Changchai Company, LimitedFinancial Report For the Year 2020I Independent Auditor’s Report
| Type of the independent auditor’s opinion | Unmodified unqualified opinion |
| Date of signing this report | 13 April 2021 |
| Name of the independent auditor | Gongzheng Tianye Certified Public Accountants (Special General Partnership) |
| No. of the auditor’s report | SGW[2021]ANo.359 |
| Name of the certified public accountants | Dai Weizhong, Xu Wenxiang |
Text of the Independent Auditor’s ReportTo the Shareholders of Changchai Company, Limited,
I OpinionWe have audited the accompanying financial statements of Changchai Company, Limited. (together with itsconsolidated subsidiaries included in the consolidated financial statements, the “Company”), which comprise theparent’s and consolidated balance sheets as at 31 December 2020, the parent’s and consolidated income statements,the parent’s and consolidated cash flow statements, the parent’s and consolidated statements of changes in owners’equity for the year then ended, as well as the notes to the financial statements.In our opinion, the financial statements attached were prepared in line with the regulations of AccountingStandards for Business Enterprises in all significant aspects which gave a true and fair view of the consolidatedand parent financial position of Changchai Company, Limited. as at 31 December 2020 and the consolidated andparent business performance and cash flow for 2020.II Basis for OpinionWe conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Ourresponsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of FinancialStatements section of our report. We are independent of the Company in accordance with the China Code ofEthics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance withthe said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.III Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. And key audit matter identified in our audit is summarized as follows:
(I) Recognition of revenue
1. Description of the item
For details of accounting policies governing revenue recognition, please refer to the Note III-28 Revenue and theNote V-35 Operating Revenue and Cost of Sales. The operating revenue of the Company in 2020 isRMB2,296,464,700.Since the operating revenue is one of key performance indicators of the Company, and there is the inherent riskthat the management may manipulate the timing of revenue recognition for the purpose of achieving certain goalsor expectations, so we identify the revenue recognition as a key audit item.
2. Response for audit
(1) Know the key internal control related to revenue recognition, evaluate whether its design and execution arevalid or not, and test the operation effectiveness of the related internal control.
(2) Interview the management, know about the recognition policies regarding revenue of the Company, get andcheck contracts or agreements of the Company signed with customers, identify contract terms related to therecognition of sales revenue of products and evaluate whether the revenue recognition of the Company meets therequirements of accounting standards for business enterprises.
(3) Check the supporting documents related to revenue recognition, such as sales contracts, order form, invoicefor sales, shipping order, declaration for exportation, and etc.
(4) Check the operating revenue recognized before and after the balance sheet date to the supporting documents,such as shipping order, declaration for exportation, and etc by sampling method to assess whether the operatingrevenue is recognized within appropriate period.
(5) Implement the confirmation by drawing sample to recognize the balance of accounts receivable and theamount of sales revenue according to the features and natures of customer transaction.(II) Bad debt provision for accounts receivable
1. Description of the item
Please refer to the accounting policies stipulated in the Note III-10 Impairment of Financial Instruments and theNote V-4 Accounts Receivable. On 31 December 2020, as for accounts receivable of the Company, the carryingamount was RMB563.1894 million, the bad debt provision was RMB166.0354 million, and the carrying valuewas RMB397.154 million, accounting for 10.05% of total assets at the period-end. The bad debt of accountsreceivable due to failure of recovery at maturity or failure of recovery will generate significant impacts onfinancial statements, thus, we identify the impairment of accounts receivable as a key audit item.
2. Response for audit
(1) Access Changchai’s internal control systems of sales and accounts receivable management to understand andevaluate the design of internal control, and carry out walk-through test to confirm the implementation of internalcontrol systems.
(2) Analyze and confirm the reasonableness of Changchai’s accounting estimates of bad debt provision foraccounts receivable, including the basis for determining the combination of accounts receivable, the expectedcredit loss rate and the judgment of impairment test of accounts receivable evaluated individually.
(3) Access and check the account receivable details, aging schedule, statement of provisions for bad debts, andconfirm the reasonableness of bad debt provision for accounts receivable by combining with the request ofconfirmation of balance and subsequent collection inspection;
(4) Understand the reasons for accounts receivable, check Changchai’s reconciliation and collection during thereporting period and any other data related to payment recovery, verify and confirm its accounts receivablewithout transaction dispute at the end of the reporting period, as well as the adequacy of bad debt provision foraccounts receivable.
(5) Send request for confirmation of balance, and confirm the authenticity and accuracy of the amount of accountsreceivable on the balance sheet date by combining with subsequent inspection and other procedures.IV Other InformationThe Company’s management (hereinafter referred to as “management”) is responsible for the other information.The other information comprises all of the information included in the Company’s 2020 Annual Report other thanthe financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we haveperformed, we conclude that there is a material misstatement of this other information; we are required to reportthat fact. We have nothing to report in this regard.V Responsibilities of Management and Those Charged with Governance for Financial StatementsThe management is responsible for the preparation of the financial statements that give a fair view in accordancewith CAS, and for designing, implementing and maintaining such internal control as the management determinesis necessary to enable the preparation of financial statements that are free from material misstatement, whetherdue to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing, matters related to going concern and using the going concern basis ofaccounting unless the management either intends to liquidate the Company or to cease operations, or have norealistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI Auditor’s Responsibilities for Audit of Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or errorand are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by CAS to draw users’ attention in our auditor’s report to the relateddisclosures in the financial statements. If such disclosures are inadequate, we need to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future eventsor conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the Company to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding the planned scope and timing of the audit andsignificant audit findings, including any noteworthy deficiencies in internal control that we identify during ouraudit.We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguards.From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Gongzheng Tianye Certified Public Accountants Chinese CPA Dai Weizhong(Special General Partnership) (Engagement Partner)
Chinese CPA Xu WenxiangWuxi · China 13 April 2021II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
31 December 2020
Unit: RMB
| Item | 31 December 2020 | 31 December 2019 |
| Current assets: | ||
| Monetary assets | 760,728,222.85 | 638,589,260.09 |
| Settlement reserve | ||
| Interbank loans granted | ||
| Held-for-trading financial assets | 11,500,272.00 | 13,050,000.00 |
| Derivative financial assets | ||
| Notes receivable | 600,140,938.05 | 606,283,023.05 |
| Accounts receivable | 397,154,016.49 | 419,302,056.87 |
| Accounts receivable financing | ||
| Prepayments | 9,357,840.75 | 12,968,746.16 |
| Premiums receivable | ||
| Reinsurance receivables | ||
| Receivable reinsurance contract reserve | ||
| Other receivables | 6,212,062.80 | 9,703,390.94 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under |
| resale agreements | ||
| Inventories | 606,680,340.55 | 473,359,168.90 |
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 27,299,362.72 | 6,421,275.47 |
| Total current assets | 2,419,073,056.21 | 2,179,676,921.48 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | ||
| Investments in other equity instruments | 685,137,950.87 | 532,886,000.00 |
| Other non-current financial assets | 98,732,938.63 | 77,952,101.63 |
| Investment property | 46,239,326.03 | 48,447,666.83 |
| Fixed assets | 454,181,555.68 | 457,722,667.32 |
| Construction in progress | 66,502,432.41 | 91,358,156.24 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 158,870,631.71 | 99,699,450.26 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | 13,693.20 | 53,497.80 |
| Deferred income tax assets | 4,231,873.15 | 1,023,863.04 |
| Other non-current assets | 19,971,006.56 | |
| Total non-current assets | 1,533,881,408.24 | 1,309,143,403.12 |
| Total assets | 3,952,954,464.45 | 3,488,820,324.60 |
| Current liabilities: | ||
| Short-term borrowings | 22,000,000.00 | 22,000,000.00 |
| Borrowings from the central bank | ||
| Interbank loans obtained | ||
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 595,346,000.00 | 403,035,000.00 |
| Accounts payable | 612,757,392.46 | 525,625,016.89 |
| Advances from customers | 661,612.17 | 31,789,001.78 |
| Contract liabilities | 35,944,517.15 | |
| Financial assets sold under |
| repurchase agreements | ||
| Customer deposits and interbank deposits | ||
| Payables for acting trading of securities | ||
| Payables for underwriting of securities | ||
| Employee benefits payable | 50,127,161.47 | 44,559,015.79 |
| Taxes payable | 2,869,485.41 | 9,094,382.58 |
| Other payables | 197,545,076.08 | 205,064,145.10 |
| Including: Interest payable | ||
| Dividends payable | 3,891,433.83 | 3,891,433.83 |
| Handling charges and commissions payable | ||
| Reinsurance payables | ||
| Liabilities directly associated with assets held for sale | ||
| Current portion of non-current liabilities | ||
| Other current liabilities | 5,233,947.12 | 1,177,712.38 |
| Total current liabilities | 1,522,485,191.86 | 1,242,344,274.52 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 56,949,737.60 | 58,864,111.22 |
| Deferred income tax liabilities | 80,671,598.82 | 57,082,890.27 |
| Other non-current liabilities | ||
| Total non-current liabilities | 137,621,336.42 | 115,947,001.49 |
| Total liabilities | 1,660,106,528.28 | 1,358,291,276.01 |
| Owners’ equity: | ||
| Share capital | 561,374,326.00 | 561,374,326.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 164,328,665.43 | 164,328,665.43 |
| Less: Treasury stock | ||
| Other comprehensive income | 425,482,758.24 | 317,059,775.00 |
| Specific reserve | 18,812,986.55 | 17,560,202.07 |
| Surplus reserves | 325,451,531.14 | 322,228,533.72 |
| General reserve | ||
| Retained earnings | 777,899,079.66 | 728,341,265.36 |
| Total equity attributable to owners of the Company as the parent | 2,273,349,347.02 | 2,110,892,767.58 |
| Non-controlling interests | 19,498,589.15 | 19,636,281.01 |
| Total owners’ equity | 2,292,847,936.17 | 2,130,529,048.59 |
| Total liabilities and owners’ equity | 3,952,954,464.45 | 3,488,820,324.60 |
Legal representative: Shi Xinkun General Manager: Zhang XinHead of the accounting department: Jiang He
2. Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 31 December 2020 | 31 December 2019 |
| Current assets: | ||
| Monetary assets | 682,322,659.41 | 584,957,678.96 |
| Held-for-trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 581,230,938.05 | 576,948,023.05 |
| Accounts receivable | 317,828,161.25 | 337,447,538.04 |
| Accounts receivable financing | ||
| Prepayments | 6,592,567.26 | 6,386,284.14 |
| Other receivables | 24,327,355.36 | 22,741,542.22 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 475,688,026.57 | 368,653,472.39 |
| Contract assets | ||
| Assets held for sale | ||
| Current portion of non-current assets | ||
| Other current assets | 17,521,203.46 | 3,898,333.51 |
| Total current assets | 2,105,510,911.36 | 1,901,032,872.31 |
| Non-current assets: | ||
| Investments in debt obligations | ||
| Investments in other debt obligations | ||
| Long-term receivables | ||
| Long-term equity investments | 375,752,730.03 | 252,752,730.03 |
| Investments in other equity instruments | 685,137,950.87 | 532,886,000.00 |
| Other non-current financial assets | 52,500,000.00 | 50,000,000.00 |
| Investment property | 46,239,326.03 | 48,447,666.83 |
| Fixed assets | 369,194,314.03 | 364,071,199.07 |
| Construction in progress | 26,195,189.06 | 89,330,161.60 |
| Productive living assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 68,088,982.37 | 70,169,770.91 |
| Development costs | ||
| Goodwill | ||
| Long-term prepaid expense | ||
| Deferred income tax assets | 4,179,544.86 | 970,026.67 |
| Other non-current assets | ||
| Total non-current assets | 1,627,288,037.25 | 1,408,627,555.11 |
| Total assets | 3,732,798,948.61 | 3,309,660,427.42 |
| Current liabilities: | ||
| Short-term borrowings | 5,000,000.00 | 5,000,000.00 |
| Held-for-trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 589,534,000.00 | 392,105,000.00 |
| Accounts payable | 550,360,564.07 | 481,854,210.18 |
| Advances from customers | 661,612.17 | 28,673,664.87 |
| Contract liabilities | 32,344,514.86 | |
| Employee benefits payable | 42,455,158.67 | 39,125,477.30 |
| Taxes payable | 1,099,861.63 | 5,952,664.10 |
| Other payables | 184,513,545.20 | 192,046,130.29 |
| 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 | 2,426,575.40 | |
| Total current liabilities | 1,408,395,832.00 | 1,144,757,146.74 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 56,949,737.60 | 58,864,111.22 |
| Deferred income tax liabilities | 75,460,192.63 | 55,951,725.00 |
| Other non-current liabilities | ||
| Total non-current liabilities | 132,409,930.23 | 114,815,836.22 |
| Total liabilities | 1,540,805,762.23 | 1,259,572,982.96 |
| Owners’ equity: | ||
| Share capital | 561,374,326.00 | 561,374,326.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 183,071,147.70 | 183,071,147.70 |
| Less: Treasury stock | ||
| Other comprehensive income | 425,482,758.24 | 317,059,775.00 |
| Specific reserve | 18,812,986.55 | 17,560,202.07 |
| Surplus reserves | 325,451,531.14 | 322,228,533.72 |
| Retained earnings | 677,800,436.75 | 648,793,459.97 |
| Total owners’ equity | 2,191,993,186.38 | 2,050,087,444.46 |
| Total liabilities and owners’ equity | 3,732,798,948.61 | 3,309,660,427.42 |
3. Consolidated Income Statement
Unit: RMB
| Item | 2020 | 2019 |
| 1. Revenue | 2,296,464,711.24 | 2,045,820,801.10 |
| Including: Operating revenue | 2,296,464,711.24 | 2,045,820,801.10 |
| Interest income | ||
| Insurance premium income | ||
| Handling charge and commission income | ||
| 2. Costs and expenses | 2,267,289,166.18 | 1,991,399,859.93 |
| Including: Cost of sales | 1,950,573,991.27 | 1,714,533,867.50 |
| 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 | 12,869,609.15 | 10,980,115.06 |
| Selling expense | 128,372,278.62 | 97,085,117.05 |
| Administrative expense | 87,446,195.74 | 107,015,957.41 |
| R&D expense | 72,258,781.08 | 66,221,376.27 |
| Finance costs | 15,768,310.32 | -4,436,573.36 |
| Including: Interest expense | 8,084,428.03 | 5,722,554.43 |
| Interest income | 6,249,975.99 | 6,733,183.88 |
| Add: Other income | 7,808,732.52 | 5,324,358.80 |
| Return on investment (“-” for loss) | 6,545,826.85 | 8,010,260.85 |
| 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) | 20,981,109.00 | -49,255.00 |
| Credit impairment loss (“-” for loss) | 2,378,630.68 | -925,811.28 |
| Asset impairment loss (“-” for loss) | -11,155,930.76 | -42,371,202.17 |
| Asset disposal income (“-” for loss) | 229,121.29 | 2,059,668.56 |
| 3. Operating profit (“-” for loss) | 55,963,034.64 | 26,468,960.93 |
| Add: Non-operating income | 1,047,114.21 | 462,351.48 |
| Less: Non-operating expense | 2,629,797.33 | 231,938.89 |
| 4. Profit before tax (“-” for loss) | 54,380,351.52 | 26,699,373.52 |
| Less: Income tax expense | 2,085,600.33 | 1,715,045.77 |
| 5. Net profit (“-” for net loss) | 52,294,751.19 | 24,984,327.75 |
| 5.1 By operating continuity | ||
| 5.1.1 Net profit from continuing operations (“-” for net loss) | 52,294,751.19 | 24,984,327.75 |
| 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 | 52,432,443.05 | 24,966,526.85 |
| 5.2.1 Net profit attributable to non-controlling interests | -137,691.86 | 17,800.90 |
| 6. Other comprehensive income, net of tax | 108,771,351.91 | 52,654,100.00 |
| Attributable to owners of the Company as the parent | 108,771,351.91 | 52,654,100.00 |
| 6.1 Items that will not be reclassified to profit or loss | 108,771,351.91 | 52,654,100.00 |
| 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 | 108,771,351.91 | 52,654,100.00 |
| 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 | 161,066,103.10 | 77,638,427.75 |
| Attributable to owners of the Company as the parent | 161,203,794.96 | 77,620,626.85 |
| Attributable to non-controlling interests | -137,691.86 | 17,800.90 |
| 8. Earnings per share | ||
| 8.1 Basic earnings per share | 0.0934 | 0.0445 |
| 8.2 Diluted earnings per share | 0.0934 | 0.0445 |
Legal representative: Shi Xinkun General Manager: Zhang XinHead of the accounting department: Jiang He
4. Income Statement of the Company as the Parent
Unit: RMB
| Item | 2020 | 2019 |
| 1. Operating revenue | 2,123,200,238.11 | 1,866,291,739.39 |
| Less: Cost of sales | 1,823,443,404.79 | 1,575,626,989.46 |
| Taxes and surcharges | 10,349,672.15 | 8,407,285.53 |
| Selling expense | 110,774,087.06 | 89,281,567.68 |
| Administrative expense | 70,342,720.73 | 89,269,943.25 |
| R&D expense | 67,074,041.38 | 60,705,823.99 |
| Finance costs | 10,879,173.24 | -7,320,351.23 |
| Including: Interest expense | 5,197,914.71 | 3,477,128.23 |
| Interest income | 6,017,663.50 | 6,955,017.26 |
| Add: Other income | 5,478,200.87 | 3,864,303.74 |
| Return on investment (“-” for loss) | 5,437,925.05 | 6,206,814.50 |
| 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) | 2,500,000.00 | |
| Credit impairment loss (“-” for loss) | 2,599,053.83 | 755,537.33 |
| Asset impairment loss (“-” for loss) | -18,384,759.06 | -41,914,242.93 |
| Asset disposal income (“-” for loss) | 80,014.23 | 2,072,367.71 |
| 2. Operating profit (“-” for loss) | 28,047,573.68 | 21,305,261.06 |
| Add: Non-operating income | 542,506.89 | 13,825.00 |
| Less: Non-operating expense | 262,488.62 | 141,118.07 |
| 3. Profit before tax (“-” for loss) | 28,327,591.95 | 21,177,967.99 |
| Less: Income tax expense | -3,554,013.58 | 236,773.02 |
| 4. Net profit (“-” for net loss) | 31,881,605.53 | 20,941,194.97 |
| 4.1 Net profit from continuing operations (“-” for net loss) | 31,881,605.53 | 20,941,194.97 |
| 4.2 Net profit from |
| discontinued operations (“-” for net loss) | ||
| 5. Other comprehensive income, net of tax | 108,771,351.91 | 52,654,100.00 |
| 5.1 Items that will not be reclassified to profit or loss | 108,771,351.91 | 52,654,100.00 |
| 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 | 108,771,351.91 | 52,654,100.00 |
| 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 | 140,652,957.44 | 73,595,294.97 |
| 7. Earnings per share | ||
| 7.1 Basic earnings per share | ||
| 7.2 Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Item | 2020 | 2019 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 2,230,952,492.49 | 2,178,835,433.27 |
| 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 | 33,693,741.46 | 42,607,617.45 |
| Cash generated from other operating activities | 16,977,100.96 | 11,790,596.40 |
| Subtotal of cash generated from operating activities | 2,281,623,334.91 | 2,233,233,647.12 |
| Payments for commodities and services | 1,571,967,433.96 | 1,824,178,697.91 |
| 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 | 294,472,502.80 | 287,894,549.87 |
| Taxes paid | 39,853,712.33 | 19,999,117.04 |
| Cash used in other operating activities | 123,533,031.29 | 121,486,471.86 |
| Subtotal of cash used in operating activities | 2,029,826,680.38 | 2,253,558,836.68 |
| Net cash generated from/used in operating activities | 251,796,654.53 | -20,325,189.56 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 557,198,253.76 | 15,101,882.58 |
| Return on investment | 6,545,826.85 | 8,546,765.69 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 275,546.00 | 326,835.85 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | 336,150.00 | |
| Subtotal of cash generated from investing activities | 564,355,776.61 | 23,975,484.12 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 133,737,262.64 | 39,236,511.40 |
| Payments for investments | 579,733,766.76 | 65,930,496.31 |
| Net increase in pledged loans granted | ||
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | 4,141,850.71 | |
| Subtotal of cash used in investing activities | 717,612,880.11 | 105,167,007.71 |
| Net cash generated from/used in investing activities | -153,257,103.50 | -81,191,523.59 |
| 3. Cash flows from financing activities: |
| Capital contributions received | ||
| Including: Capital contributions by non-controlling interests to subsidiaries | ||
| Borrowings raised | 22,000,000.00 | 34,000,000.00 |
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 22,000,000.00 | 34,000,000.00 |
| Repayment of borrowings | 22,000,000.00 | 59,500,000.00 |
| Interest and dividends paid | 3,232,890.38 | 19,005,058.96 |
| Including: Dividends paid by subsidiaries to non-controlling interests | ||
| Cash used in other financing activities | 2,500,000.00 | |
| Subtotal of cash used in financing activities | 27,732,890.38 | 78,505,058.96 |
| Net cash generated from/used in financing activities | -5,732,890.38 | -44,505,058.96 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | -8,827,118.35 | 715,396.97 |
| 5. Net increase in cash and cash equivalents | 83,979,542.30 | -145,306,375.14 |
| Add: Cash and cash equivalents, beginning of the period | 545,959,998.20 | 691,266,373.34 |
| 6. Cash and cash equivalents, end of the period | 629,939,540.50 | 545,959,998.20 |
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
| Item | 2020 | 2019 |
| 1. Cash flows from operating activities: | ||
| Proceeds from sale of commodities and rendering of services | 1,963,288,154.66 | 1,911,679,765.84 |
| Tax rebates | 25,903,016.36 | 34,035,423.13 |
| Cash generated from other operating activities | 9,006,278.01 | 9,754,947.38 |
| Subtotal of cash generated from operating activities | 1,998,197,449.03 | 1,955,470,136.35 |
| Payments for commodities and services | 1,388,644,147.32 | 1,637,576,894.25 |
| Cash paid to and for employees | 247,717,051.40 | 237,310,147.26 |
| Taxes paid | 26,755,852.89 | 8,675,558.38 |
| Cash used in other operating activities | 110,744,198.57 | 107,932,998.05 |
| Subtotal of cash used in operating activities | 1,773,861,250.18 | 1,991,495,597.94 |
| Net cash generated from/used in operating activities | 224,336,198.85 | -36,025,461.59 |
| 2. Cash flows from investing activities: | ||
| Proceeds from disinvestment | 500,487.00 | 4,000,000.00 |
| Return on investment | 5,437,925.05 | 6,206,814.50 |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 183,890.00 | 297,935.85 |
| Net proceeds from the disposal of subsidiaries and other business units | ||
| Cash generated from other investing activities | 9,718,669.72 | 9,500,000.00 |
| Subtotal of cash generated from investing activities | 15,840,971.77 | 20,004,750.35 |
| Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 4,071,225.07 | 30,078,441.85 |
| Payments for investments | 154,786,000.00 | 60,000,000.00 |
| Net payments for the acquisition of subsidiaries and other business units | ||
| Cash used in other investing activities | 9,000,000.00 | 9,500,000.00 |
| Subtotal of cash used in investing activities | 167,857,225.07 | 99,578,441.85 |
| Net cash generated from/used in investing activities | -152,016,253.30 | -79,573,691.50 |
| 3. Cash flows from financing activities: | ||
| Capital contributions received | ||
| Borrowings raised | 5,000,000.00 | 5,000,000.00 |
| Cash generated from other financing activities | ||
| Subtotal of cash generated from financing activities | 5,000,000.00 | 5,000,000.00 |
| Repayment of borrowings | 5,000,000.00 | 28,500,000.00 |
| Interest and dividends paid | 1,027,748.70 | 16,009,069.84 |
| Cash used in other financing activities | 2,500,000.00 | |
| Subtotal of cash used in financing activities | 8,527,748.70 | 44,509,069.84 |
| Net cash generated from/used in financing activities | -3,527,748.70 | -39,509,069.84 |
| 4. Effect of foreign exchange rates changes on cash and cash equivalents | -6,995,969.85 | 1,031,120.95 |
| 5. Net increase in cash and cash equivalents | 61,796,227.00 | -154,077,101.98 |
| Add: Cash and cash equivalents, beginning of the period | 497,777,104.81 | 651,854,206.79 |
| 6. Cash and cash equivalents, end of the period | 559,573,331.81 | 497,777,104.81 |
7. Consolidated Statements of Changes in Owners’ Equity
2020
Unit: RMB
| Item | 2020 | ||||||||||||||
| 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 | 561,374,326.00 | 164,328,665.43 | 317,059,775.00 | 17,560,202.07 | 322,226,700.34 | 726,689,929.10 | 2,109,239,597.94 | 19,636,281.01 | 2,128,875,878.95 | ||||||
| the prior year | |||||||||||||||
| Add: Adjustment for change in accounting policy | |||||||||||||||
| Adjustment for correction of previous error | 1,833.38 | 1,651,336.26 | 1,653,169.64 | 1,653,169.64 | |||||||||||
| Adjustment for business |
| combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the year | 561,374,326.00 | 164,328,665.43 | 317,059,775.00 | 17,560,202.07 | 322,228,533.72 | 728,341,265.36 | 2,110,892,767.58 | 19,636,281.01 | 2,130,529,048.59 | ||||||
| 3. Increase/ decrease in the perio | 108,422,983.24 | 1,252,784.48 | 3,222,997.42 | 49,557,814.30 | 162,456,579.44 | -137,691.86 | 162,318,887.58 |
| d (“-” for decrease) | |||||||||||||||
| 3.1 Total comprehensive income | 108,771,351.91 | 52,432,443.05 | 161,203,794.96 | -137,691.86 | 161,066,103.10 | ||||||||||
| 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 | 3,222,997.42 | -3,222,997.42 | |||||||||||||
| 3.3.1 Appropriation to surplus reserves | 3,222,997.42 | -3,222,997.42 | |||||||||||||
| 3.3.2 Appropriation to general reserve |
| 3.3.3 Appropriation to owners (or shareholders) | |||||||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | -348,368.67 | 348,368.67 | |||||||||||||
| 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 | -348,368.67 | 348,368.67 | |||||||||||||
| 3.5 Specific reserve | 1,252,784.48 | 1,252,784.48 | 1,252,784.48 | ||||||||||||
| 3.5.1 Increase in the period | 3,766,291.74 | 3,766,291.74 | 3,766,291.74 | ||||||||||||
| 3.5.2 Used in the period | 2,513,507.26 | 2,513,507.26 | 2,513,507.26 | ||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Bala | 561,374,326.00 | 164,328,665.43 | 425,482,758.24 | 18,812,986.55 | 325,451,531.14 | 777,899,079.66 | 2,273,349,347.02 | 19,498,589.15 | 2,292,847,936.17 |
2019
Unit: RMB
nceas attheendoftheperiod
Item
| Item | 2019 | ||||||||||||||
| 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 prior year | 561,374,326.00 | 164,328,665.43 | 264,405,675.00 | 15,182,958.83 | 320,133,050.15 | 717,883,351.33 | 2,043,308,026.74 | 19,618,480.11 | 2,062,926,506.85 | ||||||
| Add: Adjustment for change in accounti | |||||||||||||||
| ng policy | |||||||||||||||
| Adjustment for correction of previous error | 1,364.08 | 1,619,864.82 | 1,621,228.90 | 1,621,228.90 | |||||||||||
| Adjustment for business combination under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| 2. Balance as at the beginning of the year | 561,374,326.00 | 164,328,665.43 | 264,405,675.00 | 15,182,958.83 | 320,134,414.23 | 719,503,216.15 | 2,044,929,255.64 | 19,618,480.11 | 2,064,547,735.75 | ||||||
| 3. Increase/ decrease in the | 52,654,100.00 | 2,377,243.24 | 2,094,119.49 | 8,838,049.21 | 65,963,511.94 | 17,800.90 | 65,981,312.84 |
| period (“-” for decrease) | |||||||||||||||
| 3.1 Total comprehensive income | 52,654,100.00 | 24,966,526.85 | 77,620,626.85 | 17,800.90 | 77,638,427.75 | ||||||||||
| 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 | 2,094,119.49 | -16,128,477.64 | -14,034,358.15 | -14,034,358.15 | |||||||||||
| 3.3.1 Appropriation to surplus reserves | 2,094,119.49 | -2,094,119.49 | |||||||||||||
| 3.3.2 Appropriation to general reserve |
| 3.3.3 Appropriation to owners (or shareholders) | -14,034,358.15 | -14,034,358.15 | -14,034,358.15 | ||||||||||||
| 3.3.4 Other | |||||||||||||||
| 3.4 Transfers within owners’ equity | |||||||||||||||
| 3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 3.4.2 Increase in capital (or share |
| capital) from surplus reserves | |||||||||||||||
| 3.4.3 Loss offset by surplus reserves | |||||||||||||||
| 3.4.4 Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 3.4.5 Other comprehensive income transferred to retained |
| earnings | |||||||||||||||
| 3.4.6 Other | |||||||||||||||
| 3.5 Specific reserve | 2,377,243.24 | 2,377,243.24 | 2,377,243.24 | ||||||||||||
| 3.5.1 Increase in the period | 3,868,727.07 | 3,868,727.07 | 3,868,727.07 | ||||||||||||
| 3.5.2 Used in the period | 1,491,483.83 | 1,491,483.83 | 1,491,483.83 | ||||||||||||
| 3.6 Other | |||||||||||||||
| 4. Balance as at the end of the period | 561,374,326.00 | 164,328,665.43 | 317,059,775.00 | 17,560,202.07 | 322,228,533.72 | 728,341,265.36 | 2,110,892,767.58 | 19,636,281.01 | 2,130,529,048.59 |
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2020
Unit: RMB
| Item | 2020 | |||||||||||
| 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 prior year | 561,374,326.00 | 183,071,147.70 | 317,059,775.00 | 17,560,202.07 | 322,226,700.34 | 648,776,959.53 | 2,050,069,110.64 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | 1,833.38 | 16,500.44 | 18,333.82 | |||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the year | 561,374,326.00 | 183,071,147.70 | 317,059,775.00 | 17,560,202.07 | 322,228,533.72 | 648,793,459.97 | 2,050,087,444.46 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 108,422,983.24 | 1,252,784.48 | 3,222,997.42 | 29,006,976.78 | 141,905,741.92 | |||||||
| 3.1 Total comprehensive income | 108,771,351.91 | 31,881,605.53 | 140,652,957.44 | |||||||||
| 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 | 3,222,997.42 | -3,222,997.42 | ||||||||||
| 3.3.1 Appropriation to surplus reserves | 3,222,997.42 | -3,222,997.42 | ||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | ||||||||||||
| 3.3.3 Other | ||||||||||||
| 3.4 Transfers within owners’ equity | -348,368.67 | 348,368.67 | ||||||||||
| 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 | -348,368.67 | 348,368.67 | ||||||||||
| 3.4.6 Other | ||||||||||||
| 3.5 | 1,252,784. | 1,252,784.48 |
| Specific reserve | 48 | |||||||||||
| 3.5.1 Increase in the period | 3,766,291.74 | 3,766,291.74 | ||||||||||
| 3.5.2 Used in the period | 2,513,507.26 | 2,513,507.26 | ||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 561,374,326.00 | 183,071,147.70 | 425,482,758.24 | 18,812,986.55 | 325,451,531.14 | 677,800,436.75 | 2,191,993,186.38 |
2019
Unit: RMB
| Item | 2019 | |||||||||||
| 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 prior year | 561,374,326.00 | 183,071,147.70 | 264,405,675.00 | 15,182,958.83 | 320,133,050.15 | 643,968,465.93 | 1,988,135,623.61 | |||||
| Add: Adjustment for change in accounting policy | ||||||||||||
| Adjustment for correction of previous error | 1,364.08 | 12,276.71 | 13,640.79 | |||||||||
| Other adjustments | ||||||||||||
| 2. Balance as at the beginning of the year | 561,374,326.00 | 183,071,147.70 | 264,405,675.00 | 15,182,958.83 | 320,134,414.23 | 643,980,742.64 | 1,988,149,264.40 | |||||
| 3. Increase/ decrease in the period (“-” for decrease) | 52,654,100.00 | 2,377,243.24 | 2,094,119.49 | 4,812,717.33 | 61,938,180.06 | |||||||
| 3.1 Total comprehensive income | 52,654,100.00 | 20,941,194.97 | 73,595,294.97 | |||||||||
| 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 | 2,094,119.49 | -16,128,477.64 | -14,034,358.15 | |||||||||
| 3.3.1 Appropriation to surplus reserves | 2,094,119.49 | -2,094,119.49 | ||||||||||
| 3.3.2 Appropriation to owners (or shareholders) | -14,034,358.15 | -14,034,358.15 | ||||||||||
| 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 | 2,377,243.24 | 2,377,243.24 | ||||||||||
| 3.5.1 Increase in the period | 3,868,727.07 | 3,868,727.07 | ||||||||||
| 3.5.2 Used in the period | 1,491,483.83 | 1,491,483.83 | ||||||||||
| 3.6 Other | ||||||||||||
| 4. Balance as at the end of the period | 561,374,326.00 | 183,071,147.70 | 317,059,775.00 | 17,560,202.07 | 322,228,533.72 | 648,793,459.97 | 2,050,087,444.46 |
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. As at 31 December 2015,the total share capital of the Company is 561,374,326.00 shares, as well as registered capital ofRMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants CompanyLimited with issuing Capital Verification Report SGC [2010] No. B002. And the unified social credit code of theenterprise 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 Shareholders’ General Meeting, the Board of Directors and the SupervisoryCommittee, Corporate office, Financial Department, Political Department, Investment and DevelopmentDepartment, Audit Department, Human Recourses Department, Production Department, Procurement Department,Sales Company, Chief Engineer Office, Technology Center, QA Department, Foundry Branch, MachineProcessing Branch, Single-cylinder Engine branch, Multi-cylinder Engine Branch and Overseas BusinessDepartment in the Company.The financial report has been approved to be issued by the Board of Directors on 13 April 2021.The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 7subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation, please
refer to the changes of the consolidated scope of the notes to the financial report and the notes to the 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 2014)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. 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 business
reputation. 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.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actualcontrol right into the consolidated financial statement.The consolidated financial statement of the Company is compiled according to the regulations of No. 33 ofASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significantcome-and-go balance, investment, transaction and the unrealized profits should be written off when compiling theconsolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of asubsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests andminority shareholder profits and losses respectively and presented separately under shareholders’ equity and netprofits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the periodthat belong to minority interests is presented as the item of “minority shareholder profits and losses” under thebigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared byminority shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’equity, minority interests are offset.The accounting policy or accounting period of each subsidiary is different from which of the Company, whichshall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Companywhen preparing the consolidated financial statements.As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financialstatement, shall adjust individual financial statement based on the fair value of the identifiable net assets on theacquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financialstatement, shall not adjust the financial statement of the subsidiaries, namely survived by integration asparticipating in the consolidation when the final control party starts implementing control and should adjust theperiod-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of thecompared statement.As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidatedincome statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period, should not be adjusted the period-begin amount of the consolidated balance sheet.Where the Group losses control on its original subsidiaries due to disposal of some equity investments or otherreasons, the residual equity interests are re-measured according to the fair value on the date when such controlceases. 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. Andsubsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standardfor Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for BusinessEnterprises-Recognition and Measurement of Financial Instruments.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.
7. 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.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used 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.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into 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 currentperiod.
(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.
10. 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 comprehensiveincome.
(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 purchased
or original which has had credit impairment, it should be converted into cash according actual interest rate of thisfinancial asset after credit adjustment.As for financial asset purchased or original which has had credit impairment, the Company only confirmscumulative change of expected credit loss within the whole duration after initial confirmation on the balance sheetdate as loss reserve.As for accounts receivable which don’t include major financing contents or the Company does not considerfinancing contents in contract which is less than one year, the Company applies simplified measurement method,and measures loss reserve according to amount of expected credit loss within the whole duration.As for account receivable of rental and accounts receivable including major financing contents, the Companyapplies simplified measurement method, and measure loss reserve according to amount of expected credit losswithin the whole duration.As for financial asset beyond above mentioned measurement methods, the Company evaluates whether its creditrisk has increased obviously since the initial confirmation on each balance sheet date. In case credit risk hasincreased obviously, the Company measures the loss reserve according to amount of expected credit loss withinthe whole duration; in case the credit risk does not increase obviously, the Company measures loss reserveaccording to the amount of expected credit loss in next 12 months.By utilizing obtainable rational and well grounded information, including forward-looking information,comparing the risk of contract breach on balance sheet date and risk of contract breach on initial confirmation date,the Company confirms whether the credit risk of financial instrument has increased obviously from initialconfirmation.On balance sheet date, in case the Company judges that the financial instrument just has relatively low credit risk,then it will be assumed that credit risk of the financial instrument has not increased obviously.Based on single financial instrument or financial portfolio, the Company evaluates expected credit risk andmeasures expected credit loss. When based on financial instrument portfolio, the Company takes common riskcharacteristics as the basis, and divides financial instruments into different portfolios.The Company measures expected credit loss again on each balance sheet date, the increase of loss reserve oramount which is transfer back generated by it is calculated into current profits and losses as impairment profits orlosses. As for financial asset which is measured by amortized cost, loss reserve offsets the carrying value of thefinancial asset listed in the balance sheet; as for debt investment which is measured by fair value and whosechange is calculated into other comprehensive profits, the Company confirms its loss reserve in othercomprehensive profits and does not offset the carrying value of the financial asset.
② For notes receivable, accounts receivable, other receivables and long-term receivables with objective evidenceindicating impairment and those suitable for individual evaluation, the Company carries out impairment testseparately to confirm expected credit loss and prepare provision for impairment of single items. For notesreceivable, accounts receivable and other receivables without objective evidence of impairment, or a singlefinancial asset with expected credit loss impossible to be assessed at a reasonable cost, the Company divides thereceivables into groups according to the characteristics of credit risk, and calculates the expected credit loss basedon receivable groups.Accounts receivable with expected credit losses measured by groupsSpecific groups and method of measuring expected credit loss
| Item | Recognition basis | Method of measuring expected credit losses |
| Bank’s acceptance bills receivable | Bill type | Consulting historical experience in credit losses, combining current situation and prediction for future economic situation, the expected credit |
| Trade acceptance bills receivable | loss shall be accounted through exposure at default and the expected credit loss rate over the entire life | |
| Accounts receivable-credit risk characteristics group | Aging group | 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 |
| 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 |
Accounts receivable-the comparative list between aging of credit risk characteristic group and expected credit lossrate over the entire life
| Aging | Withdrawal proportion |
| Within 1 year | 2.00% |
| 1 to 2 years | 5.00% |
| 2 to 3 years | 15.00% |
| 3 to 4 years | 30.00% |
| 4 to 5 years | 60.00% |
| Over 5 years | 100.00% |
Other receivables with expected credit losses measured by groupsSpecific groups and method of measuring expected credit loss
| Item | Recognition basis | Method of measuring expected credit losses |
| Other receivables-aging analysis group | Aging group | 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 |
| Other receivables-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 |
For the measurement of impairment loss of other receivables, refer to the aforesaid measurement of impairmentloss of accounts receivable.
11. Notes Receivable
See “10. Financial Instruments”.
12. Accounts Receivable
See “10. Financial Instruments”.
13. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed 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 productsaccording 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.
14. 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.12.
15. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting 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 shallalso 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.
16. Assets Held for Sale
The Company recognizes the components (or the non-current assets) which meet with the following conditions asassets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind ofcomponents under the current conditions;
(2) The Company had made solutions on disposing the components (or the non-current assets), for example, theCompany should gain the approval from the shareholders according to the regulations and had acquired theapproved from the Annual General Meeting or the relevant authority institutions;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
17. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by 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 costwhich 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 shall
be 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 basisof 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 to
the 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.
18. 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.
19. 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 | Average method of useful life | 20-40 | 2.50%-5% |
| Machinery equipment | Average method of useful life | 6-15 | 6.67%-16.67% |
| Transportation equipment | Average method of useful life | 5-10 | 10%-20% |
| Other equipment | Average method of useful life | 5-10 | 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
20. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at directmaterials, direct wages and direct construction fees; construction contract shall be measured at project pricepayable; 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.
21. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums 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.
22. Intangible Assets
(1) Pricing Method, Service Life, and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.For the intangible assets invested by the investors should be recognized the actual cost according to the value 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) Accounting Polices of Internal R & D Costs
The 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.
23. 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. Present
value 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.
24. 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.
25. 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.
26. 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 should
recognize 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.
27. 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 conclusiveevidence 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.
28. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control 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 ClientIf 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.Interest RevenueInterest Revenue shall be determined according to the time of the Company’s use of monetary capital and theactual interest rate.
Rental IncomeThe rental income from operating lease shall be recognized during each lease period according to the straight-linemethod, and the contingent rent shall be included into the current profit and loss without delay.
29. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from 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.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, a deferred 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.
31. Lease
(1) Accounting Treatment of Operating Lease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or thecurrent profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be recognizedas the current profit or loss; Contingent rents shall be charged as expenses in the periods in which they are incurred.Lessors in an operating lease shall be recognized as the current profit or loss on a straight-line basis over the leaseterm; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the initial directexpenses occur should be directly included in the current gains and losses except for those with larger amount and becapitalized as well as be included in the gains and losses by stages. Contingent rents shall be charged as expenses inthe periods in which they are incurred.
(2) Accounting Treatments of Financial Lease
When the Company as the lessee, On the lease beginning date, the Company shall record the lower one of the fairvalue of the leased asset and the present value of the minimum lease payments on the lease beginning date as theentering value in an account, recognize the amount of the minimum lease payments as the entering value in anaccount of long-term account payable, and treat the balance between the recorded amount of the leased asset andthe long-term account payable as unrecognized financing charges and the occurred initial direct expenses, shouldbe recorded in the lease assets value. During each lease period, should recognize the current financing expensesby adopting the actual interest rate.When the Company as the leasor and on the beginning date of the lease term, the Company shall recognize thesum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value inan account of the financing lease values receivable, and record the unguaranteed residual value at the same time.The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residualvalue and the sum of their present values shall be recognized as unrealized financing income. During each leaseperiod, should recognize the current financing revenues adopting the actual interest rate.
32. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
| Changes to the accounting policies and why | Approval process | Remark |
| The Ministry of Finance issued the Notice on Revising and Printing the Accounting Standards for Business Enterprises No.14-Revenue (CK[2017]No.22) (hereinafter referred to as the “New Standards governing Revenue”) in July 2017 and required all domestically listed companies to implement it since 1 January 2020. | On 28 April 2020, the Company held the 2nd Meeting of the 9th Board of Directors and the 2nd Meeting of the 9th Supervisory Committee and approved the Proposal on Changes of Some Accounting Policies |
(1) Influence of Implementing the New Standards Governing Revenue
Affected items in the consolidated balance sheet and amount thereof:
| Item | 31 December 2019 | Affected by classification and measurement | 1 January 2020 |
| Advances from customers | 31,789,001.78 | -31,789,001.78 | |
| Contract liabilities | 29,652,202.74 | 29,652,202.74 | |
| Other current liabilities | 1,177,712.38 | 2,136,799.04 | 3,314,511.42 |
Affected items in the balance sheet of the Company as the parent and amount thereof:
| Item | 31 December 2019 | Affected by classification and measurement | 1 January 2020 |
| Advances from customers | 28,673,664.87 | -28,673,664.87 | |
| Contract liabilities | 26,661,229.33 | 26,661,229.33 |
| Other current liabilities | 2,012,435.54 | 2,012,435.54 |
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any NewStandards Governing Revenue or Leases since 2020ApplicableConsolidated Balance Sheet
Unit: RMB
| Item | 31 December 2019 | 1 January 2020 | Adjusted |
| Current assets: | |||
| Monetary assets | 638,589,260.09 | 638,589,260.09 | |
| Settlement reserve | |||
| Interbank loans granted | |||
| Held-for-trading financial assets | 13,050,000.00 | 13,050,000.00 | |
| Derivative financial assets | |||
| Notes receivable | 606,283,023.05 | 606,283,023.05 | |
| Accounts receivable | 419,302,056.87 | 419,302,056.87 | |
| Accounts receivable |
| financing | |||
| Prepayments | 12,968,746.16 | 12,968,746.16 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Receivable reinsurance contract reserve | |||
| Other receivables | 9,703,390.94 | 9,703,390.94 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 473,359,168.90 | 473,359,168.90 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 6,421,275.47 | 6,421,275.47 | |
| Total current assets | 2,179,676,921.48 | 2,179,676,921.48 | |
| Non-current assets: | |||
| Loans and advances to customers | |||
| Investments in debt obligations | |||
| Investments in other debt obligations | |||
| Long-term receivables | |||
| Long-term equity investments | |||
| Investments in other equity instruments | 532,886,000.00 | 532,886,000.00 | |
| Other non-current financial assets | 77,952,101.63 | 77,952,101.63 | |
| Investment property | 48,447,666.83 | 48,447,666.83 | |
| Fixed assets | 457,722,667.32 | 457,722,667.32 | |
| Construction in progress | 91,358,156.24 | 91,358,156.24 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | |||
| Intangible assets | 99,699,450.26 | 99,699,450.26 |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 53,497.80 | 53,497.80 | |
| Deferred income tax assets | 1,023,863.04 | 1,023,863.04 | |
| Other non-current assets | |||
| Total non-current assets | 1,309,143,403.12 | 1,309,143,403.12 | |
| Total assets | 3,488,820,324.60 | 3,488,820,324.60 | |
| Current liabilities: | |||
| Short-term borrowings | 22,000,000.00 | 22,000,000.00 | |
| Borrowings from the central bank | |||
| Interbank loans obtained | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 403,035,000.00 | 403,035,000.00 | |
| Accounts payable | 525,625,016.89 | 525,625,016.89 | |
| Advances from customers | 31,789,001.78 | -31,789,001.78 | |
| Contract liabilities | 29,652,202.74 | 29,652,202.74 | |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and interbank deposits | |||
| Payables for acting trading of securities | |||
| Payables for underwriting of securities | |||
| Employee benefits payable | 44,559,015.79 | 44,559,015.79 | |
| Taxes payable | 9,094,382.58 | 9,094,382.58 | |
| Other payables | 205,064,145.10 | 205,064,145.10 | |
| Including: Interest payable | |||
| Dividends payable | 3,891,433.83 | 3,891,433.83 | |
| Handling charges and commissions payable |
| Reinsurance payables | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | |||
| Other current liabilities | 1,177,712.38 | 3,314,511.42 | 2,136,799.04 |
| Total current liabilities | 1,242,344,274.52 | 1,242,344,274.52 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 58,864,111.22 | 58,864,111.22 | |
| Deferred income tax liabilities | 57,082,890.27 | 57,082,890.27 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 115,947,001.49 | 115,947,001.49 | |
| Total liabilities | 1,358,291,276.01 | 1,358,291,276.01 | |
| Owners’ equity: | |||
| Share capital | 561,374,326.00 | 561,374,326.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 164,328,665.43 | 164,328,665.43 | |
| Less: Treasury stock | |||
| Other comprehensive income | 317,059,775.00 | 317,059,775.00 | |
| Specific reserve | 17,560,202.07 | 17,560,202.07 |
| Surplus reserves | 322,228,533.72 | 322,228,533.72 | |
| General reserve | |||
| Retained earnings | 728,341,265.36 | 728,341,265.36 | |
| Total equity attributable to owners of the Company as the parent | 2,110,892,767.58 | 2,110,892,767.58 | |
| Non-controlling interests | 19,636,281.01 | 19,636,281.01 | |
| Total owners’ equity | 2,130,529,048.59 | 2,130,529,048.59 | |
| Total liabilities and owners’ equity | 3,488,820,324.60 | 3,488,820,324.60 |
Balance Sheet of the Company as the Parent
Unit: RMB
| Item | 31 December 2019 | 1 January 2020 | Adjusted |
| Current assets: | |||
| Monetary assets | 584,957,678.96 | 584,957,678.96 | |
| Held-for-trading financial assets | |||
| Derivative financial assets | |||
| Notes receivable | 576,948,023.05 | 576,948,023.05 | |
| Accounts receivable | 337,447,538.04 | 337,447,538.04 | |
| Accounts receivable financing | |||
| Prepayments | 6,386,284.14 | 6,386,284.14 | |
| Other receivables | 22,741,542.22 | 22,741,542.22 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 368,653,472.39 | 368,653,472.39 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 3,898,333.51 | 3,898,333.51 | |
| Total current assets | 1,901,032,872.31 | 1,901,032,872.31 | |
| Non-current assets: | |||
| Investments in debt obligations | |||
| Investments in other debt obligations |
| Long-term receivables | |||
| Long-term equity investments | 252,752,730.03 | 252,752,730.03 | |
| Investments in other equity instruments | 532,886,000.00 | 532,886,000.00 | |
| Other non-current financial assets | 50,000,000.00 | 50,000,000.00 | |
| Investment property | 48,447,666.83 | 48,447,666.83 | |
| Fixed assets | 364,071,199.07 | 364,071,199.07 | |
| Construction in progress | 89,330,161.60 | 89,330,161.60 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | |||
| Intangible assets | 70,169,770.91 | 70,169,770.91 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | |||
| Deferred income tax assets | 970,026.67 | 970,026.67 | |
| Other non-current assets | |||
| Total non-current assets | 1,408,627,555.11 | 1,408,627,555.11 | |
| Total assets | 3,309,660,427.42 | 3,309,660,427.42 | |
| Current liabilities: | |||
| Short-term borrowings | 5,000,000.00 | 5,000,000.00 | |
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 392,105,000.00 | 392,105,000.00 | |
| Accounts payable | 481,854,210.18 | 481,854,210.18 | |
| Advances from customers | 28,673,664.87 | -28,673,664.87 | |
| Contract liabilities | 26,661,229.33 | 26,661,229.33 | |
| Employee benefits payable | 39,125,477.30 | 39,125,477.30 | |
| Taxes payable | 5,952,664.10 | 5,952,664.10 | |
| Other payables | 192,046,130.29 | 192,046,130.29 | |
| Including: Interest payable |
| Dividends payable | 3,243,179.97 | 3,243,179.97 | |
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | |||
| Other current liabilities | 2,012,435.54 | 2,012,435.54 | |
| Total current liabilities | 1,144,757,146.74 | 1,144,757,146.74 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Lease liabilities | |||
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 58,864,111.22 | 58,864,111.22 | |
| Deferred income tax liabilities | 55,951,725.00 | 55,951,725.00 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 114,815,836.22 | 114,815,836.22 | |
| Total liabilities | 1,259,572,982.96 | 1,259,572,982.96 | |
| Owners’ equity: | |||
| Share capital | 561,374,326.00 | 561,374,326.00 | |
| Other equity instruments | |||
| Including: Preferred shares | |||
| Perpetual bonds | |||
| Capital reserves | 183,071,147.70 | 183,071,147.70 | |
| Less: Treasury stock | |||
| Other comprehensive income | 317,059,775.00 | 317,059,775.00 | |
| Specific reserve | 17,560,202.07 | 17,560,202.07 |
| Surplus reserves | 322,228,533.72 | 322,228,533.72 | |
| Retained earnings | 648,793,459.97 | 648,793,459.97 | |
| Total owners’ equity | 2,050,087,444.46 | 2,050,087,444.46 | |
| Total liabilities and owners’ equity | 3,309,660,427.42 | 3,309,660,427.42 |
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any NewStandards Governing Revenue or Leases since 2020
□ 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% |
| 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 Housheng Investment Co., Ltd. | 25% |
| Changzhou Changchai Housheng 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% |
2. Tax Preference
On 24 October 2018, the Company obtained the Certificates for High-tech Enterprises again, and it still enjoys15-percent preferential rate for corporate income tax during the Reporting Period; the Company’s controllingsubsidiary-Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company, shall pay thecorporate income tax at tax rate 15% from 1 January 2011 to 31 December 2020 in accordance with the Notice ofthe Ministry of Finance, the General Administration of Customs of PRC and the National Administration ofTaxation about the Preferential Tax Policies for the Western Development. On 2 December 2020, thewholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. obtained the "High-techEnterprise Certificate" and enjoyed a 15% preferential corporate income tax rate during the Reporting Period; Thewholly-owned subsidiariy Changzhou Xingsheng Real Estate Management Co., Ltd. is eligible small enterprisewith low profits and shall pay the corporate income tax at tax rate 5% for small enterprises with low profits duringthe 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 | 287,505.91 | 181,115.21 |
| Bank deposits | 620,966,786.57 | 545,271,159.50 |
| Other monetary assets | 139,473,930.37 | 93,136,985.38 |
| Total | 760,728,222.85 | 638,589,260.09 |
| Of which: Total amount deposited overseas |
At the period-end, the restricted monetary assets of the Company was RMB130,788,682.35, of whichRMB126,979,327.60 was the cash deposit for bank acceptance bills, RMB2,993,220.00 was cash deposit for L/G,and RMB816,134.75 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 | 11,500,272.00 | 13,050,000.00 |
| Of which: Forward settlement | 200,272.00 | |
| Financial products | 11,300,000.00 | 13,050,000.00 |
| Total | 11,500,272.00 | 13,050,000.00 |
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bank acceptance bill | 600,140,938.05 | 606,283,023.05 |
| Total | 600,140,938.05 | 606,283,023.05 |
If the bad debt provision for notes receivable was withdrawn in accordance with the general model of expectedcredit losses, information related to bad debt provision shall be disclosed by reference to the disclosure method ofother receivables:
□ Applicable √ Not applicable
(2) There Were No Notes Receivable Pledged by the Company at the Period-end
(3) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on 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 | 765,010,766.00 | |
| Total | 765,010,766.00 |
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed toExecute the Contract or Agreement at the Period-end
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
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 for which bad debt provision separately accrued | 33,703,039.72 | 5.98% | 31,807,452.89 | 94.38% | 1,895,586.83 | 35,534,574.55 | 5.31% | 33,449,794.41 | 94.13% | 2,084,780.14 |
| Of which: | ||||||||||
| Accounts receivable with significant amount for which bad debt provision separately accrued | 29,870,525.05 | 5.30% | 27,974,938.22 | 93.65% | 1,895,586.83 | 30,642,717.62 | 4.58% | 28,557,937.48 | 93.20% | 2,084,780.14 |
| Accounts receivable with insignificant amount for which bad debt provision separately accrued | 3,832,514.67 | 0.68% | 3,832,514.67 | 100.00% | 0.00 | 4,891,856.93 | 0.73% | 4,891,856.93 | 100.00% | 0.00 |
| Accounts receivable for which bad debt provision accrued by group | 529,486,382.09 | 94.02% | 134,227,952.43 | 25.35% | 395,258,429.66 | 633,062,365.04 | 94.69% | 215,845,088.31 | 34.10% | 417,217,276.73 |
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision accrued by credit risk features group | 529,486,382.09 | 94.02% | 134,227,952.43 | 25.35% | 395,258,429.66 | 633,062,365.04 | 94.69% | 215,845,088.31 | 34.10% | 417,217,276.73 |
| Total | 563,189,421.81 | 100.00% | 166,035,405.32 | 29.48% | 397,154,016.49 | 668,596,939.59 | 100.00% | 249,294,882.72 | 37.29% | 419,302,056.87 |
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Reason of withdrawal | |
| Customer 1 | 1,470,110.64 | 1,470,110.64 | 100.00% | Difficult to recover |
| Customer 2 | 1,902,326.58 | 1,902,326.58 | 100.00% | Difficult to recover |
| Customer 3 | 6,215,662.64 | 6,215,662.64 | 100.00% | Difficult to recover |
| Customer 4 | 2,254,860.60 | 2,175,814.38 | 96.49% | Expected to difficultly recover |
| Customer 5 | 3,633,081.23 | 1,816,540.62 | 50.00% | Expected to difficultly recover |
| Customer 6 | 3,279,100.00 | 3,279,100.00 | 100.00% | Difficult to recover |
| Customer 7 | 1,617,988.01 | 1,617,988.01 | 100.00% | Difficult to recover |
| Customer 8 | 5,359,381.00 | 5,359,381.00 | 100.00% | Difficult to recover |
| Customer 9 | 2,584,805.83 | 2,584,805.83 | 100.00% | Difficult to recover |
| Customer 10 | 1,553,208.52 | 1,553,208.52 | 100.00% | Difficult to recover |
| Total | 29,870,525.05 | 27,974,938.22 | -- | -- |
Accounts receivable for which bad debt provision accrued by credit risk features group:
Unit: RMB
| Aging | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 385,027,068.11 | 7,700,541.84 | 2.00% |
| 1 to 2 years | 10,151,185.00 | 507,559.25 | 5.00% |
| 2 to 3 years | 4,745,351.68 | 711,802.76 | 15.00% |
| 3 to 4 years | 5,193,053.09 | 1,557,915.93 | 30.00% |
| 4 to 5 years | 1,548,978.90 | 929,387.34 | 60.00% |
| Over 5 years | 122,820,745.31 | 122,820,745.31 | 100.00% |
| Total | 529,486,382.09 | 134,227,952.43 | -- |
Notes of the basis of determining the group:
The accounts receivable was adopted the aging analysis based on the months when the accounts incurred actually,among which the accounts incurred earlier will be priority to be settled in terms of the capital turnover.Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provisionon the Current Period: With reference to the experience of the historical credit loss, combining with the predictionof the present status and future financial situation, the comparison table was prepared between the aging of theaccounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable ifadopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Carrying amount |
| Within 1 year (including 1 year) | 385,027,068.11 |
| 1 to 2 years | 10,871,134.25 |
| 2 to 3 years | 6,695,101.24 |
| Over 3 years | 160,596,118.21 |
| 3 to 4 years | 7,729,342.84 |
| 4 to 5 years | 4,161,559.72 |
| Over 5 years | 148,705,215.65 |
| Total | 563,189,421.81 |
(2) 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 | |||
| Bad debt provision withdrawn separately | 33,449,794.41 | 159,597.80 | 1,801,939.32 | 31,807,452.89 | |
| Bad debt provision withdrawn by group | 215,845,088.31 | 766,429.39 | 4,361.56 | 82,379,203.71 | 134,227,952.43 |
| Total | 249,294,882.72 | 926,027.19 | 1,806,300.88 | 82,379,203.71 | 166,035,405.32 |
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
| Item | Verified amount |
| Accounts receivable with actual verification | 82,379,203.71 |
Of which the verification of significant accounts receivable:
Unit: RMB
| Name of the entity | Nature of the accounts receivable | Verified amount | Reason for verification | Verification procedures performed | Arising from related-party transactions or not |
| Customer 1 | Bad debt losses | 14,234,302.79 | The aging of canceled receivables shall exceed 5 years and result | 1. The Company held the 3rd Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th Supervisory | Not |
| Customer 2 | 10,000,000.00 | ||||
| Customer 3 | 7,583,232.65 | ||||
| Customer 4 | 4,581,880.41 | ||||
| Customer 5 | 3,600,000.00 |
| Customer 6 | 2,752,840.00 | from fruitless collection, and if any single client’s large amount is involved without any business transaction with the Company for over ten years, the client’s qualification for business operation shall be canceled or the insolvency liquidation is finished without any production and operation activities. | Committee on 28 June 2020 and approved the Proposal on Verification of Some Accounts Receivable. 2. On 12 November 2020, the bankruptcy liquidation procedures of Shandong Hongli Group Co., Ltd. had been implemented, and the repayment rate of the Company’s outstanding payment was 0. On 29 January 2021, the Company held the 7th Meeting of the 9th Board of Directors and approved the Proposal on Verification of Accounts Receivable of Shandong Hongli Group Co., Ltd.. | ||
| Customer 7 | 2,450,966.67 | ||||
| Customer 8 | 2,180,243.72 | ||||
| Customer 9 | 1,976,282.47 | ||||
| Customer 10 | 1,860,830.82 | ||||
| Customer 11 | 1,758,686.48 | ||||
| Customer 12 | 1,662,052.98 | ||||
| Customer 13 | 1,285,160.60 | ||||
| Customer 14 | 1,236,225.30 | ||||
| Customer 15 | 1,235,170.95 | ||||
| Customer 16 | 1,200,000.00 | ||||
| Customer 17 | 1,149,217.70 | ||||
| Customer 18 | 848,158.92 | ||||
| Customer 19 | 841,642.86 | ||||
| Customer 20 | 830,000.00 | ||||
| Customer 21 | 800,000.00 | ||||
| Customer 22 | 797,786.72 | ||||
| Customer 23 | 796,226.73 | ||||
| Customer 24 | 760,197.20 | ||||
| Customer 25 | 728,666.36 | ||||
| Customer 26 | 677,250.00 | ||||
| Customer 27 | 551,305.36 | ||||
| Customer 28 | 549,800.00 | ||||
| Customer 29 | 537,698.10 | ||||
| Customer 30 | 12,343,782.28 | ||||
| Customer 31 | 520,892.51 | ||||
| Total | -- | 82,330,500.58 | -- | -- | -- |
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable | Ending balance of bad debt provision |
| Customer 1 | 140,334,103.03 | 24.92% | 2,806,682.06 |
| Customer 2 | 36,991,841.04 | 6.57% | 856,733.55 |
| Customer 3 | 33,407,519.00 | 5.93% | 668,150.38 |
| Customer 4 | 22,051,755.53 | 3.92% | 441,035.11 |
| Customer 5 | 18,721,197.34 | 3.32% | 374,423.95 |
| Total | 251,506,415.94 | 44.66% |
5. Prepayments
(1) List by Aging Analysis
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 7,039,656.05 | 75.23% | 10,857,776.65 | 83.72% |
| 1 to 2 years | 641,762.79 | 6.86% | 993,030.99 | 7.66% |
| 2 to 3 years | 673,819.29 | 7.20% | 115,335.90 | 0.89% |
| Over 3 years | 1002602.62 | 10.71% | 1,002,602.62 | 7.73% |
| Total | 9,357,840.75 | -- | 12,968,746.16 | -- |
As of the end of the Reporting Period, the Company had no prepayments with an aging of more than 1 year and asignificant amount.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment TargetAt the period-end, the total top 5 of the ending balance of the prepayments collected according to the prepaymenttarget was RMB5,537,493.47 accounting for 59.17% of the total ending balance of prepayments.
6. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest receivable | 0.00 | 0.00 |
| Dividend receivable | 0.00 | 0.00 |
| Other receivables | 6,212,062.80 | 9,703,390.94 |
| Total | 6,212,062.80 | 9,703,390.94 |
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
| Nature | Ending carrying value | Beginning carrying value |
| Margin and cash pledge | 4,200.00 | 7,758.60 |
| Intercourse funds | 22,967,220.99 | 24,536,151.71 |
| Petty cash and borrowings by employees | 1,359,483.08 | 3,208,541.67 |
| Other | 13,806,779.19 | 15,374,916.41 |
| Total | 38,137,683.26 | 43,127,368.39 |
2) Withdrawal of Bad Debt Provision
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 2020 | 33,423,977.45 | 33,423,977.45 | ||
| Balance of 1 January 2020 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 | 27,302.92 | 27,302.92 | ||
| Reversal of the Current Period | 1,525,659.91 | 1,525,659.91 | ||
| Write-offs of the Current Period | ||||
| Verification of the Current Period | ||||
| Other changes | ||||
| Balance of 31 December 2020 | 31,925,620.46 | 31,925,620.46 |
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 4,544,798.95 |
| 1 to 2 years | 488,230.94 |
| 2 to 3 years | 461,642.22 |
| Over 3 years | 32,643,011.15 |
| 3 to 4 years | 1,168,912.97 |
| 4 to 5 years | 208,579.74 |
| Over 5 years | 31,265,518.44 |
| Total | 38,137,683.26 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting PeriodInformation of withdrawal of bad debt provision:
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Bad debt provision for which accrued separately | 5,042,448.58 | 3,080.17 | 5,039,368.41 | |||
| Bad debt provision for which accrued by group | 28,381,528.87 | 27,302.92 | 1,522,579.74 | 26,886,252.05 | ||
| Total | 33,423,977.45 | 27,302.92 | 1,525,659.91 | 31,925,620.46 | ||
4) There Was No Particulars of the Actual Verification of Other Receivables during the Reporting Period
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to ending balance of other receivables% | Ending balance of bad debt provision |
| Changzhou Compressor Factory | Intercourse funds | 2,940,000.00 | Over 5 years | 7.71% | 2,940,000.00 |
| Changchai Group Imp. & Exp. Co., Ltd. | Intercourse funds | 2,853,188.02 | Over 5 years | 7.48% | 2,853,188.02 |
| Changzhou New District Accounting Center | Intercourse funds | 1,626,483.25 | Over 5 years | 4.26% | 1,626,483.25 |
| Changchai Group Settlement Center | Intercourse funds | 1,140,722.16 | Over 5 years | 2.99% | 1,140,722.16 |
| Changzhou Huadi Engineering Guarantee Co., Ltd. | Intercourse funds | 1,065,400.00 | Within 1 year | 2.79% | 21,308.00 |
| Total | -- | 9,625,793.43 | -- | 25.23% | 8,581,701.43 |
7. Inventory
Whether the Company needs to comply with the requirements of real estate industryNo
(1) Category of Inventory
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Falling price reserves | Carrying value | Carrying amount | Falling price reserves | Carrying value | |
| Raw materials | 134,712,519.83 | 5,559,513.66 | 129,084,129.60 | 125,757,856.89 | 6,539,831.39 | 119,218,025.50 |
| Materials processed on commission | 14,065,866.52 | 68,876.57 | 14,065,866.52 | 12,444,566.41 | 183,111.28 | 12,261,455.13 |
| Goods in process | 134,454,109.88 | 18,512,449.08 | 115,941,660.80 | 142,399,981.66 | 26,985,350.14 | 115,414,631.52 |
| Finished goods | 361,975,004.89 | 15,261,416.17 | 346,713,588.72 | 239,701,513.09 | 15,404,153.29 | 224,297,359.80 |
| Low priced and easily worn articles | 1,906,803.53 | 1,031,708.62 | 875,094.91 | 3,373,235.80 | 1,205,538.85 | 2,167,696.95 |
| Total | 647,114,304.65 | 40,433,964.10 | 606,680,340.55 | 523,677,153.85 | 50,317,984.95 | 473,359,168.90 |
(2) Falling Price Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | ||
| Withdrawal | Other | Reversal or write-off | Other | |||
| Raw materials | 6,539,831.39 | 1,393,521.63 | 2,373,839.36 | 5,559,513.66 | ||
| Materials processed on commission | 183,111.28 | 68,876.57 | 183,111.28 | 68,876.57 | ||
| Goods in process | 26,985,350.14 | 4,107,305.33 | 12,580,206.39 | 18,512,449.08 | ||
| Finished goods | 15,404,153.29 | 7,064,868.66 | 7,207,605.78 | 15,261,416.17 | ||
| Low priced and easily worn articles | 1,205,538.85 | 1,031,708.62 | 1,205,538.85 | 1,031,708.62 | ||
| Total | 50,317,984.95 | 13,666,280.81 | 23,550,301.66 | 40,433,964.10 | ||
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories
8. Other Current Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| The VAT tax credits | 22,534,134.72 | 6,043,473.29 |
| Private placement of intermediary agency fees | 2,358,490.56 | |
| Prepaid corporate income tax | 2,240,396.88 | |
| Prepaid expense | 80,070.32 | 98,856.26 |
| Other | 86,270.24 | 278,945.92 |
| Total | 27,299,362.72 | 6,421,275.47 |
9. Long-term Equity Investment
Unit: RMB
| Investees | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserves | |||||||
| Additional investment | Reduced investment | Gain or loss recognized under the equity method | Adjustment of other comprehensive income | Changes in other equity | Cash bonus or profit announced to issue | Withdrawal of depreciation reserves | Other | ||||
| II. Associated enterprises | |||||||||||
| Beijing Tsinghua Industrial Investment Management Co., Ltd. | 0.00 | 0.00 | 44,182.50 | ||||||||
| Subtotal | 0.00 | 0.00 | 44,182.50 | ||||||||
| Total | 0.00 | 0.00 | 44,182.50 |
10. Other Equity Instrument Investment
Unit: RMB
| Item | Ending balance | Beginning balance |
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | 102,198,950.87 | 100,000,000.00 |
| Other equity instrument investment measured by fair value | 582,939,000.00 | 432,886,000.00 |
| Total | 685,137,950.87 | 532,886,000.00 |
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. | 192,185,000.00 | Non-trading equity investment | ||||
| Bank of Jiangsu | 5,004,000.00 | 522,000.00 | Non-trading equity investment | |||
| Jiangsu Ninghu Expressway Co., Ltd. | 348,368.67 | 348,368.67 | Non-trading equity investment | The stock has been sold this year |
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | 2,198,950.87 | Non-trading equity investment | ||||
| Total | 5,004,000.00 | 195,254,319.54 | 348,368.67 |
Other notes:
Securities of the Company's securities refinancing business which was still on loan at the end of the period:
26,272,100 shares of Foton Motor Co., Ltd.
11. Other Non-current Financial Assets
Unit: RMB
12. 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 | 87,632,571.14 | 87,632,571.14 |
| 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 |
| Item | Ending balance | Beginning balance |
| Jiangsu Liance Electromechanical Technology Co., Ltd. | 7,200,000.00 | 7,200,000.00 |
| Kailong High Technology Co., Ltd. | 38,282,105.00 | 20,001,268.00 |
| Guizhou Weimen Pharmaceutical Co., Ltd. | 200,104.80 | 200,104.80 |
| Guizhou Anda Technology Energy Co., Ltd. | 195,297.49 | 195,297.49 |
| Henan Lantian Gas Co., Ltd. | 160,744.76 | 160,744.76 |
| Hebei Songhe Renewable Resources Co., Ltd. | 104,699.44 | 104,699.44 |
| Anhui Haofang Electromechanical Co., Ltd. | 89,987.14 | 89,987.14 |
| Jiangsu Hosun New Energy Technology Co., Ltd. | 52,500,000.00 | 50,000,000.00 |
| Total | 98,732,938.63 | 77,952,101.63 |
| 4. Ending balance | 87,632,571.14 | 87,632,571.14 |
| II. Accumulative depreciation and accumulative amortization | ||
| 1.Beginning balance | 39,184,904.31 | 39,184,904.31 |
| 2.Increased amount of the period | 2,208,340.80 | 2,208,340.80 |
| (1) Withdrawal or amortization | 2,208,340.80 | 2,208,340.80 |
| 3.Decreased amount of the period | ||
| (1) Disposal | ||
| (2) Other transfer | ||
| 4. Ending balance | 41,393,245.11 | 41,393,245.11 |
| III. Depreciation reserves | ||
| 1.Beginning balance | ||
| 2.Increased amount of the period | ||
| (1) Withdrawal | ||
| 3.Decreased amount of the period | ||
| (1) Disposal | ||
| (2) Other transfer | ||
| 4. Ending balance | ||
| IV. Carrying value | ||
| 1.Ending carrying value | 46,239,326.03 | 46,239,326.03 |
| 2.Beginning carrying value | 48,447,666.83 | 48,447,666.83 |
13. Fixed Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 454,181,555.68 | 457,722,667.32 |
| Disposal of fixed assets | ||
| Total | 454,181,555.68 | 457,722,667.32 |
(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 | 448,688,661.22 | 956,138,240.18 | 17,283,169.54 | 42,791,587.37 | 1,464,901,658.31 |
| 2. Increased amount of the period | 16,740,314.49 | 55,956,615.74 | 1,265,424.03 | 1,253,215.06 | 75,215,569.32 |
| (1) Purchase | 418,626.65 | 1,790,876.46 | 420,194.69 | 605,480.50 | 3,235,178.30 |
| (2) Transfer from construction in progress | 16,321,687.84 | 54,165,739.28 | 845,229.34 | 647,734.56 | 71,980,391.02 |
| (3) Enterprise combination increase | |||||
| 3. Decreased amount of the period | 15,123,976.27 | 1,609,285.56 | 1,920,409.32 | 18,653,671.15 | |
| (1) Disposal or scrap | 15,123,976.27 | 1,609,285.56 | 1,920,409.32 | 18,653,671.15 | |
| 4. Ending balance | 465,428,975.71 | 996,970,879.65 | 16,939,308.01 | 42,124,393.11 | 1,521,463,556.48 |
| II.Accumulative depreciation | |||||
| 1. Beginning balance | 281,666,582.26 | 674,545,182.51 | 13,892,318.80 | 35,580,792.42 | 1,005,684,875.99 |
| 2. Increased amount of the period | 16,501,775.40 | 57,821,450.01 | 1,098,838.47 | 2,985,836.70 | 78,407,900.58 |
| (1) Withdrawal | 16,501,775.40 | 57,821,450.01 | 1,098,838.47 | 2,985,836.70 | 78,407,900.58 |
| 3. Decreased amount of the period | 1,235.25 | 13,868,284.82 | 1,526,161.49 | 1,895,768.46 | 17,291,450.02 |
| (1) Disposal or scrap | 1,235.25 | 13,868,284.82 | 1,526,161.49 | 1,895,768.46 | 17,291,450.02 |
| 4. Ending balance | 298,167,122.41 | 718,498,347.70 | 13,464,995.78 | 36,670,860.66 | 1,066,801,326.55 |
| III.Depreciation reserves | |||||
| 1. Beginning balance | 1,494,115.00 | 1,494,115.00 | |||
| 2. Increased amount of the period | |||||
| (1) Withdrawal | |||||
| 3. Decreased amount of the period | 1,013,440.75 | 1,013,440.75 | |||
| (1) Disposal or scrap | 1,013,440.75 | 1,013,440.75 | |||
| 4. Ending balance | 480,674.25 | 480,674.25 |
14. Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance |
| Construction in progress | 44,844,896.77 | 63,216,445.03 |
| Engineering materials | 21,657,535.64 | 28,141,711.21 |
| Total | 66,502,432.41 | 91,358,156.24 |
(1) List of Construction in Progress
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Expansion capacity of multi-cylinder (The 2nd Period) | 1,128,887.90 | 1,128,887.90 | 11,375,531.74 | 11,375,531.74 | ||
| Diesel Engine Cylinder Body Flexible Manufacturing Line | 38,266,788.31 | 38,266,788.31 | ||||
| 35KV Substation | 1,321,959.41 | 1,321,959.41 | ||||
| Oily water separating equipment | 340,800.00 | 340,800.00 | ||||
| Relocation project of light engine and casting | 40,307,243.35 | 40,307,243.35 | 1,687,194.64 | 1,687,194.64 | ||
| Equipment to be installed and payment for projects | 3,408,765.52 | 3,408,765.52 | 10,224,170.93 | 10,224,170.93 | ||
| IV. Carrying value | |||||
| 1. Ending carrying value | 167,261,853.30 | 277,991,857.70 | 3,474,312.23 | 5,453,532.45 | 454,181,555.68 |
| 2. Beginning carrying value | 167,022,078.96 | 280,098,942.67 | 3,390,850.74 | 7,210,794.95 | 457,722,667.32 |
| Total | 44,844,896.77 | 44,844,896.77 | 63,216,445.03 | 63,216,445.03 |
(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 | Proportion of accumulated investment in constructions to budget | 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 |
| Expansion capacity of multi-cylinder (The 2nd Period) | 79,000,000.00 | 11,375,531.74 | 31,452.00 | 10,278,095.84 | 1,128,887.90 | Uncompleted | Self-funded | |||||
| Diesel Engine Cylinder Body Flexible Manufacturing Line | 116,040,000.00 | 38,266,788.31 | 187,769.94 | 38,454,558.25 | 0.00 | Self-funded | ||||||
| 35KV Substation | 73,290,000.00 | 1,321,959.41 | 390,676.04 | 1,712,635.45 | 0.00 | Self-funded |
| Relocation project of light engine and casting | 474,706,000.00 | 1,687,194.64 | 38,620,048.71 | 0.00 | 40,307,243.35 | 8.49% | Uncompleted | Self-funded | ||||
| Total | —— | 52,651,474.10 | 39,229,946.69 | 50,445,289.54 | 41,436,131.25 | -- | -- | -- |
(3) Engineering Materials
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Engineering materials | 21,657,535.64 | 21,657,535.64 | 28,141,711.21 | 28,141,711.21 | ||
| Total | 21,657,535.64 | 21,657,535.64 | 28,141,711.21 | 28,141,711.21 | ||
15. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
| Item | Land use right | Patent right | License fee | Trademark use right | Total |
| I. Original carrying value | |||||
| 1. Beginning balance | 144,770,507.85 | 12,866,992.58 | 5,488,000.00 | 163,125,500.43 | |
| 2. Increased amount of the period | 62,013,038.83 | 1,200,922.58 | 1,087,042.79 | 64,301,004.20 | |
| (1) Purchase | 62,013,038.83 | 1,200,922.58 | 1,087,042.79 | 64,301,004.20 | |
| (2) Internal R&D | |||||
| (3) Business combination increase | |||||
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 206,783,546.68 | 14,067,915.16 | 5,488,000.00 | 1,087,042.79 | 227,426,504.63 |
| II. Accumulated amortization | |||||
| 1. Beginning balance | 51,100,000.82 | 10,771,116.13 | 1,554,933.22 | 63,426,050.17 | |
| 2. Increased amount of the period | 3,445,675.20 | 1,108,171.52 | 548,799.96 | 27,176.07 | 5,129,822.75 |
| (1) Withdrawal | 3,445,675.20 | 1,108,171.52 | 548,799.96 | 27,176.07 | 5,129,822.75 |
| 3. Decreased amount of the period | |||||
| (1) Disposal | |||||
| 4. Ending balance | 54,545,676.02 | 11,879,287.65 | 2,103,733.18 | 27,176.07 | 68,555,872.92 |
| 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 | 152,237,870.66 | 2,188,627.51 | 3,384,266.82 | 1,059,866.72 | 158,870,631.71 |
| 2. Beginning carrying value | 93,670,507.03 | 2,095,876.45 | 3,933,066.78 | 0.00 | 99,699,450.26 |
16. Long-term Prepaid Expenses
| Item | Beginning balance | Increase | Amortized amount | Decrease | Ending balance |
| Furniture of employee dormitory, etc. | 53,497.80 | 39,804.60 | 13,693.20 | ||
| Total | 53,497.80 | 39,804.60 | 13,693.20 |
17. 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 | 6,544,083.47 | 981,314.04 | 6,682,294.34 | 1,023,863.04 |
| Deductible loss | 21,670,394.08 | 3,250,559.11 | ||
| Total | 28,214,477.55 | 4,231,873.15 | 6,682,294.34 | 1,023,863.04 |
(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 | |
| Changes in fair value of other equity instrument investment | 500,567,950.87 | 75,085,192.63 | 373,011,500.00 | 55,951,725.00 |
| Changes in fair value of trading financial assets | 18,481,109.00 | 4,600,250.05 | ||
| Changes in fair value of other non-current financial assets | 2,500,000.00 | 375,000.00 | ||
| Assets evaluation appreciation for business combination not under the same control | 4,074,374.26 | 611,156.14 | 4,524,661.07 | 1,131,165.27 |
| Total | 525,623,434.13 | 80,671,598.82 | 377,536,161.07 | 57,082,890.27 |
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
| Item | Ending balance | Beginning balance |
| Bad debt provision | 191,416,942.31 | 276,036,565.83 |
| Falling price reserves of inventories | 40,433,964.10 | 50,317,984.95 |
| Total | 231,850,906.41 | 326,354,550.78 |
18. 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 | 19,971,006.56 | 19,971,006.56 | ||||
| Total | 19,971,006.56 | 19,971,006.56 | ||||
19. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
| Item | Ending balance | Beginning balance |
| Mortgage loans | 7,000,000.00 | 7,000,000.00 |
| Guaranteed loans | 10,000,000.00 | 10,000,000.00 |
| Credit loans | 5,000,000.00 | 5,000,000.00 |
| Total | 22,000,000.00 | 22,000,000.00 |
(2) There Was No Short-term Borrowings Overdue but Unpaid.
20. Notes Payable
Unit: RMB
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 595,346,000.00 | 403,035,000.00 |
| Total | 595,346,000.00 | 403,035,000.00 |
At the end of the current period, the total amount of notes payable due and not paid was RMB0.
21. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| Payment for goods | 612,757,392.46 | 525,625,016.89 |
| Total | 612,757,392.46 | 525,625,016.89 |
(2) There Was No Significant Accounts Payable Aging over One Year
22. Deposit Received
Unit: RMB
| Item | Ending balance | Beginning balance |
| Payment for goods | 661,612.17 | |
| Total | 661,612.17 |
Refer to “V Significant Accounting Policies, Estimates-32(1) Changes to Significant Accounting Policies” for thedifference between the beginning balance and ending balance of prior period (31 December 2019).
(2) There Was No Significant Accounts Payable Aging over One Year
23. Contract Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Contract liabilities | 35,944,517.15 | 29,652,202.74 |
| Total | 35,944,517.15 | 29,652,202.74 |
Refer to “V Significant Accounting Policies, Estimates-32(1) Changes to Significant Accounting Policies” for thedifference between the beginning balance and ending balance of prior period (31 December 2019).
24. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| I. Short-term salary | 44,559,015.79 | 277,676,314.10 | 272,108,168.42 | 50,127,161.47 |
| II.Post-employment benefit-defined contribution plans | 22,003,717.86 | 22,003,717.86 | ||
| III. Termination benefits | 109,584.00 | 109,584.00 |
| Total | 44,559,015.79 | 299,789,615.96 | 294,221,470.28 | 50,127,161.47 |
(2) List of Short-term Salary
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Salary, bonus, allowance, subsidy | 36,894,953.71 | 237,003,162.20 | 231,989,488.74 | 41,908,627.17 |
| 2.Employee welfare | 1,592.74 | 3,302,752.84 | 3,302,752.84 | 1,592.74 |
| 3. Social insurance | 14,152,537.94 | 14,152,537.94 | ||
| Of which: Medical insurance premiums | 11,550,069.03 | 11,550,069.03 | ||
| Work-related injury insurance | 1,128,043.94 | 1,128,043.94 | ||
| Maternity insurance | 1,474,424.97 | 1,474,424.97 | ||
| 4. Housing fund | 18,592,725.00 | 18,592,725.00 | ||
| 5.Labor union budget and employee education budget | 7,662,469.34 | 4,625,136.12 | 4,070,663.90 | 8,216,941.56 |
| 6. Short-term absence with salary | ||||
| 7. Short-term profit sharing scheme | ||||
| Total | 44,559,015.79 | 277,676,314.10 | 272,108,168.42 | 50,127,161.47 |
(3) List of Defined Contribution Plans
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| 1. Basic pension benefits | 21,335,032.17 | 21,335,032.17 | ||
| 2. Unemployment insurance | 668,685.69 | 668,685.69 | ||
| 3. Enterprise annuities | ||||
| Total | 22,003,717.86 | 22,003,717.86 |
25. Taxes Payable
Unit: RMB
| Item | Ending balance | Beginning balance |
| VAT | 461.22 | 1,290,060.47 |
| Corporate income tax | 531,557.38 | 5,090,781.18 |
| Personal income tax | 114,208.40 | 367,624.40 |
| Urban maintenance and construction tax | 879,346.31 | 970,067.92 |
| Property tax | 94,863.50 | 94,257.20 |
| Land use tax | 100,135.19 | 100,135.19 |
| Stamp duty | 6,851.35 | 6,282.95 |
| Education Surcharge | 35,023.81 | 99,824.96 |
| Comprehensive fees | 1,075,134.76 | 1,075,134.76 |
| Environmental protection tax | 31,903.49 | 213.55 |
| Total | 2,869,485.41 | 9,094,382.58 |
26. Other Payables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Interest payable | ||
| Dividends payable | 3,891,433.83 | 3,891,433.83 |
| Other payables | 193,653,642.25 | 201,172,711.27 |
| Total | 197,545,076.08 | 205,064,145.10 |
(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 | 3,406,041.83 | 3,271,541.83 |
| Intercourse funds among units | 9,309,617.95 | 11,321,462.95 |
| Intercourse funds among individuals | 1,256,848.49 | 430,612.05 |
| Sales discount and three guarantees | 147,739,746.71 | 143,497,522.22 |
| Other | 31,941,387.27 | 42,651,572.22 |
| Total | 193,653,642.25 | 201,172,711.27 |
2) Significant Other Payables Aging over One Year
The significant other payables aging over one year at the period-end mainly referred to the unsettled temporarycredits and charges owned.
27. Other Current Liabilities
Unit: RMB
| Item | Ending balance | Beginning balance |
| Ordinary share dividends | 3,243,179.97 | 3,243,179.97 |
| Interest of preferred shares/ perpetual bond classified as equity instrument | ||
| Dividends for non-controlling shareholders | 648,253.86 | 648,253.86 |
| Other | ||
| Total | 3,891,433.83 | 3,891,433.83 |
| Item | Ending balance | Beginning balance |
| Sale service fee | 365,047.65 | 229,387.96 |
| Transportation storage fee | 260,055.33 | 132,551.86 |
| Electric charge | 1,972,314.61 | 815,772.56 |
| Tax to be transferred | 2,636,529.53 | 2,136,799.04 |
| Total | 5,233,947.12 | 3,314,511.42 |
Refer to “V Significant Accounting Policies, Estimates-32(1) Changes to Significant Accounting Policies” for thedifference between the beginning balance and ending balance of prior period (31 December 2019).
28. Deferred Income
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
| Government grants | 58,864,111.22 | 1,914,373.62 | 56,949,737.60 | Government appropriation | |
| Total | 58,864,111.22 | 1,914,373.62 | 56,949,737.60 | -- |
Item involving government grants:
Unit: RMB
| Item | 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 | Amount offset cost in the Reporting Period | Other changes | Ending balance | Related to assets/related income |
| Electric control of diesel engine research and development and industrialization allocations | 248,400.00 | 248,400.000 | Related to assets | |||||
| National major project special allocations | 28,770,000.00 | 28,770,000.00 | Related to assets |
| Remove compensation | 19,845,711.22 | 665,973.62 | 19,179,737.60 | Related to assets | ||||
| Research and development and industrialization allocations of national III/IV standard high-powered efficient diesel engine for agricultural use | 10,000,000.00 | 1,000,000.00 | 9,000,000.00 | Related to assets | ||||
| Total | 58,864,111.22 | 1,914,373.62 | 56,949,737.60 |
29. Share Capital
单位：元
| Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
| New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
| The sum of shares | 561,374,326.00 | 561,374,326.00 | |||||
30. Capital Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Capital premium (premium on stock) | 143,990,690.24 | 143,990,690.24 | ||
| Other capital reserves | 20,337,975.19 | 20,337,975.19 | ||
| Total | 164,328,665.43 | 164,328,665.43 |
31. Other Comprehensive Income
Unit: RMB
| Item | Beginni | Reporting Period | Endin |
| ng 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 owners of the Company as the parent after tax | Attributable to non-controlling interests after tax | g balance | |
| I. Other comprehensive income that will not be reclassified to profit or loss | 317,059,775.00 | 127,966,296.36 | 348,368.67 | 19,194,944.45 | 108,422,983.24 | 425,482,758.24 | ||
| Of which: Changes caused by re-measurements on defined benefit pension schemes | ||||||||
| Share of other comprehensive income of investees that will not be reclassified to profit or loss under equity method | ||||||||
| Changes in fair value of other equity instrument investment | 317,059,775.00 | 127,966,296.36 | 348,368.67 | 19,194,944.45 | 108,422,983.24 | 425,482,758.24 | ||
| Changes in fair value of corporate credit risk | ||||||||
| II. Other comprehensive income that may subsequently be reclassified to profit or loss |
| Of which: Share of other comprehensive income of investees that will be reclassified to profit or loss under equity method | ||||||||
| Changes in fair value of investment in other debt obligations | ||||||||
| Amount of financial assets reclassified to other comprehensive income | ||||||||
| Credit depreciation reserves of investment in other debt obligations | ||||||||
| Reserves for cash flow hedges | ||||||||
| Differences arising from translation of foreign currency-denominated financial statements | ||||||||
| Total of other comprehensive income | 317,059,775.00 | 127,966,296.36 | 348,368.67 | 19,194,944.45 | 108,422,983.24 | 425,482,758.24 |
32. Specific Reserve
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Safety production cost | 17,560,202.07 | 3,766,291.74 | 2,513,507.26 | 18,812,986.55 |
| Total | 17,560,202.07 | 3,766,291.74 | 2,513,507.26 | 18,812,986.55 |
33. Surplus Reserves
Unit: RMB
| Item | Beginning balance | Increase | Decrease | Ending balance |
| Statutory surplus reserves | 309,071,675.82 | 3,222,997.42 | 312,294,673.24 | |
| Discretional surplus reserves | 13,156,857.90 | 13,156,857.90 | ||
| Total | 322,228,533.72 | 3,222,997.42 | 325,451,531.14 |
34. Retained Earnings
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Beginning balance of retained earnings before adjustments | 726,689,929.10 | 717,883,351.33 |
| Total retained earnings at the beginning of the adjustment period (“+” means up, “-” means down) | 1,651,336.26 | 1,619,864.82 |
| Beginning balance of retained earnings after adjustments | 728,341,265.36 | 719,503,216.15 |
| Add: Net profit attributable to owners of the Company as the parent | 52,432,443.05 | 24,966,526.85 |
| Less: Withdrawal of statutory surplus reserves | 3,222,997.42 | 2,094,119.49 |
| Withdrawal of discretional surplus reserves | ||
| Withdrawal of general reserve | ||
| Dividend of ordinary shares payable | 14,034,358.15 | |
| Dividends of ordinary shares transferred as share capital | ||
| Recorded in other comprehensive income in prior period and transferred in retained profits in the Current Period | 348,368.67 | |
| Ending retained earnings | 777,899,079.66 | 728,341,265.36 |
Notes:
The retained earnings at the beginning of the adjustment period due to the accounting errors correction in previousperiod: RMB1,651,336.26 at the period-beginning of 2020, and RMB1,619,864.82 at the period-beginning of2019.
35. 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 | 2,252,479,553.51 | 1,918,486,625.85 | 2,001,911,782.04 | 1,679,856,891.00 |
| Other operations | 43,985,157.73 | 32,087,365.42 | 43,909,019.06 | 34,676,976.50 |
| Total | 2,296,464,711.24 | 1,950,573,991.27 | 2,045,820,801.10 | 1,714,533,867.50 |
Information related to performance obligations: performing according to the contract offerInformation related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or notfully performed yet was RMB0 at the period-end.
36. Taxes and Surtaxes
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Urban maintenance and construction tax | 2,090,758.82 | 967,755.74 |
| Education surcharge | 1,493,399.12 | 690,897.41 |
| Property tax | 4,573,282.78 | 4,692,583.81 |
| Land use tax | 3,752,947.49 | 3,813,015.72 |
| Vehicle and vessel use tax | 1,350.00 | 1,320.00 |
| Stamp duty | 698,047.82 | 541,541.14 |
| Environment tax | 221,775.24 | 238,068.00 |
| Other | 38,047.88 | 34,933.24 |
| Total | 12,869,609.15 | 10,980,115.06 |
37. Selling Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Office expenses | 15,665,504.29 | 15,164,256.65 |
| Employee benefits | 38,670,632.17 | 29,850,039.44 |
| Sales promotional expense | 6,859,494.25 | 5,260,765.63 |
| Three guarantees | 65,108,496.52 | 38,321,773.50 |
| Transport charge | 7,296,670.11 | |
| Other | 2,068,151.39 | 1,191,611.72 |
| Total | 128,372,278.62 | 97,085,117.05 |
38. Administrative Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Safety expenses | 3,766,291.74 | 3,868,727.07 |
| Office expenses | 10,970,658.73 | 11,096,718.08 |
| Other | 7,389,204.00 | 22,624,149.85 |
| Repair charge | 788,498.70 | 391,744.51 |
| Transport fees | 2,035,060.15 | |
| Depreciation and amortization | 10,255,597.50 | 11,166,156.58 |
| Employee benefits | 54,275,945.07 | 55,833,401.17 |
| Total | 87,446,195.74 | 107,015,957.41 |
39. Development Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Direct input expense | 43,808,908.87 | 39,929,867.41 |
| Employee benefits | 20,288,706.97 | 19,795,993.59 |
| Depreciation and amortization | 4,534,946.69 | 3,926,467.26 |
| Entrusted development charges | 430,000.00 | 26,000.00 |
| Other | 3,196,218.55 | 2,543,048.01 |
| Total | 72,258,781.08 | 66,221,376.27 |
40. Finance Costs
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Interest expense | 7,302,086.80 | 5,722,554.43 |
| Less: Interest income | 5,467,634.76 | 6,733,183.88 |
| Net foreign exchange gains or losses | 14,491,248.00 | -1,709,183.70 |
| Other | -557,389.72 | -1,716,760.21 |
| Total | 15,768,310.32 | -4,436,573.36 |
41. Other Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Government grants | 7,763,215.65 | 5,312,295.51 |
| Other | 45,516.87 | 12,063.29 |
42. Investment Income
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Long-term equity investment income accounted by equity method | ||
| Investment income from disposal of long-term equity investment | ||
| Investment income from holding of trading financial assets | ||
| Investment income from disposal of trading financial assets | -25,036.13 | |
| Dividend income from holding of other equity instrument investment | 5,004,000.00 | 6,069,000.00 |
| Investment income from holding of held-to –maturity investment | ||
| Investment income from holding of available-for-sale financial assets | ||
| Investment income from disposal of available-for-sale financial assets | ||
| Investment income from disposal of held-to –maturity investment | ||
| Income from re-measurement of residual stock rights at fair value after losing control power | ||
| Interest income from holding of investment in debt obligations | ||
| Interest income from holding of investment in other debt obligations | ||
| Investment income from disposal of investment in other debt obligations | ||
| Investment income from disposal of other non-current financial assets | -18,685.03 | |
| Dividend income from holding of other non-current financial assets | 149,821.58 | 1,408,752.61 |
| Other income from holding of other equity instrument investments | 433,925.05 | 137,814.50 |
| Investment income from financial products | 753,991.35 | 413,378.77 |
| Forward income from foreign exchange settlement | 229,125.00 |
| Total | 6,545,826.85 | 8,010,260.85 |
43. Gain on Changes in Fair Value
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Transactional financial assets | 200,272.00 | -49,255.00 |
| Other non-current financial assets | 20,780,837.00 | |
| Total | 20,981,109.00 | -49,255.00 |
44. Credit Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Bad debt loss of other receivables | 1,498,356.99 | -288,027.65 |
| Bad debt loss of accounts receivable | 880,273.69 | -4,637,783.63 |
| Impairment loss of entrusted loan | 4,000,000.00 | |
| Total | 2,378,630.68 | -925,811.28 |
45. Asset Impairment Loss
Unit: RMB
| Item | Reporting Period | Same period of last year |
| I. Bad debt loss | ||
| II. Loss on inventory valuation and contract performance cost | -11,155,930.76 | -42,371,202.17 |
| III. Impairment loss on long-term equity investment | ||
| IV. Impairment loss on investment property | ||
| V. Impairment loss on fixed assets | ||
| VI. Impairment loss on engineering materials | ||
| VII. Impairment loss on construction in progress | ||
| VIII. Impairment loss on productive living assets | ||
| IX. Impairment loss on oil and gas assets | ||
| X. Impairment loss on intangible assets | ||
| XI. Impairment loss on goodwill | ||
| XII. Other | ||
| Total | -11,155,930.76 | -42,371,202.17 |
46. Asset Disposal Income
Unit: RMB
| Sources | Reporting Period | Same period of last year |
| Disposal income of fixed assets | 229,121.29 | 2,059,668.56 |
47. Non-operating Income
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Income from penalty | 267,439.00 | 373,200.44 | 267,439.00 |
| No payment required | 399,049.91 | 29,831.10 | 399,049.91 |
| Other | 380,625.30 | 59,319.94 | 380,625.30 |
| Total | 1,047,114.21 | 462,351.48 | 1,047,114.21 |
48. Non-operating Expense
Unit: RMB
| Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
| Retirement loss of non-current assets | 34,356.44 | 158,128.44 | 34,356.44 |
| Quality indemnity | 2,085,438.03 | 2,085,438.03 | |
| Donation expenditure | 250,000.00 | 250,000.00 | |
| Other | 260,002.86 | 73,810.45 | 260,002.86 |
| Total | 2,629,797.33 | 231,938.89 | 2,629,797.33 |
49. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Current income tax expense | 838,369.52 | 1,939,568.19 |
| Deferred income tax expense | 1,247,230.81 | -224,522.42 |
| Total | 2,085,600.33 | 1,715,045.77 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
| Item | Reporting Period |
| Profit before taxation | 54,380,351.52 |
| Current income tax expense accounted at statutory/applicable tax rate | 8,157,052.73 |
| Influence of applying different tax rates by subsidiaries | 733,969.40 |
| Influence of income tax before adjustment | -728,340.92 |
| Influence of non-taxable income | -788,055.39 |
| Influence of non-deductable costs, expenses and losses | 456,287.08 |
| Influence of deductable losses of unrecognized deferred income tax at the beginning of the Reporting Period | -2,140,409.67 |
| Influence of deductable temporary difference or deductable losses of unrecognized deferred income tax assets in the Reporting Period | 110,589.49 |
| Tax preference generated from eligible expense | -3,241,494.34 |
| Changes in the balance of deferred income tax assets/liabilities at the beginning of the period due to tax rate adjustments | -473,998.05 |
| Income tax expense | 2,085,600.33 |
50. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Subsidy and appropriation | 5,857,679.00 | 4,247,921.89 |
| Other intercourses in cash | 5,144,619.79 | 176,497.69 |
| Interest income | 5,467,634.76 | 6,987,251.60 |
| Other | 507,167.41 | 378,925.22 |
| Total | 16,977,100.96 | 11,790,596.40 |
(2) Cash Used in Other Operating Activities
Unit: RMB
| Item | Reporting Period | Same period of last year |
| Selling and administrative expenses paid in cash | 120,289,403.78 | 120,086,467.93 |
| Handling charges | 1,776,237.12 | 938,872.65 |
| Other | 777,383.09 | 317,407.08 |
| Other transactions | 690,007.30 | 143,724.20 |
| Total | 123,533,031.29 | 121,486,471.86 |
(3) Cash Generated from Other Investing Activities
| Item | Reporting Period | Same period of last year |
| Deposit of construction unit | 336,150.00 | |
| Total | 336,150.00 |
(4) Cash Used in Other Investing Activities
| Item | Reporting Period | Same period of last year |
| Product margin | 4,141,850.71 | |
| Total | 4,141,850.71 |
(5) Cash Used in Other Financial Activities
| Item | Reporting Period | Same period of last year |
| Private placement of intermediary agency fees | 2,500,000.00 | |
| Total | 2,500,000.00 |
51. 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 | 52,294,751.19 | 24,984,327.75 |
| Add: Provision for impairment of assets | 8,777,300.08 | 43,297,013.45 |
| Depreciation of fixed assets, of oil and gas assets, of productive living assets | 80,616,241.38 | 85,591,455.99 |
| Depreciation of right-of-use assets | ||
| Amortization of intangible assets | 5,129,822.75 | 4,826,730.02 |
| Amortization of long-term deferred expenses | 39,804.60 | 39,804.60 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains by “-”) | -229,121.29 | -2,059,668.56 |
| Losses on the scrapping of fixed assets (gains by “-”) | 34,356.44 | 158,128.44 |
| Losses on the changes in fair value (gains by “-”) | -20,981,109.00 | 49,255.00 |
| Financial expenses (gains by “-”) | 16,911,546.38 | 5,007,157.46 |
| Investment losses (gains by “-”) | -6,545,826.85 | -8,010,260.85 |
| Decrease in deferred income tax assets (increase by “-”) | -3,208,010.11 | -43,732.33 |
| Increase in deferred income tax liabilities (decrease by “-”) | 4,455,240.92 | -180,790.09 |
| Decrease in inventory (increase by “-”) | -144,477,102.41 | 42,238,508.04 |
| Decrease in accounts receivable from operating activities (increase by “-”) | 16,892,902.36 | -138,877,379.35 |
| Increase in payables from operating activities (decrease by “-”) | 278,992,494.07 | -99,909,743.96 |
| Other | -36,906,635.98 | 22,564,004.83 |
| Net cash flows generated from operating activities | 251,796,654.53 | -20,325,189.56 |
| 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 | 629,939,540.50 | 545,959,998.20 |
| Less: Beginning balance of cash | 545,959,998.20 | 691,266,373.34 |
| Add: Ending balance of cash equivalents | ||
| Less: Beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 83,979,542.30 | -145,306,375.14 |
(2) Cash and Cash Equivalents
Unit: RMB
| Item | Ending balance | Beginning balance |
| I. Cash | 629,939,540.50 | 545,959,998.20 |
| Including: Cash on hand | 287,505.91 | 181,115.21 |
| Bank deposit on demand | 620,966,786.57 | 545,271,159.5 |
| Other monetary assets on demand | 8,685,248.02 | 507,723.49 |
| 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 | 629,939,540.50 | 545,959,998.20 |
| Of which: Cash and cash equivalents with restriction in use for the Company as the parent or subsidiaries of the Group |
52. Assets with Restricted Ownership or Right to Use
Unit: RMB
| Item | Ending carrying value | Reason for restriction |
| Monetary assets | 130,788,682.35 | As cash deposit for bank acceptance bill and environment |
| Houses and buildings | 2,012,894.88 | Mortgaged for borrowings from banks |
| Land use right | 962,953.87 | Mortgaged for borrowings from banks |
| Machinery equipment | 34,959,585.43 | Mortgaged for borrowings from banks |
| Total | 168,724,116.53 | -- |
53. 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 | -- | -- | 88,036,406.31 |
| Of which: USD | 22,205,667.87 | 6.5249 | 144,889,762.28 |
| EUR | |||
| HKD | 285,402.45 | 0.84164 | 240,206.12 |
| SGD | 54,427.95 | 4.9314 | 268,405.99 |
| JPY | 1.00 | 0.0632 | 0.06 |
| Accounts receivable | -- | -- | |
| Of which: USD | 7,621,884.47 | 6.5249 | 49,732,033.97 |
| Accounts payable | |||
| Of which: USD | 302.60 | 6.5249 | 1,974.43 |
(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
54. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
| Category | Amount | Listed items | Amount recorded in the current profit or loss |
| Industrial and information industry transformation and upgrading subsidies | 150,000.00 | Other income | 150,000.00 |
| Trinity subsidy | 615,000.00 | Other income | 615,000.00 |
| Subsidy for stabilizing posts | 3,147,000.03 | Other income | 3,147,000.03 |
| Business development fund | 10,600.00 | Other income | 10,600.00 |
| Small and medium-sized enterprises exploit capital | 14,200.00 | Other income | 14,200.00 |
| Export credit insurance subsidies | 323,200.00 | Other income | 323,200.00 |
| Relocation compensation | 665,973.62 | Other income | 665,973.62 |
| R & D and industrialization of off-road diesel engine controlled by electricity | 248,400.00 | Other income | 248,400.00 |
| Tax contribution award | 50,000.00 | Other income | 50,000.00 |
| Funding for the first year of the demonstration base for training advanced skilled personnel | 35,000.00 | Other income | 35,000.00 |
| Subsidies for training by work | 1,217,500.00 | Other income | 1,217,500.00 |
| Epidemic subsidy | 2,000.00 | Other income | 2,000.00 |
| Development funds for science and technology projects | 10,000.00 | Other income | 10,000.00 |
| Post-doctoral grants, outbound awards and site establishment awards | 50,000.00 | Other income | 50,000.00 |
| The third batch of intellectual property award funds in Changzhou | 100,000.00 | Other income | 100,000.00 |
| Financial center subsidy | 50,460.00 | Other income | 50,460.00 |
| Innovation-driven rewards | 6,000.00 | Other income | 6,000.00 |
| Subsidy fund of New District Finance Bureau award | 7,882.00 | Other income | 7,882.00 |
| Subsidies for high-tech enterprises from the New District Finance Bureau | 60,000.00 | Other income | 60,000.00 |
| Appropriation or research and development and industrialization allocations of national III/IV standard high-powered efficient diesel engine for agricultural use | 1,000,000.00 | Other income | 1,000,000.00 |
Return of Government Grants
□ Applicable √ Not applicable
VIII. Changes of Consolidation Scope
None
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
| Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Way of gaining | |
| Directly | Indirectly | |||||
| Changchai Wanzhou Diesel Engine Co., Ltd. | Chongqing | Chongqing | Industry | 60.00% | Set-up | |
| Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. | Changzhou | Changzhou | Industry | 99.00% | 1.00% | Set-up |
| Changzhou Housheng Investment Co., Ltd. | Changzhou | Changzhou | Service | 100.00% | Set-up | |
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | Changzhou | Changzhou | Industry | 70.00% | 25.00% | Set-up |
| Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. | Changzhou | Changzhou | Industry | 100.00% | Combination not under the same control | |
| Jiangsu Changchai Machinery Co., Ltd. | Changzhou | Changzhou | Industry | 100.00% | Set-up | |
| Changzhou Xingsheng Property Management Co., Ltd. | Changzhou | Changzhou | Service | 100.00% | Set-up |
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
| Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to the non-controlling interests | Declaring dividends distributed to non-controlling interests | Balance of non-controlling interests at the period-end |
| Changchai Wanzhou Diesel Engine Co., Ltd. | 40.00% | 197,910.74 | 19,811,859.46 | |
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | 5.00% | -335,602.60 | -313,270.31 |
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. | 49,267,159.00 | 25,044,012.17 | 74,311,171.17 | 24,781,522.52 | 24,781,522.52 | 43,807,991.71 | 25,821,314.00 | 69,629,305.71 | 20,594,433.90 | 20,594,433.90 | ||
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | 26,356,205.03 | 423,493.77 | 26,779,698.80 | 33,045,105.00 | 33,045,105.00 | 28,573,892.12 | 514,669.94 | 29,088,562.06 | 28,641,916.23 | 28,641,916.23 |
Unit: RMB
| Name | Reporting Period | Same period of last year | ||||||
| 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. | 43,143,296.52 | 494,776.84 | 494,776.84 | 2,183,407.36 | 40,959,222.43 | 160,355.43 | 160,355.43 | 1,526,529.99 |
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | 14,280,066.47 | -6,712,052.03 | -6,712,052.03 | -171,680.44 | 13,888,579.77 | -926,825.38 | -926,825.38 | -419,750.02 |
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 3 December2020, new partners were added. In line with the revised Partnership Agreement, the general partner is SynergeticInnovation Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited, ChangzhouZhongyou Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu, Tong Yinxin and Anhui Haiyunzhou
Equity Investment Partnership Enterprise (Limited). In accordance with the Partnership Agreement, the limitedpartner does not execute the partnership affairs. Thus, the Company does not control Changzhou Xietong PrivateEquity Fund (Limited Partnership) and did not include it into the scope of consolidated financial statements.
X. The Risk Related to Financial InstrumentsThe 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 cashto 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’sexport 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.XI. 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 | -- | -- | -- | -- |
| 1. Trading financial assets | 49,582,105.00 | 60,651,105.63 | 110,233,210.63 | |
| (I) Financial assets at fair value through profit or loss | 49,582,105.00 | 60,651,105.63 | 110,233,210.63 | |
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | 49,582,105.00 | 60,651,105.63 | 110,233,210.63 | |
| (3) Derivative financial assets | ||||
| 2. Financial assets designated to be measured at fair value and the changes included into the current profit or loss | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (II) Other bond investment | ||||
| (III)Other equity instrument investment | 582,939,000.00 | 102,198,950.87 | 685,137,950.87 | |
| (2) Equity instrument investment | ||||
| (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 | ||||
| Total assets consistently measured by fair value | 632,521,105.00 | 162,850,056.50 | 795,371,161.50 | |
| (VI) Trading financial liabilities | ||||
| Of which: Issued trading bonds | ||||
| Derivative financial liabilities | ||||
| Other | ||||
| (VII) Financial liabilities designated to be measured at fair value and the changes recorded into the current profit or loss | ||||
| Total liabilities consistently |
| measured by fair value | ||||
| II. Inconsistent fair value measurement | -- | -- | -- | -- |
| (1) Assets held for sale | ||||
| 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 investment of other equity instruments measured at fairvalue, the closing price at the end of the period 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 3
(1) Among the trading financial assets, the basic assets invested in financial products include bond assets, depositassets, fund assets, etc. The portfolio of investment is managed dynamically, and the change in the fair value offinancial products is difficult to measure, so the cost amount is adopted to confirm its fair value.For the unsettled forward settlement contract at the end of the period, its fair value was measured based on thevaluation of the bank.
(2) Among the non-current financial assets, such as the equity investment in Jiangsu Liance Mechanical andElectrical Technology Co., Ltd., which did not have active market transactions, the Company’s equity of theinvestee was relatively low and had no significant impact, so it is not feasible to use the income method or marketmethod to estimate the value. Therefore, the investment cost was treated as reasonable estimation of fair value tomeasure at the period-end.In terms of shares of NEEQ unlisted public companies held by the Company, as for the equity instrumentinvestment with inactive market transactions, due to the market value of shares cannot be reflected by the markettransaction price with the low volume of holding, so the appraisement to the invested companies by income ormarket approach was unfeasible. Therefore, the investment cost shall be treated as reasonable estimation of fairvalue to measure at the period-end.Jiangsu Housheng New Energy Technology Co., Ltd. entrusted an appraisal agency to evaluate the value of all itsshareholders’ equity due to the need for capital increase and share expansion in 2020, and confirmed the premiumrate of capital increase based on the appreciation rate of the equity value (on 30 December 2020, the company’sinvestors signed an investment agreement). Therefore, at the end of the period, the fair value of the equityinvestment had been adjusted and confirmed accordingly.
(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) has invested in Jiangsu Housheng New Energy Technology Co., Ltd., and the change in fair value ofthe company's equity held by it had increased the equity of partners at the end of the year. In addition, thecompany's business environment, operating conditions, and financial status had not undergone major changes.Therefore, the company determined its fair value on the basis of the net book assets of the partnership at the end
of the period.XII. 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 | 30.43% | 30.43% |
Notes: Information on the Company as the parentThe parent company of the enterprise is Changzhou Investment Group Co., Ltd., which is a wholly-ownedsubsidiary of Changzhou Municipal People's Government. In accordance with Changzhou People’s GovernmentDocument (CZF [2006] No. 62), both the Company and Changzhou Investment Group Co., Ltd. are enterpriseswhich Changzhou People’s Government authorizes Changzhou Government State-owned Assets Supervision andAdministration Commission to perform duties of investors. Thus, after the sharer transfer, Changzhou InvestmentGroup Co., Ltd. is the controlling shareholder of the Company and Changzhou Government State-owned AssetsSupervision and Administration Commission is still the actual controller of the Company. The final controller ofthe Company is Changzhou Government State-owned Assets Supervision and Administration Commission.
2. Subsidiaries of the Company
Refer to Note IX for details.
3. Information on Other Related Parties
| Name | Relationship with the Company |
| Synergetic Innovation Fund Management Co., Ltd. | Senior executives of the company used to serve as directors of the Company (no longer as directors of the Company on 16 April 2020) |
| Changzhou Synergetic Innovation Private Equity Fund (Limited Partnership) | Participated in establishing the industrial investment fund |
| Jiangsu Housheng New Energy Technology Co., Ltd. | Shareholding enterprise of the Company |
| Donghai Securities Co., Ltd. | Controlled by the same Company as the parent |
4. Related-party Transactions
(1) Other Related-party Transaction
On 28 June 2020, the 3rd Meeting of the 9th Board of Directors approved the Proposal on Signature of JointSponsorship Underwriting Agreement of the Private Placement of A shares and Related-party Transaction, whichallowed the Company signing the joint sponsorship underwriting agreement with Industrial Securities Co., Ltd.
(hereinafter referred to as “Industrial Securities”) and Donghai Securities Co., Ltd. (hereinafter referred to as“Donghai Securities”), and appointing Industrial Securities and Donghai Securities as the co-sponsor underwritersfor the private placement of A shares of the Company with sponsor fee of RMB3 million to Industrial Securitiesand Donghai Securities and the underwriting fee of no more than RMB11 million (inclusive of RMB11 million).As of 31 December 2020, the Company has paid a sponsorship fee of RMB 750,000 to Donghai Securities.XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet dateAs of 31 December 2020, there was no significant commitment for the Company to disclose.
2. Contingency
As of 31 December 2020, there was no contingencies for the Company to disclose.
XIV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
| Profits or dividends to be distributed | 0 |
2. Notes to Other Events after Balance Sheet Date
According to the Investment Agreement signed on 30 December 2020, the Company increased its capital to JiangsuHousheng New Energy Technology Co., Ltd. by RMB 26.25 million on 11 January 2021.As of the approval issue date of financial statements, there was no other significant event after balance sheet datethat shall be disclosed.
XV. Other Significant Events
1. Correction of Previous Accounting Error
(1) Retrospective Restatement
Unit: RMB
| Content | Processing procedure | Affected financial statement line items of the comparative periods | Cumulative effects |
| Changzhou Xingsheng Property Management Co., Ltd. that was not included in the scope of consolidated statements before has been conducted accounting treatment according to the | The 4th Meeting of the 9th Board of Directors held on 29 July 2020 reviewed and approved the Proposal on Accounting Errors Correction in Previous Period. | Consolidated Balance Sheet in 2019-Mnetary assets | 1,375,254.03 |
| Consolidated Balance Sheet in 2019-Trading financial assets | 3,050,000.00 | ||
| Consolidated Balance Sheet in 2019-Accounts receivable | 6,391.36 | ||
| Consolidated Balance Sheet in 2019-Prepayment | 38,200.00 | ||
| Consolidated Balance Sheet in 2019-Other receivables | -893,682.24 | ||
| Consolidated Balance Sheet in 2019-Inventories | 7,158.32 | ||
| Consolidated Balance Sheet in 2019-Other current assets | 67,355.14 | ||
| Consolidated Balance Sheet in 2019-Total of current assets | 4,632,342.79 | ||
| Consolidated Balance Sheet in 2019-Fixed assets | 140,153.19 | ||
| Consolidated Balance Sheet in 2019-Long-term prepaid expenses | 53,497.80 | ||
| Consolidated Balance Sheet in 2019-Deferred | 6.52 |
| provisions of the accounting standards during the Reporting Period. | income tax assets | ||
| Consolidated Balance Sheet in 2019-Total of non-current assets | 193,657.51 | ||
| Consolidated Balance Sheet in 2019- Total assets | 4,826,000.30 | ||
| Consolidated Balance Sheet in 2019-Accounts payable | 14,760.00 | ||
| Consolidated Balance Sheet in 2019-Advances from customers | 952,386.57 | ||
| Consolidated Balance Sheet in 2019-Other payables | 1,224,017.91 | ||
| Consolidated Balance Sheet in 2019-Total of current liabilities | 2,191,164.48 | ||
| Consolidated Balance Sheet in 2019-Total liabilities | 2,191,164.48 | ||
| Consolidated Balance Sheet in 2019-Surplus reserves | 163,483.58 | ||
| Consolidated Balance Sheet in 2019- Retained earnings | 1,471,352.24 | ||
| Consolidated Balance Sheet in 2019- Total equity attributable to owners of the Company as the parent | 2,634,835.82 | ||
| Consolidated Balance Sheet in 2019- Total owners’ equity | 2,634,835.82 | ||
| Consolidated Balance Sheet in 2019- Total liabilities and owners’ equity | 4,826,000.30 | ||
| Consolidated Income Statement in 2019- Revenue | 5,687,083.80 | ||
| Consolidated Income Statement in 2019- Operating revenue | 5,687,083.80 | ||
| Consolidated Income Statement in 2019-Operating costs | 5,726,254.73 | ||
| Consolidated Income Statement in 2019- Cost of sales | 4,884,089.75 | ||
| Consolidated Income Statement in 2019- Taxes and surtaxes | 21,043.17 | ||
| Consolidated Income Statement in 2019- Administrative expense | 832,824.01 | ||
| Consolidated Income Statement in 2019- Finance costs | -11,702.20 | ||
| Consolidated Income Statement in 2019-Interest income | 13,193.10 | ||
| Consolidated Income Statement in 2019- Other income | 12,063.29 | ||
| Consolidated Income Statement in 2019- Investment income | 58,549.24 | ||
| Consolidated Income Statement in 2019-Credit impairment loss | 7,317.61 |
| Consolidated Income Statement in 2019-Operating profit | 38,759.21 |
| Consolidated Income Statement in 2019- Non-operating income | 16,006.10 |
| Consolidated Income Statement in 2019- Non-operating expense | 12,597.35 |
| Consolidated Income Statement in 2019- Profit before taxation | 42,167.96 |
| Consolidated Income Statement in 2019- Income tax | 10,227.22 |
| Consolidated Income Statement in 2019-Net profit | 31,940.74 |
| Consolidated Income Statement in 2019- Net profit from continuing operations | 31,940.74 |
| Consolidated Income Statement in 2019- Net profit attributable to owners of the Company as the parent | 31,940.74 |
| Consolidated Income Statement in 2019-Total comprehensive income | 31,940.74 |
| Consolidated Income Statement in 2019- Attributable to owners of the Company as the parent | 31,940.74 |
| Consolidated Income Statement in 2019-Earnings per share | 0.00005 |
| Consolidated Income Statement in 2019- Diluted earnings per share | 0.00005 |
| Consolidated Cash Flow Statement in 2019-Proceeds from sale of commodities and rendering of services | 6,150,306.39 |
| Consolidated Cash Flow Statement in 2019- Cash generated from other operating activities | 110,627.50 |
| Consolidated Cash Flow Statement in 2019-Subtotal of cash used in operating activities | 6,260,933.89 |
| Consolidated Cash Flow Statement in 2019- Payments for commodities and services | 4,051,587.11 |
| Consolidated Cash Flow Statement in 2019- Cash paid to and for employees | 1,415,158.29 |
| Consolidated Cash Flow Statement in 2019- Taxes paid | 223,381.96 |
| Consolidated Cash Flow Statement in 2019- Cash used in other operating activities | 353,138.57 |
| Consolidated Cash Flow Statement in 2019- Subtotal of cash used in operating activities | 6,043,265.93 |
| Consolidated Cash Flow Statement in 2019- Net cash generated from/used in operating activities | 217,667.96 |
| Consolidated Cash Flow Statement in 2019-Proceeds from disinvestments | 3,900,000.00 |
| Consolidated Cash Flow Statement in 2019- Investment income | 58,549.24 |
| Consolidated Cash Flow Statement in 2019- Subtotal of cash generated from investing activities | 3,958,549.24 |
| Consolidated Cash Flow Statement in 2019-Payments for acquisition of fixed assets, intangible assets and other long-lived assets | 37,696.92 |
| Consolidated Cash Flow Statement in 2019- Payments for investments | 6,950,000.00 |
| Consolidated Cash Flow Statement in 2019- Subtotal of cash used in investing activities | 6,987,696.92 |
| Consolidated Cash Flow Statement in 2019- Net cash generated from/used in investing activities | -3,029,147.68 |
| Consolidated Cash Flow Statement in 2019- Net increase in cash and cash equivalents | -2,811,479.72 |
2. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar, the Company conducts commonmanagement, and did not divide business unit, so the Company only made single branch report.
3. Other Significant Transactions and Events with Influence on Investors’ Decision-makingNo.XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
| Category | Ending balance | Beginning balance | ||||||||
| 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 for which bad debt provision separately accrued | 33,543,441.92 | 7.29% | 31,647,855.09 | 94.35% | 1,895,586.83 | 37,510,056.90 | 6.66% | 33,788,291.86 | 90.08% | 3,721,765.04 |
| Of which: | ||||||||||
| Accounts receivable with significant single amount for which bad debt provision separately accrued | 29,870,525.05 | 6.50% | 27,974,938.22 | 93.65% | 1,895,586.83 | 32,618,199.97 | 5.79% | 28,896,434.93 | 88.59% | 3,721,765.04 |
| Accounts receivable with insignificant single amount for which bad debt provision separately accrued | 3,672,916.87 | 0.80% | 3,672,916.87 | 100.00% | 4,891,856.93 | 0.87% | 4,891,856.93 | 100.00% | ||
| Accounts receivable for which bad debt provision accrued by group | 426,300,279.29 | 92.71% | 110,367,704.87 | 25.89% | 315,932,574.42 | 525,874,423.56 | 93.34% | 192,148,650.56 | 36.54% | 333,725,773.00 |
| Of which: | ||||||||||
| Accounts receivable for which bad debt provision accrued by credit risk features group | 426,300,279.29 | 92.71% | 110,367,704.87 | 25.89% | 315,932,574.42 | 525,874,423.56 | 93.34% | 192,148,650.56 | 36.54% | 333,725,773.00 |
| Total | 459,843,721.21 | 100.00% | 142,015,559.96 | 30.88% | 317,828,161.25 | 563,384,480.46 | 100.00% | 225,936,942.42 | 40.10% | 337,447,538.04 |
Accounts receivable with significant single amount for which bad debt provision separately accrued at the end ofthe period:
Unit: RMB
| Name | Ending balance | |||
| Carrying amount | Bad debt provision | Withdrawal proportion | Withdrawal reason | |
| Customer 1 | 1,470,110.64 | 1,470,110.64 | 100.00% | Difficult to recover |
| Customer 2 | 1,902,326.58 | 1,902,326.58 | 100.00% | Difficult to recover |
| Customer 3 | 6,215,662.64 | 6,215,662.64 | 100.00% | Difficult to recover |
| Customer 4 | 2,254,860.60 | 2,175,814.38 | 96.49% | Expected to difficultly recover |
| Customer 5 | 3,633,081.23 | 1,816,540.62 | 50.00% | Expected to difficultly recover |
| Customer 6 | 3,279,100.00 | 3,279,100.00 | 100.00% | Difficult to recover |
| Customer 7 | 1,617,988.01 | 1,617,988.01 | 100.00% | Difficult to recover |
| Customer 8 | 5,359,381.00 | 5,359,381.00 | 100.00% | Difficult to recover |
| Customer 9 | 2,584,805.83 | 2,584,805.83 | 100.00% | Difficult to recover |
| Customer 10 | 1,553,208.52 | 1,553,208.52 | 100.00% | Difficult to recover |
| Total | 29,870,525.05 | 27,974,938.22 | -- | -- |
Accounts receivable for which bad debt provision accrued by credit risk features group
Unit: RMB
| Name | Ending balance | ||
| Carrying amount | Bad debt provision | Withdrawal proportion | |
| Within 1 year | 309,661,916.82 | 6,193,238.34 | 2.00% |
| 1 to 2 years | 8,482,312.62 | 424,115.63 | 5.00% |
| 2 to 3 years | 1,236,457.38 | 185,468.61 | 15.00% |
| 3 to 4 years | 4,343,446.09 | 1,303,033.83 | 30.00% |
| 4 to 5 years | 785,744.81 | 471,446.89 | 60.00% |
| Over 5 years | 101,790,401.57 | 101,790,401.57 | 100.00% |
| Total | 426,300,279.29 | 110,367,704.87 | -- |
Notes to the basis for the determination of the groups:
The accounts receivable was adopted the aging analysis based on the months when the accounts occurred actually,among which the accounts occurred earlier will be priority to be settled in terms of the capital turnover.Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provisionon the Current Period: With reference to the experience of the historical credit loss, combining with the predictionof the present status and future financial situation, the comparison table was prepared between the aging of theaccounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable ifadopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Carrying amount |
| Within 1 year (including 1 year) | 309,661,916.82 |
| 1 to 2 years | 9,058,714.07 |
| 2 to 3 years | 3,186,206.94 |
| Over 3 years | 137,936,883.38 |
| 3 to 4 years | 6,867,235.84 |
| 4 to 5 years | 3,394,775.63 |
| Over 5 years | 127,674,871.91 |
| Total | 459,843,721.21 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Unit: RMB
| Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
| Withdrawal | Reversal or recovery | Write-off | Other | |||
| Bad debt provision withdrawn separately | 33,788,291.86 | 2,140,436.77 | 31,647,855.09 | |||
| Bad debt provision withdrawn by group | 192,148,650.56 | 598,258.02 | 82,379,203.71 | 110,367,704.87 | ||
| Total | 225,936,942.42 | 598,258.02 | 2,140,436.77 | 82,379,203.71 | 142,015,559.96 | |
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There Was No Particulars of the Actual Verification of Accounts Receivable during the ReportingPeriod
Unit: RMB
| Item | Amount |
| Actual verification of accounts receivable | 82,379,203.71 |
Of which the verification of significant accounts receivable:
Unit: RMB
| Name of the entity | Nature | Amount verified | Reason | Performance of verification procedures | Whether generated from related-party transaction |
| Customer 1 | Bad debt losses | 14,234,302.79 | The aging of canceled receivables shall exceed 5 years and result from fruitless collection, and if any single client’s large amount is involved without any business transaction with the | 1. The Company held the 3rd Meeting of the 9th Board of Directors and the 3rd Meeting of the 9th Supervisory Committee on 28 June 2020 and approved the Proposal on Verification of Some Accounts Receivable. 2. On 12 November 2020, the bankruptcy liquidation | Not |
| Customer 2 | 10,000,000.00 | ||||
| Customer 3 | 7,583,232.65 | ||||
| Customer 4 | 4,581,880.41 | ||||
| Customer 5 | 3,600,000.00 | ||||
| Customer 6 | 2,752,840.00 | ||||
| Customer 7 | 2,450,966.67 | ||||
| Customer 8 | 2,180,243.72 | ||||
| Customer 9 | 1,976,282.47 | ||||
| Customer 10 | 1,860,830.82 |
| Customer 11 | 1,758,686.48 | Company for over ten years, the client’s qualification for business operation shall be canceled or the insolvency liquidation is finished without any production and operation activities. | procedures of Shandong Hongli Group Co., Ltd. had been implemented, and the repayment rate of the Company’s outstanding payment was 0. On 29 January 2021, the Company held the 7th Meeting of the 9th Board of Directors and approved the Proposal on Verification of Accounts Receivable of Shandong Hongli Group Co., Ltd.. | ||
| Customer 12 | 1,662,052.98 | ||||
| Customer 13 | 1,285,160.60 | ||||
| Customer 14 | 1,236,225.30 | ||||
| Customer 15 | 1,235,170.95 | ||||
| Customer 16 | 1,200,000.00 | ||||
| Customer 17 | 1,149,217.70 | ||||
| Customer 18 | 848,158.92 | ||||
| Customer 19 | 841,642.86 | ||||
| Customer 20 | 830,000.00 | ||||
| Customer 21 | 800,000.00 | ||||
| Customer 22 | 797,786.72 | ||||
| Customer 23 | 796,226.73 | ||||
| Customer 24 | 760,197.20 | ||||
| Customer 25 | 728,666.36 | ||||
| Customer 26 | 677,250.00 | ||||
| Customer 27 | 551,305.36 | ||||
| Customer 28 | 549,800.00 | ||||
| Customer 29 | 537,698.10 | ||||
| Customer 30 | 12,343,782.28 | ||||
| Customer 31 | 520,892.51 | ||||
| Total | 82,330,500.58 | -- | -- | -- |
(4) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Ending balance of accounts receivable | Proportion to total ending balance of accounts receivable | Ending balance of bad debt provision |
| Customer 1 | 140,334,103.03 | 30.52% | 2,806,682.06 |
| Customer 2 | 36,991,841.04 | 8.04% | 856,733.55 |
| Customer 3 | 33,407,519.00 | 7.26% | 668,150.38 |
| Customer 4 | 22,051,755.53 | 4.80% | 441,035.11 |
| Customer 5 | 18,721,197.34 | 4.07% | 374,423.95 |
| Total | 251,506,415.94 | 54.69% |
2. Other Receivables
Unit: RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 24,327,355.36 | 22,741,542.22 |
| Total | 24,327,355.36 | 22,741,542.22 |
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
| Nature | Ending carrying amount | Beginning carrying amount |
| Cash deposit and Margin | 4,200.00 | 4,200.00 |
| Intercourse funds among units | 39,857,085.87 | 37,618,642.29 |
| Petty cash and borrowings by employees | 673,198.96 | 624,083.07 |
| Other | 13,614,585.00 | 15,373,206.41 |
| Total | 54,149,069.83 | 53,620,131.77 |
2) Withdrawal of Bad Debt Provision
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 2020 | 30,878,589.55 | 30,878,589.55 | ||
| Balance of 1 January 2020 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 | ||||
| Reversal of the Current Period | 1,056,875.08 | 1,056,875.08 | ||
| Write-offs of the Current Period | ||||
| Verification of the Current Period | ||||
| Other changes | ||||
| Balance of 31 December 2020 | 29,821,714.47 | 29,821,714.47 |
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
| Aging | Carrying amount |
| Within 1 year (including 1 year) | 14,386,648.65 |
| 1 to 2 years | 8,533,236.84 |
| 2 to 3 years | 1,450,140.04 |
| Over 3 years | 29,779,044.30 |
| 3 to 4 years | 1,151,162.51 |
| 4 to 5 years | 208,579.74 |
| Over 5 years | 28,419,302.05 |
| Total | 54,149,069.83 |
3) 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 debt provision withdrawn separately | 5,042,448.58 | 3,080.17 | 5,039,368.41 | |||
| Bad debt provision withdrawn by group | 25,836,140.97 | 1,053,794.91 | 24,782,346.06 | |||
| Total | 30,878,589.55 | 1,056,875.08 | 29,821,714.47 | |||
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period: No.
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
| Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other receivables | Ending balance of bad debt provision |
| Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. | Intercourse funds | 10,000,000.00 | Within 1 year | 18.47% | 200,000.00 |
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | Intercourse funds | 10,522,177.72 | Within 1 year with RMB 1,411,701.19, 1-2 years with RMB 8,088,841.90, 2-3 years with RMB 1,021,634.63 | 19.43% | 585,921.31 |
| Changzhou Compressors Factory | Intercourse funds | 2,940,000.00 | Over 5 years | 5.43% | 2,940,000.00 |
| Changchai Group Imp. & Exp. Co., Ltd. | Intercourse funds | 2,853,188.02 | Over 5 years | 5.27% | 2,853,188.02 |
| Changchai New District Accounting Center | Intercourse funds | 1,626,483.25 | Over 5 years | 3.00% | 1,626,483.25 |
| Total | -- | 27,941,848.99 | 51.60% | 8,205,592.58 |
3. Long-term Equity Investment
Unit: RMB
| Item | Ending balance | Beginning balance | ||||
| Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
| Investment to subsidiaries | 382,752,730.03 | 7,000,000.00 | 375,752,730.03 | 252,752,730.03 | 252,752,730.03 | |
| Investment to joint ventures and associated enterprises | 44,182.50 | 44,182.50 | 44,182.50 | 44,182.50 | ||
| Total | 382,796,912.53 | 7,044,182.50 | 375,752,730.03 | 252,796,912.53 | 44,182.50 | 252,752,730.03 |
(1) Investment to Subsidiaries
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||
| Additional investment | Reduced investment | Withdrawal of depreciation reserve | Other | ||||
| 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 Housheng Investment Co., Ltd. | 40,000,000.00 | 40,000,000.00 | |||||
| Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. | 7,000,000.00 | 7,000,000.00 | 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. | 10,000,000.00 | 130,000,000.00 | 140,000,000.00 | ||||
| ChangzhouXingsheng Property Management Co., Ltd. | 1,000,000.00 | 1,000,000.00 | |||||
| Total | 252,752,730.03 | 130,000,000.00 | 7,000,000.00 | 375,752,730.03 | 7,000,000.00 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
| Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||||||
| Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | ||||
| II. Associated enterprises | |||||||||||
| Beijing Tsinghua Xingye Industrial Investment Management Co., Ltd. | 0.00 | 0.00 | 44,182.50 | ||||||||
| Subtotal | 0.00 | 0.00 | 44,182.50 | ||||||||
| Total | 0.00 | 0.00 | 44,182.50 |
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 | 2,086,035,553.15 | 1,794,202,913.98 | 1,829,511,302.64 | 1,547,250,831.33 |
| Other operations | 37,164,684.96 | 29,240,490.81 | 36,780,436.75 | 28,376,158.13 |
| Total | 2,123,200,238.11 | 1,823,443,404.79 | 1,866,291,739.39 | 1,575,626,989.46 |
Information related to performance obligations: performing according to the contract offerInformation related to transaction value assigned to residual performance obligations:
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 | 5,004,000.00 | 6,069,000.00 |
| Income from transferring to accommodation business | 433,925.05 | 137,814.50 |
| Total | 5,437,925.05 | 6,206,814.50 |
XVII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets | 263,408.53 |
| Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 7,763,215.65 | |
| Capital occupation charges on non-financial enterprises that are recorded into current gains and losses | 344,842.86 | |
| Gain/loss from change of fair value of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment in other debt obligations, other than valid hedging related to the Company’s common businesses | 27,526,935.85 | |
| Other non-operating income and expenses other than the above | -1,571,453.49 | |
| Less: Income tax effects | 7,122,148.63 | |
| Non-controlling interests effects | 255,505.29 | |
| Total | 26,949,295.48 | -- |
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition inthe Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the saidexplanatory announcement 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 | |
| EPS-basic (Yuan/share) | EPS-diluted(Yuan/share) | ||
| Net profit attributable to ordinary shareholders of the Company | 2.45% | 0.0934 | 0.0934 |
| Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 1.19% | 0.0454 | 0.0454 |
The Board of DirectorsChangchai Company, Limited
15 April 2021