ChangchaiCompany,Limited Semi-AnnualReport2017 CHANGCHAI COMPANY, LIMITED
SEMI-ANNUAL REPORT 2017
August , 2017
ChangchaiCompany,Limited Semi-AnnualReport2017 Section I Important Statements, Contents and Definitions
The board of directors (the “Board”), the supervisory board (the “Supervisory Board”) as well as the directors, supervisors and senior management of Changchai Company, Limited (the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any false representation, misleading statements or material omissionsin this Report.
Shi Xinkun, head of the Company, Zhang Xin, accounting head for this Report, and Jiang He, head of the accounting department (head of accounting), hereby guarantee that the Financial Report carried inthis Report is factual, accurate and complete.
All thedirectors attended theboard meeting for thereview ofthisReport.
This Report involves futures plans and other forward-looking statements, which shall not be considered as virtual promises to investors. Investors are kindly reminded to pay attention to possiblerisks.
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between thetwo versions, theChineseversion shallprevail.
ChangchaiCompany,Limited Semi-AnnualReport2017 Table of Contents
Section IImportant Statements, Contentsand Definitions..................................................................2 Section II Corporate Profileand Key Operating Results.....................................................................5 Section III Business Profile..................................................................................................................8 Section IVPerformance Discussion andAnalysis.............................................................................10 SectionVSignificant Events..............................................................................................................18 SectionVI Share Changes andShareholders’Profile........................................................................25 SectionVII Preference Shares............................................................................................................30 SectionVIII Directors, Supervisors and SeniorManagement...........................................................30 Section IX CorporateBonds...............................................................................................................30 Section X Financial Report................................................................................................................31 Section XI DocumentsAvailableforReference...............................................................................121
ChangchaiCompany,Limited Semi-AnnualReport2017 Definitions
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|-|-|
|Term|Definition|
|Company,theCompany,Changchai|ChangchaiCompany,Limited|
|ChangchaiBenniu|ChuangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.|
|ChangchaiWanzhou|ChangchaiWanzhouDieselEngineCo.,Ltd.|
|HoushengInvestment|ChangzhouHoushengInvestmentCo.,Ltd.|
|HoushengAgriculturalEquipment|ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.|
|ChangchaiRobin|ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.|
|RMB,RMB’0,000|RMByuan,RMBtenthousandyuan|
|ReportingPeriod|January1,2017-June30,2017|

ChangchaiCompany,Limited Semi-AnnualReport2017 Section II Corporate Profile and Key Operating Results
I Corporate Information
|||||
|-|-|-|-|
|Stockname|ChangchaiA,ChangchaiB|Stockcode|000570,200570|
|Stockexchange|ShenzhenStockExchange|||
|CompanynameinChinese|常柴股份有限公司|||
|Abbreviation|苏常柴|||
|CompanynameinEnglish|CHANGCHAICOMPANY,LIMITED|||
|Abbreviation|CHANGCHAICO.,LTD.|||
|Legalrepresentative|ShiXinkun|||

II Contact Information
||||
|-|-|-|
||BoardSecretary|SecuritiesRepresentative|
|Name|HeJianjiang||
|Address|123HuaideMiddleRoad,Changzhou,Jiangsu,China||
|Tel.|（86）519-68683155||
|Fax|（86）519-86630954||
|E-mail|cchjj@changchai.com||

III Other Information
1.WaystoContacttheCompany
Indicate by tick mark whether any changes occur to the registered address, office address and their postal codes, websiteaddressandemailaddressoftheCompanyduringtheReportingPeriod.
□Applicable√Notapplicable
No changes occurredto thesaid information duringthe ReportingPeriod, which canbefoundin the2016Annual Report.
2.InformationDisclosureMediaandPlacewherethisReportisKept
Indicate by tick mark whether any changes occurred to the information disclosure media and the place where this ReportwaskeptduringtheReportingPeriod.
□Applicable√Notapplicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
disclosing this Report and the location where this Report was placed did not change during the Reporting Period.
Thesaidinformationcanbefoundinthe2016AnnualReport.
ChangchaiCompany,Limited Semi-AnnualReport2017 IVKey Operating Results
IndicatebytickmarkwhethertheCompanyneedstoretroactivelyrestateanyofitsaccountingdata.
□Yes√No
|||||
|-|-|-|-|
||ReportingPeriod|Sameperiodoflastyear|+/-(%)|
|Operatingrevenues(RMB)|1,308,106,180.92|1,163,660,721.69|12.41%|
|Net profit attributable to shareholders of theCompany(RMB)|39,679,158.13|35,018,142.36|13.31%|
|Net profit attributable to shareholders of theCompany before exceptional profit and loss(RMB)|20,774,047.49|28,510,501.61|-27.14%|
|Netcashgeneratedbyoperatingactivities(RMB)|64,379,323.31|118,035,913.29|-45.46%|
|Basicearningspershare(RMB/share)|0.07|0.06|16.67%|
|Dilutedearningspershare(RMB/share)|0.07|0.06|16.67%|
|Weightedaveragereturnonequity(%)|1.71%|1.76%|-0.05%|
||EndofReportingPeriod|Endoflastyear|+/-(%)|
|Totalassets(RMB)|3,814,165,961.66|3,724,857,266.71|2.40%|
|Net assets attributable to shareholders of theCompany(RMB)|2,304,915,696.27|2,323,712,892.92|-0.81%|

V Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and InternationalAccountingStandards
□Applicable√Notapplicable
NosuchdifferencesfortheReportingPeriod.
2. Differences in Net Profit and Net Assets Disclosed in Financial Reports Prepared under Chinese and ForeignAccountingStandards
□Applicable√Notapplicable
NosuchdifferencesfortheReportingPeriod.
VI Exceptional Profit/Loss
√Applicable□Notapplicable
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Note|
|Profit/loss on disposal of non-current assets(includingoffsetassetimpairmentprovisions)|756,874.20||

ChangchaiCompany,Limited Semi-AnnualReport2017
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|-|-|-|
|Government subsidies charged to profit/loss forReporting Period (exceptfor government grantsclosely related to business of the Company andgiven at a fixed quota or amount in accordancewithgovernment’suniformstandards)|788,186.82||
|Profit due to situation where investment costsfor the Company to obtain subsidiaries,associates and joint ventures are lower thanenjoyable fair value of identifiable net assets ofinvesteeswhenmakinginvestments|22,756,742.66|The ownership transfer formalitiesregardingtheCompany’sacquisitionofequity interest of Changzhou FujiChangchai Robin Gasoline Engine Co.,Ltd. (Changchai Robin) werecompleted on January 20, 2017. Assuch, from that date Changchai RobinhasbeenconsolidatedbytheCompany.Since the closing cost of this equityacquisition was lower than theappraisal, this transaction generated apremiumofRMB22,756,742.66.|
|Profit/loss on fair value changes oftransactional financial assets and liabilities &investment income from disposal oftransactional financial assets and liabilities aswell as financial assets available for sale,except for effective hedges related to routineoperationsoftheCompany|190,326.41||
|Non-operating income and expense other thanabove|-6,246,118.36||
|Less:Incometaxeffects|-591,497.43||
|Minorityinterestseffects(aftertax)|-67,601.48||
|Total|18,905,110.64|--|

Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the saidexplanatoryannouncementtorecurrentprofit/loss
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
ChangchaiCompany,Limited Semi-AnnualReport2017 Section III Business Profile
I Main Business Scopeforthe Reporting Period
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
Asamanufacturer,wespecializeinthemanufactureandsaleofdieselengines,dieselenginefittings andcastings, gasoline engines, gasoline engine fittings, cereal harvesting machinery, rotovators, walking tractors, molds and jigsaswellastheassemblyandsaleofdieselengineandgasolineenginesupportingsets.
We mainly manufacture and sell small and medium-sized single-cylinder and multi-cylinder diesel engines under the brand of “Changchai”, which are often used in tractors, combine-harvesters, light commercial vehicles, agricultureequipment,small-sizedengineeringmachinery,generatorsets,shipmachines,etc.
II SignificantChanges inMain Assets
1.SignificantChangesinMainAssets
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|-|-|
|Mainassets|Reasonforsignificantchange|
|Notesreceivable|The closing amount stood at RMB261,056,165.98, down 47.90% from the openingamount, mainly because banker’s acceptance bill was adopted more often in settlementwithcustomerstostrengthencollectionbeforetheReportingPeriod.|
|Accountsreceivable|The closing amount stood at RMB745,551,114.30, up 107.51% from the openingamount, mainly because the Company properly allowed customers’ buying on creditaccording to its production and operation characteristics in the first half of 2017 toexpand its market opportunities, and the percentage of multi-cylinder engines in thetotal sales increased (longer payment days for these customers for they mostly procuremulti-cylinderenginesasacomponent).|

2.MainAssetsOverseas
□Applicable√Notapplicable
III Core Competitiveness Analysis
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
1.AdvantagesinBrand
ChangchaiCompany,Limited Semi-AnnualReport2017 Changchai is a national industrial enterprise with a history of over one hundred years. It is one of the earliest professional manufacturers of internal combustion engines in China. The brand "Changchai" is the earliest domestic trademark of production goods known as China's well-known trademarks. The diesel engine of "Changchai" brand is China's brand-name product. The enterprise has been certified by ISO9000 quality system, ISO14001 environmental management system, ISO/TS16949 automotive product quality management system, andaccessedtothenationalexport-freeenterprisequalification.Changchaiwashonorablyrankedamong“theTop One Hundred Chinese Enterprises in Engineering Industry” and “China Pacesetter Enterprise of Industrial Industry” for several times, and was awarded the honorary title of “State-level Enterprise of Observing Contracts and Keeping Promise”, “China's Agricultural Machinery Parts and Components Leading Enterprises”, “China's Agricultural Machinery AAA Credit Enterprise”, “Jiangsu Independent Industries Brand Top 50”, “Quality Management Excellence Award of Jiangsu Province”, “Mayor Quality Award of Changzhou City”, also our company won as the 10 users most satisfied leading brands in “Jing Geng” competition in the last five years. In the first half of 2017, theCompany’s 4G33 product won the Quality New ProductAward at the China (Jiangsu) International Agricultural Machinery Fair, and the Company won the third prize in the Changzhou Entrepreneurship& Innovation Contest organized by the local government. For many years, in the process of achieving steady economic development of the enterprise, we developed in a sound manner and cultivated the “Changchai”brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights 2.AdvantagesinTechnology
Changchai has a state-level technology center and post-doctoral research station, and a research center of small and medium-power internal combustion engine engineering and technology in Jiangsu Province. Currently, Changchai is mainly engaged in production of small and medium-power single-cylinder and multi-cylinder diesel engine. It has a complete product range, a wide power level coverage, a high reputation and intellectual property rights for its main products.Changchai’s product research and development and scientific research projects have won the second prize of National Machinery Industry Science and Technology ProgressAward, the second prize of Science and Technology Award of Jiangsu Province, and the first prize of Science and Technology Progress AwardofChangzhouCityetc.So far,wehaveobtained130patentsgrantedhomeandabroadintotal,including6 inventionpatents.
3.AdvantagesinMarketing
Changchai has built up a sales service network covering the whole country, with 11 sales business units, 31 sales service centers, over 400 service stations and 600 designated maintenance stations. With a perfect diesel sales service network system, our company is able to provide high quality, efficient and timely services for our customers.
ChangchaiCompany,Limited Semi-AnnualReport2017 Section IV Performance Discussion and Analysis
I Summary
For the first half of 2017, we sold 457,800 units of diesel engines and gasoline engines and generator sets, up0.66% compared to the same period of last year. We achieved a sales income of RMB1,308,106,180.92 , up12.41% from the same period of last year. And the net profit attributable to our shareholders stood atRMB39,679,158.13,up13.31%onayear-on-yearbasis.
In the Reporting Period, the Agricultural Machinery Industry continued to face the dual pressures of rising costs and overcapacity. The agricultural machinery sector was in grave difficulties, with stricter emission rules for dieselengines,cutsinsubsidiesforfarm machinery, fallinggrainpricesandthelow purchasingpoweroffarmers. Despitethegeneralovercapacityonthesingle-cylinderdieselenginemarket,theCompanymanagedtoachievean increase in both the production and sales volumes of this product and maintained a leading position in this sub-sector. As for multi-cylinder diesel engines, the sales volume wentdown compared to the same period of last year due to the weak market demand, but the sales revenue rose because of higher sales. Meanwhile, due to theCompany’s efforts in expanding market opportunities at home and abroad, the sales volume of plant protection machinerygrew fast,theCompany’sproducts sawanincreasedsales volume inemerging markets, andtheexport revenue registered a year-on-year growth. This year Changzhou Fuji Changchai Robin Gasoline Engine Co.,Ltd. Sold 79,200 units of gasoline engines and became a new profit growth point.To sum up, in the Reporting Period, the sales revenue increased while the net profit before exceptional profit and loss went down significantly comparedtothesameperiodoflastyearbecauseofrisinginrawmaterialpricesandtheappreciationofRMBand thedeclineingrossprofitmargin.
II Analysisof MainBusiness
See“ISummary”above.
Year-on-yearchangesofkeyfinancialdata:
Unit:RMB
||||||
|-|-|-|-|-|
||ReportingPeriod|Sameperiodoflastyear|+/-%|Reasonforchange|
|Operatingrevenues|1,308,106,180.92|1,163,660,721.69|12.41%||
|Operatingcosts|1,141,392,321.88|984,594,264.43|15.93%||
|Sellingexpense|55,815,356.13|59,518,474.60|-6.22%||
|Administrativeexpense|73,398,067.51|78,488,615.70|-6.49%||

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||
|-|-|-|-|-|
|Financecosts|333,451.36|-4,811,135.29||mainly generated from theincrease of exchange netprofit or loss caused by thechangesinexchangerate.|
|Incometaxes|5,670,998.75|6,581,748.12|-13.84%||
|R&Dinvestments|34,348,304.81|36,683,008.45|-6.36%||
|Netcashgeneratedbyoperatingactivities|64,379,323.31|118,035,913.29|-45.46%|mainly generated from theincrease of Accountsreceivable.|
|Netcashgeneratedbyinvestingactivities|-53,774,916.26|-29,436,822.72||mainly generated fromrecovery of fi nancialinvestment before theReportingPeriod.|
|Netcashgeneratedbyfinancingactivities|-4,410,070.41|-20,380,965.42||mainly generated from theincrease of Pledge for bankloanofSubsidiary.|
|Netincreaseincashandcashequivalents|6,194,336.64|68,218,125.15|-90.92%|mainly generated from theincrease of Accountsreceivable.|

MajorchangestotheprofitstructureorsourcesoftheCompanyintheReportingPeriod:
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
Breakdownofmainbusiness:
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
||Operatingrevenue|Operatingcost|Grossprofitmargin|Operatingrevenue:YoY+/-%|Operatingcost:YoY+/-%|Grossprofitmargin:YoY+/-%|
|Bybusinesssegment|||||||
|Internalcombustionengine|1,297,931,638.97|1,134,816,954.26|12.57%|12.60%|16.25%|-2.74%|
|Byproduct|||||||
|Dieselengines|1,297,931,638.97|1,134,816,954.26|12.57%|12.60%|16.25%|-2.74%|
|Bygeographicsegment|||||||
|Domestic|1,148,571,549.89|988,832,403.19|13.91%|9.72%|13.22%|-2.66%|
|Overseas|149,360,089.08|145,984,551.07|2.26%|41.13%|41.85%|-0.49%|

ChangchaiCompany,Limited Semi-AnnualReport2017 III Non-Core Business Analysis
□Applicable√Notapplicable
IVAnalysis ofAssets andLiabilities
1.SignificantChangesinAssetComposition
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
||EndofReportingPeriod||Endofsameperiodoflastyear||Changeinpercentage(%)|Reasonforsignificantchange|
||Amount|Asapercentageoftotalassets(%)|Amount|Asapercentageoftotalassets(%)|||
|Monetaryfunds|708,692,252.73|18.58%|673,796,047.14|21.03%|-2.45%||
|Accountsreceivable|745,551,114.30|19.55%|567,606,221.86|17.71%|1.84%||
|Inventories|448,832,816.34|11.77%|360,199,008.69|11.24%|0.53%||
|Investmentproperty|53,968,518.83|1.41%|56,176,859.63|1.75%|-0.34%||
|Long-termequityinvestment|0.00|0.00%|21,590,568.88|0.67%|-0.67%||
|Fixedassets|587,331,046.88|15.40%|571,960,644.43|17.85%|-2.45%||
|Constructioninprogress|69,532,401.98|1.82%|76,961,584.95|2.40%|-0.58%||
|Short-termborrowings|23,000,000.00|0.60%|10,000,000.00|0.31%|0.29%|mainlygeneratedfrom theincrease ofbank loanofSubsidiary|
|Long-termborrowings|0.00|0.00%|0.00|0.00%|0.00%||

2.AssetsandLiabilitiesMeasuredatFairValue
√Applicable□Notapplicable
ChangchaiCompany,Limited Semi-AnnualReport2017 Unit:RMB
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingbalance|Profit/lossonfairvaluechangesintheReportingPeriod|Cumulativefairvaluechangeschargedtoequity|ImpairmentprovidedintheReportingPeriod|PurchasedintheReportingPeriod|SoldintheReportingPeriod|Closingbalance|
|Financialassets||||||||
|Available-for-salefinancialassets|812,872,500.00|-48,982,500.00|581,413,175.00||||763,890,000.00|
|Subtotaloffinancialassets|812,872,500.00|-48,982,500.00|581,413,175.00||||763,890,000.00|
|Total ofabove|812,872,500.00|-48,982,500.00|581,413,175.00||||763,890,000.00|
|Financialliabilities|0.00||||||0.00|

SignificantchangesinthemeasurementattributesofthemainassetsintheReportingPeriod:
□Yes√No
3.RestrictedAssetRightsasofEndofReportingPeriod
||||
|-|-|-|
|Item|Closingbookvalue|Reasons|
|Monetaryfunds|119,219,787.00|Securitydepositsforbankacceptancebills.|
|Houseconstructions|9,394,240.27|Collateralsforloan.|
|Landuseright|21,179,360.79|Collateralsforloan.|
|Total|149,793,388.06|--------|

 V Investments Made
1.TotalInvestmentsMade
√Applicable□Notapplicable
||||
|-|-|-|
|InvestmentsmadeinReportingPeriod(RMB)|Investmentsmadeinsameperiodoflastyear(RMB)|+/-%|
|26,280,000.00|0|--|

ChangchaiCompany,Limited Semi-AnnualReport2017 2.SignificantEquityInvestmentsMadeinReportingPeriod
√Applicable□Notapplicable
Unit:RMB
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name|Majorbusiness|Investmentmethod|Investmentamount|Shareholdingratio|Fundsresources|Partners|Investmentperiod|Productstype|progressuptothedateoftheassetsliabilitiesstatement|Estimatedprofits|InvestmentgainsandlossesoftheReportingperiod|Whetherinvolvedwiththelawsuits|Disclosuredate(ifany)|Disclosureindex|
|ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.|GasolineEngine,assemblyandetc|Acquisition|26,280,000.00|67.00%|Ownfunds|JapanFujiHeavyIndustriesCo.,Ltd|Long-terminvestment|Equityinvestment|Relevantindustrialandcommercialregistrationofequitytransferhaschanged|||No|08/30/2016and01/24/2017|2016-014,2016-015,2016-016,2017-001|
|Total|--|--|26,280,000.00|--|--|--|--|--|--|||--|--|--|

Note:theCompanyacceptedthetransferred67%stockequityofChangzhouFujiChangchaiRobinGasoline EngineCo.,LtdheldbyJapanFujiHeavyIndustriesCo.,LtdbyRMB26.28millionduringtheReportingperiod.Afterthistransfer,theCompanywoulddirectlyholdthe100%stockequityofChangzhouFujiChangchaiRobin GasolineEngineCo.,Ltd.
3.SignificantNon-EquityInvestmentsOngoingintheReportingPeriod
□Applicable√Notapplicable
ChangchaiCompany,Limited Semi-AnnualReport2017 4.FinancialInvestments
(1)SecuritiesInvestments
□Applicable√Notapplicable
(2)InvestmentsinDerivativeFinancialInstruments
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
VI Saleof Major Assets and EquityInterests
1.SaleofMajorAssets
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
2.SaleofMajorEquityInterests
□Applicable√Notapplicable
VII Main Controlled andJointStock Companies
√Applicable□Notapplicable
Main subsidiaries andstock-participating companies thathave aninfluence onthe netprofitof the Companyover10%
Unit:RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Companyname|Companyvariety|Main business|Industry|Registeredcapital|Totalassets|Netassets|Operatingrevenues|Operatingprofit|Netprofit|
|ChangchaiBenniu|Subsidiary|Productionofdieselengineaccessories|Machinerymanufacture|55,063,000.00|147,990,377.35|92,234,400.97|77,491,521.43|-171,460.52|490,973.25|
|ChangchaiWanzhou|Subsidiary|Dieselengineassembly|Machinerymanufacture|85,000,000.00|139,123,291.37|114,462,944.35|31,995,209.69|1,219,834.74|867,855.82|
|HoushengInvestment|Subsidiary|Externalinvestmentandconsulting|Service|30,000,000.00|36,037,726.53|35,201,481.93|647,005.27|463,243.57|325,782.34|
|HoushengAgriculturalEquipment|Subsidiary|agriculturalmachineryproductofricetransplanteretc.|Machinerymanufacture|10,000,000.00|24,563,778.61|7,851,808.36|8,688,862.25|486,228.32|486,228.32|

ChangchaiCompany,Limited Semi-AnnualReport2017
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|-|-|-|-|-|-|-|-|-|-|
|ChangchaiRobin|Subsidiary|Gasolineenginesassembly|Machinerymanufacture|37,250,000.00|99,748,792.88|68,176,218.18|80,248,034.94|6,029,604.68|4,520,975.01|

SubsidiariesobtainedordisposedintheReportingPeriod:
√Applicable□Notapplicable
||||
|-|-|-|
|Companyname|MethodofsubsidiariesobtainedordisposedintheReportingPeriod|Influenceonoverallproductionandoperationandperformance|
|Changzhou Fuji Changchai RobinGasolineEngineCo.,Ltd|The Company convened the interim meeting ofBoardofDirectors onAugust 26,2016,whichreviewed and approved the Bill aboutAcceptanceoftheTransferred67%StockEquityof Changzhou Fuji Changchai Robin GasolineEngine Co., Ltd Held by Japan Fuji HeavyIndustries Co., Ltd. After this acquisition theCompany would directly hold the 100% stockequity of Changzhou Fuji Changchai RobinGasolineEngineCo.,LtdthatwaschangedfromSino-foreignjointventuretodomesticenterprise.Changzhou Fuji Changchai Robin GasolineEngine Co., Ltd completed relevant industrialandcommercialregistrationchangeprocedureofequity transfer on January 20, 2017, and got theBusiness License renewed by ChangzhouNationalHigh-techIndustrialDevelopmentZone(New north district). Registered capital:RMB37.25 million, business scope:Mini-universal gasoline engine and its supportsets (including agricultural machinery,engineering machinery, pumping unit, and minigenerators) and its production, processing,research, development, sales, and technologyconsulting of relevant parts and accessories.Changzhou Fuji Changchai Robin GasolineEngine Co., Ltd was included the scope ofconsolidated statements of the Company fromJanuary20,2017.|The Company has paid the equitytransfer amounts. Because of thelower transaction price of theequity acquisition than thevaluation price, it incurredRMB22,756,742.66 income of thistransaction, which respectivelyrecorded into the current incomefrom investment and non-businessincome.|

ChangchaiCompany,Limited Semi-AnnualReport2017 VIII Structured BodiesControlled bytheCompany
□Applicable√Notapplicable
IXPerformance Forecast forJanuary-September2017
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginningtotheendofthenextreportingperiod,aswellasthereasons:
□Applicable√Notapplicable
X RisksFacing theCompany andCountermeasures
Possiblerisksandcountermeasures:
(1)Marketrisk:
With fiercecompetition,over-capacityofsome products andthetotalavailablemarket wereinadeclinetendency as well as thedemand from the industrywas insufficient. And the profitability of the enterprises facedwith rather greatpressure.
Countermeasures:
Firstly is to strengthen the production and sales management, to determine the production by the sales and to reasonablycontroltheinventories.
SecondlyistomakeuseoftheleadingpositionandbrandadvantagesoftheCompanyinthesingle-cylinderdiesel enginemarketandexpandthesalesofair-cooledsingle-cylinderdieselenginesandthehigh-powerdieselengines. Thirdly is to improve theR&D level of the Company, lean to medium-and high-class multi-cylinder diesel engines in product development and vigorously develop high-power diesel engines with high added value for non-roadvehicles.
Fourthly is to strengthen the quality management, constantly enhance thecustomers’ satisfaction and the brand valueaswellastoenhancetheproductsquality.
Fifthly is to update the service and management ideas, optimize the resources and to further enhance the after-salesserviceability.
(2)Policyrisk:
The macro-economic environment is complex and changeable, economic growth is slowing down and the policy on the diesel engine emissions is becoming stricter and stricter, which increased the operating difficulties and the pressure.Assuch,themarketdemandsforsomeproductsoftheCompanywillbeaffectedtosomeextent. Countermeasures: The Company will pay close attention to thegovernment’s economic macro-control policies andmarketdevelopments.Topromotetheworksuchas“promotetheproductsupgradeandqualityenhancing”,to embrace the upgrading of the engine emission standards, to accelerate the forging of the new “Standard V” platform,andtoexecutethenecessaryproductsresourcesreservesinadvance.
(3)Talentrisk:
With escalation of national environmental policy and fierce competition in the market, the social and customer requirements of product quality, performance and other aspects are getting higher and higher, meanwhile ourcompany’sneedsofhigh-rankingtalentsarealsogrowingasourresourcesinresearchanddevelopmentincreased. Solutions: introduce all kinds of high-ranking talents through varieties of channels and strengthen personnel
training.
Section V Significant Events
I AnnualandSpecial Meetings ofShareholders Convenedduringthe Reporting Period 1.MeetingsofShareholdersConvenedduringtheReportingPeriod
|||||||
|-|-|-|-|-|-|
|Meeting|Type|Investorparticipationratio|Conveneddate|Disclosuredate|Indextodisclosedinformation|
|2016AnnualMeetingofShareholders|Annual|31.43%|05/11/2017|05/12//2017|2017-011|

2. SpecialMeetings of Shareholders Convened at Request of Preference Shareholders with ResumedVoting Rights
□Applicable√Notapplicable
II Proposal for Profit Distribution and Converting Capital Reserve into Share Capital for the Reporting Period
□Applicable√Notapplicable
FortheReportingPeriod,theCompanyplansnottodistributecashdividendsorbonussharesorconvertcapital reserveintosharecapital.
III Commitments of theCompany’s Actual Controller, Shareholders, Related Parties and Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting Period or stillOngoing atPeriod-End
√Applicable□Notapplicable
||||||||
|-|-|-|-|-|-|-|
|Commitment|Commitmentmaker|Typeofcommitment|Contents|Dateofcommitmentmaking|Periodofcommitment|Fulfillment|
|Commitments made insharereform|||||||
|Commitments made inacquisition documents orshareholding alterationdocuments|||||||
|Commitments made intimeofassetrestructuring|||||||
|Commitments made in|||||||

||||||||
|-|-|-|-|-|-|-|
|time of IPO orrefinancing|||||||
|Equityincentivecommitments|||||||
|Other commitments madetominorityshareholders|ChangchaiCompany,Limited|bonus|RewardsPlanforShareholdersinNextThreeYears(2014-2016)Underthepremiseofpositivedistributiveprofit(remainingafter-taxprofitsaftermakingupforthelossandextractingforthecommonreserves)inthisyearorhalfyearandabundantmoneyflowandnoinfluenceonthefollowing-upgoingconcernaftercashbonus,theprofitsallocatedbycasheveryyearshouldn’tbelowerthan10%oftheallocableprofitsfromparentcompan.Meanwhile,theaccumulatedallocableprofitsbycashinthearbitrarycontinuousthreeaccountingyearsshouldnotbelowerthan30%oftheannualaverageallocableprofitsinthosethreeyears.|05/14/2014|Year2014-2016|Implementinanormalway|
|Fulfilledontime|Yes||||||
|Specific reasons forfailing to fulfillcommitments on time andplansfornextstep|N/A||||||

IVEngagement andDisengagement ofCPAs Firm
Hasthesemi-annualfinancialreportbeenaudited?
□Yes√No
ThisSemi-AnnualReportisunaudited.
V Explanations Given by Board of Directors and Supervisory Board Regarding “ModifiedAuditor’sReport”Issued byCPAs FirmfortheReporting Period
□Applicable√Notapplicable
VI Explanations Given by Board of Directors Regarding “ModifiedAuditor’s Report” Issued forLastYear
□Applicable√Notapplicable
VII Bankruptcy andRestructuring
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
VIII Legal Matters
Significantlawsuitsorarbitrations:
√Applicable□Notapplicable
|||||||||
|-|-|-|-|-|-|-|-|
|Basicinformationofthelawsuit(arbitration)|Amountinvolvedinthelawsuit(arbitration)(RMB’0,000)|Formingtheestimatedliabilitiesornot|Progressofthelawsuit(arbitration)|Trialresultandinfluenceofthelawsuit(arbitration)|Enforcementonthejudgmentofthelawsuit(arbitration)|Disclosuredate|Disclosureindex|
|AboutthelawsuitcaseofShandongHongliGroupCo.,Ltd.,theaccusedcompanyowedaccumulativelyRMB14.36milliontotheCompany.TheCompanysuedtoChangzhouIntermediatePeople’sCourtin2001andsuedforcompulsoryexecutioninApril,2002.Currently,thedefendanthasstartedthebankruptcyprocedure.|1,436|No|Judgedforthesecondtrial|N/A|Underthecompulsoryexecutionbythecourtandintheprocessofliquidationandbankruptcy|||

Otherlegalmatters:
□Applicable√Notapplicable
IXPunishments andRectifications
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
X Credit Conditions of the Company as well as its Controlling Shareholder and Actual Controller
□Applicable√Notapplicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
XII SignificantRelated Transactions
1.RelatedTransactionsRelevanttoRoutineOperations
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
2.RelatedTransactionsRegardingPurchaseorSalesofAssetsorEquityInterests
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
3.RelatedTransactionsRegardingJointInvestmentsinThirdParties
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
4.CreditsandLiabilitieswithRelatedParties
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
5.OtherSignificantRelatedTransactions
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
XIII. Particulars about the Non-operating Occupation of Funds by the Controlling ShareholderandOther Related Parties ofthe Company
□Applicable√Notapplicable
TheCompanywasnotinvolvedinthenon-operatingoccupationoffundsbythecontrollingshareholderandother relatedpartiesduringtheReportingPeriod.
XIV. SignificantContracts andExecution
1.Entrustment,ContractingandLeasing
(1) Entrustment
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
(2) Contracting
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
(3) Leasing
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
2.SignificantGuarantees
√Applicable□Notapplicable
(1) Guarantees
Unit:RMB’0,000
||||||||||
|-|-|-|-|-|-|-|-|-|
|GuaranteesprovidedbytheCompanyforexternalparties(excludingthoseforsubsidiaries)|||||||||
|Guaranteedparty|Disclosuredateoftheguaranteelineannouncement|Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)|Actualguaranteeamount|Typeofguarantee|Termofguarantee|Dueornot|Guaranteeforarelatedpartyornot|
|GuaranteesbetweentheCompanyanditssubsidiaries|||||||||
|Guaranteedparty|Disclosuredateofthe|Lineofguarantee|Actualoccurrencedate|Actualguarantee|Typeofguarantee|Termofguarantee|Dueornot|Guaranteefora|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||guaranteelineannouncement|||(dateofagreementsigning)|amount||||relatedpartyornot|
|ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.||12/02/2016|2,000||12/02/2016|2,000|Joint-liability|Oneyear|No|No|
|Total guarantee line forsubsidiaries approved duringtheReportingPeriod(B1)|||2,000|||TotalactualguaranteeamountforsubsidiariesduringtheReportingPeriod(B2)||2,000|||
|Total approved guarantee lineforsubsidiariesattheendoftheReportingPeriod(B3)|||2,000|||TotalactualguaranteebalanceforsubsidiariesattheendoftheReportingPeriod(B4)||2,000|||
|Guaranteesbetweensubsidiaries|||||||||||
|Guaranteedparty|Disclosuredateoftheguaranteelineannouncement||Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)||Actualguaranteeamount|Typeofguarantee|Termofguarantee|Dueornot|Guaranteeforarelatedpartyornot|
|Totalguaranteeamount(totaloftheabove-mentionedthreekindsofguarantees)|||||||||||
|Total guarantee line approvedduring the Reporting Period(A1+B1+C1)|||2,000|||TotalactualguaranteeamountduringtheReportingPeriod(A2+B2+C2)||2,000|||
|Total approved guarantee line atthe end of the Reporting Period(A3+B3+C3)|||2,000|||TotalactualguaranteebalanceattheendoftheReportingPeriod(A4+B4+C4)||2,000|||
|Proportionofthetotalactualguaranteeamount(A4+B4+C4)innetassetsoftheCompany||||||0.87%|||||
|Ofwhich:|||||||||||
|Amountofguaranteesprovidedforshareholders,theactualcontrollerandtheirrelatedparties(D)||||||0|||||
|Amountofdebtguaranteesprovideddirectlyorindirectlyforentitieswithaliability-to-assetratioover70%(E)||||||0|||||
|Portionofthetotalguaranteeamountinexcessof50%ofnetassets(F)||||||0|||||
|Totalamountofthethreekindsofguaranteesabove(D+E+F)||||||0|||||
|JointresponsibilitiespossiblyborneintheReportingPeriodforundueguarantees(ifany)||||||N/A|||||
|Provisionofexternalguaranteesinbreachoftheprescribedprocedures||||||N/A|||||

(2) IllegalProvision of Guarantees forExternal Parties
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
3.Other SignificantContracts
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
XV. SocialResponsibilities
1.Targeted Measures Takento Help People LiftThemselves OutofPoverty
□Applicable√Notapplicable
2.SignificantEnvironmental Protection
IndicatebytickmarkwhethertheCompanyoranyofitssubsidiariesisaheavilypollutingbusinessidentifiedby theenvironmentalprotectionauthoritiesofChina
No
XVI. OtherSignificantEvents
□Applicable√Notapplicable
NosuchcasesintheReportingPeriod.
XVII. SignificantEvents ofSubsidiaries
□Applicable√Notapplicable
Section VI Share Changes andShareholders’Profile
I. Changes inShares
1.ChangesinShares
Unit:share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Beforethechange||Increase/decrease(+/-)|||||Afterthechange||
||Amount|Proportion|Newlyissueshare|Bonusshares|CapitalizedCapitalreserves|Others|Subtotal|Amount|Proportion|
|I.Restrictedshares|0|0.00%||||||0|0.00%|
|1.Sharesheldbythestate|0|0.00%||||||0|0.00%|
|2. Shares held by state-ownLegal-person|0|0.00%||||||0|0.00%|
|3. Shares held by otherdomesticinvestors|0|0.00%||||||0|0.00%|
|Among which: shares heldbydomesticlegalperson|0|0.00%||||||0|0.00%|
|Shares held by domesticnaturalperson|0|0.00%||||||0|0.00%|
|4.Overseashareholdings|0|0.00%||||||0|0.00%|
|Among which: shares heldbyoversealegalperson|0|0.00%||||||0|0.00%|
|Shares held by overseanaturalperson|0|0.00%||||||0|0.00%|
|II. Shares not subject totradingmoratorium|561,374,326|100.00%||||||561,374,326|100.00%|
|1.RMBordinaryshares|411,374,326|73.28%||||||411,374,326|73.28%|
|2. Domestically listedforeignshares|150,000,000|26.72%||||||150,000,000|26.72%|
|3. Oversea listed foreignshares|0|0.00%||||||0|0.00%|
|4.Other|0|0.00%||||||0|0.00%|
|III.Totalshares|561,374,326|100.00%||||||561,374,326|100.00%|

Reasonforthechangeinshares
□Applicable√Notapplicable
Approvalofthechangeinshares
□Applicable√Notapplicable
Reasonforthechangeinshares
□Applicable√Notapplicable
EffectsofthechangeinsharesonthebasicEPS,dilutedEPS,netassetspershareattributabletocommon shareholdersoftheCompanyandotherfinancialindexesoverthelastyearandlastperiod
□Applicable√Notapplicable
OthercontentsthattheCompanyconsiderednecessaryorwererequiredbythesecuritiesregulatoryauthoritiesto disclose
□Applicable√Notapplicable
2.ChangesinRestrictedShares
□Applicable√Notapplicable
II. Issuance andListingof Securities
□Applicable√Notapplicable
III. Total Number of Shareholders and TheirShareholding
Unit:share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|TotalnumberofshareholdersattheReportingPeriod|||52,387||Totalnumberofpreferredstockholderwithvoterightrestored||||0||
|Shareholdingofcommonshareholdersholdingmorethan5%sharesorthetop10ofcommonshareholders|||||||||||
|Nameofshareholder|Natureofshareholder|Holdingpercentage(%)|NumberofshareholdingattheendoftheReportingPeriod|IncreaseanddecreaseofsharesduringReportingPeriod||Numberofsharesheldsubjecttotradingmoratorium|Numberofsharesheldsubjecttotradingmoratorium|Pledgedorfrozenshares|||
|||||||||Statusofshares||Amount|
|State-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernment|Onbehalfofgovernment|30.43%|170,845,236||||170,845,236||||
|KGIAsiaLimited|Foreigncorporation|0.57%|3,219,845||||3,219,845||||
|BeijingShenZhouMuInvestmentFundManagement|Other|0.45%|2,543,395||||2,543,395||||

||||||||
|-|-|-|-|-|-|-|
|Ltd.—HongyanShenZhouMuFund|||||||
|TibetShenZhouMuFundManagementCo.,Ltd.—TianluSecuritiesInvestmentPrivateFundNo.10|Other|0.35%|1,971,518||1,971,518||
|ZhongOuAssetManagement-BankofChina-PingAnLifeInsurance-ZhongOuAssetManagement-PingAnLifeInsuranceEntrustedInvestmentNo.1AssetManagementPlan|Other|0.34%|1,899,930||1,899,930||
|VanguardTotalInternationalStockIndexFund|Foreigncorporation|0.29%|1,626,592||1,626,592||
|GuoDongZeQuanInvestmentManagementCo.,Ltd.－ZeQuanWealthManagerSecuritiesInvestmentFundNo.2|Other|0.29%|1,616,500||1,616,500||
|TibetShenZhouMuFundManagementCo.,Ltd.—TianluSecuritiesInvestmentPrivateFundNo.1|Other|0.29%|1,613,081||1,613,081||
|HuangGuoliang|Domesticindividual|0.27%|1,528,891||1,528,891||
|AVIVA-COFCO－Dividends－DividendsonPersonalInsurance|Other|0.27%|1,504,600||1,504,600||
|Strategicinvestorsorthegenerallegalpersonduetotheplacementofnewsharesbecomethetop10shareholders||Naught|||||
|Explanationonassociatedrelationshipor/andpersons||Itis unknown whether therewas anyassociated relationshipamongthetoptentradableshareholders and among the top ten shareholders not subject to trading moratorium, orwhether they are persons acting in concert as described by Measures for theAdministrativeofDisclosureofShareholderEquityChanges.|||||
|Particularsaboutsharesheldbytop10common shareholdersnotsubjecttotradingmoratorium|||||||
|Nameofshareholder|||Numberofsharesheldnotsubjecttotradingmoratoriumattheendoftheperiod|Typeofshare|||
|||||Typeofshare||Amount|

|||||
|-|-|-|-|
|State-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernment|170,845,236|RMBordinaryshares|170,845,236|
|KGIAsiaLimited|3,219,845|Domesticallylistedforeignshares|3,219,845|
|BeijingShenZhouMuInvestmentFundManagementLtd.—HongyanShenZhouMuFund|2,543,395|RMBordinaryshares|2,543,395|
|TibetShenZhouMuFundManagementCo.,Ltd.—TianluSecuritiesInvestmentPrivateFundNo.10|1,971,518|RMBordinaryshares|1,971,518|
|ZhongOuAssetManagement-BankofChina-PingAnLifeInsurance-ZhongOuAssetManagement-PingAnLifeInsuranceEntrustedInvestmentNo.1AssetManagementPlan|1,899,930|RMBordinaryshares|1,899,930|
|VanguardTotalInternationalStockIndexFund|1,626,592|Domesticallylistedforeignshares|1,626,592|
|GuoDongZeQuanInvestmentManagementCo.,Ltd.－ZeQuanWealthManagerSecuritiesInvestmentFundNo.2|1,616,500|RMBordinaryshares|1,616,500|
|TibetShenZhouMuFundManagementCo.,Ltd.—TianluSecuritiesInvestmentPrivateFundNo.1|1,613,081|RMBordinaryshares|1,613,081|
|HuangGuoliang|1,528,891|Domesticallylistedforeignshares|1,528,891|
|AVIVA-COFCO－Dividends－DividendsonPersonalInsurance|1,504,600|RMBordinaryshares|1,504,600|
|Explanationonassociatedrelationshipamongthetopten shareholders of tradable share not subject totrading moratorium, as well as among the top tenshareholders of tradable share not subject to tradingmoratorium and top ten shareholders, or explanationonacting-in-concert|It is unknown whether there was any associated relationship among the topten tradable shareholders and among the top ten shareholders not subject totrading moratorium, or whether they are persons acting in concert asdescribed by Measures for theAdministrative of Disclosure of ShareholderEquityChanges.|||
|Particular about shareholder participate in thesecuritieslendingandborrowingbusiness|Shareholder Beijing Shen Zhou Mu Investment Fund ManagementLtd.—Hongyan Shen Zhou Mu Fund held a total of 2,543,395 shares in theCompany through a common securities account and a client account ofcollateral securities for margin trading, representing a stake of 0.45%, ofwhich the shares in the client account of collateral securities in SouthwestSecurities Co., Ltd. for margin trading were 968,100 in number, a 0.17%stakeintheCompany.|||

DidanyoftheCompany’stop10commonshareholdersortop10non-restrictedcommonshareholdersconduct anyagreedbuy-backintheReportingPeriod?
□Yes√No
Therewasnoshareholderofacompanyconductthetransactionofrepurchaseundertheagreementduringthe
ReportingPeriod.
IV.Changeof theControllingShareholderor theActual Controller
ChangeofthecontrollingshareholderduringtheReportingPeriod.
□Applicable√Notapplicable
ThecontrollingshareholderdidnotchangeduringtheReportingPeriod.
ChangeoftheactualcontrollerduringtheReportingPeriod
□Applicable√Notapplicable
TheactualcontrollerdidnotchangeduringtheReportingPeriod.
Section VII Preference Shares
□Applicable√Notapplicable
Section VIII Directors, Supervisors and Senior Management I. Changes inShareholding ofDirectors, Supervisors and SeniorManagementStaff
□Applicable√Notapplicable
There was no change in shareholding of Directors, Supervisors, Senior Management Staffs and Employees, for details,pleasereferto2016AnnualReport
II. Particulars aboutChanges ofDirectors, Supervisors andSeniorExecutives
□Applicable√Notapplicable
TherewasnochangeinDirectors,Supervisors,SeniorManagementStaffsandEmployees,fordetails,pleaserefer to2016AnnualReport
Section IX Corporate Bonds
Arethereanycorporatebondspubliclyofferedandlistedonthestockexchange,whichwereunduebeforethe approvaldateofthisReportorwereduebutcouldnotberedeemedinfull?
□Yea√No
Section X Financial Report
I. AuditReport
Hasthissemi-annualreportbeenaudited?
□Yes√No
Thesemi-annualfinancialreporthasnotbeenaudited.
II. FinancialStatements
Currencyunitforthestatementsinthenotestothesefinancialstatements:RMB
1.ConsolidatedBalanceSheet
PreparedbyChangchaiCompany,Limited
June30,2017
Unit: RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|CurrentAssets:|||
|Monetaryfunds|708,692,252.73|670,703,802.02|
|Settlementreserves|||
|Intra-grouplendings|||
|Financial assets measured by fair value with the changes beincludedinthecurrentgainsandlosses|0.00|0.00|
|Derivativefinancialassets|0.00|0.00|
|Notesreceivable|261,056,165.98|501,070,279.01|
|Accountsreceivable|745,551,114.30|359,279,821.69|
|Accountspaidinadvance|29,426,739.29|15,483,475.43|
|Premiumsreceivable|||
|Reinsurancepremiumsreceivable|||
|Receivablereinsurancecontractreserves|||
|Interestreceivable|0.00|0.00|
|Dividendreceivable|0.00|0.00|
|Otheraccountsreceivable|13,647,674.27|4,165,674.62|
|Financialassetspurchasedunderagreementstoresell|||
|Inventories|448,832,816.34|494,046,458.44|
|Assetsdividedavailableforsale|0.00|0.00|
|Non-currentassetsduewithin1year|0.00|0.00|
|Othercurrentassets|19,228,929.49|39,669,983.12|
|Totalcurrentassets|2,226,435,692.40|2,084,419,494.33|
|Non-currentassets:|||

||||
|-|-|-|
|Loansbymandateandadvancesgranted|||
|Available-for-salefinancialassets|771,090,000.00|820,072,500.00|
|Held-to-maturityinvestments|0.00|0.00|
|Long-termaccountsreceivable|0.00|0.00|
|Long-termequityinvestment|0.00|21,006,230.03|
|Investingproperty|53,968,518.83|55,072,689.23|
|Fixedassets|587,331,046.88|553,678,938.87|
|Constructioninprogress|69,532,401.98|89,781,047.21|
|Engineeringmaterials|0.00|0.00|
|Disposaloffixedassets|0.00|0.00|
|Productionbiologicalassets|||
|Oil-gasassets|||
|Intangibleassets|104,897,072.15|99,915,137.62|
|R&Dexpense|0.00|0.00|
|Goodwill|0.00|0.00|
|Long-termdeferredexpenses|0.00|0.00|
|Deferredincometaxassets|911,229.42|911,229.42|
|Othernon-currentassets|0.00|0.00|
|Totalofnon-currentassets|1,587,730,269.26|1,640,437,772.38|
|Totalassets|3,814,165,961.66|3,724,857,266.71|
|Currentliabilities:|||
|Short-termborrowings|23,000,000.00|10,000,000.00|
|BorrowingsfromCentralBank|||
|Customer bank deposits and due to banks and other financialinstitutions|||
|Intra-groupborrowings|||
|Financial liabilities measured by fair value with the changes beincludedinthecurrentgainsandlosses|0.00|0.00|
|Derivativefinancialliabilities|0.00|0.00|
|Notespayable|389,020,800.00|276,090,000.00|
|Accountspayable|582,942,259.00|605,424,726.65|
|Accountsreceivedinadvance|71,687,056.39|40,890,620.69|
|Financialassetssoldforrepurchase|||
|Handlingchargesandcommissionspayable|||
|Employee’scompensationpayable|32,383,280.13|58,549,908.90|
|Taxpayable|1,741,002.84|9,622,332.76|
|Interestpayable|0.00|0.00|
|Dividendpayable|9,016,790.91|3,891,433.83|
|Otheraccountspayable|213,754,436.42|204,446,810.56|
|Reinsurancepremiumspayable|||
|Insurancecontractreserves|||
|Payablesforactingtradingofsecurities|||

||||
|-|-|-|
|Payablesforactingunderwritingofsecurities|||
|Liabilitiesdividedavailableforsale|0.00|0.00|
|Non-currentliabilitiesduewithin1year|0.00|0.00|
|Othercurrentliabilities|3,438,589.12|2,454,381.75|
|Totalcurrentliabilities|1,326,984,214.81|1,211,370,215.14|
|Non-currentliabilities:|||
|Long-termborrowings|0.00|0.00|
|Bondspayable|0.00||
|Ofwhich:preferredshares|||
|Perpetualcapitalsecurities|||
|Long-termpayables|0.00|0.00|
|Long-termpayrollpayables|0.00||
|Specificpayables|0.00|0.00|
|Estimatedliabilities|0.00||
|Deferredincome|60,525,045.27|61,057,232.08|
|Deferredincometaxliabilities|102,602,325.00|109,949,700.00|
|Othernon-currentliabilities|0.00||
|Totalnon-currentliabilities|163,127,370.27|171,006,932.08|
|Totalliabilities|1,490,111,585.08|1,382,377,147.22|
|Owners’equity|||
|Sharecapital|561,374,326.00|561,374,326.00|
|Otherequityinstruments|0.00|0.00|
|Ofwhich:preferredshares|||
|Perpetualcapitalsecurities|||
|Capitalreserves|164,328,665.43|164,328,665.43|
|Less:Treasurystock|||
|Othercomprehensiveincome|581,413,175.00|623,048,300.00|
|Specificreserves|11,715,417.22|11,715,417.22|
|Surplusreserves|311,880,248.88|311,880,248.88|
|Provisionsforgeneralrisks|||
|Retainedprofits|674,203,863.74|651,365,935.39|
|TotalequityattributabletoownersoftheCompany|2,304,915,696.27|2,323,712,892.92|
|Minorityinterests|19,138,680.31|18,767,226.57|
|Totalowners’equity|2,324,054,376.58|2,342,480,119.49|
|Totalliabilitiesandowners’equity|3,814,165,961.66|3,724,857,266.71|

 Legalrepresentative:ShiXinkun Person-in-chargeoftheaccountingwork:ZhangXin Chiefoftheaccountingdivision:JiangHe
2.BalanceSheetoftheCompany
Unit: RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Currentassets:|||
|Monetaryfunds|670,572,518.97|637,109,762.94|
|Financialassetsatfairvaluethroughprofit/loss|0.00|0.00|
|Derivativefinancialassets|0.00|0.00|
|Notesreceivable|259,104,652.98|500,870,279.01|
|Accountsreceivable|661,325,595.53|308,800,670.90|
|Accountspaidinadvance|3,683,481.08|9,845,904.32|
|Interestreceivable|0.00|0.00|
|Dividendsreceivable|0.00|0.00|
|Otheraccountsreceivable|2,230,562.08|3,694,673.93|
|Inventories|332,563,603.44|430,345,089.36|
|Assetsheldforsale|0.00|0.00|
|Non-currentassetsduewithinoneyear|0.00|0.00|
|Othercurrentassets|1,226,185.68|24,225,031.87|
|Totalcurrentassets|1,930,706,599.76|1,914,891,412.33|
|Non-currentassets:|||
|Available-for-salefinancialassets|763,890,000.00|812,872,500.00|
|Held-to-maturityinvestments|0.00|0.00|
|Long-termaccountsreceivable|0.00|0.00|
|Long-termequityinvestments|231,752,730.03|205,472,730.03|
|Investmentproperty|53,968,518.83|55,072,689.23|
|Fixedassets|480,490,322.91|450,042,747.40|
|Constructioninprogress|69,532,401.98|89,781,047.21|
|Engineeringmaterials|0.00|0.00|
|Disposaloffixedassets|0.00|0.00|
|Productivelivingassets|||
|Oil-gasassets|||
|Intangibleassets|76,271,207.08|78,558,644.37|
|R&Dexpenses|0.00|0.00|
|Goodwill|0.00|0.00|
|Long-termdeferredexpense|0.00|0.00|
|Deferredincometaxassets|911,229.42|911,229.42|
|Othernon-currentassets|0.00||
|Totalnon-currentassets|1,676,816,410.25|1,692,711,587.66|
|Totalassets|3,607,523,010.01|3,607,602,999.99|
|Currentliabilities:|||
|Short-termborrowings|0.00||

||||
|-|-|-|
|Financialliabilitiesatfairvaluethroughprofit/loss|0.00||
|Derivativefinancialliabilities|0.00||
|Notespayable|389,020,800.00|251,220,000.00|
|Accountspayable|493,997,139.79|596,734,009.07|
|Accountsreceivedinadvance|69,375,145.21|37,250,941.51|
|Payrollpayable|26,071,177.66|52,498,428.10|
|Taxespayable|561,258.71|6,587,374.37|
|Interestpayable|0.00|0.00|
|Dividendspayable|8,368,537.05|3,243,179.97|
|Otheraccountspayable|210,410,727.69|194,596,980.96|
|Liabilitiesheldforsale|0.00||
|Non-currentliabilitiesduewithinoneyear|0.00|0.00|
|Othercurrentliabilities|0.00||
|Totalcurrentliabilities|1,197,804,786.11|1,142,130,913.98|
|Non-currentliabilities:|||
|Long-termborrowings|0.00|0.00|
|Bondspayable|0.00||
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Long-termpayables|0.00|0.00|
|Long-termpayrollpayable|0.00||
|Specialpayables|0.00|0.00|
|Provisions|||
|Deferredincome|60,525,045.27|61,057,232.08|
|Deferredincometaxliabilities|102,602,325.00|109,949,700.00|
|Othernon-currentliabilities|0.00||
|Totalnon-currentliabilities|163,127,370.27|171,006,932.08|
|Totalliabilities|1,360,932,156.38|1,313,137,846.06|
|Owners’equity:|||
|Sharecapital|561,374,326.00|561,374,326.00|
|Otherequityinstruments|0.00|0.00|
|Ofwhich:Preferenceshares|||
|Perpetualbonds|||
|Capitalreserve|183,071,147.70|183,071,147.70|
|Less:Treasuryshares|||
|Othercomprehensiveincome|581,413,175.00|623,048,300.00|
|Specialreserve|11,715,417.22|11,715,417.22|
|Surplusreserve|311,880,248.88|311,880,248.88|
|Retainedearnings|597,136,538.83|603,375,714.13|
|Totalowners’equity|2,246,590,853.63|2,294,465,153.93|
|Totalliabilitiesandowners’equity|3,607,523,010.01|3,607,602,999.99|

3.ConsolidatedIncomeStatement
Unit: RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Operatingrevenues|1,308,106,180.92|1,163,660,721.69|
|Including:Salesincome|1,308,106,180.92|1,163,660,721.69|
|Interestincome|||
|Premiumincome|||
|Feeandcommissionincome|||
|2.Operatingcosts|1,287,121,365.15|1,130,064,900.87|
|Including:Costofsales|1,141,392,321.88|984,594,264.43|
|Interestexpenses|||
|Feeandcommissionexpenses|||
|Surrenders|||
|Netclaimspaid|||
|Netamountprovidedasinsurancecontractreserve|||
|Expenditureonpolicydividends|||
|Reinsurancepremium|||
|Taxesandsurtaxes|7,032,129.00|2,017,527.41|
|Sellingexpenses|55,815,356.13|59,518,474.60|
|Administrativeexpenses|73,398,067.51|78,488,615.70|
|Financecosts|333,451.36|-4,811,135.29|
|Assetimpairmentloss|9,150,039.27|10,257,154.02|
|Add:Profitonfairvaluechanges(“-”meansloss)|0.00|0.00|
|Investmentincome(“-”meansloss)|9,358,126.62|1,901,135.64|
|Including: Share of profit/loss of associates and jointventures|||
|Exchangegains(“-”meansloss)|||
|Othergains|||
|3.Operatingprofit(“-”meansloss)|30,342,942.39|35,496,956.46|
|Add:Non-operatingincome|21,773,323.41|10,636,194.05|
|Including:Profitondisposalofnon-currentassets|94,440.43|6,113,117.21|
|Less:Non-operatingexpense|6,394,655.18|4,147,840.72|

||||
|-|-|-|
|Including:Lossondisposalofnon-currentassets|18,709.80|32,408.99|
|4.Totalprofit(“-”meansloss)|45,721,610.62|41,985,309.79|
|Less:Corporateincometax|5,670,998.75|6,581,748.12|
|5.Netprofit(“-”meansloss)|40,050,611.87|35,403,561.67|
|NetprofitattributabletoownersoftheCompany|39,679,158.13|35,018,142.36|
|Minorityinterests’income|371,453.74|385,419.31|
|6.Othercomprehensiveincomenetoftax|-41,635,125.00|-49,761,550.00|
|Other comprehensive income net of tax attributable toownersoftheCompany|-41,635,125.00|-49,761,550.00|
|6.1 Other comprehensive income that will not bereclassifiedintoprofit/loss|0.00|0.00|
|6.1.1 Changes in net liabilities or assets with a definedbenefitplanuponre-measurement|||
|6.1.2 Share of other comprehensive income of investeesthatcannotbereclassifiedintoprofit/lossundertheequitymethod|||
|6.2 Other comprehensive income to be subsequentlyreclassifiedintoprofit/loss|-41,635,125.00|-49,761,550.00|
|6.2.1 Share of other comprehensive income of investeesthatwillbereclassifiedintoprofit/lossundertheequitymethod|||
|6.2.2 Profit/loss on fair value changes ofavailable-for-salefinancialassets|-41,635,125.00|-49,761,550.00|
|6.2.3 Profit/loss on reclassifying held-to-maturityinvestmentsintoavailable-for-salefinancialassets|||
|6.2.4Effectiveprofit/lossoncashflowhedges|||
|6.2.5Currencytranslationdifferences|||
|6.2.6Other|||
|Other comprehensive income net of tax attributable tominorityinterests|||
|7.Totalcomprehensiveincome|-1,584,513.13|-14,357,988.33|
|AttributabletoownersoftheCompany|-1,955,966.87|-14,743,407.64|
|Attributabletominorityinterests|371,453.74|385,419.31|
|8.Earningspershare|||
|8.1Basicearningspershare|0.07|0.06|
|8.2Dilutedearningspershare|0.07|0.06|

Legalrepresentative:ShiXinkun Person-in-chargeoftheaccountingwork:ZhangXin
Chiefoftheaccountingdivision:JiangHe
4.IncomeStatementoftheCompany
Unit: RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Operatingrevenues|1,229,307,547.12|1,163,696,328.66|
|Less:Operatingcosts|1,086,749,833.96|1,000,185,315.06|
|Taxesandsurtaxes|6,052,840.56|1,663,181.76|
|Sellingexpenses|50,307,968.65|55,298,258.45|
|Administrativeexpenses|64,535,374.12|69,931,423.68|
|Financecosts|-636,200.84|-5,358,474.86|
|Assetimpairmentloss|9,150,039.27|10,109,097.39|
|Add:profitonfairvaluechanges(“-”meansloss)|0.00|0.00|
|Investmentincome(“-”meansloss)|6,952,750.99|1,185,264.12|
|Including: Share of profit/loss of associates and jointventures|0.00|0.00|
|Othergains|||
|2.Operatingprofit(“-”meansloss)|20,100,442.39|33,052,791.30|
|Add:Non-operatingincome|567,356.20|9,904,289.56|
|Including:Profitondisposalofnon-currentassets|94,440.43||
|Less:Non-operatingexpense|6,192,349.28|4,047,840.72|
|Including:Lossondisposalofnon-currentassets|18,709.80|32,408.99|
|3.Totalprofit(“-”meansloss)|14,475,449.31|38,909,240.14|
|Less:Corporateincometax|3,873,394.83|6,299,732.98|
|4.Netprofit(“-”meansloss)|10,602,054.48|32,609,507.16|
|5.Othercomprehensiveincomenetoftax|-41,635,125.00|-49,761,550.00|
|5.1 Other comprehensive income that will not be reclassifiedintoprofitandloss|0.00|0.00|
|5.1.1 Changes in net liabilities or assets with a definedbenefitplanuponre-measurement|||
|5.1.2 Share of other comprehensive income of investees thatcannotbereclassifiedintoprofit/lossundertheequitymethod|||
|5.2 Other comprehensive income to be subsequentlyreclassifiedintoprofit/loss|-41,635,125.00|-49,761,550.00|
|5.2.1 Share of other comprehensive income of investees thatwillbereclassifiedintoprofit/lossundertheequitymethod|||

||||
|-|-|-|
|5.2.2 Profit/loss on fair value changes of available-for-salefinancialassets|-41,635,125.00|-49,761,550.00|
|5.2.3 Profit/loss on reclassifying held-to-maturityinvestmentsintoavailable-for-salefinancialassets|||
|5.2.4Effectiveprofit/lossoncashflowhedges|||
|5.2.5Currencytranslationdifferences|||
|5.2.6Other|||
|6.Totalcomprehensiveincome|-31,033,070.52|-17,152,042.84|
|7.Earningspershare|||
|7.1Basicearningspershare|||
|7.2Dilutedearningspershare|||

5.ConsolidatedCashFlowStatement
Unit: RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Cashflowsassociatedwithoperatingactivities:|||
|Cash received from sale of commodities and rendering ofservice|1,325,350,610.18|1,297,635,026.56|
|Net increase in money deposits from customers and interbankplacements|||
|NetincreaseinloansfromtheCentralBank|||
|Netincreaseinfundsborrowedfromotherfinancialinstitutions|||
|Cashreceivedfrompremiumoforiginalinsurancecontracts|||
|Netcashreceivedfromreinsurancebusiness|||
|Netincreaseindepositsofpolicyholdersandinvestmentfund|||
|Net increase in disposal of financial assets at fair value throughprofit/loss|||
|Interest,feesandcommissionsreceived|||
|Netincreaseininterbankborrowings|||
|Netincreaseinfundsinrepurchasebusiness|||
|Taxrefundsreceived|21,145,032.94|22,852,333.55|
|Cashgeneratedbyotheroperatingactivities|5,501,291.34|7,978,801.83|
|Subtotalofcashgeneratedbyoperatingactivities|1,351,996,934.46|1,328,466,161.94|
|Cashpaidforgoodsandservices|1,033,701,551.38|956,379,929.94|
|Netincreaseinloansandadvancestocustomers|||
|Net increase in funds deposited in the Central Bank andinterbankplacements|||
|Cashpaidforclaimsoforiginalinsurancecontracts|||
|Interest,feesandcommissionspaid|||
|Cashpaidaspolicydividends|||
|Cashpaidtoandforemployees|185,470,230.57|174,777,109.44|
|Taxespaid|19,440,382.39|36,296,987.31|
|Cashusedinotheroperatingactivities|49,005,446.81|42,976,221.96|
|Subtotalofcashusedinoperatingactivities|1,287,617,611.15|1,210,430,248.65|
|Netcashgeneratedbyoperatingactivities|64,379,323.31|118,035,913.29|
|2.Cashflowsassociatedwithinvestingactivities:|||
|Cashreceivedfromretractionofinvestments|9,000,000.00|32,000,000.00|

||||
|-|-|-|
|Cashreceivedasinvestmentincome|7,143,077.40|663,870.52|
|Net cash received from disposal of fixed assets, intangibleassetsandotherlong-termassets|501,236.14|22,440.00|
|Net cash received from disposal of subsidiaries or otherbusinessunits|0.00|0.00|
|Cashgeneratedbyotherinvestingactivities||0.00|
|Subtotalofcashgeneratedbyinvestingactivities|16,644,313.54|32,686,310.52|
|Cash paid to acquire fixed assets, intangible assets and otherlong-termassets|48,464,630.47|39,123,133.24|
|Cashpaidforinvestment|3,000,000.00||
|Netincreaseinpledgedloans|||
|Netcashpaidtoacquiresubsidiariesandotherbusinessunits|1,854,599.33||
|Cashusedinotherinvestingactivities|17,100,000.00|23,000,000.00|
|Subtotalofcashusedininvestingactivities|70,419,229.80|62,123,133.24|
|Netcashgeneratedbyinvestingactivities|-53,774,916.26|-29,436,822.72|
|3.Cashflowsassociatedwithfinancingactivities:|||
|Cashreceivedfromcapitalcontributions|0.00|0.00|
|Including: Cash received from minority shareholderinvestmentsbysubsidiaries|||
|Cashreceivedasborrowings|18,000,000.00|8,000,000.00|
|Cashreceivedfromissuanceofbonds|||
|Cashgeneratedbyotherfinancingactivities|0.00|5,431.58|
|Subtotalofcashgeneratedbyfinancingactivities|18,000,000.00|8,005,431.58|
|Repaymentofborrowings|5,000,000.00|15,000,000.00|
|Cash paid for interest expenses and distribution of dividendsorprofit|17,410,070.41|13,386,397.00|
|Including:dividendsorprofitpaidbysubsidiariestominorityinterests|||
|Cashusedinotherfinancingactivities|0.00||
|Sub-totalofcashusedinfinancingactivities|22,410,070.41|28,386,397.00|
|Netcashgeneratedbyfinancingactivities|-4,410,070.41|-20,380,965.42|
|4. Effect of foreign exchange rate changes on cash and cashequivalents|0.00|0.00|
|5.Netincreaseincashandcashequivalents|6,194,336.64|68,218,125.15|
|Add:Openingbalanceofcashandcashequivalents|583,278,129.09|526,716,238.21|
|6.Closingbalanceofcashandcashequivalents|589,472,465.73|594,934,363.36|

6.CashFlowStatementoftheCompany
Unit: RMB
||||
|-|-|-|
|Item|January-June2017|January-June2016|
|1.Cashflowsassociatedwithoperatingactivities:|||
|Cash received from sale of commodities and rendering ofservice|1,287,943,005.80|1,307,793,947.42|
|Taxrefundsreceived|21,145,032.94|22,852,333.55|
|Cashgeneratedbyotheroperatingactivities|4,003,051.69|5,921,206.26|
|Subtotalofcashgeneratedbyoperatingactivities|1,313,091,090.43|1,336,567,487.23|
|Cashpaidforgoodsandservices|1,012,243,538.73|1,003,396,703.92|
|Cashpaidtoandforemployees|160,430,190.27|157,612,290.63|
|Taxespaid|17,376,389.94|31,818,121.46|
|Cashusedinotheroperatingactivities|45,213,130.50|41,036,165.12|
|Subtotalofcashusedinoperatingactivities|1,235,263,249.44|1,233,863,281.13|
|Netcashgeneratedbyoperatingactivities|77,827,840.99|102,704,206.10|
|2.Cashflowsassociatedwithinvestingactivities:|||
|Cashreceivedfromretractionofinvestments||20,000,000.00|
|Cashreceivedasinvestmentincome|6,952,750.09|364,000.00|
|Net cash received from disposal of fixed assets, intangibleassetsandotherlong-termassets|83,115.01|22,440.00|
|Net cash received from disposal of subsidiaries or otherbusinessunits||0.00|
|Cashgeneratedbyotherinvestingactivities|||
|Subtotalofcashgeneratedbyinvestingactivities|7,035,865.10|20,386,440.00|
|Cash paid to acquire fixed assets, intangible assets and otherlong-termassets|48,311,909.08|37,368,413.24|
|Cashpaidforinvestment|0.00||
|Netcashpaidtoacquiresubsidiariesandotherbusinessunits|26,516,925.27||
|Cashusedinotherinvestingactivities|0.00||
|Subtotalofcashusedininvestingactivities|74,828,834.35|37,368,413.24|
|Netcashgeneratedbyinvestingactivities|-67,792,969.25|-16,981,973.24|
|3.Cashflowsassociatedwithfinancingactivities:|||
|Cashreceivedfromcapitalcontributions|0.00|0.00|

||||
|-|-|-|
|Cashreceivedasborrowings|0.00|0.00|
|Cashreceivedfromissuanceofbonds|||
|Cashgeneratedbyotherfinancingactivities|0.00|35,761.62|
|Subtotalofcashgeneratedbyfinancingactivities|0.00|35,761.62|
|Repaymentofborrowings|0.00|0.00|
|Cash paid for interest expenses and distribution of dividendsorprofit|16,841,229.78|12,911,609.50|
|Cashusedinotherfinancingactivities|0.00|0.00|
|Sub-totalofcashusedinfinancingactivities|16,841,229.78|12,911,609.50|
|Netcashgeneratedbyfinancingactivities|-16,841,229.78|-12,875,847.88|
|4. Effect of foreign exchange rate changes on cash and cashequivalents|0.00|0.00|
|5.Netincreaseincashandcashequivalents|-6,806,358.04|72,846,384.98|
|Add:Openingbalanceofcashandcashequivalents|558,159,090.01|503,933,918.79|
|6.Closingbalanceofcashandcashequivalents|551,352,731.97|576,780,303.77|

7.ConsolidatedStatementofChangesinOwners’Equity
January-June2017
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2017|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Retainedearnings|||
|||Preferenceshares|Perpetualbonds|Other||||||||||
|1.Balanceattheendoftheprioryear|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|623,048,300.00|11,715,417.22|311,880,248.88|0.00|651,365,935.39|18,767,226.57|2,342,480,119.49|
|Add: Changes inaccountingpolicies|||||||||||||0.00|
|Correction of errors inpriorperiods|||||||||||||0.00|
|Business mergersunderthesamecontrol|||||||||||||0.00|
|Other|||||||||||||0.00|
|2.Balance at thebeginningoftheyear|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|623,048,300.00|11,715,417.22|311,880,248.88|0.00|651,365,935.39|18,767,226.57|2,342,480,119.49|
|3. Increase/ decrease in theperiod(“-”meansdecrease)|0.00|0.00|0.00|0.00|0.00|0.00|-41,635,125.00|0.00|0.00|0.00|22,837,928.35|371,453.74|-18,425,742.91|
|3.1 Total comprehensiveincome|||||||-41,635,125.00||||39,679,158.13|371,453.74|-1,584,513.13|
|3.2Capitalincreasedandreducedbyowners|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||||0.00|
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||||0.00|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity|||||||||||||0.00|
|3.2.4Other|||||||||||||0.00|
|3.3Profitdistribution|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|-16,841,229.78|0.00|-16,841,229.78|
|3.3.1 Appropriation tosurplusreserve|||||||||0.00||0.00||0.00|
|3.3.2 Appropriation togeneralriskprovisions|||||||||||||0.00|
|3.3.3 Appropriation toowners(orshareholders)|||||||||||-16,841,229.78||-16,841,229.78|
|3.3.4Other|||||||||||||0.00|
|3.4 Internalcarry-forward of owners’equity|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.4.1 New increase ofcapital (or share capital)fromcapitalreserve|||||||||||||0.00|
|3.4.2 New increase ofcapital (or share capital)fromsurplusreserve|||||||||||||0.00|
|3.4.3 Surplus reserveformakinguploss|||||||||||||0.00|
|3.4.4Other|||||||||||||0.00|
|3.5Specialreserve||||||||0.00||||0.00|0.00|
|3.5.1 Withdrawn fortheperiod||||||||0.00|||||0.00|
|3.5.2 Used in theperiod||||||||0.00|||||0.00|
|3.6Other|||||||||||||0.00|
|4.Closingbalance|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|581,413,175.00|11,715,417.22|311,880,248.88|0.00|674,203,863.74|19,138,680.31|2,324,054,376.58|

January-June2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2016|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Generalriskreserve|Retainedearnings|||
|||Preferenceshares|Perpetualbonds|Other||||||||||
|1.Balanceat theendoftheprioryear|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|353,519,675.00|10,069,746.98|305,758,285.91|0.00|607,859,611.69|17,590,453.47|2,020,500,764.48|
|Add: Changes inaccountingpolicies|||||||||||||0.00|
|Correction of errors inpriorperiods|||||||||||||0.00|
|Business mergersunderthesamecontrol|||||||||||||0.00|
|Other|||||||||||||0.00|
|2. Balance at the beginningoftheyear|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|353,519,675.00|10,069,746.98|305,758,285.91|0.00|607,859,611.69|17,590,453.47|2,020,500,764.48|
|3. Increase/ decrease in theperiod(“-”meansdecrease)|0.00|0.00|0.00|0.00|0.00|0.00|269,528,625.00|1,645,670.24|6,121,962.97|0.00|43,506,323.70|1,176,773.10|321,979,355.01|
|3.1 Total comprehensiveincome|||||||269,528,625.00||||62,539,896.17|1,176,773.10|333,245,294.27|
|3.2Capitalincreased andreducedbyowners|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||||0.00|
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||||0.00|
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity|||||||||||||0.00|
|3.2.4Other|||||||||||||0.00|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|3.3Profitdistribution|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|6,121,962.97|0.00|-19,033,572.47|0.00|-12,911,609.50|
|3.3.1 Appropriation tosurplusreserve|||||||||6,121,962.97||-6,121,962.97||0.00|
|3.3.2 Appropriation togeneralriskprovisions|||||||||||||0.00|
|3.3.3 Appropriation toowners(orshareholders)|||||||||||-12,911,609.50||-12,911,609.50|
|3.3.4Other||||||||||||||
|3.4 Internalcarry-forward of owners’equity|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.4.1 New increase ofcapital (or share capital)fromcapitalreserve|||||||||||||0.00|
|3.4.2 New increase ofcapital (or share capital)fromsurplusreserve|||||||||||||0.00|
|3.4.3 Surplus reserveformakinguploss|||||||||||||0.00|
|3.4.4Other|||||||||||||0.00|
|3.5Specialreserve||||||||1,645,670.24||||0.00|1,645,670.24|
|3.5.1 Withdrawn fortheperiod||||||||4,416,865.61|||||4,416,865.61|
|3.5.2 Used in theperiod||||||||2,771,195.37|||||2,771,195.37|
|3.6Other|||||||||||||0.00|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|4.Closingbalance|561,374,326.00|0.00|0.00|0.00|164,328,665.43|0.00|623,048,300.00|11,715,417.22|311,880,248.88|0.00|651,365,935.39|18,767,226.57|2,342,480,119.49|

8.StatementofChangesinOwners’EquityoftheCompany
January-June2017
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2017|||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Retainedearnings|Totalowners’equity|
|||Preferenceshares|Perpetualbonds|Other||||||||
|1.Balanceat theendoftheprioryear|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|623,048,300.00|11,715,417.22|311,880,248.88|603,375,714.13|2,294,465,153.93|
|Add: Changes inaccountingpolicies|||||||||||0.00|
|Correction of errors inpriorperiods|||||||||||0.00|
|Other|||||||||||0.00|
|2. Balance at the beginningoftheyear|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|623,048,300.00|11,715,417.22|311,880,248.88|603,375,714.13|2,294,465,153.93|
|3. Increase/ decrease in theperiod(“-”meansdecrease)|0.00|0.00|0.00|0.00|0.00|0.00|-41,635,125.00|0.00|0.00|-6,239,175.30|-47,874,300.30|
|3.1 Total comprehensiveincome|||||||-41,635,125.00|||10,602,054.48|-31,033,070.52|
|3.2Capital increased andreducedbyowners|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||0.00|
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||0.00|
|3.2.3Amountsof|||||||||||0.00|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|share-basedpaymentschargedtoowners’equity||||||||||||
|3.2.4Other|||||||||||0.00|
|3.3Profitdistribution|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|-16,841,229.78|-16,841,229.78|
|3.3.1 Appropriation tosurplusreserve|||||||||0.00|0.00|0.00|
|3.3.2 Appropriation toowners(orshareholders)||||||||||-16,841,229.78|-16,841,229.78|
|3.3.3Other|||||||||||0.00|
|3.4 Internalcarry-forward of owners’equity|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.4.1 New increase ofcapital (or share capital)fromcapital reserve|||||||||||0.00|
|3.4.2 New increase ofcapital (or share capital)fromsurplusreserve|||||||||||0.00|
|3.4.3 Surplus reserveformakinguploss|||||||||||0.00|
|3.4.4Other|||||||||||0.00|
|3.5Specialreserve||||||||0.00|||0.00|
|3.5.1 Withdrawn fortheperiod||||||||0.00|||0.00|
|3.5.2 Used in theperiod||||||||0.00|||0.00|
|3.6Other|||||||||||0.00|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|4.Closingbalance|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|581,413,175.00|11,715,417.22|311,880,248.88|597,136,538.83|2,246,590,853.63|

 January-June2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|January-June2016|||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:Treasuryshares|Othercomprehensiveincome|Specialreserve|Surplusreserve|Retainedearnings|Totalowners’equity|
|||Preferenceshares|Perpetualbonds|Other||||||||
|1.Balance at theendof theprioryear|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|353,519,675.00|10,069,746.98|305,758,285.91|561,189,656.87|1,974,982,838.46|
|Add: Changes inaccountingpolicies|||||||||||0.00|
|Correction of errors inpriorperiods|||||||||||0.00|
|Other|||||||||||0.00|
|2. Balance at the beginningoftheyear|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|353,519,675.00|10,069,746.98|305,758,285.91|561,189,656.87|1,974,982,838.46|
|3. Increase/ decrease in theperiod(“-”meansdecrease)|0.00|0.00|0.00|0.00|0.00|0.00|269,528,625.00|1,645,670.24|6,121,962.97|42,186,057.26|319,482,315.47|
|3.1 Total comprehensiveincome|||||||269,528,625.00|||61,219,629.73|330,748,254.73|
|3.2 Capital increased andreducedbyowners|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||0.00|
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||0.00|
|3.2.3Amountsofshare-basedpaymentschargedtoowners’equity|||||||||||0.00|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|3.2.4Other|||||||||||0.00|
|3.3Profitdistribution|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|6,121,962.97|-19,033,572.47|-12,911,609.50|
|3.3.1 Appropriation tosurplusreserve|||||||||6,121,962.97|-6,121,962.97|0.00|
|3.3.2 Appropriation toowners(orshareholders)||||||||||-12,911,609.50|-12,911,609.50|
|3.3.3Other|||||||||||0.00|
|3.4 Internalcarry-forward of owners’equity|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3.4.1 New increase ofcapital (or share capital)fromcapital reserve|||||||||||0.00|
|3.4.2 New increase ofcapital (or share capital)fromsurplusreserve|||||||||||0.00|
|3.4.3 Surplus reserveformakinguploss|||||||||||0.00|
|3.4.4Other|||||||||||0.00|
|3.5Specialreserve||||||||1,645,670.24|||1,645,670.24|
|3.5.1 Withdrawn fortheperiod||||||||4,416,865.61|||4,416,865.61|
|3.5.2 Used in theperiod||||||||2,771,195.37|||2,771,195.37|
|3.6Other|||||||||||0.00|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|4.Closingbalance|561,374,326.00|0.00|0.00|0.00|183,071,147.70|0.00|623,048,300.00|11,715,417.22|311,880,248.88|603,375,714.13|2,294,465,153.93|

ChangchaiCompany,Limited Semi-AnnualReport2017 III. Company Profile
ChangchaiCompany,Limited (hereinafter referredto as “the Company”) was foundedon5 May 1994,which is a company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State Commission for Restructuring the Economic Systems with document TGS[1993] No. 9 on 15 January 1993 by way of public offering of shares. With the approved of thePeople’s Government of Jiangsu Province SZF[1993] No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through documentZJFSZ(1994)No.9,theCompanyinitiallyissuedAsharestothepublicfrom15March1994to30Mar. 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Su ChangchaiA” for short of stock,aswellas“0570”asstockcode(presentstockcodeis“000570”).
In 1996, with the recommendation of the Office of thePeople’s Government of Jiangsu Province SZBH[1996] No.13, aswellasfirst review byShenzhen MunicipalSecuritiesAdministration OfficethroughSZBZ[1996]No. 24, and approval of the State Council Securities Commission ZWF[1996] No. 27, the Company issued 100 million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting listed on 13 September 1996.
On 9 June 2006, the Company held ashareholders’ general meeting related to A shares market to examine and approvesharemergerreformplan,andperformedthesharemergerreformon19June2006.
As examined and approved at the 2009 2nd ExtraordinaryShareholders’ General Meeting in September 2009, based on the total share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit distribution plan,i.e.to distribute5 bonussharesandcashofRMB 0.8for every10shares,with registeredcapital increased by RMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after change. As at 31 December 2014, the total share capital of the Company is 561,374,326 shares, as well as registered capital of RMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC[2010] No. B002.The Company had registered the change with the administrative authorities for industry and commerce, and obtained the renewed business license as legal personwithNo.320400000004012.
TheCompany’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its headofficelocatedatNo.123HuaideMiddleRoad,Changzhou,Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine, diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures, assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production andsalesofsmallandmedium-sizedsinglecylindersandmulti-cylinderdieselenginewiththelabelofChangchai Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and shipborne machinery and equipment, etc. TheCompany’s main business remained unchanged in the reporting period.
The Company established theShareholders’ General Meeting, the Board of Directors and the Board of Supervisors, Corporate office, Financial Department, Political Department, Investment and Development Department, Enterprise Management Department, Human Recourses Department, Production Department, Procurement Department, Sales Company, Market Department, Chief Engineer Office, Technology Center, QA Department, Foundry Branch, Machine Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine BranchandOverseasBusinessDepartmentintheCompany.
ChangchaiCompany,Limited Semi-AnnualReport2017 ThefinancialreporthasbeenapprovedtobeissuedbytheBoardofDirectorson25August2017.
The consolidation scope for the Reporting Period includes the Company (as the parent company) and five subsidiaries, one more subsidiary than the last reporting period.Tobe specific, Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. has become a wholly-owned subsidiary of the Company and has been consolidated since January 20, 2017. For details about the consolidation scope and the changes, please refer to “Changes in ConsolidationScopeandinEquityInterestsinOtherEntities”inthe“NotestoFinancialStatements”herein. IV.Basis forpreparation ofthe financial report
1.Basisforpreparation
Withthe going-concernassumption asthe basisand basedon transactionsand otherevents thatactually occurred, the Group prepared financial statements in accordance with<The Accounting Standards for BusinessEnterprises—BasicStandard>issued by the Ministry of Finance with DecreeNo. 33 andrevised with Decree No. 76, the 41 specific accounting standards, the Application Guidance of Accounting Standards for Business Enterprises, the Interpretation ofAccounting Standards for Business Enterprises and other regulations issued and revised from 15 Feb. 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) byChinaSecuritiesRegulatoryCommission.
In accordance with relevant provisions of theAccounting Standards for Business Enterprises, the Group adopted theaccrualbasis inaccounting. Exceptforsome financialinstruments, whereimpairmentoccurredonan asset,an impairmentreservewaswithdrawnaccordinglypursuanttorelevantrequirements.
2.Continuation
TheCompanycomprehensivelyevaluatedtheinformationacquiredrecentlythattherewouldbenosuchfactorsin the 12 months from the end of the reporting period that would obviously influence the continuation capability of the Company and predicted that the operating activities would continue in the future 12 months of the Company. Thefinancialstatementcompiledbaseonthecontinuousoperation.
V.Importantaccounting policies andestimations
Notetoaccounting policies andestimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord with the regulations of the relevant ASBE, formulated certain specific accounting polices and accounting estimations,whichmainlyreflectedinthewithdrawalmethodofthebaddebtprovisionoftheaccountsreceivable (NotesIII,11),themeasurementoftheinventory(NotesIII,12)andthedepreciationofthefixedassets(NotesIII, 16) etc. As for the details of the significant accounting judgment and the estimations made by the management layer,pleaserefertoNotesIII,30“Importantaccountingjudgmentandestimations”.
ChangchaiCompany,Limited Semi-AnnualReport2017 1.StatementofCompliancewiththeAccountingStandardsforBusinessEnterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s and theGroup’s financialpositions,businessresultsandcashflowsandotherrelevantinformation.
2.Fiscalperiod
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from Jan. 1 to Dec. 31 and as the metaphaseincludedmonthly,quarterlyandsemi-yearlyperiods.
3.Operatingcycle
Anormal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or cash equivalents.An operating cycle for the Group is 12 months, which is also the classification criterion for the liquidityofitsassetsandliabilities.
4.Currencyusedinbookkeeping
RenminbiisfunctionalcurrencyoftheCompany.
5. Accounting methods for business combinations under the same control and business combinations not underthesamecontrol
(1)Businesscombinationsunderthesamecontrol:
A business combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combinationandonwhichthecontrolisnottemporary.
Forthemergerofenterprisesunderthesamecontrol,iftheconsiderationofthemergingenterpriseisthatitmakes payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger,regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferredas wellas the book value of the debts borneby the merging party shalloffsetagainst the capital reserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.The totalface value of the stocks issued shallbe regarded as the capitalstock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
ChangchaiCompany,Limited Semi-AnnualReport2017 commission etc, premium income of deducting the equity securities, and as for the premium income was insufficienttodilute,theretainedearningsshallbewrittendown.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and thechangesofothernetassetssincethedateoftheearlieronebetweenthedatewhenacquiringtheoriginalequity right and the date when the combine parties and combined ones were under the same control to the combination date, should be respectively written down and compared with the beginning balance of retained earnings or the currentgainsandlossesduringthestatementperiod.
(2)Businesscombinationsnotunderthesamecontrol
Abusiness combination not under the same control is a business combination in which the combining enterprises arenotultimatelycontrolledbythesamepartyorthesamepartiesbothbeforeandafterthebusinesscombination. The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business reputation. The direct relevant expenses occurred from the enterprise combination should be included in the current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets obtained by it in the combination shall be measured according to their fair values at the acquiring date. The difference between the fair value of the assets paid out by the Company and its book value should be included in thecurrentgainsandlosses.Thepurchasedatereferstothedatethatthepurchaseracquiresthecontrolrightofthe acquiree.
Forthebusinesscombinationsnotunderthesame controlrealizedthroughstepbystepmultipletransaction,asfor the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed by the acquiree which involved with the other comprehensive income and the otherowners’ equities changes except for the net gains and losses, other comprehensive income and the profits distribution and other related comprehensive gains and otherowners’equities which in relation to the equity interests that the Group holds in the acquiree before the acquiring date should be transferred into the current investment income on the acquiring date, except for the other comprehensive income occurred from the re-measurement of the net profits of the definedbenefitplansorthechangesofthenetassetsoftheinvestees.
6.Methodsforpreparingconsolidatedfinancialstatements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual controlrightintotheconsolidatedfinancialstatement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant come-and-go balance,investment, transaction andthe unrealized profits shouldbe writtenoff whencompiling the consolidated financial statement. The portion of asubsidiary’sshareholders’ equity and the portion of asubsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and minority shareholder profits and losses respectively and presented separately undershareholders’ equity and net profits in the consolidation financial statements.The portion of asubsidiary’s net profits and losses for the period that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
ChangchaiCompany,Limited Semi-AnnualReport2017 bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority shareholders in thesubsidiary’s openingowners’ equity,minorityinterestsareoffset.
The accounting policy or accounting period of each subsidiary is different from which of the Company, which shallbeadjustedastheCompany;orsubsidiariesshallpreparefinancialstatementagainrequiredbytheCompany whenpreparingtheconsolidatedfinancialstatements.
As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financial statement, shall adjust individual financial statement based on the fair value of the identifiable net assets on the acquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financial statement, shall not adjust the financial statement of the subsidiaries, namely survived by integration as participating in the consolidation when the final control party starts implementing control and should adjust the period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the comparedstatement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidated income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the currentperiod,shouldnotbeadjustedtheperiod-beginamountoftheconsolidatedbalancesheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases.The summationofthe considerationobtainedfrom thedisposalofequity interestsandthe fairvalue of the residual equity interests, minus the portion in the originalsubsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in thesubsidiary,isrecordedininvestmentgainsfortheperiodwhentheGroup’scontrolonthesubsidiaryceases.Other comprehensive incomes in relation to the equity investment and the otherowners’equities changes except for the net gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated on the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And subsequent measurement is conducted on the residual equity interests according to the No.2Accounting Standard for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business Enterprises-RecognitionandMeasurementofFinancialInstruments.
Forthedisposalofequityinvestmentbelongstoapackagedeal,shouldbeconsideredasatransactionandconduct accountingtreatment.However,Beforelosingcontrol,everydisposalcostandcorrespondingnetassetsbalanceof subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the lose of control, when the Group losingcontrolonitssubsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation not lose the control right before losing the control right; when losing the control right, the former should be executedaccountingtreatmentaccordingtothegeneraldisposingmethodofthedisposalofthesubsidiaries. 7.Classificationofjointarrangementsandaccountingtreatmentofjointoperations
TheGroupclassifiesjointarrangementsintojointoperationsandjointventures。
ChangchaiCompany,Limited Semi-AnnualReport2017 A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the following items related to the interests share among the joint operations and executes accounting treatment accordingtotheregulationsoftherelevantASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assetsaccordingtotheGroup’sstakeinthejointoperation;
(2)Recognizestheliabilitiesthatitholdsandbearsinthejointoperationandrecognizesthejointly-heldliabilitiesaccordingtotheGroup’sstakeinthejointoperation;
(3)RecognizestheincomefromsaleoftheGroup’sshareintheoutputofthejointoperation
(4)Recognizestheincomefromsaleofthejointoperation’soutputsaccordingtotheGroup’sstakeinit
(5) Recognizes theexpense solelyincurred tothe Groupandthe expenseincurredto thejointoperationaccordingtotheGroup’sstakeinit.
8.Recognitionstandardforcashandcashequivalents
In theGroup’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments, whichareeasilyconvertibleintoknownamountofcashandwhoserisksinchangeofvalueareminimal.
9.Foreigncurrencybusinessesandtranslationofforeigncurrencyfinancialstatements
(1)Foreigncurrencybusiness
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the recording currency according to the middle price of the market exchange rate disclosed by thePeople’s Bank of Chinaonthedateofthetransaction.Amongthesaidtransactionsthatoccurred,thoseinvolvingforeignexchanges shallbeconvertedaccordingtotheexchangeratesadoptedintheactualtransactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall be converted into the recoding currency according to the middle price of the market exchange rates disclosed by thePeople’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded intotheestablishmentexpense;othersshallberecordedintothefinancialexpensesforthecurrentperiod.
Onthebalancesheetdate,theforeign-currencynon-monetaryitemsmeasuredbyhistoricalcostshallbeconverted according to the middle price of the market exchange disclosed by thePeople’s Bank of China on the date of the transaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetary itemsmeasuredbyfairvalueshallbeconvertedaccordingtothemiddlepriceofthemarketexchangedisclosedby thePeople’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss caused thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current period.
(2)Translationofforeigncurrency
ChangchaiCompany,Limited Semi-AnnualReport2017 The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spot exchange rate on the balance sheet date.Among theowner’s equity items, except for the items as “undistributed profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. And the revenues and expenses items among the balance sheet of the foreign operation shall be translated at the approximateexchangerateofthetransactiondate.Thedifferencecausedfromtheabovetransactionoftheforeigncurrencystatementshouldbelistedintheothercomprehensiveincomeamongtheowners’equities.
10.Financialinstruments
(1)Categoryoffinancialinstruments
The Company classifies the financial assets into four kinds such as trading financial assets, available-for-sale financial assets, accounts receivable and held-to-maturity investment according to the investment purpose and the economynature.
The Company classifies the financial liabilities into two kinds such as the financial liabilities measured by fair value with the changes included in the current gains and losses and the other financial liabilities measured by amortizedcostaccordingtotheeconomynature.
(2)Recognitionbasisandmeasurementmethodsoffinancialinstruments
Thetradingfinancialassetsshouldbemeasuredbyfairvaluewiththechangesoffairvalueincludedinthecurrent gains and losses; the available-for-sale financial assets should be measured by fair value with the changes of fair value included in theowners’equities; and the accounts receivable and the held-to-maturity investment should be measuredbyamortizedcost.
(3)Recognitionbasisandmeasurementmethodsoffinancialinstrumentstransformation
The Company transfers or delivers a financial asset to a party other than the issuer of the financial asset and the transformation of the financial assets could be whole of the financial assets or a part of it, which including two methods:
Theenterprisetransferstherighttoanotherpartyforreceivingthecashflowofthefinancialasset;
The enterprise transfers the financial asset to another party, but maintains the right to receive the cash flow ofthe financialassetandundertakestheobligationtopaythecashflowitreceivestothefinalrecipient.
Where the Company has transferred a part or nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset and the difference between the consideration received and the book value of the transferred financial assets should be recognized as gains and losses and at the same time transfers the accumulative gains or losses from the recognized financial assets among the originalowners’equities in the gains and losses; if it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall continue to recognize the whole or part of the financial assets and the considerationreceivedberecognizedasfinancialliabilities.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financialasset,anditdoesnotceaseitscontrolonthesaidfinancialasset,itrecognizestherelevantfinancialasset andliabilityaccordinglyaccordingtotheextentofitscontinuousinvolvementinthetransferredfinancialasset. (4)De-recognitionconditionsoffinancialliabilities
Onlywhentheprevailingobligationsofafinancialliabilityarerelievedinallorinpartmaytherecognitionofthe financialliabilitybeterminatedinallorpartly.
(5)Recognitionmethodsofthefairvalueofmainfinancialassetsandfinancialliabilities
ChangchaiCompany,Limited Semi-AnnualReport2017 As forthe financialassetsheldbythe Companyorthe financialliabilities plansto undertake, ifthere exists active market, should adopt the current offering price in the active market, and as for the financial assets plans to be purchased by the Company or the financial liabilities undertook, should adopt the current offering in the active market, and if there is no current offering price or asking price, should adopt the market quotation of the recent transactions or the adjusted market quotation of the recent transactions, except for there is definite evidence indicatethemarketquotationisnotthefairvalue.
Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of thesameessentialnatureetc.
(6) Impairment test method and withdrawal methods of impairment provision of financial assets (excluding accountsreceivable)
The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the financial assets other than those measured at their fair values and of which the variation is recorded into the profits and losses of the current period. Where there is any objective evidence proving that such financial asset has been impaired, an impairment provision shall be made. For the financial assets with significant single amount, if there is objective evidence indicates the occurred impairment, should recognize the impairment losses and should include which in the current gains and losses.As for the financial assets with insignificant single amount but not occur impairment, the Company should execute the impairment test by credit groups according to the credit degree of the customers and the actual situation of the happen of the bad debts over the years for recognizing the impairmentlosses.
The expression “objective evidence proving that the financial asset has been impaired” refers to the actually incurred events which, after the financialasset is initially recognized, have an impact onthe predicted future cash flowofthesaidfinancialassetthatcanbereliablymeasuredbytheenterprise.
Theobjectiveevidencesthatcanprovetheimpairmentofafinancialassetshallinclude:
Aseriousfinancialdifficultyoccurstotheissuerordebtor;
Thedebtorbreachesanyofthecontractualstipulations,forexample,failstopayordelaysthepaymentofinterests ortheprincipal,etc.;
The creditor makes any concession to the debtor who is in financial difficulties due to economic or legal factors, etc.;
Thedebtorwillprobablybecomebankruptorcarryoutotherfinancialreorganizations;
The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of theissuer;
Itisimpossibletoidentify whetherthecashflowofacertainassetwithin acertaincombinationoffinancialassets has decreased or not. But after making an overall appraisal according to the public data available, it is found that the predicted future cash flow of the said combination of financial assets has indeed decreased since it was initially recognized and such decrease can be measured, for example, the ability of the debtor of the said combination of financial assets worsens gradually, the unemployment rate of the country or region where the debtor is situated increases, the prices of the region where the guaranty is situated are obviously dropping, or the industrialsectorconcernedisinslump,etc.;
Any seriously disadvantageous change has occurred to technical, market, economic or legal environment, etc. wherein the debtoroperates its business, which makes the investor of an equity instrument unable to take backits investment;
ChangchaiCompany,Limited Semi-AnnualReport2017 Wherethefairvalueoftheequityinstrumentinvestmentdropssignificantlyornotcontemporarily;
Otherobjectiveevidencesshowingtheimpairmentofthefinancialasset.
Where a financial asset measured on the basis of post-amortization costs is impaired, the carrying amount of the said financial asset shall be calculated by the difference between the book value and the current value of the predictedfuturecashflowoftheimpairmentlosses.
Where any financial asset measured on the basis of post-amortization costs is recognized as having suffered from any impairment loss, if there is any objective evidence proving that the value of the said financial asset has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment-related lossesasoriginallyrecognizedshallbereversedandberecordedintotheprofitsandlossesofthecurrentperiod. Where a sellable financial assetis impaired, even if the recognition of the financialassethas notbeen terminated,theaccumulativelossesarisingfromthedecreaseofthefairvalueoftheowner’sequitywhichisdirectlyincluded shallbe transferredoutandrecordedinto theprofits andlosses of thecurrentperiod..Theaccumulative lossesare theinitialcostafterdeductingtheprincipal,theamortizationamount,fairvalueofcurrentperiodandbalanceafter originally recordedinto impairment loss ofprofits or losses.After the recognition of impairment losses, ifthere is any objective evidence indicated that the value of financial assets is resumed and objectively related to the events after the recognition of impairment losses, transfer the impairment losses originally recognized, transfer the impairment losses of available for sale equity instrument investment and recognized as other comprehensive income,andtransfertheimpairmentlossesofavailableforsaleliabilityinstrumentsandrecordintocurrentprofits orlosses.
11.Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made individually
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|-|-|
|Recognition criteria of accountsreceivablewithindividualandsignificantamount|significant single amounts refers to the accounts receivable of thesingle amount more than RMB1 million (RMB1 million include)(includingaccountsreceivableandotheraccountsreceivable)|
|Withdrawal method of the bad debtprovision ofthe accounts receivable withsignificantsingleamounts|The Company makes an independent impairment test on the accountsreceivable with significant single amount, and provision for bad debtsshallwithdrawn onthe basisof thebalancebetweenthecurrentvaluesof the predicted future cash flow lower than book value. Uponindependent impairment test, the accounts receivable with significantsingle amounts has not been impaired, it shall be withdrawn bad debtprovisionbasedonendingbalancebyadoptingaginganalysismethod.|

 (2)Accountreceivablewithdrawalbaddebtprovisionbythecreditriskportfolio
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|-|-|
|Nameofthegroup|Method|
|Theageoftheaccountsreceivableasthecreditriskportfolio|Aginganalysis|

Inthegroup,adoptingaginganalysiswithdrawsbaddebtprovision:
√Applicable□Notapplicable
ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|Age|Withdrawalproportionforaccountsreceivable|Withdrawalproportionforotheraccountsreceivable|
|Within1year(including1year)|2.00%|2.00%|
|1-2years|5.00%|5.00%|
|2-3years|15.00%|15.00%|
|3-4years|30.00%|30.00%|
|4-5years|60.00%|60.00%|
|Over5years|100.00%|100.00%|

 Inthegroups,adoptingbalancepercentagemethodtowithdrawbaddebtprovision:
□Applicable√Notapplicable
Inthegroups,adoptingothermethodstowithdrawbaddebtprovision:
□Applicable√Notapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
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|-|-|
|Reasonofindividuallywithdrawingbaddebtprovision|Recognition criteria of accounts receivable with individual butinsignificant amount: insignificant single amounts refers to the accountsreceivableofthesingleamountlowerthanRMB1 million (RMB1millioninclude)(includingaccountsreceivableandotheraccountsreceivable).|
|Withdrawalmethodforbaddebtprovision|As for an account receivable with an insignificant single amount andwhichcannotshowitsrisk featurewhenwithdrawingabad-betprovisionforitonthegroupbasis,thebad-debtprovisionfortheaccountreceivableshall be withdrawn based on the difference of the expected present valueof the future cash flows of the account receivable that less than itscarrying amount.The Company shallwithdraw thebad-debtprovision forsuchanaccountreceivablebycombiningtheagingmethodandindividualjudgmentbasedonthedebtorentity’sactualfinancialposition,cashflowsandotherrelevantinformation.|

12.Inventory
(1)CategoryofInventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed in the production process or the process providing the labor service etc. Inventory is mainly including the raw materials, low priced and easily worn articles, unfinished products, inventories and work inprocess–outsourced etc.
(2)Pricingmethod
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
accordingtotheactualcostofthecurrentperiodandthesalescostaccordingtotheweightedaveragemethod.
ChangchaiCompany,Limited Semi-AnnualReport2017 (3)Determinationbasisofthenetrealizablevalueofinventoryandwithdrawalmethodoftheprovisionforfalling priceofinventory
At the balance sheet date, inventories are measured at the lower ofthe costand netrealizable value.When all the inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, the Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the year-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory falling price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the normal production and operating process, as for the commodities inventory directly for sales such as the finished products, commodities and the materials for sales, should recognize the net realizable value according to the amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant taxes; asfor thematerials inventory needsto beprocessedinthe normalproduction andoperatingprocess,should recognize its net realizable value according to the amount of the estimated selling price of the finished products minusesthecostpredictstobeoccurwhentheproductioncompletesandtheestimated sellingexpensesaswellas the relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract price and other parts not by the contract price, should be respectively recognized the net realizable value. For items of inventories relatingtoaproductlinethatareproducedandmarketedinthesame geographicalarea,havethesame or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of inventories,provisionfordeclineinvalueismadebasedoncategoriesofinventories.
(4)Theperpetualinventorysystemismaintainedforstocksystem.
(5)Amortizationmethodoflow-valueconsumptiongoodsandpackages
Itisonetimeamortizationmethodoflow-valueconsumptiongoodsandpackageswhenconsuming.
13.Dividedasassetsheldforsale
The Company recognizes the components(or thenon-current assets) which meet with the following conditions as assetsheldforsale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of componentsunderthecurrentconditions;
(2) The Company had made solutions on disposing the components (or the non-current assets), for example, the Company should gain the approval from the shareholders according to the regulations and had acquired the approvedfromtheAnnualGeneralMeetingortherelevantauthorityinstitutions;
(3)TheCompanyhadsignedtheirrevocabletransformationagreementwiththetransferee;
(4)Thetransformationshouldbecompletedwithin1year.
14.Long-termequityinvestments
(1)Judgmentstandardofjointcontrolandsignificantinfluences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the relevant activities of the arrangement should be decided only after the participants which share the controlright make consensus. Significantinfluencerefers to the powerof the Groupwhich couldanticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of
ChangchaiCompany,Limited Semi-AnnualReport2017 thepolicieswiththeotherparties.
(2)Recognitionforinitialinvestmentcost
Theinitialinvestmentcostofthelong-termequityinvestmentshallberecognized byadoptingthefollowing ways inaccordancewithdifferentmethodsofacquisition:
① As for those forms under the same control of the enterprise combine, if the combine party takes the cash payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combination consideration, should take the shares of the book value by the ultimate control party in the consolidate financial statement of theowners’equities of the combiners acquired on the merger date as the initial investment cost.The difference between the initial investment cost and the book value of the paid combination consideration or the total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevant expense occurred when executing the enterprise merger into the current gains and losses; while the handling charges and commission occurs from the issuing the equity securities or the bonds for the enterprise mergershouldbeincludedintheinitialmeasurementamountoftheshareholders’equitiesortheliabilities.
② As for long-term equity investment acquired through the merger of enterprises not under the same control, its initial investment cost shall regard as the combination cost calculated by the fair value of the assets, equity instrumentissuedandliabilitiesincurredorundertakenonthepurchasedateaddingthedirectcostrelatedwiththe acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability) undertaken on the combining date shall be measured at the fair value without considering the amount of minority interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative balancebetweenthe combination costs andthefair value ofthe identifiable netassets itobtainsfrom the acquiree into the consolidatedincome statementdirectly.The agentexpense andother relevant managementexpenses such astheaudit,legalserviceandevaluation consultationoccursfrom theenterprisemerger,shouldbeincludedinthe current gains and losses when occur; while the handling charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger should be included in the initial measurement amount oftheshareholders’equitiesortheliabilities.
③ Long-termequityinvestmentobtainedbyothermeans
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost whichisactuallypaid.
The initial costof a long-term equityinvestmentobtained onthe basis of issuing equitysecurities shall bethe fair valueoftheequitysecuritiesissued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment contractoragreement,theunfairvaluestipulatedinthecontractoragreementshallbemeasuredatfairvalue. As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature, the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment received; where itis notcommercial in nature, the book value ofthe assets surrendered shallbe recognized as the initialcostofthelong-termequityinvestmentreceived.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at fairvalueoflong-termequityinvestment.
(3)Subsequentmeasurementandrecognitionofprofitsandlosses
① Aninvestmentinthesubsidiarycompanyshallbemeasuredbyemployingthecostmethod
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
ChangchaiCompany,Limited Semi-AnnualReport2017 entity shall be its subsidiary company.Where the Company holds the shares of an entity over50%, or, while the Company holds the shares of an entity below50%, but has a real control to the said entity, then the said entity shallbeitssubsidiarycompany.
② An investment in the joint enterprise or associated enterprise shall be measured by employing the equity method
Where the Company hold, and is able to do equity investment with joint control with other parties over an invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have equity investment with significant influences on an invested entity, the invested entity shall be its associated entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according toprofitswhichbedeclaredtodistributebytheinvesteesortheportionofthecalculationofcashdividendswhich should be enjoyed;for the other changes exceptfor the netgains and losses, other comprehensive income and theowners’equity except for the profits distribution of the investees, should adjust the book value of the long-termequityinvestmentaswellasincludeintheowners’equity.
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when itobtainstheinvestment, recognizetheattributableshareofthenetprofits andlosses oftheinvestedentity afterit adjuststhenetprofitsoftheinvestedentity.
If the accounting polices adopted by the investees is not accord with that of the Group, should be adjusted according to the accounting policies of the Group and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Group according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened between the Company and the investees which belongs to the impairment losses of the transferred assets, should notbeneutralized.
TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseaccordingtothefollowingsequence:firstof all, to write downthebookvalue of thelong-term equity investment. Secondly,ifthe bookvalue of thelong-term equityinvestmentisinsufficientforwrittendown,shouldbecontinuedtorecognizedtheinvestmentlosseslimited to the book value of other long-term equity which forms of the net investment of the investees and to written down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those should still undertake the additional obligations according to the investment contracts or the agreements, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizingitsattributableshareofprofits.
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if
ChangchaiCompany,Limited Semi-AnnualReport2017 thecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted;theCompanydisposedpartof the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposedprice andattributable netassets of subsidiaries bydisposingthe long-term equity investmentshallberecordedintoowners’equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equityanditsactualpaymentgainedshallberecordedintocurrentprofitsandlosses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded intoowners’ equity should adoptthe same basis of the accounting disposalof the relevant assets or liabilities directly disposed by theinvestees accordingtothecorrespondingproportion.Theowners’equity recognized owning tothe changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distributionoftheinvestees,shouldbetransferredintothecurrentgainsandlossesaccordingtotheproportion. For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforeacquiringthecontrolof the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the current gains and losses according to the proportion; the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the netassets ofthe investees which recognized by adopting the equity methodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion. For those the Company lost the control of the investees by disposing part of the equity investment as well as the remainedequityafterdisposalcouldexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchange to measure by equity method when compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees, should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of financial instrument, and its difference between the fair value and book value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the recognition and measurement standards of financial instrument before the Groupacquired thecontrolofthe investees,shouldexecute the accountingdisposalby adoptingthe same basisof the accountingdisposalofthe relevantassets orliabilities directlydisposedbythe investees whenlosethecontrol of them, while the changes of the otherowners’equity except for the net gains and losses, other comprehensive income and the profits distribution among the netassets ofthe investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the disposed remained equity which adopted the equity method for measurement, the other comprehensiveincomeandtheotherowners’equityshouldbecarriedforwardaccordingtotheproportion;forthe 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 shouldbecarriedforwardinfullamount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed remained equity should change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair value and book value on the date lose the control right should be included in the currentgains and losses. For the other comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of
ChangchaiCompany,Limited Semi-AnnualReport2017 the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the equity method for measurement, while for theowners’ equity recognized owning to the changes of the otherowner’s equity except for the netgains andlosses, other comprehensive income and the profits distribution of the investees, should be transferred into the current investment income with full amount when terminate adopting the equitymethod.
15.Investmentrealestates
Measurementmodeofinvestmentrealestates:
Measurementofcostmethod
Depreciationoramortizationmethod:
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; the cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped condition for use.The investmentreal estates invested by investors shallbe recordedat the value stipulated in the investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered intotheaccountbookatthefairvalue.
As for withdrawal basis of provision forimpairment of investment realestates, please refer to withdrawal method forprovisionforimpairmentoffixedassets.
16.Fixedassets
(1)Conditionsforrecognition
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits probablyflowintheCompanyanditscostcouldbereliablemeasured.
(2)Depreciationmethods
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|-|-|-|-|-|
|Categoryoffixedassets|Method|Usefullife|Expectednetsalvagevalue|Annualdeprecation|
|Housesandbuildings|Averagemethodofusefullife|20-40||2.50-5|
|Machineequipment|Averagemethodofusefullife|6-15||6.67-16.67|
|Transportationequipment|Averagemethodofusefullife|5-10||10-20|
|Electronicequipment|Averagemethodofusefullife||||
|Otherequipment|Averagemethodofusefullife|5-10||10-20|

ChangchaiCompany,Limited Semi-AnnualReport2017 (3)Recognitionbasis,pricinganddepreciationmethodoffixedassetsbyfinancelease
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance lease:
① Theleasingcontracthadagreedthat(ormadethereasonablejudgmentaccordingtotherelevantconditionson the lease starting date) when the lease term expires, the ownership of leasing the fixed assets could be transferred totheCompany;
② The Company owns the choosingright for purchasingandleasing the fixed assets, with the setpurchaseprice which is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosing right,sotheCompanycouldexecutethechoosingrightreasonablyontheleasestartingdate;
③ Even if the ownership of the fixed assets not be transferred, the lease period is of75% or above of the useful lifeoftheleasefixedassets;
④ ThecurrentvalueoftheminimumleasepaymentontheleasestartingdateoftheCompanyisequalto90%or above of the fair value of the lease fixed assets on the lease starting date; the current value of the minimum lease receipts on the lease starting date of the leaser is equal to90% or above of the fair value of the lease fixed assets ontheleasestartingdate;
⑤ ThenatureoftheleaseassetsisspecialthatonlytheCompanycoulduseitifnotexecutelargetransformation. The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and the current value of the minimum lease payment on the lease starting date as the entry value. As for the minimum lease payment which be regarded as the entry value of the long-term accounts payable, its difference should be regarded asthe unrecognizedfinancingexpense. For theinitial directexpenses occurinthe leasenegotiationsand the signing processof thelease contracts thatattribute to thehandlingexpenses, counselfees,travelexpenses and stamp taxes of the lease items, should be included in the charter-in assets value. The unrecognized financing expensesshouldbeamortizedbyadoptingtheactualinterestrateduringtheperiodoftheleaseterm.
The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, theleasedassetshallbefullydepreciatedoveritsusefullife.Ifitisnotreasonabletobecertainthatthelesseewill obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated overtheshorteroneoftheleasetermoritsusefullife
17.Constructioninprocess
(1)Valuationoftheprogressinconstruction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct materials, direct wages and direct construction fees; construction contract shall be measured at project price payable;projectcostforplantengineeringshallberecognizedatvalueofequipmentsinstalled,costofinstallation, trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses, whichshouldbecapitalized.
(2)Standardizationonconstructioninprocesstransferredintofixedassetsandtimepoint
The construction in process,of which the fixed assets reach to the predicted condition for use, shallcarry forward fixed assets on schedule. The one thathasn’t audit the final accounting shall recognize the cost and make depreciationinlinewithvaluationvalue.Theconstructioninprocessshalladjusttheoriginalvaluationvalueatits
historicalcostbutnotadjustthedepreciationthathasbeenmadeafterauditingthefinalaccounting.
ChangchaiCompany,Limited Semi-AnnualReport2017 18.Borrowingcosts
(1)Recognitionprincipleofcapitalizationofborrowingcosts
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing costsoccurredbelongtospecificallyborrowedloanorgeneralborrowingusedfortheacquisitionandconstruction of investment real estates and inventories over one year (including one year) shall be capitalized, and record into relevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalized unless they simultaneously meet the following three requirements: (1) The asset disbursements have already incurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or production activitieswhicharenecessarytopreparetheassetforitsintendeduseorsalehavealreadystarted.
(2)Theperiodofcapitalizationofborrowingcosts
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates and inventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing costs shall be measured into asset cost before such assets reach to the intended use or sale, Where acquisition and construction of fixed assets, investment real estates and inventories is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended, and recorded into the current expense, till the acquisition and construction of the assets restarts. When the qualified asset is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased, the borrowing costs occurredlatershallbeincludedintothefinancialexpensedirectlyatthecurrentperiod.
(3)Measurementmethodofcapitalizationamountofborrowingcosts
As for specifically borrowed loans for the acquisition and construction or production of assets eligible for capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loansasadepositinthebankorasatemporaryinvestment.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests onthe general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing.
19.Intangibleassets
(1)Pricingmethod,usinglifeandimpairmenttestofintangibleassets
1)Pricingmethodofintangibleassets
Intangibleassetspurchasedshouldtaketheactualpaymentandtherelevantotherexpensesastheactualcost. For the intangible assets invested by the investors should be recognized the actual cost according to the value of theinvestmentcontractsoragreements,however,forthevalueofthecontractsoragreementsisnotfair,theactual costshouldberecognizedaccordingtothefairvalue.
ChangchaiCompany,Limited Semi-AnnualReport2017 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, shouldberecordedaccordingtothebookvalueoftheswap-outassets.
Fortheintangibleassetsacquiresfromthedebtsreorganizationshouldberecognizedbythefairvalue.
2)Amortizationmethodandtermofintangibleassets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is available for use within the service period, shall be recorded into the current profits and losses. The Company shall, at least at the end of each year, check the service life and the amortization method of intangible assets with limitedservicelife.Whentheservicelifeandtheamortizationmethodofintangibleassetsaredifferentfromthose before,theyearsandmethodoftheamortizationshallbechanged.
Intangible assets with uncertain service life may notbeamortized. However,the Company shallcheckthe service life of intangible assets with uncertain service life during each accounting period. Where there are evidences to prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized accordingtotheabovemethodmentioned.
TherightstouselandoftheCompanyshallbeamortizedaccordingtotherestservicelife.
(2)AccountingpolicesofinternalR&Dexpenses
The internal research and development projects of an enterprise shall be classified into research phase and developmentphase:the term “research” refers to thecreative and planned investigation to acquire andunderstand new scientific or technological knowledge; the term “development” refers to the application of research achievements andother knowledge to a certain planordesign, prior to the commercial production or use,so as to produceanynewmaterial,deviceorproduct,orsubstantiallyimprovedmaterial,deviceandproduct.
TheCompanycollectstheexpensesofthecorrespondingphasesaccordingtotheabovestandardofclassifyingthe research phase and the development phase. The research expenditures for its internal research and development projects of an enterprise shall be recorded into the profit or loss for the current period. The development expenditures for its internal research and development projects of an enterprise may be capitalized when they satisfy the following conditions simultaneously: it is feasible technically to finish intangible assets for use or sale; it is intended to finish and use or sell the intangible assets; the usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally; it is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and otherresources;thedevelopmentexpendituresoftheintangibleassetscanbereliablymeasured.
20.Impairmentoflong-termassets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the Group should judge whether decrease in value exists on the date of balance sheet.Recoverableamountsshouldbetestedfordecreaseinvalueifitexists.OtherintangibleAssetsofreputation and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no matterwhetheritexists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences shouldinclude in impairmentloss. Recoverable amounts would bethe higher ofnetvalue ofassetfair
ChangchaiCompany,Limited Semi-AnnualReport2017 value deducting disposal charges or present value of predicted cash flow.Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to theBuyer’s price of the asset. If no sales agreement or asset active market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses include legal fees, taxes, cartage or other direct expenses of merchantableAssets related to asset disposal. Present value ofpredictedassetcashflow shouldbe determinedbythe properdiscountrate accordingtoAssets in service and predicted cash flow of final disposal.Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determinedaccordingtothebelongingassetgroup.Assetgroupistheminimumassetcombinationproducingcash flowindependently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amountsofsharedbusinessreputationassetgrouporassetgroupcombinationarelowerthanbookvalue,itshould determinetheimpairmentloss.Impairmentlossamountshouldfirstlybedeductedandsharedtothebookvalueof business reputation of asset group or asset group combination, then deduct book value of all assets according to proportions of other book value of above assets in asset group or asset group combination except business reputation.
Aftertheassetimpairmentlossisdetermined,recoverablevalueamountswouldnotbereturnedinfuture. 21.Amortizationmethodoflong-termdeferredexpenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and amortized averagely within benefitperiod. In case of no benefitin the future accounting period, the amortized value of such projectthatfailstobeamortizedshallbetransferredintotheprofitsandlossesofthecurrentperiod.
22.Payroll
(1)Accountingtreatmentofshort-termcompensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Groupshouldberecognized as liabilities andis included inthe currentgains andlosses orrelevant assets cost.Of whichthenon-monetarybenefitsshouldbemeasuredaccordingtothefairvalue.
(2)Accountingtreatmentofthewelfareafterdemission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the Companyandtheemployees, ortheregulations ormethods formulatedbythe Companyfor providingthe welfare afterdemissionfortheemployees.Ofwhich,definedcontributionplansreferstothewelfareplansafterdemission that the Company no more undertake the further payment obligations after the payment of the fixed expenses for the independent funds; defined benefit plans, refers to the welfare plans after demission except for the defined contributionplans.
Definedcontributionplans
ChangchaiCompany,Limited Semi-AnnualReport2017 During the accounting period that the Company providing the service for the employees, the Company should recognizetheliabilitiesaccordingtothedepositedamountcalculatedbydefinedcontributionplans,andshouldbe includedinthecurrentgainsandlossesortherelevantassetscost.
(3)Accountingtreatmentofthedemissionwelfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the earlier date between the following two conditions and include which in the current gains and losses when providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the costsorexpensesrelatedtothereorganizationinvolveswiththedemissionwelfarepayments.
(4)Accountingtreatmentofthewelfareofotherlong-termstaffs
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the earlier date between the following two conditions and include which in the current gains and losses when providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the costsorexpensesrelatedtothereorganizationinvolveswiththedemissionwelfarepayments.
23.Estimatedliabilities
(1)Criteriaofestimatedliabilities
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following conditionsaresatisfiedsimultaneously:
① ThatobligationisacurrentobligationoftheCompany;
② It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation;and
③ Theamountoftheobligationcanbemeasuredinareliableway.
(2)Measurementofestimatedliabilities
The Company shall measure the estimated debts in accordance with the best estimate of the necessary expenses fortheperformanceofthecurrentobligation.
The Company shall check the book value of the estimated debts on the Balance Sheet Date. If there is any conclusive evidence proving that the said book valuecan’t truly reflect the current best estimate, the Company shall,subjecttochange,makeadjustmenttocarryingvaluetoreflectthecurrentbestestimate.
24.Revenue
(1) Recognition of revenue from sale of goods: the revenue from selling shall be recognized by the following conditions:The significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; the Company retains neither continuous management right that usually keeps relation with the ownership noreffective controlover the soldgoods;the relevantamount ofrevenue canbemeasuredin a reliable way;therelevantrevenueandcostsofsellinggoodscanbemeasuredinareliableway.Theamountoftherevenue from selling shall ascertain the revenue incurred by selling goods in accordance with the received or receivable price stipulated in the contract or agreement signed between the enterprise and the buyer, unless the received or receivableamountasstipulatedinthecontractoragreementisunfair.
ChangchaiCompany,Limited Semi-AnnualReport2017 (2) Recognition of revenue from providing labor services:When the total revenue and costs from providing labor can be measured in a reliable way; the relevant economic benefits are likely to flow into the enterprise; the schedule of completion under thetransaction canbe measured in a reliable way,therevenue from providing labor shall be recognized. If the Company can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method on the date of the balance sheet, otherwise the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred and expected to be compensated. The Company recognized the completion process of the transaction concerning the labor services according to the proportion of the occurred cost of the estimated total cost.The total amount of the revenue from providing services should be recognized according to the contract price received or receivable from theacceptingofthelaborservicesortheagreementpriceexceptforthoseunfairprices.
(3) Recognition of the revenue from transferring use rights of assets: When the relevant economic benefits are likelytoflow intotheenterprisesandtheamountofrevenuescanbemeasuredinareliableway,therevenuefrom abalienating the right to use assets shall be recognized. The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actualinterestrate；theamountofroyaltyrevenueshouldbemeasuredandconfirmedinaccordancewiththeperiodandmethodofchargingasstipulatedintherelevantcontractoragreement；asfortherentalrevenue:theamountofthe rental revenue from the operation lease should be recognized according to the straight-line method during each periodoftheleasetermoraccruedintothecurrentgainsandlossesifrentalactualoccurred.
25.Governmentsubsidies
(1)Judgmentbasisandaccountingtreatmentofgovernmentsubsidiesrelatedtoassets
A government subsidy means the monetary or non-monetary assets obtained free by an enterprise from the government. Government subsidies consist of the government subsidies pertinent to assets and government subsidiespertinenttoincomeaccordingtotherelevantgovernmentdocuments.
For those the government documents not definite stipulate the assistance object, the judgment basis of the Company classifies the government subsidies pertinentto assets and governmentsubsidies pertinentto income is: whetherareusedforpurchasingorconstructingorforformingthelong-termassetsbyothermethods.
The government subsidies should be recognized only when meet with the attached conditions of the government subsidiesaswellascouldbeacquired.
If the government subsidies are the monetary assets, should be measured according to the received or receivable amount;andforthegovernmentsubsidiesarethenon-monetaryassets,shouldbemeasuredbyfairvalue.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within theusefullivesoftherelevantassets,andincludedinthecurrentprofitsandlosses.
(2)Judgmentbasisandaccountingtreatmentofgovernmentsubsidiesrelatedtoprofits
The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevantexpensesarerecognized;orthosesubsidiesusedforcompensatingtherelatedexpensesorlossesincurred totheenterpriseshallbedirectlyincludedinthecurrentprofitsandlosses.
ChangchaiCompany,Limited Semi-AnnualReport2017 26.Deferredincometaxassetsandliabilities
(1)Basisofrecognizingthedeferredincometaxassets
According to the difference between the book value of the assets and liabilities and their tax basis,Adeferred tax assets shall be measured in accord with the tax rates that are expected to apply to the period when the asset is realizedortheliabilityissettled.
Therecognitionofthedeferredincometaxassetsislimitedbytheincome taxpayablethattheCompanyprobably gains fordeductingthedeductible temporarydifferences.Atthebalancesheetdate,wherethereis strongevidence showing that sufficient taxable profit will be available against which the deductible temporary difference can be utilized,thedeferredtaxassetunrecognizedinpriorperiodshallberecognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. Ifit’s probable that sufficienttaxableprofitwillnotbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,the Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down laterwhenit’sprobablethatsufficienttaxableprofitwillbeavailable
(2)Basisofrecognizingthedeferredincometaxliabilities
According to the difference between the book value of the assets and liabilities and their tax basis,Adeferred tax liabilities shall be measured in accord with the tax rates that are expected to apply to the period when the asset is realizedortheliabilityissettled.
27.Lease
(1)Accountingtreatmentofoperatinglease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or the current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be recognizedasthecurrentprofitorloss;Contingentrentsshallbechargedasexpensesintheperiodsin whichthey areincurred.
Lessors inanoperatingleaseshallberecognized asthecurrentprofitorlossonastraight-linebasis overthelease term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the initial direct expensesoccurshouldbedirectlyincludedinthecurrentgainsandlossesexceptforthosewith largeramountand be capitalized as well as be included in the gains and losses by stages. Contingent rents shall be charged as expensesintheperiodsinwhichtheyareincurred.
(2)Accountingtreatmentsoffinanciallease
Whenthe Companyas thelessee,Onthelease beginningdate,the Companyshallrecordthelower oneofthefair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges and the occurred initial direct expenses, should be recorded in the lease assets value. During each lease period, should recognize the current financing expenses byadoptingtheactualinterestrate.
When the Company as the leasor and on the beginning date of the lease term, the Company shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time.
The balance betweenthe sum ofthe minimum lease receipts, the initial directcosts and the unguaranteed residual
ChangchaiCompany,Limited Semi-AnnualReport2017 value and the sum of their present values shall be recognized as unrealized financing income. During each lease period,shouldrecognizethecurrentfinancingrevenuesadoptingtheactualinterestrate.
28.Othersignificantaccountingpoliciesandestimates
(1)Operationtermination
Operation termination refers to the compose part that meet with one of the following conditions which had been disposed by the Group or be classified to held-to-sold as well as could be individually distinguished in operating andcompilingthefinancialstatement:
① Thecomposepartrepresentsanindividualmainbusinessoramainoperationarea;
② Thecomposepartisapartintendstodisposeandplananindividualmainbusinessoramainoperationarea;③ Thecomposepartisasubsidiarywhichbeacquiredonlyforresold.
(2)Hedgingaccounting
The term “hedging”refers to oneormore hedging instruments whichare designatedby anenterprise foravoiding the risks of foreign exchange, interestrate, commodity price, stockprice, creditandetc.,andwhich is expected to make thechanges in fair value or cashflow of hedging instrument(s) to offsetall orpartof thechanges in the fair valueorcashflowofthehedgeditem.
The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise for hedging and bywhich it is expected thatchanges in its fair value or cash flow can offsetthe changes in fair value or cash flow of the hedged item. For a hedging of foreign exchange risk, a non-derivative financial asset or non-derivativefinancialliabilitymaybeusedasahedginginstrument.
The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair value or cashflowandaredesignatedasthehedgedobjectives.
The hedging should be executed by the hedging accounting methods when satisfying the following conditions at thesametime:
① At the commencement of the hedging, the enterprise shall specify the hedging relationship formally (namely the relationship between the hedging instrument and the hedged item) and prepare a formal written document on thehedgingrelationship,riskmanagementobjectivesandthestrategiesofhedging.
② The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed for thehedgingrelationshipbyenterpriseattheverybeginning.
③ Foracashflowhedgingofforecasttransaction,theforecasttransactionshallbelikelytooccurandshallmake theenterprisefacedtotheriskofchangesincashflow,whichwillultimatelyaffecttheprofitsandlosses.
④ Theeffectivenessofhedgingcanbereliablymeasured.
⑤ Thehedgingishighlyeffectiveinaccountingperiodinwhichthehedgingrelationshipisspecified.
29.Changesinmainaccountingpoliciesandestimates
(1)Changeofaccountingpolicies
√Applicable□Inapplicable
||||
|-|-|-|
|Thereasonofchangeofaccountingpolicies|Procedures for examination and approvalofprojects|Remarks|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||
|-|-|
|According to the Notice (CK [2017] No. 15)Regarding Printing and Issuing <AccountingStandard No. 16 for BusinessEnterprises—Governmental Subsidies> issuedby the Ministry of Finance on May 10, 2017,the new standard has applied since June 12,2017. As such, the Company accounted itsgovernmental subsidies existing on January 1,2017 using the prospective application method,andadjustedthe governmentalsubsidies arisingduring the period from January 1, 2017 to theapplicationdayofthenewstandard.|Considered and approved at 6th Meetingof 8th Board and 6th Meeting of 8thSupervisoryBoardoftheCompany.|

(2)Changeofmainaccountingestimates
□Applicable√Inapplicable
30.Other
Criticalaccountingjudgmentsandestimates
Due to the inside uncertainty of operating activity, the Group needed to make judgments, estimates and assumption on the book value of the accounts without accurate measurement during the employment of accounting policies.And these judgments, estimates and assumption were made basing on the prior experience of the senior executives of the Group, as well as in consideration of other factors. These judgments, estimates and assumptionwould alsoaffectthereportamountof income, costs,assets andliabilities, aswellas thedisclosureof contingent liabilities on balance sheet date. However, the uncertainty of these estimates was likely to cause significantadjustmentonthebookvalueoftheaffectedassetsandliabilities.
The Group would check periodically the above judgments, estimates and assumption on the basis of continuing operation. For the changes in accounting estimates only affected on the current period, the influence should be recognized at the period of change occurred; for the changes in accounting estimates affected the current period andalsothefutureperiod,theinfluenceshouldberecognizedattheperiodofchangeoccurredandfutureperiod. On the balance sheetdate, the Group needed to make judgments, estimates andassumption onthe accounts in the followingimportantitems:
(1)Provisionforbaddebts
Inaccordancewiththeaccountingpoliciesofaccountsreceivable,theGroupmeasuredthelossesforbaddebtsby adopting allowance method. The impairment of accounts receivable was based on the appraisal of the recoverability of accounts receivable. The impairment of accounts receivable was dependenton the judgment and estimates. The actual amount and the difference of previous estimates would affect the book value of accounts receivable and the withdrawal and reversal on provision for bad debts of accounts receivable during the period of estimatesbeingchanged.
(2)Provisionforfallingpriceofinventories
In accordancewith theaccountingpolicies ofinventories, fortheinventories thatthecosts weremorethanthenet
ChangchaiCompany,Limited Semi-AnnualReport2017 realizable value as well as out-of-date and dull-sale inventories, the Group withdrawn the provision for falling price of inventories on the lower one between costs and net realizable value. Evaluating the falling price of inventories needed the management level gain the valid evidence and take full consideration of the purpose of inventories, influence of events after balance sheet date and other factors, and then made relevant judgments and estimates. The actual amount and the difference of previous estimates would affect the book value of inventories and the withdrawal and reversal on provision for bad debts of inventories during the period of estimates being changed.
(3)Held-to-maturityinvestment
The Company classifies the non-derivative financial assets which meet with conditions with fixed or confirmable repaymentamountandfixedmaturitydateaswellastheCompanyownsdefiniteintentionandabilitytoholduntil mature as the held-to-maturity investment. To execute the classification needs large judgment. In the process of executing the judgment, the Company would assess the intention and ability of the investment which hold until the due date. Except for the particular situation (for example, selling the investment with insignificant amount when approaching the duedate), if the Companyfails to hold the investment untilthe duedate, shouldre-classify the investment to the available-for-sale financial assets and would no more be classified as the held-to-maturity investmentinthecurrentfiscalyearaswellastheafterwardtwocompletefiscalyears.Ifthereexitssuchsituation, that would probably cause significant influences on the value of the relevant financial assets presented on the financial statement and may influence the risks management strategies of the financial instruments of the Company.
(4)Held-to-maturityinvestmentimpairment
The Company confirms whether the held-to-maturity investment has impairment depends on the judgment from the management layer to a large extent. The objective evidences of the impairments including the issuers which occur serious financial difficulties that lead the financial assets could not continue to trade in the active market and to execute the contracts regulations (for example, to return the interests or the principal violates a treaty) etc. In the process of executing judgment, the Company needs to evaluate the influences of the objective evidences of theimpairmentontheestimatedfuturecashflow.
(5)Theimpairmentoffinancialassetsavailableforsale
The Group judged whether the financial assets available for sale were impaired relying heavily on the judgment andassumption of themanagementteam, soas todecide whetherrecognized theimpairment losses inthe income statement. During the process of making the judgment and assumption, the Group needed to appraise the balance of the cost of the investment exceeding its fair value and the continuous period, the financial status and business forecast in a short period, including the industrial situation, technical reform, credit level, default rate and risk of counterparty.
(6)Provisionforimpairmentofnon-financialnon-currentassets
The Group made a judgment on the non-currentassets other than financialassets whether they hadany indication of impairment on the balancesheetdate. For the intangible assets withoutfinite service life, other than the annual impairment test, they should be subject to the impairment test when there was any indication of impairment. For other non-currentnon-financial assets,which should besubjectedto impairment testwhen therewas indication ofimpairmentindicatedthatthebookvaluecan’tberecoverable.
Whenthebookvalueoftheassetsorassetsportfoliowasmorethantherecoverableamount,whichwasthehigher one between the net amount of fair value after deducting the disposal expenses and the discounted amount of the estimatedfuturecashflow,itmeansimpairmentincurred.
The netamountof fair value after deducting the disposalexpensesshouldbe fixed theprice in the sale agreement
ChangchaiCompany,Limited Semi-AnnualReport2017 forsimilarassetsinthefairtransactionminustheincreasedcostsdirectlyattributabletotheassetsdisposal. When estimated the discounted value of future cash flow, the Group needed to make important judgment on the output, selling price, relevant costs and the discount rate for calculating the discounted amount, etc. When estimatedtherecoverableamount,theGroupwouldadoptalltheavailabledocuments,includingthepredictionfor relevantoutput,sellingpriceandrelevantoperatingcostsarisingfromreasonableandsupportiveassumptions. The Group made the impairment test on goodwill at least one time per year, which required to predict the discountedamountofthefuturecashflowoftheassetsorassetsportfoliowiththedistributedgoodwill,forwhich, the Group needed to predict the future cash flow of the assets or assets portfolio, and adopt the property discountedratetodecidethediscountedamountoffuturecashflow.
(7)Depreciationandamortization
For the investment real estate, fixed assets and intangible assets, the Group withdrew the depreciation and amortization by adopting the straight-line method during the service life after full consideration of the salvage value.TheGroupcheckedtheservicelifeperiodicallysoastodecidetheamountofdepreciationandamortization at each reporting period. The service life was fixed by the Group in accordance with the previous experience of thesimilar assetsandtheexpectedtechnicalupdate.If therewasanysignificantchangeontheprevious estimates, thedepreciationandamortizationexpensesshouldbeadjusted.
(8)Incometax
During the routine operating activities, there were some uncertainty in the ultimate tax treatment and calculation for parts of transactions. Some accounts of such transaction could be listed as pre-tax expenditures only after the approval of taxation authorities. If there were any differences between the ultimate result of recognition for these taxationmatersandtheirinitialestimates,thedifferenceswouldaffectthecurrentincometaxanddeferredincome taxattheperiodofultimaterecognition.
VI.Taxation
1.Maintaxesandtaxrate
||||
|-|-|-|
|Typeoftax|Taxationbasis|Taxrates|
|VAT|Payabletosalesrevenue|13%,17%|
|Urban maintenance and constructiontax|Taxableturnoveramount|Tax paid in accordance with the taxregulationsoftaxunitslocation|
|Corporateincometax|Taxableincome|25%or15%|
|Educationsurcharge|Taxableturnoveramount|5%|

2.Taxpreference
In 2009, the Company has been identified as High-tech Enterprises, therefore, it enjoys 15-percent preferential rate for corporate income tax; theCompany’s controllingsubsidiary—Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company,shall pay the corporate income tax at tax rate15% from 1 January 2011
to 31 December 2020 in accordance with the Notice of the Ministry of Finance, the General Administration of
Customs of PRC and the NationalAdministration of Taxation about the Preferential Tax Policies for the Western
Development.
ChangchaiCompany,Limited Semi-AnnualReport2017 VII. Notes on major items in consolidated financial statements ofthe Company
1.Monetaryfunds
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Cashonhand|136,578.34|314,905.29|
|Bankdeposits|589,335,887.39|582,963,123.80|
|Othermonetaryfunds|119,219,787.00|87,425,772.93|
|Total|708,692,252.73|670,703,802.02|

 At the period-end, the restricted monetary fund was RMB 119,219,787.00 in total, of which: the bankacceptance depositwasRMB119,219,787.00.
2.Notesreceivable
(1)Notesreceivablelistedbycategory
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Bankacceptancebill|261,056,165.98|501,070,279.01|
|Total|261,056,165.98|501,070,279.01|

 (2)Notesreceivablepledgedattheperiod-end
Naught
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balancesheetdateattheperiod-end
Unit:RMB
||||
|-|-|-|
|Item|Amountofrecognitionterminationattheperiod-end|Amountofnotterminatedrecognitionattheperiod-end|
|Bankacceptancebill|210,469,025.51||
|Total|210,469,025.51||

(4) There was no any notes be transferred to accounts receivable owning to the drawer failed to performanceoftheCompanyattheperiod-end
(5)Theamountoftheperiod-enddecreasedof47.9%overthatoftheperiod-begin,whichwasmainlydue
tothepaymentincurrentperiodfornonbalancebillinlastperiod-endorcollectionwithacceptance
ChangchaiCompany,Limited Semi-AnnualReport2017 3.Accountsreceivable
(1)Accountsreceivabledisclosedbycategory
Unit:RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance|||||Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion|Amount|Withdrawalproportion||Amount|Proportion|Amount|Withdrawalproportion||
|Accountsreceivable withsignificant singleamount for whichbad debtprovisionseparatelyaccrued|26,163,467.65|2.64%|25,324,828.04|96.79%|838,639.61|27,508,638.82|4.62%|25,391,099.21|92.30%|2,117,539.61|
|Accountsreceivablewithdrawn baddebt provisionaccordingto creditriskscharacteristics|964,407,900.22|97.33%|219,695,425.53|22.78%|744,712,474.69|567,673,711.72|95.33%|210,511,429.64|37.08%|357,162,282.08|
|Accountsreceivable withinsignificantsingle amount forwhich bad debtprovisionseparatelyaccrued|276,298.29|0.03%|276,298.29|100.00%||276,298.29|0.05%|276,298.29|100.00%||
|Total|990,847,666.16|100.00%|245,296,551.86|24.76%|745,551,114.30|595,458,648.83|100.00%|236,178,827.14|39.66%|359,279,821.69|

Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedatperiodend:√Applicable□Notapplicable
Unit:RMB
||||||
|-|-|-|-|-|
|Accountsreceivable(classifiedbyunits)|Closingbalance||||
||Bookbalance|Baddebtprovision|WithdrawalProportion|WithdrawalReason|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||
|-|-|-|-|-|
|Customer1|1,902,326.58|1,902,326.58|100.00%|Difficulttorecover|
|Customer2|6,215,662.64|6,202,854.45|99.79%|Difficulttorecover|
|Customer3|3,040,439.17|2,214,607.75|72.84%|Estimatedirrecoverable|
|Customer4|3,279,100.00|3,279,100.00|100.00%|Difficulttorecover|
|Customer5|2,133,377.01|2,133,377.01|100.00%|Difficulttorecover|
|Customer6|5,359,381.00|5,359,381.00|100.00%|Difficulttorecover|
|Customer7|2,584,805.83|2,584,805.83|100.00%|Difficulttorecover|
|Customer8|1,648,375.42|1,648,375.42|100.00%|Difficulttorecover|
|Total|26,163,467.65|25,324,828.04|--|--|

Inthegroups,accountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Notapplicable
Unit:RMB
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Accountsreceivable|Baddebtprovision|WithdrawalProportion|
|Sub-itemwithin1year||||
|Within1year|752,385,108.62|15,047,702.17|2.00%|
|Subtotalofwithin1year|752,385,108.62|15,047,702.17|2.00%|
|1to2years|3,248,002.36|162,400.11|5.00%|
|2to3years|1,995,444.32|299,316.65|15.00%|
|3to4years|602,482.11|180,744.63|30.00%|
|4to5years|5,429,002.10|3,257,401.26|60.00%|
|Over5years|200,747,860.71|200,747,860.71|100.00%|
|Total|964,407,900.22|219,695,425.53||

Notesofconfirmingthebasisofthegroups:
Inthegroups,accountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision
□Applicable√Notapplicable
Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
Notapplicable
(2)Accountsreceivablewithdraw,reversedorcollectedduringtheReportingPeriod
ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB9,183,995.89;the amountofthereversedorcollectedpartduringtheReportingPeriodwasofRMB66,271.17.
(3)Top5oftheclosingbalanceoftheaccountsreceivablecollectedaccordingtothearrearsparty
At period end, the total amount of top 5 of the closing balance of the accounts receivable collected according to
ChangchaiCompany,Limited Semi-AnnualReport2017 the arrears party was RMB 449,507,585.4,45.37% of the closing balance of the accounts receivable and the relevantclosingbalanceofbaddebtprovisionwasRMB22,939,768.44.
(4) The amount of the period-end increased of107.51% over that of the period-begin, which was mainly because the Company sells on credit moderately to expand the market space. At the same time, the proportion of multi-cylinder engine among promoting products increased. Customers of multi-cylinder engine are mainly from unitsofsupportingmainengine,sothepaymentdaysarecomparativelylong.
4.Prepayment
(1)Listbyaginganalysis:
Unit:RMB
||||||
|-|-|-|-|-|
|Aging|Closingbalance||Openingbalance||
||Amount|Proportion|Amount|Proportion|
|Within1year|27,901,734.49|94.82%|13,981,887.79|90.30%|
|1to2years|621,763.47|2.11%|515,122.72|3.33%|
|2to3years|12,785.91|0.04%|7,418.00|0.05%|
|Over3years|890,455.42|3.03%|979,046.92|6.32%|
|Total|29,426,739.29|--|15,483,475.43|--|

(2)Top5oftheclosingbalanceoftheprepaymentcollectedaccordingtotheprepaymenttarget
At the period-end, the total amount of top 5 of the closing balance of the prepayment collected according to theprepaymenttargetwasRMB26,018,229.27,88.42% oftheclosingbalanceoftheaccountsreceivable.
(3)Theamountoftheperiod-endincreasedof90.05%overthatoftheperiod-begin,whichwasmainlydue totheincreasedpaymentinadvanceforsomematerialscustomerstomeetthemarketdemand.
5.Otheraccountsreceivable
(1)Otheraccountsreceivabledisclosedbycategory
Unit:RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance|||||Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion|Amount|Withdrawalproportion||Amount|Proportion|Amount|Withdrawalproportion||

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other accountsreceivable withsignificant singleamount for whichbad debtprovisionseparatelyaccrued|2,853,188.02|6.21%|2,853,188.02|100.00%||2,853,188.02|7.82%|2,853,188.02|100.00%||
|Other accountsreceivablewithdrawn baddebt provisionaccordingto creditriskscharacteristics|40,435,733.09|87.96%|26,788,058.82|66.25%|13,647,674.27|30,950,737.22|84.83%|26,785,062.60|86.54%|4,165,674.62|
|Other accountsreceivable withinsignificantsingle amount forwhich bad debtprovisionseparatelyaccrued|2,679,801.13|5.83%|2,679,801.13|100.00%||2,679,801.13|7.35%|2,679,801.13|100.00%||
|Total|45,968,722.24|100.00%|32,321,047.97|100.00%|13,647,674.27|36,483,726.37|100.00%|32,318,051.75|88.58%|4,165,674.62|

Otheraccountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccrued:√Applicable□Notapplicable
Unit:RMB
||||||
|-|-|-|-|-|
|Otheraccountreceivable(classifiedbyunits)|Closingbalance||||
||Otheraccountsreceivable|Badprovision|Withdrawalproportion|Withdrawalreason|
|Changchai Group Import &ExportCompany|2,853,188.02|2,853,188.02|100.00%|Difficulttorecover|
|Total|2,853,188.02|2,853,188.02|--|--|

 Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtoaccruebaddebtprovision:
√Applicable□Notapplicable
Unit:RMB
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Otheraccountreceivable|Badprovision|Withdrawalproportion|
|Sub-itemwithin1year||||
|Within1year|13,275,459.23|265,509.18|2.00%|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||
|-|-|-|-|
|Subtotalofwithin1year|13,275,459.23|265,509.18|2.00%|
|1-2years|153,096.28|7,654.81|5.00%|
|2-3years|73,669.19|11,050.37|15.00%|
|3-4years|594,689.02|178,406.70|30.00%|
|4-5years|33,454.01|20,072.40|60.00%|
|Over5years|26,305,365.36|26,305,365.36|100.00%|
|Total|40,435,733.09|26,788,058.82||

Inthegroups,otheraccountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision□Applicable√Notapplicable
Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
□Applicable√Notapplicable
(2)Accountsreceivablewithdraw,reversedorcollectedduringtheReportingPeriod
ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB2,996.22;theamount ofthereversedorcollectedpartduringtheReportingPeriodwasofRMB0.00.
(3)Listoftheotheraccountsreceivableactualwritten-offduringtheReportingPeriod
Naught
(4)Otheraccountsreceivableclassifiedbythenatureofaccounts
Unit:RMB
||||
|-|-|-|
|Nature|Closingbookbalance|Openingbookbalance|
|Marginandcashpledge|4,200.00|4,200.00|
|Unitcurrentamount|18,255,359.36|19,305,341.92|
|Employeeloan|2,093,156.28|1,819,817.62|
|Other|25,616,006.60|15,354,366.83|
|Total|45,968,722.24|36,483,726.37|

 (5)Top5oftheclosingbalanceoftheotheraccountsreceivablecollectedaccordingtothearrearsparty Unit:RMB
|||||||
|-|-|-|-|-|-|
|Nameofunits|Nature|Closingbalance|Aging|Proportionofthetotalyearendbalanceoftheaccountsreceivable|Closingbalance of baddebtprovision|
|Xuzhou East China CastingGeneralFactory|Current|5,000,000.00|Within1year|10.88%|100,000.00|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||||
|-|-|-|-|-|-|
|Changzhou ChangjiangCastingMaterialsCo.,Ltd.|Current|5,000,000.00|Within1year|10.88%|100,000.00|
|Changzhou Compressor Co.,Ltd.|Current|2,940,000.00|Over5years|6.40%|2,940,000.00|
|Import and Export CompanyofChangchaiGroup|Current|2,853,188.02|Over5years|6.21%|2,853,188.02|
|Changzhou New DistrictAccountingCenter|Current|1,626,483.25|Over5years|3.54%|1,626,483.25|
|Total|--|17,419,671.27|--|37.89%|7,619,671.27|

 (6)Theamount oftheperiod-endincreasedof227.62% overthatoftheperiod-begin,whichwasmainlydue to the temporary borrowings of subsidiary Housheng Investment from Xuzhou East China Casting General FactoryandotherunitsintheReportingPeriod.
6.Inventory
(1)Categoryofinventory
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Fallingpricereserves|Bookvalue|Bookbalance|Fallingpricereserves|Bookvalue|
|Rawmaterial|130,188,781.71|4,345,253.62|125,843,528.09|105,129,601.58|4,315,935.29|100,813,666.29|
|Goods inprocess|103,285,266.86|21,803,781.18|81,481,485.68|127,378,644.50|21,803,781.18|105,574,863.32|
|Materialsprocessedoncommission|28,446,620.31|597,808.75|27,848,811.56|25,326,273.77|597,808.75|24,728,465.02|
|Finishedgoods|229,645,391.32|20,174,913.34|209,470,477.98|280,847,238.35|20,174,913.34|260,672,325.01|
|Low pricedand easilywornarticles|5,489,300.37|1,300,787.34|4,188,513.03|3,557,926.14|1,300,787.34|2,257,138.80|
|Total|497,055,360.57|48,222,544.23|448,832,816.34|542,239,684.34|48,193,225.90|494,046,458.44|

ChangchaiCompany,Limited Semi-AnnualReport2017 (2)Fallingpricereservesofinventory
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increasedamount||Decreasedamount||Closingbalance|
|||Withdrawal|Other|Reverseorwrite-off|Other||
|Rawmaterial|4,315,935.29|29,318.33||||4,345,253.62|
|Goodsinprocess|21,803,781.18|||||21,803,781.18|
|Materialsprocessedoncommission|597,808.75|||||597,808.75|
|Finishedgoods|20,174,913.34|||||20,174,913.34|
|Lowpricedandeasilywornarticles|1,300,787.34|||||1,300,787.34|
|Total|48,193,225.90|29,318.33||||48,222,544.23|

 7.Othercurrentassets
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|TheVATtaxcredits|8,728,929.49|31,669,983.12|
|Bankfinancialproducts|||
|Financialproductsfromsecuritiescompanies|5,500,000.00|6,000,000.00|
|Financialproducts|5,000,000.00|2,000,000.00|
|Total|19,228,929.49|39,669,983.12|

Theamountoftheperiod-enddecreasedof51.53%overthatoftheperiod-begin,whichwasmainlytothe decreaseoftaxretainedofretainedVATinlastperiod-end.
8.Available-for-salefinancialassets
(1)Listofavailable-for-salefinancialassets
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
|Available-for-sale equityinstruments:|772,300,000.00|1,210,000.00|771,090,000.00|821,282,500.00|1,210,000.00|820,072,500.00|
|Measured by fairvalue|763,890,000.00||763,890,000.00|812,872,500.00||812,872,500.00|
|Measured by costmethod|8,410,000.00|1,210,000.00|7,200,000.00|8,410,000.00|1,210,000.00|7,200,000.00|
|Total|772,300,000.00|1,210,000.00|771,090,000.00|821,282,500.00|1,210,000.00|820,072,500.00|

ChangchaiCompany,Limited Semi-AnnualReport2017 (2)Available-for-salefinancialassetsmeasuredbyfairvalueattheperiod-end
Unit:RMB
|||||
|-|-|-|-|
|Category|Available-for-saleequityinstruments|Available-for-saledebtinstruments|Total|
|Cost of equity instruments /amortized cost ofdebtinstruments|79,874,500.00||79,874,500.00|
|Fairvalue|763,890,000.00||763,890,000.00|
|Changes of fair value accumulated recordedintoothercomprehensiveincome|581,413,175.00||581,413,175.00|

(3)Available-for-salefinancialassetsmeasuredbycostattheperiod-end
Unit:RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Investee|Bookbalance||||Impairmentprovision||||Shareholdingproportionamongtheinvestees|Cashbonusofthereportingperiod|
||Period-begin|Increase|Decrease|Period-end|Period-begin|Increase|Decrease|Period-end|||
|QidongLiantongDynamometerCo.,Ltd.|7,200,000.00|||7,200,000.00|||||3.20%||
|Others|1,210,000.00|||1,210,000.00|1,210,000.00|||1,210,000.00|||
|Total|8,410,000.00|||8,410,000.00|1,210,000.00|||1,210,000.00|--||

Other were respectively the investment of RMB0.51 million in Chengdu Changchai Wanzhou Diesel Engine Distribution Company, RMB0.29 million in Chongqing Wanzhou District Changchai Wanzhou Diesel Engine Accessories Company, RMB0.02 million in Changzhou Economic Technology Development Company, RMB0.1 million in Changzhou Tractor Company, RMB0.2 million in Changzhou Economic Commission Industrial Funds Fraternity and RMB0.09 million in Beijing Engineering MachineryAgricultural Machinery Company, and all of theaboveinvestmentweredifficulttorecoverthatshouldwithdrawtheimpairmentprovisioninfullamount.
ChangchaiCompany,Limited Semi-AnnualReport2017 (4)Changesoftheimpairmentoftheavailable-for-salefinancialassetsduringthereportingperiod
Unit:RMB
|||||
|-|-|-|-|
|Category|Available-for-saleequityinstruments|Available-for-saledebtinstruments|Total|
|Balance of the withdrawn impairmentattheperiod-begin|1,210,000.00||1,210,000.00|
|Balance of the withdrawn impairmentattheperiod-end|1,210,000.00||1,210,000.00|

9.Long-termequityinvestment
Unit:RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Investees|Openingbalance|Increase/decrease||||||||Closingbalance|Closingbalanceofimpairmentprovision|
|||Additionalinvestment|Reducedinvestment|Gainsandlossesrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|Changesofotherequity|Cashbonusorprofitsannouncedtoissue|Withdrawalofimpairmentprovision|Other|||
|I．Jointventures||||||||||||
|II.Associatedenterprises||||||||||||
|Changzhou FujiChangchaiRobinGasolineEngineCo.,Ltd.|21,006,230.03||||||||-21,006,230.03|||
|BeijingTsinghuaIndustrialInvestmentManagementCo.,Ltd.|||||||||||44,182.50|
|Subtotal|21,006,230.03||||||||-21,006,230.03||44,182.50|
|Total|21,006,230.03||||||||-21,006,230.03||44,182.50|

ChangchaiCompany,Limited Semi-AnnualReport2017Theclosingamountdecreases100%fromtheopeningamountmainlybecausewholly-ownedsubsidiaryChangch aiRobinwasincludedintheconsolidationscopefortheReportingPeriodwhileitwasajointstockcompanyand accountedforasalong-termequityinvestmentinthesameperiodoflastyear.
10.Investmentproperty
(1)Investmentpropertyadoptedthecostmeasurementmode
√Applicable□Notapplicable
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Housesandbuildings|Landuseright|Constructioninprogress|Total|
|I.Originalbookvalue|||||
|1.Openingbalance|87,632,571.14|||87,632,571.14|
|2.Increasedamountoftheperiod|||||
|(1)Outsourcing|||||
|(2) Transfer of inventory\fixedassets\projectunderconstruction|||||
|(3)Increasedfromenterprisemerger|||||
|3.Decreasedamountoftheperiod|||||
|(1)Disposal|||||
|(2)Othertransfer|||||
|4.Closingbalance|87,632,571.14|||87,632,571.14|
|II. Accumulative depreciation andaccumulativeamortization|||||
|1.Openingbalance|32,559,881.91|||32,559,881.91|
|2.Increasedamountoftheperiod|1,104,170.40|||1,104,170.40|
|(1)Withdrawaloramortization|1,104,170.40|||1,104,170.40|
|3.Decreasedamountoftheperiod|||||
|(1)Disposal|||||
|(2)Othertransfer|||||
|4.Closingbalance|33,664,052.31|||33,664,052.31|
|III.Depreciationreserves|||||
|1.Openingbalance|||||
|2.Increasedamountoftheperiod|||||
|(1)Withdrawal|||||
|3.Decreasedamountoftheperiod|||||

ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|(1)Disposal|||
|(2)Othertransfer|||
|4.Closingbalance|||
|IV.Bookvalue|||
|1.Closingbookvalue|53,968,518.83|53,968,518.83|
|2.Openingbookvalue|55,072,689.23|55,072,689.23|

 11.Fixedassets
(1)Listoffixedassets
Unit:RMB
|||||||
|-|-|-|-|-|-|
|Item|Housesandbuildings|Machineryequipment|Transportationequipment|Other|Total|
|I.Originalbookvalue||||||
|1.Openingbalance|419,008,246.37|853,659,305.64|23,007,178.60|35,579,255.84|1,331,253,986.45|
|2. Increased amount oftheperiod|7,294,253.69|83,913,099.63|895,525.12|1,582,238.78|93,685,117.22|
|(1)Purchase|||||0.00|
|(2) Transfer ofprojectunderconstruction|3,769,687.39|64,566,184.52||1,058,113.59|69,393,985.50|
|(3) Increased fromenterprisemerger|3,524,566.30|19,346,915.11|895,525.12|524,125.19|24,291,131.72|
|3.Decreasedamountoftheperiod||2,076,030.39|1,275,274.00|351,002.32|3,702,306.71|
|(1)Disposalorscrap||2,076,030.39|1,275,274.00|351,002.32|3,702,306.71|
|4.Closingbalance|426,302,500.06|935,496,374.88|22,627,429.72|36,810,492.30|1,421,236,796.96|
|II. Accumulativedepreciation||||||
|1.Openingbalance|227,113,343.57|521,613,394.34|16,918,357.45|27,792,358.93|793,437,454.29|
|2. Increased amount oftheperiod|7,854,165.37|30,899,240.09|994,215.91|1,419,264.10|41,166,885.47|
|(1)Withdrawal|7,854,165.37|30,899,240.09|994,215.91|1,419,264.10|41,166,885.47|
|3.Decreasedamountoftheperiod||1,820,588.31|1,099,240.63|302,898.10|3,222,727.04|
|(1)Disposalorscrap||1,820,588.31|1,099,240.63|302,898.10|3,222,727.04|
|4.Closingbalance|234,967,508.94|550,692,046.12|16,813,332.73|28,908,724.93|831,381,612.72|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||||
|-|-|-|-|-|-|
|III.Depreciationreserves||||||
|1.Openingbalance||2,524,137.36|||2,524,137.36|
|2. Increased amount oftheperiod||||||
|(1)Withdrawal||||||
|3.Decreasedamountoftheperiod||||||
|(1)Disposalorscrap||||||
|4.Closingbalance||2,524,137.36|||2,524,137.36|
|IV.Bookvalue||||||
|1.Closingbookvalue|191,334,991.12|382,280,191.40|5,814,096.99|7,901,767.37|587,331,046.88|
|2.Openingbookvalue|194,880,445.10|342,780,985.20|6,245,071.54|9,772,437.03|553,678,938.87|

 The depreciation amount of the Reporting Period was of RMB 41,166,885.47. The original value transferred into thefixedassetsfromtheconstructioninprogressoftheReportingPeriodwasofRMB69,393,985.50.
12.Constructioninprogress
(1)Listofconstructioninprogress
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closingamount|||Openingamount|||
||Bookbalance|Baddebtprovision|Bookvalue|Bookbalance|Baddebtprovision|Bookvalue|
|Trial production workshopprojecttechnologycenter|1,753,262.88||1,753,262.88|4,233,919.80||4,233,919.80|
|Testsystemoftechnologycenter|18,608,677.80||18,608,677.80||||
|Castingrenovationproject|7,527,600.00||7,527,600.00|396,000.00||396,000.00|
|Expansion capacity ofmulti-cylinder (The 2ndPeriod)|1,603,928.11||1,603,928.11|57,529,623.42||57,529,623.42|
|Warehouseofmulti-cylinderengine|5,929,403.82||5,929,403.82||||
|Diesel Engine CylinderBody FlexibleManufacturingLine|19,476,100.69||19,476,100.69|15,110,073.95||15,110,073.95|
|Equipment to be installedandpaymentforprojects|14,633,428.68||14,633,428.68|12,511,430.04||12,511,430.04|
|Total|69,532,401.98||69,532,401.98|89,781,047.21||89,781,047.21|

ChangchaiCompany,Limited Semi-AnnualReport2017 (2)Changesofsignificantconstructioninprogress
Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Nameofitem|Estimatednumber|Openingbalance|Increasedamountoftheperiod|Amountthattransferredtofixedassetsoftheperiod|Otherdecreasedamountoftheperiod|Closingbalance|Proportionestimatedoftheprojectaccumulativeinput|Projectprogress|Accumulativeamountofcapitalizedinterests|Ofwhich:theamountofthecapitalizedinterestsoftheperiod|Capitalizationrateoftheinterestsoftheperiod|Capitalresources|
|Trialproductionworkshopprojecttechnologycenter|49,130,000.00|4,233,919.80|1,384,601.36|3,865,258.28||1,753,262.88|65.68%|65.68%||||Other|
|Testsystemoftechnologycenter|22,896,320.00||18,608,677.80|||18,608,677.80|81.27%|81.27%||||Other|
|Castingrenovationproject|48,320,000.00|396,000.00|7,131,600.00|||7,527,600.00|48.21%|48.21%||||Other|
|Expansioncapacity ofmulti-cylinder(The2ndPeriod)|60,000,000.00|57,529,623.42|1,207,711.25|57,133,406.56||1,603,928.11|95.55%|95.55%||||Other|
|Warehouseofmulti-cylinderengine|10,190,000.00||5,929,403.82|||5,929,403.82|58.19%|58.19%||||Other|
|DieselEngineCylinder BodyFlexibleManufacturingLine|116,040,000.00|15,110,073.95|4,366,026.74|||19,476,100.69|24.65%|24.65%||||Other|
|Total|306,576,320.00|77,269,617.17|38,628,020.97|60,998,664.84|0.00|54,898,973.30|--|--||||--|

ChangchaiCompany,Limited Semi-AnnualReport2017 13.Intangibleassets
(1)Listofintangibleassets
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Landuseright|Patentright|Non-patentedtechnology|Software|Other|Total|
|I.Totaloriginalbookvalue|||||||
|1.Openingbalance|137,782,945.30|||8,795,831.59||146,578,776.89|
|2. Increaseinthereportingperiod|2,550,800.00||8,751,862.30|||11,302,662.30|
|(1)Purchase|||||||
|(2)InternalR&D|||||||
|(3) Increase from enterprisecombination|2,550,800.00||8,751,862.30|||11,302,662.30|
|3.Decreaseinthereportingperiod|||||||
|(1)Purchase|||||||
|4.Closingbalance|140,333,745.30||8,751,862.30|8,795,831.59||157,881,439.19|
|II.Totalaccruedamortization|||||||
|1.Openingbalance|42,118,737.38||2,553,703.10|5,360,285.28||50,032,725.76|
|2.Increaseinthereportingperiod|1,421,545.38||346,126.47|1,183,969.43||2,951,641.28|
|(1)Withdrawal|1,421,545.38||346,126.47|1,183,969.43||2,951,641.28|
|3.Decreaseinthereportingperiod|||||||
|(1)Disposal|||||||
|4.Closingbalance|43,540,282.76||2,899,829.57|6,544,254.71||52,984,367.04|
|III.Totalimpairmentprovision|||||||
|1.Openingbalance|||||||
|2. Increaseinthereportingperiod|||||||
|(1)Withdrawal|||||||
|3.Decreaseinthereportingperiod|||||||
|(1)Disposal|||||||
|4.Closingbalance|||||||
|IV. Total book value of intangibleassets|||||||
|1.Bookvalueoftheperiod-end|96,793,462.54||5,852,032.73|2,251,576.88||104,897,072.15|
|2.Bookvalueoftheperiod-begin|96,479,591.31|||3,435,546.31||99,915,137.62|

ChangchaiCompany,Limited Semi-AnnualReport2017 14.Deferredincometaxassets/deferredincometaxliabilities
(1)Deferredincometaxassetshadnotbeenoff-set
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Closingbalance||Openingbalance||
||Deductibletemporarydifference|Deferredincometaxassets|Deductibletemporarydifference|Deferredincometaxassets|
|Assets impairmentprovision|6,074,862.83|911,229.42|6,074,862.83|911,229.42|
|Total|6,074,862.83|911,229.42|6,074,862.83|911,229.42|

 (2)Deferredincometaxliabilitieshadnotbeenoff-set
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Closingbalance||Openingbalance||
||Taxabletemporarydifference|Deferredincometaxliabilities|Taxabletemporarydifference|Deferredincometaxliabilities|
|Change in fair value ofavailablefinancialassets|684,015,500.00|102,602,325.00|732,998,000.00|109,949,700.00|
|Total|684,015,500.00|102,602,325.00|732,998,000.00|109,949,700.00|

 (3)Listoftheunrecognizeddeferredincometaxassts
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Baddebtprovision|271,542,737.00|262,422,016.06|
|Inventoryfallingpricereserves|48,222,544.23|48,193,225.90|
|Total|319,765,281.23|310,615,241.96|

 15.Othernon-currentassets
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Closingbalance|Impairmentprovisionattheperiod-end|Openingbalance|Impairmentprovisionattheperiod-begin|
|Entrusted loans|14,000,000.00|14,000,000.00|14,000,000.00|14,000,000.00|
|Total|14,000,000.00|14,000,000.00|14,000,000.00|14,000,000.00|

ChangchaiCompany,Limited Semi-AnnualReport2017 16.Short-termloans
(1)Categoryofshort-termloans
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Mortgageloan|13,000,000.00|5,000,000.00|
|Guaranteedloan|10,000,000.00|5,000,000.00|
|Total|23,000,000.00|10,000,000.00|

 (2)Listoftheshort-termloansoverduebutnotreturnatperiodend
(3) The amount ofthe period-end increased of130% over that of the period-begin, which was mainly due to the increasing bank borrowings of subsidiaries Fuji Robin and Housheng Agricultural Equipment in the ReportingPeriod.
17.Notespayable
Unit:RMB
||||
|-|-|-|
|Category|Closingbalance|Openingbalance|
|Bankacceptancebill|389,020,800.00|276,090,000.00|
|Total|389,020,800.00|276,090,000.00|

 Theamount oftheperiod-endincreasedof40.9%overthat ofthe period-begin,which wasmainlyduetothe settlementwithsupplierswithmorebillsoftheCompanyintheReportingPeriod.
18.Accountspayable
(1)Listofaccountspayable
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Goodspayment|582,942,259.00|605,424,726.65|
|Total|582,942,259.00|605,424,726.65|

 (2)Therewasnonoteoftheaccountspayableagingoveroneyear
19.Advancefromcustomers
(1)Listofadvancefromcustomers
ChangchaiCompany,Limited Semi-AnnualReport2017 Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Goodspayment|71,687,056.39|40,890,620.69|
|Total|71,687,056.39|40,890,620.69|

 (2)Therewasnosignificantadvancefromcustomersagingoveroneyear
(3) The amount of the period-end increased of75.31% over that of the period-begin, which was mainly becausetheCompanyincreasedtheadvancepaymentofsomecustomersintheReportingPeriod.
20.Payrollpayable
(1)ListofPayrollpayable
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|I.Short-termsalary|58,549,908.90|137,532,006.04|163,698,634.81|32,383,280.13|
|II. Post-employment benefit-definedcontributionplans||19,148,057.60|19,148,057.60||
|Total|58,549,908.90|156,680,063.64|182,846,692.41|32,383,280.13|

 (2)ListofShort-termsalary
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|1.Salary,bonus,allowance,subsidy|50,720,926.61|112,882,259.68|140,014,642.47|23,588,543.82|
|2.Employeewelfare||2,596,588.69|2,596,588.69||
|3.Socialinsurance||9,764,264.83|9,764,264.83||
|Of which: Medical insurancepremiums||7,876,593.40|7,876,593.40||
|Work-relatedinjuryinsurance||1,330,547.67|1,330,547.67||
|Maternityinsurance||557,123.76|557,123.76||
|4.Housingfund||9,094,294.00|9,094,294.00||
|5. Labor union budget and employeeeducationbudget|7,828,982.29|3,194,598.84|2,228,844.82|8,794,736.31|
|Total|58,549,908.90|137,532,006.04|163,698,634.81|32,383,280.13|

 (3)Listofdrawingscheme
ChangchaiCompany,Limited Semi-AnnualReport2017 Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|1.Basicpensionbenefits||18,330,431.52|18,330,431.52||
|2.Unemploymentinsurance||817,626.08|817,626.08||
|Total||19,148,057.60|19,148,057.60||

(4) The amount of the period-end decreased of44.69% over that of the period-begin, which was mainly becausesomeofthesalaryandbonuswithheldinthesameperiodoflastyearhasbeenpaid.
21.Taxespayable
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|VAT|325,025.10|972,104.89|
|Corporateincometax|799,265.24|5,537,211.23|
|Personalincometax|124,661.81|940,612.41|
|Urbanmaintenanceandconstructiontax|52,624.01|902,501.60|
|Propertytax|154,266.37|143,204.51|
|Educationsurcharge|45,744.87|51,563.36|
|Comprehensivefees|239,415.44|1,075,134.76|
|Total|1,741,002.84|9,622,332.76|

 22.Dividendspayable
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Commonstockdividends|8,368,537.05|3,243,179.97|
|Minoritydividends|648,253.86|648,253.86|
|Total|9,016,790.91|3,891,433.83|

 Reasonofnotpayoverdue1year:theshareholderhadnotdrawndownyet.
The amount of the beginning of the period increases131.71% compared with that of the end of the period,whichismainlygeneratedfromsomeshareholders’dividendsnotyettaken.
23.OtherAccountsPayable
(1)OtherAccountsPayableListedbyNatureoftheAccount
Unit:RMB
ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Margin&cashpledge|3,280,796.03|2,700,853.59|
|Intercoursefundsbetweenentities|15,497,255.05|11,420,825.32|
|Personalamountpayable|1,785,768.40|1,067,429.96|
|Salesdiscountandthreeguarantees|154,374,468.85|151,408,043.35|
|Others|38,816,148.09|37,849,658.34|
|Total|213,754,436.42|204,446,810.56|

 (2)OtherSignificantAccountsPayablewithAgingoverOneYear
Other significant accounts payable with aging over one year mainly was the temporary receivable and charges owed.
24.OtherCurrent-liabilities
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Sewagecharge|200,000.00|200,000.00|
|Energycharge|2,454,129.51|2,254,381.75|
|Other|784,459.61||
|Total|3,438,589.12|2,454,381.75|

 25.DeferredRevenue
Unit:RMB
|||||||
|-|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|Formedreason|
|Governmentsubsidies|61,057,232.08||532,186.81|60,525,045.27|Governmentallocations|
|Total|61,057,232.08||532,186.81|60,525,045.27|--|

Iteminvolvinggovernmentsubsidies:
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeinreportperiod|Otherchanges|Closingbalance|Relatedtoassets/relatedincome|
|Electric control of dieselengine research anddevelopment and|1,443,600.00||199,200.00||1,244,400.00|Relatedtoassets|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||||
|-|-|-|-|-|-|
|industrializationallocations||||||
|National major projectspecialallocations|28,770,000.00|||28,770,000.00|Relatedtoassets|
|Removecompensation|21,843,632.08||332,986.81|21,510,645.27|Relatedtoassets|
|TheR&DandIndustrializationallocationsofNationalIII/IVStandardhigh-poweredandefficientagriculturaldieselengine|9,000,000.00|||9,000,000.00|Relatedtoassets|
|Total|61,057,232.08|0.00|532,186.81|60,525,045.27|--|

 26.ShareCapital
Unit:RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Openingbalance|Increase/decrease(+/-)|||||Closingbalance|
|||Newsharesissued|Bonusshares|CapitalizedCapitalreserves|Others|Subtotal||
|Thesumofshares|561,374,326.00||||||561,374,326.00|

27.CapitalSurplus
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Capitalpremium|143,990,690.24|||143,990,690.24|
|Othercapitalreserves|20,337,975.19|||20,337,975.19|
|Total|164,328,665.43|||164,328,665.43|

 28.OtherComprehensiveIncome
Unit:RMB
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingbalance|Thereportingperiod|||||Closingbalance|
|||Amountbeforeincometaxincurrentperiod|Less:recordedinothercomprehensiveincomeinpriorperiodandtransferredtoprofitor|Less:Incometaxexpense|AttributabletoownersoftheCompanyaftertax|Attributabletominorityshareholdersaftertax||

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||||
|-|-|-|-|-|-|-|
||||lossincurrentperiod||||
|I.Othercomprehensivecannotbereclassifiedintoprofitsorlosses|||||0.00||
|II.Othercomprehensivereclassifiedintoprofitsorlosses|623,048,300.00|-48,982,500.00||-7,347,375.00|-41,635,125.00|581,413,175.00|
|Profitsorlossesofchangeinfairvalueofavailable-for-salefinancialassets|623,048,300.00|-48,982,500.00||-7,347,375.00|-41,635,125.00|581,413,175.00|
|Total|623,048,300.00|-48,982,500.00||-7,347,375.00|-41,635,125.00|581,413,175.00|

 29.SpecialReserves
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Safetyproductioncost|11,715,417.22|||11,715,417.22|
|Total|11,715,417.22|||11,715,417.22|

 30.SurplusReserves
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Statutorysurplusreserves|298,723,390.98|||298,723,390.98|
|Discretionarysurplusreserves|13,156,857.90|||13,156,857.90|
|Total|311,880,248.88|||311,880,248.88|

 31.RetainedProfits
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Lastperiod|
|Openingbalanceofretainedprofitsbeforeadjustments|651,365,935.39|607,859,611.69|
|Openingbalanceofretainedprofitsafteradjustments|651,365,935.39|607,859,611.69|
|Add:NetprofitattributabletoownersoftheCompany|39,679,158.13|62,539,896.17|
|Less:Withdrawalofstatutorysurplusreserves||6,121,962.97|
|Dividendofcommonstockpayable|16,841,229.78|12,911,609.50|
|Closingretainedprofits|674,203,863.74|651,365,935.39|

ChangchaiCompany,Limited Semi-AnnualReport2017 32.RevenueandCostofSales
Unit:RMB
||||||
|-|-|-|-|-|
|Item|ReportingPeriod||Sameperiodoflastyear||
||Salesrevenue|Costofsales|Salesrevenue|Costofsales|
|Mainoperations|1,297,931,638.97|1,134,816,954.26|1,152,656,941.95|976,226,687.99|
|Otheroperations|10,174,541.95|6,575,367.62|11,003,779.74|8,367,576.44|
|Total|1,308,106,180.92|1,141,392,321.88|1,163,660,721.69|984,594,264.43|

 33.BusinessTaxandSurcharges
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Urbanmaintenanceandconstructiontax|1,420,461.39|1,130,189.36|
|EducationSurcharge|1,010,250.20|792,992.40|
|Housepropertytax|2,185,072.01||
|Landusetax|1,632,123.85||
|Stampduty|553,859.70||
|Businesstax||94,345.65|
|Vehiclesandvesselstax|3,495.54||
|Othertaxes|226,866.31||
|Total|7,032,129.00|2,017,527.41|

 The current financial expenses increase106.93% ,According to “Notice of‘VAT AccountingTreatment’ Issued by Ministry of Finance” (Finance and 137Accounting[2016] No.22), after full trial for changing business tax to VAT, the name of “business tax and surcharges” was changed to “tax and surcharges”, whichwasforcalculatingconsumption tax,urbanmaintenanceandconstructiontax, andresourcestax, education surcharge, house property tax, land use tax, vehicle and vessel taxand stamp tax, and other related taxes inenterprise’sbusinessactivities.
34.SalesExpenses
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Officeexpenses|6,982,458.17|9,181,360.21|
|Employee’sremuneration|11,332,610.95|12,133,611.70|
|Salespromotionalexpense|5,898,980.00|7,436,628.43|
|Threeguarantees|25,519,985.07|26,050,046.98|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|Transportfees|2,928,996.14|3,854,006.91|
|Others|3,152,325.80|862,820.37|
|Total|55,815,356.13|59,518,474.60|

 35.AdministrativeExpenses
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Officeexpenses|8,272,173.27|8,381,652.44|
|Employee’sremuneration|30,067,256.77|32,126,018.65|
|Depreciationandamortization|7,874,255.36|8,374,082.68|
|Researchanddevelopmentexpense|20,745,380.97|20,553,134.25|
|Transportfees|1,748,122.94|1,035,214.39|
|Repaircharge|2,150,881.75|2,044,525.58|
|Taxes||3,789,425.82|
|Securitycharge|584,333.18|881,547.58|
|Others|1,955,663.27|1,303,014.31|
|Total|73,398,067.51|78,488,615.70|

 36.FinancialExpenses
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Interestexpenses|2,466,943.16|1,917,987.53|
|Less:Interestincome|1,995,814.22|2,859,561.84|
|Exchangenetprofitorloss|2,245,667.55|-1,649,720.29|
|Others|-2,383,345.13|-2,219,840.69|
|Total|333,451.36|-4,811,135.29|

 The current financial expenses increase106.93% compared to that of the same period of last year, which is mainlygeneratedfromtheincreaseofexchangenetprofitorlosscausedbythechangesinexchangerate. 37.AssetImpairmentLoss
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|I. Baddebtloss|9,120,720.94|10,257,154.02|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|II. Inventoryfallingpriceloss|29,318.33||
|Total|9,150,039.27|10,257,154.02|

 38.InvestmentIncome
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Long-termequityinvestmentincomeaccountedbyequitymethod||821,264.12|
|Investment income received from disposal of financial assetsmeasured by fair value and the changes be included in the currentprofitsandlossesduringholdingperiod||555,871.52|
|Investment income received from holding of available-for-salefinancialassets|6,952,750.99|160,000.00|
|Investmentincomefromdisposalofbankfinancialproducts||364,000.00|
|Investmentincomefromdisposalof financialproductsofsecuritycompanies|190,326.41||
|Equitydifferenceismeasuredatfairvalue.|2,215,049.22||
|Total|9,358,126.62|1,901,135.64|

 The amountin the Reporting Periodincreases392.24% from ayear earlier mainly because theCompanyreceived dividendsfromtheBankofJiangsuintheReportingPeriodwhiletherewerenosuchdividendsinthesameperiod of last year; and the Company increased its investment in Changchai Robin to gain its control and theCompany’s previous holdings in Changchai Robin are accounted for atthe difference between theseholdings’ fairvalueandbookvalue.
39.Non-operatingGains
Unit:RMB
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Recordedintheamountofthenon-recurringgainsandlosses|
|Total gains from disposalofnon-currentassets|94,440.43|6,113,117.21|94,440.43|
|Including: Gains fromdisposaloffixedassets|94,440.43|6,113,117.21|94,440.43|
|Governmentsubsidies|532,186.81|3,787,728.09|532,186.81|
|Insurancecompensation|353,600.00|144,000.00|353,600.00|
|Gainsfromdisposalofcurrentassets|251,402.73|377,937.49|251,402.73|
|Others|20,541,693.44|213,411.26|20,541,693.44|
|Total|21,773,323.41|10,636,194.05|21,773,323.41|

ChangchaiCompany,Limited Semi-AnnualReport2017 Governmentsubsidiesrecordedintocurrentprofitsandlosses:
Unit:RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Item|Distributionentity|Distribution reason|Nature|Whethersubsidiesinfluencethecurrentprofitsandlossesornot|Specialsubsidyornot|ReportingPeriod|Sameperiodoflastyear|Relatedtoassets/relatedincome|
|Thecentralbudgetinvestmentplans|||||||1,000,000.00|Relatedtoincome|
|Specialfundforindustrialdevelopment||||||||Relatedtoincome|
|SpecialfundforPromotingthetransformationofindustrialeconomysteadygrowth|||||||1,250,000.00|Relatedtoincome|
|Borrowingfiscalinterestdiscount|||||||500,000.00|Relatedtoincome|
|Talentdevelopmentfunds|||||||103,800.00|Relatedtoincome|
|Otherincentivesandsubsidies|||||||300,941.28|Relatedtoincome|
|Removecompensation||||||332,986.81|332,986.81|Relatedtoassets|
|Electriccontrolofdieselengineresearchanddevelopmentandindustrializationallocations||||||199,200.00||Relatedtoassets|
|Famousbrandreward|||||||300,000.00|Relatedtoincome|
|Total|--|--|--|--|--|532,186.81|3,787,728.09|--|

The current non-operating gains increase104.71% compared to that of the same period of last year, which
is mainly generated from the stock acquisition by a discount of ChangzhouFujiChangchaiRobinGasolineEngineCo.,
Ltd.whichisrecordedintotheincomeofscopeofconsolidatedstatementsascurrentnon-operatinggains.
ChangchaiCompany,Limited Semi-AnnualReport2017 40.Non-operatingExpenses
Unit:RMB
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|Recordedintheamountofthenon-recurringgainsandlosses|
|Lossondisposalofnon-currentassets|18,709.80|32,408.99||
|Including: Loss on disposal of fixedassets|18,709.80|32,408.99||
|Donation||100,000.00||
|Lossondisposalofcurrentassets|6,124,349.29|3,988,707.85||
|Others|251,596.09|26,723.88||
|Total|6,394,655.18|4,147,840.72||

Thecurrentnon-operatingexpensesincrease54.17%comparedtothatofthesameperiodoflastyear, whichismainlygeneratedfromlossescausedbythedisposalofbadinventory.
41.IncomeTaxExpense
(1)ListsofIncomeTaxExpense
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Currentincometaxexpense|5,670,998.75|6,581,748.12|
|Total|5,670,998.75|6,581,748.12|

 (2)AdjustmentProcessofAccountingProfitandIncomeTaxExpense:
Unit:RMB
|||
|-|-|
|Item|ReportingPeriod|
|Totalprofits|45,721,610.62|
|Current income tax expense accounted by tax andrelevantregulations|6,858,241.59|
|Influenceofdifferenttaxratesuitabletosubsidiary|649,121.03|
|Influenceofnontaxableincome|-1,042,912.65|
|Influenceofnotdeductablecosts,expensesandlosses|762,452.35|
|Taxpreferenceincurredfromqualifiedexpense|-1,555,903.57|
|Incometaxexpense|5,670,998.75|

ChangchaiCompany,Limited Semi-AnnualReport2017 42.InformationofCashFlowStatements
(1)OtherCashReceivedRelevanttoOperatingActivities
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Subsidiesandgrants||3,454,741.28|
|Cashreceivedfromothercurrentaccount|3,505,477.12|1,964,606.67|
|Interestincome|1,995,814.22|2,559,453.88|
|Total|5,501,291.34|7,978,801.83|

 (2)OtherCashPaidRelevanttoOperatingActivities
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|SalesexpensepaidinReportingPeriod|25,339,487.40|18,835,610.08|
|AdministrationexpensepaidinReportingPeriod|23,145,470.19|23,200,555.04|
|HandlingchargesforfinancialexpenseinReportingPeriod|190,445.34|359,561.84|
|Others|330,043.88|580,495.00|
|Total|49,005,446.81|42,976,221.96|

 43.SupplementalInformationforCashFlowStatement
(1)SupplementalInformationforCashFlowStatement
Unit:RMB
||||
|-|-|-|
|Supplementalinformation|ReportingPeriod|Sameperiodoflastyear|
|1. Reconciliation of net profit to net cash flows generated fromoperatingactivities|--|--|
|Netprofit|40,050,611.87|35,403,561.67|
|Add:Provisionforimpairmentofassets|9,150,039.27|10,257,154.02|
|Depreciation of fixed assets, of oil-gas assets, of productivebiologicalassets|46,215,003.48|42,685,033.48|
|Amortizationofintangibleassets|2,951,641.28|2,408,513.75|
|Losses on disposal of fixed assets, intangible assets and otherlong-termassets(gains:negative)|-65,821.39|-6,113,117.21|
|Financialcost(gains:negative)|568,840.63|2,163,147.25|
|Investmentloss(gains:negative)|-7,143,077.40|-1,901,135.64|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|Decreaseindeferredincometaxassets(“-”meansincrease)||-8,781,450.00|
|Decreaseininventory(gains:negative)|45,213,642.10|37,091,003.67|
|Decrease in accounts receivable from operating activities (gains:negative)|-97,396,929.18|-25,134,137.10|
|Increaseinpayablesfromoperatingactivities(decrease:negative)|30,817,483.85|29,957,339.40|
|Others|-5,982,111.20||
|Netcashflowsgeneratedfromoperatingactivities|64,379,323.31|118,035,913.29|
|2. Significant investing and financing activities withoutinvolvementofcashreceiptsandpayments|--|--|
|3.Changeofcashandcashequivalent:|--|--|
|Closingbalanceofcash|589,472,465.73|594,934,363.36|
|Less:Openingbalanceofcash|583,278,129.09|526,716,238.21|
|Netincreaseincashandcashequivalents|6,194,336.64|68,218,125.15|

 (2)CashandCashEquivalents
Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|I.Cash|589,472,465.73|583,278,129.09|
|Including:Cashonhand|136,578.34|314,905.29|
|Bankdepositondemand|589,335,887.39|582,963,123.80|
|Othermonetaryfundondemand||100.00|
|III.Closingbalanceofcashandcashequivalents|589,472,465.73|583,278,129.09|

 44.TheAssetswiththeOwnershiporUseRightRestricted
Unit:RMB
||||
|-|-|-|
|Item|Closingbookvalue|Restrictedreason|
|Monetarycapital|119,219,787.00|Bankacceptancedraftdepositedinthemargin|
|Housesandbuildings|9,394,240.27|Pledgeforbankloan|
|Landuseright|21,179,360.79|Pledgeforbankloan|
|Total|149,793,388.06|--|

ChangchaiCompany,Limited Semi-AnnualReport2017 45.ForeignCurrencyMonetaryItems
(1)ForeignCurrencyMonetaryItems
Unit:RMB
|||||
|-|-|-|-|
|Item|Closingforeigncurrencybalance|Exchangerate|ClosingconverttoRMBbalance|
|Monetarycapital||||
|Including:USD|5,742,604.48|6.774|38,902,699.82|
|Accountreceivable||||
|Including:USD|5,063,339.22|6.774|34,301,085.23|

 (2) Note to Oversea Entities Including: for Significant Oversea Entities, Shall Disclose Main Operating Place, Recording Currency and Selection Basis, if there Are Changes into Recording Currency, Shall Also DisclosetheReason.
□Applicable√Notapplicable
VIII. Changes ofMerge Scope
The Company held an extraordinary meeting of the Board of Directors on August 26, 2016. The meeting examined and approved the Proposal on Assigning67% Equity of Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. held by Fuji Heavy Industries, Ltd..After the completion of the acquisition, the Company holdsChangzhou100%stockofFujiChangchaiRobinGasoline EngineCo.,Ltd.anditshallchange fromSino-foreign joint ventures to domestic enterprises. On January 20, 2017, Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. completed the business registration procedures related to equity transfer, and got the business license issued by Changzhou National Hi-Tech Industrial Development Zone (Xinbei District) Market Supervision and Administration. The registered capital is RMB37,250,000, and the business scope includes small general-purpose gasolineengineanditsauxiliaryunits(Includingagriculturalmachinery,engineeringmachinery,waterpumpunits, small generating units) and the production, processing, R& D, development, sales and technical consulting of supporting components andparts. Changzhou Fuji ChangchaiRobin Gasoline Engine Co., Ltd. has beenincluded intheconsolidatedfinancialstatementsoftheCompanysinceJanuary20,2017.
IX.Equity in OtherEntities
(1)TheStructureoftheEnterpriseGroup
1.EquityinSubsidiary
||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Wayofgaining|
|||||Holding|percentage||
|Changchai Wanzhou DieselEngineCo.,Ltd.|Chongqing|Chongqing|Industry|60.00%||Set-up|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||||
|-|-|-|-|-|-|-|
|Changzhou Changchai BenniuDieselEngineFittingsCo.,Ltd.|Changzhou|Changzhou|Industry|99.00%|1.00%|Set-up|
|Changzhou HoushengInvestmentCo.,Ltd.|Changzhou|Changzhou|Service|100.00%||Set-up|
|Changzhou ChangchaiHousheng AgriculturalEquipmentCo.,Ltd.|Changzhou|Changzhou|Industry|70.00%|25.00%|Set-up|
|ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.|Changzhou|Changzhou|Industry|100.00%||Investment|

 (2)SignificantNotWhollyOwnedSubsidiary
Unit:RMB
||||||
|-|-|-|-|-|
|Name|Shareholdingproportionofminorityshareholder|Theprofitsandlossesarbitratetotheminorityshareholders|Declaringdividendsdistributetominorityshareholder|Balanceofminorityshareholderatclosingperiod|
|Changchai WanzhouDiesel Engine Co.,Ltd.|40.00%|347,142.32||18,746,089.89|
|ChangzhouChangchai HoushengAgriculturalEquipmentCo.,Ltd.|5.00%|24,311.42||392,590.42|

(3)TheMainFinancialInformationofSignificantNotWhollyOwnedSubsidiary
Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name|Closingbalance||||||Openingbalance||||||
||Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|Totalliabilities|Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|Totalliabilities|
|ChangchaiWanzhouDieselEngineCo.,Ltd.|50,196,479.97|27,219,810.97|77,416,290.94|30,551,066.20||30,551,066.20|43,462,836.42|27,671,597.38|71,134,433.80|25,137,064.88||25,137,064.88|
|Changzhou|25,427,470.18|389,887.75|25,817,357.93|17,965,549.57||17,965,549.57|29,743,164.98|372,868.70|30,116,033.68|22,750,453.64||22,750,453.64|

ChangchaiCompany,Limited Semi-AnnualReport2017
||
|-|
|ChangchaiHoushengAgriculturalEquipment Co.,Ltd.|

Unit:RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Name|ReportingPeriod||||Sameperiodoflastyear||||
||Operationrevenue|Netprofit|Totalcomprehensiveincome|Operatingcashflow|Operationrevenue|Netprofit|Totalcomprehensiveincome|Operatingcashflow|
|ChangchaiWanzhouDiesel EngineCo.,Ltd.|32,078,103.46|867,855.82|867,855.82|1,475,032.87|29,922,164.72|684,407.82|684,407.82|9,295,155.40|
|ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.|8,689,291.61|486,228.32|486,228.32|-10,269,003.10|14,101,934.04|2,233,123.56|2,233,123.56|-10,382,517.52|

X. TheRisk Related FinancialInstruments
The goal of theCompany’s risk management was gaining the balance between the risk and income, and reduced the negative impactto the operation performance ofthe Company in the lowest level and maximized the interestsofshareholdersandotherequityinvestors.Baseontheriskmanagementgoal,thebasisstrategyoftheCompany’s risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk bottom line andconductrisk management,and supervised therisks timely andreliably andcontrolthe risk within thelimitedscope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The managementlevelhadreviewedandapprovedthepoliciestomanagetherisks,whichsummarizedasfollows: (I)Creditrisk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the otherparty.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Companyconductthefollowingmethods.
TheCompanyonlyconductsrelatedtransactionwith approvedandreputablethird party, inlinewith thepolicyof
the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct
ChangchaiCompany,Limited Semi-AnnualReport2017 transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the Companywouldnotfacethesignificantbaddebtrisk.
(II)LiquidityRisk
Liquidityriskisreferredtotheriskofincurringcapitalshortagewhenperformingsettlementobligationintheway ofcashpaymentorotherfinancialassets.Thepolicies oftheCompanyaretoensurethattherewassufficientcash topaythedueliabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial departments through supervising the balance of the cash and securities can be convert to cash at any time and the rolling prediction of cash flow in future 12 months to ensure the Company have sufficient cash to pay the liabilitiesunderthecaseofallreasonableprediction.
(III)Marketrisk
Market risk is refer to risk ofthe fair value or future cash flow of financial instrument changed due to the change ofmarketprice, including:foreignexchangeraterisk,interestraterisk.
1.Interestraterisk
Interestrateriskisreferstofluctuationriskofthefairvalueorfuturecashflowoffinancialinstrumentchangedue tothechangeofmarketprice.
2.Foreignexchangerisk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. The export sales of the Company mainly was market of Southeast Asia region which settled by USD. Though theCompany’s export business receiving part of payment for goods in advance, but the balance had a certain credit term, if the RMB appreciatesagainstthedollar,thecompany'saccountsreceivablewillincurforeigncurrencyexchangeloss. XI.TheDisclosure oftheFairValue
1.ClosingFairValueofAssetsandLiabilitiesCalculatedbyFairValue
Unit:RMB
||||||
|-|-|-|-|-|
|Item|Fairvalueattheendofthereportingperiod||||
||FirstlevelFairvaluemeasurement|SecondlevelFairvaluemeasurement|ThirdlevelFairvaluemeasurement|Total|
|I. Consistent fair valuemeasurement|--|--|--|--|
|(II) Available-for-salefinancialassets|763,890,000.00|||763,890,000.00|
|(2)Equitytoolinvestment|763,890,000.00|||763,890,000.00|
|Total assets of consistent fairvaluemeasurement|763,890,000.00|||763,890,000.00|
|II. Inconsistent fair valuemeasurement|--|--|--|--|

ChangchaiCompany,Limited Semi-AnnualReport2017 2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level 1
Tradable financial assets and available for sale financial assets of the Company were funds and shares with the closingpriceasthebasisoffairvaluecalculationatperiod-end.
XII. Related Party andRelated Transaction
1.InformationRelatedtoParentCompanyoftheCompany
|||||||
|-|-|-|-|-|-|
|Nameofparentcompany|Registrationplace|Natureofbusiness|Registeredcapital|ProportionofshareheldbyparentcompanyagainsttheCompany(%)|ProportionofvotingrightsownedbyparentcompanyagainsttheCompany(%)|
|ChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommission|Changzhou|||30.43%|30.43%|

The actual controller of the Company is Changzhou Government State-owned Assets Supervision andAdministrationCommission.AsofJune30,2017,itheld30.43%sharesoftheCompany(stateownedshares). 2.SubsidiariesoftheCompany
ThedetailsofsubsidiariesoftheCompanypleaserefertoequityinotherentitiesinnotetofinancialstatements. 3.InformationontheJointVenturesandAssociatedEnterprisesoftheCompany
ThedetailsofthejointventuresandassociatedenterprisesoftheCompanypleaserefertoequityinotherentities innotetofinancialstatements.
4.InformationonOtherRelatedPartiesoftheCompany
TheCompanyhadnootherrelatedparty.
5.ListofRelated-partyTransactions
TheCompanyhadnootherrelatedtransactionneedtobedisclosed.
XIII. Commitments andContingencies
1.SignificantCommitments
Asof30June2017,therewerenosignificantcommitmentstobedisclosed.
ChangchaiCompany,Limited Semi-AnnualReport2017 2.Contingencies
(1)SignificantContingencyatBalanceSheetDate
LitigationandarbitrationintheReportingPeriod:
||||||
|-|-|-|-|-|
|Nameoftheentity|Dateofaccepted|Nameofthelitigationorarbitrationinstitutions|Amountinvolved(RMBtenthousand)|Notes|
|ShandongHongliGroupCo.,Ltd.|06/27/2001|ChangzhouIntermediatePeople'sCourt|1,436.00|Underthebankruptcyandliquidation|
|Total|1,436.00||||

Notes:
About the lawsuit case of Shandong Hongli Group Co., Ltd., the accused company owed accumulatively RMB 14.36 million to the Company. The Company sued to Changzhou IntermediatePeople’s Court in 2001 and sued for compulsory execution in April, 2002. Currently, the defendant has started the bankruptcy procedure. The aforesaidpaymenthasarrangedforthefullprovisionforbaddebts.
XIV. OtherSignificantEvents
1.SegmentInformation
Due to the operation scope of the Company and subsidiaries were similar, the Company conduct common management,didnotdividebusinessunit,sotheCompanyonlymadesinglebranchreport.
XV. Notes of Main Items in theFinancialStatements ofthe Company
1.AccountsReceivable
(1)AccountsReceivableClassifiedbyCategory
Unit:RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance|||||Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion|Amount|Withdrawalproportion||Amount|Proportion|Amount|Withdrawalproportion||
|Accountsreceivable withsignificant single|36,350,005.76|4.08%|31,144,305.79|85.68%|5,205,699.97|37,894,677.78|7.17%|31,210,576.96|82.36%|6,684,100.82|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|amount for whichbad debtprovisionseparatelyaccrued|||||||||||
|Accountsreceivablewithdrawal of baddebt provision ofby credit riskscharacteristics:|853,571,093.30|95.89%|197,451,197.74|23.13%|656,119,895.56|490,383,771.93|92.78%|188,267,201.85|38.39%|302,116,570.08|
|Accountsreceivable withinsignificantsingle amount forwhich bad debtprovisionseparatelyaccrued|276,298.29|0.03%|276,298.29|100.00%|0.00|276,298.29|0.05%|276,298.29|100.00%||
|Total|890,197,397.35|100.00%|228,871,801.82|25.71%|661,325,595.53|528,554,748.00|100.00%|219,754,077.10|41.58%|308,800,670.90|

Accountsreceivablewithsinglesignificantamountandwithdrawalbaddebtprovisionseparatelyatendofperiod√Applicable□Notapplicable
Unit:RMB
||||||
|-|-|-|-|-|
|Accountsreceivable(classifiedbyunits)|Closingbalance||||
||Accountreceivable|Baddebtprovision|Withdrawalproportion|Withdrawalreason|
|Customer1|1,902,326.58|1,902,326.58|100.00%|Difficulttorecover|
|Customer2|6,215,662.64|6,202,854.45|99.79%|Difficulttorecover|
|Customer3|3,040,439.17|2,214,607.75|72.84%|Estimated difficulttorecover|
|Customer4|3,279,100.00|3,279,100.00|100.00%|Difficulttorecover|
|Customer5|2,133,377.01|2,133,377.01|100.00%|Difficulttorecover|
|Customer6|5,359,381.00|5,359,381.00|100.00%|Difficulttorecover|
|Customer7|2,584,805.83|2,584,805.83|100.00%|Difficulttorecover|
|Customer8|1,648,375.42|1,648,375.42|100.00%|Difficulttorecover|
|Customer9|10,186,538.11|5,819,477.75|57.13%|Estimated difficulttorecover|
|Total|36,350,005.76|31,144,305.79|--|--|

Inthegroups,accountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Notapplicable
ChangchaiCompany,Limited Semi-AnnualReport2017 Unit:RMB
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Accountreceivable|Baddebtprovision|Withdrawalproportion|
|Subentrywithin1year||||
|Within1year|662,351,634.14|13,247,032.68|2.00%|
|Subtotalofwithin1year|662,351,634.14|13,247,032.68|2.00%|
|1to2years|3,158,558.75|157,927.94|5.00%|
|2to3years|1,700,460.62|255,069.09|15.00%|
|3to4years|656,652.40|196,995.72|30.00%|
|4to5years|5,274,037.71|3,164,422.63|60.00%|
|Over5years|180,429,749.68|180,429,749.68|100.00%|
|Total|853,571,093.30|197,451,197.74||

Inthegroups,accountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision:
□Applicable√Notapplicable
Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
Notapplicable
(2)AccountsReceivableWithdraw,ReversedorCollectedduringtheReportingPeriod
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB9,183,995.89; the amountofthereversedorcollectedpartduringtheReportingPeriodwasofRMB66,271.17.
(3)AccountsReceivableoftheTop5oftheClosingBalanceCollectedAccordingtotheArrearsParty The total amount of top five of account receivable of closing balance collected by arrears party wasRMB449,507,585.41,50.50% oftotalclosing balanceof accountreceivable.42.05%, the relevantclosing balance ofbaddebtprovisionwithdrawnwasRMB22,939,768.44.
2.OtherAccountsReceivable
(1)OtherAccountsReceivableClassifiedbyCategory
Unit:RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance|||||Openingbalance|||||
||Bookbalance||Baddebtprovision||Bookvalue|Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion|Amount|Withdrawalproportion||Amount|Proportion|Amount|Withdrawalproportion||

ChangchaiCompany,Limited Semi-AnnualReport2017
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other accountsreceivable withsignificant singleamount for whichbad debtprovisionseparatelyaccrued|2,853,188.02|8.95%|2,853,188.02|100.00%||2,853,188.02|8.56%|2,853,188.02|100.00%||
|Other accountsreceivablewithdrawn baddebt provisionaccordingto creditriskscharacteristics|26,346,366.45|82.64%|24,115,804.37|91.53%|2,230,562.08|27,799,389.26|83.40%|24,104,715.33|86.71%|3,694,673.93|
|Other accountsreceivable withinsignificantsingle amount forwhich bad debtprovisionseparatelyaccrued|2,679,801.13|8.41%|2,679,801.13|100.00%||2,679,801.13|8.04%|2,679,801.13|100.00%||
|Total|31,879,355.60|100.00%|29,648,793.52|93.00%|2,230,562.08|33,332,378.41|100.00%|29,637,704.48|88.92%|3,694,673.93|

Otherreceivablewithsinglesignificantamountandwithdrawalbaddebtprovisionseparatelyatendofperiod：√Applicable□Notapplicable
Unit:RMB
||||||
|-|-|-|-|-|
|Otheraccountsreceivable(unit)|Closingbalance||||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion|Withdrawalreason|
|Changchai Group Import &ExportCo.,Ltd.|2,853,188.02|2,853,188.02|100.00%|Difficulttorecover|
|Total|2,853,188.02|2,853,188.02|--|--|

 Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Notapplicable
Unit:RMB
|||||
|-|-|-|-|
|Aging|Closingbalance|||
||Otheraccountsreceivable|Baddebtprovision|Withdrawalproportion|
|Subentrywithin1year||||
|Within1year|1,699,462.99|33,989.26|2.00%|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||
|-|-|-|-|
|Subtotalofwithin1year|1,699,462.99|33,989.26|2.00%|
|1to2years|99,906.12|4,995.31|5.00%|
|2to3years|59,314.08|8,897.10|15.00%|
|3to4years|588,002.87|176,400.85|30.00%|
|4to5years|20,396.36|12,237.82|60.00%|
|Over5years|23,879,284.03|23,879,284.03|100.00%|
|Total|26,346,366.45|24,115,804.37||

Inthegroups,otheraccountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision□Applicable√Notapplicable
Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
□Applicable√Notapplicable
(2)TheBad-debtProvisionWithdrew,ReversedorCollectedduringtheReportingPeriod
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB2,996.22; the amount ofthereversedorcollectedpartduringtheReportingPeriodwasofRMB0.00.
(3)OtherAccountsReceivableClassifiedbyAccountNature
Unit:RMB
||||
|-|-|-|
|Natureofaccounts|Closingbookbalance|Openingbookbalance|
|Margin&cashpledge|4,200.00|4,200.00|
|Intercoursefundsbetweenentities|8,954,002.16|16,917,626.21|
|Pettycash&employeeborrowing|1,980,351.32|1,056,185.37|
|Others|20,940,802.12|15,354,366.83|
|Total|31,879,355.60|33,332,378.41|

 (4)TheTopFiveOtherAccountReceivableClassifiedbyDebtoratPeriod-end
Unit:RMB
|||||||
|-|-|-|-|-|-|
|Nameofunit|Natureofaccounts|Closingbalance|Account-ageattheendoftheperiod|Proportiontothetotalofclosingbalanceofotheraccountsreceivable|Closingbalanceofbad-debtprovision|
|Changzhou Compressor Co.,Ltd.|Intercoursefunds|2,940,000.00|Over5years|9.22%|2,940,000.00|
|Changchai Group Import &ExportCo.,Ltd.|Intercoursefunds|2,853,188.02|Over5years|8.95%|2,853,188.02|
|Changzhou New District|Intercours|1,626,483.25|Over5years|5.10%|1,626,483.25|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||||
|-|-|-|-|-|-|
|AccountingCenter|efunds|||||
|OEMGroupSettlementCente|Intercoursefunds|1,140,722.16|Over5years|3.58%|1,140,722.16|
|ChangzhouXingshengPropertyManagementCo.,Ltd.|Intercoursefunds|505,981.70|Within1year|1.59%|10,119.63|
|Total|--|9,066,375.13|--|28.44%|8,570,513.06|

 3.Long-termEquityInvestment
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Depreciationreserves|Bookvalue|Bookbalance|Depreciationreserves|Bookvalue|
|Investment tothesubsidiary|231,752,730.03||231,752,730.03|184,466,500.00||184,466,500.00|
|Investment tojoint venturesand associatedenterprises|44,182.50|44,182.50||21,050,412.53|44,182.50|21,006,230.03|
|Total|231,796,912.53|44,182.50|231,752,730.03|205,516,912.53|44,182.50|205,472,730.03|

 (1)InvestmenttotheSubsidiary
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
|Investee|Openingbalance|Increase|Decrease|Closingbalance|WithdrawnimpairmentprovisionintheReportingPeriod|Closingbalanceofimpairmentprovision|
|Changchai WanzhouDieselEngineCo.,Ltd.|51,000,000.00|||51,000,000.00|||
|Changzhou ChangchaiBenniu Diesel EngineFittingsCo.,Ltd.|96,466,500.00|||96,466,500.00|||
|Changzhou HoushengInvestmentCo.,Ltd.|30,000,000.00|||30,000,000.00|||
|Changzhou ChangchaiHousheng AgriculturalEquipmentCo.,Ltd.|7,000,000.00|||7,000,000.00|||
|ChangzhouFuji|0.00|47,286,2||47,286,230.03|||

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||
|-|-|-|-|
|ChangchaiRobinGasolineEngineCo.,Ltd.||30.03||
|Total|184,466,500.00|47,286,230.03|231,752,730.03|

(2)InvestmenttoJointVenturesandAssociatedEnterprises
Unit:RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Investee|Openingbalance|Increase/decreaseinReportingPeriod||||||||Closingbalance|Closingbalanceofimpairmentprovision|
|||Additionalinvestment|Negativeinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|Otherequitychanges|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Others|||
|I.Jointventures||||||||||||
|II.Associatedenterprises||||||||||||
|ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.|21,006,230.03||||||||21,006,230.03|0.00||
|BeijingTsinghuaXingyeIndustrialInvestmentManagementCo.,Ltd.|44,182.50|||||||||44,182.50|44,182.50|
|Subtotal|21,050,412.53|||||||||44,182.50|44,182.50|

ChangchaiCompany,Limited Semi-AnnualReport2017
|||||
|-|-|-|-|
|Total|21,050,412.53|44,182.50|44,182.50|

 4.RevenuesandOperatingCosts
Unit:RMB
||||||
|-|-|-|-|-|
|Item|ReportingPeriod||Sameperiodoflastyear||
||Salesrevenue|Costofsales|Salesrevenue|Costofsales|
|Mainoperations|1,219,777,917.09|1,080,764,388.78|1,153,641,301.29|992,786,487.60|
|Otheroperations|9,529,630.03|5,985,445.18|10,055,027.37|7,398,827.46|
|Total|1,229,307,547.12|1,086,749,833.96|1,163,696,328.66|1,000,185,315.06|

 5.InvestmentIncome
Unit:RMB
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Long-termequityinvestmentincomeaccountedbyequitymethod||821,264.12|
|Investment income received from holding of available-for-salefinancialassets|6,952,750.99||
|Investmentincomefromdisposalofbankfinancialproducts||364,000.00|
|Total|6,952,750.99|1,185,264.12|

 XVI. Supplementary Materials
1.ItemsandAmountsofExtraordinaryGainsandLosses
√Applicable□Notapplicable
Unit:RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/lossesonthedisposalofnon-currentassets|756,874.20||
|Government subsidies recorded into the current gainsand losses (excluding the government subsidies thatare closely relative to business and enjoyed in normedway or quantitatively in accordance with the nationalstandards)|788,186.82||
|GainachievedwhentheCompany’sinvestmentcostsintheacquisitionofsubsidiary,JointventureandassociatedenterprisearelessthanthefairvalueofrecognizableassetsofinvestedcompanyenjoyedbytheCompanywhilefinishingtheinvestment|22,756,742.66|OnJanuary20,2017,theCompanyaccomplishedthetransferofstockrightsaftertheacquisitionofsharesofChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.From|

ChangchaiCompany,Limited Semi-AnnualReport2017
||||
|-|-|-|
|||January20,2017,thecompanyshallbeincludedintheCompany’sconsolidatedstatements.Sincethetransferpricewaslessthanvaluation,thetransactionbroughtaboutrevenuesofRMB22,756,742.66.|
|Gain/loss from change of fair value of transactionalassets and liabilities, and investment gains fromdisposal of transactional financial assets and liabilitiesand available-for-sale financial assets, other than validhedgingrelatedtotheCompany’scommonbusinesses|190,326.41||
|Other non-operating income and expenses other thantheabove|-6,246,118.36||
|Less:Incometaxeffects|-591,497.43||
|Minorityinterestseffects|-67,601.48||
|Total|18,905,110.64|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatoryannouncementasarecurrentgain/lossitem.
□Applicable√Notapplicable
2.ReturnonNetEquityandEarningsPerShare
|||||
|-|-|-|-|
|ProfitasofReportingPeriod|WeightedaverageROE(%)|EPS（Yuan/share）||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common shareholders of theCompany|1.71%|0.07|0.07|
|Net profit attributable to common shareholders of theCompanyafterdeductionofnon-recurringprofitandloss|0.90%|0.04|0.04|

3.DifferencesbetweenAccountingDataunderDomesticandOverseasAccountingStandards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International andChineseAccountingStandards
□Applicable√Notapplicable
(2) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Overseas and
ChineseAccountingStandards
□Applicable√Notapplicable
ChangchaiCompany,Limited Semi-AnnualReport2017 Section XI Documents Available for Reference
Documents available forreference includethe following:
1.The 2017Semi-Annual Report with thesignature oftheBoard Chairman.
2. Financial Statements carrying the signatures and seals of the responsible person of the Company, the accounting principal, as well as the headof theaccounting organ.
3. In the Reporting Period, originals of all documents of the Company ever disclosed publicly in media designated by China Securities Regulatory Commission such as the Securities Times and Ta Kung Pao and theoriginals ofall thepublicnotices.
4.The Articles ofAssociation oftheCompany.
The above-mentioned documents available forreference are all kept in theSecretariat of the
Board ofDirectors oftheCompany and Shenzhen Stock Exchange.
This Semi-annual Report and its abstract have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
TheBoard of Directors Changchai Company, Limited August 25,2017