2016 Semi-annual Report of Changchai Company, Limited CHANGCHAI COMPANY, LIMITED 2016 SEMI-ANNUAL REPORT
18 August 2016
2016 Semi-annual Report of Changchai Company, Limited Section I Important Reminders, Contents& Definition
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Changchai Company, Limited (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into share capital.
Mr. Xue Guojun, company principal, Mr. He Jianguang, chief of the accounting work, and Mr. Jiang He, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete.
The future plans and some other forward-looking statements carried in this report shall not be considered as virtual promises of the Company to investors. And investors are kindly reminded to pay attention to possible risks.
This report is prepared in both Chinese and English. Should there be any understanding discrepancy between the two versions, the Chinese version shall prevail.
2016 Semi-annual Report of Changchai Company, Limited Contents
Section I Important Reminders, Contents& Definition......................................................................2 Section II Company Profile..................................................................................................................5 Section III Highlights of Accounting Data& Financial Indicators.....................................................7 Section IV Report of the Board of Directors.......................................................................................9 Section V Significant Events.............................................................................................................18 Section VI Change in Shares& Shareholders...................................................................................26 Section VII Preference Shares...........................................................................................................30 Section VIII Directors, Supervisors& Senior Management Staff.....................................................30 Section IX Financial Report...............................................................................................................31 Section X Documents Available for Reference................................................................................125
2016 Semi-annual Report of Changchai Company, Limited Definition
||||
|-|-|-|
||Refers||
|Term||Definition|
||to||
||Refers||
|Company, the Company, Changchai||Changchai Company, Limited|
||to||
||Refers|Chuangzhou Changchai Benniu Diesel Engine Fittings Co.,|
|Changchai Benniu|||
||to|Ltd.|
||Refers||
|Changchai Wanzhou||Changchai Wanzhou Diesel Engine Co., Ltd|
||to||
||Refers||
|Housheng Investment||Changzhou Housheng Investment Co., Ltd.|
||to||
||Refers|Changzhou Changchai Housheng Agricultural Equipment Co.,|
|Housheng Agricultural Equipment|||
||to|Ltd.|
|Changchai Robin|Refers|Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd.|
||Refers||
|Yuan, Ten thousand Yuan||RMB, RMB Ten thousand|
||to||
||Refers||
|Reporting Period||1 January 2016-30 June 2016|
||to||

2016 Semi-annual Report of Changchai Company, Limited Section II Company Profile
I Basic information about the Company
|||||
|-|-|-|-|
|Stock name|Changchai A, Changchai B|Stock code|000570, 200570|
|Stock exchange|Shenzhen Stock Exchange|||
|Company name in|常柴股份有限公司|||
|Chinese||||
|Abbreviation|苏常柴|||
|Company name in||||
||CHANGCHAI COMPANY,LIMITED|||
|English||||
|Abbreviation|CHANGCHAI CO.,LTD.|||
|Legal representative|Xue Guojun|||

II Contact information
||||
|-|-|-|
||Board Secretary|Securities Representative|
|Name|Shi Jianchun|He Jianjiang|
||123 Huaide Middle Road,|123 Huaide Middle Road,|
|Address|||
||Changzhou, Jiangsu, China|Changzhou, Jiangsu, China|
|Tel.|(86)519-86610041|(86)519-68683155|
|Fax|(86)519-86630954|(86)519-86630954|
|E-mail|ccsjc@changchai.com|cchjj@changchai.com|

III Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the Company during the Reporting Period?
□ Applicable√ Not applicable
The registered address, office address and their postal codes, website address and email address of the Company did not change during the reporting period. The said information can be found in the 2015 Annual Report.
2016 Semi-annual Report of Changchai Company, Limited 2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the Reporting Period?
□ Applicable√ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report and the location where this report is placed did not change during the Reporting Period. The said information can be found in the 2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable√ Not applicable
The registration date and place of the Company, its business license No., taxation registration No. and organizational code did not change during the Reporting Period. The said information can be found in the 2015 Annual Report.
2016 Semi-annual Report of Changchai Company, Limited Section III Highlights of Accounting Data& Financial Indicators I Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of any accounting policy or correction of any accounting error?
□ Yes√ No
|||||
|-|-|-|-|
||Reporting period|Same period of last year|+/- (%)|
|Operating revenues (RMB)|1,163,660,721.69|1,359,895,900.69|-14.43%|
|Net profit attributable to shareholders|35,018,142.36|37,563,399.18||
||||-6.78%|
|of the Company (RMB)||||
|Net profit attributable to shareholders||||
||28,510,501.61|35,710,619.28|-20.16%|
|of the Company after excluding||||
|extraordinary gains and losses (RMB)||||
|Net cash flows from operating|118,035,913.29|46,727,741.12||
||||152.60%|
|activities (RMB)||||
|Basic EPS (RMB/share)|0.06|0.07|-14.29%|
|Diluted EPS (RMB/share)|0.06|0.07|-14.29%|
|Weighted average ROE (%)|1.76%|1.85%|-0.09%|
||As at the end of the|||
|||As at the end of last year|+/- (%)|
||reporting period|||
|Total assets (RMB)|3,204,416,788.95|3,232,406,102.20|-0.87%|
|Net assets attributable to shareholders|1,975,255,293.87|2,002,910,311.01||
||||-1.38%|
|of the Company (RMB)||||

II Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Not applicable
No difference.
2016 Semi-annual Report of Changchai Company, Limited 3. Explain reasons for the differences between accounting data under domestic and overseas accounting standards
□ Applicable√ Not applicable
III Items and amounts of extraordinary gains and losses
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current assets (including the|6,113,117.21||
|offset part of asset impairment provisions)|||
|Government grants recognized in the current period, except for|3,787,728.09||
|those acquired in the ordinary course of business or granted at|||
|certain quotas or amounts according to the country’s unified|||
|standards|||
|Gains and losses on change in fair value from tradable financial|1,205,730.87||
|assets and tradable financial liabilities, as well as investment|||
|income from disposal of tradable financial assets and tradable|||
|financial liabilities and financial assets available for sales except|||
|for effective hedging related with normal businesses of the|||
|Company|||
|Non-operating income and expenses other than the above|-3,412,491.97||
|Less: Income tax effects|986,443.45||
|Minority interests effects (after tax)|200,000.00||
|Total|6,507,640.75||

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 explanatory announcement as a recurrent gain/loss item
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2016 Semi-annual Report of Changchai Company, Limited Section IV Report of the Board of Directors
I Overview
For the first half of 2016, we sold 376,100 units of diesel engines and generator sets, down22.79% over the same period of last year. We achieved a sales income of RMB1,163,660,700, down14.43% from the same period of last year. And the net profit attributable to our shareholders stood at RMB35.0181 million, down6.78% on a year-on-year basis.
The reporting period saw a drop in production and consumption of diesel engines as well as fierce competition in the industry due to more downward pressure on the macro-economy and weak market demand for combustion engines. In face of the unfavorable factor of oversupply in the single-cylinder diesel engine market, we managed to keep our leading position in sales through upgrading products, improving our marketing network, stabilizing our supporting plants, etc.. As for our multi-cylinder diesel engines, we have achieved remarkable results with our product structure after years of improvement. Our multi-cylinder diesel engines with more technological contents and higher added value have started mass production, and the new products have also begun small-lot production. As a result, multi-cylinder diesel engines took up a larger proportion in our total sales income.
In general, despite the decreased sales revenue and net profit in the first half of 2016, our development momentum is still considered positive.
II Main business analysis
YoY change of major financial data:
Unit: RMB
||||||
|-|-|-|-|-|
|||Same period of last||Main reasons for|
||Reporting period||YoY +/- %||
|||year||change|
|Operating revenues|1,163,660,721.69|1,359,895,900.69|-14.43%||
|Operating costs|984,594,264.43|1,179,073,102.73|-16.49%||
|Selling expenses|59,518,474.60|58,059,098.92|2.51%||
|Administrative|78,488,615.70|84,401,024.18|||
||||-7.01%||
|expenses|||||
|Financial costs|-4,811,135.29|-6,673,703.74|——||
|Income tax expenses|6,581,748.12|7,503,443.33|-12.28%||
|R&D inputs|36,683,008.45|35,771,589.22|2.55%||

2016 Semi-annual Report of Changchai Company, Limited
|||||
|-|-|-|-|
|Net cash flows from|118,035,913.29|46,727,741.12|152.60%|
|operating activities||||
|Net cash flows from|-29,436,822.72|-65,286,749.02|——|
|investing activities||||
|Net cash flows from|-20,380,965.42|-17,079,395.46|——|
|financing activities||||
|Net increase in cash|68,218,125.15|-35,638,403.36|——|
|and cash equivalents||||

Major changes to the profit structure or sources of the Company during the Reporting Period;
□ Applicable√ Not applicable
No major changes occurred to the profit structure or sources of the Company during the Reporting Period. Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable√ Not applicable
No such situation of the Company during the Reporting Period.
Overview of the reporting period progress of the business plans disclosed in previous periods:
The progress of the business plans of Y2016 that disclosed in the 2015 annual report was normal during the reporting period.
III. Breakdown of main business
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|||
||||||Increase/decrease|Increase/decrease|
||||Gross profit|of operating|||
||Operating revenues|Operating costs|||of operating costs|of gross profit|
||||rate|revenues over last|||
||||||over last year|rate over last year|
|||||year|||
|Classified by industry|||||||
|Internal|||||||
|combustion|1,152,656,941.95|976,226,687.99|15.31%|-14.65%|-16.80%|2.19%|
|engine|||||||
|Other|||||||
|Classified by product|||||||
|Diesel engines|1,152,656,941.95|976,226,687.99|15.31%|-14.65%|-16.80%|2.19%|
|Classified by region|||||||
|Domestic|1,046,828,931.10|873,404,875.20|16.57%|-15.94%|-18.50%|2.62%|
|Overseas|105,828,010.85|102,914,223.93|2.75%|0.68%|1.14%|-0.45%|

 IV. Core competitiveness analysis
1. Brand advantage
Incorporated in 1913, the Company has a history over 100 years, with its diesel engines well received both at
2016 Semi-annual Report of Changchai Company, Limited home and abroad.
The trademark of “Changchai” was the first among the production goods in the country to be recognized as a “Famous Trademark of China”. In 2005, the single-cylinder diesel engines of the Company were among the first to be titled as “Brandname Products of China”. In 2013, through the review and approval of General Administration of Quality Supervision, Inspection and Quarantine of thePeople’s Republic of China, the diesel engine products of the Company gained the export inspection-free qualification. In 2014, Changchai was awarded the honorary title of “Y2012-Y2013 State-level Enterprise of Observing Contracts and Keeping Promise” and had been awarded the title of “China Pacesetter Enterprise of Internal Combustion Engine and Accessories Manufacturing Industry” for five years in a row. In 2015, the Company listed in the “China Export Quality and Safety Demonstration Enterprises” with proud and be selected as the “Hundred Companies of the China Machinery Industry” that be awarded as the “Precision Farming Cup” among the national agricultural machinery industry brands as well as the products of the Company such as the 4G33TC, 3M78, 4H11 was respectively awarded the gold award of the China Agricultural Machinery Industry Annual Product, gold award and innovation award of China Agricultural Machinery Parts. For decades, the Company developed in a sound manner and cultivated the “Changchai” brand, a famous small diesel engine brand of China with independent intellectual property rights.
2. Product advantage
Currently, the Company is mainly engaged in small power single-cylinder and multi-cylinder diesel engines. It has a complete product range, a wide power level coverage, a high reputation and intellectual property rights for its main products. The sales of the single cylinder diesel had beenChina’ first for consecutive years. It owns a state-level technical center, a post doctoral scientific research station and Jiangsu Small-and Medium-power Internal Combustion Engine Engineering Research Center. Quite a few of its multi-cylinder diesel engines have passed the European Union EC certification, it has the capability to develop and put into pass production products meeting the national emission standard IV.
3. Sales network advantage
The Company has built up a sales service network covering the whole country. With 11 marketing units, 31 sales service centers, over 400 service locations and 600 cooperation maintenance stations, the service network covering the major cities and the countryside, the Company is able to provide quality, efficient and timely services for its customers.
VI. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
□ Applicable√ Not applicable
(2) Equity-holdings in financial enterprises
√ Applicable□ Not applicable
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Enterprise|Enterprise|Initial|Opening|Opening|Closing|Closing|Closing book|Gain/loss|Accounti|Equity|

2016 Semi-annual Report of Changchai Company, Limited
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|name|variety|investment|equity-hol|equity-ho|equity-hol|equity-ho|value (RMB)|in the|ng title|source|
|||cost (RMB)|dings|lding|dings|lding||reporting|||
||||(share)|ratio|(share)|ratio||period|||
|||||||||(RMB)|||
||Commercial bank||||||||Long-ter||
|Bank of|||||||||||
||||||||||m equity|Promoter’s|
|Jiangsu||38,000,000.00|38,000,000|0.42%|38,000,000|0.42%|38,000,000.00|0.00|||
||||||||||investme|shares|
|Co., Ltd.|||||||||||
||||||||||nt||

(3) Investment in securities
□ Applicable√ Not applicable
The Company did not invest in any securities in the Reporting Period.
(4) Explanation about shareholdings in other listed companies
√ Applicable□ Not applicable
At the end of the reporting period, the Company held 72.25 million “Foton Motor” shares measured as available-for-sale financial assets and 50,000 “Ninghu Expressway” shares measured as a long-term equity investment.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
√ Applicable□ Not applicable
Unit:RMB’0,000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal||||
||||||||||Withdraw||Amount|
||||||||Remunera|amount||||
||||||||||n||of actual|
|Name of|Related|Related|||||tion|actually||||
||||||Initial|Ended|||impairme|Estimate|profits or|
|the|relationsh|transactio|Type|Amount|||determina|received||||
||||||date|Date|||nt|profit|losses in|
|trustee|ip|n or not|||||tion|in||||
||||||||||provision||reporting|
||||||||method|reporting||||
||||||||||( if any)||period|
|||||||||period||||
||||Break-eve|||||||||
||||||||One-time|||||
||||n floating|||||||||
|Bank of|||||26 Aug.|24 Feb.|confirmat|||||
||N/A|No|proceeds|1,000||||1,000||17.95|17.95|
|Jiangshu|||||2015|2016|ion when|||||
||||financial|||||||||
||||||||expired|||||
||||products|||||||||
||||Break-eve||||One-time|||||
|Bank of|||n floating||3 Nov.|4 May|confirmat|||||
||N/A|No||1,000||||1,000||18.45|18.45|
|Jiangshu|||proceeds||2015|2016|ion when|||||
||||financial||||expired|||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
||products||||||||
|Total||2,000|--|--|--|2,000|36.4|36.4|
|Capital resources||Self-owned raising funds|||||||
|Cumulative amount of principal and|||||||||
|||0|||||||
|earnings maturity that fail to recover|||||||||
|Self-own idle fund||Not applicable|||||||
|Disclosure date of announcement on|||||||||
|wealth management entrustment reviewed||13 Jan. 2015|||||||
|and approved by the Board of Directors|||||||||
|Disclosure date of announcement on|||||||||
|wealth management entrustment reviewed||Not applicable|||||||
|and approved by the Board of Shareholders|||||||||

(2) Derivative investment
□ Applicable√ Not applicable
The Company did not carry out any derivative investment in the Reporting Period.
(3) Entrustment loans
□ Applicable√ Not applicable
There were no entrustment loans in the Reporting Period.
3. Use of raised funds
□ Applicable√ Not applicable
There was no any use of raised funds in the Reporting Period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable□ Not applicable
Main subsidiaries and stock-participating companies:
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Mainproducts/services|||||||
|Company|Company|||Registered|||Operating|Operating||
|||Industry|||Total assets|Net assets|||Net profit|
|name|variety|||capital|||revenues|profit||
||||Productionand sales of|||||||
|||Machinery||||||||
|Changchai||||||||||
||Subsidiary|manufactur|diesel|55063000.00|163,734,566.78|105,680,655.06|67,967,415.82|-820,115.14|-688,210.65|
|Benniu||||||||||
|||e|enginefittings|||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Production|||||||
|||Machinery||||||||
|Changchai|||and sales of|||||||
||Subsidiary|manufactur||85000000.00|77,278,180.18|43,997,240.93|29,922,164.72|305,185.67|684,407.82|
|Wanzhou|||diesel|||||||
|||e||||||||
||||engine|||||||
||||External|||||||
||||investment|||||||
|Housheng||||||||||
||Subsidiary|Service|and|30000000.00|35,763,602.62|34,974,633.67|414,893.21|725,971.07|564,733.78|
|Investment||||||||||
||||consulting|||||||
||||service|||||||
||||Production|||||||
||||and sales of|||||||
||||agricultural|||||||
|Housheng||Machinery||||||||
||||machinery|||||||
|Agricultural|Subsidiary|manufactur||10000000.00|24,566,756.27|7,539,527.94|14,101,934.04|2,233,123.56|2,233,123.56|
||||product of|||||||
|Equipment||e||||||||
||||rice|||||||
||||transplanter|||||||
||||etc.|||||||
||||Production|||||||
|||Machinery||||||||
||Joint stock||and sales of|USD4500000.||||||
|Fuji Robin||manufactur|||89,249,557.73|65,425,966.93|81,740,227.95|3,339,679.86|2,488,679.14|
||company||gasoline|00||||||
|||e||||||||
||||engines|||||||

5. Significant projects invested with non-raised funds
□ Applicable√ Not applicable
No significant projects of investments with non-raised funds during the reporting period.
VI. Predict the operating results of Jan.-Sep. 2016
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable√ Not applicable
VII. Explanation of the Board of Directors and Board of Supervisors on Non-standard Auditing Report issued by the CPA firm for the reporting period
□ Applicable√ Not applicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” for last year
□ Applicable√ Not applicable
2016 Semi-annual Report of Changchai Company, Limited IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the plan for turning capital reserve into share capital:
√ Applicable□ Not applicable
On 26 May 2016, the Y2015 Annual General Meeting of the Company reviewed and approved the Y2015 Equity Distribution Proposal as: based on the current share capital of 561,374,326 shares, the Company distributed the cash (tax including) of RMB0.23 Yuan for every 10 shares to the whole shareholders. On 15 June 2016, the Company disclosed Y2015 Implementation Announcement on Equity Distribution. The register date of the A share equity of the equity distribution was: 22 June 2016, the date of ex-right and ex-interest was: 23 June 2016; the last trading date of B share was: 22 June 2016, and the equity register date was 27 June 2016 as well as the date of ex-right and ex-interest was: 23 June 2016.
Y2015 profits distribution had completed the execution.
|||
|-|-|
|Special explanation of the cash dividend policy||
|Whether conformed with the regulations of the Articles of association or the requirements of the||
||Yes|
|resolutions of the shareholders’ meeting:||
|Whether the dividend standard and the proportion were definite and clear:|Yes|
|Whether the relevant decision-making process and the system were complete:|Yes|
|Whether the independent director acted dutifully and exerted the proper function:|Yes|
|Whether the medium and small shareholders had the chances to fully express their suggestions and||
||Yes|
|appeals, of which their legal interest had gained fully protection:||
|Whether the conditions and the process met the regulations and was transparent of the adjustment or||
||Yes|
|altered of the cash dividend policy:||

X. Preplan for profit distribution and turning capital reserve into share capital for the reporting period
□ Applicable√ Not applicable
The Company planed not to distribute cash dividends or bonus shares or turn capital reserve into share capital for the Reporting Period.
XI. Researches, visits and interviews received in the reporting period
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
|||Way of|||Main discussion and materials|
|Time|Place||Visitor type|Visitor||
|||reception|||provided by the Company|
||http://irm.cninfo.com.c|||Individual|List of the stocks of the Bank of|
|18 Jun. 2016||Other|Individual|||
||n/szse/|||investor|Jiangsu held by the Company|
||http://irm.cninfo.com.c|||Individual|Shareholding increase or decrease plan|
|13 Jun. 2016||Other|Individual|||
||n/szse/|||investor|of the major shareholders|

2016 Semi-annual Report of Changchai Company, Limited
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|-|-|-|-|-|-|
||http://irm.cninfo.com.c|||Individual||
|6 Jun. 2016||Other|Individual||List of the shareholders’ number|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|Future development plan of the|
|25 May 2016||Other|Individual|||
||n/szse/|||investor|Company|
||http://irm.cninfo.com.c|||Individual|Whether the Company tend to|
|25 May 2016||Other|Individual|||
||n/szse/|||investor|reorganize|
||http://irm.cninfo.com.c|||Individual||
|19 May 2016||Other|Individual||List of the shareholders’ number|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|19 May 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|13 May 2016||Other|Individual||List of the Company’s operation|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|28 Apr. 2016||Other|Individual||List of the Company’s products|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|27 Apr. 2016||Other|Individual||List of the agricultural informatization|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|26 Apr. 2016||Other|Individual||List of the shareholders’ number|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|List of the Changchai Benniu|
|22 Apr. 2016||Other|Individual|||
||n/szse/|||investor|Company’s operation|
||http://irm.cninfo.com.c|||Individual||
|22 Apr. 2016||Other|Individual||List of the Company’s operation|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|List of the construction of the|
|22 Apr. 2016||Other|Individual|||
||n/szse/|||investor|industrial park|
||http://irm.cninfo.com.c|||Individual|List of the foreign cooperation of the|
|22 Apr. 2016||Other|Individual|||
||n/szse/|||investor|Company|
||http://irm.cninfo.com.c|||Individual|List of the investment and operation of|
|22 Apr. 2016||Other|Individual|||
||n/szse/|||investor|Housheng Company|
||http://irm.cninfo.com.c|||Individual||
|22 Apr. 2016||Other|Individual||List of the future plan of the Company|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|Future development direction of the|
|21 Apr. 2016||Other|Individual|||
||n/szse/|||investor|technology products of the Company|
||http://irm.cninfo.com.c|||Individual|List of the products development of|
|5 Apr. 2016||Other|Individual|||
||n/szse/|||investor|the Company|
||http://irm.cninfo.com.c|||Individual||
|31 Mar. 2016||Other|Individual||List of the future plan of the Company|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|List of the participation of the|
|28 Mar. 2016||Other|Individual|||
||n/szse/|||investor|securities financing of the Company|

2016 Semi-annual Report of Changchai Company, Limited
|||||||
|-|-|-|-|-|-|
||http://irm.cninfo.com.c|||Individual|List of the participation of the|
|28 Mar. 2016||Other|Individual|||
||n/szse/|||investor|securities financing of the Company|
||http://irm.cninfo.com.c|||Individual||
|15 Mar. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|10 Mar. 2016||Other|Individual||List of the shareholders’ number|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|1 Mar. 2016||Other|Individual||List of the Company’s operation|
||n/szse/|||investor||
||||||List of the Tsinghua Industrial|
||http://irm.cninfo.com.c|||Individual||
|23 Feb. 2016||Other|Individual||Company which the Company|
||n/szse/|||investor||
||||||participated in|
||http://irm.cninfo.com.c|||Individual||
|23 Feb. 2016||Other|Individual||List of the shareholders’ number|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|List of the Housheng Agricultural|
|22 Feb. 2016||Other|Individual|||
||n/szse/|||investor|Equipment|
||http://irm.cninfo.com.c|||Individual|List of the SOE reform progress of the|
|1 Feb. 2016||Other|Individual|||
||n/szse/|||investor|Company|
||http://irm.cninfo.com.c|||Individual|List of the export business of the|
|20 Jan. 2016||Other|Individual|||
||n/szse/|||investor|Company|
||http://irm.cninfo.com.c|||Individual||
|11 Jan. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|List of the Company’s products|
|8 Jan. 2016||Other|Individual|||
||n/szse/|||investor|development|
||http://irm.cninfo.com.c|||Individual||
|7 Jan. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|6 Jan. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual|Future development advice of the|
|6 Jan. 2016||Other|Individual|||
||n/szse/|||investor|Company|
||http://irm.cninfo.com.c|||Individual||
|6 Jan. 2016||Other|Individual||List of the foundry works’ operation|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|6 Jan. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||
||http://irm.cninfo.com.c|||Individual||
|5 Jan. 2016||Other|Individual||List of the Company’s stocks|
||n/szse/|||investor||

2016 Semi-annual Report of Changchai Company, Limited Section V. Significant Events
I. Corporate governance
In the Reporting Period, the Company was strictly in line with laws, statutes such as Company Law, Securities Laws, Code of Corporate Governance of Listed Companies, Guide Opinion on Establishment of Independent Director System by Listed Companies and Guidelines on Internal Controls of Listed Companies and so on, continuously perfected corporate governance, established and accomplished internal management and control system, consistently and deeply put forward corporate governance activities, so as to further normalized operation of the Company, raising corporate governance level, laying a guard for steady and healthy development of the Company, protect legal rights and interests of the Company and all shareholders.
According to each law and regulation and the traits of the industry, operation mode and self business, the Company formulated or revised a whole set of internal control system throughout routine operation management as well as formed the normative documents such as Internal Control Manual of Suzhou Changchai and Assemble of Internal Control System of Suzhou Changzhou. The content was a series of administration system, process and standard including each operation aspect and level such as purchase, sales, finance, assets, human resources, internal audit supervision, which ensured all kinds of work, had rules to follow.
There is not discrepancy between the corporate governance and Company Law, relevant regulations of CSRC. II. Lawsuits or arbitrations
Significant lawsuits or arbitrations
√ Applicable□ Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount|||||||
||involved in|||||||
||the lawsuit|Forming the|Progress of|Trial result and|Enforcement on|||
|Basic information of the|(arbitration|estimated|the lawsuit|influence of the|the judgment of|Disclosure|Disclosure|
|lawsuit (arbitration)|) (RMB|liabilities or|(arbitration|lawsuit|the lawsuit|date|index|
||Ten|not?|)|(arbitration)|(arbitration)|||
||Thousand|||||||
||Yuan)|||||||
|About the lawsuit case of||||||||
|Shandong Hongli Group||||||||
|Co., Ltd., the accused||||||||
||||Judged for||Under the|||
|company owed||||||||
||||the second||compulsory|||
|accumulatively RMB14.36||||||||
||||trial and no||execution by the|||
|million to the Company. The||||||||
||1,436|No|progress of||court and in the|||
|Company sued to||||||||
||||the||process of|||
|Changzhou Intermediate||||||||
||||reporting||liquidation and|||
|People’s Court in 2001 and||||||||
||||period||bankruptcy|||
|sued for compulsory||||||||
|execution in April, 2002.||||||||
|Currently, the defendant has||||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||||
|-|-|-|-|-|-|
|started the bankruptcy||||||
|procedure.||||||
|About the lawsuit case of||||||
|Beijing Baic Changsheng||||||
|Automobile Co., Ltd., the|||Had|||
|accused company owed|||mediated.|||
|accumulatively RMB8.0636|||Up the end|||
|million to the Company.|||of the|||
|According to the paper of|||reporting|||
|civil mediation issued by the|||period,|||
|people's court of Beijing|||Baic|||
|Shunyi on 31 October. 2013,|||Changshen|||
|the Company will amortize|||g had paid||http//www.cn|
|the arrears of RMB8.0636|||RMB4.2||info.com.cn.|
|||||30 Aug. 2013,||
|million. If Baic Changsheng|806.36|No|million to||Announceme|
|||||6 Nov. 2013||
|failed to execute the|||the||nt No.: 2013|
|reconciliation agreement on|||Company.||-015, 019|
|time, the Company should|||Recently,|||
|applied for the compulsory|||the|||
|execution of the whole|||Company|||
|unpaid accounts at one time|||is applying|||
|and the Baic Changsheng|||for|||
|should pay for the otherwise|||compulsor|||
|liquidated damages of|||y|||
|RMB40,000 and the|||execution.|||
|interests of the overdue||||||
|payment.||||||

Other lawsuits
□ Applicable√ Not applicable
III. Media query
□Applicable√ Not applicable
The Company was not involved in any media query in the Reporting Period.
IV. Bankruptcy or Reorganization Events
□ Applicable√ Not applicable
There Company was not involved in any bankruptcy or reorganization events in the Reporting Period.
2016 Semi-annual Report of Changchai Company, Limited V. Transaction in Assets
1. Purchase of assets
□ Applicable√ Not applicable
There is no purchase of assets in the Company during the Reporting Period.
2. Sale of assets
□ Applicable√ Not applicable
There is no sale of assets in the Company during the Reporting Period.
3. Business combination
□ Applicable√ Not applicable
There is no business combination in the Company during the Reporting Period.
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable√ Not applicable
There is no equity incentive plan and its implementation in the Company during the Reporting Period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
□ Applicable√ Not applicable
There is no related-party transaction concerning routine operation in the Company during the Reporting Period. 2. Related-party transactions arising from asset acquisition or sale
□ Applicable√ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the Reporting Period.
3. Related-party transitions with joint investments
□ Applicable√ Not applicable
The Company was not involved in any related-party transaction with joint investments during the Reporting Period.
4. Credits and liabilities with related parties
□ Applicable√ Not applicable
2016 Semi-annual Report of Changchai Company, Limited The Company was not involved in any credit and liability with related parties during the Reporting Period. 5. Other related-party transactions
□ Applicable√ Not applicable
The Company was not involved in any other related-party transaction during the Reporting Period.
VIII. Particulars about the non-operating occupation of funds by the controlling shareholder and other related parties of the Company
□ Applicable√ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the Reporting Period.
IX. Significant contracts and their execution
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable√ Not applicable
No such cases in the Reporting Period.
(2) Contract
□ Applicable√ Not applicable
No such cases in the Reporting Period.
(3) Lease
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2. Guarantees provided by the Company
√ Applicable□ Not applicable
Unit: RMB Thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees provided by the company for external parties (excluding those for subsidiaries)|||||||||
||Disclosure|||||||Guarante|
||||Actual||||||
||date of|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|relevant|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||announcem|||amount||||party or|
||||agreement)||||||
||ent|||||||not|

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees provided by the Company for its subsidiaries|||||||||
||Disclosure|||||||Guarante|
||||Actual||||||
||date of|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|relevant|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||announcem|||amount||||party or|
||||agreement)||||||
||ent|||||||not|
|Changzhou|||||||||
|Changchai|||||||||
||4||||||||
|Housheng|||4 December||General||||
||December|1,000||1,000||1 year|No|No|
|Agricultural|||2015||guarantee||||
||2015||||||||
|Equipment Co.,|||||||||
|Ltd.|||||||||
|||||Total actual occurred amount|||||
|Total guarantee line approved|||||||||
|||||of guarantee for the|||||
|for the subsidiaries during the||0||||0|||
|||||subsidiaries during the|||||
|Reporting Period (B1)|||||||||
|||||Reporting Period (B2)|||||
|Total guarantee line that has|||||||||
|||||Total actual guarantee balance|||||
|been approved for the|||||||||
|||1,000||for the subsidiaries at the end||1,000|||
|subsidiaries at the end of the|||||||||
|||||of the Reporting Period (B4)|||||
|Reporting Period (B3)|||||||||
|Guarantees provided by the subsidiaries of the Company for subsidiaries|||||||||
||Disclosure|||||||Guarante|
||||Actual||||||
||date of|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|relevant|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||announcem|||amount||||party or|
||||agreement)||||||
||ent|||||||not|
|Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)|||||||||
|Total guarantee line approved||||Total actual occurred amount|||||
|during the Reporting Period||0||of guarantee during the||0|||
|(A1+B1+C1)||||Reporting Period (A2+B2+C2)|||||
|Total guarantee line that has||||Total actual guarantee balance|||||
|been approved at the end of the||1,000||at the end of the Reporting||1,000|||
|Reporting Period (A3+B3+C3)||||Period (A4+B4+C4)|||||
|Proportion of total actual guarantee amoun（t A4+B4+C4）in the|||||||||
|||||0.51%|||||
|net assets of the Company|||||||||
|Of which:|||||||||
|Guarantee amount provided for shareholders, actual controllers|||||||||
|||||0|||||
|and its related parties(D)|||||||||
|Amount of debt guarantee provided for the guaranteed party||||0|||||

2016 Semi-annual Report of Changchai Company, Limited
|||
|-|-|
|whose asset-liability ratio is not less than 70% directly or||
|indirectly（E）||
|Part of the amount of the total guarantee over 50% of net||
||0|
|assets （F）||
|Total amount of the above three guarantees （D+E+F）|0|
|Note to not overdue guarantee may bear joint liquidated||
||Not applicable|
|liability (if any)||
|Explanation on the external guarantees in violation of||
||Not applicable|
|stipulated procedures (if any)||

Illegal external guarantee
□ Applicable√ Not applicable
No such case during Reporting Period
3. Other significant contracts
□ Applicable√ Not applicable
No such cases in the Reporting Period.
4. Other significant related-party transactions
□ Applicable√ Not applicable
No such cases in the Reporting Period.
X. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the Reporting Period or such commitments carried down into the Reporting Period√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||Date of|||
||Commitment|||Term of||
|Commitment||Contents|commitment||Fulfillment|
||maker|||commitment||
||||making|||
|Commitments made in||||||
|share reform||||||
|Commitments made in||||||
|acquisition documents||||||
|or shareholding||||||
|alteration documents||||||
|Commitments made in||||||
|time of asset||||||
|restructuring||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||||
|-|-|-|-|-|-|
|Commitments made in||||||
|time of IPO or||||||
|refinancing||||||
|Bonus commitment||Under the conditions of in future||||
|||three years (2014-2016) the||||
|||attributable profit (the remaining||||
|||profits after the losses have been||||
|||made up and common reserves||||
|||have been drawn) of||||
|||shareholders’ reward plan in the||||
|||year or half year is positive, and||||
|||the cash flow is sufficient, the||||
||Changchai|||||
|||cash dividends had no influence|||The commitment was under|
||Company,||2014-05-14|Y2014-2016||
|||to the follow-up continuously|||progress.|
||Limited|||||
|||operation, the profit dividends in||||
|||cash shall no lower than the 10%||||
|||of attributable profit realized by||||
|||the Company and in any three||||
|||continuous accounting years the||||
|||accumulative profit dividends in||||
|||cash shall no less than 30% of the||||
|||average annual attributable||||
|||profits realized in three years.||||

XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes√ No
This semi-annual report is un-audited.
XII. Punishment and rectification
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XIII. Reveal of the delisting risks of illegal or violation
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2016 Semi-annual Report of Changchai Company, Limited XIV. Other significant events
□ Applicable√ Not applicable
No such cases in the Reporting Period.
XV. Corporation bonds
Whether existing corporation bonds public issued and listed in Stock Exchange and maturity or maturity but not fully paid on the approval report date of semi-annual report
No
2016 Semi-annual Report of Changchai Company, Limited Section VI. Change in Shares& Shareholders
I. Changes in shares
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease (+/-)|||||After the change||
||||||Capitaliz|||||
||||Newly|||||||
|||Proporti||Bonus|ed|Other|Subt||Proporti|
||Amount||issue|||||Amount||
|||on||shares|Capital|s|otal||on|
||||share|||||||
||||||reserves|||||
|I. Restricted shares|0|0.00%||||||0|0.00%|
|1.Shares held by the||||||||||
||0|0.00%||||||0|0.00%|
|state||||||||||
|2. Shares held by||||||||||
||0|0.00%||||||0|0.00%|
|state-own Legal-person||||||||||
|3. Shares held by other||||||||||
||0|0.00%||||||0|0.00%|
|domestic investors||||||||||
|Among which: shares||||||||||
|held by domestic legal|0|0.00%||||||0|0.00%|
|person||||||||||
|Shares held by domestic||||||||||
||0|0.00%||||||0|0.00%|
|natural person||||||||||
|4.Oversea shareholdings|0|0.00%||||||0|0.00%|
|Among which: shares||||||||||
|held by oversea legal|0|0.00%||||||0|0.00%|
|person||||||||||
|Shares held by oversea||||||||||
||0|0.00%||||||0|0.00%|
|natural person||||||||||
|II. Shares not subject to||||||||||
||561,374,326|100.00%||||||561,374,326|100.00%|
|trading moratorium||||||||||
|1. RMB ordinary shares|411,374,326|73.28%||||||411,374,326|73.28%|
|2. Domestically listed||||||||||
||150,000,000|26.72%||||||150,000,000|26.72%|
|foreign shares||||||||||
|3. Oversea listed foreign||||||||||
||0|0.00%||||||0|0.00%|
|shares||||||||||
|4. Other|0|0.00%||||||0|0.00%|
|III. Total shares|561,374,326|100.00%||||||561,374,326|100.00%|

2016 Semi-annual Report of Changchai Company, Limited Reason for the change in shares
□ Applicable√ Not applicable
Approval of the change in shares
□ Applicable√ Not applicable
Reason for the change in shares
□ Applicable√ Not applicable
Effects of the change in shares on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company and other financial indexes over the last year and last period
□ Applicable√ Not applicable
Other contents that the Company considered necessary or were required by the securities regulatory authorities to disclose
□ Applicable√ Not applicable
Explanation on changes in share capital& the structure of shareholders, the structure of assets and liabilities□ Applicable√ Not applicable
II. Total number of shareholders and their shareholding
Unit: share
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Total number of shareholders|||||Total number of preferred stockholder|||||||
|||63,916|||||||0|||
|at the Reporting Period|||||with vote right restored|||||||
|Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders||||||||||||
|||||Number of||Increase and|Number of|Number of||Pledged or frozen||
||||Holding|shareholding||decrease of|shares held|shares held||shares||
||Nature of|||||||||||
|Name of shareholder|||percentage|at the end of||shares during|subject to|subject to||||
||shareholder|||||||||Status of|Amou|
||||(%)|the Reporting||Reporting|trading|trading||||
|||||||||||shares|nt|
|||||Period||Period|moratorium|moratorium||||
|STATE-OWNEDASSETS SUPERVISIONANDADMINISTRATIONCOMMISSION OFCHANGZHOUMUNICIPAL PEOPLE’SGOVERNMENT|On behalf of thegovernment||30.43%|170,845,236||||170,845,236||||
|KGI ASIA LIMITED|Overseascorporation||0.59%|3,324,845||||3,324,845||||
|BNP PARIBAS WEALTHMANAGEMENT HONGKONG BRANCH|Overseascorporation||0.55%|3,099,873||||3,099,873||||
|HUANG LIHOU|Domesticindividual||0.35%|1,949,700||||1,949,700||||
|VANGUARD TOTAL|Overseas||0.29%|1,626,592||||1,626,592||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||
|-|-|-|-|-|-|-|
|INTERNATIONALSTOCK INDEX FUND|corporation||||||
|LI MIN|Domesticindividual|0.29%|1,618,950||1,618,950||
|HUANG GUOLIANG|Domesticindividual|0.27%|1,528,891||1,528,891||
|LI SUINAN|Domesticindividual|0.24%|1,328,300||1,328,300||
|CENTRAL HUIJINASSET MANAGEMENTCO., LTD.|State-ownedcorporation|0.20%|1,107,900||1,107,900||
|XIE DEQING|Domesticindividual|0.19%|1,078,700||1,078,700||
|Strategic investors or the general legal|||||||
|person due to the placement of new shares||Naught|||||
|become the top 10 shareholders|||||||
|||It is unknown whether there was any associated relationship among the top ten tradable|||||
|Explanation on associated relationship||shareholders and among the top ten shareholders not subject to trading moratorium, or|||||
|or/and persons||whether they are persons acting in concertas described by Measures for the Administrative of|||||
|||Disclosure of Shareholder Equity Changes.|||||
|Particulars about shares held by top 10 common shareholders not subject to trading moratorium|||||||
||||Number of shares held not subject to|Type of share|||
|Name of shareholder|||trading moratorium at the end of the||||
|||||Type of share||Amount|
||||period||||
|STATE-OWNED ASSETS SUPERVISION ANDADMINISTRATION COMMISSION OFCHANGZHOU MUNICIPAL PEOPLE’SGOVERNMENT|||170,845,236||||
|||||RMB ordinary shares||170,845,236|
|KGI ASIA LIMITED|||3,324,845|Domestically listed|||
|||||||3,324,845|
|||||foreign shares|||
|BNP PARIBAS WEALTH MANAGEMENT HONGKONG BRANCH|||3,099,873|Domestically listed|||
|||||||3,099,873|
|||||foreign shares|||
|HUANG LIHOU|||1,949,700|RMB ordinary shares||1,949,700|
|VANGUARD TOTAL INTERNATIONAL STOCKINDEX FUND|||1,626,592|Domestically listed|||
|||||||1,626,592|
|||||foreign shares|||
|LI MIN|||1,618,950|RMB ordinary shares||1,618,950|
|HUANG GUOLIANG|||1,528,891|Domestically listed|||
|||||||1,528,891|
|||||foreign shares|||
|LI SUINAN|||1,328,300|Domestically listed|||
|||||||1,328,300|
|||||foreign shares|||
|CENTRAL HUIJIN ASSET MANAGEMENT CO.,LTD.|||1,107,900||||
|||||RMB ordinary shares||1,107,900|

2016 Semi-annual Report of Changchai Company, Limited
|||||
|-|-|-|-|
|XIE DEQING|1,078,700|Domestically listed||
||||1,078,700|
|||foreign shares||
|Explanation on associated relationship among the top||||
||It is unknown whether there was any associated relationship among the top ten|||
|ten shareholders of tradable share not subject to trading||||
||tradable shareholders and among the top ten shareholders not subject to trading|||
|moratorium, as well as among the top ten shareholders||||
||moratorium, or whether they are persons acting in concert as described by|||
|of tradable share not subject to trading moratorium and||||
||Measures for the Administrative of Disclosure of Shareholder Equity Changes.|||
|top ten shareholders, or explanation on acting-in-concert||||
||The shareholder Huang Lihou held the shares of the Company of 1,949,700|||
||shares through the securities guarantee account of the customer credit|||
|Particular about shareholder participate in the securities|transactions provided by Guotai Junan Securities Co., Ltd, with the proportionof|||
|lending and borrowing business|the share holding of 0.35%. The shareholder Li Min held 1,618,950 shares of the|||
||Company through customer credit collateral securities trading account of Guosen|||
||Securities Co., Ltd, with the proportion of the share holding of 0.29%.|||

 Did any of theCompany’s top 10 common shareholders or top 10 non-restricted common shareholders conduct any agreed buy-back in the Reporting Period?
□ Yes√ No
There was no shareholder of a company conduct the transaction of repurchase under the agreement during the Reporting Period. III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder during the Reporting Period.
□ Applicable√ Not applicable
The controlling shareholder did not change during the Reporting Period.
Change of the actual controller during the Reporting Period
□ Applicable√ Not applicable
The actual controller did not change during the Reporting Period.
IV. Particulars on shareholding increase scheme during the Reporting Period proposed or implemented by the shareholders and act-in-concert persons
□ Applicable√ Not applicable
Within the scope known to the Company, there was no any shareholding increase scheme during the Reporting Period proposed or implemented by the shareholders and act-in-concert persons.
2016 Semi-annual Report of Changchai Company, Limited Section VII. Preferred stock
□ Applicable√ Not applicable
There was no preferred stock during Reporting Period.
Section VIII. Directors, Supervisors, Senior Management Staff& Employees
I. Changes in shareholding of directors, supervisors and senior management staff
□ Applicable√ Not applicable
There was no change in shareholding of Directors, Supervisors, Senior Management Staffs and Employees, for details, please refer to 2015 Annual Report
II. Particulars about changes of Directors, Supervisors and Senior Executives
□ Applicable√ Not applicable
There was no change in Directors, Supervisors, Senior Management Staffs and Employees, for details, please refer to 2015 Annual Report
2016 Semi-annual Report of Changchai Company, Limited IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes√ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB
1. Consolidated balance sheet
Prepared by Changchai Company, Limited
30 June 2016
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|673,796,047.14|601,312,715.62|
|Settlement reserves|||
|Intra-group lendings|||
|Financial assets measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial assets|||
|Notes receivable|278,520,898.26|498,502,274.42|
|Accounts receivable|567,606,221.86|308,596,920.50|
|Accounts paid in advance|10,141,930.24|12,882,271.70|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|18,236,447.42|5,622,539.81|
|Financial assets purchased under|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|agreements to resell|||
|Inventories|360,199,008.69|397,290,012.36|
|Assets divided available for sale|||
|Non-current assets due within 1 year|||
|Other current assets|22,645,221.04|60,304,691.41|
|Total current assets|1,931,145,774.65|1,884,511,425.82|
|Non-current assets:|||
|Loans by mandate and advances|||
|granted|||
|Available-for-sale financial assets|444,437,000.00|502,980,000.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|21,590,568.88|20,769,304.76|
|Investing property|56,176,859.63|57,281,030.03|
|Fixed assets|571,960,644.43|554,601,893.23|
|Construction in progress|76,961,584.95|108,198,455.01|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|101,181,825.53|103,101,462.47|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|962,530.88|962,530.88|
|Other non-current assets|||
|Total of non-current assets|1,273,271,014.30|1,347,894,676.38|
|Total assets|3,204,416,788.95|3,232,406,102.20|
|Current liabilities:|||
|Short-term borrowings|10,000,000.00|17,000,000.00|
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Financial liabilities measured by fair|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial liabilities|||
|Notes payable|278,909,300.00|238,200,000.00|
|Accounts payable|509,018,960.25|535,978,470.07|
|Accounts received in advance|39,284,991.46|26,665,671.38|
|Financial assets sold for repurchase|||
|Handling charges and commissions|||
|payable|||
|Employee’s compensation payable|33,470,816.93|60,309,349.29|
|Tax payable|2,549,274.24|10,798,062.93|
|Interest payable|||
|Dividend payable|3,891,433.83|3,891,433.83|
|Other accounts payable|225,946,037.83|201,151,632.46|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities divided available for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|1,921,013.87|2,403,287.06|
|Total current liabilities|1,104,991,828.41|1,096,397,907.02|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Long-term payables|||
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|52,589,418.89|53,121,605.70|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Deferred income tax liabilities|53,604,375.00|62,385,825.00|
|Other non-current liabilities|||
|Total non-current liabilities|106,193,793.89|115,507,430.70|
|Total liabilities|1,211,185,622.30|1,211,905,337.72|
|Owners’ equity|||
|Share capital|561,374,326.00|561,374,326.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Capital reserves|164,328,665.43|164,328,665.43|
|Less: Treasury stock|||
|Other comprehensive income|303,758,125.00|353,519,675.00|
|Specific reserves|10,069,746.98|10,069,746.98|
|Surplus reserves|305,758,285.91|305,758,285.91|
|Provisions for general risks|||
|Retained profits|629,966,144.55|607,859,611.69|
|Total equity attributable to owners of|||
||1,975,255,293.87|2,002,910,311.01|
|the Company|||
|Minority interests|17,975,872.78|17,590,453.47|
|Total owners’ equity|1,993,231,166.65|2,020,500,764.48|
|Total liabilities and owners’ equity|3,204,416,788.95|3,232,406,102.20|

 Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang Chief of the accounting division: Jiang He
2. Balance sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|655,641,987.55|572,530,396.20|
|Financial assets measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial assets|||
|Notes receivable|277,874,656.26|490,777,874.42|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Accounts receivable|515,840,137.69|263,878,166.23|
|Accounts paid in advance|4,544,702.50|6,512,574.55|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|6,587,098.07|4,885,363.01|
|Inventories|296,700,526.06|348,179,430.41|
|Assets divided available for sale|||
|Non-current assets due within 1 year|||
|Other current assets|2,579,928.34|41,403,182.61|
|Total current assets|1,759,769,036.47|1,728,166,987.43|
|Non-current assets:|||
|Available-for-sale financial assets|437,237,000.00|495,780,000.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|206,057,068.88|205,235,804.76|
|Investing property|56,176,859.63|57,281,030.03|
|Fixed assets|466,608,080.79|445,343,167.61|
|Construction in progress|76,939,362.73|108,198,455.01|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|79,532,775.58|81,159,855.82|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|962,530.88|962,530.88|
|Other non-current assets|||
|Total of non-current assets|1,323,513,678.49|1,393,960,844.11|
|Total assets|3,083,282,714.96|3,122,127,831.54|
|Current liabilities:|||
|Short-term borrowings|||
|Financial liabilities measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Derivative financial liabilities|||
|Notes payable|253,909,300.00|218,200,000.00|
|Accounts payable|490,856,873.65|527,416,373.82|
|Accounts received in advance|37,894,565.98|24,537,940.90|
|Employee’s compensation payable|28,818,140.01|55,068,743.12|
|Tax payable|113,640.60|8,521,233.87|
|Interest payable|||
|Dividend payable|3,243,179.97|3,243,179.97|
|Other accounts payable|217,334,034.74|194,650,090.70|
|Liabilities divided available for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|1,032,169,734.95|1,031,637,562.38|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Long-term payables|||
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|52,589,418.89|53,121,605.70|
|Deferred income tax liabilities|53,604,375.00|62,385,825.00|
|Other non-current liabilities|||
|Total non-current liabilities|106,193,793.89|115,507,430.70|
|Total liabilities|1,138,363,528.84|1,147,144,993.08|
|Owners’ equity:|||
|Share capital|561,374,326.00|561,374,326.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Capital reserves|183,071,147.70|183,071,147.70|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Less: Treasury stock|||
|Other comprehensive income|303,758,125.00|353,519,675.00|
|Specific reserves|10,069,746.98|10,069,746.98|
|Surplus reserves|305,758,285.91|305,758,285.91|
|Retained profits|580,887,554.53|561,189,656.87|
|Total owners’ equity|1,944,919,186.12|1,974,982,838.46|
|Total liabilities and owners’ equity|3,083,282,714.96|3,122,127,831.54|

 3. Consolidated income statement
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Total operating revenues|1,163,660,721.69|1,359,895,900.69|
|Including: Sales income|1,163,660,721.69|1,359,895,900.69|
|Interest income|||
|Premium income|||
|Handling charge and commission|||
|income|||
|II. Total operating cost|1,130,064,900.87|1,319,907,071.98|
|Including: Cost of sales|984,594,264.43|1,179,073,102.73|
|Interest expenses|||
|Handling charge and commission|||
|expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the|||
|insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|2,017,527.41|2,280,012.43|
|Selling and distribution expenses|59,518,474.60|58,059,098.92|
|Administrative expenses|78,488,615.70|84,401,024.18|
|Financial expenses|-4,811,135.29|-6,673,703.74|
|Asset impairment loss|10,257,154.02|2,767,537.46|
|Add: Gain/(loss) from change in fair|||
|value (“-” means loss)|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Gain/(loss) from investment (“-”|||
||1,901,135.64|4,900,603.44|
|means loss)|||
|Including: share of profits in associates|||
|and joint ventures|||
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|35,496,956.46|44,889,432.15|
|Add: non-operating income|10,636,194.05|3,664,111.90|
|Of which: gains from non-current|||
||6,113,117.21|106,674.56|
|asset disposal|||
|Less: non-operating expense|4,147,840.72|2,832,658.16|
|Of which: losses from non-current|||
||32,408.99|14,758.29|
|asset disposal|||
|IV. Total profit (“-” means loss)|41,985,309.79|45,720,885.89|
|Less: Income tax expense|6,581,748.12|7,503,443.33|
|V. Net profit (“-” means loss)|35,403,561.67|38,217,442.56|
|Attributable to owners of the|||
||35,018,142.36|37,563,399.18|
|Company|||
|Minority shareholders’ income|385,419.31|654,043.38|
|VI. After-tax net amount of other|||
||-49,761,550.00|157,931,275.00|
|comprehensive incomes|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|-49,761,550.00|157,931,275.00|
|owners of the Company|||
|(I) Other comprehensive incomes|||
|that will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|cannot be reclassified into gains and|||
|losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|-49,761,550.00|157,931,275.00|
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|will be reclassified into gains and losses|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|under the equity method|||
|2. Gains and losses on fair|||
|value changes of available-for-sale|-49,761,550.00|157,931,275.00|
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains and|||
|losses on cash flows|||
|5. Foreign-currency financial|||
|statement translation difference|||
|6. Other|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|||
|minority shareholders|||
|VII. Total comprehensive incomes|-14,357,988.33|196,148,717.56|
|Attributable to owners of the|||
||-14,743,407.64|195,494,674.18|
|Company|||
|Attributable to minority|||
||385,419.31|654,043.38|
|shareholders|||
|VIII. Earnings per share|||
|(I) Basic earnings per share|0.06|0.07|
|(II) Diluted earnings per share|0.06|0.07|

 Where business mergers under the same control occurred in this reporting period, the net profit achieved by the merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00.
Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang Chief of the accounting division: Jiang He
4. Income statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Total sales|1,163,696,328.66|1,371,231,764.35|
|Less: cost of sales|1,000,185,315.06|1,200,341,035.82|
|Business taxes and surcharges|1,663,181.76|2,092,245.81|
|Distribution expenses|55,298,258.45|55,751,714.71|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Administrative expenses|69,931,423.68|76,865,506.74|
|Financial costs|-5,358,474.86|-7,439,596.01|
|Impairment loss|10,109,097.39|2,767,537.46|
|Add: gain/(loss) from change in|||
|fair value (“-” means loss)|||
|Gain/(loss) from investment (“-”|||
||1,185,264.12|3,509,872.47|
|means loss)|||
|Of which: income form investment|||
|on associates and joint ventures|||
|II. Business profit (“-” means loss)|33,052,791.30|44,363,192.29|
|Add: non-business income|9,904,289.56|3,052,280.67|
|Of which: gains from non-current|||
|asset disposal|||
|Less: non-business expense|4,047,840.72|2,800,072.37|
|Of which: losses from non-current|||
||32,408.99|14,758.29|
|asset disposal|||
|III. Total profit (“-” means loss)|38,909,240.14|44,615,400.59|
|Less: income tax expense|6,299,732.98|7,047,847.82|
|IV. Net profit (“-” means loss)|32,609,507.16|37,567,552.77|
|V. After-tax net amount of other|||
||-49,761,550.00|157,931,275.00|
|comprehensive incomes|||
|(I) Other comprehensive|||
|incomes that will not be reclassified|||
|into gains and losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that cannot be reclassified into gains|||
|and losses under the equity method|||
|(II) Other comprehensive|||
|incomes that will be reclassified into|-49,761,550.00|157,931,275.00|
|gains and losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that will be reclassified into gains and|||
|losses under the equity method|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|2. Gains and losses on fair|||
|value changes of available-for-sale|-49,761,550.00|157,931,275.00|
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains|||
|and losses on cash flows|||
|5. Foreign-currency financial|||
|statement translation difference|||
|6. Other|||
|VI. Total comprehensive incomes|-17,152,042.84|195,498,827.77|
|VII. Earnings per share|||
|(I) Basic earnings per share|0.06|0.07|
|(II) Diluted earnings per share|0.06|0.07|

 5. Consolidated cash flow statement
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||1,297,635,026.56|1,379,194,450.30|
|commodities and rendering of service|||
|Net increase of deposits from|||
|customers and dues from banks|||
|Net increase of loans from the|||
|central bank|||
|Net increase of funds borrowed|||
|from other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase of deposits of policy|||
|holders and investment fund|||
|Net increase of dispose of the|||
|financial assets measured by fair value|||
|with the changes be included in the|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|current gains and losses|||
|Cash received from interest,|||
|handling charges and commissions|||
|Net increase of intra-group|||
|borrowings|||
|Net increase of funds in repurchase|||
|business|||
|Tax refunds received|22,852,333.55|17,902,474.19|
|Other cash received relating to|||
||7,978,801.83|11,362,233.37|
|operating activities|||
|Subtotal of cash inflows from operating|||
||1,328,466,161.94|1,408,459,157.86|
|activities|||
|Cash paid for goods and services|956,379,929.94|1,117,905,635.90|
|Net increase of customer lendings|||
|and advances|||
|Net increase of funds deposited in|||
|the central bank and amount due from|||
|banks|||
|Cash for paying claims of the|||
|original insurance contracts|||
|Cash for paying interest, handling|||
|charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|174,777,109.44|161,565,170.00|
|Various taxes paid|36,296,987.31|48,202,988.69|
|Other cash payment relating to|||
||42,976,221.96|34,057,622.15|
|operating activities|||
|Subtotal of cash outflows from|||
||1,210,430,248.65|1,361,731,416.74|
|operating activities|||
|Net cash flows from operating activities|118,035,913.29|46,727,741.12|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
||32,000,000.00|2,109,642.19|
|investments|||
|Cash received from return on|||
||663,870.52|3,953,970.87|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|22,440.00|283,604.57|
|long-term assets|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
|investing activities|||
|Subtotal of cash inflows from investing|||
||32,686,310.52|6,347,217.63|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|39,123,133.24|31,633,966.65|
|assets|||
|Cash paid for investment||20,000,000.00|
|Net increase of pledged loans|||
|Net cash paid to acquire|||
|subsidiaries and other business units|||
|Other cash payments relating to|||
||23,000,000.00|20,000,000.00|
|investing activities|||
|Subtotal of cash outflows from|||
||62,123,133.24|71,633,966.65|
|investing activities|||
|Net cash flows from investing activities|-29,436,822.72|-65,286,749.02|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received from borrowings|8,000,000.00|10,000,000.00|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||5,431.58|4,046.87|
|financing activities|||
|Subtotal of cash inflows from financing|||
||8,005,431.58|10,004,046.87|
|activities|||
|Repayment of borrowings|15,000,000.00|15,000,000.00|
|Cash paid for interest expenses and|||
||13,386,397.00|12,083,442.33|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|financing activities|||
|Sub-total of cash outflows from|||
||28,386,397.00|27,083,442.33|
|financing activities|||
|Net cash flows from financing activities|-20,380,965.42|-17,079,395.46|
|IV. Effect of foreign exchange rate|||
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||68,218,125.15|-35,638,403.36|
|equivalents|||
|Add: Opening balance of cash and|||
||526,716,238.21|464,761,820.50|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||594,934,363.36|429,123,417.14|
|equivalents|||

6. Cash flow statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||1,307,793,947.42|1,382,174,877.12|
|commodities and rendering of service|||
|Tax refunds received|22,852,333.55|17,902,474.19|
|Other cash received relating to|||
||5,921,206.26|9,780,837.80|
|operating activities|||
|Subtotal of cash inflows from operating|||
||1,336,567,487.23|1,409,858,189.11|
|activities|||
|Cash paid for goods and services|1,003,396,703.92|1,148,582,635.11|
|Cash paid to and for employees|157,612,290.63|145,784,170.00|
|Various taxes paid|31,818,121.46|45,452,896.38|
|Other cash payment relating to|||
||41,036,165.12|32,169,844.52|
|operating activities|||
|Subtotal of cash outflows from|||
||1,233,863,281.13|1,371,989,546.01|
|operating activities|||
|Net cash flows from operating activities|102,704,206.10|37,868,643.10|
|II. Cash flows from investing activities:|||
|Cash received from retraction of|||
||20,000,000.00||
|investments|||
|Cash received from return on|||
||364,000.00|3,112,240.00|
|investments|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|22,440.00|106,674.57|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
|investing activities|||
|Subtotal of cash inflows from investing|||
||20,386,440.00|3,218,914.57|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|37,368,413.24|29,560,366.65|
|assets|||
|Cash paid for investment||20,000,000.00|
|Net cash paid to acquire|||
|subsidiaries and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||37,368,413.24|49,560,366.65|
|investing activities|||
|Net cash flows from investing activities|-16,981,973.24|-46,341,452.08|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Cash received from borrowings|||
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||35,761.62||
|financing activities|||
|Subtotal of cash inflows from financing|||
||35,761.62||
|activities|||
|Repayment of borrowings|||
|Cash paid for interest expenses|||
||12,911,609.50|11,227,486.52|
|and distribution of dividends or profit|||
|Other cash payments relating to|||
|financing activities|||
|Sub-total of cash outflows from|||
||12,911,609.50|11,227,486.52|
|financing activities|||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Net cash flows from financing activities|-12,875,847.88|-11,227,486.52|
|IV. Effect of foreign exchange ratechanges on cash and cash equivalents|||
|V. Net increase in cash and cashequivalents|||
||72,846,384.98|-19,700,295.50|
|Add: Opening balance of cash andcash equivalents|||
||503,933,918.79|430,758,675.98|
|VI. Closing balance of cash and cashequivalents|||
||576,780,303.77|411,058,380.48|

7. Consolidated Statement of Changes inOwners’ Equity
Jan.-Jun. 2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2016|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|Item|||Perpet|Other|||Other|||||Minorit|Total|
|||||||Less:||||General||||
||Share|Prefer|ual||Capital|treasury|compre|Specific|Surplus|risk|Retaine|y|owners’|
||capital||capita||reserve||hensive|reserve|reserve||d profit|interests|equity|
|||red||||stock||||reserve||||
||||l||||income|||||||
|||shares||||||||||||
||||securi|||||||||||
||||ties|||||||||||
|I. Balance at the|561,37||||||||||||2,020,5|
||||||164,328||353,519|10,069,|305,758||607,859|17,590,||
|end of the|4,326.||||||||||||00,764.|
||||||,665.43||,675.00|746.98|,285.91||,611.69|453.47||
|previous year|00||||||||||||48|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|combination under||||||||||||||
|the same control||||||||||||||
|Other||||||||||||||
||561,37||||||||||||2,020,5|
|II. Balance at the|||||164,328||353,519|10,069,|305,758||607,859|17,590,||
||4,326.||||||||||||00,764.|
|period-begin|||||,665.43||,675.00|746.98|,285.91||,611.69|453.47||
||00||||||||||||48|

2016 Semi-annual Report of Changchai Company, Limited
||||||
|-|-|-|-|-|
|III. Increase/|||||
|decrease in the|-49,761,|22,106,|385,419|-27,269,|
|period (“-” means|550.00|532.86|.31|597.83|
|decrease)|||||
|(I) Total amount|||||
|of the|-49,761,|35,018,|385,419|-14,357,|
|comprehensive|550.00|142.36|.31|988.33|
|income|||||
|(II) Capital paid|||||
|in and reduced by|||||
|owners|||||
|1. Common shares|||||
|invested by the|||||
|shareholders|||||
|2. Capital invested|||||
|by the owners of|||||
|other equity|||||
|instruments|||||
|3. Amounts of|||||
|share-based|||||
|payments|||||
|recognized in|||||
|owners’ equity|||||
|4. Others|||||
|(III) Profit||-12,911,||-12,911,|
|distribution||609.50||609.50|
|1. Appropriations|||||
|to surplus reserves|||||
|2. Appropriations|||||
|to general risk|||||
|provisions|||||
|3. Appropriations|||||
|||-12,911,||-12,911,|
|to owners (or|||||
|||609.50||609.50|
|shareholders)|||||
|4. Other|||||
|(IV) Internal|||||
|carry-forward of|||||
|owners’ equity|||||
|1. New increase of|||||
|capital (or share|||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|capital) from|||||||||
|capital public|||||||||
|reserves|||||||||
|2. New increase of|||||||||
|capital (or share|||||||||
|capital) from|||||||||
|surplus reserves|||||||||
|3. Surplus reserves|||||||||
|for making up|||||||||
|losses|||||||||
|4. Other|||||||||
|(V) Specific|||||||||
|reserve|||||||||
|1. Withdrawn for|||||||||
|the period|||||||||
|2. Used in the|||||||||
|period|||||||||
|(VI) Other|||||||||
||561,37|||||||1,993,231,166.65|
|IV. Closing||164,328|303,758|10,069,|305,758|629,966|17,975,||
||4,326.||||||||
|balance||,665.43|,125.00|746.98|,285.91|,144.55|872.78||
||00||||||||

 Jan.-Jun. 2015
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2015|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|||||||||||||Minorit||
|Item|||Perpet||||Other||||||Total|
|||||||Less:||||General||y||
||Share|Prefer|ual||Capital|treasury|compre|Specific|Surplus|risk|Retaine|interest|owners’|
||capital||capita||reserve||hensive|reserve|reserve||d profit||equity|
|||red||Other||stock||||reserve||s||
||||l||||income|||||||
|||shares||||||||||||
||||securi|||||||||||
||||ties|||||||||||
|I. Balance at the|561,37||||||||||||1,953,1|
||||||164,328||349,159|8,332,0|298,151||555,590|16,208,||
|end of the|4,326.||||||||||||45,745.|
||||||,665.43||,175.00|77.21|,696.96||,894.67|910.07||
|previous year|00||||||||||||34|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|errors in previous|||||||||
|periods|||||||||
|Business|||||||||
|combination under|||||||||
|the same control|||||||||
|Other|||||||||
||561,37|||||||1,953,1|
|II. Balance at the||164,328|349,159|8,332,0|298,151|555,590|16,208,||
||4,326.|||||||45,745.|
|period-begin||,665.43|,175.00|77.21|,696.96|,894.67|910.07||
||00|||||||34|
|III. Increase/|||||||||
|decrease in the|||157,931|||26,335,|654,043|184,921|
|period (“-” means|||,275.00|||912.66|.38|,231.04|
|decrease)|||||||||
|(I) Total amount|||||||||
|of the|||157,931|||37,563,|654,043|196,148|
|comprehensive|||,275.00|||399.18|.38|,717.56|
|income|||||||||
|(II) Capital paid|||||||||
|in and reduced by|||||||||
|owners|||||||||
|1. Common shares|||||||||
|invested by the|||||||||
|shareholders|||||||||
|2. Capital invested|||||||||
|by the owners of|||||||||
|other equity|||||||||
|instruments|||||||||
|3. Amounts of|||||||||
|share-based|||||||||
|payments|||||||||
|recognized in|||||||||
|owners’ equity|||||||||
|4. Others|||||||||
|(III) Profit||||||-11,227,||-11,227,|
|distribution||||||486.52||486.52|
|1. Appropriations|||||||||
|to surplus reserves|||||||||
|2. Appropriations|||||||||
|to general risk|||||||||
|provisions|||||||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|3. Appropriations|||||||||
|||||||-11,227,||-11,227,|
|to owners (or|||||||||
|||||||486.52||486.52|
|shareholders)|||||||||
|4. Other|||||||||
|(IV) Internal|||||||||
|carry-forward of|||||||||
|owners’ equity|||||||||
|1. New increase of|||||||||
|capital (or share|||||||||
|capital) from|||||||||
|capital public|||||||||
|reserves|||||||||
|2. New increase of|||||||||
|capital (or share|||||||||
|capital) from|||||||||
|surplus reserves|||||||||
|3. Surplus reserves|||||||||
|for making up|||||||||
|losses|||||||||
|4. Other|||||||||
|(V) Specific|||||||||
|reserve|||||||||
|1. Withdrawn for|||||||||
|the period|||||||||
|2. Used in the|||||||||
|period|||||||||
|(VI) Other|||||||||
||561,37|||||||2,138,0|
|IV. Closing||164,328|507,090|8,332,0|298,151|581,926|16,862,||
||4,326.|||||||66,976.|
|balance||,665.43|,450.00|77.21|,696.96|,807.33|953.45||
||00|||||||38|

 8. Statement of changes inowners’ equity of the Company
Jan.-Jun. 2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2016|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share||Perpetu||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre||||treasury|||||owners’|
||capital||al|Other|reserve||nsive|reserve|reserve|d profit||
|||d shares||||stock|||||equity|
||||capital||||income|||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|||securiti|||||||
|||es|||||||
|I. Balance at the|||||||||
||561,374,||183,071,1|353,519,6|10,069,74|305,758,2|561,189|1,974,982|
|end of the previous|||||||||
||326.00||47.70|75.00|6.98|85.91|,656.87|,838.46|
|year|||||||||
|Add: change of|||||||||
|accounting policy|||||||||
|Correction of|||||||||
|errors in previous|||||||||
|periods|||||||||
|Other|||||||||
|II. Balance at the|561,374,||183,071,1|353,519,6|10,069,74|305,758,2|561,189|1,974,982|
|period-begin|326.00||47.70|75.00|6.98|85.91|,656.87|,838.46|
|III. Increase/|||||||||
|decrease in the||||-49,761,5|||19,697,|-30,063,6|
|period (“-” means||||50.00|||897.66|52.34|
|decrease)|||||||||
|(I) Total amount|||||||||
|of the||||-49,761,5|||32,609,|-17,152,0|
|comprehensive||||50.00|||507.16|42.84|
|income|||||||||
|(II) Capital paid|||||||||
|in and reduced by|||||||||
|owners|||||||||
|1. Common shares|||||||||
|invested by the|||||||||
|shareholders|||||||||
|2. Capital invested|||||||||
|by the owners of|||||||||
|other equity|||||||||
|instruments|||||||||
|3. Amounts of|||||||||
|share-based|||||||||
|payments|||||||||
|recognized in|||||||||
|owners’ equity|||||||||
|4. Others|||||||||
|(III) Profit|||||||-12,911,|-12,911,6|
|distribution|||||||609.50|09.50|
|1. Appropriations|||||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||||||
|-|-|-|-|-|-|-|-|
|to surplus reserves||||||||
|2. Appropriations||||||||
|||||||-12,911,|-12,911,6|
|to owners (or||||||||
|||||||609.50|09.50|
|shareholders)||||||||
|3. Other||||||||
|(IV) Internal||||||||
|carry-forward of||||||||
|owners’ equity||||||||
|1. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|capital public||||||||
|reserves||||||||
|2. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|surplus reserves||||||||
|3. Surplus reserves||||||||
|for making up||||||||
|losses||||||||
|4. Other||||||||
|(V) Specific||||||||
|reserve||||||||
|1. Withdrawn for||||||||
|the period||||||||
|2. Used in the||||||||
|period||||||||
|(VI) Other||||||||
|IV. Closing|561,374,|183,071,1|303,758,1|10,069,74|305,758,2|580,887|1,944,919,186.12|
|balance|326.00|47.70|25.00|6.98|85.91|,554.53||

 Jan.-Jun. 2015
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2015|||||||||||
|||Other equity instruments||||||||||
||||Perpetu||||Other|||||
|||||||Less:|||||Total|
|Item|Share||al||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre||||treasury|||||owners’|
||capital||capital|Other|reserve||nsive|reserve|reserve|d profit||
|||d shares||||stock|||||equity|
||||securiti||||income|||||
||||es|||||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||||||
|-|-|-|-|-|-|-|-|
|I. Balance at the||||||||
||561,374,|183,071,1|349,159,1|8,332,077|298,151,6|503,957|1,904,046|
|end of the previous||||||||
||326.00|47.70|75.00|.21|96.96|,842.86|,265.73|
|year||||||||
|Add: change of||||||||
|accounting policy||||||||
|Correction of||||||||
|errors in previous||||||||
|periods||||||||
|Other||||||||
|II. Balance at the|561,374,|183,071,1|349,159,1|8,332,077|298,151,6|503,957|1,904,046|
|period-begin|326.00|47.70|75.00|.21|96.96|,842.86|,265.73|
|III. Increase/||||||||
|decrease in the|||157,931,2|||26,340,|184,271,3|
|period (“-” means|||75.00|||066.25|41.25|
|decrease)||||||||
|(I) Total amount||||||||
|of the|||157,931,2|||37,567,|195,498,8|
|comprehensive|||75.00|||552.77|27.77|
|income||||||||
|(II) Capital paid||||||||
|in and reduced by||||||||
|owners||||||||
|1. Common shares||||||||
|invested by the||||||||
|shareholders||||||||
|2. Capital invested||||||||
|by the owners of||||||||
|other equity||||||||
|instruments||||||||
|3. Amounts of||||||||
|share-based||||||||
|payments||||||||
|recognized in||||||||
|owners’ equity||||||||
|4. Others||||||||
|(III) Profit||||||-11,227,|-11,227,4|
|distribution||||||486.52|86.52|
|1. Appropriations||||||||
|to surplus reserves||||||||
|2. Appropriations||||||-11,227,|-11,227,4|

2016 Semi-annual Report of Changchai Company, Limited
|||||||||
|-|-|-|-|-|-|-|-|
|to owners (or||||||486.52|86.52|
|shareholders)||||||||
|3. Other||||||||
|(IV) Internal||||||||
|carry-forward of||||||||
|owners’ equity||||||||
|1. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|capital public||||||||
|reserves||||||||
|2. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|surplus reserves||||||||
|3. Surplus reserves||||||||
|for making up||||||||
|losses||||||||
|4. Other||||||||
|(V) Specific||||||||
|reserve||||||||
|1. Withdrawn for||||||||
|the period||||||||
|2. Used in the||||||||
|period||||||||
|(VI) Other||||||||
|IV. Closing|561,374,|183,071,1|507,090,4|8,332,077|298,151,6|530,297|2,088,317|
|balance|326.00|47.70|50.00|.21|96.96|,909.11|,606.98|

 III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 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 document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30 Mar. 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 Changchai A” for short of
stock, as well as “0570” as stock code (present stock code is “000570”).
2016 Semi-annual Report of Changchai Company, Limited In 1996, with the recommendation of the Office of thePeople’s Government of Jiangsu Province SZBH[1996] No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ[1996] No. 24, and approval of the State Council Securities Commission ZWF[1996] No. 27, the Company issued 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 approve share merger reform plan, and performed the share merger reform on 19 June 2006.
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 distribute 5 bonus shares and cash of RMB 0.8 for every 10 shares, with registered capital 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 person with No. 320400000004012.
TheCompany’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine, diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures, assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai 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 Branch and Overseas Business Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 16 August 2016.
The consolidated scope of the Company of the Reporting Period included the parent company and 4 subsidiaries, which remained the same as the last period. As for the details of the consolidated scope of the financial statements as well as the changes, please refer to the notes to the changes of the consolidated scope and the equities among other entities of the annotation of the financial statements.
IV. Basis for preparation of the financial report
1. Basis for preparation
2016 Semi-annual Report of Changchai Company, Limited With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Group prepared financial statements in accordance with<The Accounting Standards for BusinessEnterprises—BasicStandard> issued by the Ministry of Finance with Decree No. 33 and revised with Decree No. 76, the 41 specific accounting standards, the Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting 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) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in 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. The financial statement compiled base on the continuous operation.
V. Important accounting policies and estimations
Note to accounting policies and estimations:
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, which mainly reflected in the withdrawal method of the bad debt provision of the accounts receivable (Notes III, 11), the measurement of the inventory (Notes III, 12) and the depreciation of the fixed assets (Notes III, 16) etc. As for the details of the significant accounting judgment and the estimations made by the management layer, please refer to Notes III, 30 “Important accounting judgment and estimations”.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
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 financial positions, business results and cash flows and other relevant information.
2. Fiscal period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from Jan. 1 to Dec. 31 and as the metaphase included monthly, quarterly and semi-yearly periods.
2016 Semi-annual Report of Changchai Company, Limited 3. Operating cycle
A normal 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 liquidity of its assets and liabilities.
4. Currency used in bookkeeping
Renminbi is functional currency of the Company.
5. Accounting methods for business combinations under the same control and business combinations not under the same control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes 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 transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, 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 commission etc, premium income of deducting the equity securities, and as for the premium income was insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and the changes of other net assets since the date of the earlier one between the date when acquiring the original equity 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 current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination.
2016 Semi-annual Report of Changchai Company, Limited 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 the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for 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 defined benefit plans or the changes of the net assets of the investees.
6. Methods for preparing consolidated financial statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual control right into the consolidated financial statement.
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 and the unrealized profits should be written off when compiling 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 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, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the Company, which shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Company when preparing the consolidated financial statements.
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
2016 Semi-annual Report of Changchai Company, Limited period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the compared statement.
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 current period, should not be adjusted the period-begin amount of the consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of 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 the subsidiary, is recorded in investment gains for the period when theGroup’s control on the subsidiary ceases. 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.2 Accounting Standard for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of 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 losing control on its subsidiary.
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 executed accounting treatment according to the general disposing method of the disposal of the subsidiaries. 7. Classification of joint arrangements and accounting treatment of joint operations
The Group classifies joint arrangements into joint operations and jointventures。
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 according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets according to theGroup’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities according to theGroup’s stake in the joint operation;
(3) Recognizes the income from sale of theGroup’s share in the output of the joint operation
(4) Recognizes the income from sale of the jointoperation’s outputs according to theGroup’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
2016 Semi-annual Report of Changchai Company, Limited to theGroup’s stake in it.
8. Recognition standard for cash and cash equivalents
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, which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the recording currency according to the middle price of the market exchange rate disclosed by thePeople’s Bank of China on the date of the transaction. Among the said transactions that occurred, those involving foreign exchanges shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall 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 into the establishment expense; others shall be recorded into the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be converted 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 items measured by fair value shall be converted according to the middle price of the market exchange disclosed by 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) Translation of foreign currency
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 approximate exchange rate of the transaction date. The difference caused from the above transaction of the foreign currency statement should be listed in the other comprehensive income among theowners’ equities.
10. Financial instruments
(1) Category of financial instruments
The Company classifies the financial assets into four kinds such as trading financial assets, available-for-sale
2016 Semi-annual Report of Changchai Company, Limited financial assets, accounts receivable and held-to-maturity investment according to the investment purpose and the economy nature.
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 amortized cost according to the economy nature.
(2) Recognition basis and measurement methods of financial instruments
The trading financial assets should be measured by fair value with the changes of fair value included in the current 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 measured by amortized cost.
(3) Recognition basis and measurement methods of financial instruments transformation
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:
The enterprise transfers the right to another party for receiving the cash flow of the financial asset;
The enterprise transfers the financial asset to another party, but maintains the right to receive the cash flow of the financial asset and undertakes the obligation to pay the cash flow it receives to the final recipient.
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 consideration received be recognized as financial liabilities.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial asset and liability accordingly according to the extent of its continuous involvement in the transferred financial asset. (4) De-recognition conditions of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly.
(5) Recognition methods of the fair value of main financial assets and financial liabilities
As for the financial assets held by the Company or the financial liabilities plans to undertake, if there 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 indicate the market quotation is not the fair value.
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 the same essential nature etc.
(6) Impairment test method and withdrawal methods of impairment provision of financial assets (excluding
2016 Semi-annual Report of Changchai Company, Limited accounts receivable)
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 impairment losses.
The expression “objective evidence proving that the financial asset has been impaired” refers to the actually incurred events which, after the financial asset is initially recognized, have an impact on the predicted future cash flow of the said financial asset that can be reliably measured by the enterprise.
The objective evidences that can prove the impairment of a financial asset shall include:
A serious financial difficulty occurs to the issuer or debtor;
The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.;
The creditor makes any concession to the debtor who is in financial difficulties due to economic or legal factors, etc.;
The debtor will probably become bankrupt or carry out other financial reorganizations;
The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of the issuer;
It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial assets 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 industrial sector concerned is in slump, etc.;
Any seriously disadvantageous change has occurred to technical, market, economic or legal environment, etc. wherein the debtor operates its business, which makes the investor of an equity instrument unable to take back its investment;
Where the fair value of the equity instrument investment drops significantly or not contemporarily;
Other objective evidences showing the impairment of the financial asset.
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 predicted future cash flow of the impairment losses.
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 losses as originally recognized shall be reversed and be recorded into the profits and losses of the current period. Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been terminated,
2016 Semi-annual Report of Changchai Company, Limited the accumulative losses arising from the decrease of the fair value of theowner’s equity which is directly included shall be transferred out and recorded into the profits and losses of the current period.. The accumulative losses are the initial cost after deducting the principal, the amortization amount, fair value of current period and balance after originally recorded into impairment loss of profits or losses. After the recognition of impairment losses, if there 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, and transfer the impairment losses of available for sale liability instruments and record into current profits or losses.
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made individually
|||
|-|-|
||significant single amounts refers to the accounts receivable of the|
|Recognition criteria of accounts receivable with individual and||
||single amount more than RMB1 million (RMB1 million include)|
|significant amount||
||(including accounts receivable and other accounts receivable)|
||The Company makes an independent impairment test on the|
||accounts receivable with significant single amount, and provision|
||for bad debts shall withdrawn on the basis of the balance|
|Withdrawal method of the bad debt provision of the accounts|between the current values of the predicted future cash flow|
|receivable with significant single amounts|lower than book value. Upon independent impairment test, the|
||accounts receivable with significant single amounts has not been|
||impaired, it shall be withdrawn bad debt provision based on|
||ending balance by adopting aging analysis method.|

(2) Account receivable withdrawal bad debt provision by the credit risk portfolio
|||
|-|-|
|Name of the group|Method|
|The age of the accounts receivable as the credit risk portfolio|Aging analysis|

In the group, adopting aging analysis withdraws bad debt provision:
√ Applicable□ Not applicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Age|||
||receivable|receivable|
|Within 1 year (including 1 year)|2.00%|2.00%|
|1-2 years|5.00%|5.00%|
|2-3 years|15.00%|15.00%|
|3-4 years|30.00%|30.00%|
|4-5 years|60.00%|60.00%|
|Over 5 years|100.00%|100.00%|

2016 Semi-annual Report of Changchai Company, Limited In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||Recognition criteria of accounts receivable with individual but|
||insignificant amount: insignificant single amounts refers to the|
|Reason of individually withdrawing bad debt provision|accounts receivable of the single amount lower than RMB1|
||million (RMB1 million include) (including accounts receivable|
||and other accounts receivable).|
||As for an account receivable with an insignificant single amount|
||and which can not show its risk feature when withdrawing a|
||bad-bet provision for it on the group basis, the bad-debt|
||provision for the account receivable shall be withdrawn based on|
||the difference of the expected present value of the future cash|
|Withdrawal method for bad debt provision||
||flows of the account receivable that less than its carrying amount.|
||The Company shall withdraw the bad-debt provision for such an|
||account receivable by combining the aging method and|
||individual judgment based on the debtor entity’s actual financial|
||position, cash flows and other relevant information.|

12. Inventory
(1) Category of Inventory
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) Pricing method
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 according to the actual cost of the current period and the sales cost according to the weighted average method. (3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling price of inventory
At the balance sheet date, inventories are measured at the lower of the cost and net realizable 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
2016 Semi-annual Report of Changchai Company, Limited 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; as for the materials inventory needs to be processed in the normal production and operating process, should recognize its net realizable value according to the amount of the estimated selling price of the finished products minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as 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 relating to a product line that are produced and marketed in the same geographical area, have the same 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, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumption goods and packages
It is one time amortization method of low-value consumption goods and packages when consuming.
13. Divided as assets held for sale
The Company recognizes the components (or the non-current assets) which meet with the following conditions as assets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of components under the current conditions;
(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 approved from the Annual General Meeting or the relevant authority institutions;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
14. Long-term equity investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus. Significant influence refers to the power of the Group which could anticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways in accordance with different methods of acquisition:
① As for those forms under the same control of the enterprise combine, if the combine party takes the 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
2016 Semi-annual Report of Changchai Company, Limited 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 merger should be included in the initial measurement amount of theshareholders’ equities or the liabilities.
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 instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the 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 balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree into the consolidated income statement directly. The agent expense and other relevant management expenses such as the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in the 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 of theshareholders’ equities or the liabilities.
③ Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value. As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature, the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
① An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested 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 shall be its subsidiary company.
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
2016 Semi-annual Report of Changchai Company, Limited 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 to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as include in theowners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity.
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 not be neutralized.
The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of all, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-term equity investment is insufficient for written down, should be continued to recognized the investment losses limited 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 recognizing its attributable share of profits.
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 the capital reserves are not sufficient to offset, the retained profits shall be adjusted; the Company disposed part of the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be recorded intoowners’ equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded intoowners’
2016 Semi-annual Report of Changchai Company, Limited equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees according to the corresponding proportion. Theowners’ equity recognized owning to the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into the current gains and losses according to the proportion. For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurement or the recognition and measurement standards of financial instrument before acquiring the control of 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 net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. For those the Company lost the control of the investees by disposing part of the equity investment as well as the remained equity after disposal could execute joint control or significant influences on the investees, should change 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 Group acquired the control of the investees, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control 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 net assets of the 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 comprehensive income and the otherowners’ equity should be carried forward according to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to the recognition and measurement standards of financial instrument, the other comprehensive income and the otherowners’ equity should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the 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 current gains 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 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 net gains and losses, 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 equity method.
15. Investment real estates
2016 Semi-annual Report of Changchai Company, Limited Measurement mode of investment real estates:
Measurement of cost method
Depreciation or amortization method:
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 investment real estates invested by investors shall be recorded at the value stipulated in the investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method for provision for impairment of fixed assets.
16. Fixed assets
(1) Conditions for recognition
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 probably flow in the Company and its cost could be reliable measured.
(2) Depreciation methods
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category of fixed assets|Method|Useful life||Annual deprecation|
||||value||
|Houses and buildings|Average method of useful life|20-40||2.50-5|
|Machine equipment|Average method of useful life|6-15||6.67-16.67|
|Transportation|Average method of useful life|5-10||10-20|
|equipment|||||
|Electronic equipment|Average method of useful life||||
|Other equipment|Average method of useful life|5-10||10-20|

(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance lease:
① The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions on the lease starting date) when the lease term expires, the ownership of leasing the fixed assets could be transferred to the Company;
② The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase price
which is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosing
right, so the Company could execute the choosing right reasonably on the lease starting date;
2016 Semi-annual Report of Changchai Company, Limited③ Even if the ownership of the fixed assets not be transferred, the lease period is of75% or above of the useful life of the lease fixed assets;
④ The current value of the minimum lease payment on the lease starting date of the Company is equal to90% 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 on the lease starting date;
⑤ The nature of the lease assets is special that only the Company could use it if not execute large transformation. The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and 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 as the unrecognized financing expense. For the initial direct expenses occur in the lease negotiations and the signing process of the lease contracts that attribute to the handling expenses, counsel fees, travel expenses and stamp taxes of the lease items, should be included in the charter-in assets value. The unrecognized financing expenses should be amortized by adopting the actual interest rate during the period of the lease term.
The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its useful life
17. Construction in process
(1) Valuation of the progress in construction
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; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation, trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses, which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forward fixed assets on schedule. The one thathasn’t audit the final accounting shall recognize the cost and make depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its historical cost but not adjust the depreciation that has been made after auditing the final accounting.
18. Borrowing costs
(1) Recognition principle of capitalization of borrowing costs
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 costs occurred belong to specifically borrowed loan or general borrowing used for the acquisition and construction 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
2016 Semi-annual Report of Changchai Company, Limited 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 activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates 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 occurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible 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 loans as a deposit in the bank or as a temporary investment.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the 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. Intangible assets
(1) Pricing method, using life and impairment test of intangible assets
1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost. For the intangible assets invested by the investors should be recognized the actual cost according to the value of the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature, should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature, should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is available for use within the service period, shall be recorded into the current profits and losses. The Company
2016 Semi-annual Report of Changchai Company, Limited shall, at least at the end of each year, check the service life and the amortization method of intangible assets with limited service life. When the service life and the amortization method of intangible assets are different from those before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the 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 according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
(2) Accounting polices of internal R& D expenses
The internal research and development projects of an enterprise shall be classified into research phase and development phase: the term “research” refers to the creative and planned investigation to acquire and understand new scientific or technological knowledge; the term “development” refers to the application of research achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to produce any new material, device or product, or substantially improved material, device and product.
The Company collects the expenses of the corresponding phases according to the above standard of classifying the 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 other resources; the development expenditures of the intangible assets can be reliably measured.
20. Impairment of long-term assets
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. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair 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 merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single
2016 Semi-annual Report of Changchai Company, Limited Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the minimum asset combination producing cash flow independently.
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 amounts of shared business reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of 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.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future. 21. Amortization method of long-term deferred expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and amortized averagely within benefit period. In case of no benefit in the future accounting period, the amortized value of such project that fails to be amortized shall be transferred into the profits and losses of the current period.
22. Payroll
(1) Accounting treatment of short-term compensation
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 Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting treatment of the welfare after demission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the Company and the employees, or the regulations or methods formulated by the Company for providing the welfare after demission for the employees. Of which, defined contribution plans refers to the welfare plans after demission 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 contribution plans.
Defined contribution plans
During the accounting period that the Company providing the service for the employees, the Company should recognize the liabilities according to the deposited amount calculated by defined contribution plans, and should be included in the current gains and losses or the relevant assets cost.
(3) Accounting treatment of the demission welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the earlier date between the following two conditions and include which in the current gains and losses when
2016 Semi-annual Report of Changchai Company, Limited 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 costs or expenses related to the reorganization involves with the demission welfare payments.
(4) Accounting treatment of the welfare of other long-term staffs
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 costs or expenses related to the reorganization involves with the demission welfare payments.
23. Estimated liabilities
(1) Criteria of estimated liabilities
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following conditions are satisfied simultaneously:
① That obligation is a current obligation of the Company;
② It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation; and
③ The amount of the obligation can be measured in a reliable way.
(2) Measurement of estimated liabilities
The Company shall measure the estimated debts in accordance with the best estimate of the necessary expenses for the performance of the current obligation.
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, subject to change, make adjustment to carrying value to reflect the current best estimate.
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 nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant revenue and costs of selling goods can be measured in a reliable way. The amount of the revenue 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 receivable amount as stipulated in the contract or agreement is unfair.
(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 the transaction can be measured in a reliable way, the revenue 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
2016 Semi-annual Report of Changchai Company, Limited 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 the accepting of the labor services or the agreement price except for those unfair prices.
(3) Recognition of the revenue from transferring use rights of assets: When the relevant economic benefits are likely to flow into the enterprises and the amount of revenues can be measured in a reliable way, the revenue from 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 actual interestrate；the amount of royalty revenue should be measured and confirmed in accordance with the period and method of charging as stipulated in the relevant contract oragreement；as for the rental revenue: the amount of the rental revenue from the operation lease should be recognized according to the straight-line method during each period of the lease term or accrued into the current gains and losses if rental actual occurred.
25. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
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 subsidies pertinent to income according to the relevant government documents.
For those the government documents not definite stipulate the assistance object, the judgment basis of the Company classifies the government subsidies pertinent to assets and government subsidies pertinent to income is: whether are used for purchasing or constructing or for forming the long-term assets by other methods.
The government subsidies should be recognized only when meet with the attached conditions of the government subsidies as well as could be acquired.
If the government subsidies are the monetary assets, should be measured according to the received or receivable amount; and for the government subsidies are the non-monetary assets, should be measured by fair value.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the relevant assets, and included in the current profits and losses.
(2) Judgment basis and accounting treatment of government subsidies related to profits
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 relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses.
26. Deferred income tax assets and liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax assets shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
2016 Semi-annual Report of Changchai Company, Limited realized or the liability is settled.
The recognition of the deferred income tax assets is limited by the income tax payable that the Company probably gains for deducting the deductible temporary differences. At the balance sheet date, where there is strong evidence showing that sufficient taxable profit will be available against which the deductible temporary difference can be utilized, the deferred tax asset unrecognized in prior period shall be recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. Ifit’s probable that sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later whenit’s probable that sufficient taxable profit will be available
(2) Basis of recognizing the deferred income tax liabilities
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax liabilities shall be measured in accord with the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
27. Lease
(1) Accounting treatment of operating lease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or the current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be recognized as the current profit or loss; Contingent rents shall be charged as expenses in the periods in which they are incurred.
Lessors in an operating lease shall be recognized as the current profit or loss on a straight-line basis over the lease term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the initial direct expenses occur should be directly included in the current gains and losses except for those with larger amount and be capitalized as well as be included in the gains and losses by stages. Contingent rents shall be charged as expenses in the periods in which they are incurred.
(2) Accounting treatments of financial lease
When the Company as the lessee, On the lease beginning date, the Company shall record the lower one of the fair 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 by adopting the actual interest rate.
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 between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. During each lease period, should recognize the current financing revenues adopting the actual interest rate.
28. Other significant accounting policies and estimates
2016 Semi-annual Report of Changchai Company, Limited (1) Operation termination
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 and compiling the financial statement:
① The compose part represents an individual main business or a main operation area;
② The compose part is a part intends to dispose and plan an individual main business or a main operation area;③ The compose part is a subsidiary which be acquired only for resold.
(2) Hedging accounting
The term “hedging” refers to one or more hedging instruments which are designated by an enterprise for avoiding the risks of foreign exchange, interest rate, commodity price, stock price, credit and etc., and which is expected to make the changes in fair value or cash flow of hedging instrument(s) to offset all or part of the changes in the fair value or cash flow of the hedged item.
The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise for hedging and by which it is expected that changes in its fair value or cash flow can offset the 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-derivative financial liability may be used as a hedging instrument.
The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair value or cash flow and are designated as the hedged objectives.
The hedging should be executed by the hedging accounting methods when satisfying the following conditions at the same time:
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 the hedging relationship, risk management objectives and the strategies of hedging.
② The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed for the hedging relationship by enterprise at the very beginning.
③ For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to occur and shall make the enterprise faced to the risk of changes in cash flow, which will ultimately affect the profits and losses.
④ The effectiveness of hedging can be reliably measured.
⑤ The hedging is highly effective in accounting period in which the hedging relationship is specified.
29. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable√ Inapplicable
(2) Change of main accounting estimates
□ Applicable√ Inapplicable
2016 Semi-annual Report of Changchai Company, Limited 30. Other
Critical accounting judgments and estimates
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 assumption would also affect the report amount of income, costs, assets and liabilities, as well as the disclosure of contingent liabilities on balance sheet date. However, the uncertainty of these estimates was likely to cause significant adjustment on the book value of the affected assets and liabilities.
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 and also the future period, the influence should be recognized at the period of change occurred and future period. On the balance sheet date, the Group needed to make judgments, estimates and assumption on the accounts in the following important items:
(1) Provision for bad debts
In accordance with the accounting policies of accounts receivable, the Group measured the losses for bad debts by 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 dependent on 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 estimates being changed.
(2) Provision for falling price of inventories
In accordance with the accounting policies of inventories, for the inventories that the costs were more than the net 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-maturity investment
The Company classifies the non-derivative financial assets which meet with conditions with fixed or confirmable repayment amount and fixed maturity date as well as the Company owns definite intention and ability to hold until 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 due date), if the Company fails to hold the investment until the due date, should re-classify the investment to the available-for-sale financial assets and would no more be classified as the held-to-maturity investment in the current fiscal year as well as the afterward two complete fiscal years. If there exits such situation, that would probably cause significant influences on the value of the relevant financial assets presented on the
2016 Semi-annual Report of Changchai Company, Limited financial statement and may influence the risks management strategies of the financial instruments of the Company.
(4) Held-to-maturity investment impairment
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 the impairment on the estimated future cash flow.
(5) The impairment of financial assets available for sale
The Group judged whether the financial assets available for sale were impaired relying heavily on the judgment and assumption of the management team, so as to decide whether recognized the impairment losses in the 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) Provision for impairment of non-financial non-current assets
The Group made a judgment on the non-current assets other than financial assets whether they had any indication of impairment on the balance sheet date. For the intangible assets without finite 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-current non-financial assets, which should be subjected to impairment test when there was indication of impairment indicated that the book valuecan’t be recoverable.
When the book value of the assets or assets portfolio was more than the recoverable amount, which was the higher one between the net amount of fair value after deducting the disposal expenses and the discounted amount of the estimated future cash flow, it means impairment incurred.
The net amount of fair value after deducting the disposal expenses should be fixed the price in the sale agreement for similar assets in the fair transaction minus the increased costs directly attributable to the assets disposal. 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 estimated the recoverable amount, the Group would adopt all the available documents, including the prediction for relevant output, selling price and relevant operating costs arising from reasonable and supportive assumptions. The Group made the impairment test on goodwill at least one time per year, which required to predict the discounted amount of the future cash flow of the assets or assets portfolio with the distributed good will, for which, the Group needed to predict the future cash flow of the assets or assets portfolio, and adopt the property discounted rate to decide the discounted amount of future cash flow.
(7) Depreciation and amortization
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. The Group checked the service life periodically so as to decide the amount of depreciation and amortization at each reporting period. The service life was fixed by the Group in accordance with the previous experience of the similar assets and the expected technical update. If there was any significant change on the previous estimates, the depreciation and amortization expenses should be adjusted.
(8) Income tax
2016 Semi-annual Report of Changchai Company, Limited 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 taxation maters and their initial estimates, the differences would affect the current income tax and deferred income tax at the period of ultimate recognition.
VI. Taxation
1. Main taxes and tax rate
||||
|-|-|-|
|Type of tax|Taxation basis|Tax rates|
|VAT|Payable to sales revenue|13%, 17%|
|||Tax paid in accordance with the tax|
|Urban maintenance and construction tax|Taxable turnover amount||
|||regulations of tax units location|
|Corporate income tax|Taxable income|25% or 15%|
|Education surcharge|Taxable turnover amount|5%|

2. Tax preference
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 National Administration of Taxation about the Preferential Tax Policies for the Western Development.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|317,822.87|252,373.65|
|Bank deposits|594,616,540.49|526,463,864.56|
|Other monetary funds|78,861,683.78|74,596,477.41|
|Total|673,796,047.14|601,312,715.62|

 At the period-end, the restricted monetary fund was RMB78,861,683.78 in total, of which: the bank acceptance deposit was RMB78,861,683.78.
2016 Semi-annual Report of Changchai Company, Limited 2. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|278,520,898.26|498,502,274.42|
|Total|278,520,898.26|498,502,274.42|

 (2) Notes receivable pledged at the period-end
Naught
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
Unit: RMB
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Item|||
||period-end|the period-end|
|Bank acceptance bill|463,361,452.46||
|Total|463,361,452.46||

(4) There was no any notes be transferred to accounts receivable owning to the drawer failed to performance of the Company at the period-end
3. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Item||||Withdra|Book||||||
|||||||||||Book value|
|||Proportio||wal|||Proportio||Withdrawal||
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|with significant|||||||||||
||32,467,2||28,615,5||3,851,654|32,966,||28,743,56||4,223,004.7|
|||3.98%||88.14%|||6.03%||87.19%||
|single amount for|||||||||||
||31.93||77.21||.72|572.81||8.09||2|
|which bad debt|||||||||||
|provision separately|||||||||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|accrued|||||||||||
|Accounts receivable||||,27.85%|||||40.53%||
|withdrawn bad debt|||||||||||
||781,385,||217,630||563,754,5|511,838||207,464,0||304,373,91|
|provision according||95.81%|||||93.66%||||
||263.07||695.93||67.14|,003.05||87.27||5.78|
|to credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable||||100.00%|||||100.00%||
|with insignificant|||||||||||
|single amount for|1,686,71||1,686,71|||1,686,7||1,686,716|||
|||0.21%|||||0.31%||||
|which bad debt|6.39||6.39|||16.39||.39|||
|provision separately|||||||||||
|accrued|||||||||||
|Total|815,539,||247,932|,100.00%|567,606,221.86|546,491||237,894,3|43.53%|308,596,920.50|
|||100.00%|||||100.00%||||
||211.39||989.53|||,292.25||71.75|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at period end:
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable|Closing balance||||
|(classified by units)|Book balance|Bad debt provision|Withdrawal Proportion|Withdrawal Reason|
|Customer 1|3,863,600.00|1,931,800.00|50.00%|Estimated irrecoverable|
|Customer 2|1,902,326.58|1,902,326.58|100.00%|Difficult to recover|
|Customer 3|6,215,662.64|6,193,248.32|99.64%|Difficult to recover|
|Customer 4|4,115,396.29|2,217,955.89|53.89%|Estimated irrecoverable|
|Customer 5|3,279,100.00|3,279,100.00|100.00%|Estimated irrecoverable|
|Customer 6|2,592,177.01|2,592,177.01|100.00%|Estimated irrecoverable|
|Customer 7|5,359,381.00|5,359,381.00|100.00%|Difficult to recover|
|Customer 8|2,584,805.83|2,584,805.83|100.00%|Difficult to recover|
|Customer 9|1,060,660.44|1,060,660.44|100.00%|Difficult to recover|
|Customer 10|1,494,122.14|1,494,122.14|100.00%|Difficult to recover|
|Total|32,467,231.93|28,615,577.21|--|--|

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal Proportion|
|Subitem within 1 year||||
|Subtotal of within 1 year|446,547,327.18|8,930,946.54|2.00%|

2016 Semi-annual Report of Changchai Company, Limited
|||||
|-|-|-|-|
|1-2 years|125,094,600.52|6,254,730.03|5.00%|
|2-3 years|2,943,628.31|441,544.25|15.00%|
|Over 3 years|206,799,707.06|202,003,475.12||
|3 to 4 years|6,227,544.95|1,868,263.49|30.00%|
|4 to 5 years|1,092,376.21|655,425.73|60.00%|
|Over 5 years|199,479,785.90|199,479,785.90|100.00%|
|Total|781,385,263.07|217,630,695.93||

(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB13,290,094.03; the amount of the reversed or collected part during the Reporting Period was of RMB3,251,476.25.
(3) List of the accounts receivable actual written-off during the Reporting Period
Naught
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
At period end, the total amount of top 5 of the closing balance of the accounts receivable collected according to the arrears party was RMB314,311,923.70,38.54% of the closing balance of the accounts receivable and the relevant closing balance of bad debt provision was RMB33,195,372.32.
4. Prepayment
(1) List by aging analysis:
Unit: RMB
||||||
|-|-|-|-|-|
|Aging|Closing balance||Opening balance||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|9,122,952.07|89.95%|11,891,116.78|92.30%|
|1 to 2 years|35,241.25|0.35%|7,418.00|0.06%|
|2 to 3 years|114,790.79|1.13%|114,790.79|0.89%|
|Over 3 years|868,946.13|8.57%|868,946.13|6.75%|
|Total|10,141,930.24|--|12,882,271.70|--|

(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
At the period-end, the total amount of top 5 of the closing balance of the prepayment collected according to the
prepayment target was RMB7,513,250.28,74.08% of the closing balance of the accounts receivable.
2016 Semi-annual Report of Changchai Company, Limited 5. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||||||
|||||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category||||Withdra|Book||||||
|||||||||||Book value|
|||Proportio||wal|||Proportio||Withdrawal||
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|significant single|2,853,18||2,853,18|||2,853,1||2,853,188|||
|||5.70%||100.00%|||7.66%||100.00%||
|amount for which|8.02||8.02|||88.02||.02|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Other accounts|||||||||||
|receivable withdrawn|||||||||||
||45,263,6||27,027,2||18,236,44|32,431,||26,808,67||5,622,539.8|
|bad debt provision||90.40%||59.71%|||87.10%||82.66%||
||54.42||07.00||7.42|210.57||0.76||1|
|according to credit|||||||||||
|risks characteristics|||||||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|1,952,62||1,952,62|||1,952,6||1,952,628|||
|||3.90%||100.00%|||5.24%||100.00%||
|amount for which|8.15||8.15|||28.15||.15|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Total|50,069,4||31,833,0||18,236,447.42|37,237,||31,614,48||5,622,539.81|
|||100.00%||63.58%|||100.00%||84.90%||
||70.59||23.17|||026.74||6.93|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued:
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Other account receivable|Closing balance||||
|(classified by units)|Book balance|Bad provision|Withdrawal proportion|Withdrawal reason|
|Changchai Group Import|||||
||2,853,188.02|2,853,188.02|100.00%|Difficult to recover|
|& Export Company|||||
|Total|2,853,188.02|2,853,188.02|--|--|

In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable□ Not applicable
2016 Semi-annual Report of Changchai Company, Limited Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other account receivable|Bad provision|Withdrawal proportion|
|Subitem within 1 year||||
|Subtotal of within 1 year|16,348,668.83|326,973.38|2.00%|
|1-2 years|270,511.72|13,525.59|5.00%|
|2-3 years|746,557.24|16,232.27|15.00%|
|Over 3 years|27,897,916.63|26,670,475.77||
|3 to 4 years|670,650.62|37,747.29|30.00%|
|4 to 5 years|1,486,343.82|891,806.29|60.00%|
|Over 5 years|25,740,922.19|25,740,922.19|100.00%|
|Total|45,263,654.42|27,027,207.00||

(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB218,536.24.
(3) List of the other accounts receivable actual written-off during the Reporting Period
Naught
(4) Other accounts receivable classified by the nature of accounts
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin and cash pledge|4,200.00|4,200.00|
|Unit current amount|32,156,632.14|20,433,624.06|
|Employee loan|2,026,731.24|2,011,484.92|
|Other|15,881,907.21|14,787,717.76|
|Total|50,069,470.59|37,237,026.74|

 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the|Closing balance of|
|||||total year end|bad debt provision|
|Name of units|Nature|Closing balance|Aging|||
|||||balance of the||
|||||accounts receivable||
|Xuzhou East China|Current|6,000,000.00|Within 1 year|11.98%|120,000.00|

2016 Semi-annual Report of Changchai Company, Limited
|||||||
|-|-|-|-|-|-|
|Casting General||||||
|Factory||||||
|Changzhou||||||
|Changjiang Casting|Current|5,000,000.00|Within 1 year|9.99%|100,000.00|
|Materials Co., Ltd.||||||
|Changzhou||||||
|Compressor Co.,|Current|2,940,000.00|Over 5 years|5.87%|2,940,000.00|
|Ltd.||||||
|Import and Export||||||
|Company of|Current|2,853,188.02|Over 5 years|5.70%|2,853,188.02|
|Changchai Group||||||
|Changzhou New||||||
|District Accounting|Current|1,626,483.25|Over 5 years|3.25%|1,626,483.25|
|Center||||||
|Total|--|18,419,671.27|--|36.79%|7,639,671.27|

 (6) The amount of the period-begin increased of224.35% over that of the period-end, which mainly due to the subsidiary Housheng Investment lent RMB11 million to Xuzhou East China Casting Factory and Changzhou Changjiang Casting Materials Co., Ltd.
6. Inventory
(1) Category of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closing balance|||Opening balance|||
|||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw material|88,721,968.31|2,587,305.60|86,134,662.71|111,288,103.55|2,587,305.60|108,700,797.95|
|Goods in process|118,460,998.75|23,144,279.29|95,316,719.46|110,165,018.34|23,144,279.29|87,020,739.05|
|Inventory goods|181,128,422.74|20,277,368.92|160,851,053.82|208,519,567.29|20,277,368.92|188,242,198.37|
|Materials|||||||
|processed on|17,045,095.69||17,045,095.69|12,310,710.53||12,310,710.53|
|commission|||||||
|Low priced and|||||||
|easily worn|2,152,264.35|1,300,787.34|851,477.01|2,316,353.80|1,300,787.34|1,015,566.46|
|articles|||||||
|Total|407,508,749.84|47,309,741.15|360,199,008.69|444,599,753.51|47,309,741.15|397,290,012.36|

2016 Semi-annual Report of Changchai Company, Limited (2) Falling price reserves of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||Increased amount||Decreased amount|||
|Item|Opening balance||Other|Reverse or||Closing balance|
|||Withdrawal|||Other||
|||||write-off|||
|Raw materials|2,587,305.60|||||2,587,305.60|
|Goods in process|23,144,279.29|||||23,144,279.29|
|Inventory goods|20,277,368.92|||||20,277,368.92|
|Low priced and|||||||
|easily worn|1,300,787.34|||||1,300,787.34|
|articles|||||||
|Total|47,309,741.15|||||47,309,741.15|

 7. Other current assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|The VAT tax credits|10,645,221.04|28,304,691.41|
|Bank financial products||20,000,000.00|
|Financial products from securities|||
||12,000,000.00|12,000,000.00|
|companies|||
|Export drawback receivable|||
|Total|22,645,221.04|60,304,691.41|

 8. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|Item|Closing balance|||Opening balance|||
|||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Available-for-sale equity|||||||
||445,647,000.00|1,210,000.00|444,437,000.00|504,190,000.00|1,210,000.00|502,980,000.00|
|instruments:|||||||
|Measured by fair value|399,237,000.00||399,237,000.00|457,780,000.00||457,780,000.00|
|Measured by cost|||||||
||46,410,000.00|1,210,000.00|45,200,000.00|46,410,000.00|1,210,000.00|45,200,000.00|
|method|||||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||
|-|-|-|-|-|-|-|
|Total|445,647,000.00|1,210,000.00|444,437,000.00|504,190,000.00|1,210,000.00|502,980,000.00|

 (2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||
|Cost of equity instruments /amortized||||
||41,874,500.00||41,874,500.00|
|cost of debt instruments||||
|Fair value|399,237,000.00||399,237,000.00|
|Changes of fair value accumulated||||
|recorded into other comprehensive|303,758,125.00||303,758,125.00|
|income||||

(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision||||Shareholdi|Cash|
||||||||||ng|bonus of|
|Investee|Period-beg||||Period-beg||||proportion|the|
|||Increase|Decrease|Period-end||Increase|Decrease|Period-end|||
||in||||in||||among the|reporting|
||||||||||investees|period|
|Jiangsu|38,000,000|||38,000,000|||||||
||||||||||0.42%||
|Bank|.00|||.00|||||||
|Qidong|||||||||||
|Liantong|||||||||||
||7,200,000.|||7,200,000.|||||||
|Dynamom|||||||||3.20%|160,000.00|
||00|||00|||||||
|eter Co.,|||||||||||
|Ltd.|||||||||||
||1,210,000.|||1,210,000.|1,210,000.|||1,210,000.|||
|Others|||||||||||
||00|||00|00|||00|||
||46,410,000|||46,410,000|1,210,000.|||1,210,000.|||
|Total|||||||||--|160,000.00|
||.00|||.00|00|||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 Machinery Agricultural
Machinery Company, and all of the above investment were difficult to recover that should withdraw the impairment provision in full
2016 Semi-annual Report of Changchai Company, Limited amount.
(4) Changes of the impairment of the available-for-sale financial assets during the reporting period
Unit: RMB
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||
|Balance of the withdrawn||||
||1,210,000.00||1,210,000.00|
|impairment at the period-begin||||
|Balance of the withdrawn||||
||1,210,000.00||1,210,000.00|
|impairment at the period-end||||

9. Long-term equity investment
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease||||||||||
||||||||||||Closing|
|||||Gains and|Adjustme|||||||
||||||||Cash|Withdraw|||balance|
|||Additiona||losses|nt of|||||||
||Opening||Reduced|||Changes|bonus or|al of||Closing|of|
|Investees||||||||||||
|||l||recognize|other|||||||
||balance||investmen|||of other|profits|impairme|Other|balance|impairme|
|||investmen||d under|comprehe|||||||
||||t|||equity|announce|nt|||nt|
|||t||the equity|nsive|||||||
||||||||d to issue|provision|||provision|
|||||method|income|||||||
|I．Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Changzho||||||||||||
|u Fuji||||||||||||
|Changcha||||||||||||
||20,769,30|||821,264.1||||||21,590,56||
|i Robin||||||||||||
||4.76|||2||||||8.88||
|Gasoline||||||||||||
|Engine||||||||||||
|Co., Ltd.||||||||||||
|Beijing||||||||||||
|Tsinghua||||||||||||
|Industrial||||||||||||
|Investme||||||||||||
||||||||||||44,182.50|
|nt||||||||||||
|Managem||||||||||||
|ent Co.,||||||||||||
|Ltd.||||||||||||
||20,769,30|||821,264.1||||||21,590,56||
|Subtotal|||||||||||44,182.50|
||4.76|||2||||||8.88||

2016 Semi-annual Report of Changchai Company, Limited
||||||
|-|-|-|-|-|
||20,769,30|821,264.1|21,590,56||
|Total||||44,182.50|
||4.76|2|8.88||

10. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|Construction in progress|Total|
|I. Original book value|||||
|1. Opening balance|87,632,571.14|||87,632,571.14|
|2. Increased amount|||||
|of the period|||||
|(1) Outsourcing|||||
|(2) Transfer of|||||
|inventory\fixed|||||
|assets\project under|||||
|construction|||||
|(3) Increased from|||||
|enterprise merger|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|(2) Other transfer|||||
|4. Closing balance|87,632,571.14|||87,632,571.14|
|II. Accumulative|||||
|depreciation and|||||
|accumulative|||||
|amortization|||||
|1.Opening balance|30,351,541.11|||30,351,541.11|
|2. Increased amount|||||
||1,104,170.40|||1,104,170.40|
|of the period|||||
|(1) Withdrawal or|||||
||1,104,170.40|||1,104,170.40|
|amortization|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|(2) Other transfer|||||

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|4. Closing balance|31,455,711.51|31,455,711.51|
|III. Depreciation reserves|||
|1.Opening balance|||
|2. Increased amount|||
|of the period|||
|(1) Withdrawal|||
|3. Decreased|||
|amount of the period|||
|(1) Disposal|||
|(2) Other transfer|||
|4. Closing balance|||
|IV. Book value|||
|1. Closing book||56,176,859.63|
||56,176,859.63||
|value|||
|2. Opening book||57,281,030.03|
||57,281,030.03||
|value|||

11. Fixed assets
List of fixed assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|||
|Item||||Other|Total|
||buildings|equipment|equipment|||
|I. Original book||||||
|value||||||
|1. Opening||||||
||419,409,924.25|802,789,176.38|23,547,415.98|34,971,574.20|1,280,718,090.81|
|balance||||||
|2. Increased||||||
||15,205,415.74|41,931,939.19|1,880,778.49|2,330,411.06|61,348,544.48|
|amount of the period||||||
|(1) Purchase||661,187.08||407,209.33|1,068,396.41|
|(2) Transfer of||||||
|project under|15,205,415.74|41,270,752.11|1,880,778.49|1,923,201.73|60,280,148.07|
|construction||||||
|(3) Increased||||||
|from enterprise||||||
|merger||||||
|3. Decreased|4,061,877.00|3,045,487.26|2,148,795.61|1,232,211.06|10,488,370.93|

2016 Semi-annual Report of Changchai Company, Limited
|||||||
|-|-|-|-|-|-|
|amount of the period||||||
|(1) Disposal or||||||
||4,061,877.00|3,045,487.26|2,148,795.61|1,232,211.06|10,488,370.93|
|scrap||||||
|4. Closing balance|430,553,462.99|841,675,628.31|23,279,398.86|36,069,774.20|1,331,578,264.36|
|II. Accumulative||||||
|depreciation||||||
|1.Opening balance|212,091,873.84|468,192,248.83|15,368,212.09|26,845,593.79|722,497,928.55|
|2. Increased||||||
|amount of the period|9,729,309.18|30,252,266.58|951,416.36|1,752,041.36|42,685,033.48|
|(1) Withdrawal|9,729,309.18|30,252,266.58|951,416.36|1,752,041.36|42,685,033.48|
|3. Decreased||||||
||3,641,066.64|2,652,615.33|1,942,516.55|947,412.61|9,183,611.13|
|amount of the period||||||
|(1) Disposal or||||||
||3,641,066.64|2,652,615.33|1,942,516.55|947,412.61|9,183,611.13|
|scrap||||||
|4. Closing balance|218,180,116.38|495,791,900.08|14,377,111.90|27,650,222.54|755,999,350.90|
|III. Depreciation||||||
|reserves||||||
|1.Opening balance||3,618,269.03|||3,618,269.03|
|2. Increased||||||
|amount of the period||||||
|(1) Withdrawal||||||
|3. Decreased||||||
|amount of the period||||||
|(1) Disposal or||||||
|scrap||||||
|4. Closing balance||3,618,269.03|||3,618,269.03|
|IV. Book value||||||
|1. Closing book||||||
||212,373,346.61|342,265,459.20|8,902,286.96|8,419,551.66|571,960,644.43|
|value||||||
|2. Opening book||||||
||207,318,050.41|330,978,658.52|8,179,203.89|8,125,980.41|554,601,893.23|
|value||||||

The depreciation amount of the Reporting Period was of RMB42,685,033.48. The original value transferred into the fixed assets from the construction in progress of the Reporting Period was of RMB60,280,148.07.
2016 Semi-annual Report of Changchai Company, Limited 12. Construction in progress
(1) List of construction in progress
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing amount|||Opening amount|||
|Item|Book balance|Bad debt|Book value|Book balance|Bad debt|Book value|
|||provision|||provision||
|Trial production|||||||
|workshop project||||22,960,533.29||22,960,533.29|
|technology center|||||||
|Casting|||||||
|renovation||||396,000.00||396,000.00|
|project|||||||
|Expansion|||||||
|capacity of|||||||
||41,887,573.16||41,887,573.16|40,050,712.95||40,050,712.95|
|multi-cylinder|||||||
|(The 2nd Period)|||||||
|Base of land in|||||||
|||||33,550.53||33,550.53|
|Hehai Road|||||||
|Diesel Engine|||||||
|Cylinder Body|||||||
|Flexible|11,039,316.25||11,039,316.25|1,851,752.13||1,851,752.13|
|Manufacturing|||||||
|Line|||||||
|Equipment to be|||||||
|installed and|||||||
||24,034,695.54||24,034,695.54|42,905,906.11||42,905,906.11|
|payment for|||||||
|projects|||||||
|Total|76,961,584.95||76,961,584.95|108,198,455.01||108,198,455.01|

 (2) Changes of significant construction in progress
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||eOpeningbalance||Amount|||Proporti||Accumul|Ofwhich:atheamountof thecapitalized|||
||||||||||||Capitaliz||
|||||that|Other||on||ative||||
||||Increase||||||||tion rate||
||Estimat|||transferr|decrease||estimate||amount||||
|Name of|||d amount|||Closing||Project|||of the|Capital|
||d|||ed to|d amount||d of the||of||||
|item|||of the|||balance||progress|||interests|resources|
||number|||fixed|of the||project||capitaliz||||
||||period||||||||of the||
|||||assets of|period||accumul||ed||||
||||||||||||period||
|||||the|||ative||interests||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
||||period||input||interests||
||||||||of the||
||||||||period||
|Trial|||||||||
|producti|||||||||
|on|||||||||
||22,960,5||22,960,5||||||
|worksho||||0.00||||Other|
||33.29||33.29||||||
|p project|||||||||
|technolo|||||||||
|gy center|||||||||
|Casting|||||||||
|renovati|396,000.||396,000.||||||
|||||0.00||||Other|
|on|00||00||||||
|project|||||||||
|Expansio|||||||||
|n|||||||||
|capacity|||||||||
|of|40,050,7|2,097,06|260,200.|41,887,5|||||
|||||||||Other|
|multi-cyl|12.95|0.78|57|73.16|||||
|inder|||||||||
|(The 2nd|||||||||
|Period)|||||||||
|Base of|||||||||
|land in|33,550.5||33,550.5||||||
|||||0.00||||Other|
|Hehai|3||3||||||
|Road|||||||||
|Diesel|||||||||
|Engine|||||||||
|Cylinder|||||||||
|Body|1,851,75|9,187,56||11,039,3|||||
|||||||||Other|
|Flexible|2.13|4.12||16.25|||||
|Manufac|||||||||
|turing|||||||||
|Line|||||||||
||65,292,5|11,284,6|23,650,2|52,926,8|||||
|Total|||||--|--||--|
||48.90|24.90|84.39|89.41|||||

13. Intangible assets
(1) List of intangible assets
Unit: RMB
2016 Semi-annual Report of Changchai Company, Limited
||||||||
|-|-|-|-|-|-|-|
||||Non-patented||||
|Item|Land use right|Patent right||Software|Other|Total|
||||technology||||
|I. Total original|||||||
|book value|||||||
|1. Opening|||||||
||137,782,945.30|||5,871,691.42||143,654,636.72|
|balance|||||||
|2. Increase in|||||||
|the reporting||||488,876.81||488,876.81|
|period|||||||
|(1) Purchase||||488,876.81||488,876.81|
|(2) Internal R|||||||
|&D|||||||
|(3) Increase|||||||
|from enterprise|||||||
|combination|||||||
|3. Decrease in the|||||||
|reporting period|||||||
|(1) Purchase|||||||
|4. Closing|||||||
||137,782,945.30|||6,360,568.23||144,143,513.53|
|balance|||||||
|II. Total accrued|||||||
|amortization|||||||
|1. Opening|||||||
||38,511,304.87|||2,041,869.38||40,553,174.25|
|balance|||||||
|2. Increase in the|||||||
||1,396,024.56|||1,012,489.19||2,408,513.75|
|reporting period|||||||
|(1) Withdrawal|1,396,024.56|||1,012,489.19||2,408,513.75|
|3. Decrease in the|||||||
|reporting period|||||||
|(1) Disposal|||||||
|4. Closing|||||||
||39,907,329.43|||3,054,358.57||42,961,688.00|
|balance|||||||
|III. Total|||||||
|impairment|||||||
|provision|||||||
|1. Opening|||||||
|balance|||||||
|2. Increase in|||||||
|the reporting|||||||

2016 Semi-annual Report of Changchai Company, Limited
|||||
|-|-|-|-|
|period||||
|(1) Withdrawal||||
|3. Decrease in the||||
|reporting period||||
|(1) Disposal||||
|4. Closing||||
|balance||||
|IV. Total book||||
|value of||||
|intangible assets||||
|1. Book value of||||
||97,875,615.87|3,306,209.66|101,181,825.53|
|the period-end||||
|2. Book value of||||
||99,271,640.43|3,829,822.04|103,101,462.47|
|the period-begin||||

14. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||6,416,872.53|962,530.88|6,416,872.53|962,530.88|
|provision|||||
|Total|6,416,872.53|962,530.88|6,416,872.53|962,530.88|

 (2) Deferred income tax liabilities had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Change in fair value of|||||
||357,362,500.00|53,604,375.00|415,905,500.00|62,385,825.00|
|available financial assets|||||
|Total|357,362,500.00|53,604,375.00|415,905,500.00|62,385,825.00|

(3) List of the unrecognized deferred income tax assts
Unit: RMB
2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bad debt provision|273,349,140.17|263,091,986.15|
|Inventory falling price reserves|47,309,741.15|47,309,741.15|
|Total|320,658,881.32|310,401,727.30|

 15. Other non-current assets
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Closing balance|Impairmentprovision at theperiod-end|Opening balance|Impairment provision atthe period-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|

 16. Short-term loans
(1) Category of short-term loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Mortgage loan|5,000,000.00|12,000,000.00|
|Guaranteed loan|5,000,000.00|5,000,000.00|
|Total|10,000,000.00|17,000,000.00|

 (2) List of the short-term loans overdue but not return at period end
17. Notes payable
Unit: RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance bill|278,909,300.00|238,200,000.00|
|Total|278,909,300.00|238,200,000.00|

 No such case.
18. Accounts payable
(1) List of accounts payable
Unit: RMB
2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Goods payment|509,018,960.25|535,978,470.07|
|Total|509,018,960.25|535,978,470.07|

 (2)There was no note of the accounts payable aging over one year
19. Advance from customers
(1) List of advance from customers
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Goods payment|39,284,991.46|26,665,671.38|
|Total|39,284,991.46|26,665,671.38|

 (2) There was no significant advance from customers aging over one year
20. Payroll payable
(1) List of Payroll payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|60,309,349.29|127,405,958.34|154,244,490.70|33,470,816.93|
|II. Post-employment|||||
|benefit-defined||18,367,799.93|18,367,799.93||
|contribution plans|||||
|III. Termination benefits|||||
|IV. Other benefits due|||||
|within one year|||||
|Total|60,309,349.29|145,773,758.27|172,612,290.63|33,470,816.93|

 (2) List of Short-term salary
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus,|||||
||53,805,049.80|103,933,731.06|130,970,704.71|26,768,076.15|
|allowance, subsidy|||||
|2. Employee welfare||3,883,673.30|3,883,673.30||

2016 Semi-annual Report of Changchai Company, Limited
||||||
|-|-|-|-|-|
|3. Social insurance||8,719,918.78|8,719,918.78||
|Of which: 1. Medical|||||
|||6,833,863.52|6,833,863.52||
|insurance premiums|||||
|Work-related injury|||||
|||1,446,486.71|1,446,486.71||
|insurance|||||
|Maternity insurance||439,568.55|439,568.55||
|4. Housing fund||7,973,387.00|7,973,387.00||
|5. Labor union budget|||||
|and employee education|6,504,299.49|2,895,248.20|2,696,806.91|6,702,740.78|
|budget|||||
|6.Short-term absence|||||
|with payment|||||
|7. Short-term profit|||||
|sharing plan|||||
|Total|60,309,349.29|127,405,958.34|154,244,490.70|33,470,816.93|

 (3) List of drawing scheme
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Basic pension benefits||17,276,042.90|17,276,042.90||
|2. Unemployment|||||
|||1,091,757.03|1,091,757.03||
|insurance|||||
|Annuity|||||
|Total||18,367,799.93|18,367,799.93||

21. Taxes payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT||467,010.50|
|Business tax||2,900.00|
|Corporate income tax|635,775.94|5,923,463.67|
|Personal income tax|113,640.60|49,924.16|
|Urban maintenance and construction tax||1,996,316.42|
|Property tax|945,986.32|143,204.50|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Education surcharge||840,517.28|
|Comprehensive fees|853,871.38|1,374,726.40|
|Total|2,549,274.24|10,798,062.93|

 22. Dividends payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Common stock dividends|3,243,179.97|3,243,179.97|
|Minority dividends|648,253.86|648,253.86|
|Total|3,891,433.83|3,891,433.83|

 Reason of not pay overdue 1 year: the shareholder had not drawn down yet.
23. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Margin &cash pledge|3,043,793.03|3,149,353.59|
|Intercourse funds between entities|16,340,217.93|15,550,754.25|
|Personal amount payable|959,580.09|955,910.51|
|Sales discount and three guarantees|165,265,432.24|146,392,031.63|
|Others|40,337,014.54|35,103,582.48|
|Total|225,946,037.83|201,151,632.46|

 (2) Other significant accounts payable with aging over one year
Other significant accounts payable with aging over one year mainly was the temporary receivable and charges owed.
24. Other current-liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Sewage charge|200,000.00|200,000.00|
|Energy charge|1,615,216.25|1,795,289.06|
|Others|105,797.62|407,998.00|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Total|1,921,013.87|2,403,287.06|

 25. Deferred revenue
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formed reason|
|Government|||||Government|
||53,121,605.70||532,186.81|52,589,418.89||
|subsidies|||||allocations|
|Total|53,121,605.70||532,186.81|52,589,418.89|--|

Item involving government subsidies:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount recorded||||
||||into|||Related to|
|||Amount of newly|||||
|Item|Opening balance||non-operating|Other changes|Closing balance|assets/related|
|||subsidy|||||
||||income in report|||income|
||||period||||
|Electric control of|||||||
|diesel engine|||||||
|research and||||||Related to the|
||1,842,000.00||199,200.00||1,642,800.00||
|development and||||||assets|
|industrialization|||||||
|allocations|||||||
|National major|||||||
|||||||Related to the|
|project special|28,770,000.00||||28,770,000.00||
|||||||assets|
|allocations|||||||
|Remove||||||Related to the|
||22,509,605.70||332,986.81||22,176,618.89||
|compensation||||||assets|
|Total|53,121,605.70||532,186.81||52,589,418.89|--|

 26. Share capital
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Opening|||Capitalized|||Closing|
|||New shares||||||
||balance||Bonus shares|Capital|Others|Subtotal|balance|
|||issued||||||
|||||reserves||||
|The sum of|561,374,326.00||||||561,374,326.00|
|shares||||||||

2016 Semi-annual Report of Changchai Company, Limited 27. Capital surplus
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Capital premium|143,990,690.24|||143,990,690.24|
|Other capital reserves|20,337,975.19|||20,337,975.19|
|Total|164,328,665.43|||164,328,665.43|

 28. Other comprehensive income
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Reporting Period||||||
||||Less: recorded|||||
||||in other|||||
|||Amount|comprehensive||Attributable|||
|||||||Attributable||
||Opening|before|income in|Less:|to owners||Closing|
|Item||||||||
|||||||to minority||
||balance|income tax|prior period|Income tax|of the||balance|
|||||||shareholder||
|||in current|and transferred|expense|Company|||
|||||||s after tax||
|||period|to profit or||after tax|||
||||loss in current|||||
||||period|||||
|II. Other comprehensive reclassified|353,519,675.|-58,543,000||-8,781,450.|-49,761,550.00||303,758,1|
|into profits or losses|00|.00||00|||25.00|
|Profits or losses of change in|||||-49,761,550.00|||
||353,519,675.|-58,543,000||-8,781,450.|||303,758,1|
|fair value of available-for-sale||||||||
||00|.00||00|||25.00|
|financial assets||||||||
||353,519,675.00|-58,543,000||-8,781,450.|-49,761,550.00||303,758,125.00|
|Total||||||||
|||.00||00||||

 29. Special reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Safety production cost|10,069,746.98|||10,069,746.98|
|Total|10,069,746.98|||10,069,746.98|

 30. Surplus reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Statutory surplus|||
||292,601,428.01|292,601,428.01|
|reserves|||
|Discretionary surplus|||
||13,156,857.90|13,156,857.90|
|reserves|||
|Total|305,758,285.91|305,758,285.91|

 31. Retained profits
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Last period|
|Opening balance of retained profits beforeadjustments|||
||607,859,611.69|555,590,894.67|
|Opening balance of retained profits afteradjustments|607,859,611.69||
|||555,590,894.67|
|Add: Net profit attributable to owners of theCompany|||
||35,018,142.36|71,102,792.49|
|Less: Withdrawal of statutory surplus reserves||7,606,588.95|
|Dividend of common stock payable|12,911,609.50|11,227,486.52|
|Closing retained profits|629,966,144.55|607,859,611.69|

 32. Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|1,152,656,941.95|976,226,687.99|1,350,510,775.34|1,173,357,978.37|
|Other operations|11,003,779.74|8,367,576.44|9,385,125.35|5,715,124.36|
|Total|1,163,660,721.69|984,594,264.43|1,359,895,900.69|1,179,073,102.73|

 33. Business tax and surcharges
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Business tax|94,345.65|120,612.60|
|Urban maintenance and construction tax|1,130,189.36|1,255,742.07|
|Education Surcharge|792,992.40|903,657.76|
|Total|2,017,527.41|2,280,012.43|

2016 Semi-annual Report of Changchai Company, Limited 34. Sales expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Office expenses|9,181,360.21|8,713,283.05|
|Employee’s remuneration|12,133,611.70|12,430,572.11|
|Sales promotional expense|7,436,628.43|6,919,526.51|
|Three guarantees|26,050,046.98|24,877,205.63|
|Transport fees|3,854,006.91|4,383,942.37|
|Others|862,820.37|734,569.25|
|Total|59,518,474.60|58,059,098.92|

 35. Administrative expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Office expenses|8,381,652.44|12,135,083.25|
|Employee’s remuneration|32,126,018.65|30,279,507.54|
|Depreciation and amortization|8,374,082.68|8,657,938.02|
|Research and development expense|20,553,134.25|22,045,157.07|
|Transport fees|1,035,214.39|2,218,091.89|
|Repair charge|2,044,525.58|2,101,559.99|
|Taxes|3,789,425.82|3,785,315.92|
|Security charge|881,547.58|951,236.54|
|Others|1,303,014.31|2,227,133.96|
|Total|78,488,615.70|84,401,024.18|

 36. Financial expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest expenses|1,917,987.53|1,317,324.03|
|Less: Interest income|2,859,561.84|3,247,570.12|
|Exchange net profit or loss|-1,649,720.29|-1,609,657.81|
|Others|-2,219,840.69|-3,133,799.84|
|Total|-4,811,135.29|-6,673,703.74|

2016 Semi-annual Report of Changchai Company, Limited 37. Asset impairment loss
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|I. Bad debt loss|10,257,154.02|2,767,537.46|
|Total|10,257,154.02|2,767,537.46|

 38. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Long-term equity investment income|||
||821,264.12|397,632.47|
|accounted by equity method|||
|Investment income received from disposal of|||
|financial assets measured by fair value and the|||
||555,871.52|673,457.57|
|changes be included in the current profits and|||
|losses during holding period|||
|Investment income received from holding of|||
||160,000.00|3,829,513.40|
|available-for-sale financial assets|||
|Investment income from disposal of bank|||
||364,000.00||
|financial products|||
|Total|1,901,135.64|4,900,603.44|

 39. Non-operating gains
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Total gains from disposal of|6,113,117.21|106,674.56||
||||6,113,117.21|
|non-current assets||||
|Including: Gains from disposal||||
||6,113,117.21|106,674.56|6,113,117.21|
|of fixed assets||||
|Government subsidies|3,787,728.09|2,573,286.81|3,787,728.09|
|Insurance compensation|144,000.00|604,260.63|144,000.00|
|Penalty income||36,121.36||
|Gains from disposal of current||||
||377,937.49|185,478.91|377,937.49|
|assets||||
|Account payable no need to pay||85,655.38||
|Others|213,411.26|72,634.25|213,411.26|

2016 Semi-annual Report of Changchai Company, Limited
|||||
|-|-|-|-|
|Total|10,636,194.05|3,664,111.90|10,636,194.05|

 Government subsidies recorded into current profits and losses
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||subsidies|||||
||||||Special|||Related to|
||Distribution|Distribution||influence the||Reporting|Same period||
|Item|||Nature||subsidy or|||assets/related|
||entity|reason||current||Period|of last year||
||||||not|||income|
|||||profits and|||||
|||||losses or not|||||
|The central|||||||||
|budget||||||||Related to the|
|||||||1,000,000.00|||
|investment||||||||income|
|plans|||||||||
|Special fund|||||||||
|for|||||||||
|Promoting|||||||||
|the|||||||||
|transformatio||||||||Related to the|
|||||||1,250,000.00|1,600,300.00||
|n of||||||||income|
|industrial|||||||||
|economy|||||||||
|steady|||||||||
|growth|||||||||
|The mayor||||||||Related to the|
||||||||500,000.00||
|award||||||||income|
|Famous||||||||Related to the|
|||||||300,000.00|||
|brand reward||||||||income|
|Science and|||||||||
|Technology||||||||Related to the|
||||||||30,000.00||
|Progress||||||||income|
|Award|||||||||
|Talent|||||||||
|||||||||Related to the|
|development||||||103,800.00|110,000.00||
|||||||||income|
|funds|||||||||
|Borrowing|||||||||
|||||||||Related to the|
|fiscal interest||||||500,000.00|||
|||||||||income|
|discount|||||||||
|Other|||||||||
|||||||||Related to the|
|incentives||||||300,941.28|||
|||||||||income|
|and subsidies|||||||||
|Remove||||||332,986.81|332,986.81|Related to the|

2016 Semi-annual Report of Changchai Company, Limited
||||||||||
|-|-|-|-|-|-|-|-|-|
|compensation||||||||assets|
|Total|--|--|--|--|--|3,787,728.09|2,573,286.81|--|

 40. Non-operating expenses
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Loss on disposal of non-current|32,408.99|14,758.29||
||||32,408.99|
|assets||||
|Including: Loss on disposal of||||
||32,408.99|14,758.29|32,408.99|
|fixed assets||||
|Donation|100,000.00|100,000.00|100,000.00|
|The flood control security fund||1,359,895.90||
|Loss on disposal of current||||
||3,988,707.85|1,242,677.62|3,988,707.85|
|assets||||
|Others|26,723.88|115,326.35|26,723.88|
|Total|4,147,840.72|2,832,658.16|4,147,840.72|

 41. Income tax expense
(1) Lists of income tax expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Current income tax expense|6,581,748.12|7,503,443.33|
|Total|6,581,748.12|7,503,443.33|

 (2) Adjustment process of accounting profit and income tax expense:
Unit: RMB
|||
|-|-|
|Item|Reporting Period|
|Total profits|41,985,309.79|
|Current income tax expense accounted by tax and relevant||
||6,297,796.47|
|regulations||
|Influence of different tax rate suitable to subsidiary|-385,858.50|
|Influence of income tax before adjustment|36,073.11|
|Influence of non taxable income|-457,500.00|

2016 Semi-annual Report of Changchai Company, Limited
|||
|-|-|
|Influence of not deductable costs, expenses and losses|1,734,785.66|
|Influence of deductible temporary difference or deductible losses||
||791,426.54|
|of deferred income tax assets derecognized in Reporting Period.||
|Tax preference incurred from qualified expense|-1,434,975.16|
|Income tax expense|6,581,748.12|

 42. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Subsidies and grants|3,454,741.28|2,240,300.00|
|Cash received from other current account|1,964,606.67|5,874,363.25|
|Interest income|2,559,453.88|3,247,570.12|
|Total|7,978,801.83|11,362,233.37|

 (2) Other cash paid relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Sales expense paid in Reporting Period|18,835,610.08|14,343,363.07|
|Administration expense paid in Reporting|||
||23,200,555.04|19,150,193.53|
|Period|||
|Handling charges for financial expense in|||
||359,561.84|242,529.32|
|Reporting Period|||
|Others|580,495.00|321,536.23|
|Total|42,976,221.96|34,057,622.15|

 43. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Supplemental information|Reporting Period|Same period of last year|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|35,403,561.67|38,217,442.56|
|Add: Provision for impairment of assets|10,257,154.02|2,767,537.46|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Depreciation of fixed assets, of oil-gas|||
||42,685,033.48|40,473,167.52|
|assets, of productive biological assets|||
|Amortization of intangible assets|2,408,513.75|1,728,810.62|
|Losses on disposal of fixed assets, intangible|||
|assets and other long-term assets (gains:|-6,113,117.21|-106,674.56|
|negative)|||
|Financial cost (gains: negative)|2,163,147.25|1,350,365.56|
|Investment loss (gains: negative)|-1,901,135.64|-4,900,603.44|
|Increase in deferred income tax liabilities|||
||-8,781,450.00|27,870,225.00|
|(“-” means decrease)|||
|Decrease in inventory (gains: negative)|37,091,003.67|87,405,953.65|
|Decrease in accounts receivable from|||
||-25,134,137.10|-109,506,857.89|
|operating activities (gains: negative)|||
|Increase in payables from operating|||
||29,957,339.40|-38,571,625.36|
|activities (decrease: negative)|||
|Net cash flows generated from operating|118,035,913.29|46,727,741.12|
|activities|||
|2. Significant investing and financing|||
|activities without involvement of cash|--|--|
|receipts and payments|||
|3. Change of cash and cash equivalent:|--|--|
|Closing balance of cash|594,934,363.36|429,123,417.14|
|Less: Opening balance of cash|526,716,238.21|464,761,820.50|
|Net increase in cash and cash equivalents|68,218,125.15|-35,638,403.36|

 (2) Cash and cash equivalents
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|594,934,363.36|526,716,238.21|
|Including: Cash on hand|317,822.87|252,373.65|
|Bank deposit on demand|594,616,540.49|526,463,864.56|
|II. Closing balance of cash and cash|594,934,363.36|526,716,238.21|
|equivalents|||

44. The assets with the ownership or use right restricted
Unit: RMB
2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Item|Closing book value|Restricted reason|
|||Bank acceptance draft deposited in the|
|Monetary capital|78,861,683.78||
|||margin|
|Houses and buildings|7,562,514.22|Pledge for bank loan|
|Land use right|19,763,533.25|Pledge for bank loan|
|Total|106,187,731.25|--|

45. Foreign currency monetary items
Unit: RMB
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Monetary capital||||
|Including: USD|6,109,769.87|6.6312|40,515,105.96|
|HKD|1,380,790.93|0.8547|1,180,162.01|
|Account receivable||||
|Including: USD|5,168,227.43|6.6312|34,271,549.73|

 VIII. Changes of merge scope
N/A
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operating||Nature of|Holding percentage (%)|||
|Name||Registration place||||Way of gaining|
||place||business|Directly|Indirectly||
|Changchai|||||||
|Wanzhou Diesel|Chongqing|Chongqing|Industry|60.00%||Set-up|
|Engine Co., Ltd.|||||||
|Changzhou|||||||
|Changchai|||||||
|Benniu Diesel|Changzhou|Changzhou|Industry|99.00%|1.00%|Set-up|
|Engine Fittings|||||||
|Co., Ltd.|||||||
|Changzhou|||||||
||Changzhou|Changzhou|Service|100.00%||Set-up|
|Housheng|||||||

2016 Semi-annual Report of Changchai Company, Limited
||||||||
|-|-|-|-|-|-|-|
|Investment Co.,Ltd.|||||||
|ChangzhouChangchaiHoushengAgriculturalEquipment Co.,Ltd.|||||||
||Changzhou|Changzhou|Industry|70.00%|25.00%|Set-up|

(2) Significant not wholly owned subsidiary
Unit: RMB
||||||
|-|-|-|-|-|
|||The profits and losses|Declaring dividends|Balance of minority|
||Shareholding proportion||||
|Name||arbitrate to the minority|distribute to minority|shareholder at closing|
||of minority shareholder||||
|||shareholders|shareholder|period|
|Changchai Wanzhou|||||
||40.00%|273,763.13||17,598,896.38|
|Diesel Engine Co., Ltd.|||||
|Changzhou Changchai|||||
|Housheng Agricultural|5.00%|111,656.18||376,976.40|
|Equipment Co., Ltd.|||||

(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|||Non-currentassets|||Non-curr|||Non-curr||Currentliabilities|Non-curr||
|Name|Current||Total|Current||Total|Current||Total|||Total|
||||||ent|||ent|||ent||
||assets||assets|liabilities||liabilities|assets||assets|||liabilities|
||||||liability|||assets|||liability||
|Changch||||||||||27,089,950.52|||
|ai|||||||||||||
|Wanzhou|49,129,3|28,148,8|77,278,1|33,280,9||33,280,9|41,770,9|28,631,8|70,402,7|||27,089,9|
|Diesel|66.56|13.62|80.18|39.25||39.25|53.46|30.17|83.63|||50.52|
|Engine|||||||||||||
|Co., Ltd.|||||||||||||
|Changzh||||||||||11,753,288.83|||
|ou|||||||||||||
|Changch|||||||||||||
|ai|24,162,3|404,358.|24,566,7|17,027,2||17,027,2|16,619,1|440,565.|17,059,6|||11,753,2|
|Houshen|97.91|36|56.27|28.33||28.33|27.25|96|93.21|||88.83|
|g|||||||||||||
|Agricult|||||||||||||
|ural|||||||||||||

2016 Semi-annual Report of Changchai Company, Limited
||
|-|
|Equipme|
|nt Co.,|
|Ltd.|

Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting Period||||Same period of last year||||
||||Total||||Total||
|Name|Operation|||Operating|Operation|||Operating|
|||Net profit|comprehensi|||Net profit|comprehensi||
||revenue|||cash flow|revenue|||cash flow|
||||ve income||||ve income||
|Changchai|||||||||
|Wanzhou|||||||||
||29,922,164.7||||46,604,607.8||||
|Diesel||684,407.82|684,407.82|9,295,155.40||1,748,347.34|1,748,347.34|6,600,149.69|
||2||||7||||
|Engine Co.,|||||||||
|Ltd.|||||||||
|Changzhou|||||||||
|Changchai|||||||||
|Housheng|14,101,934.0|||-10,382,517.5|||||
|||2,233,123.56|2,233,123.56||897,928.98|-905,911.21|-905,911.21|-1,075,236.54|
|Agricultural|4|||2|||||
|Equipment|||||||||
|Co., Ltd.|||||||||

2. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Holding percentage (%)||Accounting|
|||||||treatment of the|
||Main operating||Nature of|||investment of|
|Name||Registration place|||||
||place||business|Directly|Indirectly|joint venture or|
|||||||associated|
|||||||enterprise|
|Changzhou Fuji|||||||
|Changchai Robin|||||||
||Changzhou|Changzhou|Industry|33.00%||Equity method|
|Gasoline Engine|||||||
|Co., Ltd.|||||||

(2) Main financial information of significant associated enterprise
Unit: RMB
||||
|-|-|-|
||Closing balance/ Reporting Period|Opening balance /last period|
|Current assets|78,600,777.00|70,218,388.26|
|Non-current assets|10,648,780.73|11,465,367.78|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Total assets|89,249,557.73|81,683,756.04|
|Current liabilities|16,823,590.80|11,746,468.25|
|Non-current liability|7,000,000.00|7,000,000.00|
|Total liabilities|23,823,590.80|18,746,468.25|
|Equity attributable to owners of the|||
||65,425,966.93|62,937,287.79|
|Company|||
|Portion of net assets calculated according|||
||21,590,569.09|20,769,304.76|
|to proportion of shareholdings|||
|Book value of equity investment to|||
||21,590,569.09|20,769,304.76|
|associated venture|||
|Operation revenue|81,740,227.95|76,175,353.71|
|Net profit|2,488,679.14|1,204,946.89|
|Total comprehensive income|2,488,679.14|1,204,946.89|

 X. The risk related financial instruments
The goal of theCompany’s risk management was gaining the balance between the risk and income, and reduced the negative impact to the operation performance of the Company in the lowest level and maximized the interests of shareholders and other equity investors. Base on the risk management goal, the basis strategy of theCompany’s risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk bottom line and conduct risk management, and supervised the risks timely and reliably and control the risk within the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The management level had reviewed and approved the policies to manage the risks, which summarized as follows: (1) Credit risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the policy of the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The 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
liabilities under the case of all reasonable prediction.
(III) Market risk
2016 Semi-annual Report of Changchai Company, Limited Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change of market price, including: foreign exchange rate risk, interest rate risk.
1. Interest rate risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due to the change of market price.
2. Foreign exchange risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. 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 appreciates against the dollar, the company's accounts receivable will incur foreign currency exchange loss. XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB
||||||
|-|-|-|-|-|
||Closing fair value||||
|Item|Fair value measurement|Fair value measurement|Fair value measurement||
|||||Total|
||items at level 1|items at level 2|items at level 3||
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|(I) Available-for-sale|||||
||399,237,000.00|||399,237,000.00|
|financial assets|||||
|(1) Equity tool investment|399,237,000.00|||399,237,000.00|
|Total assets of consistent|||||
||399,237,000.00|||399,237,000.00|
|fair value measurement|||||
|II. Inconsistent fair value|||||
||--|--|--|--|
|measurement|||||

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 closing price as the basis of fair value calculation at period-end.
XII. Related party and related Transaction
1. Information related to parent company of the Company
The actual controller of the Company is Changzhou Government State-owned Assets Supervision and Administration Commission.
As of 30 June 2016, it held30.43% shares of the Company (state owned shares).
2016 Semi-annual Report of Changchai Company, Limited 2. Subsidiaries of the Company
The details of subsidiaries of the Company please refer to equity in other entities in note to financial statements.
3. Information on the joint ventures and associated enterprises of the Company
The details of the joint ventures and associated enterprises of the Company please refer to equity in other entities in note to financial statements.
4. The Company had no other related party.
5. The Company had no other related transaction need to be disclosed.
XIII. Commitments and contingency
1. Significant commitments
As of 30 June 2016, there were no significant commitments to be disclosed.
2. Contingency
Significant contingency at balance sheet date
Litigation and arbitration in the Reporting Period:
||||||
|-|-|-|-|-|
|Name of the entity|Date ofaccepted|Name of the litigation orarbitration institutions|Amount involved(RMB tenthousand)|Notes|
|Shandong Hongli Group Co.,Ltd.|2001.6.27|Changzhou IntermediatePeople's Court|1,436.00|Under thebankruptcy andliquidation|
|Beijing Beiqi ChangshengAutomobile Co., Ltd.|2013.8.12|Beijing Shunyi DistrictPeople's Court|806.36|Enforcingconduct|
|Total|2,242.36||||

Notes:
(1) 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 aforesaid payment has arranged for the full provision for bad debts.
(2) As the litigation of Beijing Beiqi Changsheng Automobile Co., Ltd., the company owned our Company 8.0636 million; Beijing Shunyi District People's Court accepted the case on Aug. 12 2013. Under the auspices, two sides concluded mediation agreement. Beiqi Changsheng pays RMB 8,063,600.00 to the Company by stage.
Although the Company bombarded many times, Beijing Beiqi Changsheng Automobile Co., Ltd did not perform
its obligation of payment in line with mediation agreement. As of the end of Reporting Period, the Company had
paid the payment of goods RMB 4.2 million, the Company had applied to the Court for compulsory execution.
2016 Semi-annual Report of Changchai Company, Limited XIV. Other significant events
1. Segment information
Due to the operation scope of the Company and subsidiaries were similar, the Company conduct common management, did not divide business unit, so the Company only made single branch report.
XV. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|44,562,3||35,502,1||9,060,145|44,942,||35,630,15||9,312,311.3|
|||5.95%||79.67%|||9.24%||79.28%||
|which bad debt|11.89||66.30||.59|468.52||7.18||4|
|provision separately|||||||||||
|accrued|||||||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||702,139,||195,359,||506,779,9|439,906||185,340,5||254,565,85|
|debt provision of by||93.82%||27.82%|||90.41%||42.13%||
||081.00||088.90||92.10|,391.76||36.87||4.89|
|credit risks|||||||||||
|characteristics:|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|1,686,71||1,686,71|||1,686,7||1,686,716|||
|||0.23%||100.00%|0.00||0.35%||100.00%||
|which bad debt|6.39||6.39|||16.39||.39|||
|provision separately|||||||||||
|accrued|||||||||||
||748,388,||232,547,||515,840,137.69|486,535||222,657,4||263,878,166.23|
|Total||100.00%||45.76%|||100.00%||45.76%||
||109.28||971.59|||,576.67||10.44|||

Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable□ Not applicable
Unit: RMB
2016 Semi-annual Report of Changchai Company, Limited
||||||
|-|-|-|-|-|
|Accounts receivable|Closing balance||||
|(classified by units)|Account receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Estimated difficult to|
|Customer 1|3,863,600.00|1,931,800.00|50.00%||
|||||recover|
|Customer 2|1,902,326.58|1,902,326.58|100.00%|Difficult to recover|
|Customer 3|6,215,662.64|6,193,248.32|99.64%|Difficult to recover|
|||||Estimated difficult to|
|Customer 4|4,115,396.29|2,217,955.89|53.89%||
|||||recover|
|||||Estimated difficult to|
|Customer 5|3,279,100.00|3,279,100.00|100.00%||
|||||recover|
|||||Estimated difficult to|
|Customer 6|2,592,177.01|2,592,177.01|100.00%||
|||||recover|
|Customer 7|5,359,381.00|5,359,381.00|100.00%|Difficult to recover|
|Customer 8|2,584,805.83|2,584,805.83|100.00%|Difficult to recover|
|Customer 9|1,060,660.44|1,060,660.44|100.00%|Difficult to recover|
|Customer 10|1,494,122.14|1,494,122.14|100.00%|Difficult to recover|
|||||Estimated difficult to|
|Customer 11|12,095,079.96|6,886,589.09|56.94%||
|||||recover|
|Total|44,562,311.89|35,502,166.30|--|--|

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Account receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Subtotal of within 1 year|381,521,022.15|7,630,420.44|2.00%|
|1 to 2 years|127,647,057.22|6,382,352.84|5.00%|
|2 to 3 years|2,943,628.31|441,544.25|15.00%|
|Over 3 years|185,701,003.32|180,904,771.38||
|3 to 4 years|6,227,544.95|1,868,263.49|30.00%|
|4 to 5 years|1,092,376.21|655,425.73|60.00%|
|Over 5 years|178,381,082.16|178,381,082.16|100.00%|
|Total|702,139,081.00|195,359,088.90||

(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB13, 142,037.40; the amount of the
2016 Semi-annual Report of Changchai Company, Limited reversed or collected part during the Reporting Period was of RMB 3,251,476.25.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
N/A
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB314, 715,720.86,42.05% of total closing balance of account receivable.42.05%, the relevant closing balance of bad debt provision withdrawn was RMB33, 201,024.83
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|2,853,18||2,853,18|||2,853,1||2,853,188|||
|||8.03%||100.00%|||8.44%||100.00%||
|amount for which|8.02||8.02|||88.02||.02|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Other accounts|||||||||||
|receivable withdrawn|||||||||||
||30,710,3||24,123,2||6,587,098|29,010,||24,124,75||4,885,363.0|
|bad debt provision||86.47%||78.55%|||85.79%||83.16%||
||94.21||96.14||.07|122.91||9.90||1|
|according to credit|||||||||||
|risks characteristics|||||||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|1,952,62||1,952,62|||1,952,6||1,952,628|||
|||5.50%||100.00%|||5.77%||100.00%||
|amount for which|8.15||8.15|||28.15||.15|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
||35,516,2||28,929,1||6,587,098.07|33,815,||28,930,57||4,885,363.01|
|Total||100.00%||81.45%|||100.00%||85.55%||
||10.38||12.31|||939.08||6.07|||

2016 Semi-annual Report of Changchai Company, Limited Other receivable with single significant amount and withdrawal bad debt provision separately at end ofperiod：
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||||
|Other accounts receivable|||||
||Other accounts||||
|(unit)||Bad debt provision|Withdrawal proportion|Withdrawal reason|
||receivable||||
|Changchai Group Import|||||
||2,853,188.02|2,853,188.02|100.00%|Difficult to recover|
|& Export Co., Ltd.|||||
|Total|2,853,188.02|2,853,188.02|--|--|

In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Subtotal of within 1 year|4,804,251.37|96,085.03|2.00%|
|1 to 2 years|212,264.36|10,613.22|5.00%|
|2 to 3 years|721,514.66|108,227.04|15.00%|
|Over 3 years|24,972,363.82|23,908,370.86||
|3 to 4 years|670,650.62|201,195.19|30.00%|
|4 to 5 years|1,486,343.82|891,806.29|60.00%|
|Over 5 years|22,815,369.38|22,815,369.38|100.00%|
|Total|30,710,394.21|24,123,296.14||

(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB145, 216.33; the amount of the reversed or collected part during the Reporting Period was of RMB 146,680.09.
(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
N/A
(4) Other account receivable classified by account nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Margin &cash pledge|4,200.00|4,200.00|

2016 Semi-annual Report of Changchai Company, Limited
||||
|-|-|-|
|Intercourse funds between entities|18,046,889.10|17,463,134.91|
|Petty cash &employee borrowing|1,583,214.07|1,560,886.41|
|Others|15,881,907.21|14,787,717.76|
|Total|35,516,210.38|33,815,939.08|

 (5) The top five other account receivable classified by debtor at period-end
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Changzhou||||||
||Intercourse funds|2,940,000.00|Over 5 years|8.28%|2,940,000.00|
|Compressor Co., Ltd.||||||
|Changchai Group||||||
|Import & Export Co.,|Intercourse funds|2,853,188.02|Over 5 years|8.03%|2,853,188.02|
|Ltd.||||||
|Changzhou New||||||
|District Accounting|Intercourse funds|1,626,483.25|Over 5 years|4.58%|1,626,483.25|
|Center||||||
|Changzhou||||||
|Xingsheng Property|Intercourse funds|1,141,056.71|Within 1 year|3.21%|22,821.13|
|Management Co., Ltd.||||||
|OEM Group||||||
||Intercourse funds|1,140,722.16|Over 5 years|3.21%|1,140,722.16|
|Settlement Cente||||||
|Total|--|9,701,450.14|--|27.32%|8,583,214.56|

 3. Long-term equity investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Investment to the|||||||
||184,466,500.00||184,466,500.00|184,466,500.00||184,466,500.00|
|subsidiary|||||||
|Investment to|||||||
|joint ventures and|||||||
||21,634,751.38|44,182.50|21,590,568.88|20,813,487.26|44,182.50|20,769,304.76|
|associated|||||||
|enterprises|||||||
|Total|206,101,251.38|44,182.50|206,057,068.88|205,279,987.26|44,182.50|205,235,804.76|

2016 Semi-annual Report of Changchai Company, Limited (1) Investment to the subsidiary
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Investee|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||Reporting Period||
|Changchai|||||||
|Wanzhou Diesel|51,000,000.00|||51,000,000.00|||
|Engine Co., Ltd.|||||||
|Changzhou|||||||
|Changchai Benniu|||||||
||96,466,500.00|||96,466,500.00|||
|Diesel Engine|||||||
|Fittings Co., Ltd.|||||||
|Changzhou|||||||
|Housheng|||||||
||30,000,000.00|||30,000,000.00|||
|Investment Co.,|||||||
|Ltd.|||||||
|Changzhou|||||||
|Changchai|||||||
|Housheng|||||||
||7,000,000.00|||7,000,000.00|||
|Agricultural|||||||
|Equipment Co.,|||||||
|Ltd.|||||||
|Total|184,466,500.00|||184,466,500.00|||

(2) Investment to joint ventures and associated enterprises
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in Reporting Period||||||||||
|||||Investme|||||||Closing|
||||||Adjustme|||||||
|||||nt profit||||Withdraw|||balance|
|||Additiona|||nt of||Declarati|||||
||Opening||Negative|and loss||Other||n||Closing|of|
|Investee||||||||||||
|||l|||other||on of cash|||||
||balance||investmen|recognize||equity||impairme|Others|balance|impairme|
|||investmen|||comprehe||dividends|||||
||||t|d under||changes||nt|||nt|
|||t|||nsive||or profits|||||
|||||the equity||||provision|||provision|
||||||income|||||||
|||||method||||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Changzho|20,769,30|||821,264.1||||||21,590,56||
|u Fuji|4.76|||2||||||8.88||

2016 Semi-annual Report of Changchai Company, Limited
||||||
|-|-|-|-|-|
|Changcha|||||
|i Robin|||||
|Gasoline|||||
|Engine|||||
|Co., Ltd.|||||
|Beijing|||||
|Tsinghua|||||
|Xingye|||||
|Industrial|||||
|Investme|44,182.50||44,182.50|44,182.50|
|nt|||||
|Managem|||||
|ent Co.,|||||
|Ltd.|||||
||20,813,48|821,264.1|21,634,75||
|Subtotal||||44,182.50|
||7.26|2|1.38||
||20,813,487.26||21,634,751.38|44,182.50|
|Total|||||

4. Revenue and Cost of Sales
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|1,153,641,301.29|992,786,487.60|1,361,846,639.00|1,186,065,510.97|
|Other operations|10,055,027.37|7,398,827.46|9,385,125.35|6,353,215.35|
|Total|1,163,696,328.66|1,000,185,315.06|1,371,231,764.35|1,192,418,726.32|

 5. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Long-term equity investment income|||
||821,264.12|397,632.47|
|accounted by equity method|||
|Investment income received from holding of|||
|||3,112,240.00|
|available-for-sale financial assets|||
|Investment income from disposal of bank|||
||364,000.00||
|financial products|||
|Total|1,185,264.12|3,509,872.47|

2016 Semi-annual Report of Changchai Company, Limited XVI. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current|||
||6,113,117.21||
|assets|||
|Tax rebates, reductions or exemptions due to|||
|approval beyond authority or the lack of|3,787,728.09||
|official approval documents|||
|Gain/loss from change of fair value of|||
|transactional assets and liabilities, and|||
|investment gains from disposal of|||
|transactional financial assets and liabilities|1,205,730.87||
|and available-for-sale financial assets, other|||
|than valid hedging related to the Company’s|||
|common businesses|||
|Other non-operating income and expenses|||
||-3,412,491.97||
|other than the above|||
|Less: Income tax effects|986,443.45||
|Minority interests effects|200,000.00||
|Total|6,507,640.75|--|

2. Return on equity and earnings per share
|||||
|-|-|-|-|
|||EPS (Yuan/share）||
|Profit as of Reporting Period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||0.06|0.06|
||1.76%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company after||||
||1.43%|0.05|0.05|
|deduction of non-recurring profit||||
|and loss||||

2016 Semi-annual Report of Changchai Company, Limited 3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Not applicable
2016 Semi-annual Report of Changchai Company, Limited Section X. Documents Available For Reference
1. 2016 semi-annual report with signatures and seals of the Chairman.
2. Financial Statements carried with signatures and seals of responsible person of the Company, Accounting Principal, as well as Head of the Accounting 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 the originals of all the public notices.
4. Articles of Association
Board of Directors Changchai Company, Limited 18 August 2016