CHANGCHAI COMPANY, LIMITED
SEMI-Financial Report 2014
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 Yuan
1. Consolidated balance sheet
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|551,913,952.63|688,297,469.30|
|Settlement reserves|||
|Intra-group lendings|||
|Transactional financial assets|||
|Notes receivable|199,453,958.43|257,845,729.93|
|Accounts receivable|509,084,231.25|317,295,375.34|
|Accounts paid in advance|5,729,029.03|14,659,048.00|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|21,924,873.94|12,723,300.47|
|Financial assets purchased under|||
|agreements to resell|||
|Inventories|439,182,789.99|473,238,876.29|
|Non-current assets due within 1 year|||

||||
|-|-|-|
|Other current assets|||
|Total current assets|1,727,288,835.27|1,764,059,799.33|
|Non-current assets:|||
|Loans by mandate and advances|||
|granted|||
|Available-for-sale financial assets|368,752,000.00|368,754,000.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|65,362,119.40|64,748,325.73|
|Investing property|60,593,541.23|61,697,711.63|
|Fixed assets|603,448,947.19|619,468,246.18|
|Construction in progress|99,655,302.07|78,207,347.80|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|84,529,924.49|84,217,899.70|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|1,195,990.26|1,195,990.26|
|Other non-current assets|||
|Total of non-current assets|1,283,537,824.64|1,278,289,521.30|
|Total assets|3,010,826,659.91|3,042,349,320.63|
|Current liabilities:|||
|Short-term borrowings|30,000,000.00|30,000,000.00|
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Transactional financial liabilities|||
|Notes payable|248,110,000.00|246,300,000.00|
|Accounts payable|499,234,937.72|577,327,834.60|
|Accounts received in advance|47,940,584.35|38,090,958.80|
|Financial assets sold for repurchase|||

||||
|-|-|-|
|Handling charges and commissions|||
|payable|||
|Employee’s compensation payable|26,724,757.17|57,122,045.12|
|Tax payable|-14,227,020.07|-23,761,875.83|
|Interest payable|||
|Dividend payable|3,891,433.83|3,891,433.83|
|Other accounts payable|207,856,766.31|174,454,382.17|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|1,913,733.67|1,939,407.40|
|Total current liabilities|1,051,445,192.98|1,105,364,186.09|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities|49,031,625.00|49,031,925.00|
|Other non-current liabilities|58,078,566.13|61,894,052.94|
|Total non-current liabilities|107,110,191.13|110,925,977.94|
|Total liabilities|1,158,555,384.11|1,216,290,164.03|
|Owners’ equity (or shareholders’|||
|equity)|||
|Paid-up capital (or share capital)|561,374,326.00|561,374,326.00|
|Capital reserves|448,862,029.25|448,863,729.25|
|Less: Treasury stock|||
|Specific reserves|6,996,256.56|6,996,256.56|
|Surplus reserves|289,629,574.39|289,629,574.39|
|Provisions for general risks|||

||||
|-|-|-|
|Retained profits|528,109,322.52|502,779,906.92|
|Foreign exchange difference|-28,981.92|-66,730.67|
|Total equity attributable to owners of|||
||1,834,942,526.80|1,809,577,062.45|
|the Company|||
|Minority interests|17,328,749.00|16,482,094.15|
|Total owners’ (or shareholders’) equity|1,852,271,275.80|1,826,059,156.60|
|Total liabilities and owners’ (or|||
||3,010,826,659.91|3,042,349,320.63|
|shareholders’) equity|||

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
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|528,728,310.29|649,755,641.89|
|Transactional financial assets|||
|Notes receivable|198,565,162.77|257,695,729.93|
|Accounts receivable|471,025,279.62|287,405,670.66|
|Accounts paid in advance|5,532,294.55|10,821,513.13|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|8,547,562.96|10,397,443.72|
|Inventories|350,183,100.57|401,992,702.79|
|Non-current assets due within 1 year|||
|Other current assets|||
|Total current assets|1,562,581,710.76|1,618,068,702.12|
|Non-current assets:|||
|Available-for-sale financial assets|368,752,000.00|368,754,000.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|213,907,059.40|188,666,565.73|

||||
|-|-|-|
|Investing property|60,593,541.23|61,697,711.63|
|Fixed assets|481,710,036.56|496,473,706.65|
|Construction in progress|99,192,866.18|77,785,739.64|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|82,501,569.54|82,161,279.41|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|1,195,990.26|1,195,990.26|
|Other non-current assets|||
|Total of non-current assets|1,307,853,063.17|1,276,734,993.32|
|Total assets|2,870,434,773.93|2,894,803,695.44|
|Current liabilities:|||
|Short-term borrowings|||
|Transactional financial liabilities|||
|Notes payable|241,110,000.00|239,300,000.00|
|Accounts payable|470,735,552.20|534,436,105.73|
|Accounts received in advance|47,440,608.47|48,173,277.25|
|Employee’s compensation payable|23,937,402.26|52,616,431.17|
|Tax payable|-5,707,452.98|-16,220,685.07|
|Interest payable|||
|Dividend payable|3,243,179.97|3,243,179.97|
|Other accounts payable|199,592,133.09|167,758,011.92|
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|980,351,423.01|1,029,306,320.97|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||

||||
|-|-|-|
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities|49,031,625.00|49,031,925.00|
|Other non-current liabilities|58,078,566.13|61,894,052.94|
|Total non-current liabilities|107,110,191.13|110,925,977.94|
|Total liabilities|1,087,461,614.14|1,140,232,298.91|
|Owners’ equity (or shareholders’|||
|equity)|||
|Paid-up capital (or share capital)|561,374,326.00|561,374,326.00|
|Capital reserves|460,890,184.95|460,891,884.95|
|Less: Treasury stock|||
|Specific reserves|6,996,256.56|6,996,256.56|
|Surplus reserves|289,629,574.39|289,629,574.39|
|Provision for general risks|||
|Retained profits|464,082,817.89|435,679,354.63|
|Foreign exchange difference|||
|Total owners’ (or shareholders’) equity|1,782,973,159.79|1,754,571,396.53|
|Total liabilities and owners’ (or|||
||2,870,434,773.93|2,894,803,695.44|
|shareholders’) equity|||

Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
3. Consolidated income statement
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Total operating revenues|1,339,876,201.72|1,597,702,698.46|
|Including: Sales income|1,339,876,201.72|1,597,702,698.46|
|Interest income|||
|Premium income|||
|Handling charge and|||
|commission income|||
|II. Total operating cost|1,300,717,656.51|1,562,568,115.06|
|Including: Cost of sales|1,185,484,758.63|1,432,960,897.52|

||||
|-|-|-|
|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|315,287.40|277,350.13|
|Selling and distribution expenses|58,523,814.07|64,200,737.85|
|Administrative expenses|62,882,576.84|74,097,146.15|
|Financial expenses|-7,132,562.78|-7,612,793.48|
|Asset impairment loss|643,782.35|-1,355,223.11|
|Add: Gain/(loss) from change in fair|||
|value (―-‖ means loss)|||
|Gain/(loss) from investment (―-‖|||
||1,472,670.17|12,352,806.80|
|means loss)|||
|Including: share of profits in associates|||
|and joint ventures|||
|Foreign exchange gains (―-‖ means|||
|loss)|||
|III. Business profit (―-‖ means loss)|40,631,215.38|47,487,390.20|
|Add: non-operating income|7,218,462.62|2,444,279.30|
|Less: non-operating expense|5,605,447.60|2,709,230.25|
|Including: loss from non-current asset|||
||61,479.60|17,207.16|
|disposal|||
|IV. Total profit (―-‖ means loss)|42,244,230.40|47,222,439.25|
|Less: Income tax expense|7,094,145.06|7,353,641.41|
|V. Net profit (―-‖ means loss)|35,150,085.34|39,868,797.84|
|Including: Net profit achieved by|||
|combined parties before the|||
|combinations|||
|Attributable to owners of the|||
||34,303,430.49|39,865,197.16|
|Company|||
|Minority shareholders’ income|846,654.85|3,600.68|

||||
|-|-|-|
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|0.06|0.07|
|(II) Diluted earnings per share|0.06|0.07|
|VII. Other comprehensive incomes|36,048.75|-100,140,108.12|
|VIII. Total comprehensive incomes|35,186,134.09|-60,271,310.28|
|Attributable to owners of the|||
||34,339,479.24|-60,274,910.96|
|Company|||
|Attributable to minority|||
||846,654.85|3,600.68|
|shareholders|||

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
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Total sales|1,354,997,514.11|1,611,325,164.28|
|Less: cost of sales|1,212,418,726.32|1,459,842,700.85|
|Business taxes and surcharges|||
|Distribution expenses|55,680,402.73|61,139,755.87|
|Administrative expenses|55,405,434.27|66,196,199.72|
|Financial costs|-8,790,528.16|-8,792,831.94|
|Impairment loss|643,782.35|-1,355,223.11|
|Add: gain/(loss) from change in fair|||
|value (―-‖ means loss)|||
|Gain/(loss) from investment (―-‖ means|||
||3,060,393.67|12,133,439.60|
|loss)|||
|Including: income form investment on|||
|associates and joint ventures|||
|II. Business profit (―-‖ means loss)|42,700,090.27|46,428,002.49|
|Add: non-business income|6,216,359.80|1,172,586.26|
|Less: non-business expense|5,559,301.31|2,709,116.75|
|Including: loss from non-current asset|||
||61,479.60|17,207.16|
|disposal|||

||||
|-|-|-|
|III. Total profit (―-‖ means loss)|43,357,148.76|44,891,472.00|
|Less: income tax expense|6,533,070.61|6,922,380.50|
|IV. Net profit (―-‖ means loss)|36,824,078.15|37,969,091.50|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|0.07||
|(II) Diluted earnings per share|0.07||
|VI. Other comprehensive income|-1,700.00|-100,094,725.00|
|VII. Total comprehensive income|36,822,378.15|-62,125,633.50|

 Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
5. Consolidated cash flow statement
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||1,394,839,795.50|1,616,369,972.24|
|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 disposal of tradable|||
|financial assets|||
|Cash received from interest, handling|||
|charges and commissions|||
|Net increase of intra-group|||

||||
|-|-|-|
|borrowings|||
|Net increase of funds in repurchase|||
|business|||
|Tax refunds received|19,215,031.04|23,964,783.80|
|Other cash received relating to|||
||18,014,958.47|24,647,890.64|
|operating activities|||
|Subtotal of cash inflows from operating|||
||1,432,069,785.01|1,664,982,646.68|
|activities|||
|Cash paid for goods and services|1,252,794,264.51|1,356,780,835.29|
|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|145,777,445.78|157,035,563.67|
|Various taxes paid|26,373,319.83|21,549,567.29|
|Other cash payment relating to|||
||37,480,542.74|42,945,364.85|
|operating activities|||
|Subtotal of cash outflows from|||
||1,462,425,572.86|1,578,311,331.10|
|operating activities|||
|Net cash flows from operating activities|-30,355,787.85|86,671,315.58|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
|||0.00|
|investments|||
|Cash received from return on|||
||1,472,670.17|11,779,367.20|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|158,173.02|286,693.11|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
||20,000.00|5,000,000.00|
|investing activities|||

||||
|-|-|-|
|Subtotal of cash inflows from|||
||1,650,843.19|17,066,060.31|
|investing activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|61,493,442.88|56,154,612.02|
|assets|||
|Cash paid for investment||0.00|
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries|||
||23,850,000.00||
|and other business units|||
|Other cash payments relating to|||
||11,500,000.00|21,000,000.00|
|investing activities|||
|Subtotal of cash outflows from|||
||96,843,442.88|77,154,612.02|
|investing activities|||
|Net cash flows from investing activities|-95,192,599.69|-60,088,551.71|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received from borrowings||20,500,000.00|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
|||4,955.77|
|financing activities|||
|Subtotal of cash inflows from financing|||
||0.00|20,504,955.77|
|activities|||
|Repayment of borrowings||10,500,000.00|
|Cash paid for interest expenses and|||
||8,974,014.89|1,403,740.18|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
||553,400.00||
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|||
|financing activities|||
|Sub-total of cash outflows from|||
||8,974,014.89|11,903,740.18|
|financing activities|||
|Net cash flows from financing activities|-8,974,014.89|8,601,215.59|

||||
|-|-|-|
|IV. Effect of foreign exchange rate|||
||37,748.75|-45,383.12|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||-134,484,653.68|35,138,596.34|
|equivalents|||
|Add: Opening balance of cash and|||
||610,882,216.18|637,004,823.27|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||476,397,562.50|672,143,419.61|
|equivalents|||

Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
6. Cash flow statement of the Company
Prepared by Changchai Company, Limited
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||1,396,130,314.62|1,611,461,476.63|
|commodities and rendering of service|||
|Tax refunds received|19,215,031.04|23,964,783.80|
|Other cash received relating to|||
||16,849,880.76|20,158,573.47|
|operating activities|||
|Subtotal of cash inflows from operating|||
||1,432,195,226.42|1,655,584,833.90|
|activities|||
|Cash paid for goods and services|1,283,081,961.60|1,366,693,890.34|
|Cash paid to and for employees|128,355,508.04|141,588,380.76|
|Various taxes paid|22,352,270.90|17,960,083.75|
|Other cash payment relating to|||
||32,394,115.76|41,358,406.67|
|operating activities|||
|Subtotal of cash outflows from|||
||1,466,183,856.30|1,567,600,761.52|
|operating activities|||
|Net cash flows from operating activities|-33,988,629.88|87,984,072.38|
|II. Cash flows from investing activities:|||
|Cash received from retraction of|||
|investments|||
|Cash received from return on|2,446,600.00|11,560,000.00|

||||
|-|-|-|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|158,173.02|286,693.11|
|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|||
||2,604,773.02|11,846,693.11|
|investing activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|56,797,296.86|47,695,953.82|
|assets|||
|Cash paid for investment|||
|Net cash paid to acquire subsidiaries|||
||24,626,700.00||
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||81,423,996.86|47,695,953.82|
|investing activities|||
|Net cash flows from investing activities|-78,819,223.84|-35,849,260.71|
|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|||
|financing activities|||
|Subtotal of cash inflows from financing|||
||0.00|0.00|
|activities|||
|Repayment of borrowings|0.00|0.00|
|Cash paid for interest expenses and|||
||8,420,614.89|180,422.71|
|distribution of dividends or profit|||
|Other cash payments relating to|||
|financing activities|||
|Sub-total of cash outflows from|8,420,614.89|180,422.71|

||||
|-|-|-|
|financing activities|||
|Net cash flows from financing activities|-8,420,614.89|-180,422.71|
|IV. Effect of foreign exchange ratechanges on cash and cash equivalents|||
|V. Net increase in cash and cashequivalents|||
||-121,228,468.61|51,954,388.96|
|Add: Opening balance of cash andcash equivalents|||
||574,440,388.77|605,259,198.95|
|VI. Closing balance of cash and cashequivalents|||
||453,211,920.16|657,213,587.91|

Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
7. Consolidated statement of changes inowners’ equity
Prepared by Changchai Company, Limited
Jan.-Jun. 2014
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Reporting period||||||||||
||Equity attributable to owners of the Company||||||||||
||Paid-up||||||||||
|||||||||||Total|
|Item|capital||Less:|||General|||Minority||
|||Capitalreserve||Specific|Surplus||Retaine|||owners’|
||(or||treasury|||risk||Others|interests||
|||||reserve|reserve||d profit|||equity|
||share||stock|||reserve|||||
||capital)||||||||||
|I. Balance at the end of the|561,374|448,863,||6,996,25|289,629||502,779,|-66,730.|16,482,09|1,826,059,|
|previous year|,326.00|729.25||6.56|,574.39||906.92|67|4.15|156.60|
|Add: change of accounting|||||||||||
|policy|||||||||||
|Correction of errors in|||||||||||
|previous periods|||||||||||
|Other|||||||||||
|II. Balance at the beginning of|561,374|448,863,||6,996,25|289,629||502,779,|-66,730.|16,482,09|1,826,059,|
|the year|,326.00|729.25||6.56|,574.39||906.92|67|4.15|156.60|
|III. Increase/ decrease of|||||||||||
|||-1,700.00|||||25,329,4|37,748.7|846,654.8|26,212,119|
|amount in the year (―-‖ means|||||||||||
||||||||15.60|5|5|.20|
|decrease)|||||||||||

|||||||
|-|-|-|-|-|-|
|||34,303,4||846,654.8|35,150,085|
|(I) Net profit||||||
|||30.49||5|.34|
|(II) Other comprehensive|-1,700.0||37,748.7|||
||||||36,048.75|
|incomes|0||5|||
||-1,700.0|34,303,4|37,748.7|846,654.8|35,186,134|
|Subtotal of (I) and (II)||||||
||0|30.49|5|5|.09|
|(III) Capital paid in and||||||
|reduced by owners||||||
|1. Capital paid in by||||||
|owners||||||
|2. Amounts of share-based||||||
|payments recognized in||||||
|owners’ equity||||||
|3. Others||||||
|||-8,974,0|||-8,974,014.|
|(IV) Profit distribution||||||
|||14.89|||89|
|1. Appropriations to||||||
|surplus reserves||||||
|2. Appropriations to||||||
|general risk provisions||||||
|3. Appropriations to||-8,974,0|||-8,974,014.|
|owners (or shareholders)||14.89|||89|
|4. Other||||||
|(V) 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||||||
|(VI) Specific reserve||||||
|1. Withdrawn for the||||||
|period||||||
|2. Used in the period||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|(VII) Other|||||||||
||561,374|448,862,|6,996,25|289,629|528,109,|-28,981.|17,328,74|1,852,271,275.80|
|IV. Closing balance|||||||||
||,326.00|029.25|6.56|,574.39|322.52|92|9.00||

 Jan.-Jun. 2013
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Last year||||||||||
||Equity attributable to owners of the Company||||||||||
||Paid-up||||||||||
|||||||||||Total|
|Item|capital||Less:|||General|||Minority||
|||Capital||Specific|Surplus||Retaine|||owners’|
||(or||treasury|||risk||Others|interests||
|||reserve||reserve|reserve||d profit|||equity|
||share||stock|||reserve|||||
||capital)||||||||||
|I. Balance at the end of the|561,374|548,950,||4,169,08|282,364||448,366,|-32,070.|16,143,38|1,861,336,|
|previous year|,326.00|379.25||7.73|,917.36||561.06|75|2.32|582.97|
|Add: retrospective|||||||||||
|adjustments due to business|||||||||||
|combinations under the same|||||||||||
|control|||||||||||
|Add: change of accounting|||||||||||
|policy|||||||||||
|Correction of errors in|||||||||||
|previous periods|||||||||||
|Other|||||||||||
|II. Balance at the beginning of|561,374|548,950,||4,169,08|282,364||448,366,|-32,070.|16,143,38|1,861,336,|
|the year|,326.00|379.25||7.73|,917.36||561.06|75|2.32|582.97|
|III. Increase/ decrease of|||||||||||
|||-100,09|||||25,830,8|-45,383.||-74,305,66|
|amount in the year (―-‖ means|||||||||3,600.68||
|||4,725.00|||||39.01|12||8.43|
|decrease)|||||||||||
||||||||39,865,1|||39,868,797|
|(I) Net profit|||||||||3,600.68||
||||||||97.16|||.84|
|(II) Other comprehensive||-100,09||||||-45,383.||-100,140,1|
|incomes||4,725.00||||||12||08.12|
|||-100,09|||||39,865,1|-45,383.||-60,271,31|
|Subtotal of (I) and (II)|||||||||3,600.68||
|||4,725.00|||||97.16|12||0.28|
|(III) Capital paid in and|||||||||||
|reduced by owners|||||||||||
|1. Capital paid in by|||||||||||
|owners|||||||||||
|2. Amounts of share-based|||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|payments recognized in|||||||||
|owners’ equity|||||||||
|3. Others|||||||||
||||||-14,034,|||-14,034,35|
|(IV) Profit distribution|||||||||
||||||358.15|||8.15|
|1. Appropriations to|||||||||
|surplus reserves|||||||||
|2. Appropriations to|||||||||
|general risk provisions|||||||||
|3. Appropriations to|||||-14,034,|||-14,034,35|
|owners (or shareholders)|||||358.15|||8.15|
|4. Other|||||||||
|(V) 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|||||||||
|(VI) Specific reserve|||||||||
|1. Withdrawn for the|||||||||
|period|||||||||
|2. Used in the period|||||||||
|(VII) Other|||||||||
||561,374|448,855,|4,169,08|282,364|474,197,|-77,453.|16,146,98|1,787,030,|
|IV. Closing balance|||||||||
||,326.00|654.25|7.73|,917.36|400.07|87|3.00|914.54|

 Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
8. Statement of changes inowners’ equity of the Company
Prepared by Changchai Company, Limited
Jan.-Jun. 2014
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting period||||||||
||Paid-up||||||||
||||Less:|||General||Total|
|Item|capital (or|Capital||Specific|Surplus||Retained||
||||treasury|||risk||owners’|
||share|reserve||reserve|reserve||profit||
||||stock|||reserve||equity|
||capital)||||||||
|I. Balance at the end of the|561,374,32|460,891,88||6,996,256.|289,629,57||435,679,35|1,754,571,|
|previous year|6.00|4.95||56|4.39||4.63|396.53|
|Add: change of accounting|||||||||
|policy|||||||||
|Correction of errors in|||||||||
|previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of|561,374,32|460,891,88||6,996,256.|289,629,57||435,679,35|1,754,571,|
|the year|6.00|4.95||56|4.39||4.63|396.53|
|III. Increase/ decrease of amount|||||||28,403,463|28,401,763|
|||-1,700.00|||||||
|in the year (―-‖ means decrease)|||||||.26|.26|
||||||||36,824,078|36,824,078|
|(I) Net profit|||||||||
||||||||.15|.15|
|(II) Other comprehensive|||||||||
|||-1,700.00||||||-1,700.00|
|incomes|||||||||
||||||||36,824,078|36,822,378|
|Subtotal of (I) and (II)||-1,700.00|||||||
||||||||.15|.15|
|(III) Capital paid in and|||||||||
|reduced by owners|||||||||
|1. Capital paid in by owners|||||||||
|2. Amounts of share-based|||||||||
|payments recognized in owners’|||||||||
|equity|||||||||
|3. Others|||||||||
||||||||-8,420,614.|-8,420,614.|
|(IV) Profit distribution|||||||||
||||||||89|89|
|1. Appropriations to surplus|||||||||
|reserves|||||||||
|2. Appropriations to general|||||||||
|risk provisions|||||||||
|3. Appropriations to owners|||||||-8,420,614.|-8,420,614.|
|(or shareholders)|||||||89|89|

||||||||
|-|-|-|-|-|-|-|
|4. Other|||||||
|(V) 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|||||||
|(VI) Specific reserve|||||||
|1. Withdrawn for the period|||||||
|2. Used in the period|||||||
|(VII) Other|||||||
||561,374,32|460,890,18|6,996,256.|289,629,57|464,082,81|1,782,973,159.79|
|IV. Closing balance|||||||
||6.00|4.95|56|4.39|7.89||

 Jan.-Jun. 2013
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Last year||||||||
||Paid-up||||||||
||||Less:|||General||Total|
|Item|capital (or|Capital||Specific|Surplus||Retained||
||||treasury|||risk||owners’|
||share|reserve||reserve|reserve||profit||
||||stock|||reserve||equity|
||capital)||||||||
|I. Balance at the end of the|561,374,32|560,978,53||4,169,087.|282,364,91||384,331,79|1,793,218,|
|previous year|6.00|4.95||73|7.36||9.53|665.57|
|Add: change of accounting|||||||||
|policy|||||||||
|Correction of errors in|||||||||
|previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of|561,374,32|560,978,53||4,169,087.|282,364,91||384,331,79|1,793,218,|
|the year|6.00|4.95||73|7.36||9.53|665.57|
|III. Increase/ decrease of amount||-100,094,7|||||23,934,733|-76,159,99|
|in the year (―-‖ means decrease)||25.00|||||.35|1.65|
||||||||37,969,091|37,969,091|
|(I) Net profit|||||||||
||||||||.50|.50|

||||||||
|-|-|-|-|-|-|-|
|(II) Other comprehensive||-100,094,7||||-100,094,7|
|incomes||25.00||||25.00|
|||-100,094,7|||37,969,091|-62,125,63|
|Subtotal of (I) and (II)|||||||
|||25.00|||.50|3.50|
|(III) Capital paid in and|||||||
|reduced by owners|||||||
|1. Capital paid in by owners|||||||
|2. Amounts of share-based|||||||
|payments recognized in owners’|||||||
|equity|||||||
|3. Others|||||||
||||||-14,034,35|-14,034,35|
|(IV) Profit distribution|||||||
||||||8.15|8.15|
|1. Appropriations to surplus|||||||
|reserves|||||||
|2. Appropriations to general|||||||
|risk provisions|||||||
|3. Appropriations to owners|||||-14,034,35|-14,034,35|
|(or shareholders)|||||8.15|8.15|
|4. Other|||||||
|(V) 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|||||||
|(VI) Specific reserve|||||||
|1. Withdrawn for the period|||||||
|2. Used in the period|||||||
|(VII) Other|||||||
||561,374,32|460,883,80|4,169,087.|282,364,91|408,266,53|1,717,058,|
|IV. Closing balance|||||||
||6.00|9.95|73|7.36|2.88|673.92|

Legal representative: Xue Guojun Person-in-charge of the accounting
work: He Jianguang
Chief of the accounting division: Jiang He
III. Company Profile
Changchai Company, Limited (hereinafter referred to as―theCompany‖) 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 Jan. 1993 by way of public offering of shares. With the approved of the People's Government of Jiangsu Province SZF[1993] No. 67, as well as reexamined and approved by China Securities Regulatory Commission(―CSRC‖) through document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 Mar. 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 Jul. 1994 at Shenzhen Stock Exchange with―Su ChangchaiA‖ for short of stock, as well as―0570‖ as stock code (present stock code is―000570‖).
In 1996, with the recommendation of the Office of the People's Government of Jiangsu Province SZBH[1996] No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ[1996] No. 24, and approval of the State Council Securities Commission ZWF[1996] No. 27, the Company issued 100 million B shares to qualified investors on 27 Aug. 1996 to 30 Aug. 1996, getting listed on 13 Sep. 1996.
On 9 Jun. 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 Jun. 2006.
As examined and approved at the 2009 2nd ExtraordinaryShareholders’ General Meeting in Sep. 2009, based on the total share capital of 374,249,551 shares as at 30 Jun. 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 RMB 187,124,775.00, as well as registered capital of RMB 561,374,326.00 after change. As at 31 Dec. 2011, the total share capital of the Company is 561,374,326 shares, as well as registered capital of RMB 561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC[2010] No. B002 and managed the industry and commerce changes registration, as well as the Company obtained the renewed business license as legal person with No. 320400000004012. 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 7th Session of the 7th Board of Directors on 19 Aug. 2014.
IV. Main accounting policies, accounting estimates and prior period errors
1. Basis for preparation
With going-concern assumption as the basis, the Company prepares the following significant accounting policies and accounting estimates in light of the actual transactions and matters, as well as the ASBE issued by Ministry of Finance on 15 Feb. 2006.
2. Statement on following Accounting Standard for Business Enterprises
The Company declared that the Financial Report prepared by the Company was in line with requirements of the Accounting Standard for Business Enterprises, which reflected the financial status, operating results and cash flow of the Company truly and objectively.
3. 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.
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
The combination consideration paid by the combining party and net assets obtained by the combining party in a business combination shall be measured on the basis of their carrying amount. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, 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 handling fees, commissions and other expense for the issuance of equity securities or bonds for the business combination shall be recorded into the amount of initial measurement of theshareholders’ equity or liabilities.
(2) Business combinations not under the same control
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 balance that the combination costs are less than the fair value of the identifiable net assets the acquirer obtains from the acquiree in a business combination, including expense on audit, evaluating and legal services shall be recorded into the gains and losses at the current period. The handling fees, commissions and other expenses for the issuance of equity securities or bonds for the business combination shall be recorded into the amount of initial measurement of theshareholders’ equity or liabilities.
6. Preparation methods for consolidated financial statements
(1) Preparation methods of consolidated financial statements
The Company shall start consolidating the subsidiary companies since the date the Company obtained the actual control right of the subsidiaries and stop consolidating since the date the Company lost the actual control right of the subsidiaries. All significant current balance, investment, transactions and unrealized profits between the Company and subsidiary company or among the subsidiaries shall be offset when preparing the consolidated financial statement. As for the shares in theowner’s equity of subsidiary company not belong to the Company, shall be indicated in the item of―minorityshareholders’equity‖ belonging theowner’s equity in the consolidated balance sheet.
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 current status of each party participating in the consolidation when the final control party starts implementing control.
7. Recognition standard for cash and cash equivalents
The term―cash‖ refers to cash on hand and deposits that are available for payment at any time. The term―cashequivalents‖ refers to short-term (within 3 months from the purchase date) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
8. Foreign currency and accounting method for foreign currency
(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.
(2) Translations of financial statements in foreign currencies
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.
9. Financial instruments
(1) Category of financial instruments
Financial instruments were divided to: financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the profits and losses of the current period; investments which will be held to their maturity;
accounts receivable; financial assets available for sale; other financial liabilities.
(2) Recognition and measurement of financial liabilities
1) Recognition of financial assets
When an enterprise becomes a party to a financial instrument, it shall recognize a financial asset or financial liability.
Where a financial asset satisfies any of the following requirements, the recognition of it shall be terminated:
(1) Where the contractual rights for collecting the cash flow of the said financial assets are terminated;
(2) Where the said financial asset has been transferred and meets the conditions for recognizing the termination of financial assets as provided for in Accounting Standard for Business Enterprises No. 23– Transfer of Financial Assets.
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.
2) Financial assets and the category, recognition and measurement of the financial liabilities
The classification, recognition and measurement of financial assets and financial liabilities
(1) The financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the profits and losses of the current period
The interest rate or cash dividend which was gained in the when the financial assets held by the Company are measured at its fair value and of which the variation is recorded into the profits and losses in the current period shall be recognized as investment income. On Balance Sheet Date, the change in the fair value of the financial asset or financial liability which is measured at its fair value and of which the variation is recorded into the profits and losses of the current period, shall be recorded into the profits and losses of the current period; when the said financial assets or financial liabilities are on disposal, the difference between the fair value and the amount in initial account shall be recognized as investment income, meanwhile, the profits and loses arising from the change in fair value shall be adjusted.
(2) The investments which will be held to their maturity
The investments which will be held to their maturity will regard the sum between the gained fair value and the transaction expense thereof as the initially recognized amount. The interest on bonds in payment, of which the mature interest is not drawn, shall be solely recognized as the receivables.
The interest revenue which is measured and recognized by the post-amortization cost and actual interest rate during the holding period of held-to-maturity investment shall be recorded into investment income. The actual interest rate which is recognized in the period of gaining the held-to-maturity investment shall remained unchanged within the predicted term of existence or within a shorter applicable term of the said investment. The little difference between actual interest rate and coupon rate shall be recorded into the profits of losses in the current period.
When the held-to-maturity investments are on disposal, the difference between the obtained price and investment book value shall be recorded into the profits and losses in the current period.
(3) Accounts receivable
Thecreditor’s right receivable formed during the Company selling commodity outside or offering labor shall be regarded as the initial recognized amount in accordance with the receivable price stipulated in the contract or agreement signed between the Company and the buyers.
When the Company recovers or disposes the accounts receivable, the difference between the obtained price and the book value of the accounts receivable shall be recorded into the profits and losses in the current period.
(4) Financial assets available for sale
The available-for-sale financial assets will be regarded at the initial recognized amount in accordance of the sum between the fair value obtained from the said financial assets and the transaction expense thereof. The interest on bonds of which the mature interest rate is not drawn in the payment or the cash dividend which is declared but not extended in the payment shall be solely recognized as the receivables.
The interest rate or cash dividend gained during the period of holding the available-for-sale financial assets shall be recorded into investment income. On balance sheet date, the financial assets shall be measured through fair value, while the change in fair value is recorded into capital reserves (other capital reserves).
When the financial assets are on disposal, the difference between the obtained price and the book value of the financial assets shall be recorded into investment income, meanwhile, the amount on proposal transferring out from the accumulated amount which is directly recorded intoshareholders’ equity and arises from the variation of the fair value, shall be recorded into investment income.
(5) Other financial liabilities
Other financial liabilities are regarded as the initial recognized amount in accordance with the sum between the fair value and the transaction expense thereof. The Company shall make subsequent measurement on other financial liabilities on the basis of the post-amortization costs.
(3) Recognition and accounting method for transfer of financial assets
Transfer of a financial asset refers to the Company transferring or delivering a financial asset to a party other than the issuer of the financial asset (the transferee).
Where the Company has transferred 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. If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a financial asset, it shall deal with it according to the circumstances as follows, respectively: if it gives up its control over the financial asset, it shall stop recognizing the financial asset and recognize the occurred assets and liabilities; if it does not give up its control over the financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset, recognize the related financial asset and recognize the relevant liability accordingly.
(4) Derecognizing conditions of financial liabilities
Only if the whole or partly of the current obligation of the financial liabilities of the Company is relieved, should derecognize the financial liabilities or partly of it.
(5) Recognition method for fair value of financial assets and financial liabilities
1) The quotation in the active market shall be used to recognize the fair value of the financial assets or financial liabilities existing in active market.
2) If the financial instruments do not exist in the active market, the fair value shall be recognized by value appraisal techniques.
3) As for the financial assets initially obtained of produced at source and the financial liabilities assumed, the fair value thereof shall be determined on the basis of the transaction price of the market.
(6) Withdrawal of impairment provision for financial assets (excluding accounts receivable)
The recognition standard for impairment provision of the financial assets: 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.
The withdrawal method for impairment provision of the financial assets: as for the impairment provision of the financial assets is measured on the basis of post-amortization costs, if the current value of the predicted future cash flow of the financial assets is below the difference in the carrying amount of the said financial asset, the impairment provision of the financial assets shall
be made; as for the impairment provision of the available-for-sale financial assets, if the recoverable amount is below the difference in the carrying amount, the impairment provision shall be made. Where an available-for-sale financial asset is impaired, even if the recognition of the financial asset has not been terminated, the accumulative losses arising from the decrease of the fair value of theowners’ equity which was directly included shall be transferred out and recorded into the profits and losses of the current period.
10. Recognition criteria and withdrawal methods for bad debts provision of accounts receivable
1) Recognition standard for bad debt provision of accounts receivable:
Receivables are considered uncollectible after liquidation with statutory procedures for debtors are in bankrupt, due death of debtors who has no bequest and no undertaker on obligation, or caused by debtors fail to perform their obligation to pay a debt over three years, and it will be recognized as bad debt.
2) Withdrawal method of bad debt provision:
(1) Bad debt provision for individually significant accounts receivable
|||
|-|-|
|Judgement basis or monetary standards of provision||
|for bad debts of the individually significant accounts|More than 1 million (including 1 million)|
|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 between the current values of the predicted future|
|Method of individual provision for bad debts of the||
||cash flow lower than book value. Upon independent|
|individually significant accounts receivable||
||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) Accounts receivable for which bad debt provisions are made on the group basis
||||
|-|-|-|
||Withdrawal method of||
|Name of group|bad debt provision on|Recognition basis of group|
||the group basis||
|||Withdraw the bad debt provisions by aging analysis|
|Aging group|Aging analysis method||
|||method|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
||||
|-|-|-|
|Age|Withdrawal proportion for|Withdrawal proportion for other accounts|

||||
|-|-|-|
||accounts receivable (%)|receivable (%)|
|Within 1 year (including 1|||
||2%|2%|
|year)|||
|1-2 years|5%|5%|
|2-3 years|15%|15%|
|3-4 years|30%|30%|
|4-5 years|60%|60%|
|Over 5 years|100%|100%|

 In the groups, adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision
√ Applicable□ Inapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||As for an account receivable with an insignificant single amount and|
||which can not show its risk feature when withdrawing a bad-bet|
|Reason of individually withdrawing|provision for it on the group basis, the bad-debt provision for the account|
|bad debt provision|receivable shall be withdrawn based on the difference of the expected|
||present value of the future cash 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|
|Withdrawal method for bad debt||
||other relevant information. According to the 4th Session of the 9th Board|
|provision||
||of Directors, as for the accounts receivable of the related parties of the|
||Company which owned the sustainable operation ability, the bad debts|
||provision should not exceed 60% at best.|

11. Inventory
(1) Category of Inventory
Inventories of the Company include raw material, material purchasing, Self-manufactured goods, unfinished products, finished products and low-value consumption.
(2) Pricing method for outgoing inventories
Pricing method: Specific identification method
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves for
inventories
The inventories at the end of the reporting period will be priced according to the lower of the product cost and the 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. 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. The net realizable inventory falling price reserve refers to the value minus the predicted expense needed in the process of completing the production and sales from the predicted price for sale when the Company under normal operations. If the value of the inventory with falling price reserve can be resumed, the inventory falling price reserve and the current income shall be adjusted in line with the increase amount by being resumed (the increase amount should be limited by the original withdrawal amount).
(4) Inventory system for inventories
Inventory system for inventories: Perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
Amortization method: one-off amortization method
Packing articles
Amortization method: one-off amortization method
12. Long-term equity investment
(1) Recognition of 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 long-term equity investment acquired through the merger of enterprises under the same control, 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 acquisition cost and initial investment cost shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
(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 transaction 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.
(3) Long-term equity investment obtained by other means
① The initial cost of a long-term equity investment obtained by making payment in cash shall be
the purchase cost which is actually paid.
② 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.
③ 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.
④ 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.
⑤ 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.
(2) 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 entity. Where the Company holds the shares of an entity between20% and50%, and has no real control to the said entity, or, while the Company holds the shares of an entity below20%, but has a significant influence to the said entity, then the said entity shall be the joint enterprise or associated enterprise of the Company.
The Company shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable shares of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity.
If the accounting policies and accounting periods adopted by the invested entity are different from those adopted by the Company, an adjustment shall be made to the financial statements of the invested entity in accordance with the accounting policies and accounting periods of the Company and recognize the investment profits or losses.
As for other change ofowners’ equity excluding net gains and losses of the investing enterprise, the book value of the long-term equity investment shall be adjusted and measured into theowner’s equity.
3) Long-term equity investment without control, joint control and significant influences
Long-term equity investment for which there is no offer in the active market and of which the fair value cannot be reliably measured shall be measured by employing the cost method.
Long-term equity investment for which there is offer in the active market and of which the fair
value can be reliably shall be showed in the item―available-for-sale financialassets‖, and recorded at fair value. Change in its fair value shall be included in theshareholders’ equity.
(3) Recognition basis of joint control and significant influences to the investing enterprise
Joint control to the investing enterprise refers to the control over an economic activity in accordance with the contracts and agreements, which does not exist unless the investing parties of the economic activity with one an assent on sharing the control power over the relevant important financial and operating decisions. Significant influences to the investing enterprise refers to the power to participate in making decisions on the financial and operating policies of an enterprise, but not to control or do joint control together with other parties over the formulation of these policies.
(4) Method of impairment test of long-term equity investment and withdrawal method of impairment provision of long-term investment
Method of impairment test of long-term equity investment: Where the long-term equity investment with a sign of impairment, its recoverable amount shall be tested. The recoverable amount shall be determined in light of the higher one of the net amount of the selling fair value of the long-term equity investment and the current value of the expected future cash flow of the long-term equity investment.
At the end of reporting period, the Company shall check the long-term equity investment. Where there is a sign of impairment exists, the recoverable amount shall be estimated. Where its recoverable amount is lower than its book value, the impairment of long-term investment shall be made in light of the difference that its recoverable amount is less than its book value.
As for Long-term equity investment for which there is no offer in the active market and of which the fair value cannot be reliably measured, where the amount that its book value is lower than the current value due to impact upon the discount for the expected future cash flow, the current market earnings yield of similar financial assets shall be recognized as impairment loss recording into the profits and losses of the current period.
As for other long-term equity investment except for the available-for-sales financial assets, once any provision for impairment is recognized, it shall not be switched back within theasset’s useful life. The impairment loss of available-for-sales financial asset shall be switched back through equity.
13. Investment real estates
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.
The Company shall make a follow-up measurement to the investment real estate by adopting the cost pattern. The depreciation or amortization for investment real estate shall be made in the light of such relevant policies as depreciation or amortization of fixed assets and intangible assets.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method for provision for impairment of fixed assets.
14. Fixed assets
(1) Recognition of fixed assets
Fixed assets refers to those are held for the sake of producing commodities, rendering labor service, renting or business management with their useful life is in excess of one fiscal year and their unit value is higher.
The fixed assets shall be measured at its cost when obtaining. Its depreciation shall be withdrawn by adopting straight line since the next month that bring the fixed asset to the expected conditions for use.
(2) Depreciation method of various fixed assets
|||||
|-|-|-|-|
|Type|Depreciable life (year)|Residuals rate (%)|Annual depreciation rate (%)|
|Houses and buildings|20-40||2.50-5|
|Machine equipment|6-15||6.67-16.67|
|Electronic equipment|5-10||10-20|
|Transportation equipment|5-10||10-20|

(3) Methods for impairment test of fixed assets and withdrawal method of provision for impairment
The Company shall make inspection to fixed assets at the end of reporting period. Where there is any evidence indicates that the recoverable amount of fixed assets is lower than its book value, such fixed asset shall be subject to an impairment test on the balance sheet date. As for the fixed assets that its recoverable amount is lower than its book value, its provision for impairment shall be withdrawn at the difference that recoverable amount of assets is lower than its book value. The provision for impairment shall be withdrawn on the basis of single item assets. Where it is difficult to do so, it shall be withdrawn on the basis of the asset group to which the asset belongs. Once any loss of asset impairment is recognized, it shall not be switched back in the future accounting periods.
15. Construction in process
(1) Category construction in process
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.
(3) Method of impairment test of construction in process and withdrawal method of impairment
Where a sign of impairment exists, recoverable amount of construction in process shall be tested.
The recoverable amount of construction in process shall be recognized according to the high one between the net amount of fair value after deducting disposal costs and the current value of the expected future cash flow of construction in process.
At the end of fiscal year, the Company shall check the construction in process roundly. Where there is a sign of impairment occur, the recoverable amount shall be estimated, and impairment of construction in process shall be made in light of the difference that its recoverable amount is less than its book value. Once any provision for impairment is recognized, it shall not be switched back within theasset’s useful life.
16. 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 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) Period for ceasing capitalization of borrowing costs
If the acquisition and construction activities of fixed assets, investment real estates and inventories
was interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended , and should recognized as current expenses till the acquisition and construction of the asset restarts.
(4) Calculation method of capitalized 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.
17. Intangible assets
(1) Pricing method of intangible assets
(1) The cost of an outsourcing intangible asset consists of the acquisition price, relevant taxes, and other expenses directly relegated to the asset.
(2) The cost of self-developed intangible assets shall include the total expenditures incurred during the period from the time when it meets the following conditions to the time when the expected purposes of use are realized, except that the expenditures which have already been treated prior to the said period shall not be adjusted.
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ 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 manufacturing by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally.
④ 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;
⑤ The development expenditures of the intangible assets can be reliably measured.
(3) The cost invested into intangible assets by investors shall be determined according to the conventional value in the investment contract or agreement.
(4) The costs of intangible assets acquired from non-monetary assets transaction, debt recombination, government subsides, and merger of enterprises shall be determined respectively according to the Accounting Standard for Business Enterprises No. 7 - Non-monetary Assets, Accounting Standard for Business Enterprises No. 12– Debt Restructurings, Accounting Standard for Business Enterprises No. 16– Government Grants and Accounting Standard for Business Enterprises No. 20– Business Combinations.
(2) Withdrawal of impairment provision of intangible assets
1) As for the intangible assets with limited service life, which are amortized by straight-line method when it is available for use within the service period, shall be recorded into the current profits and losses. The Company shall, at least at the end of each year, check the service life and the amortization method of intangible assets with 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.
2) 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 in (1).
3) The rights to use land of the Company shall be amortized according to the rest service life.
Intangible assets trending to impairment can be tested by its recoverable amount.
The recoverable amount of intangible assets shall be recognized according to the high one between the net amount of fair value after deducting disposal costs and the current value of the expected future cash flow of intangible assets.
18. 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.
19. 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.
20. Revenue
(1) Criteria for recognition time of revenue from selling goods
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 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.
(2) Recognition basis of royalty revenue
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.
(3) Recognition basis for revenue from providing labor services
If the total labor income and the total cost could be measured in a reliable way, the relevant economic benefits could flow into the Company, and the schedule of completion under the transaction could be confirmed in a reliable way, should recognized the realization of labor revenue. If an enterprise could 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 balance sheet date, otherwise should be recognized as the revenue according to the amount of the labor cost that incurred and expected to compensate. The Company recognized the schedule of completion under the transaction concerning the providing of labor services according to the proportion of the costs incurred against the estimated total costs. The Company should ascertain the total revenue from the providing of labor services in accordance with the received or to-be-received price of the party that receives the labor services as stipulated in the contract or agreement, unless the received or to-be-received price as stipulated in the contract or agreement is unfair.
21. Government Subsidies
(1) Types
The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows: (1) Those subsidies used for compensating the related future expenses or losses of the Company 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 (2) Those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses.
(2) Accounting treatment methods
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. But the government subsidies measured at their nominal amounts shall be directly included in the current profits and losses.
22. Deferred income tax assets and liabilities
Deferred income tax assets and liabilities should be calculated and recognized according to the tax base and the difference (temporary difference) of assets and liabilities between its book value. As for the deductible losses and the tax deduction which could deduct the income tax payable in future years according to the tax laws, should be recognized the corresponding deferred income tax assets by considering as the temporary differences. As for the temporary differences of the initial recognition of business reputation, should not be recognized the corresponding deferred income tax liabilities. As for the temporary differences which are formed by the initial recognition of assets or liabilities arising from the transactions which are not business combination that neither affect the accounting profits nor the taxable amount (or the deductible losses),should not be
recognized the corresponding deferred income tax assets and liabilities. On the balance sheet date, the deferred income assets and deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be 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, deductible losses and tax deduction. The deferred income tax assets and the liabilities arising from the taxable temporary differences relating to the investments of subsidiary companies, associated enterprises and contractual enterprises shall be recognized, while those the Company could control the reverse time of the temporary differences and the temporary differences are unlikely to reverse in the excepted future, should not be recognized.
23. Changes in main accounting policies and estimates
Whether there were changes in main accounting policies and estimates of the reporting period
□ Yes√ No
There was no any change.
(1) Changes of main accounting policies
Whether there were changes of main accounting policies of the reporting period
□ Yes√ No
There was no any change.
(2) Change of accounting estimates
Whether there were changes of accounting estimates
□ Yes√ No
24. Correction of previous accounting errors
Whether there was correction of previous accounting errors
□ Yes√ No
There was no error.
(1) Retrospective restatement method
Was any previous accounting error adopting retrospective restatement method discovered in the
report period?
□Yes√No
(2) Prospective application method
Was any previous accounting error adopting prospective application method discovered in the
report period?
□Yes√No
V. Taxation
1. Main taxes and tax rate of the Company
||||
|-|-|-|
|Type of tax|Taxation basis|Tax rates|
|VAT|Payable to sales revenue|13%、17%|
|Business tax|Taxable operating revenue|5%|
|||Tax paid in accordance with the|
|Urban maintenance and construction tax|Taxable turnover amount||
|||tax regulations of tax units location|
||Taxable income of parent company||
|Enterprise income tax|and subsidiary company|15%|
||Changwan||
||The taxable income of the||
|Enterprise income tax|subsidiaries Changchai Benniu|25%|
||Company and Housheng Company||
|Property tax|Income of leasing property|12%|
||70% of original value of||
|Property tax||1.2%|
||independent properties||
|||Tax paid in accordance with the|
|Educatinonal suecharges|Taxable turnover amount||
|||tax regulations of tax units location|

 2. Tax preference and approved document
In 2009, the Company has been identified as High-tech Enterprises, therefore, it enjoys 15-percent preferential rate for corporate income tax, and continues to enjoy it after the Company passed the reexamination in 2012; theCompany’s controllingsubsidiary—Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company, shall pay the corporate income tax at tax rate15% from 1 Jan. 2011 to 31 Dec. 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.
VI. Business combination and consolidated financial statements
(1) Subsidiaries obtained by establishment and investment
Unit: RMB Yuan
|||||||||||||||
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||||||||||||||by|
||||||||||||||minority|
||||||||||||||sharehol|
||||||||||||||ders|
|Changc||No.||||||||||||
|hai||1101,||||||||||||
|Wanzho||Xiamen|||Producti|||||||||
||Limited|||||||||||||
|u Diesel||Road,|||on and|||||||||
||Liability|||350000||21,000,|||||||4,663,9|
|Engine||Wanzho|Industry||sales of|||60%|60%|Yes||||
||Compan|||00.00||000.00|||||||73.66|
|Co.,||u|||diesel|||||||||
||y|||||||||||||
|Ltd.||District,|||engine|||||||||
|(Chang||Chongqi||||||||||||
|wan)||ng||||||||||||
|Changz||||||||||||||
|hou||||||||||||||
|Changc||||||||||||||
|||Nangua||||||||||||
|hai|||||Producti|||||||||
|||n||||||||||||
|Benniu|Limited||||on and|||||||||
|||Village,||||||||||||
|Diesel|Liability|||550630|sales of|550630||||||||
|||Benniu|Industry|||||100%|100%|Yes||||
|Engine|Compan|||00.00|diesel|00.00||||||||
|||Town,||||||||||||
|Fittings|y||||engine|||||||||
|||Wujin||||||||||||
|Co.,|||||fittings|||||||||
|||District||||||||||||
|Ltd.||||||||||||||
|(Benniu||||||||||||||
|)||||||||||||||
|Changz|Limited|No. 123,|Service|300000|External|30,000,||100%|100%|Yes||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|hou|Liability|Huadei|industry|00.00|enterpris|000.00|||||
|Houshe|Compan|Middle|||e||||||
|ng|y|Road,|||investme||||||
|Investm||Changz|||nts,||||||
|ent Co.,||hou|||investme||||||
|Ltd|||||nt||||||
|(Houshe|||||manage||||||
|ng)|||||ment,||||||
||||||consulta||||||
||||||ncy||||||
||||||service||||||
||||||Purchasi||||||
||||||ng, sales||||||
||||||and||||||
||||||technical||||||
||||||service||||||
||||||of||||||
||||||starting||||||
||||||engine||||||
||||||of diesel||||||
|||1 Ang|||engine,||||||
|||Mo Kio|||gasoline||||||
|Chansu|||||||||||
|||Industri|||engine,||||||
|n|||||||||||
|||al Park|||compone||||||
|Internati|Limited||||||||||
|||2A#05-|||nts,||||||
|onal|Liability|||USD||USD|||||
|||12,Amk|Trade||supporti||100%|100%|Yes||
|(Pte.)|Compan|||200,000||200,000|||||
|||Tech|||ng||||||
|Ltd.|y||||||||||
|||1,Singa|||equipme||||||
|(Chansu|||||||||||
|||pore|||nt of||||||
|n)|||||||||||
|||(Singap|||starting||||||
|||ore)|||engine||||||
||||||of diesel||||||
||||||engine||||||
||||||and||||||
||||||gasoline||||||
||||||engine,||||||
||||||agricultu||||||
||||||ral||||||
||||||equipme||||||
||||||nts etc.||||||
|Changz||No. 20|||Rice||||||
||Limited|||||100000|||||
|hou||of||100000|Transpla|||||221,423|
||Liability||Industry|||00.00|95%|95%|Yes||
|Changc||Changj||00.00|nter,|||||.13|
||Compan||||||||||
|hai||iang|||Mini-Till||||||

|||||
|-|-|-|-|
|Houshe|y|Middle|er,AgriculturalMachineryManufacturingandGardeningMachineryManufacturing.|
|ng||Road,||
|Agricult||Chang||
|ural||zhou||
|Equipm||||
|ent Co.,||||
|Ltd.||||
|(Houshe||||
|ng AE)||||

VII. Notes to major items of the consolidated financial statement
1. Monetary funds
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing amount|||Opening amount|||
|Item|Foreign currency|Conversion||Foreign|Conversion||
||||RMB amount|||RMB amount|
||amount|rate||currency amount|rate||
|Cash：|--|--|344,615.56|--|--|626,951.84|
|RMB|--|--|344,615.56|--|--|626,951.84|
|Bank savings：|--|--|476,052,946.94|--|--|610,255,264.34|
|RMB|--|--|474,622,224.69|--|--|586,688,964.61|
|USD|232,528.73|6.1528|1,430,702.77|3,865,288.95|6.0969|23,566,280.20|
|EUR|2.32|8.3966|19.48|2.32|8.4189|19.53|
|Other monetary capital|--|--|75,516,390.13|--|--|77,415,253.12|
|RMB|--|--|75,516,390.13|--|--|77,415,253.12|
|Total|--|--|551,913,952.63|--|--|688,297,469.30|

 Other monetary fund at period-end was the bank acceptance deposit.
2. Notes receivable
(1) Category of notes receivable
Unit: RMB Yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance bill|199,453,958.43|257,845,729.93|
|Total|199,453,958.43|257,845,729.93|

(2) Notes transferred to accounts receivable because drawer of the notes fails to execute the contract or agreement, and undue notes endorsed to other parties at the end of the period
Notes receivable has already endorsed to other party but not yet expired
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Issuing entity|Date of issuance|Expiring day|Amount|Remark|
|Jiangsu Xingyao Motor Co.,|||||
||28 Feb. 2014|28 Aug. 2014|6,000,000.00||
|Ltd.|||||
|Shandong Wuzheng Group|||||
||19 Feb. 2014|19 Aug. 2014|5,000,000.00||
|Co., Ltd.|||||
|Qirui Heavy Industry|||||
||4 Feb. 2014|4 Oct. 2014|3,500,000.00||
|Zhejiang Co., Ltd.|||||
|Shandong Pufa Iron and Steel|||||
||12 Mar. 2014|12 Sep. 2014|3,000,000.00||
|Co., Ltd.|||||
|Hangzhou Donghua Chain|||||
||25 Apr. 2014|25 Oct. 2014|3,000,000.00||
|Group Co., Ltd.|||||
|Total|--|--|20,500,000.00|--|

 3. Accounts receivable
(1) Accounts receivable classified by type
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Closing amount||||Opening amount||||
|Type|Book balance||Bad debt provision||Book balance||Bad debt provision||
|||Proportion(%)||Proportion||Proportion||Proportion|
||Amount||Amount||Amount||Amount||
|||||(%)||(%)||(%)|
|Accounts receivable with|||||||||
|significant single amounts|23,125,776.||19,563,556.6||23,125,77||19,563,556.6||
|||3.14%||84.60%||4.26%||84.60%|
|and withdrawal of bad|05||1||6.05||1||
|debt provision|||||||||
|Accounts receivable with bad debt provision withdrawn according to portfolio|||||||||
||711,894,41||206,372,402.56||519,100,4||205,629,123.||
|Account ages||96.77%||28.99%||95.53%||39.61%|
||4.37||||54.00||10||
||711,894,41||206,372,402.56||519,100,4||205,629,123.||
|Subtotal of the groups||96.77%||28.99%||95.53%||39.61%|
||4.37||||54.00||10||
|Accounts receivable with|||||||||
|insignificant single|||||1,155,900||||
||632,250.00|0.09%|632,250.00|100.00%||0.21%|894,075.00|77.35%|
|amount and individually|||||||||
||||||.00||||
|withdrawn bad debt|||||||||
|provision|||||||||
|Total|735,652,44|--|226,568,209.|--|543,382,1|--|226,086,754.|--|

|||||
|-|-|-|-|
|0.42|17|30.05|71|

 Accounts receivable with significant single amount and individually withdrawn bad debt provision√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawal||
|Accounts receivable|Book balance|Bad debt provision||Withdrawal Reason|
||||Proportion （%）||
|Customer 1|7,063,600.00|3,531,800.00|50%|Estimated irrecoverable|
|Customer 2|1,902,326.58|1,902,326.58|100%|Difficult to recover|
|Customer 3|6,215,662.64|6,185,243.20|99.51%|Difficult to recover|
|Customer 4|5,359,381.00|5,359,381.00|100%|Difficult to recover|
|Customer 5|2,584,805.83|2,584,805.83|100%|Difficult to recover|
|Total|23,125,776.05|19,563,556.61|--|--|

 In the groups, accounts receivable adopting aging analysis method to withdraw bad debt
provision:
√ Applicable□ Inapplicable
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
||Book balance|||Book balance|||
|Aging|||Provision for bad|||Provision for bad|
|||Proportion|||Proportion||
||Amount||debts|Amount||debts|
|||(%)|||(%)||
|Within 1 year|||||||
|Including:|--|--|--|--|--|--|
|Subtotal of within|||||||
||504,855,085.58|70.92%|10,347,453.71|308,845,226.68|59.5%|6,176,905.00|
|1 year|||||||
|1-2 years|10,105,567.58|1.42%|505,278.38|9,688,173.12|1.87%|484,408.67|
|2-3 years|1,008,570.79|0.14%|153,486.37|1,046,771.37|0.2%|157,015.72|
|Over 3 years|195,925,190.42|27.52%|195,366,184.10|199,520,282.83|38.43%|198,810,793.71|
|3 to 4 years|310,689.41|0.04%|94,206.82|428,326.55|0.08%|128,497.98|
|4 to 5 years|856,309.32|0.12%|513,785.59|1,024,151.38|0.2%|614,490.83|
|Over 5 years|194,758,191.69|27.36%|194,758,191.69|198,067,804.90|38.15%|198,067,804.90|
|Total|711,894,414.37|--|206,372,402.56|519,100,454.00|--|205,629,123.1|

 Unit: RMB Yuan In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
Accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawing proportion||
|Account receivable|Balance of book value|Provision for bad debt||Reason for withdrawal|
||||(%)||
|Munching Xingnong|||||
|||||Aging was long and|
|Agricultural Machinery|233,100.00|233,100.00|100%||
|||||difficult to recover|
|Company|||||
|China Yituo Group Co.,|||||
||399,150.00|399,150.00|100%|Difficult to recover|
|Ltd. Benma branch|||||
|Total|632,250.00|632,250.00|--|--|

 (2) Accounts receivable due to the top five entities
||||||
|-|-|-|-|-|
|Name of entity|Relationship|Amount|Term|Proportion (%)|
|Changzhou Dongfeng Agricultural|||||
||Customer|66,968,308.51|Within one year||
|Machinery Group Co., Ltd.||||9.10%|
|Changzhou Dongfeng Agricultural|||||
||Customer|58,477,192.83|Within one year||
|Machinery Group Co., Ltd.||||7.95%|
|Dongfeng Automobile Co.,Ltd|Customer|34,116,620.40|Within one year|4.64%|
|Shenyang Jinbei Vehicle|||||
||Customer|29,812,218.60|Within one year||
|Manufacturing Co.,Ltd.||||4.05%|
|Shandong Wuzheng (Group) Co., Ltd.|Customer|28,564,311.06|Within one year|3.88%|
|Total|--|217,938,651.40|--|29.62%|

 Unit: RMB Yuan 4. Other accounts receivable
(1) Other accounts receivable disclosed by type
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Closing balance||||Opening balance||||
||Book balance||Provision for doubtful debts||Book balance||Provision for doubtful debts||
|Category|||||||||
|||Proportio||Proportio||Proportion||Proportio|
||Amount||Amount||Amount||Amount||
|||n (%)||n (%)||(%)||n (%)|
|Other accounts|||||||||
||2,853,188.02|6.69%|2,853,188.02|100%|2,853,188.02|6.59%|2,853,188.02|100%|
|receivable with|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|significant single|||||||||
|amounts and individual|||||||||
|withdrawal of bad debt|||||||||
|provision|||||||||
|accounts receivable with bad debt provision withdrawn according to portfolio|||||||||
|Aging portfolio|37,914,225.9|88.84%|24,709,351.96|65.17%|38,550,324.54|89.01%|25,827,024.07|67%|
|Subtotal of group|37,914,225.9|88.84%|24,709,351.96|65.17%|38,550,324.54|89.01%|25,827,024.07|67%|
|Other accounts|||||||||
|receivables with|||||||||
|insignificant single|1,907,662.13|4.47%|1,907,662.13|100%|1,907,662.13|4.4%|1,907,662.13|100%|
|amounts and withdrawal|||||||||
|of bad debt provision|||||||||
|Total|42,675,076.05|--|29,470,202.11|--|43,311,174.69|--|30,587,874.22|--|

 Other accounts receivable with significant single amount and individual withdrawal of bad debt provision at the
end of reporting period
√√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawal Proportion（%）||
|Other accounts receivable|Book balance|Bad debt provision||Withdrawal Reason|
|Changchai Group Import &|||||
||2,853,188.02|2,853,188.02|100%|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 withdraw bad debt provision:
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
||Book balance|||Book balance|||
|Aging|||||||
|||Proportion|Book balance||Proportion|Book balance|
||Amount|||Amount|||
|||(%)|||(%)||
|Within 1 year|||||||
|Including:|||||||
|Subtotal for those aging|||||||
||19,146,299.90|39.96%|382,926.00|8,756,366.02|22.71%|175,127.32|
|within 1 year|||||||
|1-2 years|1,043,911.66|2.18%|52,195.58|1,116,546.07|2.9%|55,827.30|
|2-3 years|1,235,380.45|2.58%|185,307.07|1,503,366.49|3.9%|225,504.97|
|Over 3 years|26,488,633.89|55.28%|25,368,923.31|27,174,045.96|70.49%|25,370,564.48|
|3-4 years|605,310.39|1.26%|181,593.12|1,516,000.94|3.93%|454,800.28|

||||||||
|-|-|-|-|-|-|-|
|4-5 years|1,920,834.32|4.01%|1,224,841.01|1,855,702.05|4.81%|1,113,421.23|
|Over 5 years|23,962,489.18|50.01%|23,962,489.18|23,802,342.97|61.75%|23,802,342.97|
|Total|47,914,225.90|--|25,989,351.96|38,550,324.54|--|25,827,024.07|

 In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
Other accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
√√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawal Proportion||
|Other accounts receivable|Book balance|Bad debt provision||Withdrawal Reason|
||||（%）||
|Jiehua Electrical (Anhui) Co.,|||||
||377,033.06|377,033.06|100%|Difficult to recover|
|Ltd.|||||
|Wuxi Fuel Tank Factory|205,095.61|205,095.61|100%|Difficult to recover|
|Other|1,325,533.46|1,325,533.46|100%|Difficult to recover|
|Total|1,907,662.13|1,907,662.13|--|--|

 (2) Information of top five other accounts receivable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Relationship with||||
|Name of entity||Amount|Aging|Proportion of the total (%)|
||the Company||||
|Xuzhou East China Casting General|||||
||Customer|10,000,000.00|Within 1 year||
|Factory||||23.43%|
|Changzhou Compressor Co., Ltd.|Customer|2,940,000.00|Over 5 years|6.89%|
|Import and Export Company of|||||
||Customer|2,853,188.02|Over 5 years||
|Changchai Group||||6.69%|
|Changzhou New District Accounting|||||
||Client|1,626,483.25|Over 5 years|3.09%|
|Center|||||
|Changzhou Xingsheng Property|||||
||Client|628,615.27|Within 1 year|1.19%|
|Management Co., Ltd.|||||
|Total|--|18,048,286.54|--|34.26%|

 5. Prepayment
(1) Prepayment listed according to aging analysis
||||
|-|-|-|
|Aging|Closing amount|Opening amount|

||||||
|-|-|-|-|-|
||Amount|Proportion （%）|Amount|Proportion （%）|
|Within 1 year|4,657,851.07|81.30%|13,699,155.24|93.45%|
|1-2 years|146,310.10|2.56%|70,049.80|0.48%|
|2-3 years|38,100.00|0.67%|3,075.10|0.02%|
|Over 3 years|886,767.86|15.48%|886,767.86|6.05%|
|Total|5,729,029.03|--|14,659,048.00|--|

Unit: RMB Yuan (2) Top five entities of prepayment
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Reason for|
||Relationship with the||||
|Name of entity|||Term||
|||Amount|||
||Company|||unsettlement|
|Xuzhou East China Casting General||||Normal settlement|
||Supplier|2,700,728.55|Within 1 year||
|Factory||||period|
|Brilliant Group International Ltd.||||Normal settlement|
||Supplier|450,643.35|Within 1 year||
|(Shanghai)||||period|
|Changzhou Hidea Machinery Co., Ltd||||Normal settlement|
||Supplier|258,600.00|Within 1 year||
|||||period|
|Changzhou Chunyu Diesel Engine Parts||||Normal settlement|
||Supplier|110,100.79|Within 1 year||
|Co., Ltd.||||period|
|Changzhou Outskirts Materials||||Normal settlement|
||Supplier|94,717.10|Within 1 year||
|Recycling Co., Ltd.||||period|
|Total|--|3,614,789.79|--|--|

 6. Inventory
(1) Classification of inventory
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing amount|||Opening amount|||
|Item||Provision for|||Provision for||
||Book balance||Book value|Book balance||Book value|
|||falling price|||falling price||
|Raw materials|92,012,547.36|2,816,113.21|89,196,434.15|101,823,136.99|2,816,113.21|99,007,023.78|
|Goods in|||||||
||104,400,092.39|18,032,036.95|86,368,055.44|128,872,052.38|18,032,036.95|110,840,015.43|
|process|||||||
|Inventory goods|272,435,173.72|18,035,127.65|254,400,046.07|272,010,816.14|18,035,127.65|253,975,688.49|
|Turnover|||||||
|material|9,218,254.33|0|9,218,254.33|9,416,148.59|0|9,416,148.59|

||||||||
|-|-|-|-|-|-|-|
|Total|478,066,067.80|38,883,277.81|439,182,789.99|512,122,154.10|38,883,277.81|473,238,876.29|

 (2) Provision for falling price of inventories
|||||||
|-|-|-|-|-|-|
|||Withdrawal in the|Decrease in the reporting period|||
|Category|Opening book value||||Closing book balance|
|||reporting period|Reversal|Written off||
|Raw materials|2,816,113.21||||2,816,113.21|
||18,032,036.95||||18,032,036.95|
|Goods in process||||||
|Inventory goods|18,035,127.65||||18,035,127.65|
|Turnover material|0.00||||0.00|
|Total|38,883,277.81||||38,883,277.81|

 Unit: RMB Yuan (3) Details of provision for falling price of inventories
|||||
|-|-|-|-|
||||Proportion of reversal of|
||Basis on provision for falling|Reasons for reversal in|provision for impairment of|
|Item||||
||price of inventories|reporting period|inventories to closing balance|
||||(%)|
||Book cost is higher than|||
|Raw materials||||
||realizable net value|||
||Book cost is higher than|||
|Inventory goods||||
||realizable net value|||
||Book cost is higher than|||
|Goods in process||||
||realizable net value|||

7. Available-for-sale financial assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing fair value|Opening fair value|
|Available-for-sale equity instrument:|368,752,000.00|368,754,000.00|
|Total|368,752,000.00|368,754,000.00|

 Note:
The aforesaid available-for-sale equity instruments were the shares of Ninghu High Speed Stock and Foton Automobile Stock held by the Company. The fair market value of share at period-end was the closing price of the last trading day of the stock exchange in reporting period.
8. Investment to associated enterprise and joint venture
U
nit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||Percentage of|Voting||||||
||||Closing total|||Total operating||
||holding shares|percentage of||Closing total|Closing total||Net profit in|
|Investee|||assets( RBM|||income in this||
||of the|the Company||liabilities|net assets||this period|
||||ten thousand)|||period||
||Company|in investee||||||
|I. Joint ventures||||||||
|II. Associated enterprises||||||||
|Changzhou||||||||
|Fuji Changchai||||||||
|Robin Diesel|33%|33%|102,073,787.96|40,958,311.67|61,115,476.29|107,292,423.90|1,859,980.81|
|Engine Co.,||||||||
|Ltd.||||||||
|Beijing||||||||
|Tsinghua||||||||
|Xingye||||||||
|Industrial|25%|25%|2,187,675.42|2,034,852.68|152,822.74|||
|Investment||||||||
|Management||||||||
|Co., Ltd.||||||||

9. Long-term equity investment
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Explanati||||
|||||||||on for||||
|||||||||indifferen||||
|||||||||ces||Withdraw||
|||||||||between||n||
|||||||Sharehold|||||Cash|
||||||||Voting|the||impairme||
||Accounti|Initial||||ing|||Impairme||bonus in|
||||Opening|Increase/d|Closing||percentag|sharehold||nt||
|Investee|ng|investmen||||percentag|||nt||the|
||||balance|ecrease|balance||e in|ing||provision||
||method|t cost||||e in|||provision||reporting|
||||||||investee|percentag||in the||
|||||||investee|||||period|
|||||||||e and||reporting||
|||||||||voting||period||
|||||||||percentag||||
|||||||||e in||||
|||||||||investee||||
|Changzho||||||||||||
|u Fuji||||||||||||
||Equity|12,294,54|19,548,32|613,793.6|20,162,11|||||||
|Changcha||||||33%|33%|||||
||method|6.00|5.73|7|9.4|||||||
|i Robin||||||||||||
|Gasoline||||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Engine|||||||||
|Co., Ltd.|||||||||
|Beijing|||||||||
|Tsinghua|||||||||
|Industrial|||||||||
|Investme|Equity|2,500,000|||||||
|||||||25%|25%|44,182.50|
|nt|method|.00|||||||
|Managem|||||||||
|ent Co.,|||||||||
|Ltd.|||||||||
|Jiangsu|Cost|38,000,00|38,000,00||38,000,00||||
|||||||0.42%|0.42%||
|Bank|method|0.00|0.00||0.00||||
|Chengdu|||||||||
|Changwa|||||||||
|n Diesel|Cost|510,000.0||||||510,000.0|
|Engine|method|0||||||0|
|Marketin|||||||||
|g Corp.|||||||||
|Chongqin|||||||||
|g|||||||||
|Wanzhou|||||||||
|Changwa|Cost|290,000.0||||||290,000.0|
|n Diesel|method|0||||||0|
|Engine|||||||||
|Fitting|||||||||
|Corp.|||||||||
|Qidong|||||||||
|Liantong|||||||||
||Cost|7,200,000|7,200,000||7,200,000||||
|Dynamo||||||4%|4%||
||method|.00|.00||.00||||
|meter|||||||||
|Co., Ltd.|||||||||
||Cost|410,000.0||||||410,000.0|
|Others|||||||||
||method|0||||||0|
|||61,204,54|64,748,32|613,793.6|65,362,11|||1,254,182|
|Total|||||||||
|||6.00|5.73|7|9.40|||.50|

10. Investment property
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Increase in the reporting|Decrease in the||
|Item|Opening book balance|||Closing book balance|
|||period|reporting period||

|||||
|-|-|-|-|
|I. Total original book||||
|value|87,632,571.14||87,632,571.14|
|Houses & buildings|87,632,571.14||87,632,571.14|
|II. Accumulated||||
|depreciation and||||
|accumulated||||
|amortization|25,934,859.51|1,104,170.40|27,039,029.91|
|Houses & buildings|25,934,859.51|1,104,170.40|27,039,029.91|
|III. Total net book||||
|value of investment||||
|property|61,697,711.63|-1,104,170.40|60,593,541.23|
|Houses & buildings|61,697,711.63|-1,104,170.40|60,593,541.23|
|V. Total book value of||||
|investment property|61,697,711.63|-1,104,170.40|60,593,541.23|
|Houses & buildings|61,697,711.63|-1,104,170.40|60,593,541.23|

 Unit: RMB Yuan
|||
|-|-|
||Reporting period|
|Depreciation and amortization of the reporting period|1,104,170.40|
|Impairment provision withdrawal amount of investment property of the||
||0.00|
|reporting period||

11. Fixed assets
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||Opening book|||Decrease in the|Closing book|
|Item||Increase in the reporting period||||
||balance|||reporting period|balance|
|I. Total original book||||||
|amount：|1,219,866,845.72|18,965,205.55||2,043,543.25|1,236,788,508.02|
|Of which: Houses &||||||
|buildings|405,042,760.27|2,538,095.95||106,357.03|407,474,499.19|
|Machinery equipment|755,476,414.32|15,578,511.06||1,153,127.55|769,901,797.83|
|Vehicles||||||
||24,733,895.14|634,542.15||551,454.61|24,816,982.68|
|Other facilities|34,613,775.99|214,056.39||126,247.03|34,701,585.35|
|--|Opening book|Increase in|Withdrawal in|Decrease in current|Closing book|
||balance|current period|current period|period|balance|

|||||||
|-|-|-|-|-|-|
|II. Accumulated||||||
|depreciation|589,926,764.58||35,750,825.98|2,809,864.69|622,867,725.87|
|Of which: Houses &||||||
|buildings|182,152,928.40||26,878,029.02|2,558,993.61|206,471,963.81|
|Machinery equipment|366,362,257.67||6,145,915.25|212,265.36|372,295,907.56|
|Vehicles|14,762,073.63||1,138,625.36|38,605.72|15,862,093.27|
|Other facilities|26,649,504.88||1,588,256.35||28,237,761.23|
||Opening book||||Closing book|
|--||--||||
||balance||||balance|
|III. Total net book value|629,940,081.14|--|||613,920,782.15|
|Of which: Houses &||||||
|||--||||
|buildings|222,889,831.87||||201,002,535.38|
|Machinery equipment|389,114,156.65|--|||397,605,890.27|
|Vehicles|9,971,821.51|--|||8,954,889.41|
|Other facilities|7,964,271.11|--|||6,463,824.12|
|IV. Total provision for||||||
|||--||||
|impairment loss|10,471,834.96||||10,471,834.96|
|Of which: Houses &||||||
|||--||||
|buildings|7,633,328.53||||7,633,328.53|
|Machinery equipment|2,838,506.43|--|||2,838,506.43|
|Other facilities||--||||
|V. Total book value|619,468,246.18|--|||603,448,947.19|
|Of which: Houses &||||||
|||--||||
|buildings|215,256,503.34||||193,369,206.85|
|Machinery equipment|386,275,650.22|--|||394,767,383.84|
|Vehicles|9,971,821.51|--|||8,954,889.41|
|Other facilities|7,964,271.11|--|||6,463,824.12|

 Depreciation in the reporting period was RMB 35,750,825.98.
Original price of fix assets transferred from construction was RMB 18,751,149.16.
12. Construction in progress
(1) Construction in progress
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
||||||Impairm||
|Item||Impairment|||ent||
||Book balance||Book value|Book balance||Book value|
|||provision|||provisio||
||||||n||
|Experimental workshop of|29,619,402.47||29,619,402.47|27,883,095.92||27,883,095.92|

||||||
|-|-|-|-|-|
|technology center|||||
|Renovation of casting|10,345,568.90|10,345,568.90|1,233,832.09|1,233,832.09|
|Expansion capacity of|||||
|multi-cylinder (The 2nd|||||
|Period)|3,360,159.66|3,360,159.66|2,609,879.95|2,609,879.95|
|Non-road electric generator|||||
|Project|336,503.39|336,503.39|336,503.39|336,503.39|
|Base of land in Hehai Road|0.00|0.00|3,661,472.03|3,661,472.03|
|Static pressure line renovation|||||
||8,556,213.65|8,556,213.65|||
|project|||7,845,686.59|7,845,686.59|
|Unerected equipment and|||||
||38,736,289.21|38,736,289.21|||
|engineering amount project|||34,636,877.83|34,636,877.83|
|Total|99,655,302.07|99,655,302.07|78,207,347.80|78,207,347.80|

 (2) Change in main project of construction in progress
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Includin||||
||||||Oth||||||||
|||||||Project|||g:||||
||||||||Projec|||Capitaliz|||
|||||Transferred to|er|input||Capitaliz|capitaliz||Source||
|Name of|Budge||Increase in current||||t|||ation of|||
|||Opening balance|||dec|percenta||ation of|ation of||of|Closing balance|
|project|t||period|fixed assets|||proces|||interest|||
||||||reas|ge of||interest|interest||funding||
||||||||s|||rate (%)|||
||||||e|budget|||this||||
||||||||||period||||
|Experiment|||||||||||||
|al|||||||||||||
|workshop|||||||||||Self-rai||
|||27,883,095.92|7,497,842.90|5,761,536.35||||||||29,619,402.47|
|of|||||||||||sed||
|technology|||||||||||||
|center|||||||||||||
|Renovation|||||||||||Self-rai||
|||1,233,832.09|9,111,736.81|||||||||10,345,568.90|
|of casting|||||||||||sed||
|Expansion|||||||||||||
|capacity of|||||||||||||
||||||||||||Self-rai||
|multi-cylin||2,609,879.95|931,334.76|181,055.05||||||||3,360,159.66|
||||||||||||sed||
|der (The|||||||||||||
|2nd Period)|||||||||||||
|Non-road|||||||||||||
||||||||||||Self-rai||
|electric||336,503.39||||||||||336,503.39|
||||||||||||sed||
|generator|||||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Project|||||||||
|Base of|||||||||
|land in|||||||Self-rai||
||3,661,472.03|814,628.42|4,476,100.45|||||0.00|
|Hehai|||||||sed||
|Road|||||||||
|Cylinder|||||||||
|body|||||||||
|flexible|||||||Self-rai||
||7,845,686.59|6,433,864.99|5,578,386.79|||||8,701,164.79|
|manufactur|||||||sed||
|ing line|||||||||
|project|||||||||
|Static|||||||||
|pressure|||||||||
||||||||Self-rai||
|line|0.00|8,556,213.65||||||8,556,213.65|
||||||||sed||
|renovation|||||||||
|project|||||||||
|Total|43,570,469.97|33,345,621.53|15,997,078.64|--|--|--|--|60,919,012.86|

 (3) Notes of construction in progress:
There is no net realizable value lower than the book value in the closing balance of construction in progress, thus
no provision for impairment. And there was no mortgage guarantee in the construction in progress at the
period-end.
13. Intangible assets
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Increase in the reporting|Decrease in the||
|Item|Opening balance|||Closing balance|
|||period|reporting period||
|I. Total book original value|117,730,385.96|1,573,828.71||119,304,214.67|
|Land use right|117,212,266.30|||117,212,266.30|
|Software|518,119.66|1,573,828.71||2,091,948.37|
|II. Accumulative amortization|33,512,486.26|1,261,803.92||34,774,290.18|
|Land use right|33,411,740.79|1,131,733.20||34,543,473.99|
|Software|100,745.47|130,070.72||230,816.19|
|III. Total net book value|84,217,899.70|312,024.79||84,529,924.49|
|Land use right|83,800,525.51|-1,131,733.20||82,668,792.31|
|Software|417,374.19|1,443,757.99||1,861,132.18|
|Total book value of intangible|84,217,899.70|||84,529,924.49|
|assets||312,024.79|||

|||||
|-|-|-|-|
|Land use right|83,800,525.51|-1,131,733.20|82,668,792.31|
|Software|417,374.19|1,443,757.99|1,861,132.18|

 Amortization amount in the reporting period was RMB 1,261,803.92.
14. Deferred tax assets and liabilities
(1) Deferred tax assets and liabilities are not listed as the net value after offset
Deferred tax assets and liabilities that already recognized
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deferred income tax assets|||
|Provision for assets impairment|1,195,990.26|1,195,990.26|
|Subtotal|1,195,990.26|1,195,990.26|
|Deferred income tax liabilities：|||
|Change in fair value of available-for-sale|||
||49,031,625.00|49,031,925.00|
|financial assets measured into capital reserve|||
|Subtotal|49,031,625.00|49,031,925.00|

 List of unrecognized deferred income tax assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary differences|0.00|0.00|
|Deductible losses|0.00|0.00|
|Total|||

Details about taxable differences and deductible difference project.
Unit: RMB Yuan
||||
|-|-|-|
||The amount of temporary differences||
|Item|||
||Closing period|Opening period|
|Taxable difference project|||
|Change in fair value of available for sale financial|||
||368,752,000.00|368,754,000.00|
|assets|||
|Subtotal|368,752,000.00|368,754,000.00|
|Deductible difference project|||
|Provision for impairment|7,973,268.43|7,973,268.43|
|Subtotal|7,973,268.43|7,973,268.43|

 (2) Deferred income tax assets and liabilities are listed as the net value after offset
Components items of deferred income tax assets and liabilities after mutual set-off
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Deferred income tax|Deductible or taxab|l Deferred income tax|Deductible or taxable|
|Item|||||
||assets or liabilities|e temporary differen|assets or liabilities|temporary|

||||||
|-|-|-|-|-|
||after mutual set-off at|ces after mutual set|after mutual set-off at|differences after|
||the end of the period|-off at the end of t|the opening of the|mutual set-off at the|
|||he period|period|opening of the period|
|Deferred income tax assets|1,195,990.26||1,195,990.26||
|Deferred income tax liabilities|49,031,625.00||49,031,925.00||

15. List of provision for assets impairment
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||Opening book||Decrease||Closing book|
|Item||Increase||||
||balance||Reversal|Written off|balance|
|Bad debt provision|256,674,628.93|9,564,358.21|8,920,575.86||257,318,411.28|
|Inventory falling price|38,883,277.81||||38,883,277.81|
|reserves||||||
|Provision for impairment of|||||1,254,182.50|
|long-term equity investment|1,254,182.50|||||
|Provision for impairment of|10,471,834.96||||10,471,834.96|
|fixed assets||||||
|Other|14,000,000.00||||14,000,000.00|
|Total|321,283,924.20|9,564,358.21|8,920,575.86||321,927,706.55|

 16. Short-term loan
Unit: RMB Yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Guaranteed borrowings|20,000,000.00|20,000,000.00|
|Credit loan|10,000,000.00|10,000,000.00|
|Total|30,000,000.00|30,000,000.00|

 Short-term borrowings that have been due up until the period-end but have not been paid off.:
Among guaranteed borrowings at the end of reporting period, RMB 20,000,000.00 loans of Changwan Company was guaranteed by Chongqing Wanzhou State-owned Assets Guarantee Co., Ltd.
17. Notes payable
U nit: RMB Yuan
||||
|-|-|-|
|Category|Closing amount|Opening amount|
|Bankers’ acceptance bill|248,110,000.00|246,300,000.00|
|Total|248,110,000.00|246,300,000.00|

The amount due in the next accounting period was RMB 248,110,000.0.
(1) Accounts payable classified by nature
Uni t: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
||491,409,276.17|568,123,524.87|
|Operating payables|||
||7,825,661.55|9,204,309.73|
|Engineering payables|||
|Total|499,234,937.72|577,327,834.60|

 (2) Note to large-amount accounts receivables with age of accounts being over 1 year.
There was no note to large-amount accounts receivables with age of accounts being over 1 year.
19. Advance from customers
(1) Advance from customers
U nit: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
||47,940,584.35|38,090,958.80|
|Prepayment|||
|Total|47,940,584.35|38,090,958.80|

 (2) Note to large-amount prepayment with age of accounts being over 1 year.
There was no note to large-amount prepayment with age of accounts being over 1 year.
20. Payroll payable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening book balance|Increase|Decrease|Closing book balance|
|I. Wages, bonuses,|||||
|allowances and|||||
|||95,549,866.15|125,934,977.01||
|subsidies to|||||
|employees|51,549,910.49|||21,164,799.63|
|II. Welfare expense|||||
|||3,980,655.96|3,980,655.96||
|for employees||||0.00|
|III. Social insurances||25,212,030.96|25,212,030.96|0.00|
|Of which:|||||
|endowment||16,176,423.44|16,176,423.44||
|insurance||||0.00|
|Basic medical|||||
|||6,374,417.68|6,374,417.68||
|insurance||||0.00|
|Unemployment||1,223,347.08|1,223,347.08|0.00|

||||||
|-|-|-|-|-|
|insurance|||||
|Work injury|||||
|||806,545.14|806,545.14||
|insurance||||0.00|
|Maternity insurance||631,297.62|631,297.62|0.00|
|Housing|||||
|||8,042,017.33|8,042,017.33||
|accumulation funds||||0.00|
|V. Other|5,572,134.63|1,835,762.32|1,847,939.41|5,559,957.54|
|Total|57,122,045.12|134,620,332.72|165,017,620.67|26,724,757.17|

 RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB 5,559,957.54, and the non-monetary benefits are RMB 0.00, the compensation for terminating the labor contract is RMB 0.00.
21. Taxes payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|-21,403,610.46|-39,783,337.11|
|Business tax|1,428.00|2,235.00|
|Corporate income tax|4,809,340.14|12,330,315.34|
|Personal income tax|67,317.27|703,880.69|
|Urban maintenance and construction tax||834,829.34|
|Educational surcharges||4471.75|
|Housing property tax|285,214.33|343,204.41|
|comprehensive fee|2,013,290.65|1,802,524.72|
|Total|-14,227,020.07|-23,761,875.83|

 22. Dividends payable
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Reason for unsettlement over 1|
|Name of company|Closing balance|Opening balance||
||||year|
|Dividend payables to common||||
||3,243,179.97|3,243,179.97|Not yet drawn|
|shareholders||||
|Dividend payables to minority||||
||648,253.86|648,253.86|Not yet drawn|
|shareholders||||
|Total|3,891,433.83|3,891,433.83|--|

 23. Other accounts payable
(1)
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Other payables|207,856,766.31|174,454,382.17|
|Total|207,856,766.31|174,454,382.17|

(2) Notes of the other large amount accounts payable
The other large amount accounts payable at the end of the period mainly was sales discounts and quality
compensation.
24. Other current liabilities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
|Sewage charge|85,000.00|105,000.00|
|Electricity charge|1,696,800.57|1,663,500.90|
|Others|131,933.10|170,906.50|
|Total|1,913,733.67|1,939,407.40|

 25. Other non-current liabilities
U nit: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
|Deferred income|58,078,566.13|61,894,052.94|
|Total|58,078,566.13|61,894,052.94|

 Liabilities related to government subsidy
U nit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||Newly increase|Amount recorded||||
||||||Closing|Related to assets/|
|Item|Opening balance|amount in the|into non-operating|Other changes|||
||||||balance|related to income|
|||reporting period|income||||
|Special subsidy for|||||||
|National High|||||||
|Technology Research|2,720,000.00|1,800,000.00|2,720,000.00||1,800,000.00|Related to assets|
|and Development|||||||
|Program of China|||||||
|Subsidy for electronic|||||||
|control of diesel|||||||
|engine research and|6,562,500.00||2,562,500.00||4,000,000.00|Related to assets|
|development and|||||||
|industrialization|||||||

|||||||
|-|-|-|-|-|-|
|Subsidy for the||||||
|national major|28,770,000.00|||28,770,000.00|Related to assets|
|projects||||||
|Compensation for||||||
||23,841,552.94||332,986.81|23,508,566.13|Related to assets|
|removing||||||
|Total|61,894,052.94|1,800,000.00|5,615,486.81|58,078,566.13|--|

 26. Share capital
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/Decrease (+/-)||||||
||Opening||||||Closing|
|||||Capitalization||||
|||Issuing new||||||
||balance||Bonus shares|of public|Other|Subtotal|balance|
|||shares||||||
|||||reserves||||
|Total shares|561,374,326.00||||||561,374,326.00|

 27. Specific reserves
U nit: RMB Yuan
||||||
|-|-|-|-|-|
|||Increase in the reporting|Decrease in the||
|Item|Opening amount|||Closing amount|
|||period|reporting period||
|Safe production expenses|6,996,256.56|||6,996,256.56|
|Total|6,996,256.56|||6,996,256.56|

 28. Capital reserve
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Increase in the reporting|Decrease in the||
|Item|Opening amount|||Closing amount|
|||period|reporting period||
|Capital premium (equity|||||
||150,705,016.81|||150,705,016.81|
|premium)|||||
|Other capital reserve|20,311,137.44|||20,311,137.44|
|Profit or loss of changes in fair|277,847,575.00|||277,845,875.00|
||||1,700.00||
|value|||||
|Total|448,863,729.25||1,700.00|448,862,029.25|

29. Surplus reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Increase in the reporting|Decrease in the||
|Item|Opening amount|||Closing amount|
|||period|reporting period||
|Statutory surplus reserves|276,472,716.49|||276,472,716.49|
|Discretional surplus reserves|13,156,857.90|||13,156,857.90|
|Total|289,629,574.39|||289,629,574.39|

 30. Retained profits
Unit: RMB Yuan n
||||
|-|-|-|
|||Withdrawal or distributed|
|Item|Amount||
|||proportion|
|Retained profit at the end of year before|||
||502,779,906.92|--|
|adjustment|||
|Retained profit at the begin of year after|502,779,906.92||
|||--|
|adjustment|||
|Retained profit at the end of year after adjustment|34,303,430.49|--|
|Retained profit at the end of year after adjustment|8,974,014.89||
|Retained profit at the period-end|528,109,322.52|--|

 31. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
U nit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Income of main business|1,326,898,748.16|1,585,168,723.53|
|Other operating income|12,977,453.56|12,533,974.93|
|Cost of sales|1,185,484,758.63|1,432,960,897.52|

 (2) Main business (Classified by industry)
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Industry|||||
||Revenue of sales|Costs of sales|Revenue of sales|Costs of sales|
|Internal-combustion engine|1,326,898,748.16|1,178,502,245.27|1,585,168,723.53|1,426,375,878.12|
|Total|1,326,898,748.16|1,178,502,245.27|1,585,168,723.53|1,426,375,878.12|

 (3) Main business (Classified by product)
Unit RMB Yuan
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Product|||||
||Revenue of sales|Costs of sales|Revenue of sales|Costs of sales|
|Diesels engines|1,326,898,748.16|1,178,502,245.27|1,585,168,723.53|1,426,375,878.12|
|Total|1,326,898,748.16|1,178,502,245.27|1,585,168,723.53|1,426,375,878.12|

(4) Main business (Classified by area)
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Area|||||
||Revenue of sales|Costs of sales|Revenue of sales|Costs of sales|
|Home|1,222,784,580.13|1,077,313,685.36|1,462,593,976.75|1,306,940,907.31|
|Abroad|104,114,168.03|101,188,559.91|122,574,746.78|119,434,970.81|
|Total|1,326,898,748.16|1,178,502,245.27|1,585,168,723.53|1,426,375,878.12|

 (5) The revenue of sales from the top five customers
Unit: RMB Yuan
||||
|-|-|-|
|Customer|Main business revenue|Proportion of total business revenue (%)|
|Customer 1|137,968,552.56|10.30%|
|Customer 2|104,647,944.72|7.81%|
|Customer 3|74,079,188.03|5.53%|
|Customer 4|57,917,281.38|4.32%|
|Customer 5|54,635,193.20|4.08%|
|Total|429,248,159.89|32.04%|

 32. Business tax and surcharges
U nit: RMB Yuan
|||||
|-|-|-|-|
|||Same period of||
|Item|Reporting period||Calculation and payment standard|
|||last year||
|Payment standard|||Refer to the note ―Main taxes and tax rate during|
||135,203.48|116,409.53||
||||the reporting period ‖|
|Urban maintenance and constructiontax|||Refer to the note ―Main taxes and tax rate during|
||110,125.57|98,481.85||
||||the reporting period ‖|
|Educational surtax|||Refer to the note ―Main taxes and tax rate during|
||69,958.35|62,458.75||
||||the reporting period ‖|
|Total|315,287.40|277,350.13|--|

33. Sales expense
U nit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Office expense|9,908,567.84|10,857,628.04|
|Payrolls|12,241,733.45|11,906,117.70|

||||
|-|-|-|
|sales promotion expenses|5,815,563.78|6,957,764.02|
|Expense of guarantee for repair, replace|||
|||28,862,001.22|
|and refund|24,972,079.19||
|Freight|4,940,346.63|4,759,994.88|
|Others|645,523.18|857,231.99|
|Total|58,523,814.07|64,200,737.85|

 34. Administration expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Office expense|11,300,320.13|14,077,661.38|
|Payrolls|25,662,412.41|25,736,586.38|
|Depreciation and amortization|6,611,090.07|7,339,689.80|
|Fees for R & D|7,575,838.28|9,272,181.48|
|Freight|2,782,316.02|3,441,772.42|
|Repair charge|1,862,698.02|3,297,184.88|
|Tax|3,899,516.70|5,084,166.47|
|Others|3,188,385.21|5,847,903.34|
|Total|62,882,576.84|74,097,146.15|

 35. Financial expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Interest expenses|1,508,536.32|1,450,669.32|
|Less: interest income|-3,755,081.76|-3,935,881.76|
|Exchange gains or losses|936,130.45|1,020,229.55|
|Others|-5,822,147.79|-6,147,810.59|
|Total|-7,132,562.78|-7,612,793.48|

 36. Income from investment
(1) Details of income from investment
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Long-term equity investment income measured with|||
||613,793.67|573,439.60|
|equity method|||
|Investment income achieved during the period of|0.00|11,560,000.00|

||||
|-|-|-|
|holding transactional financial assets|||
|Investment income from disposal of transactional|||
||858,876.50|219,367.20|
|financial assets|||
|Total|1,472,670.17|12,352,806.80|

 (2) Long-term equity investment income measured with equity method
Unit: RMB Yuan
|||||
|-|-|-|-|
|Investee entity|Reporting period|Same period of last|Reason for change|
|||year||
|Changzhou Fuji Changchai Robin||||
||613,793.67|573,439.60|Profits of this period increased|
|Gasoline Engine Co., Ltd.||||
|Total|613,793.67|573,439.60|--|

37. Asset impairment loss
Unit: RMB Yuan 38. Non-operating income
(1) Information about non-operating income
U nit: RMB Yuan
|||||
|-|-|-|-|
|Item|Reporting period|Same period of last year|Amount recorded into|
||||non-recurring gains and|
||||losses of this period|
|Total gains from disposal of non-currentassets||||
||158,173.02|286,693.11|158,173.02|
|Including: gains from disposal of fixedassets||||
||158,173.02|286,693.11|158,173.02|
|Government subsidies|5,516,500.00|790,000.00|5,516,500.00|
|Gains from disposal of current assets|297,738.00|481,693.04|297,738.00|
|Others|1,246,051.60|885,893.15|1,246,051.60|
|Total|7,218,462.62|2,444,279.30|7,218,462.62|

 (2) Particulars about government subsidies
U
nit: RMB Yuan
|||||
|-|-|-|-|
||||Related to assets/ related to|
|Item|Reporting period|Same period of last year||
||||income|
|Special subsidy for National High||||
|Technology Research and Development|2,720,000.00||Related to income|
|Program of China||||
|Subsidy for electronic control of diesel||||
|engine research and development and|2,562,500.00||Related to income|
|industrialization||||
|Special subsidy for industrial economy||||
|||780,000.00|Related to income|
|steady growth promoting the transformation||||
|Other incentives and subsidies|234,000.00|10,000.00|Related to income|
|Total|5,516,500.00|790,000.00|--|

 39. Non-operating expenses
U nit: RMB Yuan
|||||
|-|-|-|-|
|Item|Reporting period|Same period of last year|Amount recorded into|
||||non-recurring gains and|
||||losses of this period|
|Total losses from disposal of non-current assets|61,479.60|17,207.16|61,479.60|
|Including: loss from disposal of fixed assets|61,479.60|17,207.16|61,479.60|
|Expense on flood prevention and security|1,339,876.20|1,598,791.19|1,339,876.20|
|Loss from disposal of current assets|4,036,328.10|113.50|4,036,328.10|
|Others|167,763.70|1,093,118.40|167,763.70|
|Total|5,605,447.60|2,709,230.25|5,605,447.60|

 40. Income tax expense
U nit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Income tax calculated according to the Law of Tax and relevant|||
||6,394,145.06|7,353,641.41|
|regulations|||
|Total|6,394,145.06|7,353,641.41|

41. Calculation process of basic EPS and diluted EPS
|||
|-|-|
|Item|Amount|
|Calculation of basic EPS and diluted EPS||
|(Ⅰ) Numerator||
|Net profit after tax|34,303,430.49|
|Adjustment: influence of preference share dividends and other tools||
|Gains/losses attributable to ordinary share holders of parent company in thecalculation of basic EPS|34,303,430.49|
|Adjustment: dividends and interest related to dilution potential ordinaryshares||
|Gain/loss changes caused by conversion of dilution potential ordinary shares||
|Gains/losses attributable to ordinary share holders of parent company in thecalculation of diluted EPS|34,303,430.49|
|(Ⅱ) Denominator||
|Weighted average number of common shares issued in the reporting periodin the calculation of basic EPS|561,374,326.00|
|Add: weighted average number of common shares converted from alldelusion potential common shares||
|Weighted average number of common shares issued in the reporting periodin the calculation of diluted EPS|561,374,326.00|
|(Ⅲ) EPS||
|Basic EPS||
|Net profit attributable to common share holders of the Company|0.06|
|Net profit attributable to common share holders of the Company afterdeducting non-recurring gains/losses|0.06|
|Diluted EPS||
|Net profit attributable to common share holders of the Company|0.06|
|Net profit attributable to common share holders of the Company afterdeducting non-recurring gains/losses|0.06|

42. Other comprehensive incomes
Unit:
RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|1. Gain/loss from the financial assets available for sale|-2,000.00|-117,758,500.00|
|Minus: income tax impact caused by the financial assets|||
||-300.00|-17,663,775.00|
|available for sale|||
|Subtotal|-1,700.00|-100,094,725.00|
|2. Difference from translating of foreign currency financial|||
||37,748.75|-45,383.12|
|statements|||
|Subtotal|37,748.75|-45,383.12|
|Total|36,048.75|-100,140,108.12|

 Note:
The gains from available-for-sale equity instrument were the income from fair value changes in the shares of Ninghu High Speed Stock and Foton Automobile Stock held by the Company.
43. Notes to items in the Cash Flow Statement
(1) Other cash received related to operating activities
U nit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Subsidies and grants|2,034,000.00|
|Cash received from other activities|12,225,876.71|
|Interest income|3,755,081.76|
|Total|18,014,958.47|

 (2) Other cash paid related to operating activities
U nit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Sales expenses paid in cash|19,612,069.29|
|Management expenses paid in cash|17,316,833.94|
|Service fee expense|291,567.35|
|Other|260,072.16|
|Total|37,480,542.74|

44. Supplementary information to the Cash Flow Statement
(1) Supplementary information to the Cash Flow Statement
Uni t: RMB Yuan
||||
|-|-|-|
|Supplemental information|Reporting period|Same period of last year|
|1. Reconciliation of net profit to net cash flows generated|||
||--|--|
|from operating activities|||
|Net profit|35,150,085.34|39,868,797.84|
|Add: Provision for impairment of assets|643,782.35|-1,355,223.11|
|Depreciation of fixed assets, of oil-gas assets, of productive|||
||39,750,825.98|38,061,920.31|
|biological assets|||
|Amortization of intangible assets|1,312,826.92|1,166,274.51|
|Losses on disposal of property, plant and equipment,|||
|intangible assets and other|-135,455.08|-269,485.95|
|long-term assets (gains: negative)|||
|Financial cost (income: negative)|1,508,536.32|1,450,669.32|
|Investment loss (gains: negative)|-1,472,670.17|-12,352,806.80|
|Increase in deferred tax liabilities (decrease: negative)|-300.00|-17,663,775.00|
|Decrease in inventory (increase: negative)|34,056,086.30|89,515,534.42|
|Decrease in accounts receivable from operating activities|||
||-112,067,072.47|-154,197,959.83|
|(increase: negative)|||
|Increase in accounts payable from operating activities|||
||-29,102,433.34|102,447,369.87|
|(decrease: negative)|||
|Net cash flows generated from operating activities|-30,355,787.85|86,671,315.58|
|2. Significant investing and financing activities without|||
|||--|
|involvement of cash receipts and payments|||
|3. Change of cash and cash equivalent:||--|
|Closing balance of cash|476,397,562.50|672,143,419.61|
|Less：Opening balance of cash|610,882,216.18|637,004,823.27|
|Add：Closing balance of cash equivalents|0.00||
|Less：Opening balance of cash equivalents|0.00||
|Net increase in cash and cash equivalents|-134,484,653.68|35,138,596.34|

 (2) Composition of cash and cash equivalents
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
|1.Cash|476,397,562.50|672,143,419.61|

||||
|-|-|-|
|Of which: cash in hand|344,615.56|389,316.31|
|Other monetary capital available for payment at any|||
||476,052,946.94|671,754,103.30|
|time|||
|2. cash and cash equivalents|0.00|0.00|
|3. Balance of cash and cash equivalents at the period-end|476,397,562.50|672,143,419.61|

 VIII. Related party and related Transaction
1. Information related to parent company of the Company
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Proportion|||
||||||||Proportion||||
|||||||||of voting|||
||||||||of share||||
|||||||||rights|The||
||||||||held by||||
|Name ofparentcompany||||Legal||Name of||owned by|ultimate||
||Relationsh||Registratio||Business||parent|||Organization code|
|||Type||representat||parent||parent|controller||
||ip||n of place||scope||company||||
|||||ive||company||company|of the||
||||||||against the||||
|||||||||against the|Company||
||||||||Company||||
|||||||||Company|||
||||||||(%)||||
|||||||||(%)|||
|ChangzhouGovernmentState-owned AssetsSupervision andAdministrationCommission|||||||||||
|||Governme|||||||||
|||nt Agency|Changzho|Jiang||||||01411025-1|
||Controller||||||30.02%|30.02%|||
|||Legal|u|Huaping|||||||
|||Person|||||||||

Note:
2. Particulars about subsidiaries of the Company
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||Registered||||
|Full name||||Legal||capital||||
||Type ofsubsidiary|Type of|Registered||Business||Shareholdin|Voting right|Code of|
|of||||representati||( RMB ten||||
|||enterprise|place||nature||g ratio (%)|ratio (%)|organization|
|subsidiary||||ve||thousand||||
|||||||yuan)||||
|Changchai||||||||||
|Wanzhou||Limited||||||||
||Controlledsubsidiary||Chongqing|||||||
|Diesel||Liability||Yin Lihou|Industry|3,500|60.00%|60.00%|20793370-5|
||||City|||||||
|Engine Co.,||Company||||||||
|Ltd.||||||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Changzhou||||||||||
|Changchai||||||||||
|Benniu||Limited||||||||
||Controlled||Changzhou|Cao||||||
|Diesel||Liability|||Industry|5,506.30|99.00%|100.00%|25083232-8|
||subsidiary||City|Weiping||||||
|Engine||Company||||||||
|Fittings Co.,||||||||||
|Ltd.||||||||||
|Changzhou||||||||||
|||Limited||||||||
|Housheng|Controlled||Changzhou|Shi||||||
|||Liability|||Service|3,000|100.00%|100.00%|55027547-1|
|Investment|subsidiary||City|Jianchun||||||
|||Company||||||||
|Co., Ltd.||||||||||
|Chansun||Limited||||||||
||Controlled|||Shi||USD 20 ten||||
|Internationa||Liability|Singapore||Service||100.00%|100.00%||
||subsidiary|||Jianchun||thousand||||
|l (Pte.) Ltd.||Company||||||||
|Changzhou||||||||||
|Changchai||||||||||
|||Limited||||||||
|Housheng|Controlled||Changzhou|Xu||||||
|||Liability|||Industry|1,000|70.00%|95.00%|08690181-0|
|Agricultural|subsidiary||City|Zhenping||||||
|||Company||||||||
|Equipment||||||||||
|Co., Ltd.||||||||||

3. Joint ventures and associated enterprises of the Company
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||Percentage|Voting|||
||||Legal|||of holding|percentage|||
|Name of|Type of|Registration||Nature of|Registered|||Relationshi|Organizatio|
||||representati|||shares of|of the|||
|investee|enterprise|place||business|capital|||p|n code|
||||ve|||the|Company in|||
|||||||Company|investee|||
|I. Joint ventures||||||||||
|II. Associated enterprises||||||||||
|Changzhou||||||||||
|Fuji||||||||||
|Changchai|Limited|||||||||
||||Shijing||US $4.5|||Associated||
|Robin|liability|Changzhou||Industry||33.00%|33.00%||71497547-5|
||||Qijie||million|||enterprise||
|Diesel|company|||||||||
|Engine Co.,||||||||||
|Ltd.||||||||||
|Beijing||||||||||
|Tsinghua|Limited|||||||||
||||Chen||RMB10|||Associated||
|Industrial|liability|Beijing||Service||25.00%|25.00%||700233059|
||||Zhangwu||million|||enterprise||
|Investment|company|||||||||
|Managemen||||||||||

||
|-|
|t Co., Ltd.|

IX. Contingency
Litigation and arbitration in the reporting period
In the reporting period, the litigation the Company involved in from previous year continuing to the reporting
period：
||||||
|-|-|-|-|-|
|Name of the entity|Date of accepted|Name of the litigation orarbitration institutions|Amount involved(RMB ten thousand)|Remark|
|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|Concludedmediationagreement|
|Total|2242.36||||

Note to the case:
As the litigation of Shandong Hongli Group Co., Ltd. the company owned our Company RMB of 14.36 million payments for good. In 2001, the Company instituted litigation from Changzhou Intermediate People's Court, in Apr. 2002, applied to the court for compulsory execution, so far, the company has entered bankruptcy proceedings, 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
RMB of 8.0636 million payments for good. Beijing Shunyi District People's Court accepted the case on Aug. 12
2013. In court, under the auspices, two sides concluded mediation agreement. Payments of RMB 8,063,600.00
Beiqi Changsheng pay to the Company by stages. As the end of the reporting period, Beiqi Changsheng had
paid RMB 3.5 million payments of goods.
X. Commitment
There was no significant commitment shall disclose but did not disclose.
XI. Other significant events
1. Assets and liabilities measured by the fair value
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Gain/loss from|Accumulative|Impairment||
|Item|Opening amount|change in fair value|change in fair value|provision for this|Closing amount|
|||in this year|recorded into equity|year||
|Financial assets||||||
|Available-for-sale||||||
||368,754,000.00|-2,000.00|277,845,575.00||368,752,000.00|
|financial assets||||||
|Subtotal of financial||||||
||368,754,000.00|-2,000.00|277,845,575.00||368,752,000.00|
|assets||||||
|Total of above|368,754,000.00|-2,000.00|277,845,575.00||368,752,000.00|
|Financial liabilities|0.00||||0.00|

 2. Foreign financial assets and liabilities
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Gain/loss from|Accumulative|Impairment||
|Item|Opening amount|change in fair value|change in fair value|provision for this|Closing amount|
|||in this year|recorded into equity|year||
|Financial assets||||||
|Loans and account||||||
||56,202,430.22||||43,860,592.75|
|receivables||||||
|Subtotal of financial||||||
||56,202,430.22||||43,860,592.75|
|assets||||||
|Financial liabilities|0.00||||0.00|

 XII. Notes to the financial statements of Parent Company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Closing balance||||Opening balance||||
||Book value||Provision for bad debts||Book value||Provision for bad debts||
|Items|||||||||
|||Propo||Proportion||Proporti||Proporti|
||Amount||Amount||Amount||Amount||
|||rtion||||on||on|
|Accounts receivable with|||||||||
|significant single amount|||||||||
|and individually|67,928,315.76|9.61%|45,500,580.18|66.98%|68,044,928.76|13.14%|45,827,025.23|67.35%|
|withdrawn bad debt|||||||||
|provision|||||||||
|Accounts receivable for which bad debt provisions are made on the group basis|||||||||
|Aging group|638,481,266.19|90.30|189,883,722.15|29.74%|448,468,597.96|86.63%|183,542,655.83|637,957|

||||||||||
|-|-|-|-|-|-|-|-|-|
|||%||||||,616.19|
|||90.30||||||637,957|
|Subtotal of aging group|638,481,266.19||189,883,722.15|29.74%|448,468,597.96|86.63%|183,542,655.83||
|||%||||||,616.19|
|Accounts receivable with|||||||||
|insignificant single|||||||||
|||||100.00||||1,155,9|
|amount but individually|632,250.00|0.09%|632,250.00||1,155,900.00|0.23%|894,075.00||
|||||%||||00.00|
|withdrawn bad debt|||||||||
|provision|||||||||
|||||||||707,041|
|Total|707,041,831.95|--|236,016,552.33|--|517,669,426.72|--|230,263,756.06||
|||||||||,831.95|

 Accounts receivable with significant single amount and individually withdrawn bad debt provision at period-end
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Content of accounts|||Withdrawal||
||Book balance|Provision for bad debts||Withdrawal reason|
|receivable|||proportion（%）||
|||||Difficult to recover part of|
|Customer 1|44,802,539.71|25,937,023.57|57.89%||
|||||the account receivable|
|Customer 2|7,063,600.00|3,531,800.00|50.00%|Difficult to recover|
|Customer 3|1,902,326.58|1,902,326.58|100.00%|Difficult to recover|
|Customer 4|6,215,662.64|6,185,243.20|99.51%|Difficult to recover|
|Customer 5|5,359,381.00|5,359,381.00|100.00%|Difficult to recover|
|Customer 6|2,584,805.83|2,584,805.83|100.00%|Difficult to recover|
|Total|67,928,315.76|45,500,580.18|--||

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
||Book balance|||Book balance|||
|Aging|||||||
|||Proportion|Bad debt provision||Proportion|Bad debt provision|
||Amount|||Amount|||
|||(%)|||(%)||
|Within 1 year|||||||
|Including:|--|--|--|--|--|--|
|Subtitao of|||||||
||450,971,657.14|70.63%|13,056,602.52|259,312,074.38|57.82%|5,186,241.47|
|within 1 year|||||||
|1-2 years|8,568,554.10|1.34%|389,154.67|9,688,173.12|2.16%|484,408.67|
|2-3 years|1,086,883.45|0.17%|175,026.32|1,046,771.37|0.23%|157,015.72|
|Over 3 years|177,854,171.50|27.86%|176,262,938.64|178,421,579.09|39.78%|177,714,989.97|

||||||||
|-|-|-|-|-|-|-|
|3 to 4 years|1,885,310.48|0.30%|685,097.17|428,326.55|0.10%|128,497.98|
|4 to 5 years|1,053,100.64|0.16%|662,081.09|1,016,901.38|0.23%|610,140.83|
|Over 5 years|174,915,760.38|27.40%|174,915,760.38|176,976,351.16|39.46%|176,976,351.16|
|Total|638,481,266.19|--|189,883,722.15|448,468,597.96|--|183,542,655.83|

 In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
Accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
Accounts receivable with insignificant single amount but independently withdrawn bad debts provision
√Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawing proportion||
|Account receivable|Balance of book value|Provision for bad debt||Reason for withdrawal|
||||(%)||
|MengCheng Xingnong|||||
|||||Aing was long and|
|Agricultural Machinery|233,100.00|233,100.00|100%||
|||||difficult to recover|
|Co.,Ltd.|||||
|YTO Group Co., Ltd.||||Aing was long and|
||399,150.00|399,150.00|100%||
|Benma Branch||||difficult to recover|
|Total|632,250.00|632,250.00|--|--|

 (2) Top five accounts receivable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Relationship with||||
|Name of company||Amount|Term|Proportion (%)|
||the Company||||
|Changzhou Dongfeng Agricultural|||||
||Client|66,968,308.51|Within 1year|9.47%|
|Machinery Group Co., Ltd.|||||
|Jiangsu World Agricultural Machinery|||||
||Client|58,477,192.83|Within 1year|8.27%|
|Co., Ltd.|||||
|Changchai Wanzhou Diesel Engine Co.,|Controlling||Within 4 years& over 5||
|||44,802,539.71||6.34%|
|Ltd|subsidiary||years||
|Dongfeng Automobile Co., Ltd.|Client|34,116,620.40|Within 1year|4.83%|
|Shenyang Jinbei Vehicle Manufacturing|||||
||Client|29,812,218.60|Within 1year|4.22%|
|Co.,Ltd.|||||
|Total|--|234,176,880.05|--|33.13%|

 (3) Accounts receivable of related parties
Unit: RMB Yuan
|||||
|-|-|-|-|
|Name of entity|Relationship|Amount|Proportion (%)|

|||||
|-|-|-|-|
|CHANGCHAI WANZHOU||||
||Controlling subsidy|44,802,539.71|6.34%|
|DIESEL ENGINE CO., LTD.||||
|Total|--|44,802,539.71|6.34%|

 2. Other accounts receivable
（1）Other accounts receivable
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Closing balance||||Opening balance||||
||Book balance||Bad debt provision||Book balance||Bad debt provision||
|Category|||||||||
|||Proportion||Proportion||Proportion||Proportio|
||Amount||Amount||Amount||Amount||
|||(%)||(%)||(%)||n (%)|
|Other accounts|||||||||
|receivable with|||||||||
|significant single|||||||||
||2,853,188.02|7.95%|2,853,188.02|100.00%|2,853,188.02|7.56%|2,853,188.02|100%|
|amounts and individual|||||||||
|withdrawal of bad debt|||||||||
|provision|||||||||
|Other accounts receivable with bad debt provision withdrawn according to portfolio|||||||||
|Aging portfolio|31,120,387.71|86.73%|22,572,824.75|59.53%|32,970,268.47|87.38%|22,572,824.75|68.46%|
|Subtotal of aging|||||||||
||31,120,387.71|86.73%|22,572,824.75|59.53%|32,970,268.47|87.38%|22,572,824.75|68.46%|
|portfolio|||||||||
|Other accounts|||||||||
|receivables with|||||||||
|insignificant single|||||||||
||1,907,662.13|5.32%|1,907,662.13|100.00%|1,907,662.13|5.06%|1,907,662.13|100%|
|amounts and|||||||||
|withdrawal of bad debt|||||||||
|provision|||||||||
|Total|35,881,237.86|--|27,333,674.90|--|37,731,118.62|--|27,333,674.90|--|

 Other accounts receivable with significant single amount and individual withdrawal of bad debt provision at the
end of reporting period
√Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawal Proportion||
|Other accounts receivable|Book balance|Bad debt provision||Withdrawal Reason|
||||（%）||
|Changchai Group Import &|||||
||2,853,188.02|2,853,188.02|100%|Difficult to recover|
|Export Company|||||
|Total|2,853,188.02|2,853,188.02|--|--|

In the group, other accounts receivable withdrawn bad debt provision by adopting aging analysis
√Applicable□ Inapplicable
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
||Book balance|||Book balance|||
|Age|||||||
||||Bad debt provision|||Bad debt provision|
|||Proportion|||Proportion||
||Amount|||Amount|||
|||(%)|||(%)||
|Within 1 year|||||||
|Including:|--|--|--|--|--|--|
|Subtotal within 1|||||||
||6,074,186.94|19.52%|151,219.65|7,560,982.07|22.93%|151,219.65|
|year|||||||
|1-2 years|861,570.55|2.77%|44,917.49|898,349.88|2.72%|44,917.49|
|2-3 years|1,212,215.58|3.90%|225,504.91|1,503,366.09|4.56%|225,504.91|
|Over 3 years|22,972,414.64|73.82%|22,151,182.70|23,007,570.43|69.79%|22,151,182.70|
|3-4 years|702,415.68|2.26%|220,333.93|734,446.44|2.23%|220,333.93|
|4-5 years|852,563.02|2.74%|513,412.83|855,688.05|2.60%|513,412.83|
|Over 5 years|21,417,435.94|68.82%|21,417,435.94|21,417,435.94|64.96%|21,417,435.94|
|Total|31,120,387.71|--|22,572,824.75|32,970,268.47|--|22,572,824.75|

 In the group, the other accounts receivable using balance percentage method for withdrawing
provisions for bad debt:
□ Applicable√ Inapplicable
In the group, the accounts receivable were using other methods for withdrawing provisions for bad debt:
□ Applicable√ Inapplicable
Other accounts receivable with insignificant single amount but independently withdrawn bad debts provision:
√Applicable□Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Withdrawal||
|Other accounts receivable|Book balance|Bad debt provision||Withdrawal Reason|
||||Proportion （%）||
|Jiehua Electrical (Anhui) Co.,||||Difficult to recover|
||377,033.06|377,033.06|100%||
|Ltd.|||||
|Wuxi Fuel Tank Factory|205,095.61|205,095.61|100%|Difficult to recover|
|Other|1,325,533.46|1,325,533.46|100%|Difficult to recover|
|Total|1,907,662.13|1,907,662.13|--|--|

(2) Top five entities of other receivables
U ni t: R M B y u a n
||||||
|-|-|-|-|-|
|||||Proportion in the|
||Relationship with the||||
|Name of entity||Amount|Years|total other accounts|
||Company||||
|||||receivable (%)|
|Changzhou Compression|||||
||Customer|2,940,000.00|Over 5 years|8.19%|
|Factory|||||
|Changcai Import & Export|||||
||Customer|2,853,188.02|Over 5 years|7.95%|
|(Group) Corporation|||||
|Changzhou New District|||||
||Customer|1,626,483.25|Over 5 years|4.53%|
|Accounting Center|||||
|Changzhou Xingsheng|||||
|Property Management Co.,|Customer|628,615.27|Within 1 year|1.75%|
|Ltd.|||||
|China Export & Credit|||||
||Customer|614,990.00|Within 1 year|1.71%|
|Insurance Corporation|||||
|Total|--|8,663,276.54|--|24.13%|

 3. Long-term equity investments
(1)
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Sharehold|Voting|Reasons||Withdraw||
|||||Increasin||ing|power|for||al of|Cash|
||Accounti|Initial|||||||Depreciat|||
||||Openingbalance|g or|Closing|proportio|proportio|inconfor||depreciati|dividends|
|Investee|ng|investmen|||||||ion|||
|||||decreasin|balance|n for|n for|mity||on|for this|
||method|t cost|||||||reserves|||
|||||g amount||investee|investee|between||reserves|period|
|||||||(%)|(%)|Sharehold||for this||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||||ing|period|
|||||||||proportio||
|||||||||n and||
|||||||||Voting||
|||||||||power||
|||||||||proportio||
|||||||||n||
|Changc||||||||||
|hai||||||||||
|Wanzho|Cost|21,000,00|21,000,00||21,000,00|||||
|||||||60%|60%|||
|u Diesel|method|0.00|0.00||0.00|||||
|Engine||||||||||
|Co., Ltd||||||||||
|||||||||Indirectly||
|||||||||holding||
|Changcha||||||||1% of||
|i Benniu||||||||share||
|Diesel|Cost|96,466,50|75,339,80|21,126,70|96,466,50|||equity||
|||||||99%|100%|||
|Engine|method|0.00|0.00|0.00|0.00|||through||
|Fittings||||||||the||
|Co., Ltd||||||||Housheng||
|||||||||Investme||
|||||||||nt||
|Changzho||||||||||
|u||||||||||
|Housheng|Cost|30,000,00|30,000,00||30,000,00|||||
|||||||100%|100%|||
|Investme|method|0.00|0.00||0.00|||||
|nt Co.,||||||||||
|Ltd.||||||||||
|Chansun||||||||||
|Internatio|Cost|1,278,440|1,278,440||1,278,440|||||
|||||||100%|100%|||
|nal (Pte.)|method|.00|.00||.00|||||
|Ltd.||||||||||
|Changzho||||||||Indirectly||
|u||||||||holding||
|Changch||||||||25% of||
|ai||||||||share||
|Houshen|Cost|7,000,000|3,500,000|3,500,000|7,000,000|||equity||
|||||||70%|95%|||
|g|method|.00|.00|.00|.00|||through||
|Agricult||||||||the||
|ural||||||||Housheng||
|Equipm||||||||Investme||
|ent Co.,||||||||nt||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Ltd.||||||||||
|Changzho||||||||||
|u Fuji||||||||||
|Changcha||||||||||
||Equity|12,294,54|19,548,32|613,793.6|20,162,11|||||
|i Robin||||||33%|33%|||
||method|6.00|5.73|7|9.40|||||
|Gasoline||||||||||
|Engine||||||||||
|Co., Ltd.||||||||||
|Beijing||||||||||
|Tsinghua||||||||||
|Industrial||||||||||
|Investme|Equity|2,500,000||||||||
|||||||25%|25%||44,182.50|
|nt|method|.00||||||||
|Managem||||||||||
|ent Co.,||||||||||
|Ltd.||||||||||
|Jiangsu|Cost|38,000,00|38,000,00||38,000,00|||||
|||||||0.42%|0.42%|||
|Bank|method|0.00|0.00||0.00|||||
||Cost|410,000.0|||||||410,000.0|
|Others||||||||||
||method|0|||||||0|
|||180,822,7|188,666,5|25,240,49|213,907,0||||454,182.5|
|Total||||||--|--|--||
|||86.00|65.73|3.67|59.40||||0|

Note:
(1) Beijing Tsinghua Xingye Investment Management Co., Ltd. has no production or operation as a matter of fact, so no relevant impairment provision is made.
(2) Other: RMB 20,000 in Changzhou Economic and Technological Development Co., Ltd., RMB 100,000 in Cha ngzhou Tractors Co., Ltd., RMB 200,000 in the Industrial Financing Mutual Benefit Association of Changzhou Ec onomic and Information Technology Commission and RMB 90,000 in Beijing Engineering and Agricultural Machi nery Co., Ltd.. Due to difficulty in recovery, full-amount impairment provisions were made for the aforesaid four a ccounts.
4. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Main operation revenue|1,342,020,060.55|1,598,791,189.35|
|Other operation revenue|12,977,453.56|12,533,974.93|
|Total|1,354,997,514.11|1,611,325,164.28|
|Main operating cost|1,212,418,726.32|1,459,842,700.85|

(2) Main business (classified by industries)
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount of this period||Amount of last period||
|Name of Industries|||||
||Operating revenue|Operating cost|Operating revenue|Operating cost|
|Internal-combustion engine|||||
||1,342,020,060.55|1,206,183,564.96|1,598,791,189.35|1,453,257,681.45|
|industry|||||
|Total|1,342,020,060.55|1,206,183,564.96|1,598,791,189.35|1,453,257,681.45|

 (3) Main business (classified by products)
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount of this period||Amount of last period||
|Name of Products|||||
||Operating revenue|Operating cost|Operating revenue|Operating cost|
|Diesels engines and|||||
||1,342,020,060.55|1,206,183,564.96|1,598,791,189.35|1,453,257,681.45|
|accessories|||||
|Total|1,342,020,060.55|1,206,183,564.96|1,598,791,189.35|1,453,257,681.45|

 (4) Main business (classified by regions)
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount of this period||Amount of last period||
|Name of region|||||
||Operating revenue|Operating cost|Operating revenue|Operating cost|
|Domestic|1,237,905,892.52|1,104,995,005.05|1,476,216,442.57|1,333,822,710.64|
|Overseas|104,114,168.03|101,188,559.91|122,574,746.78|119,434,970.81|
|Total|1,342,020,060.55|1,206,183,564.96|1,598,791,189.35|1,453,257,681.45|

 (5) Operating revenue from the top five customers of the Company
Unit: RMB Yuan
||||
|-|-|-|
|||Proportion in total|
|Name of customer|Total operating revenue||
|||operating revenue (%)|
|Customer 1|137,968,552.56|10.18%|
|Customer 2|104,647,944.72|7.72%|
|Customer 3|74,079,188.03|5.47%|
|Customer 4|57,917,281.38|4.27%|
|Customer 5|54,635,193.20|4.03%|
|Total|429,248,159.89|31.67%|

(1) Details of investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|Investment income of long term equity investment accounted|||
||2,446,600.00|0.00|
|by cost method|||
|Investment income of long term equity investment accounted|||
||613,793.67|573,439.60|
|by equity method|||
|Investment income gained during the held of available for||11,560,000.00|
|sale financial assets.|||
|Total|3,060,393.67|12,133,439.60|

 (2) Long-term equity investment income assessed by equity method
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Same period of last||
|Name of investee|Reporting period||Reason for increase/decrease YoY|
|||year||
|Changzhou Fuji Changchai Robin Gasoline||||
||613,793.67|573,439.60|Profits of this period increased|
|Engine Co., Ltd.||||
|Total|613,793.67|573,439.60|--|

6. Supplementary information to cash flow statement
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount of this period|Amount of last period|
|1. Reconciliation of net profit to net cash flows generated from|||
||--|--|
|operating activities|||
|Net profit|36,824,078.15|37,969,091.50|
|Add: Provision for impairment of assets|643,782.35|-1,355,223.11|
|Depreciation of fixed assets, of oil-gas assets, of productive|||
||35,365,185.65|34,465,109.33|
|biological assets|||
|Amortization of intangible assets|1,261,803.62|1,138,009.17|
|Losses on disposal of property, plant and equipment, intangible|||
|assets and other|-135,455.08|-269,485.95|
|long-term assets (gains: negative)|||
|Financial cost (income: negative)|1,365,236.55|1,304,981.32|
|Investment loss (gains: negative)|-3,060,393.67|-12,133,439.60|
|Decrease in deferred tax assets (increase: negative)|-300.00|-17,663,775.00|
|Increase in deferred tax liabilities (decrease: negative)|51,809,602.22|98,545,403.27|
|Decrease in inventory (increase: negative)|-124,489,041.80|-160,072,555.10|
|Decrease in accounts receivable from operating activities (increase:|||
||-33,573,127.87|106,055,956.55|
|negative)|||

||||
|-|-|-|
|Increase in accounts payable from operating activities (decrease:|-33,988,629.88|87,984,072.38|
|negative)|||
|Net cash flows generated from operating activities|--|--|
|2. Significant investing and financing activities without|||
||--|--|
|involvement of cash receipts and payments|||
|3. Change of cash and cash equivalent:|453,211,920.16|657,213,587.91|
|Closing balance of Cash|574,440,388.77|605,259,198.95|
|Net increase in cash and cash equivalents|-121,228,468.61|51,954,388.96|

 XIII. Supplementary information
1 Items and amounts of extraordinary gains and losses
Unit: RMB Yuan Government subsidy recorded into current profit or loss was regular profit or los, shall disclose recognition reason
||||
|-|-|-|
|Item|Amount|Note|
|Gain/loss on the disposal of non-current assets (including the||Net income from the disposal of|
||158,173.02||
|offset part of the asset impairment provisions)||fixed assets|
|Government grants recognized in the current period, except for|||
|those acquired in the ordinary course of business or granted at|||
||5,516,500.00||
|certain quotas or amounts according to the government’s unified|||
|standards|||
|Gains and losses on change in fair value from tradable financial|||
|assets and tradable financial liabilities, as well as investment|||
|income from disposal of tradable financial assets and tradable|||
||843,260.06||
|financial liabilities and financial assets available for sales except|||
|for effective hedging related with normal businesses of the|||
|Company|||
|Other gain/loss items that meet the definition of an extraordinary|||
||-5,375,774.98||
|gain/loss|||
|Less: Income tax effects|351,245.37||
|Minority interests effects (after tax)|7,169.67||
|Total|783,743.06|--|

one by one.
√ Applicable□ Inapplicable
||||
|-|-|-|
|Item|Amount (RMB Yuan)|Reason|
|Special subsidy for National|||
|High Technology Research|||
||2,720,000.00||
|and Development Program of|||
|China|||

|||
|-|-|
|Electronic control of diesel||
|engine research and||
||2,562,500.00|
|development and||
|industrialization||
|Other incentives and subsidies|234,000.00|

2. 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
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Net profit attributable to shareholders of the||Net assets attributable to shareholders of the||
||Company||Company||
||Reporting period|Same period of last year|Closing amount|Opening amount|
|According to Chinese|34,303,430.49|39,865,197.16|1,834,942,526.80|1,809,577,062.45|
|accounting standards|||||
|Items and amounts adjusted according to international accounting standards|||||
|According to international|||||
||34,303,430.49|39,865,197.16|1,834,942,526.80|1,809,577,062.45|
|accounting standards|||||

(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
No difference
3. Return on equity and earnings per share
Unit: RMB Yuan
|||||
|-|-|-|-|
||The weighted average ROE|EPS||
|Profit in the reporting period||||
||(%)|Basic EPS|Diluted EPS|
|Net profit attributable to the Company'scommon stock shareholders|1.88%|0.06|0.06|
|Net profit attributable to shareholders of theCompany's common stock after deductingnon-recurring gains and losses|1.84%|0.06|0.06|

4. Particulars on the abnormal conditions of main items in the financial statements of the
Company and relevant reasons
(1) Account receivable
Closing amount increased RMB 191.7889 million than that in the opening period, which up by60.44%, mainly due to the Company strengthened the promotions, expanded the proportion of credit sales within the scope of the controllable expanded credit proportion.
(2) Prepayment
Closing amount decreased RMB 8.93 million than that in the opening period, which down by60.92%; mainly due to the Company controlled the inventory and reduced the suppliers of raw materials procurement.
(3) Other account receivable
Closing amount increased RMB 9.2016 million than that in the opening period, which upby72.32% ; mainly due to the subsidiary HoushengInvestment’s temporary loan from Xuzhou East China Foundry Factory
(4) Payroll payable
Closing amount decreased RMB 30.3973 million than that in the opening period, which down by53.21%, mainly due to paying parts of the accrued salaries and bonuses of previous period in the reporting period.
(5) Tax payable
Closing amount increased RMB 9.5349 million than that in the opening period, which up by40.13%, mainly due to the inventory of parent company decreased, and the related VAT input tax decreased.
(6) Assets impairment loss
Closing amount increased RMB 1.999 million than that in the opening period, which up by147.5%, mainly due to account receivable increased in the reporting period, thus the bad debt provision withdrawn increased.
(7) Investment income
Closing amount increased RMB 10.8801 million than that in the opening period, which up by88.08%; mainly due to gaining cash bonus gained of available for sale financial assets in last period, and .did not happened in this period.
(8) Non-operating income
Closing amount increased RMB 4.77 42 million than that in the opening period, which up by195.32%; mainly due to the Company received the government subsidy which was increased.
(9) Non-operating expense
Non-operating expense increased RMB 1.8962 million than that in last period, which up by106.9%, mainly due to the increase of non-current assets disposal of the Company in this period.
Changchai Company, Limited