained earnings or thecurrent gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprisesare not ultimately controlled by the same party or the same parties both before and after the business combination.The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a businesscombination shall be measured at the fair values. The acquirer shall recognize the positive balance between thecombination costs and the fair value of the identifiable net assets it obtains forms the acquiree as businessreputation. The direct relevant expenses occurred from the enterprise combination should be included in thecurrent gains and losses when occurred. The combination costs of the acquirer and the identifiable net assetsobtained by it in the combination shall be measured according to their fair values at the acquiring date. Thedifference between the fair value of the assets paid out by the Company and its book value should be included inthe current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of theacquiree.For the business combinations not under the same control realized through step by step multiple transaction, as forthe equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measuredaccording to their fair values at the acquiring date; the positive difference between their fair values and carryingamounts shall be recorded into the investment gains for the period including the acquiring date. The equity holedby the acquiree which involved with the other comprehensive income and the other owners’ equities changesexcept for the net gains and losses, other comprehensive income and the profits distribution and other relatedcomprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds inthe acquiree before the acquiring date should be transferred into the current investment income on the acquiringdate, except for the other comprehensive income occurred from the re-measurement of the net profits of thedefined benefit plans or the changes of the net assets of the investees.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial Statements
(1) Criteria for determining control
Control refers to the authority held by the investor over the investee, entailing participation in its relevantactivities to yield variable returns and the capability to influence the investee's returns through exercising power
over it.The Company will judge whether these entities have been controlled by the investee based on its comprehensiveconsideration of relevant facts and circumstances. Should any changes in such facts and circumstances alter theelements defining control, a reassessment is promptly conducted.Relevant facts and circumstances primarily encompass:
① The purpose of the investee's establishment.
② The investee's pertinent activities and decision-making processes therein.
③ Whether the rights held by the investor currently enable it to dominate the investee's relevant activities.
④ Whether the investor gains variable returns through participating in the investee's relevant activities.
⑤ The investor's capacity to influence the investee's returns through exercising power over it.
⑥ The relationship between the investor and other entities.
(2) Consolidation scope
The consolidation scope of the Company's consolidated financial statements is determined based on control,encompassing all subsidiaries (including separately controlled entities by the Company) in the consolidatedfinancial statements.
(3) Combination procedure
The Company prepares consolidated financial statements based on its own and each subsidiary's financialstatements, along with other relevant information.When the Company prepares the consolidated financial statements, it shall regard the entire Group as anaccounting entity, and shall reflect the overall financial status, operating results and cash flows of the Group inaccordance with the requirements for recognition, measurement and presentation of the relevant accountingstandard for business enterprises, as well as unified accounting policies.All subsidiaries included in the consolidation scope of the consolidated financial statements apply accountingpolicies and accounting periods consistent with the Company.The accounting policy or accounting period of each subsidiary is different from which of the Company, whichshall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Companywhen preparing the consolidated financial statements.In preparing the consolidated financial statements, transactions between the Company and its subsidiaries, as wellas among subsidiaries themselves, are offset to reflect their impact on the consolidated balance sheet, consolidatedincome statement, consolidated cash flow statement, and consolidated statement of changes in equity. If there aredifferences in the recognition of the same transaction when viewed from the perspective of the corporate group'sconsolidated financial statements compared to when viewed from the standpoint of the Company or a subsidiaryas the accounting entity, adjustments are made from the perspective of the corporate group.The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net profits and losses for theperiod are recognized as minority interests and minority shareholder profits and losses respectively and presentedseparately under shareholders’ equity and net profits in the consolidation financial statements. The portion of asubsidiary’s net profits and losses for the period that belong to minority interests is presented as the item of“minority shareholder profits and losses” under the bigger item of net profits in the consolidated financialstatements.Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minorityshareholders in the subsidiary’s opening owners’ equity, minority interests are offset.For subsidiaries acquired through business combinations under common control, adjustments to their financial
statements are based on their assets, liabilities (including goodwill arising from the acquisition by the ultimatecontroller), and their carrying value in the financial statements of the ultimate controller.For subsidiaries acquired through business combinations not under common control, adjustments to their financialstatements are based on the fair value of identifiable net assets as of the acquisition date.
① Addition of subsidiaries or businesses
If subsidiaries or businesses are added through business combinations under common control during the ReportingPeriod, adjustments are made to the opening balances of the consolidated balance sheet. The income, expenses,and profits of the subsidiaries or businesses from the beginning of the current period to the end of the ReportingPeriod are included in the consolidated income statement. The cash flows of the subsidiaries or businesses fromthe beginning of the current period to the end of the Reporting Period are included in the consolidated cash flowstatement. Comparative items in the financial statements are adjusted accordingly, treating the reporting entityafter the combination as if it had existed since the date when control was obtained by the ultimate controller.If control over an investee under common control is achieved due to the reasons such as the additional investment,adjustments are made as if all parties participating in the merger existed in their current state from the date whencontrol was obtained by the ultimate controller. For the equity investment held before acquiring the control rightof the combined parties, the confirmed relevant gains and losses, other comprehensive income and the changes ofother net assets since the date of the earlier one between the date when acquiring the original equity right and thedate when the combine parties and combined ones were under the same control to the combination date, should berespectively written down and compared with the beginning balance of retained earnings or the current gains andlosses during the statement period.During the Reporting Period, if there is an increase in subsidiaries or businesses due to business combinations notunder common control, the opening balances of the consolidated balance sheet are not adjusted. The income,expenses, and profits of the subsidiary or business from the acquisition date to the end of the Reporting Period areincluded in the consolidated income statement. The cash flows of the subsidiary or business from the acquisitiondate to the end of the Reporting Period are included in the consolidated cash flow statement.In the event of acquiring control over an investee previously not under common control due to additionalinvestments or similar reasons, as for the equity interests that the Group holds in the acquiree before the acquiringdate, they shall be re-measured according to their fair values at the acquiring date; the positive difference betweentheir fair values and carrying amounts shall be recorded into the investment gains for the period including theacquiring date. The equity holed by the acquiree which involved with the other comprehensive income and theother owners’ equities changes except for the net gains and losses, other comprehensive income and the profitsdistribution and other related comprehensive gains and other owners’ equities which in relation to the equityinterests that the Group holds in the acquiree before the acquiring date should be transferred into the currentinvestment income on the acquiring date, except for the other comprehensive income occurred from there-measurement of the net profits of the defined benefit plans or the changes of the net assets of the investees.
② Disposal of subsidiaries or businesses
A. General disposal methodsDuring the Reporting Period, if the Company disposes of a subsidiary or business, the income, expenses, andprofits of the subsidiary or business from the beginning of the period to the disposal date are included in theconsolidated income statement. The cash flows of the subsidiary or business from the beginning of the period tothe disposal date are included in the consolidated cash flow statement.Where the Group losses control on its original subsidiaries due to disposal of some equity investments or otherreasons, the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of theresidual equity interests, minus the portion in the original subsidiary’s net assets measured on a continuous basisfrom the acquisition date that is enjoyable by the Group according to the original shareholding percentage in thesubsidiary, is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Othercomprehensive incomes in relation to the equity investment and the other owners’ equities changes except for thenet gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated onthe same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for thechanges in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the originalsubsidiary, the rest shall all be transferred into current investment gains) when such control ceases.B. Disposal of subsidiaries step by stepIf the clauses, conditions, and economic impact, by which the equity investments of a subsidiary were disposed ofstep by step through multiple transactions until the control was lost, and the various transactions in the equityinvestments of a subsidiary were disposed of, fell under one or more of the following circumstances, the multipletransactions were generally regarded as a "Package Deal":
a. These transactions are reached concurrently or after the impact thereof on each other is taken into consideration.b. These transactions might achieve a complete business result only as a whole;c. The occurrence of a transaction depends on the occurrence of, at a minimum, one another transaction; and/ord. A transaction is considered uneconomical separately but is considered economical when other transactions arealso taken into consideration.For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conductaccounting treatment. However, before losing control, every disposal cost and corresponding net assets balance ofsubsidiary of disposal investment are confirmed as other comprehensive income in consolidated financialstatements, which together transferred into the current profits and losses in the loss of control, when the Grouplosing control on its subsidiary.For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatmentaccording to the relevant policies of partly disposing the equity investment of the subsidiaries under the situationnot lose the control right before losing the control right; when losing the control right, the former should beexecuted accounting treatment according to the general disposing method of the disposal of the subsidiaries.
③ Acquisition of minority equity of subsidiaries
The balance existed between the long-term equity investment increased by acquiring shares of minority interestand the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (orcombination date), the share premium of capital reserves within the consolidated balance sheet shall be adjusted,if the capital reserves are not sufficient to offset, the retained profits shall be adjusted.
④ The Company disposed part of the long-term equity investment on subsidiaries without losing its controllingright on themIn the case of partial disposal of long-term equity investments in a subsidiary without loss of control, thedifference between the disposal proceeds obtained and the proportionate share of net assets of the subsidiarycontinuously calculated from the purchase date or merger date corresponding to the disposal of long-term equityinvestments is adjusted in the share premium within the consolidated balance sheet. If the share premium in thecapital reserve is insufficient to offset the difference, adjustments are made to retained earnings.
8. Classification of Joint Arrangements and Accounting Treatment of Joint OperationsThe Group classifies joint arrangements into joint operations and joint ventures.A joint operation refers to a joint arrangement where the Group is the joint operations party of the jointarrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms thefollowing items related to the interests share among the joint operations and executes accounting treatmentaccording to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assetsaccording to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilitiesaccording to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation accordingto the Group’s stake in it.
9. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used forcover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,which are easily convertible into known amount of cash and whose risks in change of value are minimal.
10. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into therecording currency according to the middle price of the market exchange rate disclosed by the People’s Bank ofChina on the date of the transaction. Among the said transactions that occurred, those involving foreign exchangesshall be converted according to the exchange rates adopted in the actual transactions.On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall beconverted into the recoding currency according to the middle price of the market exchange rates disclosed by thePeople’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amountconverted according to the exchange rate on the Balance Sheet Date and the original book recording-currencyamount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by theforeign-currency borrowings related to purchasing fixed assets shall be handled according to the principle ofcapitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recordedinto the establishment expense; others shall be recorded into the financial expenses for the current period.On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be convertedaccording to the middle price of the market exchange disclosed by the People’s Bank of China on the date of thetransaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetaryitems measured by fair value shall be converted according to the middle price of the market exchange disclosed bythe People’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss causedthereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spotexchange rate on the balance sheet date. Among the owner’s equity items, except for the items as “undistributedprofits”, other items shall be translated at the spot exchange rate at the time when they are incurred. And therevenues and expenses items among the balance sheet of the foreign operation shall be translated at theapproximate exchange rate of the transaction date. The difference caused from the above transaction of the foreigncurrency statement should be listed in the other comprehensive income among the owners’ equities.
11. Financial Instruments
(1) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories based onthe business model for financial assets management and characteristics of contractual cash flow of financial assets:
financial assets measured at amortized cost, financial assets at fair value through other comprehensive income(debt instruments) and financial assets at fair value through profit or lossFinancial liabilities were classifies when initially recognized into financial liabilities at fair value through profit orloss and financial liabilities measured at amortized cost.
(2) Recognition Basis and Measurement Method for Financial Instruments
① Financial assets measured at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-termreceivables, and investment in debt obligations which are initially measured at fair value and related transactioncost shall be recorded into the initial recognized amount. For accounts receivable excluding significant financingand accounts receivable that the Company decides not to consider financing components less than one year, theinitial measurement shall be made at the contract transaction price. The interest calculated with actual rates for theholding period shall be recorded into the current profit or loss. When recovered or disposed, the differencebetween the price obtained and the carrying value of the financial assets shall be recorded into the current profit orloss.
② Financial assets at fair value through other comprehensive income (debt instruments)Financial assets at fair value through other comprehensive income (debt instruments) include accounts receivablefinancing and investment in other debt obligations which are initially measured at fair value and relatedtransaction cost shall be recorded into the initial recognized amount. The subsequent measurement of the financialassets shall be at fair value and changes of fair value except for interest calculated with actual rates, impairmentlosses or gains and exchange gains or losses shall be recorded into other comprehensive income. Whenderecognized, the accumulated gains or losses originally recorded into other comprehensive income shall betransferred into the current profit or loss.
③ Financial assets at fair value through other comprehensive income (equity instruments)Financial assets at fair value through other comprehensive income (equity instruments) include investment inother equity instruments, etc. which are initially measured at fair value and related transaction cost shall berecorded into the initial recognized amount. The subsequent measurement of the financial assets shall be at fairvalue and changes of fair value shall be recorded into other comprehensive income. The dividends obtained shallbe recorded into the current profit or loss. When derecognized, the accumulated gains or losses originally recordedinto other comprehensive income shall be transferred into retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets, derivative financialassets and other non-current financial assets which are initially measured at fair value and the related transactioncost shall be recorded into the current profit or loss. The subsequent measurement of the financial assets shall beat fair value and the changes of fair value shall be recorded into the current profit or loss.
⑤ Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and derivativefinancial liabilities which are initially measured at fair value and the related transaction cost shall be recorded intothe current profit or loss. The subsequent measurement of the financial liabilities shall be at fair value and thechanges of fair value shall be recorded into the current profit or loss. When derecognized, the difference betweenthe carrying value and the paid consideration shall be recorded into the current profit or loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings, notes payable, accounts payable, otherpayables, long-term borrowings, bonds payable and long-term payables which are initially measured at fair valueand the related transaction cost shall be recorded into the initial recognized amount. The interest calculated withactual rates for the holding period shall be recorded into the current profit or loss. When derecognized, thedifference between the paid consideration and the carrying value of the financial liabilities shall be recorded intothe current profit or loss.
(3) Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financialasset to the transferee, it shall stop recognizing the financial asset and separately recognize the rights andobligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks andrewards related to the ownership of the financial asset, it shall continue to recognize the transferred financial asset.Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of afinancial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up itscontrol over the financial asset, it shall stop recognizing the financial asset and separately recognize the rights andobligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over thefinancial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset,recognize the related financial asset and recognize the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference betweenthe amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) Thecarrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration receivedfrom the transfer of financial assets, and derecognition amount among the accumulative amount of the changes ofthe fair value originally recorded in the other comprehensive income (the financial assets involve transfer areinvestments in debt instruments at fair value through other comprehensive income. If the transfer of partialfinancial asset satisfies the conditions to stop the recognition, the entire carrying value of the transferred financialasset shall, between the portion whose recognition has been stopped and the portion whose recognition has notbeen stopped, be apportioned according to their respective relative fair value on the transfer date, and thedifference between the amounts of the following two items shall be included into the profits and losses of thecurrent period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum ofconsideration of the portion whose recognition has been stopped, and derecognition amount among theaccumulative amount of the changes of the fair value originally recorded in the other comprehensive income (thefinancial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the activemarket. For financial instruments without active market, the fair value is determined by valuation techniques. TheCompany adopts the valuation techniques applicable to the current conditions which are supported by sufficientdata and other information for valuation, and selects the input values consistent with the characteristics of assetsor liabilities considered by market participants in asset or liability transactions, with priority to observable inputvalues. Unobservable input values are used only when relevant observable input values are not available orpractical.
(6) Impairment of financial instrument
① Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms credit impairment lossfor financial assets which is measured by amortized cost, debt instrument investment which is measured by fairvalue and whose change is calculated into other comprehensive profits, financial guarantee contract.Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk ofcontract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow whichis converted into cash according to actual interest rate and receivable according to contract and all cash flowwhich to be charged as expected, i.e. current value of all cash shortage. Among it, as for financial asset purchasedor original which has had credit impairment, it should be converted into cash according actual interest rate of thisfinancial asset after credit adjustment.Lifetime expected credit losses refer to those caused by possible defaults during the entire expected duration of afinancial instrument.The expected credit losses in the next 12 months refers to those caused by the default events of the financialinstrument that may occur within 12 months (or the expected duration if the expected duration of the financialinstrument is less than 12 months) after the balance sheet date, and is part of the expected credit losses in theentire duration.On each balance sheet date, the Company respectively measured the expected credit losses of financialinstruments in different stages. If the credit risk of a financial instrument has had no significant increase since itsinitial recognition, the instrument shall fall in the first stage, for which the Company would measure the lossreserves according to the expected credit losses in the future 12 months. If the credit risk of a financial instrumenthas had a significant increase since its initial recognition but no credit impairment has occurred, the instrumentshall fall in the second stage, for which the Company would measure the loss reserves according to the expectedcredit losses in the entire duration of the instrument. If the credit impairment has occurred since its initialrecognition, the financial instrument shall fall in the third stage, for which the Company would measure the lossreserves according to the expected credit losses in the entire duration of the instrument.As for a financial instrument with low credit risks on the balance sheet date, the Company measured the lossreserves according to the expected credit losses in the future 12 months, assuming that its credit risk has had nosignificant increase since its initial recognition.For financial instruments with low credit risks in stages 1 and 2, the Company calculated the interest income at theeffective interest rate and on the carrying amount of the instruments without deductions for provisions for assetimpairment. For financial instruments in stage 3, interest income was calculated at the effective interest rates and
on the amortized cost by reducing the provisions for asset impairment from the carrying amount.For notes receivables, accounts receivables, and financing receivables, whether there was a significant financialcomponent or not, the Company measured the loss reserves based on the expected credit losses for the entireduration.A. Accounts receivableFor notes receivable, accounts receivable, other receivables and accounts receivable financing with objectiveevidence indicating impairment and those suitable for individual evaluation, the Company carries out impairmenttest separately to confirm expected credit loss and prepare provision for impairment of single items. For notesreceivable, accounts receivable, other receivables, accounts receivable financing, contract assets and long-termreceivables without objective evidence of impairment, or a single financial asset with expected credit lossimpossible to be assessed at a reasonable cost, the Company divides the notes receivable, accounts receivable,other receivables and accounts receivable financing into groups according to the characteristics of credit risk, andcalculates the expected credit loss based on receivable groups. The basis for recognizing groups is as follows:
| Item | Recognition basis | Method of measuring expected credit losses |
| Group 1 of notes receivable | All commercial bills | Consulting historical experience in credit losses, combining current situation and prediction for future economic situation, the expected credit loss shall be accounted through exposure at default and the expected credit loss rate over the entire life |
| Group 2 of notes receivable | Bank’s acceptance bills with low credit rating | |
| Accounts receivable financing | Bank’s acceptance bills with high credit rating | Consulting historical experience in credit losses, combining current situation and prediction for future economic situation, the expected credit loss shall be accounted through exposure at default and the expected credit loss rate over the entire life |
| Accounts receivable-credit risk characteristics group | Accounts receivable portfolio with credit period | Prepare the comparative list between aging of accounts receivable and expected credit loss rate over the entire life and calculate the expected credit loss by consulting historical experience in credit losses, combining current situation and prediction for future economic situation. The Company takes aging as credit risk characteristics groups and calculates the expected credit loss for accounts receivable. |
| Accounts receivable-intercourse funds among related party group within the consolidation scope | Related party within the consolidation scope | Consulting historical experience in credit losses, combining current situation and prediction for future economic situation, the expected credit loss shall be accounted through exposure at default and the expected credit loss rate over the entire life |
Basis for recognizing groups of other receivables is as follows:
| Item | Recognition basis | Method of measuring expected credit losses |
| Group 1 of other receivables | Other receivables excluding those from | Consulting historical experience in credit losses, combining current situation and prediction for future |
related parties-aging
group
| related parties-aging group | economic situation, the expected credit loss shall be accounted through exposure at default and the expected credit loss rate within the next 12 months or over the entire life | |
| Group 2 of other receivables | Related party within the consolidation scope | Consulting historical experience in credit losses, combining current situation and prediction for future economic situation, the expected credit loss shall be accounted through exposure at default and the expected credit loss rate within the next 12 months or over the entire life |
12. Accounts Receivable
See “11. Financial Instruments”.
13. Accounts Receivable Financing
See “11. Financial Instruments”.
14. Other Receivables
See “11. Financial Instruments”.
15. Contract Assets
Contract Assets means that the Company is endowed with the right to charge the consideration throughtransferring any commodity or service to the client, and such right depends on other factors except the passing oftime. The Company’s unconditional right (only depending on the passing of time) of charging the considerationfrom the client shall be separately presented as receivables.The recognition method and accounting treatment method of the estimated credit loss of contract assets areconsistent with that specified in Notes V.11.
16. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed inthe production process or the process providing the labor service etc. Inventory is mainly including the rawmaterials, low priced and easily worn articles, unfinished products, inventories and work in process–outsourcedetc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatchbe calculated according to the weighted average method; carried forward the cost of the finished products
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for fallingprice of inventoryAt the balance sheet date, inventories are measured at the lower of the costs and net realizable value. When all theinventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, theCompany shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at theyear-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory fallingprice reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in thenormal production and operating process, as for the commodities inventory directly for sales such as the finishedproducts, commodities and the materials for sales, should recognize the net realizable value according to theamount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevanttaxes; as for the materials inventory needs to be processed in the normal production and operating process, shouldrecognize its net realizable value according to the amount of the estimated selling price of the finished productsminuses the cost predicts to be occur when the production completes and the estimated selling expenses as well asthe relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract priceand other parts not by the contract price, should be respectively recognized the net realizable value. For items ofinventories relating to a product line that are produced and marketed in the same geographical area, have the sameor similar end users or purposes, and cannot be practicably evaluated separately from other items in that productline provision for decline in value is determined on an aggregate basis; for large quantity and low value items ofinventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumables and packages
One time amortization method is adopted for low-value consumables and packages.
17. Assets Held for Sale
(1) Classification under held for sale recognition criteria
The Company confirms certain non-current assets or disposal groups as held for sale when they simultaneouslymeet the following conditions:
① They can be sold immediately in their current condition, following the customary practices observed in similartransactions; and
② The sale is highly probable, meaning the Company has resolved to execute a sales plan, obtained regulatoryapproval (where applicable), secured definite purchase commitments, and anticipates completion of the salewithin one year.A definite purchase commitment refers to a legally binding purchase agreement between the Company andanother party. This agreement encompasses essential terms such as the transaction price, timing, and sufficientlystringent penalty clauses for breach, minimizing the likelihood of significant adjustments or cancellation.
(2) Accounting treatment for held for sale assets
The Company does not depreciate or amortize non-current assets or disposal groups classified as held for sale. Iftheir carrying amount exceeds the net amount derived from subtracting the fair value less selling costs, thecarrying amount should be written down to the net amount. The written-down amount is recognized as animpairment loss, reflected in the current period's income statement, while also establishing a provision forimpairment of held for sale assets.
Non-current assets or disposal groups classified as held-for-sale on the date of acquisition shall be measured at thelower of net amount of initial measurement amount minus sales cost and that of fair value minus selling expenses,assuming they were not classified as held-for-sale during initial measurement.The aforementioned principles apply to all non-current assets, excluding investment properties measured using thefair value model, biological assets measured at fair value less selling costs, assets arising from employee benefits,deferred tax assets, financial assets governed by accounting standards related to financial instruments, and rightsarising from insurance contracts regulated by accounting standards related to insurance contracts.
18. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by theCompany and the relevant activities of the arrangement should be decided only after the participants which sharethe control right make consensus. Significant influence refers to the power of the Company which could anticipatein the finance and the operation polices of the investees, but could not control or jointly control the formulation ofthe policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following waysin accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine, if the combine party takes the cashpayment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combinationconsideration, should take the shares of the book value by the ultimate control party in the consolidate financialstatement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. Thedifference between the initial investment cost and the book value of the paid combination consideration or thetotal amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If thecapital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevantexpense occurred when executing the enterprise merger into the current gains and losses; while the handlingcharges and commission occurs from the issuing the equity securities or the bonds for the enterprise mergershould be included in the initial measurement amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same control, itsinitial investment cost shall regard as the combination cost calculated by the fair value of the assets, equityinstrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with theacquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)undertaken on the combining date shall be measured at the fair value without considering the amount of minorityinterest. The acquirer shall recognize the positive balance between the combination costs and the fair value of theidentifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negativebalance between the combination costs and the fair value of the identifiable net assets it obtains from the acquireeinto the consolidated income statement directly. The agent expense and other relevant management expenses suchas the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in thecurrent gains and losses when occur; while the handling charges and commission occurs from the issuing theequity securities or the bonds for the enterprise merger should be included in the initial measurement amount ofthe shareholders’ equities or the liabilities.
3) Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fairvalue of the equity securities issued.The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investmentcontract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investmentreceived; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as theinitial cost of the long-term equity investment received.The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized atfair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost methodWhere the Company hold, and is able to do equity investment with control over an invested entity, the investedentity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while theCompany holds the shares of an entity below 50%, but has a real control to the said entity, then the said entityshall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equitymethodWhere the Company hold, and is able to do equity investment with joint control with other parties over aninvested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to haveequity investment with significant influences on an invested entity, the invested entity shall be its associatedentity.After the Company acquired the long-term equity investment, should respectively recognize investment incomeand other comprehensive income according to the net gains and losses as well as the portion of othercomprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of thelong-term equity investment; corresponding reduce the book value of the long-term equity investment accordingto profits which be declared to distribute by the investees or the portion of the calculation of cash dividends whichshould be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the book value of the long-termequity investment as well as include in the owners’ equity .The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity whenit obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after itadjusts the net profits of the invested entity.If the accounting policy adopted by the investees is not accord with that of the Company, should be adjustedaccording to the accounting policies of the Company and the financial statement of the investees during theaccounting period and according which to recognize the investment income as well as other comprehensiveincome.For the transaction happened between the Company and associated enterprises as well as joint ventures, if theassets launched or sold not form into business, the portion of the unrealized gains and losses of the internaltransaction, which belongs to the Company according to the calculation of the enjoyed proportion, shouldrecognize the investment gains and losses on the basis. But the losses of the unrealized internal transactionhappened between the Company and the investees which belongs to the impairment losses of the transferred assets,
should not be neutralized.The Company shall recognize the net losses of the invested enterprise according to the following sequence: first ofall, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-termequity investment is insufficient for written down, should be continued to recognized the investment losses limitedto the book value of other long-term equity which forms of the net investment of the investees and to writtendown the book value of the long-term accounts receivable etc. Lastly, through the above handling, for thoseshould still undertake the additional obligations according to the investment contracts or the agreements, it shallbe recognized as the estimated liabilities in accordance with the estimated duties and then recorded intoinvestment losses at current period. If the invested entity realizes any net profits later, the Company shall, after theamount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resumerecognizing its attributable share of profits.In the preparation for the financial statements, the balance existed between the long-term equity investmentincreased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated bythe increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, ifthe capital reserves are not sufficient to offset, the retained profits shall be adjusted; the Company disposed part ofthe long-term equity investment on subsidiaries without losing its controlling right on them, the balance betweenthe disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall berecorded into owners’ equity.For other ways on disposal of long-term equity investment, the balance between the book value of the disposedequity and its actual payment gained shall be recorded into current profits and losses.For the long-term equity investment measured by adopting equity method, if the remained equity after disposalstill adopts the equity method for measurement, the other comprehensive income originally recorded into owners’equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposedby the investees according to the corresponding proportion. The owners’ equity recognized owning to the changesof the other owners’ equity except for the net gains and losses, other comprehensive income and the profitsdistribution of the investees, should be transferred into the current gains and losses according to the proportion.For the long-term equity investment which adopts the cost method of measurement, if the remained equity stilladopt the cost method, the other comprehensive income recognized owning to adopting the equity method formeasurement or the recognition and measurement standards of financial instrument before acquiring the control ofthe investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directlydisposed by the investees and should be carried forward into the current gains and losses according to theproportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensiveincome and the profits distribution among the net assets of the investees which recognized by adopting the equitymethod for measurement, should be carried forward into the current gains and losses according to the proportion.For those the Company lost the control of the investees by disposing part of the equity investment as well as theremained equity after disposal could execute joint control or significant influences on the investees, should changeto measure by equity method when compiling the individual financial statement and should adjust themeasurement of the remained equity to equity method as adopted since the time acquired; if the remained equityafter disposal could not execute joint control or significant influences on the investees, should change theaccounting disposal according to the relevant regulations of the recognition and measurement standards offinancial instrument, and its difference between the fair value and book value on the date lose the control rightshould be included in the current gains and losses. For the other comprehensive income recognized by adoptingequity method for measurement or the recognition and measurement standards of financial instrument before theCompany acquired the control of the investees, should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose thecontrol of them, while the changes of the other owners’ equity except for the net gains and losses, othercomprehensive income and the profits distribution among the net assets of the investees which recognized byadopting the equity method for measurement, should be carried forward into the current gains and lossesaccording to the proportion. Of which, for the disposed remained equity which adopted the equity method formeasurement, the other comprehensive income and the other owners’ equity should be carried forward accordingto the proportion; for the disposed remained equity which changed to execute the accounting disposal according tothe recognition and measurement standards of financial instrument, the other comprehensive income and the otherowners’ equity should be carried forward in full amount.For those the Company lost the control of the investees by disposing part of the equity investment, the disposedremained equity should change to calculate according to the recognition and measurement standards of financialinstrument, and difference between the fair value and book value on the date lose the control right should beincluded in the current gains and losses. For the other comprehensive income recognized from the original equityinvestment by adopting the equity method, should execute the accounting disposal by adopting the same basis ofthe accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate theequity method for measurement, while for the owners’ equity recognized owning to the changes of the otherowner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of theinvestees, should be transferred into the current investment income with full amount when terminate adopting theequity method.
19. Investment Real Estate
Measurement mode of investment real estate:
Measurement of cost methodDepreciation or amortization methodThe investment real estate shall be measured at its cost. Of which, the cost of an investment real estate byacquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; thecost of a self-built investment real estate composes of the necessary expenses for building the asset to the hopedcondition for use. The investment real estate invested by investors shall be recorded at the value stipulated in theinvestment contracts or agreements, but the unfair value appointed in the contract or agreement shall be enteredinto the account book at the fair value.As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal methodfor provision for impairment of fixed assets.
20. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held forthe sake of producing commodities, rendering labor service, renting or business management; and (b) their usefullife is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefitsprobably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
| Category of fixed assets | Method | Useful life | Annual deprecation |
Housing and building
| Housing and building | Average method of useful life | 20-40 years | 2.50%-5% |
| Machinery equipment | Average method of useful life | 6-15 years | 6.67%-16.67% |
| Transportation equipment | Average method of useful life | 5-10 years | 10%-20% |
| Other equipment | Average method of useful life | 5-10 years | 10%-20% |
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance LeaseThe Company recognizes those meet with the following one or certain standards as the fixed assets by financelease:
1) The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions onthe lease starting date) when the lease term expires, the ownership of leasing the fixed assets could be transferredto the Company;
2) The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase pricewhich is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosingright, so the Company could execute the choosing right reasonably on the lease starting date;
3) Even if the ownership of the fixed assets not be transferred, the lease period is of 75% or above of the usefullife of the lease fixed assets;
4) The current value of the minimum lease payment on the lease starting date of the Company is equal to 90% orabove of the fair value of the lease fixed assets on the lease starting date; the current value of the minimum leasereceipts on the lease starting date of the leaser is equal to 90% or above of the fair value of the lease fixed assetson the lease starting date;
5) The nature of the lease assets is special that only the Company could use it if not execute large transformation.The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and thecurrent value of the minimum lease payment on the lease starting date as the entry value. As for the minimumlease payment which be regarded as the entry value of the long-term accounts payable, its difference should beregarded as the unrecognized financing expense. For the initial direct expenses occur in the lease negotiations andthe signing process of the lease contracts that attribute to the handling expenses, counsel fees, travel expenses andstamp taxes of the lease items, should be included in the charter-in assets value. The unrecognized financingexpenses should be amortized by adopting the actual interest rate during the period of the lease term.The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it isreasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires,the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee willobtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciatedover the shorter one of the lease term or its useful life
21. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at directmaterials, direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation,trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses,which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time pointThe construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forwardfixed assets on schedule. The one that has not audited the final accounting shall recognize the cost and makedepreciation in line with valuation value. The construction in process shall adjust the original valuation value at itshistorical cost but not adjust the depreciation that has been made after auditing the final accounting.
22. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums onborrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowingcosts occurred belong to specifically borrowed loan or general borrowing used for the acquisition and constructionof investment real estates and inventories over one year (including one year) shall be capitalized, and record intorelevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amountincurred, and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalizedunless they simultaneously meet the following three requirements: (1) The asset disbursements have alreadyincurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or productionactivities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates andinventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing costsshall be measured into asset cost before such assets reach to the intended use or sale, Where acquisition andconstruction of fixed assets, investment real estates and inventories is interrupted abnormally and the interruptionperiod lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended, and recordedinto the current expense, till the acquisition and construction of the assets restarts. When the qualified asset isready for the intended use or sale, the capitalization of the borrowing costs shall be ceased, the borrowing costsoccurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible forcapitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred ofthe specially borrowed loan at the present period minus the income of interests earned on the unused borrowingloans as a deposit in the bank or as a temporary investment.Where a general borrowing is used for the acquisition and construction or production of assets eligible forcapitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the generalborrowing by multiplying the weighted average asset disbursement of the part of the accumulative assetdisbursements minus the general borrowing by the capitalization rate of the general borrowing used. Thecapitalization rate shall be calculated and determined in light of the weighted average interest rate of the generalborrowing.
23. Intangible Assets
(1) Useful Life and the Basis for its Determination, Estimation, Amortization Methodology or ReviewProcedures
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.For the intangible assets invested by the investors should be recognized the actual cost according to the value ofthe investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actualcost should be recognized according to the fair value.For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,should be recorded according to the book value of the swap-out assets.For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it isavailable for use within the service period, shall be recorded into the current profits and losses. The Companyshall, at least at the end of each year, check the service life and the amortization method of intangible assets withlimited service life. When the service life and the amortization method of intangible assets are different from thosebefore, the years and method of the amortization shall be changed.Intangible assets with uncertain service life may not be amortized. However, the Company shall check the servicelife of intangible assets with uncertain service life during each accounting period. Where there are evidences toprove the intangible assets have limited service life, it shall be estimated of its service life, and be amortizedaccording to the above method mentioned.The rights to use land of the Company shall be amortized according to the rest service life.
(2) The Scope of R&D Expenditure Collection and the Related Accounting TreatmentThe internal research and development projects of an enterprise shall be classified into research phase anddevelopment phase: the term “research” refers to the creative and planned investigation to acquire and understandnew scientific or technological knowledge; the term “development” refers to the application of researchachievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as toproduce any new material, device or product, or substantially improved material, device and product.The Company collects the costs of the corresponding phases according to the above standard of classifying theresearch phase and the development phase. The research expenditures for its internal research and developmentprojects of an enterprise shall be recorded into the profit or loss for the current period. The development costs forits internal research and development projects of an enterprise may be capitalized when they satisfy the followingconditions simultaneously: it is feasible technically to finish intangible assets for use or sale; it is intended tofinish and use or sell the intangible assets; the usefulness of methods for intangible assets to generate economicbenefits shall be proved, including being able to prove that there is a potential market for the productsmanufactured by applying the intangible assets or there is a potential market for the intangible assets itself or theintangible assets will be used internally; it is able to finish the development of the intangible assets, and able touse or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources;the development costs of the intangible assets can be reliably measured.
24. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limitedservice life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperativeenterprises and joint ventures, the Company should judge whether decrease in value exists on the date of balancesheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputationand uncertain service life and other non-accessible intangible assets should be tested for decrease in value nomatter whether it exists.If the recoverable amount is less than book value in impairment test results, the provision for impairment ofdifferences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fairvalue deducting disposal charges or present value of predicted cash flow. Asset fair value should be determinedaccording to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fairvalue should be determined according to the Buyer’s price of the asset. If no sales agreement or asset activemarket exists, asset fair value could be acquired on the basis of best information available. Disposal expensesinclude legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Presentvalue of predicted asset cash flow should be determined by the proper discount rate according to Assets in serviceand predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of singleAssets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should bedetermined according to the belonging asset group. Asset group is the minimum asset combination producing cashflow independently.In impairment test, book value of the business reputation in financial report should be shared to beneficial assetgroup and asset group combination in collaboration of business merger. It is shown in the test that if recoverableamounts of shared business reputation asset group or asset group combination are lower than book value, it shoulddetermine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value ofbusiness reputation of asset group or asset group combination, then deduct book value of all assets according toproportions of other book value of above assets in asset group or asset group combination except businessreputation.After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
25. Long-term Deferred Expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and amortizedaveragely within benefit period. In case of no benefit in the future accounting period, the amortized value of suchproject that fails to be amortized shall be transferred into the profits and losses of the current period.
26. Contract Liabilities
Contract liabilities refer to the Company’s obligations in transferring commodities or services to the client for thereceived or predicted consideration. Contract assets and contract liabilities under the same contract shall bepresented based on the net amount.
27. Employee Benefits
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services andbenefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housingfund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-termcompensation actually happened during the accounting period when the active staff offering the service for theCompany should be recognized as liabilities and is included in the current gains and losses or relevant assets cost.Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefitplans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between theCompany and the employees, or the regulations or methods formulated by the Company for providing the welfareafter demission for the employees. Of which, defined contribution plans refers to the welfare plans after demissionthat the Company no more undertake the further payment obligations after the payment of the fixed expenses forthe independent funds; defined benefit plans, refers to the welfare plans after demission except for the definedcontribution plans.Defined contribution plansDuring the accounting period that the Company providing the service for the employees, the Company shouldrecognize the liabilities according to the deposited amount calculated by defined contribution plans, and should beincluded in the current gains and losses or the relevant assets cost.
(3) Accounting Treatment of the Demission Welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to theearlier date between the following two conditions and include which in the current gains and losses whenproviding the demission welfare for the employees: the Company could not unilaterally withdraw the demissionwelfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing thecosts or expenses related to the reorganization involves with the demission welfare payments.
28. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the followingconditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of theobligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses for theperformance of the current obligation.The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any conclusive
evidence proving that the said book value can’t truly reflect the current best estimate, the Company shall, subjectto change, make adjustment to carrying value to reflect the current best estimate.
29. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control overrelated commodities or services), revenues shall be recognized based on the obligation’s amortized transactionprice. Performance Obligation refers to the Company’s promise of transferring commodities or services that canbe clearly defined to the client. Transaction Price refers to the consideration amount duly charged by the Companyfor transferring commodities or services to the client, excluding any amount charged by the third party and anyamount predicted to be returned to the client. Control Over Relevant Commodities means that the use ofcommodities can be controlled and almost all economic interests can be obtained.On the contract commencement day, the Company shall evaluate the contract, recognize individual performanceobligation and confirm that individual performance obligation is fulfilled in a certain period. When one of thefollowing conditions is met, such performance obligation shall be deemed as fulfilled in a certain period, and theCompany shall recognize it as revenue within a certain period according to the performance schedule: (1) theclient obtains and consumes the economic interests resulting from the Company’s performance of contract whileperforming the contract; (2) the client is able to control the commodities under construction during theperformance; (3) commodities produced by the Company during the performance possess the irreplaceablepurpose, and the Company has the right to charge all finished parts during the contract period; otherwise, theCompany shall recognize the revenue when the client obtains the control over relevant commodities or services.The Company shall adopt the Input Method to determine the Performance Schedule. Namely, the PerformanceSchedule shall be determined according to the Company’s input for fulfilling performance obligations. When thePerformance Schedule cannot be reasonably determined and all resulting costs are predicted to be compensated,the Company shall recognize the revenue based on the resulting cost amount till the Performance Schedule can bereasonably determined.When the contract involves two or more than two performance obligations, the transaction price shall beamortized to each single performance obligation on the contract commencement day according to the relativeproportion of the independent selling price of commodities or services under each single performance obligation.If any solid evidence proves that the contract discount or variable consideration only relates to one or more thanone (not all) performance obligation under the contract, the Company shall amortize the contract discount orvariable consideration to one or more than one related performance obligations. Independent selling price refers tothe price adopted by the Company to independently sell commodities or services to the client. However,independent selling price cannot be directly observed. The Company shall estimate the independent selling priceby comprehensively considering all related information that can be reasonably obtained and maximally adoptingthe observable input value.Variable ConsiderationIf any variable consideration exists in the contract, the Company shall determine the optimal estimation of thevariable consideration based on the expected values or the most possible amount. The variable consideration’stransaction price shall be included without exceeding the total revenue amount recognized without the risk ofsignificant restitution when all uncertainties are eliminated. On each balance sheet day, the Company shallre-estimate the variable consideration amount to be included in the transaction price.Consideration Payable to the Client
If any consideration payable to the client exists in the contract, the Company shall use such consideration to offsetthe transaction price unless such consideration is paid for acquiring other clearly-defined commodities or servicesfrom the client, and write down the current revenue at the later time between the time of recognizing relevantrevenues and the time of paying (or promising the payment) the consideration to the client.Sales with the Quality AssuranceFor sales with the Quality Assurance, if the Quality Assurance involves another separate service except for theguarantee of all sold commodities or services meeting all established standards, the Quality Assurance shallconstitute a single Performance Obligation; otherwise, the Company shall make corresponding accountingtreatment to the Quality Assurance according to ASBE No.13--Contingency.Main Responsibility Person/AgentAccording to whether the control over commodities or services is obtained before they are transferred to the client,the Company can judge whether it is Main Responsibility Person or Agent based on its status during thetransaction. If the Company can control commodities or services before they are transferred to the client, theCompany shall be Main Responsibility Person, and revenues shall be recognized according to the totalconsideration amount received or to be received; otherwise, the Company shall be Agent, and revenues shall berecognized according to the commission or service fees predicted to be duly charged. However, such amount shallbe determined based on the net amount after deducting other amounts payable to other related parties from thetotal consideration received or to be duly received or the fixed commission amount or proportion.Specific methodsThe specific methods of the Company's revenue recognition are as follows:
The sale contract between the Company and its customers usually contains only the performance obligation forthe transfer of goods, which is satisfied at a point in time.The following requirements must be met to confirm the revenue of domestic products: The Company hasdelivered the goods to the customer in accordance with the contract and the customer has accepted the goods. Thepayment has been recovered or the receipt voucher has been obtained, and the relevant economic benefits arelikely to flow in. The customer has obtained control of the relevant goods. The main risks and rewards of productownership have been transferred. The legal ownership of the goods has been transferred.The following requirements must be met to confirm the revenue of export products: The Company has declaredthe products in accordance with the contract, obtained the bills of lading, and received the payment or obtained thereceipt voucher and the related economic benefits are likely to flow in. The main risks and rewards of productownership have been transferred. The legal ownership of the goods has been transferred.Interest RevenueInterest Revenue shall be determined according to the time of the Company’s use of monetary capital and theactual interest rate.
30. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting fromthe acquiring of contract) is predicted to be retrieved, it shall be recognized as an assets, amortized by adoptingthe same basis with the recognition of commodities or service revenues related to the assets and included into thecurrent profit and loss. If the assets’ amortization period does not exceed one year, it shall be immediatelyincluded into the current profit and loss. Other expenses resulting from the Company’s acquiring of contract shall
also be included into the current profit and loss unless it is explicitly borne by the client.
(2) Costs from Executing Contract
The Company’s costs from executing contract is not covered by other ASBE except for Revenue Standards, andwhen the following situations are met, such costs can be recognized as an assets: ① the costs are directly relatedto a current or predicted contract; ② the costs increase the Company’s resources applied to fulfill performanceobligations in the future; ③ the costs are predicted to be retrieved. The recognized assets shall be amortized byadopting the same basis with the recognition of commodities or service revenues related to the assets and includedinto the current profit and loss.If the book value of contract costs is higher than the difference of the following two items, correspondingdepreciation reserves shall be counted and withdrawn and it shall be recognized as the assets depreciation loss: ①the residual consideration predicted to be acquired by transferring commodities related to the assets; ② the costspredicted to occur due to the transfer of related commodities.If the difference between ① and ② is higher than the book value of contract costs due to any change in variousfactors causing depreciation in previous periods, it shall be restituted to the withdrawn assets depreciation reservesand included in the current profit and loss. However, the book value of restituted contract costs shall not exceedthe book value of the assets on the day of restitution based on the hypothesis that depreciation reserves are notcounted and withdrawn.
31. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from thegovernment. Government grants consist of the government grants pertinent to assets and government grantspertinent to income according to the relevant government documents.For those the government documents not definite stipulate the assistance object, the judgment basis of theCompany classifies the government grants pertinent to assets and government subsidies pertinent to income is:
whether are used for purchasing or constructing or for forming the long-term assets by other methods.
(2) Recognition of Government Subsidies
The government subsidies should be recognized only when meet with the attached conditions of the governmentgrants as well as could be acquired.If the government grants are the monetary assets, should be measured according to the received or receivableamount; and for the government grants are the non-monetary assets, should be measured by fair value.
(3) Accounting Treatment
The government grants pertinent to assets shall be recognized as deferred income, and included in the currentgains and losses or offset the book value of related assets within the useful lives of the relevant assets with areasonable and systematic method. Government grants pertinent to income used to compensate the relevant costs,expenses or losses of the Company in the subsequent period shall be recognized as deferred income, and shall beincluded in the current profit and loss during the period of confirming the relevant costs, expenses or losses; thoseused to compensate the relevant costs, expenses or losses of the Company already happened shall be included inthe current gains and losses or used to offset relevant costs directly.For government grants that include both assets-related and income-related parts, they should be distinguishedseparately for accounting treatment; for government subsidies that are difficult to be distinguished, they should beclassified as income-related.
Government grants related to the daily activities of the Company shall be included into other income or used tooffset relevant costs by the nature of economic business; those unrelated shall be included into non-operatingincome.The government grants recognized with relevant deferred income balance but need to return shall be used to offsetthe book balance of relevant deferred income, the excessive part shall be included in the current gains and lossesor adjusting the book value of assets for the government grants assets-related that offset the book value of relevantassets when they are initially recognized; those belong to other cases shall be directly included in the current gainsand losses.
32. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, a deferred taxasset shall be measured in accord with the tax rates that are expected to apply to the period when the asset isrealized or the liability is settled.The recognition of the deferred income tax assets is limited by the income tax payable that the Company probablygains for deducting the deductible temporary differences. At the balance sheet date, where there is strong evidenceshowing that sufficient taxable profit will be available against which the deductible temporary difference can beutilized, the deferred tax asset unrecognized in prior period shall be recognized.The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable thatsufficient taxable profit will not be available against which the deductible temporary difference can be utilized, theCompany shall write down the carrying amount of deferred tax asset, or reverse the amount written down laterwhen it’s probable that sufficient taxable profit will be available.
(2) Basis of recognizing the deferred income tax liabilities
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred taxliability shall be measured in accord with the tax rates that are expected to apply to the period when the asset isrealized or the liability is settled.
33. Lease
(1) Accounting treatment for leases as the lessee
On the beginning date of the lease term, the Company will recognize the lease with a lease term not exceeding 12months and exclude the purchase option as a short-term lease. Leases with lower value when a single leased assetis a brand-new asset are identified as low-value asset leases. If the Company sublets or expects to sublet the leasedassets, the original lease shall not be deemed as a low-value asset lease.The Company records the payments of short-term and low-value asset leases incurred during each period of thelease term in the relevant asset costs or the profit or loss for the current period by the straight-line method.The Company will recognize right-of-use assets and lease liabilities on the inception date of the lease term,excluding the above short-term and low-value asset leases.
① Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise:
A. the amount of the initial measurement of the lease liabilities;B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee;D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring thesite on which it is located or restoring the underlying asset to the condition required by the terms and conditions ofthe lease.The Company depreciates the right-of-use asset using the straight-line method. If it is reasonably certain thatownership of the leased asset(s) will be obtained at the end of the lease term, the Company depreciates the leasedasset(s) over its/their remaining service life. If it is not reasonably certain that the ownership of the leaseholdproperty will be obtained at the end of the lease term, the Company will depreciate the leased asset(s) over thelease term or the remaining service life, whichever is shorter.
② Lease liabilities
At the commencement date, the Company measures the lease liabilities at the present value of the lease paymentsthat are not paid at that date, The Company uses the interest rate implicit in lease as the rate of discount whencalculating the present value of the lease payments. The incremental interest rate on borrowing of the lessee willbe used as the rate of discount, if the interest rate implicit in lease cannot be determined. The difference betweenthe lease payment and its present value is regarded as an unrecognized financing expense. Interest expense isrecognized at the discount rate of the present value of the recognized lease payment during each period of thelease term and is recorded in the profit and loss for the current period. Variable lease payments that are notcovered in the measurement of the lease liabilities are included in current profit or loss when actually incurred.After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amountsexpected to be payable under residual value guarantees; (c) an index or a rate used to determine lease payments;(d) assessment result or exercise of purchase option, extension option or termination option., the Companyremeasures the lease liabilities based on the present value of lease payments after changes, and adjusts thecarrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset is reduced tozero but there shall be a further reduction in the lease liabilities, the remaining amount shall be recognized intoprofit or loss.
(2) Accounting treatment of leases as the lessor
The Company as lessorOn the start date of the lease term, the Company divides the lease that substantially transfers almost all risks andrewards related to the ownership of the leased assets into finance leases, except for operating leases.
① Operating lease
The Company recognizes the lease payments receivable as rental earnings in each period within the lease term ona straight-line basis. The initial direct costs related to the operating lease are capitalized, amortized within thelease term on the same basis as the recognition of rental earnings, and included in the profit or loss for the currentperiod. Variable lease payments obtained by the Company in relation to operating leases that are not included inthe lease receivable are included in the profit or loss for the current period when they are actually incurred.
②Financial lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the netinvestment in the lease (sum of the present value of unguaranteed residual value and lease receipts that are notreceived at the commencement date, discounted by the interest rate implicit in the lease), and derecognizes assetsheld under the finance lease. The Company calculates and recognizes interest income using the interest rateimplicit in the lease over the lease term.Variable lease payments not included in the measurement of the net investment in the lease are charged as profit orloss in the periods in which they are incurred.
34. Other Significant Accounting Policies and Accounting Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an ongoing basis,based on historical experience and other factors, including reasonable expectations of future events. Importantaccounting estimates and critical assumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next fiscal year are listed as follows:
(1) Classification of financial assets
The significant judgments involved when the Company determines the classification of financial assets includeanalysis of business models and contractual cash flow characteristics. The Company determines the businessmodel for managing financial assets at the level of the financial asset portfolio, taking into account factors such asthe approach of evaluating and reporting the performance of financial assets to key management personnel, therisks affecting the performance of financial assets and the manner in which they are managed, and way in whichthe relevant business management personnel are compensated.The following main judgments exist in assessing whether the contractual cash flows of financial assets areconsistent with the basic lending arrangements:
Whether the time distribution or amount of the principal amount during the duration may change due to earlyrepayment or for other reasons; whether the interest includes only the time value of money, credit risk, other basiclending risks and consideration against costs and profits. For example, whether the amount of early repaymentreflects only the outstanding principal and interest based on the outstanding principal, as well as reasonablecompensation paid for early termination of the contract.
(2) Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to default risk ofaccounts receivable and the expected credit loss ratio, and determines the expected credit loss ratio based on theprobability of default and the default loss ratio. When determining the expected credit loss ratio, the Companyuses data such as internal historical credit loss experience and adjusts historical data to take into account currentconditions and forward-looking information. When considering forward-looking information, the Company usesindicators such as the risk of economic downturn and changes in the external market environment, technologicalenvironment and customer profile. The Company regularly monitors and reviews the assumptions related to thecalculation of expected credit losses.
(3) Inventory falling price reserves
The Company follows the inventory accounting policy and carries out measurement based on which is smallerbetween the cost and the net realizable value. If the cost of inventories is higher than its net realizable value, thenthe inventory falling prices reserves were implemented. The impairment of inventories to net realizable value isbased on an assessment of the marketability of the inventories and their net realizable value. The managementshall determine the impairment of inventories after obtaining reliable evidence while taking into account thepurpose of holding inventories, the effect of items after the balance sheet date, and other factors. Differencesbetween actual results and original estimates will affect the carrying value of inventories and the provision orreversal of reverses for falling prices of inventories in the period in which the estimates are changed.
(4) Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the current discountrate for items with similar terms and risk characteristics. Such valuation requires the Company to estimateexpected future cash flows and discount rates and is therefore subject to uncertainty. Under limited circumstances,if the information used to determine fair value is insufficient, or if the range of possible estimates of fair value is
wide and the cost represents the best estimate of fair value within that range, the cost may represent its appropriateestimate of fair value within that range of distribution.
(5) Reserves for long-term assets impairment
The Company determines at the balance sheet date whether there is any indication that a non-current asset, otherthan a financial asset, may be impaired. For intangible assets with an uncertain useful life, impairment tests shallbe conducted when there is an indication of impairment besides the annual impairment test. Other non-currentassets other than financial assets shall be tested for impairment when there is an indication that the carryingamount is irrecoverable.An impairment is indicated when the carrying amount of an asset or asset group is greater than the recoverableamount, which is the higher of the fair value minus disposal expenses and the present value of estimated futurecash flows.The net value of the fair value minus disposal expenses is determined by referring to the negotiable sale price orobservable market price of similar assets in a fair transaction and deducting incremental costs directly attributableto the disposal of the asset.Estimating the present value of future cash flows requires significant judgments with respect to the productionvolume of the asset (or asset group), the selling price, the related operating costs and the discount rate used incalculating the present value. The Company uses all available relevant information in estimating recoverableamounts, including projections of volumes, selling prices and related operating costs based on reasonable andsupportable assumptions.
(6) Depreciation and amortization
The Company depreciates and amortizes investment properties, fixed assets and intangible assets on a straight-linebasis within their service lives after taking into account their residual values. The Company regularly reviewsservice lives to determine the amount of depreciation and amortization expenses to be included in each reportingperiod. The service life is determined by the Company based on past experience with similar assets and expectedtechnological updates. Depreciation and amortization expenses will be adjusted in the future period if there is asignificant change in previous estimates.
(7) Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses, the Companyrecognizes deferred income tax assets for all unused tax losses. This requires the Company's management to usemany judgments to estimate the timing and amount of future taxable profits, taking into account tax planningstrategies, so as to determine the amount of deferred income tax assets to be recognized.
(8) Income tax
In the normal operating activities of the Company, the ultimate tax treatment and calculation of certaintransactions are subject to certain uncertainties. Whether some items can be disbursed before tax requires theapproval of the tax authorities. If the final determination of these tax matters differs from the amounts initiallyestimated, the difference will have an impact on current and deferred income taxes in the period in which they arefinally determined.
35. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation ofthe New Accounting Standards Implemented since 2024
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
| Category of taxes | Tax basis | Tax rate |
| VAT | Payable to sales revenue | 13%, 9%, 6%, 5% |
| Urban maintenance and construction tax | Taxable turnover amount | Tax paid in accordance with the tax regulations of tax units location |
| Enterprise income tax | Taxable income | 25%、15%、5% |
| Education surcharge | Taxable turnover amount | 5% |
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
| Name | Income tax rate |
| Changchai Company, Limited | 15% |
| Changchai Wanzhou Diesel Engine Co., Ltd. | 15% |
| Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. | 25% |
| Changzhou Horizon Investment Co., Ltd. | 25% |
| Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. | 25% |
| Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. | 15% |
| Jiangsu Changchai Machinery Co., Ltd. | 25% |
| Changzhou Xingsheng Real Estate Management Co., Ltd. | 5% |
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 15% |
2. Tax Preference
On 30 November 2021, the Company obtained the Certificates for High-tech Enterprises again, andit still enjoys 15-percent preferential rate for corporate income tax during the Reporting Period; theCompany’s controlling subsidiary-Changchai Wanzhou Diesel Engine Co., Ltd., the controllingsubsidiary company, shall pay the corporate income tax at tax rate 15% from 1 January 2011 to 31December 2030 in accordance with the Notice of the Ministry of Finance, the General
Administration of Customs of PRC and the National Administration of Taxation about thePreferential Tax Policies for the Western Development and Ministry of Finance Announcement No.23 [2020] Announcement of the Ministry of Finance, the State Administration of Taxation and theNational Development and Reform Commission on Continuing the Enterprise Income Tax Policyfor the Great Western Development. On 6 November 2023, the wholly-owned subsidiaryChangzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. obtained the "High-tech EnterpriseCertificate" and enjoyed a 15% preferential corporate income tax rate during the Reporting Period;The wholly-owned subsidiary Changzhou Xingsheng Real Estate Management Co., Ltd. is eligiblesmall enterprise with low profits and shall pay the corporate income tax at tax rate 5% for smallenterprises with low profits during the Reporting Period; the subsidiary Zhenjiang Siyang DieselEngine Manufacturing Co., Ltd. obtained the "High-tech Enterprise Certificate" and enjoyed a 15%preferential corporate income tax rate during the Reporting Period.VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Cash on hand | 146,931.23 | 157,238.05 |
| Bank deposits | 679,526,223.62 | 999,604,998.68 |
| Other monetary assets | 112,246,945.05 | 84,105,730.14 |
| Total | 791,920,099.90 | 1,083,867,966.87 |
Other notes: At the period-end, the restricted monetary assets of the Company was RMB108,979,912.31, of whichRMB107,195,110.82 was the cash deposit for bank acceptance bills, RMB897,966.00 was cash deposit for L/G,and RMB886,835.49 was cash deposit for environment.
2. Trading Financial Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Financial assets at fair value through profit or loss | 402,900,783.53 | 225,641,429.94 |
| Of which: | ||
| Stocks | 50,661,877.00 | 85,295,021.00 |
| Financial products | 352,238,906.53 | 140,346,408.94 |
| Of which: | ||
| Total | 402,900,783.53 | 225,641,429.94 |
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 115,592,564.84 | 161,632,567.94 |
| Total | 115,592,564.84 | 161,632,567.94 |
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Notes receivable for which bad debt provision separately accrued | 0.00 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00 | 0.00% | 0.00 | 0.00% | 0.00 |
| Of which: | ||||||||||
| Notes receivable for which bad debt provision accrued by group | 115,592,564.84 | 100.00% | 0.00 | 0.00% | 115,592,564.84 | 161,632,567.94 | 100.00% | 0.00 | 0.00% | 161,632,567.94 |
| Of which: | ||||||||||
| Bank acceptance bills | 115,592,564.84 | 100.00% | 0.00 | 0.00% | 115,592,564.84 | 161,632,567.94 | 100.00% | 0.00 | 0.00% | 161,632,567.94 |
| Total | 115,592,564.84 | 100.00% | 0.00 | 0.00% | 115,592,564.84 | 161,632,567.94 | 100.00% | 0.00 | 0.00% | 161,632,567.94 |
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable √ Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on theBalance Sheet Date at the Period-end
Unit: RMB
| Item | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
| Bank acceptance bill | 0.00 | 46,144,123.81 |
| Total | 0.00 | 46,144,123.81 |
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
| Aging | Ending carrying amount | Beginning carrying amount |
| Within 1 year (including 1 year) | 1,197,542,854.82 | 313,597,375.85 |
| 1 to 2 years | 2,622,686.63 | 1,873,298.19 |
| 2 to 3 years | 4,709,550.82 | 4,436,548.28 |
| Over 3 years | 144,681,837.96 | 144,403,241.11 |
| 3 to 4 years | 5,446,856.35 | 5,278,022.33 |
| 4 to 5 years | 1,895,735.78 | 1,815,570.52 |
| Over 5 years | 137,339,245.83 | 137,309,648.26 |
| Total | 1,349,556,930.23 | 464,310,463.43 |
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable withdrawal of Bad debt provision separately accrued | 33,805,182.71 | 2.50% | 33,805,182.71 | 100% | 0.00 | 33,805,182.71 | 7.28% | 33,805,182.71 | 100.00% | 0.00 |
Of which:
| Of which: | ||||||||||
| Accounts receivable withdrawal of bad debt provision of by group | 1,315,751,747.52 | 97.50% | 131,802,594.96 | 10.02% | 1,183,949,152.56 | 430,505,280.72 | 92.72% | 113,962,120.81 | 26.47% | 316,543,159.91 |
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision accrued by credit risk features group | 1,315,751,747.52 | 97.50% | 131,802,594.96 | 10.02% | 1,183,949,152.56 | 430,505,280.72 | 92.72% | 113,962,120.81 | 26.47% | 316,543,159.91 |
| Total | 1,349,556,930.23 | 100.00% | 165,607,777.67 | 12.27% | 1,183,949,152.56 | 464,310,463.43 | 100.00% | 147,767,303.52 | 31.83% | 316,543,159.91 |
Individual provision for bad debts: 33,805,182.71 yuan, including 31,609,904.23 yuan for large impairment items,as follows:
Unit: RMB
| Name | Beginning balance | Ending balance | ||||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | Withdrawal proportion | Reason for withdraw | |
| Customer 1 | 1,470,110.64 | 1,470,110.64 | 1,470,110.64 | 1,470,110.64 | 100.00% | Difficult to recover |
| Customer 2 | 1,902,326.58 | 1,902,326.58 | 1,902,326.58 | 1,902,326.58 | 100.00% | Difficult to recover |
| Customer 3 | 6,215,662.64 | 6,215,662.64 | 6,215,662.64 | 6,215,662.64 | 100.00% | Difficult to recover |
| Customer 4 | 2,797,123.26 | 2,797,123.26 | 2,797,123.26 | 2,797,123.26 | 100.00% | Difficult to recover |
| Customer 5 | 2,322,278.50 | 2,322,278.50 | 2,322,278.50 | 2,322,278.50 | 100.00% | Difficult to recover |
| Customer 6 | 2,584,805.83 | 2,584,805.83 | 2,584,805.83 | 2,584,805.83 | 100.00% | Difficult to recover |
| Customer 7 | 1,726,935.65 | 1,726,935.65 | 1,726,935.65 | 1,726,935.65 | 100.00% | Difficult to recover |
| Customer 8 | 2,025,880.18 | 2,025,880.18 | 2,025,880.18 | 2,025,880.18 | 100.00% | Difficult to recover |
Customer 9
| Customer 9 | 5,972,101.90 | 5,972,101.90 | 5,972,101.90 | 5,972,101.90 | 100.00% | Difficult to recover |
| Customer 10 | 4,592,679.05 | 4,592,679.05 | 4,592,679.05 | 4,592,679.05 | 100.00% | Difficult to recover |
| Total | 31,609,904.23 | 31,609,904.23 | 31,609,904.23 | 31,609,904.23 | -- | -- |
Provision for bad debts by combination: provision for bad debts by combination based on credit riskcharacteristics of 13,180,2594.96 yuan
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 1,197,542,854.82 | 23,950,857.10 | 2.00% |
| 1 to 2 years | 2,622,686.63 | 131,134.33 | 5.00% |
| 2 to 3 years | 4,246,306.96 | 636,946.04 | 15.00% |
| 3 to 4 years | 5,446,746.35 | 1,634,023.91 | 30.00% |
| 4 to 5 years | 1,108,797.95 | 665,278.77 | 60.00% |
| Over 5 years | 104,784,354.81 | 104,784,354.81 | 100.00% |
| Total | 1,315,751,747.52 | 131,802,594.96 | -- |
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable:
□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current PeriodWithdrawal of bad debt provision:
Unit: RMB
| Category | Beginning balance | Changes in the current period | Ending balance | |||
| Withdrawal | Reversed or recovered | Verification | Others | |||
| Bad debt provision separately accrued | 33,805,182.71 | 33,805,182.71 | ||||
| Withdrawal of bad debt provision by group | 113,962,120.81 | 17,840,474.15 | 131,802,594.96 | |||
| Total | 147,767,303.52 | 17,840,474.15 | 165,607,777.67 | |||
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(4) There Were No Accounts Receivable with Actual Verification during the Reporting Period.
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according toArrears Party
Unit: RMB
| Name of the entity | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion to total ending balance of accounts receivable and contract assets | Ending balance of bad debt provision of accounts receivable and impairment provision for contract assets |
| Customer 1 | 646,622,440.97 | 0.00 | 646,622,440.97 | 47.91% | 12,932,448.82 |
| Customer 2 | 117,517,494.00 | 0.00 | 117,517,494.00 | 8.71% | 2,350,349.88 |
| Customer 3 | 70,421,083.72 | 0.00 | 70,421,083.72 | 5.22% | 1,408,421.67 |
| Customer 4 | 57,254,239.63 | 0.00 | 57,254,239.63 | 4.24% | 1,145,084.79 |
| Customer 5 | 48,331,650.00 | 0.00 | 48,331,650.00 | 3.58% | 966,633.00 |
| Total | 940,146,908.32 | 0.00 | 940,146,908.32 | 69.66% | 18,802,938.16 |
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bills | 12,282,312.54 | 195,875,948.92 |
| Total | 12,282,312.54 | 195,875,948.92 |
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Bad debt provision | 0.00 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00 | 0.00% | 0.00 | 0.00% | 0.00 |
separatelyaccrued
| separately accrued | ||||||||||
| Of which: | ||||||||||
| Bad debt provision accrued by group | 12,282,312.54 | 100.00% | 0.00 | 0.00% | 12,282,312.54 | 195,875,948.92 | 100.00% | 0.00 | 0.00% | 195,875,948.92 |
| Of which: | ||||||||||
| Bank acceptance bills | 12,282,312.54 | 100.00% | 0.00 | 0.00% | 12,282,312.54 | 195,875,948.92 | 100.00% | 0.00 | 0.00% | 195,875,948.92 |
| Total | 12,282,312.54 | 100.00% | 0.00 | 0.00% | 12,282,312.54 | 195,875,948.92 | 100.00% | 0.00 | 0.00% | 195,875,948.92 |
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Accounts receivable financing which had endorsed by the Company or had discounted but had not dueat the period-end
Unit: RMB
| Category | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
| Bank acceptance bill | 86,540,386.86 | |
| Total | 86,540,386.86 |
6. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest receivable | 0.00 | 0.00 |
| Dividend receivable | 0.00 | 0.00 |
| Other receivables | 2,566,508.89 | 49,699,753.61 |
| Total | 2,566,508.89 | 49,699,753.61 |
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
| Nature | Ending carrying value | Beginning carrying value |
| Margin and cash pledge | 625,636.85 | 595,723.55 |
| Intercourse funds | 22,723,784.78 | 69,845,564.95 |
| Petty cash and borrowings by employees | 902,563.54 | 922,370.54 |
| Other | 13,614,317.60 | 13,638,079.94 |
| Total | 37,866,302.77 | 85,001,738.98 |
2) Disclosure by Aging
Unit: RMB
| Aging | Ending carrying amount | Beginning carrying amount |
| Within 1 year (including 1 year) | 6,969,619.41 | 56,704,032.54 |
| 1 to 2 years | 2,646,786.23 | 115,776.00 |
| 2 to 3 years | 67,513.23 | 12,802.00 |
| Over 3 years | 28,182,383.90 | 28,169,128.44 |
| 3 to 4 years | 31,232.23 | 30,000.00 |
| 4 to 5 years | 12,023.23 | |
| Over 5 years | 28,139,128.44 | 28,139,128.44 |
| Total | 37,866,302.77 | 85,001,738.98 |
3) Disclosure by Withdrawal Methods for Bad Debts
√Applicable □Not applicable
Provision for bad debts based on general model of expected credit losses
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2024 | 211,671.73 | 2,715,705.99 | 32,374,607.65 | 35,301,985.37 |
Balance of 1 January2024 in the CurrentPeriod
| Balance of 1 January 2024 in the Current Period | ||||
| --Transfer to Second stage | ||||
| -- Transfer to Third stage | ||||
| -- Reverse to Second stage | ||||
| -- Reverse to First stage | ||||
| Withdrawal of the Current Period | -2,297.69 | 106.20 | -2,191.49 | |
| Reversal of the Current Period | ||||
| Write-offs of the Current Period | ||||
| Verification of the Current Period | ||||
| Other changes | ||||
| Balance of 30 June 2024 | 209,374.04 | 2,715,812.19 | 32,374,607.65 | 35,299,793.88 |
The basis for the division of each stage and the withdrawal proportion of bad debt provision: NoneChanges of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
4) Bad Debt Provision Withdrawn, Reversed or Recovered in the Current PeriodWithdrawal of bad debt provision:
Unit: RMB
| Category | Beginning balance | Changes in the current period | Ending balance | |||
| Withdrawal | Reversed or recovered | Charged-off/Written-off | Others | |||
| Bad debt provision separately accrued | 5,282,163.35 | 5,282,163.35 | ||||
| Withdrawal of bad debt provision by group | 30,019,822.02 | 19,588.00 | 21,779.49 | 30,017,630.53 | ||
| Total | 35,301,985.37 | 19,588.00 | 21,779.49 | 35,299,793.88 | ||
5) There Were No Particulars of the Actual Verification of Other Receivables during the Reporting Period
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables % | Ending balance of bad debt provision |
| Changzhou Compressor Factory | Intercourse funds | 2,940,000.00 | Over 5 years | 7.76% | 2,940,000.00 |
| Changchai Group Imp. & Exp. Co., Ltd. | Intercourse funds | 2,853,188.02 | Over 5 years | 7.53% | 2,853,188.02 |
| Changzhou New District Accounting Center | Intercourse funds | 1,626,483.25 | Over 5 years | 4.29% | 1,626,483.25 |
| Changchai Group Settlement Center | Intercourse funds | 1,128,676.16 | Over 5 years | 2.98% | 1,128,676.16 |
| Chuangye Diesel Engine Workshop | Intercourse funds | 1,000,000.00 | Over 5 years | 2.64% | 1,000,000.00 |
| Total | 9,548,347.43 | 25.20% | 9,548,347.43 |
7. Prepayments
(1) Prepayment Listed by Aging Analysis
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 13,280,773.47 | 91.95% | 11,196,498.47 | 90.78% |
| 1 to 2 years | 865,236.33 | 5.99% | 840,617.01 | 6.82% |
| 2 to 3 years | 291,256.36 | 2.02% | 289,345.37 | 2.35% |
| Over 3 years | 6,850.00 | 0.05% | 6,850.00 | 0.05% |
| Total | 14,444,116.16 | -- | 12,333,310.85 | -- |
Notes of the reasons of the prepayment aging over 1 year with significant amount but failed settled in time: Therewas no prepayment with significant amount aging over one year as of the period-end.
(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment TargetAt the period-end, the total top 5 of the ending balance of the prepayments collected according to the prepayment
target was RMB8,326,500 accounting for 57.65% of the total ending balance of prepayments.
8. Inventories
Whether the Company needs to comply with the disclosure requirements for the real estate industryNo
(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves of inventories or impairment provision for contract performance costs | Carrying value | Carrying amount | Depreciation reserves of inventories or impairment provision for contract performance costs | Carrying value | |
| Raw materials | 236,679,735.80 | 5,259,727.39 | 231,420,008.41 | 199,751,010.25 | 7,529,878.82 | 192,221,131.43 |
| Materials processed on commission | 14,289,320.09 | 0.00 | 14,289,320.09 | 12,422,107.02 | 0.00 | 12,422,107.02 |
| Goods in process | 74,393,358.21 | 6,585,732.46 | 67,807,625.75 | 90,202,210.05 | 6,761,129.14 | 83,441,080.91 |
| Finished goods | 330,693,761.05 | 27,731,258.67 | 302,962,502.38 | 527,412,149.21 | 27,690,142.42 | 499,722,006.79 |
| Low priced and easily worn articles | 3,235,562.29 | 0.00 | 3,235,562.29 | 1,413,859.53 | 0.00 | 1,413,859.53 |
| Total | 659,291,737.44 | 39,576,718.52 | 619,715,018.92 | 831,201,336.06 | 41,981,150.38 | 789,220,185.68 |
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | ||
| Withdrawal | Others | Transferred-back or charged-off | Others | |||
| Raw materials | 7,529,878.82 | 156,525.32 | 2,426,676.75 | 5,259,727.39 | ||
Goods inprocess
| Goods in process | 6,761,129.14 | 175,396.68 | 6,585,732.46 | |||
| Finished goods | 27,690,142.42 | 203,470.48 | 162,354.23 | 27,731,258.67 | ||
| Total | 41,981,150.38 | 359,995.80 | 2,764,427.66 | 39,576,718.52 |
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories.
(4) There Was No Inventory Pledged for Guarantee at the Period-end.
9. Held-for-sale Assets
Unit: RMB
| Item | Ending book balance | Impairment allowance | Ending book value | Fair value | Estimated disposal cost | Estimated disposal time |
| Houses and buildings | 2,725,225.86 | 2,725,225.86 | 75,721,813.00 | |||
| Machinery equipment | 200,020.98 | 200,020.98 | 10,349,066.00 | |||
| Other equipment | 26,204.27 | 26,204.27 | 1,433,792.00 | |||
| Total | 2,951,451.11 | 2,951,451.11 | 87,504,671.00 |
10. Current Portion of Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Investments in debt obligations due within one year | 0.00 | 40,773,509.75 |
| Total | 0.00 | 40,773,509.75 |
(1) Investments in Debt Obligations Due within One Year
√Applicable □ Not applicable
1）Investments in Debt Obligations Due within One Year
Unit: RMB
| Group name | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves | Carrying value | Carrying amount | Falling price reserves | Carrying value | |
| Three-year fixed | 0.00 | 0.00 | 40,773,509.75 | 40,773,509.75 | ||
term deposit
| term deposit | ||||||
| Total | 0.00 | 0.00 | 40,773,509.75 | 40,773,509.75 |
11. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| The VAT tax credits | 13,195,639.44 | 19,940,871.92 |
| Prepaid corporate income tax | 547,841.16 | 908,233.33 |
| Prepaid expense | 23,222.29 | 61,399.59 |
| Total | 13,766,702.89 | 20,910,504.84 |
12. Other Equity Instrument Investment
Unit: RMB
| Item | Beginning balance | Gains recorded in other comprehensive income in the current period | Losses recorded in other comprehensive income in the current period | Accumulative gains recorded in other comprehensive income in the current period | Accumulative losses recorded in other comprehensive income in the current period | Dividend income recognized in current year | Ending balance | Reason for assigning to measure in fair value of which changes included other comprehensive income |
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | 418,457,025.67 | 318,457,025.67 | 418,457,025.67 | Non-trading equity investment | ||||
| Other equity instrument | 551,031,000.00 | 52,044,000.00 | 414,417,000.00 | 10,998,000.00 | 498,987,000.00 | Non-trading equity investment |
investmentmeasuredby fairvalue
| investment measured by fair value | ||||||||
| Total | 969,488,025.67 | 52,044,000.00 | 732,874,025.67 | 10,998,000.00 | 917,444,025.67 |
Non-trading equity instrument investment disclosed by category
Unit: RMB
| Item | Dividend income recognized | Accumulative gains | Accumulative losses | Amount of other comprehensive transferred to retained earnings | Reason for assigning to measure by fair value of which changes be included to other comprehensive income | Reason for other comprehensive income transferred to retained earnings |
| Foton Motor Co., Ltd. | 283,341,000.00 | Non-trading equity investment | ||||
| Bank of Jiangsu | 10,998,000.00 | 131,076,000.00 | Non-trading equity investment | |||
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | 318,457,025.67 | Non-trading equity investment |
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 1,777,600 shares of FotonMotor Co., Ltd.
13. Long-term Equity Investment
Unit: RMB
| Investees | Beginning | Beginning | Increase/decrease | Ending | Ending | |||||||
| Addit | Redu | Gain | Adjus | Chan | Cash | Withd | Other | |||||
balance(carryingvalue)
| balance (carrying value) | balance of depreciation reserves | ional investment | ced investment | or loss recognized under the equity method | tment of other comprehensive income | ges in other equity | bonus or profit announced to issue | rawal of depreciation reserves | balance (carrying value) | balance of depreciation reserves | ||
| I. Joint venture | ||||||||||||
| Subtotal | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||
| II. Associated enterprises | ||||||||||||
| Beijing Tsinghua Industrial Investment Management Co., Ltd. | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
| Subtotal | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
| Total | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external information: Not applicableThe reason for the discrepancy between the information used in the Company's impairment tests in prior years andthe actual situation of those years: Not applicable
14. Other Non-current Financial Assets
Unit: RMB
15. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
| Item | Houses and buildings | Total |
| I. Original carrying value | ||
| 1. Beginning balance | 93,077,479.52 | 93,077,479.52 |
| 2. Increased amount of the period | ||
| (1) Outsourcing | ||
| (2) Transfer from inventories/fixed assets/construction in progress | ||
| (3) Enterprise combination increase | ||
| 3. Decreased amount of the period | ||
| (1) Disposal | ||
| (2) Other transfer | ||
| 4. Ending balance | 93,077,479.52 | 93,077,479.52 |
| II. Accumulative depreciation and accumulative amortization | ||
| 1. Beginning balance | 53,239,921.41 | 53,239,921.41 |
| 2. Increased amount of the period | 1,048,356.78 | 1,048,356.78 |
| (1) Withdrawal or amortization | 1,048,356.78 | 1,048,356.78 |
| 3. Decreased amount of the period | ||
| (1) Disposal | ||
| (2) Other transfer | ||
| 4. Ending balance | 54,288,278.19 | 54,288,278.19 |
| III. Depreciation reserves | ||
| 1. Beginning balance | ||
| 2. Increased amount of the period | ||
| (1) Withdrawal |
Item
| Item | Ending balance | Beginning balance |
| Jiangsu Horizon New Energy Technology Co., Ltd. | 412,914,576.80 | 412,914,576.80 |
| Total | 412,914,576.80 | 412,914,576.80 |
3. Decreased amount of the period
| 3. Decreased amount of the period | ||
| (1) Disposal | ||
| (2) Other transfer | ||
| 4. Ending balance | ||
| IV. Carrying value | ||
| 1. Ending carrying value | 38,789,201.33 | 38,789,201.33 |
| 2. Beginning carrying value | 39,837,558.11 | 39,837,558.11 |
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external information: Not applicableThe reason for the discrepancy between the information used in the Company's impairment tests in prior years andthe actual situation of those years: Not applicable
16. Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 637,435,729.73 | 675,596,920.95 |
| Disposal of fixed assets | ||
| Total | 637,435,729.73 | 675,596,920.95 |
(1) List of Fixed Assets
Unit: RMB
| Item | Houses and buildings | Machinery equipment | Transportation equipment | Other equipment | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 683,973,527.80 | 1,117,118,836.89 | 16,527,248.93 | 61,820,174.73 | 1,879,439,788.35 |
| 2. Increased amount of the period | 2,418,461.01 | 5,309.73 | 321,824.49 | 2,745,595.23 | |
| (1) Purchase | 5,309.73 | 43,595.00 | 48,904.73 |
(2) Transfer
fromconstruction inprogress
| (2) Transfer from construction in progress | 2,418,461.01 | 278,229.49 | 2,696,690.50 | ||
| (3) Enterprise combination increase | |||||
| 3. Decreased amount of the period | 48,062,644.51 | 20,515,448.25 | 169,264.00 | 1,078,316.68 | 69,825,673.44 |
| (1) Disposal or scrap | 9,343,083.81 | 516,924.98 | 9,860,008.79 | ||
| (2) Classified as held-for-sale assets | 48,062,644.51 | 11,172,364.44 | 169,264.00 | 561,391.70 | 59,965,664.65 |
| 4. Ending balance | 635,910,883.29 | 1,099,021,849.65 | 16,363,294.66 | 61,063,682.54 | 1,812,359,710.14 |
| II. Accumulative depreciation | |||||
| 1. Beginning balance | 331,778,938.87 | 822,480,700.96 | 10,101,717.80 | 39,184,289.07 | 1,203,545,646.70 |
| 2. Increased amount of the period | 10,635,019.26 | 23,789,836.43 | 699,796.64 | 2,799,499.71 | 37,924,152.04 |
| (1) Withdrawal | 10,635,019.26 | 23,789,836.43 | 699,796.64 | 2,799,499.71 | 37,924,152.04 |
| 3. Decreased amount of the period | 45,337,418.65 | 20,292,066.44 | 169,264.00 | 1,044,289.94 | 66,843,039.03 |
| (1) Disposal or scrap | 9,319,722.98 | 509,102.51 | 9,828,825.49 | ||
| (2) Classified as held-for-sale assets | 45,337,418.65 | 10,972,343.46 | 169,264.00 | 535,187.43 | 57,014,213.54 |
| 4. Ending balance | 297,076,539.48 | 825,978,470.95 | 10,632,250.44 | 40,939,498.84 | 1,174,626,759.71 |
| III.Depreciation reserves | |||||
| 1. Beginning balance | 297,220.70 | 297,220.70 |
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
| Item | Original carrying value | Accumulative depreciation | Depreciation reserves | Carrying value | Note |
| Machinery equipment | 309,407.50 | 12,186.80 | 297,220.70 |
17. Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance |
| Construction in progress | 4,308,776.18 | 4,253,721.78 |
| Engineering materials | 21,900.40 | 21,900.40 |
| Total | 4,330,676.58 | 4,275,622.18 |
(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying | Depreciatio | Carrying | Carrying | Depreciati | Carrying | |
2. Increased
amount of theperiod
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal or scrap | |||||
| 4. Ending balance | 297,220.70 | 297,220.70 | |||
| IV. Carrying value | |||||
| 1. Ending carrying value | 338,834,343.81 | 272,746,158.00 | 5,731,044.22 | 20,124,183.70 | 637,435,729.73 |
| 2. Beginning carrying value | 352,194,588.93 | 294,340,915.23 | 6,425,531.13 | 22,635,885.66 | 675,596,920.95 |
amount
| amount | n reserves | value | amount | on reserves | value | |
| Innovation capacity construction of technology center | 981,532.17 | 981,532.17 | 981,532.17 | 981,532.17 | ||
| Equipment to be installed and payment for projects | 3,327,244.01 | 3,327,244.01 | 3,272,189.61 | 3,272,189.61 | ||
| Total | 4,308,776.18 | 4,308,776.18 | 4,253,721.78 | 4,253,721.78 |
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
| Item | Budget | Beginning balance | Increased amount | Transferred in fixed assets | Other decreased amount | Ending balance | Job schedule | Accumulated amount of interest capitalization | Of which: Amount of capitalized interests for the Reporting Period | Capitalization rate of interests for the Reporting Period | Capital resources |
| Innovation capacity construction of technology center | 96,066,200.00 | 981,532.17 | 981,532.17 | Completed | Self-raised and raised funds | ||||||
| Total | 96,066,200.00 | 981,532.17 | 981,532.17 |
(3) Impairment Test of Construction in Progress
□Applicable √ Not applicable
(4) Engineering Materials
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Impairment provision | Carrying value | Carrying amount | Impairment provision | Carrying value | |
| Engineering materials | 21,900.40 | 21,900.40 | 21,900.40 | 21,900.40 | ||
| Total | 21,900.40 | 21,900.40 | 21,900.40 | 21,900.40 | ||
18. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
| Item | Land use right | Software | License fee | Trademark use right | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 205,187,775.71 | 20,419,604.15 | 5,538,000.00 | 1,650,973.47 | 232,796,353.33 |
| 2. Increased amount of the period | |||||
| (1) Purchase | |||||
| (2) Internal R&D | |||||
| (3) Business combination increase | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 205,187,775.71 | 20,419,604.15 | 5,538,000.00 | 1,650,973.47 | 232,796,353.33 |
| II. Accumulated amortization | |||||
| 1. Beginning balance | 63,473,422.16 | 16,541,171.87 | 3,800,133.10 | 523,440.52 | 84,338,167.65 |
| 2. Increased amount of the period | 1,980,481.75 | 708,456.08 | 274,399.98 | 83,520.96 | 3,046,858.77 |
(1) Withdrawal
| (1) Withdrawal | 1,980,481.75 | 708,456.08 | 274,399.98 | 83,520.96 | 3,046,858.77 |
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 65,453,903.91 | 17,249,627.95 | 4,074,533.08 | 606,961.48 | 87,385,026.42 |
| III. Depreciation reserves | |||||
| 1. Beginning balance | |||||
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Carrying value | |||||
| 1. Ending carrying value | 139,733,871.80 | 3,169,976.20 | 1,463,466.92 | 1,044,011.99 | 145,411,326.91 |
| 2. Beginning carrying value | 141,714,353.55 | 3,878,432.28 | 1,737,866.90 | 1,127,532.95 | 148,458,185.68 |
19. Long-term Prepaid Expenses
Unit: RMB
| Item | Beginning balance | Increase | Amortized amount | Decrease | Ending balance |
| Trademark renewal fee | 268,208.12 | 31,831.68 | 33,226.81 | 266,812.99 | |
| External power line access project | 2,754,000.00 | 206,615.33 | 2,547,384.67 | ||
| Processing reserved floor paving and lighting installation works | 5,205,750.54 | 260,287.50 | 4,945,463.04 | ||
| Total | 8,227,958.66 | 31,831.68 | 500,129.64 | 7,759,660.70 |
20. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Bad debt provision | 24,153,483.66 | 3,623,022.55 | 6,427,652.90 | 967,779.48 |
| Inventory falling price reserves | 2,707,033.40 | 506,633.20 | 2,707,033.40 | 506,633.20 |
| Impairment of fixed assets | 297,220.70 | 44,583.11 | 297,220.70 | 44,583.11 |
| Total | 27,157,737.76 | 4,174,238.86 | 9,431,907.00 | 1,518,995.79 |
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Assets evaluation appreciation for business combination not under the same control | 5,489,891.06 | 823,483.65 | 5,489,891.06 | 823,483.65 |
| Changes of fair value of other equity instrument investments | 994,680,304.41 | 154,234,538.20 | 1,102,931,935.12 | 171,019,971.87 |
| Total | 1,000,170,195.47 | 155,058,021.85 | 1,108,421,826.18 | 171,843,455.52 |
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Deductible loss | 137,917,562.93 | 137,917,562.93 |
| Bad debt provision | 176,754,087.89 | 176,641,635.99 |
Falling price reserves ofinventories
| Falling price reserves of inventories | 36,869,685.12 | 39,274,116.98 |
| Total | 351,541,335.94 | 353,833,315.90 |
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
| Years | Ending amount | Beginning amount | Note |
| 2024 | 3,605,384.25 | 3,605,384.25 | |
| 2025 | 5,250,820.81 | 5,250,820.81 | |
| 2026 | 9,546,495.23 | 9,546,495.23 | |
| 2027 | 68,877,350.74 | 68,877,350.74 | |
| 2028 | 50,637,511.90 | 50,637,511.90 | |
| Total | 137,917,562.93 | 137,917,562.93 |
21. Other Non-current Assets
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Advances payment of equipments | 830,991.15 | 830,991.15 | 2,578,776.77 | 2,578,776.77 | ||
| Total | 830,991.15 | 830,991.15 | 2,578,776.77 | 2,578,776.77 | ||
22. Assets with Restricted Ownership or Right of Use
Unit: RMB
| Item | Period-end | Period-beginning | ||||||
| Carrying amount | Carrying value | Type of restriction | Status of restriction | Carrying amount | Carrying value | Type of restriction | Status of restriction | |
| Monetary funds -- other monetary funds | 108,979,912.31 | 108,979,912.31 | Occupied as cash deposit | Bank acceptance deposit, environmental performance bond, etc. | 76,238,443.41 | 76,238,443.41 | Occupied as cash deposit | Bank acceptance deposit, environmental performance bond, etc. |
| Fixed assets – houses and | 1,245,851.51 | 1,245,851.51 | Mortgaged | Mortgaged for issuing | 1,332,812.48 | 1,332,812.48 | Mortgaged | Mortgaged for issuing |
buildings
| buildings | bank acceptance bills | bank acceptance bills | ||||||
| Intangible assets -- land use rights | 828,429.65 | 828,429.65 | Mortgaged | Mortgaged for issuing bank acceptance bills | 847,162.28 | 847,162.28 | Mortgaged | Mortgaged for issuing bank acceptance bills |
| Fixed assets -- machinery and equipment | 21,597,853.38 | 21,597,853.38 | Mortgaged | Mortgaged for issuing bank acceptance bills | 23,728,733.18 | 23,728,733.18 | Mortgaged | Mortgaged for issuing bank acceptance bills |
| Notes receivable -- outstanding transferred notes | 46,144,123.81 | 46,144,123.81 | Obligation to pay unexpired transferred notes | Endorsed by the Company at the period-end and not due on the balance sheet date | 55,979,832.64 | 55,979,832.64 | Obligation to pay bills discounted before maturity | Discounted by the Company at the period-end and not due on the balance sheet date |
| Total | 178,796,170.66 | 178,796,170.66 | 158,126,983.99 | 158,126,983.99 |
23. Notes Payable
Unit: RMB
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 756,037,100.68 | 528,139,582.33 |
| Total | 756,037,100.68 | 528,139,582.33 |
At the end of the current period, there were no notes payable due and not paid.
24. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Payment for goods | 589,863,799.52 | 641,484,184.05 |
| Total | 589,863,799.52 | 641,484,184.05 |
(2) Significant Accounts Payable Aging over One Year or Overdue
Unit: RMB
Item
| Item | Ending balance | Unpaid/ Un-carry-over reason |
| Payment for goods | 37,259,326.16 | Suspending cooperation with suppliers to liquidate the payment |
| Payment for equipment | 4,576,029.01 | Equipment warranty |
| Total | 41,835,355.17 |
25. Other Payables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest payable | 0.00 | 0.00 |
| Dividends payable | 3,891,433.83 | 3,891,433.83 |
| Other payables | 202,782,329.24 | 155,131,948.98 |
| Total | 206,673,763.07 | 159,023,382.81 |
(1) Dividends Payable
Unit: RMB
The reason for non-payment for over one year: Not gotten by shareholders yet.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
| Item | Ending balance | Beginning balance |
| Margin & cash pledged | 3,546,895.46 | 2,671,042.33 |
| Intercourse funds among units | 16,052,352.25 | 11,107,514.80 |
| Intercourse funds among individuals | 415,689.65 | 398,761.04 |
| Sales discount and three guarantees | 165,240,406.47 | 125,096,632.36 |
Item
| Item | Ending balance | Beginning balance |
| Ordinary share dividends | 3,243,179.97 | 3,243,179.97 |
| Dividends for non-controlling shareholders | 648,253.86 | 648,253.86 |
| Total | 3,891,433.83 | 3,891,433.83 |
Other
| Other | 17,526,985.41 | 15,857,998.45 |
| Total | 202,782,329.24 | 155,131,948.98 |
2) Significant Other Payables Aging over One Year or Overdue
The significant other payables aging over one year at the period-end mainly referred to the unsettled temporarycredits and charges owned.
26. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
| Item | Ending balance | Beginning balance |
| Rent received in advance | 678,302.75 | 647,441.22 |
| Land compensation received in advance | 30,000,000.00 | 1,000,000.00 |
| Total | 30,678,302.75 | 1,647,441.22 |
(2) There were no significant advances from customers aging over one year or overdue.
27. Contract Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Contract liabilities | 37,517,411.19 | 33,352,877.66 |
| Total | 37,517,411.19 | 33,352,877.66 |
There were no significant contract liabilities aging over one year at the end of the period.
28. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 47,738,883.57 | 146,844,195.94 | 183,393,037.79 | 11,190,041.72 |
| II.Post-employment benefit-defined contribution plans | 16,356,909.67 | 16,356,909.67 |
III. Terminationbenefits
| III. Termination benefits | ||||
| IV. Current portion of other benefits | ||||
| Total | 47,738,883.57 | 163,201,105.61 | 199,749,947.46 | 11,190,041.72 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 40,196,939.41 | 123,031,773.43 | 159,614,971.93 | 3,613,740.91 |
| 2.Employee welfare | 1,592.74 | 1,685,033.60 | 1,685,033.60 | 1,592.74 |
| 3. Social insurance | 9,287,879.34 | 9,287,879.34 | ||
| Of which: Medical insurance premiums | 7,588,439.46 | 7,588,439.46 | ||
| Work-related injury insurance | 914,597.04 | 914,597.04 | ||
| Maternity insurance | 784,842.84 | 784,842.84 | ||
| 4. Housing fund | 10,753,058.00 | 10,753,058.00 | ||
| 5.Labor union budget and employee education budget | 7,540,351.42 | 2,086,451.57 | 2,052,094.92 | 7,574,708.07 |
| 6. Short-term absence with salary | ||||
| 7. Short-term profit sharing scheme | ||||
| Total | 47,738,883.57 | 146,844,195.94 | 183,393,037.79 | 11,190,041.72 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 15,858,886.58 | 15,858,886.58 | ||
| 2. Unemployment insurance | 498,023.09 | 498,023.09 |
3. Enterprise annuities
| 3. Enterprise annuities | ||||
| Total | 16,356,909.67 | 16,356,909.67 |
29. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 1,905,690.13 | 189,045.23 |
| Corporate income tax | 501,235.23 | 1,686,812.32 |
| Personal income tax | 155,738.26 | 312,930.09 |
| Urban maintenance and construction tax | 116,252.32 | 881,885.27 |
| Property tax | 1,582,563.25 | 1,678,590.95 |
| Land use tax | 935,265.32 | 943,261.64 |
| Stamp duty | 295,260.23 | 349,554.08 |
| Education Surcharge | 50,254.32 | 36,841.50 |
| Comprehensive fees | 110,523.52 | 120,291.58 |
| Environmental protection tax | 31,957.08 | 31,957.08 |
| Total | 5,684,739.66 | 6,231,169.74 |
30. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Sale service fee | 352,652.36 | 393,790.53 |
| Transportation storage fee | 654,893.25 | 830,881.27 |
| Electric charge | 1,385,265.48 | 1,457,500.39 |
| Tax to be transferred | 2,810,623.25 | 2,830,696.17 |
| Estimated share value added tax | 2,231,194.94 | 2,230,084.52 |
| Obligation to pay bills transferred before maturity | 46,144,123.81 | 55,979,832.64 |
| Other withholding expenses | 4,517,256.58 | 3,347,180.44 |
| Total | 58,096,009.67 | 67,069,965.96 |
31. Deferred Income
Unit: RMB
Item
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
| Government grants | 32,795,896.48 | 1,704,864.73 | 31,091,031.75 | Government appropriation | |
| Total | 32,795,896.48 | 1,704,864.73 | 31,091,031.75 | -- |
Other notes:
Liability items involving government grants
Unit: RMB
| Item | Beginning balance | Amount of new subsidy | Amount recorded into other income in the Reporting Period | Ending balance | Related to assets/related income |
| National major project special allocations- Flexible processing production line for cylinders of diesel engines | 10,001,835.00 | 759,633.00 | 9,242,202.00 | Related to assets | |
| Remove compensation | 17,181,816.74 | 332,986.81 | 16,848,829.93 | Related to assets | |
| Research and development and industrialization allocations of national III/IV standard high-powered efficient diesel engine for agricultural use | 5,612,244.74 | 612,244.92 | 4,999,999.82 | Related to assets | |
| Total | 32,795,896.48 | 1,704,864.73 | 31,091,031.75 |
32. Share Capital
Unit: RMB
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
| The sum of shares | 705,692,507.00 | 705,692,507.00 | |||||
33. Capital Reserves
Unit: RMB
Item
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 620,338,243.21 | 620,338,243.21 | ||
| Other capital reserves | 20,171,432.63 | 20,171,432.63 | ||
| Total | 640,509,675.84 | 640,509,675.84 |
34. Other Comprehensive Income
Unit: RMB
| Item | Beginning balance | Reporting Period | Ending balance | |||||
| Income before taxation in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred in profit or loss in the Current Period | Less: Recorded in other comprehensive income in prior period and transferred in retained earnings in the Current Period | Less: Income tax expense | Attributable to the Company as the parent after tax | Attributable to non-controlling interests after tax | |||
| I. Other comprehensive income that will not be reclassified to profit or loss | 667,180,321.82 | -52,044,000.00 | -7,806,600.00 | -44,237,400.00 | 622,942,921.82 | |||
| Changes in fair value of other equity instrument investment | 667,180,321.82 | -52,044,000.00 | -7,806,600.00 | -44,237,400.00 | 622,942,921.82 | |||
| Total of other comprehensive income | 667,180,321.82 | -52,044,000.00 | -7,806,600.00 | -44,237,400.00 | 622,942,921.82 | |||
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized
amount: None
35. Specific Reserve
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Safety production cost | 19,432,089.52 | 3,083,166.06 | 2,432,550.21 | 20,082,705.37 |
| Total | 19,432,089.52 | 3,083,166.06 | 2,432,550.21 | 20,082,705.37 |
36. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 350,538,734.44 | 350,538,734.44 | ||
| Discretional surplus reserves | 13,156,857.90 | 13,156,857.90 | ||
| Total | 363,695,592.34 | 363,695,592.34 |
37. Retained Earnings
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained earnings before adjustments | 1,002,436,724.71 | 915,495,909.35 |
| Total retained earnings at the beginning of the adjustment period (“+” means up, “-” means down) | ||
| Beginning balance of retained earnings after adjustments | 1,002,436,724.71 | 915,495,909.35 |
| Add: Net profit attributable to owners of the Company as the parent | 50,097,655.15 | 131,937,324.66 |
| Less: Withdrawal of statutory surplus reserves | ||
| Withdrawal of discretional surplus reserves | ||
| Withdrawal of general |
reserve
| reserve | ||
| Dividend of ordinary shares payable | 33,167,547.83 | 7,056,925.07 |
| Dividends of ordinary shares transferred as share capital | ||
| Ending retained earnings | 1,019,366,832.03 | 1,040,376,308.94 |
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to theAccounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from samecontrol.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
38. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 1,477,768,073.74 | 1,232,962,844.33 | 1,333,099,509.22 | 1,156,456,220.22 |
| Other operations | 18,141,078.89 | 14,141,225.72 | 17,418,130.63 | 12,441,983.61 |
| Total | 1,495,909,152.63 | 1,247,104,070.05 | 1,350,517,639.85 | 1,168,898,203.83 |
Information of operating income and operating cost:
Unit: RMB
| Category of contracts | Segment 1 | Total | ||
| Operating Revenue | Operating cost | Operating Revenue | Operating cost | |
| Business Type | ||||
| Of which: | ||||
| Single-cylinder diesel engines | 473,252,480.60 | 408,535,961.19 | 473,252,480.60 | 408,535,961.19 |
| Multi-cylinder diesel engines | 850,224,657.96 | 697,174,644.25 | 850,224,657.96 | 697,174,644.25 |
| Other products | 117,713,164.75 | 95,789,399.32 | 117,713,164.75 | 95,789,399.32 |
| Fittings | 36,577,770.43 | 31,462,839.57 | 36,577,770.43 | 31,462,839.57 |
| Classification by operating region | ||||
| Of which: | ||||
| Sales in domestic | 1,321,666,902.16 | 1,089,037,564.13 | 1,321,666,902.16 | 1,089,037,564.13 |
market
| market | ||||
| Export sales | 156,101,171.58 | 143,925,280.20 | 156,101,171.58 | 143,925,280.20 |
| Total | 1,477,768,073.74 | 1,232,962,844.33 | 1,477,768,073.74 | 1,232,962,844.33 |
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0 at the period-end.
39. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Urban maintenance and construction tax | 1,206,347.65 | 1,006,348.45 |
| Education surcharge | 892,462.87 | 718,820.35 |
| Property tax | 3,460,896.66 | 3,169,527.35 |
| Land use tax | 2,237,252.61 | 2,197,586.41 |
| Vehicle and vessel use tax | 403.52 | 403.52 |
| Stamp duty | 1,054,326.09 | 628,716.88 |
| Environment tax | 102,132.33 | 100,381.82 |
| Other | 5,269.40 | 5,470.80 |
| Total | 8,959,091.13 | 7,827,255.58 |
40. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 27,401,986.86 | 28,128,076.17 |
| Office expenses | 5,393,754.21 | 5,597,629.95 |
| Depreciation and amortization | 8,902,514.69 | 9,181,948.43 |
| Safety expenses | 2,432,550.21 | 1,768,064.08 |
| Repair charge | 529,280.85 | 589,852.63 |
| Inventory scrap and inventory loss (profit) | 133,065.37 | -651,231.55 |
| Other | 8,687,477.27 | 8,263,031.35 |
| Total | 53,480,629.46 | 52,877,371.06 |
41. Selling Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Employee benefits | 21,109,483.94 | 17,034,869.46 |
| Office expenses | 4,106,380.87 | 3,936,262.82 |
| Three guarantees | 36,051,097.32 | 35,094,246.66 |
| Other | 1,436,160.48 | 6,065,653.23 |
| Total | 62,703,122.61 | 62,131,032.17 |
42. Development Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Direct input expense | 22,523,758.26 | 20,419,421.63 |
| Employee benefits | 11,317,402.28 | 11,534,165.94 |
| Depreciation and amortization | 2,749,281.31 | 3,284,892.82 |
| Other | 2,174,805.19 | 600,591.03 |
| Total | 38,765,247.04 | 35,839,071.42 |
43. Finance Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Interest expense | 1,546,928.49 | 3,343,884.90 |
| Less: Interest income | 7,969,452.65 | 4,264,102.18 |
| Net foreign exchange gains or losses | -2,334,179.75 | -4,784,425.33 |
| Other | 142,352.25 | 727,989.66 |
| Total | -8,614,351.66 | -4,976,652.95 |
44. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Government grants directly recorded into the current profit or loss | 248,837.64 | 1,594,191.79 |
Government grants related todeferred income
| Government grants related to deferred income | 1,704,864.73 | 1,704,864.73 |
List of other income:
Unit: RMB
| Category | Reporting Period | Same period of last year |
| Membership dues return | 12,085.00 | 2,856.53 |
| Special funds for high-quality industrial development | 25,000.00 | |
| Special funds for promoting high-quality development through technological innovation | 513,000.00 | |
| Special funds for talents | 60,000.00 | |
| Municipal science and technology innovation and incentive funds, Science and Technology Program Funding | 81,000.00 | 543,026.62 |
| Subsidies for high-quality invention | 30,000.00 | |
| Intellectual property funding and rewards | 1,500.00 | |
| Rewards for district engineering technology research centre in 2023 | 50,000.00 | |
| Changzhou talent plan-special program for foreign talents | 100,000.00 | 0.00 |
| Demolition compensation (replacing Zou Village with Hehai Road) | 133,666.74 | 133,666.74 |
| Demolition compensation - main workshops in the base in Hehai Road | 199,320.07 | 199,320.07 |
| The national major special project - the flexible processing production line for diesel engine cylinder blocks | 759,633.00 | 759,633.00 |
| National III/IV Appropriation for the research and development and industrialization of standard high-horsepower high-efficiency agricultural diesel engine | 612,244.92 | 612,244.92 |
| Value Added Tax (VAT) Deductions and Benefits | 294,256.13 | |
| Individual tax handling fees | 55,752.64 | 74,552.51 |
Category
| Category | Reporting Period | Same period of last year |
| Total | 1,953,702.37 | 3,299,056.52 |
45. Gain on Changes in Fair Value
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Held-for-trading financial assets | -34,487,453.74 | 19,360,455.86 |
| Total | -34,487,453.74 | 19,360,455.86 |
46. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | ||
| Investment income from disposal of long-term equity investment | ||
| Investment income from holding of trading financial assets | 654,815.85 | 343,730.00 |
| Investment income from disposal of trading financial assets | 2,430.18 | |
| Dividend income from holding of other equity instrument investment | 10,998,000.00 | |
| Income from re-measurement of residual stock rights at fair value after losing control power | ||
| Interest income from holding of investment in debt obligations | 499,852.62 | 705,680.77 |
| Interest income from holding of investment in other debt obligations | ||
| Investment income from disposal of investment in other debt obligations | ||
| Income from debt reorganization | ||
| Income from refinancing operations | 74,524.00 | 14,396.97 |
| Investment income from financial products | 3,371,852.31 | 4,471,297.06 |
| Accounts receivable financing-discount interest of bank acceptance bills | -1,300,004.16 | -2,310,613.28 |
| Total | 14,299,040.62 | 3,226,921.70 |
47. Credit Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Bad debt loss of accounts receivable | -17,840,474.15 | -12,796,606.08 |
| Bad debt loss of other receivables | 2,191.49 | -1,750,745.09 |
| Total | -17,838,282.66 | -14,547,351.17 |
48. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Loss on inventory valuation and contract performance cost | -359,995.80 | -565,273.49 |
| Total | -359,995.80 | -565,273.49 |
49. Asset Disposal Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Disposal income of fixed assets and intangible assets | 408,245.54 | 105,395,693.25 |
50. Non-operating Income
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Accounts not required to be paid | 410,870.50 | 410,870.50 | |
| Income from penalty | 13,396.22 | 13,396.22 | |
| Other | 646,668.47 | 495,538.97 | 646,668.47 |
| Total | 1,070,935.19 | 495,538.97 | 1,070,935.19 |
51. Non-operating Expense
Unit: RMB
Item
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Compensation for quality | 264,014.59 | 144,428.82 | 264,014.59 |
| Compensation | 0.00 | 731,752.92 | 0.00 |
| Other | 3,720.00 | 421,166.39 | 3,720.00 |
| Total | 267,734.59 | 1,297,348.13 | 267,734.59 |
52. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Current income tax expense | 12,974,889.92 | 2,460,114.33 |
| Deferred income tax expense | -8,660,218.60 | 4,729,214.00 |
| Total | 4,314,671.32 | 7,189,328.33 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 58,289,800.93 |
| Current income tax expense accounted at statutory/applicable tax rate | 8,769,361.12 |
| Influence of applying different tax rates by subsidiaries | 551,584.53 |
| Influence of income tax before adjustment | |
| Influence of non-taxable income | -1,832,034.96 |
| Influence of non-deductable costs, expenses and losses | |
| Influence of deductable losses of unrecognized deferred income tax at the beginning of the Reporting Period | |
| Influence of deductable temporary difference or deductable losses of unrecognized deferred income tax assets in the Reporting Period | -3,174,239.37 |
| Income tax expense | 4,314,671.32 |
53. Other Comprehensive Income
See Note 34 for details.
54. Cash Flow Statement
(1) Cash Related to Operating Activities
Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Subsidy and appropriation | 55,752.64 | 1,594,191.79 |
| Other intercourses in cash | 4,561,973.63 | 5,293,371.43 |
| Interest income | 7,969,452.65 | 4,264,102.18 |
| Other | 201,272.35 | 372,352.32 |
| Total | 12,788,451.27 | 11,524,017.72 |
Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Selling and administrative expense paid in cash | 80,012,536.52 | 79,187,465.71 |
| Handling charges | 1,546,928.49 | 1,125,365.36 |
| Other | 789,612.45 | 658,923.36 |
| Other transactions | 13,789,734.98 | 149,835.21 |
| Total | 96,138,812.44 | 81,121,589.64 |
(2) Cash Related to Financing Activities
Changes in liabilities arising from financing activities
√ Applicable □ Not applicable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | ||
| Cash changes | Non-cash changes | Cash changes | Non-cash changes | |||
| Other payables-dividends payable | 3,891,433.83 | 33,167,547.83 | 33,167,547.83 | 3,891,433.83 | ||
| Total | 3,891,433.83 | 33,167,547.83 | 33,167,547.83 | 3,891,433.83 | ||
55. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
| Supplemental information | Reporting Period | Same period of last year |
| 1. Reconciliation of net profit to net cash flows generated from operating activities | ||
| Net profit | 53,975,129.61 | 136,099,723.92 |
| Add: Provision for impairment of assets | -359,995.80 | 15,112,624.66 |
| Depreciation of fixed assets, of oil and gas assets, of productive living assets | 38,972,508.82 | 44,923,816.05 |
| Depreciation of right-of-use assets | ||
| Amortization of intangible assets | 3,046,858.77 | 3,208,767.08 |
| Amortization of long-term deferred expenses | 500,129.64 | 168,946.50 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains by “-”) | -408,245.54 | -105,395,693.25 |
| Losses on the scrapping of fixed assets (gains by “-”) | ||
| Losses on the changes in fair value (gains by “-”) | 34,487,453.74 | -19,360,455.86 |
| Financial expenses (gains by “-”) | -8,614,351.66 | -4,976,652.95 |
| Investment losses (gains by “-”) | -14,299,040.62 | -3,226,921.70 |
| Decrease in deferred income tax assets (increase by “-”) | -2,655,243.07 | 21,603,212.61 |
| Increase in deferred income tax liabilities (decrease by “-”) | -16,785,433.67 | -17,481,773.65 |
| Decrease in inventory (increase by “-”) | 169,505,166.76 | 14,472,740.38 |
| Decrease in accounts receivable from operating activities (increase by “-”) | -431,702,702.30 | -269,061,905.84 |
| Increase in payables from operating activities (decrease by “-”) | 12,523,252.32 | 79,116,755.30 |
| Other | ||
| Net cash flows generated from operating activities | -161,814,513.00 | -104,796,816.75 |
| 2. Investing and financing activities that do not involving cash receipts and payment: | ||
| Debt transferred as capital | ||
| Convertible corporate bond due within one year | ||
| Fixed assets from financing lease | ||
| 3. Net increase in cash and cash equivalents | ||
| Ending balance of cash | 643,940,187.59 | 651,307,581.82 |
Less: Beginning balance of cash
| Less: Beginning balance of cash | 971,629,523.46 | 810,350,966.05 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -327,689,335.87 | -159,043,384.23 |
(2) Cash and Cash Equivalents
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 643,940,187.59 | 971,629,523.46 |
| Including: Cash on hand | 146,931.23 | 157,238.05 |
| Bank deposit on demand | 638,741,422.13 | 963,604,998.68 |
| Other monetary assets on demand | 5,051,834.23 | 7,867,286.73 |
| Accounts deposited in the central bank available for payment | ||
| Deposits in other banks | ||
| Accounts of interbank | ||
| II. Cash equivalents | ||
| Of which: Bond investment expired within three months | ||
| III. Ending balance of cash and cash equivalents | 643,940,187.59 | 971,629,523.46 |
| Of which: Cash and cash equivalents with restriction in use for the Company as the parent or subsidiaries of the Group |
(3) Monetary Assets Not Classified as Cash and Cash Equivalents
Unit: RMB
| Item | Amount during the current period | Previous period | Reason for not classifying the item as cash and cash equivalents |
| Bank deposits-fixed time deposits over 3 months | 39,000,000.00 | 24,000,000.00 | Time deposits in banks not held to meet short-term cash requirements for external payments |
| Other monetary assts-cash deposit | 108,979,912.31 | 173,206,532.10 | Banker's acceptance deposit, environmental performance bonds, etc. |
| Total | 147,979,912.31 | 197,206,532.10 |
56. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
| Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
| Monetary assets | |||
| Of which: USD | 13,710,056.35 | 7.1268 | 97,708,829.60 |
| HKD | 9,065,169.44 | 0.9127 | 8,273,780.15 |
| Accounts receivable | |||
| Of which: USD | 9,065,169.44 | 7.1268 | 64,605,649.56 |
| GBP | -67,212.27 | 9.0430 | -607,800.56 |
| Contract liabilities | |||
| Of which: USD | 472,535.68 | 7.1268 | 3,367,667.28 |
| EUR | 117,145.84 | 7.6617 | 897,536.28 |
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, RecordingCurrency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, RelevantReasons Shall Be Disclosed.
□ Applicable √ Not applicable
57. Lease
(1) The Company Was Lessee:
√Applicable □Not applicable
Variable lease payments that are not covered in the measurement of the lease liabilities
□ Applicable √ Not applicable
Simplified short-term lease or lease expense for low-value assets
√Applicable □ Not applicable
The leases simplistically treated by the Company were mainly leased houses, etc., which were not recognized asright-of-use assets and lease liabilities by the Company as required by the provisions of the convergence of thenew standard for leases because of the shorter lease terms and lower individual lease expenses.Circumstances involving sale and leaseback transactions：Not applicable
(2) The Company Was Lessor:
Operating leases with the Company as lessor
√Applicable □ Not applicable
Unit: RMB
| Item | Rental income | Of which: income related to variable lease payments not included in lease receipts |
| Lease income | 1,156,352.63 | |
| Total | 1,156,352.63 |
Finance leases with the Company as lessor
□ Applicable √ Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable √ Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases: Not applicable
(3) Recognition of Gain or Loss on Sales under Finance Leases with the Company as a Manufacturer orDistributor
□ Applicable √ Not applicable
VIII. Research and Development Expenditure
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Direct input | 22,523,758.26 | 20,419,421.63 |
| Employee remuneration | 11,317,402.28 | 11,534,165.94 |
| Depreciation and amortization | 2,749,281.31 | 3,284,892.82 |
| Others | 2,174,805.19 | 600,591.03 |
| Total | 38,765,247.04 | 35,839,071.42 |
| Of which: Expensed research and development expenditure | 38,765,247.04 | 35,839,071.42 |
| Capitalized research and development expenditure | 0.00 | 0.00 |
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Unit: RMB
| Name | Registered capital | Main operating | Registration | Nature of | Holding percentage (%) | Way of gaining |
place
| place | place | business | Directly | Indirectly | |||
| Changchai Wanzhou Diesel Engine Co., Ltd. | 85,000,000.00 | Chongqing | Chongqing | Industry | 60.00% | Set-up | |
| Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. | 55,063,000.00 | Changzhou | Changzhou | Industry | 99.00% | 1.00% | Set-up |
| Changzhou Horizon Investment Co., Ltd. | 40,000,000.00 | Changzhou | Changzhou | Service | 100.00% | Set-up | |
| Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. | 10,000,000.00 | Changzhou | Changzhou | Industry | 100.00% | Set-up | |
| Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. | 37,250,000.00 | Changzhou | Changzhou | Industry | 100.00% | Combination not under the same control | |
| Jiangsu Changchai Machinery Co., Ltd. | 300,000,000.00 | Changzhou | Changzhou | Industry | 100.00% | Set-up | |
| Changzhou Xingsheng Property Management Co., Ltd. | 1,000,000.00 | Changzhou | Changzhou | Service | 100.00% | Set-up | |
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 2,000,000.00 | Zhenjiang | Zhenjiang | Industry | 49.00% | Combination not under the same control |
Explanation:
1. The Company holding 49% of the shares in Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. is thelargest shareholder, and the other shareholders are relatively scattered. Among the 7 members of the board ofdirectors of Zhenjiang Siyang, 4 are dispatched by the Company. The chairman of Zhenjiang Siyang is dispatchedby the Company, and the Company is the actual controller of Zhenjiang Siyang, which constitutes the conditionsfor merger.
2. In June 2024, the Company acquired 25% of the shares in Horizon Agricultural Equipment originally held byHorizon Investment. Currently the Company directly holds 100% of the shares in Horizon AgriculturalEquipment.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding | The profit or loss | Declaring | Balance of |
proportion ofnon-controllinginterests
| proportion of non-controlling interests | attributable to the non-controlling interests | dividends distributed to non-controlling interests | non-controlling interests at the period-end | |
| Changchai Wanzhou Diesel Engine Co., Ltd. | 40.00% | 194,926.30 | 20,005,287.41 | |
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 51.00% | 3,682,548.16 | 54,993,395.40 |
Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
| Name | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
| Changchai Wanzhou Diesel Engine Co., Ltd. | 41,807,112.03 | 21,988,559.62 | 63,795,671.65 | 13,179,957.90 | 13,179,957.90 | 41,179,375.84 | 22,351,977.78 | 63,531,353.62 | 13,584,154.77 | 13,584,154.77 | ||
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 93,041,815.38 | 25,243,492.13 | 118,285,307.51 | 11,380,848.99 | 11,380,848.99 | 94,747,199.90 | 26,468,620.63 | 121,215,820.53 | 20,295,436.96 | 310,879.17 | 20,606,316.13 | |
Unit: RMB
| Name | Reporting Period | Same period of last year |
Operatingrevenue
| Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
| Changchai Wanzhou Diesel Engine Co., Ltd. | 20,436,838.02 | 487,315.76 | 487,315.76 | 494,183.89 | 26,190,043.15 | 212,968.83 | 212,968.83 | -8,525,646.36 |
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 40,212,271.49 | 6,294,954.12 | 6,294,954.12 | 291,189.20 | 38,098,312.48 | 6,969,592.70 | 6,969,592.70 | 7,732,566.01 |
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial StatementsNotes to the structured entity excluded in the scope of consolidated financial statements:
In 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together withSynergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018 and 3December 2020, new partners were respectively added. Partnership Shares transfer was made respectively on 29December 2022 and 30 October 2023. In line with the revised Partnership Agreement, the general partner isSynergetic Innovation Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited,Changzhou Zhongyou Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu, Tong Yinxin, AnhuiHaiyunzhou Equity Investment Partnership Enterprise (Limited), Shenzhen Jiaxin One Venture CapitalPartnership (Limited Partnership), Zhong Wende and Qingdao Yinjiahui Industrial Investment Partnership(Limited Partnership). In accordance with the Partnership Agreement, the limited partner does not execute thepartnership affairs. Thus, the Company does not control Changzhou Xietong Private Equity Fund (LimitedPartnership) and did not include it into the scope of consolidated financial statements.X. Government Grants
1. Government Grants Recognized at the End of the Reporting Period at the Amount Receivable
□ Applicable √ Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in time
□ Applicable √ Not applicable
2. Liability Items Involving Government Grants
√Applicable ? Not applicable
Unit: RMB
| Accounting items | Beginning balance | Amount of new subsidy | Amount recorded into non-operating income in the Reporting Period | Amount recorded into other income in the Reporting Period | Other changes | Ending balance | Related to assets/related income |
| Deferred income | 32,795,896.48 | 1,704,864.73 | 31,091,031.75 | Related to assets |
3. Government Grants Recognized as Current Profit or Loss
√Applicable ? Not applicable
Unit: RMB
| Accounting items | Amount for the current period | Amount for the previous period |
| Other income | 1,897,949.73 | 2,930,247.88 |
XI. The Risk Related to Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and reducedthe negative impact to the operation performance of the Company in the lowest level and maximized the interestsof shareholders and other equity investors. Base on the risk management goal, the basis strategy of the Company’srisk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable riskbottom line and conduct risk management, and supervised the risks timely and reliably and control the risk withinthe limited scope.The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. Themanagement level had reviewed and approved the policies to manage the risks, which summarized as follows:
(I) Credit RiskCredit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of theother party.The credit of risk of the Company mainly was related to account receivable, in order to control the risk, theCompany conduct the following methods.The Company only conducts related transaction with approved and reputable third party, in line with the policy ofthe Company, the Company need to conduct credit-check for the clients adopting way of credit to conducttransaction. In addition, the Company continuously monitors the balance of account receivable to ensure theCompany would not face the significant bad debt risk.(II) Liquidity RiskLiquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the wayof cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.The liquidity risk was centralized controlled by the financial department of the Company. The financialdepartments through supervising the balance of the cash and securities can be convert to cash at any time and therolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilitiesunder the case of all reasonable prediction.(III) Market RiskMarket risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the changeof market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change dueto the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the Company’s export business, customers will be given a certain credit term, if the RMB appreciates against the dollar, thecompany's accounts receivable will incur foreign currency exchange loss.
2. Financial Assets
(1) Classification of Transfer Methods
√Applicable ? Not applicable
Unit: RMB
| Transfer method | Nature of transferred financial assets | Amount of transferred financial assets | Recognition termination or not | Basis for recognition termination |
| Endorsement/discount | Notes receivable | 46,144,123.81 | Not derecognized | The Company retains substantially all of the risks and rewards, including the risk of default associated with its |
| Endorsement/discount | Accounts receivable financing | 12,282,312.54 | Derecognized | The Company transfers almost all the risks and rewards |
| Total | 58,426,436.35 |
(2) Financial Assets Derecognized due to Transfer
√Applicable ? Not applicable
Unit: RMB
| Item | Transfer method of financial assets | Amount of derecognized financial assets | Gains or losses related to derecognization |
| Accounts receivable financing | Endorsement | 8,259,386.86 | |
| Accounts receivable financing | Discount | 78,281,000.00 | -1,300,004.16 |
| Total | 86,540,386.86 | -1,300,004.16 |
(3) Continued Involvement in the Transfer of Assets Financial Assets
√Applicable ? Not applicable
Unit: RMB
| Item | Transfer method of assets | Amount of assets resulting from continued involvement | Amount of liabilities resulting from continued involvement |
| Notes receivable | Endorsement | 46,144,123.81 | 46,144,123.81 |
| Total | 46,144,123.81 | 46,144,123.81 |
XII. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
| Item | Ending fair value | |||
| Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
| I. Consistent fair value measurement | -- | -- | -- | -- |
| (I) Trading financial assets | 50,661,877.00 | 352,238,906.53 | 402,900,783.53 | |
| 1. Financial assets at fair value through profit or loss | 50,661,877.00 | 352,238,906.53 | 402,900,783.53 | |
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | 50,661,877.00 | 50,661,877.00 | ||
| (3) Derivative financial assets | ||||
| Wealth management investments | 352,238,906.53 | 352,238,906.53 | ||
| 2. Financial assets designated to be measured at fair value and the changes included into the current | ||||
profit or loss
| profit or loss | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (II) Other investments in debt obligations | ||||
| (III)Other equity instrument investment | 498,987,000.00 | 418,457,025.67 | 917,444,025.67 | |
| (IV) Investment property | ||||
| 1. Land use right for lease | ||||
| 2. Buildings leased out | ||||
| 3. Land use right held and planned to be transferred once appreciating | ||||
| (V) Living assets | ||||
| 1. Consumptive living assets | ||||
| 2. Productive living assets | ||||
| Accounts receivable financing | 12,282,312.54 | 12,282,312.54 | ||
| Other non-current financial assets | 412,914,576.80 | 412,914,576.80 | ||
| Total assets consistently measured by fair value | 549,648,877.00 | 352,238,906.53 | 843,653,915.01 | 1,745,541,698.54 |
| (VI) Trading financial liabilities | ||||
| Of which: Issued trading bonds | ||||
| Derivative |
financial liabilities
| financial liabilities | ||||
| Other | ||||
| (VII) Financial liabilities designated to be measured at fair value and the changes recorded into the current profit or loss | ||||
| Total liabilities consistently measured by fair value | ||||
| II. Inconsistent fair value measurement | ||||
| (1) Assets held for sale | ||||
| Total assets inconsistently measured by fair value | ||||
| Total liabilities inconsistently measured by fair value |
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value,the closing market price on the balance sheet date was the basis for the measurement of fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 2Wealth management and investment: The underlying assets of investment in wealth management products includebond assets, deposit assets, fund assets, etc. The portfolio of investment assets should be dynamically managed.The fair value of wealth management products should be adjusted according to the yield of similar productsprovided by the counterparty.
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating,short maturity and low risk. The par amount is close to the fair value and is used as the fair value.
(2) Among the other non-current financial assets: for the investments in equity instrument of Jiangsu Horizon NewEnergy Technology Co., Ltd., Jiangsu Horizon New Energy Technology Co., Ltd. entrusted an appraisal agency toevaluate the value of all its shareholders’ equity due to the need for capital increase and share expansion in 2023,and confirmed the premium rate of capital increase based on the appreciation rate of the equity value. Thecompany’s new investors signed the capital increase agreements on 27 September 2023. Therefore, the fair valueof the equity investment had been adjusted and confirmed accordingly based on the premium rate of the newround of financing. And an appraisal agency was hired to conduct an appraisal to confirm
(3) Among other equity investment instruments, the total investment in Chengdu Changwan Diesel EngineDistribution Co., Ltd., Chongqing Wanzhou Changwan Diesel Engine Parts Co., Ltd., Changzhou Economic andTechnological Development Company, Changzhou Tractor Company, Changzhou Economic CommissionIndustrial Capital Mutual Aid Association, Beijing Engineering Machinery Agricultural Machinery Company wasRMB 1.21 million, and the fair value was RMB 0.00 due to the difficulty in recovering the investment.Since its establishment in October 2017, Changzhou Synergetic Innovation Private Equity Fund (LimitedPartnership) had increased the equity of partners at the end of the year due to the change in fair value of the equityheld by it. In addition, the company's business environment, operating conditions, and financial status had notundergone major changes. Therefore, the company determined its fair value on the basis of the net book assets ofthe partnership at the end of the period.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning andEnding Carrying Value of Consistent Fair Value Measurement Items at Level 3Not applicable
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens ifConversion Happens among Consistent Fair Value Measurement Items at Different LevelsNot applicable
7. Changes in the Valuation Technique in the Current Period and the Reason for Such ChangesNot applicable
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and liabilities measured at amortization cost mainly include notes receivable, accountsreceivable, other receivables, short-term borrowings, accounts payable, other payables, etc. The differencebetween the carrying value and fair value for financial assets and liabilities not measured at fair value is small.
9. Other
During the Reporting Period, there was no conversion between Level 1 and Level 2, nor was there any transfer toor from Level 3 for the fair value measurement of the Company's financial assets and financial liabilities.
XIII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
| Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company | Proportion of voting rights owned by the Company as the parent against the Company |
| Changzhou Investment Group Co., Ltd. | Changzhou | Investment and operations of state-owned assets, assets management (excluding financial business), investment consulting (excluding consulting on investment in securities and options), etc. | RMB1.2 billion | 32.26% | 32.26% |
Notes: Information on the Company as the parentThe parent company of the Company is Changzhou Investment Group Co., Ltd. According to the guidingprinciple of the Notice of Provincial Government on Issuing the Implementation Plan for Transferring Part ofState-owned Capital to Boost Social Security Fund in Jiangsu Province (SZF [2020] No. 27), the Notice onTransferring Part of State-owned Capital to Cities and Counties to Boost Social Security Fund (SCGM [2020] No.
139) from the Department of Finance of Jiangsu Province and other five departments and the Notice onTransferring Part of State-owned Capital at Urban (District) Level to Boost Social Security Fund (CCGM [2020]No. 4) from Changzhou Finance Bureau and other four departments, the 10% state-owned equity of theInvestment Group held by Changzhou Municipal People's Government is transferred to the Department ofFinance of Jiangsu Province free of charge. After the share transfer, Changzhou People’s Government holds 90%state-owned equity of the Investment Group and the Department of Finance of Jiangsu Province holds 10%state-owned equity of the Investment Group. In accordance with Changzhou People’s Government Document(CZF [2006] No. 62), Changzhou Investment Group Co., Ltd. is an enterprise which Changzhou People’sGovernment authorizes Changzhou Government State-owned Assets Supervision and Administration Commission
to perform duties of investors. Thus, Changzhou Investment Group Co., Ltd. is the controlling shareholder of theCompany and Changzhou Government State-owned Assets Supervision and Administration Commission is stillthe actual controller of the Company. The final controller of the Company is Changzhou Government State-ownedAssets Supervision and Administration Commission.
2. Subsidiaries of the Company
Refer to Note IX for details.
3. Situation of Joint Ventures and Associated Enterprises of the Company
None
4. Information on Other Related Parties
| Name | Relationship with the Company |
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | Participated in establishing the industrial investment fund |
| Jiangsu Horizon New Energy Technology Co., Ltd. | Shareholding enterprise of the Company |
XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet dateAs of 30 June 2024, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
None
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant StatementsThere was no significant contingency in the Company.
XV. Events after Balance Sheet Date
1. Sales Return
None
2. Notes to Other Events after Balance Sheet Date
There was no other event after balance sheet date.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retrospective Restatement
None
(2) Prospective Application
None
2. Debt Restructuring
Not applicable
3. Assets Replacement
Not applicable
4. Pension Plans
Not applicable
5. Discontinued Operations
Not applicable
6. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar, the Company conducts commonmanagement, and did not divide business unit, so the Company only made single branch report.
7. Other Significant Transactions and Events with Influence on Investors’ Decision-makingNone
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
| Aging | Ending carrying amount | Beginning carrying amount |
| Within one year (including 1 year) | 1,170,450,727.23 | 289,665,029.12 |
| One to two years | 2,314,925.52 | 1,642,898.19 |
| Two to three years | 4,626,330.47 | 4,274,309.13 |
| More than three years | 103,514,432.55 | 103,238,762.39 |
| Three to four years | 4,545,159.53 | 4,376,325.51 |
| Four to five years | 1,476,565.43 | 1,398,123.34 |
| Over 5 years | 97,492,707.59 | 97,464,313.54 |
| Total | 1,280,906,415.77 | 398,820,998.83 |
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable withdrawal of Bad debt provision separately accrued | 21,058,702.18 | 1.64% | 21,058,702.18 | 100.00% | 0.00 | 21,058,702.18 | 5.28% | 21,058,702.18 | 100.00% | 0.00 |
| Of which: | ||||||||||
| Accounts receivable withdrawal of bad debt provision of by group | 1,259,847,713.59 | 98.36% | 103,523,078.88 | 8.22% | 1,156,324,634.71 | 377,762,296.65 | 94.72% | 85,765,458.71 | 22.70% | 291,996,837.94 |
| Of which: | ||||||||||
Accountsreceivable forwhich bad debtprovisionaccrued bycredit riskfeatures group
| Accounts receivable for which bad debt provision accrued by credit risk features group | 1,259,847,713.59 | 98.36% | 103,523,078.88 | 8.22% | 1,156,324,634.71 | 377,762,296.65 | 94.72% | 85,765,458.71 | 22.70% | 291,996,837.94 |
| Total | 1,280,906,415.77 | 100.00% | 124,581,781.06 | 9.73% | 1,156,324,634.71 | 398,820,998.83 | 100.00% | 106,824,160.89 | 26.78% | 291,996,837.94 |
Individual provision for bad debts: 21,058,702.18 yuan, including 19,019,243.10 yuan for large impairment items,as follows:
Unit: RMB
| Name | Beginning balance | Ending balance | ||||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | Withdrawal proportion | Reason for withdraw | |
| Customer 1 | 1,470,110.64 | 1,470,110.64 | 1,470,110.64 | 1,470,110.64 | 100.00% | Difficult to recover |
| Customer 2 | 1,902,326.58 | 1,902,326.58 | 1,902,326.58 | 1,902,326.58 | 100.00% | Difficult to recover |
| Customer 3 | 6,215,662.64 | 6,215,662.64 | 6,215,662.64 | 6,215,662.64 | 100.00% | Difficult to recover |
| Customer 4 | 2,797,123.26 | 2,797,123.26 | 2,797,123.26 | 2,797,123.26 | 100.00% | Difficult to recover |
| Customer 5 | 2,322,278.50 | 2,322,278.50 | 2,322,278.50 | 2,322,278.50 | 100.00% | Difficult to recover |
| Customer 6 | 2,584,805.83 | 2,584,805.83 | 2,584,805.83 | 2,584,805.83 | 100.00% | Difficult to recover |
| Customer 7 | 1,726,935.65 | 1,726,935.65 | 1,726,935.65 | 1,726,935.65 | 100.00% | Difficult to recover |
| Total | 19,019,243.10 | 19,019,243.10 | 19,019,243.10 | 19,019,243.10 | -- | -- |
Provision for bad debts by combination: provision for bad debts by combination based on credit riskcharacteristics of RMB 103,523,078.88
Unit: RMB
| Item | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 1,170,588,490.37 | 23,411,769.80 | 2.00 % |
| 1 to 2 years | 2,314,925.52 | 115,746.28 | 5.00 % |
2 to 3 years
| 2 to 3 years | 4,064,067.81 | 609,610.17 | 15.00% |
| 3 to 4 years | 4,511,159.53 | 1,353,347.86 | 30.00% |
| 4 to 5 years | 841,163.98 | 504,698.39 | 60.00% |
| Over 5 years | 77,527,906.38 | 77,527,906.38 | 100.00% |
| Total | 1,259,847,713.59 | 103,523,078.88 |
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable:
□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Unit: RMB
| Category | Beginning balance | Changes in the current period | Ending balance | |||
| Withdrawal | Reversed or recovered | Verification | Others | |||
| Bad debt provision accrued by item | 21,058,702.18 | 21,058,702.18 | ||||
| Withdrawal of bad debt provision by group | 85,765,458.71 | 17,757,620.17 | 103,523,078.88 | |||
| Total | 106,824,160.89 | 17,757,620.17 | 124,581,781.06 | |||
Of which significant amount of recovered or transferred-back bad debt provision for the current period: None
(4) There were no accounts receivable with actual verification during the Reporting Period.
(5) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion to total ending balance of accounts receivable and contract assets | Ending balance of bad debt provision of accounts receivable and impairment provision for contract assets |
| Customer 1 | 646,622,440.97 | 0.00 | 646,622,440.97 | 50.48% | 12,932,448.83 |
| Customer 2 | 117,517,494.00 | 0.00 | 117,517,494.00 | 9.17% | 2,350,349.88 |
| Customer 3 | 70,421,083.72 | 0.00 | 70,421,083.72 | 5.50% | 1,408,421.67 |
| Customer 4 | 57,254,239.63 | 0.00 | 57,254,239.63 | 4.47% | 1,145,084.79 |
| Customer 5 | 48,331,650.00 | 0.00 | 48,331,650.00 | 3.77% | 966,633.00 |
| Total | 940,146,908.32 | 0.00 | 940,146,908.32 | 73.39% | 18,802,938.17 |
2. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 253,310,648.05 | 399,142,024.92 |
| Total | 253,310,648.05 | 399,142,024.92 |
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Cash deposit and Margin | 1,300.00 | 1,300.00 |
| Intercourse funds among units | 288,834,794.06 | 433,589,441.68 |
| Petty cash and borrowings by employees | 864,426.75 | 884,233.75 |
| Other | 13,616,314.29 | 13,638,079.94 |
| Total | 303,316,835.10 | 448,113,055.37 |
2) Disclosure by Aging
Unit: RMB
| Aging | Ending carrying amount | Beginning carrying amount |
| Within one year (including 1 year) | 164,027,411.09 | 308,824,779.36 |
| One to two years | 113,974,734.71 | 113,974,034.71 |
| Two to three years | 13,250.00 | 12,802.00 |
| More than three years | 25,301,439.30 | 25,301,439.30 |
| Three to four years | 30,000.00 | 30,000.00 |
| Four to five years | ||
| Over 5 years | 25,271,439.30 | 25,271,439.30 |
| Total | 303,316,835.10 | 448,113,055.37 |
3) Disclosure by Withdrawal Methods for Bad Debts
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
Expected creditloss in the next12 months
| Expected credit loss in the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
| Balance of 1 January 2024 | 46,873.20 | 16,709.10 | 48,907,448.15 | 48,971,030.45 |
| Balance of 1 January 2024 in the Current Period | —— | —— | —— | —— |
| --Transfer to Second stage | ||||
| -- Transfer to Third stage | ||||
| -- Reverse to Second stage | ||||
| -- Reverse to First stage | ||||
| Withdrawal of the Current Period | 1,035,156.60 | 1,035,156.60 | ||
| Reversal of the Current Period | ||||
| Write-offs of the Current Period | ||||
| Verification of the Current Period | ||||
| Other changes | ||||
| Balance of 30 June 2024 | 1,082,029.80 | 16,709.10 | 48,907,448.15 | 50,006,187.05 |
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
4) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation of bad debt provision withdrawn:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
Bad debtprovisionwithdrawnseparately
| Bad debt provision withdrawn separately | 21,844,634.06 | 1,015,568.60 | 22,860,202.66 | |||
| Bad debt provision withdrawn by group | 27,126,396.39 | 19,588.00 | 27,145,984.39 | |||
| Total | 48,971,030.45 | 1,035,156.6 | 50,006,187.05 |
5) There Were No Other Receivables with Actual Verification during the Reporting Period
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables | Ending balance of bad debt provision |
| Jiangsu Changchai Machinery Co., Ltd. | Intercourse funds | 237,954,416.88 | Within 1 year: 142,954,416.88, 1-2 years: 95,000,000 | 78.45% | |
| Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. | Intercourse funds | 17,557,631.35 | Within 1 year: 7,699,372.64, 1-2 years: 9,858,258.71 | 5.79% | 17,557,631.35 |
| Changzhou Changniu Machinery Co., Ltd. | Intercourse funds | 15,000,000.00 | 1-2 years | 4.95% | |
| Changzhou Compressors Factory | Intercourse funds | 2,940,000.00 | Over 5 years | 0.97% | 2,940,000.00 |
| Changchai Group Imp. & Exp. Co., Ltd. | Intercourse funds | 2,853,188.02 | Over 5 years | 0.94% | 2,853,188.02 |
| Total | 276,305,236.25 | 91.10% | 23,350,819.37 |
3. Long-term Equity Investment
Unit: RMB
Item
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Investment to subsidiaries | 583,443,530.03 | 7,000,000.00 | 576,443,530.03 | 583,443,530.03 | 7,000,000.00 | 576,443,530.03 |
| Investment to joint ventures and associated enterprises | 44,182.50 | 44,182.50 | 44,182.50 | 44,182.50 | ||
| Total | 583,487,712.53 | 7,044,182.50 | 576,443,530.03 | 583,487,712.53 | 7,044,182.50 | 576,443,530.03 |
(1) Investment to Subsidiaries
Unit: RMB
| Investee | Beginning balance (carrying value) | Beginning balance of depreciation reserve | Increase/decrease for the current period | Ending balance (Carrying value) | Ending balance of depreciation reserve | |||
| Additional investment | Reduced investment | Withdrawal of impairment provision | Others | |||||
| Changchai Wanzhou Diesel Engine Co., Ltd. | 51,000,000.00 | 51,000,000.00 | ||||||
| Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. | 96,466,500.00 | 96,466,500.00 | ||||||
| Changzhou Horizon Investment Co., Ltd. | 40,000,000.00 | 40,000,000.00 | ||||||
ChangzhouChangchaiHorizonAgriculturalEquipmentCo., Ltd.
| Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. | 0.00 | 7,000,000.00 | 0.00 | 7,000,000.00 | ||||
| Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. | 47,286,230.03 | 47,286,230.03 | ||||||
| Jiangsu Changchai Machinery Co., Ltd. | 300,000,000.00 | 300,000,000.00 | ||||||
| ChangzhouXingsheng Property Management Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||||
| Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. | 40,690,800.00 | 40,690,800.00 | ||||||
| Total | 576,443,530.03 | 7,000,000.00 | 576,443,530.03 | 7,000,000.00 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
| Investee | Beginning balance (carrying value) | Beginning balance of depreciation reserve | Increase/decrease for the current period | Ending balance (Carrying value) | Ending balance of depreciation reserve | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity metho | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Others | |||||
d
| d | ||||||||||||
| I. Joint ventures | ||||||||||||
| Subtotal | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||
| II. Associated enterprises | ||||||||||||
| Beijing Tsinghua Xingye Industrial Investment Management Co., Ltd. | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
| Subtotal | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
| Total | 0.00 | 44,182.50 | 0.00 | 44,182.50 | ||||||||
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairmenttests in prior years or external information: Not applicableThe reason for the discrepancy between the information used in the Company's impairment tests in prior years andthe actual situation of those years: Not applicable
4. Operating Revenue and Cost of Sales
Unit: RMB
| Item | Reporting Period | Same period of last year | ||
| Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
| Main operations | 1,366,413,377.99 | 1,162,530,395.97 | 1,229,806,219.61 | 1,080,327,550.17 |
| Other operations | 53,682,141.33 | 49,682,288.16 | 15,360,013.94 | 12,076,793.29 |
| Total | 1,420,095,519.32 | 1,212,212,684.13 | 1,245,166,233.55 | 1,092,404,343.46 |
Breakdown information of operating income and operating cost:
Unit: RMB
| Category of contracts | Segment 1 | Total | ||
| Operating Revenue | Operating cost | Operating Revenue | Operating cost | |
| Business Type | ||||
| Of which: | ||||
| Single-cylinder diesel engines | 432,998,950.52 | 390,766,306.02 | 432,998,950.52 | 390,766,306.02 |
| Multi-cylinder diesel engines | 850,224,657.96 | 697,174,644.25 | 850,224,657.96 | 697,174,644.25 |
| Other products | 47,669,282.15 | 41,574,102.80 | 47,669,282.15 | 41,574,102.80 |
| Fittings | 35,520,487.36 | 33,015,342.90 | 35,520,487.36 | 33,015,342.90 |
| Classification by operating region | ||||
| Of which: | ||||
| Sales in domestic market | 1,253,777,712.59 | 1,058,680,312.47 | 1,253,777,712.59 | 1,058,680,312.47 |
| Export sales | 112,635,665.40 | 103,850,083.50 | 112,635,665.40 | 103,850,083.50 |
| Total | 1,366,413,377.99 | 1,162,530,395.97 | 1,366,413,377.99 | 1,162,530,395.97 |
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0 at the period-end.
5. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Dividend income from holding of other equity instrument investment | 10,998,000.00 | |
| Interest income from holding of debt obligation investments | 499,852.62 | 705,680.77 |
| Investment income obtained from financial products | 3,180,749.07 | 4,322,777.77 |
| Income from refinancing operations | 74,524.00 | 14,396.97 |
| Accounts receivable financing-discount interest of bank acceptance bills | -1,300,004.16 | -2,310,613.28 |
| Total | 13,453,121.53 | 2,732,242.23 |
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
Gains and losses from the disposal of non currentassets (including the offsetting portion ofimpairment provisions already made for assets)
| 408,245.54 | ||
| Government grants recognised in profit or loss (exclusive of those that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 193,085.00 | Government grants charged to current profit and loss amounted to RMB1,953,702.37, the amount deducting deferred income and charged to current profit and loss was RMB1,704,864.73. |
| Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | -18,684,594.97 | The company received stock dividends from Jiangsu Bank Co., Ltd. held by the company, the wealth management income generated from cash management and the decrease in the fair value of the shares held by wholly-owned subsidiary Horizon Investment in Jiangsu Liance Electromechanical Technology Co., Ltd., and Kailong High Technology Co., Ltd. |
| Other non-operating income and expenses other than the above | 803,200.60 | |
| Less: Income tax effects | -7,709,542.20 | |
| Non-controlling interests effects (net of tax) | 178,088.19 | |
| Total | -9,748,609.82 | -- |
Others that meets the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
| Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
| EPS-basic | EPS-diluted | ||
| Net profit attributable to ordinary shareholders of the Company | 1.47% | 0.0710 | 0.0710 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 1.76% | 0.0848 | 0.0848 |
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance withInternational Accounting Standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance withOverseas Accounting Standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data Under Domestic and OverseasAccounting Standards; for Any Adjustment Made to the Difference Existing in the Data Audited by theForeign Auditing Agent, Such Foreign Auditing Agent's Name Shall Be Clearly Stated
□ Applicable √ Not applicable
The Board of DirectorsChangchai Company, Limited
23 August 2024