Changchai Company Limited Annual Report 2024
CHANGCHAI COMPANY LIMITED
ANNUAL REPORT 2024
April 2025
1Changchai Company Limited Annual Report 2024
Part I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) the Supervisory Committee as well as the directors
supervisors and senior management of Changchai Company Limited (hereinafter referred to
as the “Company”) hereby guarantee the factuality accuracy and completeness of the
contents of this Report and its summary and shall be jointly and severally liable for any
misrepresentations misleading statements or material omissions therein.Xie Guozhong the Company’s legal representative and General Manager and Jiang He head
of the Company’s financial department (equivalent to financial manager) hereby guarantee
that the Financial Statements carried in this Report are factual accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.Any plans for the future and other forward-looking statements mentioned in this Report shall
NOT be considered as absolute promises of the Company to investors. Therefore investors
are kindly reminded to pay attention to possible investment risks.The Company has described in detail the risks it might face in “XI Prospects” in “Part IIIManagement Discussion and Analysis” herein.The Board has approved a final dividend plan as follows: based on the 705692507 shares a
cash dividend of RMB0.1 (tax inclusive) per 10 shares is to be distributed to the shareholders
with no bonus issue from either profit or capital reserves.
2Changchai Company Limited Annual Report 2024
Table of Contents
Part I Important Notes Table of Contents and Defin... 2
Part II Corporate Information and Key Financial In... 6
Part III Management Discussion and Analysis ........ 11
Part IV Corporate Governance ....................... 36
Part V Environmental and Social Responsibility ..... 56
Part VI Significant Events ..........................57
Part VII Share Changes and Shareholder Information...66
Part VIII Preference Shares .........................73
Part IX Bonds ...................................... 73
Part X Financial Statements ........................ 74
3Changchai Company Limited Annual Report 2024
Documents Available for Reference
1. The financial statements signed and sealed by the Company’s legal representative General
Manager and head of the financial department.
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs as well as
sealed by the CPA firm.
3. The originals of all the Company’s documents and announcements which were disclosed on
Securities Time and Ta Kung Pao (HK) (newspapers designated by the CSRC for information
disclosure) during the Reporting Period.
4. The Annual Report disclosed in other securities markets.
The above-mentioned documents available for reference are all kept in the Secretariat of the Board
of Directors of the Company.This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions the Chinese version shall prevail.
4Changchai Company Limited Annual Report 2024
Definitions
Term Definition
Changchai Company Limited and its consolidated subsidiaries
“Changchai” the “Company” or “we”
except where the context otherwise requires
Changchai Benniu Changzhou Changchai Benniu Diesel Engine Fittings Co. Ltd.Changchai Wanzhou Changchai Wanzhou Diesel Engine Co. Ltd.Horizon Investment Changzhou Horizon Investment Co. Ltd.Horizon Agricultural Equipment Changzhou Changchai Horizon Agricultural Equipment Co. Ltd.Changchai Robin Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd.Changchai Machinery Jiangsu Changchai Machinery Co. Ltd.Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co. Ltd.Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.Expressed in the Chinese currency of Renminbi expressed in tens
RMB RMB’0000
of thousands of Renminbi
The “Reporting Period” or “CurrentThe period from 1 January 2024 to 31 December 2024Period”
5Changchai Company Limited Annual Report 2024
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Changchai Changchai B Stock code 000570 200570
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 常柴股份有限公司
Abbr. 苏常柴
Company name in English (if any) CHANGCHAI COMPANYLIMITED
Abbr. (if any) CHANGCHAI CO.LTD.Legal representative Xie Guozhong
Registered address 123 Huaide Middle Road Changzhou Jiangsu China
Zip code 213002
Registered addresses previously
N/A
used
Office address 123 Huaide Middle Road Changzhou Jiangsu China
Zip code of office address 213002
Company website http://www.changchai.com.cn
Email address cctqm@public.cz.js.cn
II Contact Information
Board Secretary Securities Representative
Name He Jianjiang
123 Huaide Middle Road
Address
Changzhou Jiangsu China
Tel. (86) 519-68683155
Fax (86) 519-86630954
Email address cchjj@changchai.com
III Media for Information Disclosure and Place where this Report Is Lodged
Stock exchange website where this Report is
disclosed http://www.szse.cn
Securities Times
Media and website where this Report is disclosed
http://www.cninfo.com.cn
6Changchai Company Limited Annual Report 2024
Place where this Report is lodged Board Secretariat of the Company
IV Change to Company Registered Information
Unified social credit code 91320400134792410W
Change to principal activity of the
No change
Company since going public
On 22 November 2018 the State-owned Assets Supervision and
Administration Commission of Changzhou Municipal People’s
Every change of controlling shareholder Government transferred its entire holdings of 170845236 shares
since incorporation in the Company (a stake of 30.43%) to Changzhou Investment
Group Co. Ltd. for no compensation which has thus become the
controlling shareholder of the Company.V Other Information
The independent audit firm hired by the Company:
Name Zhongxinghua Certified Public Accountants (Special GeneralPartnership)
Office address 20th Floor South Building Building 1 Yard 20 Lize RoadFengtai District Beijing China
Accountants writing signatures Wang Jun Pang Daliang
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in
the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes √ No
2024 2023 2024-over-2023 change (%) 2022
Operating revenue
(RMB) 2415869028.32 2155698787.49 12.07% 2182043095.61
Net profit attributable to
the listed company’s 18489896.00 108495607.05 -82.96% 76684796.91
shareholders (RMB)
Net profit attributable to
the listed company’s
shareholders before 52958683.45 -47466184.54 —— -73636511.02
exceptional gains and
losses (RMB)
7Changchai Company Limited Annual Report 2024
Net cash generated
from/used in operating -154292968.70 137189827.35 —— 364930277.84
activities (RMB)
Basic earnings per share
(RMB/share) 0.0262 0.1537 -82.95% 0.1087
Diluted earnings per
share (RMB/share) 0.0262 0.1537 -82.95% 0.1087
Weighted average return
on equity (%) 0.55% 3.19% -2.64% 2.51%
Change of 31
31 December 31 December December 2024 31 December
2024 2023 over 31 December 2022
2023(%)
Total assets (RMB) 5381900903.82 5159394958.92 4.31% 5219359853.42
Equity attributable to the
listed company’s 3362683464.32 3398946911.23 -1.07% 3284710665.90
shareholders (RMB)
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative for the last three accounting years and the latest independent
auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative.□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 836479520.73 659429631.90 462057774.62 457902101.07
Net profit attributable to the
32382777.7017714877.45-3740213.65-27867545.50
listed company’s shareholders
8Changchai Company Limited Annual Report 2024
Net profit attributable to the
listed company’s shareholders
39340826.6820505438.29-17209332.1610321750.64
before exceptional gains and
losses
Net cash generated from/used in
-16877796.78-144936716.22-148985056.86156506601.16
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2024 2023 2022 Note
Gain or loss on disposal
of non-current assets
304377.71105702551.01393161.73
(inclusive of impairment
allowance write-offs)
Government grants The governmentsubsidies included in
recognized in current the current period's
profit or loss (exclusive profit and loss
of those that are closely amounted toRMB7553294.84.related to the Company's Deducting government
normal business grants related to assets
operations and given in transferred from
3477338.38 3009573.87 3774298.59 deferred income totaling
accordance with defined RMB3409729.46 and
criteria and in job retention subsidies
compliance with of RMB666227.00. The
government policies and government subsidiesincluded in the current
have a continuing impact period's non recurring
on the Company's profit profit and loss
or loss) amounted toRMB3477338.38.Gain or loss on During the reporting
fair-value changes in period the decrease was
attributable to:
financial assets and
(i) the decline in fair
liabilities held by a value of the Company's
non-financial enterprise -58411420.91 74628323.54 162319373.53 equity holdings in
as well as on disposal of Jiangsu Horizon New
Energy Technology Co.financial assets and Ltd. and
liabilities (exclusive of (ii) the drop in share
the effective portion of prices of Jiangsu Liance
9Changchai Company Limited Annual Report 2024
hedges that arise in the Electro-Mechanical
Company’s ordinary Technology Co. Ltd.and Kailong High-Tech
course of business) Co. Ltd. held by its
wholly-owned
subsidiary Horizon
Investment.Reversed portions of
impairment allowances
for receivables which are 1122559.94
tested individually for
impairment
Non-operating income
and expense other than 7735818.14 21618.24 30000.00
the above
Negative goodwill due
to business combination
not under common 267434.70
control
Less: Income tax effects 1952095.73 -254543.89 1735346.51
Non-controlling interests
1904132.58
effects (net of tax)
Total -9444181.95 27193473.11 19859063.58
Gain or loss on disposal
of non-current assets
(inclusive of impairment 361173.09 -47741.93 -24058.57
allowance write-offs)
Government grants
recognized in current
profit or loss (exclusive
of those that are closely
related to the Company's
normal business
operations and given in
accordance with defined -34468787.45 155961791.59 150321307.93 --
criteria and in
compliance with
government policies and
have a continuing impact
on the Company's profit
or loss)
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
10Changchai Company Limited Annual Report 2024
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
We are a manufacturer of internal combustion engines and fittings in general equipment manufacturing. According
to the classification of fuel used internal combustion engines are mainly divided into diesel engines and gasoline
engines. Our diesel engines and gasoline engines are mainly used in non-road mobile machinery fields such as
harvesters tractors plant protection machinery small engineering machinery and shipborne machinery.
(1) Basic information on the industry
The internal combustion engine is an important support for China's manufacturing industry security energy
security and national defense security and an important basic industry of national economy and national defense
construction. The internal combustion engine is the most power-dense thermally efficient and widely used heat
engine power unit.In order to implement the national overall development strategy of energy conservation emission reduction
transformation and upgrading the internal combustion engine industry and agricultural machinery industry will
strengthen independent innovation and research and development accelerate the construction of a common basic
technology platform optimize the construction of the upstream and downstream industry chain implement
intelligent manufacturing and actively carry out international exchange and cooperation to accelerate the
realization of industrial technology upgrading.
(2) Development pattern and trend of the industry
From a policy perspective there is a strong emphasis on prioritizing energy conservation and emissions reduction
promoting green circular low-carbon and environmentally friendly practices. Energy efficiency emission
reduction and reliability have become the main themes in the development of internal combustion engines. The
industry is gradually transitioning toward greener and smarter solutions leveraging optimized combustion
technology emission control and intelligent monitoring to minimize environmental impact and enhance
operational efficiency.In recent years the government has introduced a series of policies to support the agricultural machinery market
including purchase subsidies scrappage and renewal incentives and support for the agricultural equipment
distribution sector. The 2025 Central No. 1 Document outlines goals for rural revitalization and building a strong
agricultural sector calling for high-quality development of agricultural machinery accelerated R&D and adoption
of advanced domestic farm equipment and the phasing out of outdated machinery. It also supports smart
agriculture expanding the application of AI big data and low-altitude technologies. These initiatives present new
growth opportunities for the agricultural machinery sector while demanding higher levels of technological
innovation and industrial upgrading.In 2024 the single-cylinder engine market continued to decline due to weakening agricultural demand remaining
on a downward trend. Meanwhile multi-cylinder engines compliant with China IV emissions standards have fully
entered the market. The overall agricultural machinery market remained stable but low livestock agricultural
product and grain prices reduced operational income and subsidy adjustments have dampened purchasing power
leading to insufficient demand. While the traditional agricultural machinery industry is in decline emerging
segments and new applications continue to grow with rising demand for mid-to-high-end products. Leading
companies are strengthening their competitive advantages further consolidating market share and driving industry
11Changchai Company Limited Annual Report 2024
concentration.From an industry development standpoint technological innovation is fueling industrial upgrades while policy
support is expanding market potential. With the rapid advancement of AI big data new energy and energy-saving
technologies agricultural machinery is evolving from traditional mechanization toward high-end intelligent
digital and green solutions ushering in a new wave of structural transformation. Agricultural machinery
companies are entering a high-quality development phase accelerating the adoption of advanced technologies and
products in energy efficiency smart manufacturing and productivity enhancement. Amid national strategic
initiatives and accelerated industrial transformation new growth opportunities are emerging paving the way for
expansive prospects in the agricultural machinery market.II Principal Activity of the Company in the Reporting Period
1. Principal Operations of the Company
We mainly specialize in the R&D manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery small
engineering machinery generator sets and shipborne machinery and other fields closely related to people's
livelihood.In the Reporting Period there were no major changes in the Company's core business and main products.
2. Main Products of the Company
Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:
Main
Product Application
produc Graphic display Product description
features fields
ts
Our diesel engine products include
single-cylinder diesel engines and High power low Agricultural
multi-cylinder engines covering oil consumption machinery
power range from 3kW to 129kW low noise construction
Diesel
and cylinder diameters from 65mm compact machinery
engine
to 135mm. Besides sale in domestic structure low generator sets
market our diesel engines are sold emission good shipborne
to Southeast Asia South America reliability machinery
the Middle East and Africa.Our gasoline engines are mainly
general-purpose small gasoline
engines covering the power range Agricultural
Simple structure
Gasolin from 1.5kW to 9.0kW. Besides sale machinery
good reliability
e in domestic market our gasoline small
easy
engine engines are sold to Southeast Asia construction
maintenance
the Middle East Europe and machinery
America Africa Japan and other
countries and regions.
3. Major Business Models
12Changchai Company Limited Annual Report 2024
(1) R&D model
We have established an innovative technology management system for internal combustion engine based on
market demand and forward-looking technologies. Prior to the new products or new technologies development
the marketing department first conducts market assessment and customer research and then initiates a project
according to the forecasted market demand; the technology center conducts development according to the project
materials and collects feedback information from the market and customers in real time during the development
process to ensure technology leadership and product suitability.
(2) Purchasing model
We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders the sales plan
developed by the sales department and the production plan drawn up by the production department into the
demand of parts needed and the purchasing department organizes the purchase according to such demand.Meanwhile the purchasing department makes a plan to guide parts procurement according to the sales
department's sales plan and provide it to the supplier and urge the supplier to prepare for the goods.
(3) Production model
We adopt the "make-to-order" production management model. The sales department makes sales plans for
different stages according to the orders in hand sales data in previous years market demand judgment and
feedback of existing customers' purchasing intentions. The Company's production department makes the
production plan according to the sales orders displayed in the ERP system the sales plan made by the sales
department and the reserve inventory demand and organizes the production task in strict accordance with the plan.During the production process the quality assurance department arranges regular inspection to ensure the product
quality.
(4) Sale model
We adopt the sales model of "direct selling + distribution" i.e. the direct selling model for the main engine factory
and the distribution model for the individual circulation market represented by farmers and overseas market.
4. The Company's position in the market
We mainly specialize in the R&D manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Up to now we have successfully developed a number of advanced core
technologies with independent intellectual property rights. In terms of diesel engine according to the statistics of
China Internal Combustion Engine Industry Association (CICEIA) as the largest small- and medium-sized
single-cylinder diesel engine manufacturer in the agricultural machinery industry of China we have maintained a
high market share of single-cylinder engines and our market share of single-cylinder diesel engines of some
power ranges has ranked first in China. For many years in the process of achieving steady economic development
of the enterprise we developed in a sound manner and cultivated the "Changchai" brand a famous small diesel
engine brand of China with independent intellectual property rights.
5. Key Performance Drivers
(1) National policy driver
In recent years the No. 1 Document issued by the central government has demonstrated the government's
intention to attach greater importance to agriculture and strengthen agricultural development so as to promote the
development of agriculture and rural economy and society and strengthen the support of agricultural technology
and equipment. China's agricultural machinery and equipment industry layout has always been based on the main
line of innovation focused on core technology strengthened the construction of innovation capacity and strove to
make up for the shortcomings and weaknesses. The full implementation of National Emission Standard IV and the
high-end and intelligent trends of agricultural machinery have let the agricultural machinery industry towards a
13Changchai Company Limited Annual Report 2024
new stage of development. The Action Plan for Promoting Large-scale Equipment Renewals and Consumer
Goods Trade-ins in 2024 clarifies that old agricultural and industrial machinery will be renewed subsidy policies
will be continuously implemented for agricultural machinery scrapping and renewal the scrapping and renewal of
old agricultural machinery will be promoted and the structural adjustment of agricultural machinery will be
accelerated. The acceleration of the replacement process of old equipment of engineering machinery has created a
favorable policy environment for the application of internal combustion engines.
(2) Industrial chain synergy empowers the sustainable development of the Company
We have built our own casting manufacturing and processing plants to meet the use requirements of some diesel
engine parts. In terms of production and quality we have formed a significant synergy with its own internal
combustion engine assembly team. Our casting manufacturing team and internal combustion engine assembly
team work together to form a mutually reinforcing positive feedback loop to assist the Company in integrating the
internal combustion engine industry chain and building differentiated industry barriers. In terms of collaborative
production the reduction of external purchase is of great significance for the Company to reduce process flow
reduce intermediate loss improve production efficiency shorten delivery time and increase purchasing bargaining
power. In terms of quality coordination the self-built foundry can improve our quality control of parts to improve
the yield and reliability of internal combustion engines.
(3) Stable and efficient R&D team
We have experienced technical management team and perfect technical support team. Our key technical personnel
and R&D management personnel have been engaged in internal combustion engine R&D design production and
manufacturing for a long time. With profound professional knowledge and rich practical experience they can
make strong forward-looking and scientific judgment in the market direction and technical route. Also we have
established an effective training mechanism to foster talented persons for the follow-up R&D.
(4) Well-known brand with many well-known customers
The Company formerly known as Changzhou Diesel Engine Factory is a national industrial enterprise with a
history of a hundred years and one of the earliest professional internal combustion engine manufacturers in China.Our diesel and gasoline engines as power sources of agricultural machinery and commercial vehicles show
excellent performance in power range reliability power per liter noise control and emission standards and have
been recognized by customers. We maintained a long-term partnership with major customers with cumulative
partnership time exceeding 15 years. Many main engine plant customers of the Company are well-known
enterprises in the agricultural machinery industry with their market shares being at the forefront of the market.III Core Competitiveness Analysis
1. Advantages in Brand
Changchai is a century-old national industrial enterprise and one of China’s earliest specialized manufacturers of
internal combustion engines. The "Changchai" brand is recognized as a China Famous Trademark and its diesel
engines are China Brand Name Products. The company has obtained certifications including ISO 9001 IATF
16949 (Quality Management System) ISO 14001 (Environmental Management System) and IATF 16949
(Automotive Product Quality Management System) as well as the national qualification for export product
exemption from inspection.Changchai has been repeatedly listed among China’s Top 100 Machinery Industry Enterprises and China’s
Industry Leading Enterprises. It has been honored with titles such as:
* National Contract-Honoring & Creditworthy Enterprise
14Changchai Company Limited Annual Report 2024
* Leading Agricultural Machinery Components Enterprise in China
* AAA Credit-Rated Agricultural Machinery Enterprise
* Jiangsu Provincial Quality Management Excellence Award
* Changzhou Mayor’s Quality Award
* "Fine Farming Cup" Award for Top 10 Most Satisfactory After-Sales Service Brands (multiple years)
During the reporting period the company was further recognized as:
* National Product & Service Quality Integrity Demonstration Enterprise
* China Agricultural Machinery Annual TOP50+ Supporting Supplier Award
* Key Large-Scale Machinery Industry Enterprise
* Outstanding Brand in Jiangsu Agricultural Equipment Industry
* Jiangsu Contract-Honoring & Creditworthy Enterprise
Over the years while achieving steady economic growth Changchai has cultivated and developed the
"Changchai" brand—a renowned national brand in China’s small diesel engine industry with independent
intellectual property rights and a strong reputation at home and abroad.
2. Technological Advantages
Changchai operates a National-Level Technical Center a Postdoctoral Research Station and the Jiangsu
Provincial Small- and Medium-Power Internal Combustion Engine Engineering Research Center. The company
specializes in manufacturing single- and multi-cylinder diesel engines in the small-to-medium power range
offering the most comprehensive product portfolio and broadest power coverage in China’s small diesel engine
sector with independent IP rights for all core products.During the reporting period Changchai:
* Won the First Prize for Outstanding Quality Management Achievements in China’s machinery industry
(2024).
* Obtained 24 new patents bringing its total to 172 valid patents (including 18 domestic and 3 international
invention patents) by the end of 2024.
3. Marketing & Service Advantages
Changchai adopts a market-centric approach continuously innovating its sales strategies. It implements an
integrated "Five-in-One" management system covering:
* Whole-machine sales
* Spare parts supply
* Warranty services
* Payment collection
* Customer feedback
The company has built an extensive nationwide sales and service network including:
* 24 sales service centers
* 736 authorized service stations
* Coverage extending to both urban and rural areas
This network ranks among the most comprehensive in China’s small-to-medium diesel engine industry. Through
its Changchai Customer Call Center the company delivers proactive rapid convenient and precise pre-sales
in-sales and after-sales services.To comply with China Non-Road Stage IV emission standards and enhance after-sales precision Changchai has
15Changchai Company Limited Annual Report 2024
developed a customized service monitoring platform further strengthening its competitive edge in customer
support.IV Core Business Analysis
1. Overview
In 2024 the global economic situation continued to decline with heightened international geopolitical tensions
and complex global trade relations. Domestically China's economy maintained stable growth but structural
supply-demand imbalances and insufficient effective demand persisted. With the full marketization of Non-Road
China Stage IV products and factors such as low grain prices and subsidy adjustments market demand decreased
and competition intensified. While the overall situation remained stable minor fluctuations were observed. The
traditional agricultural machinery industry operated at a slower pace while emerging segments and new
applications continued to grow driving the industry toward high-quality development with broad market
prospects.Adhering to its development strategy and annual operational objectives the company actively adapted to market
conditions. Through the united efforts of all employees it achieved steady orderly and healthy development
maintaining its leading position in the small agricultural diesel engine industry. During the reporting period the
company sold 604600 diesel engines gasoline engines and generator sets generating RMB 2.416 billion in
revenue representing a 12.07% year-on-year increase.In product R&D and supporting applications the company continuously optimized its core products based on
market demand strengthening the integration of Non-Road China Stage IV multi-cylinder engines with new OEM
equipment. The installation volume of lightweight diesel engines increased significantly year-on-year. The
company accelerated product development and expanded its product line speeding up the mass production of
China Stage IV single-cylinder diesel engines which entered the market in bulk and gained user recognition.Phased progress was made in the development and supporting work for multi-cylinder products. Meanwhile the
company increased investment in technological reserves steadily advancing hybrid power R&D projects. The
D25 outboard engine obtained ship inspection certification and completed production and supply chain
integration.In sales and services the domestic market adopted multiple measures to consolidate its main markets and
strengthen competitive products across various sectors solidifying the company's share in the traditional
agricultural machinery market while accelerating expansion into new fields such as construction crop protection
electromechanical low-altitude and marine applications. The international market optimized its layout
significantly increasing sales in core and emerging markets. Leveraging synergies between domestic and
international markets the company refined its customer network improved service resource allocation and
coordination and further enhanced service quality. It also expanded new media applications to boost marketing
effectiveness and customer engagement through multiple channels.In quality management the company implemented measures such as component upgrades and production process
improvements to address market quality issues. It strengthened technical and quality exchanges with suppliers and
deepened quality engineering initiatives effectively improving overall quality standards. The company continued
its supply chain assurance efforts focusing on strengthening supplementing and extending the supply chain to
build a stable efficient and reliable supply system. By optimizing production processes and management models
it reduced production and operational costs while continuously improving efficiency. Safety training risk
identification hazard rectification emergency drills and occupational health measures were incorporated into
16Changchai Company Limited Annual Report 2024
routine institutional management and the environmental management system operated in an orderly and
controlled manner. During the reporting period the company passed external audits for ISO 9001 and IATF 16949
quality management systems.In internal management the company further strengthened oversight of subsidiaries comprehensively improved
its internal control system and implemented multiple cost-reduction and efficiency-boosting measures to enhance
operational performance and governance. In talent development it intensified cadre training and rejuvenation
efforts refined performance evaluation and incentive mechanisms and motivated employees to boost corporate
vitality. Safety training fire drills and other activities were conducted with increased emphasis on inspections
and hazard rectification to ensure a safe foundation for stable and healthy development. Various cultural and
sports activities were organized to create a secure stable and cohesive work environment and corporate culture.Externally the company strengthened its corporate image and product promotion to enhance brand influence.During the reporting period wholly-owned subsidiary Changchai Robin absorbed and merged with wholly-owned
subsidiary Horizon Agricultural Equipment inheriting all assets liabilities business operations and other rights
and obligations. By February 2025 Horizon Agricultural Equipment's legal entity status was deregistered
completing the merger. Additionally the company increased capital in wholly-owned subsidiary Changchai
Machinery by RMB 291.8359 million through a "debt-to-capital reserve conversion" with the entire amount
recorded as capital surplus.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
20242023
As % of total As % of Change (%)
Operating revenue operating Operating revenue total
revenue (%) operatingrevenue (%)
Total 2415869028.32 100% 2155698787.49 100% 12.07%
By operating division
Internal
combustion 2371931691.41 98.18% 2110376920.43 97.90% 12.39%
engines
Other 43937336.91 1.82% 45321867.06 2.10% -3.05%
By product category
Diesel engines 2243543689.25 92.87% 1908040669.16 88.51% 17.58%
Gasoline 122859838.38 5.09%
engines 153677944.53 7.13%
-20.05%
Other 49465500.69 2.05% 93980173.80 4.36% -47.37%
By operating segment
Domestic 2059623002.73 85.25% 1778018604.18 82.48% 15.84%
Overseas 356246025.59 14.75% 377680183.31 17.52% -5.68%
By marketing model
17Changchai Company Limited Annual Report 2024
Distribution 961865962.18 39.81% 754228779.91 34.99% 27.53%
Direct sales 1454003066.14 60.19% 1401470007.58 65.01% 3.75%
(2) Operating Division Product Category Operating Segment or Marketing Model Contributing over 10%
of Operating Revenue or Operating Profit
□Applicable √ Not applicable
Unit: RMB
YoY YoY
Operating Gros change in
YoY change in
Cost of sales s profit operating change in grossrevenue margin revenue cost of profit
(%) sales (%) margin(%)
By operating division
Internal
combustion 2371931691.41 2084092192.19 12.14% 12.39% 12.12% 0.21%
engines
By product category
Diesel
engines 2243543689.25 1937324581.91 13.65% 17.58% 13.40% 3.18%
Gasoline
engines 122859838.38 108205868.99 11.93% -20.05% -15.52% -4.73%
By operating segment
Domestic 2059623002.73 1780283448.38 13.56% 15.84% 17.02% -0.87%
Overseas 356246025.59 339017017.69 4.84% -5.68% -6.58% 0.93%
By marketing model
Distribution 961865962.18 837305962.65 12.95% 27.53% 24.02% 2.47%
Direct sales 1454003066.14 1281994503.42 11.83% 3.75% 6.03% -1.89%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating
division Item Unit 2024 2023 Change (%)
Unit sales Unit 477592 478280 -0.14%
Diesel engines Output Unit 473719 513177 -7.69%
Inventory Unit 95891 99764 -3.88%
Any over 30% YoYmovements in the data above and why:
□ Applicable √ Not applicable
18Changchai Company Limited Annual Report 2024
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
20242023
Product As % As %Item Changecategory Cost of sales of total of total (%)cost of Cost of sales cost of
sales (%) sales (%)
Raw
materials 1594081880.39 77.93% 1458317249.89 77.39% 9.31%
Diesel and
gasoline Labor cost 230255452.63 11.26% 225056024.38 11.94% 2.31%
engines Depreciation 58977062.10 2.88% 58676870.45 3.11% 0.51%
Energy 25209330.48 1.23% 24344615.38 1.29% 3.55%
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes √ No
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 1177094563.31
Total sales to top five customers as % of total sales of the Reporting Period (%) 48.72%
Total sales to related parties among top five customers as % of total sales of the Reporting
0.00%
Period (%)
Information about top five customers:
Sales revenue contributed for the As % of total sales revenue
No. Customer
Reporting Period (RMB) (%)
1 Customer A 694759928.51 28.76%
2 Customer B 208352865.36 8.62%
3 Customer C 127606552.93 5.28%
4 Customer D 78389441.53 3.24%
5 Customer E 67985774.98 2.81%
19Changchai Company Limited Annual Report 2024
Total -- 1177094563.31 48.72%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 398156825.26
Total purchases from top five suppliers as % of total purchases of the Reporting Period (%) 22.79%
Total purchases from related parties among top five suppliers as % of total purchases of the
0.00%
Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting Period
No. Supplier As % of total purchases (%)
(RMB)
1 Supplier A 128079527.00 7.33%
2 Supplier B 103700959.42 5.94%
3 Supplier C 70755470.41 4.05%
4 Supplier D 53533925.01 3.06%
5 Supplier E 42086943.42 2.41%
Total -- 398156825.26 22.79%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
2024 2023 Change (%) Reason for anysignificant change
Selling expense 60617254.43 54069774.62 12.11%
Administrative
expense 115466341.90 123981333.99 -6.87%
This growth mainly
resulted from
Finance costs -23423038.69 -11284676.92 —— increased interest
income and exchange
gains.R&D expenses 83401477.60 90339104.33 -7.68%
4. R&D Investments
√ Applicable □ Not applicable
Major Progre Expected impact on the
Purpose Specific objectives
R&D project ss Company
20Changchai Company Limited Annual Report 2024
Post-implementation the
4H11V16 Develop
Optimize diesel engine upgraded diesel engine will
Diesel higher-performanc In
performance to meet comply with Non-Road China
Engine e diesel engines progre
Non-Road China Stage IV Stage IV emission standards
Development that meet emission ss
emission standards. with broad and promising market
Project requirements
application prospects.Upon project completion the
Develop Enhance diesel engine
4H13V16 product will meet Non-Road
higher-performanc performance to effectively
Diesel In China Stage IV requirements
e diesel engines reduce harmful emissions
Engine progre advancing the company's
compliant with and promote energy
Development ss non-road product technology
emission conservation and emission
Project maturity while demonstrating
regulations reduction.excellent market potential.After the implementation of the
Optimize and
4G36V16A Improve product project the product will meet
upgrade diesel
Diesel In performance reach the market demand and complies
engine
Engine progre advanced level of similar with the Non-Road China Stage
performance to
Development ss foreign products and meet IV emission standards with
meet market
Project emission requirements. broad market prospects in the
demand
future.
4G33TC
Develop
Diesel Refine diesel engine Upon project completion the
higher-performanc
Engine In performance to achieve product will meet the
e energy-saving
Matching progre high-efficiency output with requirements of Non-Road China
and
Tractor ss energy-saving and Stage IV emission standards and
emission-reducing
Development emission-reducing benefits. market demand.diesel engines
Project
Develop
L22 China Non-Road China Upon project completion the
Improve product
Stage IV Stage IV product will meet the
In performance reach the
Diesel mechanical pump requirements of Non-Road China
progre advanced level of similar
Engine engines that meet Stage IV emission standards the
ss foreign products and meet
Development emission product has broad market
emission requirements.Project requirements and prospects.market demand
L24
Common Develop Upgrade engine Upon project completion the
Rail China higher-performanc performance to achieve product will meet the
In
Stage IV e diesel engines best-in-class domestic requirements of Non-Road China
progre
Diesel with energy reliability while meeting Stage IV emission standards and
ss
Engine conservation and Non-Road China Stage IV market demand the product has
Optimization emission reduction emission requirements. broad market prospects.Project
390 Develop In Improve product After the implementation of the
21Changchai Company Limited Annual Report 2024
Turbocharged higher-performanc progre performance reach the project the product will meet the
Diesel e diesel engines ss advanced level of similar emission requirements have a
Engine with energy foreign products and meet clear target market positioning
Development conservation and emission requirements. and broad market prospects.emission reduction
Develop
4L88 China high-efficiency
Post-project products will
Stage IV environmentally-fr In Improve product
maintain existing OEM
Diesel iendly diesel progre performance and meet
application compatibility while
Engine engines meeting ss emission requirements.expanding market opportunities.Development emission
requirements
Develop
Improve product
higher-performanc After the implementation of the
Mining performance meet non
e mining pickup In project the company's product
Pickup Truck road national emission
engines with progre line will be further expanded to
Engine regulations and related
energy ss meet emission requirements and
Development requirements and achieve
conservation and have broad market prospects
leading domestic indicators.emission reduction
178FA Develop After the implementation of the
Improve product
Air-Cooled high-efficiency project the product will meet
In performance reach the
China Stage energy-saving market demand comply with
progre advanced level of similar
IV Diesel diesel engines energy-saving and environmental
ss foreign products and meet
Engine compliant with protection policies and have
emission requirements.Development emission standards broad market prospects.L12 Develop
Water-Cooled high-efficiency Enhance product reliability Implementation will expand
In
China Stage eco-friendly and and energy efficiency while product applications enrich
progre
IV Diesel energy-efficient meeting Stage IV emission technical reserves and meet both
ss
Engine single-cylinder regulations. regulatory and market demands.Development diesel engines
Upon project completion the
Develop Improve product
3M82 Diesel product will meet the
higher-performanc performance reach the
Engine Compl requirements of Non-Road China
e diesel engines advanced level of similar
Development eted Stage IV emission standards the
satisfying foreign products and meet
Project product has broad market
emission standards emission requirements.prospects.Improve product Upon project completion the
Development Development of
performance metrics products will meet market
of 173FA high-efficiency
achieve energy-saving and demand comply with
Air-Cooled energy-saving Compl
emission reduction and energy-saving and environmental
China IV diesel engines that eted
comply with the Non-Road protection policies and
Diesel meet emission
China IV emission demonstrate broad market
Engine requirements
standards. prospects.
22Changchai Company Limited Annual Report 2024
Mechanical Develop
Pump higher-performanc
Single-Cylin e mechanical
Upon project completion the
der Diesel pump Improve power
product will meet the
Engine single-cylinder Compl performance fuel economy
requirements of Non-Road China
Non-Road diesel engines eted service life and Non-Road
Stage IV emission standards and
China Stage meeting Non-Road China Stage IV compliance.market demand.IV China Stage IV
Development emission
Project requirements
Develop
Elevate all performance Upgraded engines will achieve
4G29 Diesel higher-performanc
metrics to domestic Non-Road China Stage IV
Engine e diesel engines Compl
advanced levels while certification advancing the
Development conforming to eted
satisfying Non-Road China company's technological
Project emission
Stage IV standards. capabilities in this sector.regulations
Motorcycle
Develop
Tricycle Improve product Upon project completion the
lightweight
Specialized performance reach the product will enrich the
single-cylinder Compl
Diesel advanced level of similar company's products further
water-cooled eted
Engine foreign products and meet explore the power market and
high-speed diesel
Development emission requirements. meet emission regulations.engines
Project
Details about R&D investments:
2024 2023 Change (%)
Number of R&D
personnel 214 225 -4.89%
R&D personnel as % of
total employees 8.84% 8.74% 0.10%
Educational background of R&D personnel
Bachelor’s degree 91 96 -5.21%
Master’s degree 9 6 50.00%
Age structure of R&D personnel
Below 30 17 31 -45.16%
30~4081775.19%
Details about R&D investments:
2024 2023 Change (%)
R&D investments (RMB) 83401477.60 90339104.33 -7.68%
R&D investments as % of operating
revenue 3.45% 4.19% -0.74%
Capitalized R&D investments (RMB) 0.00 0.00 ——
23Changchai Company Limited Annual Report 2024
Capitalized R&D investments as % of
total R&D investments 0.00% 0.00% ——
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2024 2023 Change (%)
Subtotal of cash generated from
operating activities 2325383619.26 2169305862.90 7.19%
Subtotal of cash used in
operating activities 2479676587.96 2032116035.55 22.02%
Net cash generated from/used in
operating activities -154292968.70 137189827.35 ——
Subtotal of cash generated from
investing activities 1206915907.12 1197150475.33 0.82%
Subtotal of cash used in
investing activities 1198878172.96 1044165754.31 14.82%
Net cash generated from/used in
investing activities 8037734.16 152984721.02 -94.75%
Subtotal of cash generated from
financing activities 94412090.20 0.00 ——
Subtotal of cash used in
financing activities 33168340.22 131365400.07 -74.75%
Net cash generated from/used in
financing activities 61243749.98 -131365400.07 ——
Net increase in cash and cash
equivalents -78947638.62 161278557.41 ——
Explanation of why any of the data above varies significantly:
√Applicable□ Not applicable
The significant year-on-year fluctuation in net cash flow from operating activities was primarily attributable to
extended payment terms granted to most of the Company's multi-cylinder engine customers (OEM suppliers)
coupled with increased market expansion expenditures for emission-standard upgraded products resulting in
slower cash collection and relatively higher procurement payments to suppliers during the reporting period.The material change in net cash flow from investing activities was mainly due to increased investments in wealth
management products during the reporting period.The substantial variation in net cash flow from financing activities principally arose from the discounting of bank
acceptance bills with lower credit ratings during the reporting period as no such activities were conducted in the
previous period.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
24Changchai Company Limited Annual Report 2024
√Applicable□ Not applicable
The significant variance between the Company's net cash flow from operating activities and its net profit for the
reporting period was primarily attributable to (i) the impact of fair value changes in financial assets held by the
Company on current-period earnings and (ii) increased procurement payments made to suppliers during the
reporting period.V Analysis of Non-Core Businesses
√Applicable□ Not applicable
Unit: RMB
Amount As % of Source Recurrentgross profit or not
The increase was primarily attributable
Return on
investment 24265851.27 158.01%
to dividends received from equity hol
dings and investment income generated Yes
from cash management activities.During the reporting period the fair v
alue of the Company's equity interest i
n Jiangsu Horizon New Energy Techn
Gains/losses on ology Co. Ltd. declined and the shar
changes in fair -65938196.89 -429.38% e prices of Jiangsu Liance Electromec
value hanical Technology Co. Ltd. and Kail
No
ong High-Tech Co. Ltd. held by who
lly-owned subsidiary Horizon Investme
nt decreased compared to the beginnin
g of the period.Asset impairment
loss -14403371.83 -93.79% No
Non-operating
income 2838603.42 18.48% No
Non-operating
expense 886507.69 5.77% No
Asset disposal
income 304377.71 1.98% No
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2024 1 January 2024 Change
As % of As % of in Reason for any
Amount total Amount total percent significant change
assets assets age (%)
Cash and Cash
Equivalents 1063700492.59 19.76% 1083867966.87 21.01% -1.25%
25Changchai Company Limited Annual Report 2024
The primary reas
ons were that mo
st of the Compan
y's multi-cylinder
engine customers
are OEM supplier
s with relatively l
onger payment ter
ms. Meanwhile d
Accounts ue to product emi
receivable 444254240.02 8.25% 316543159.91 6.14% 2.11% ssion upgrades the Company intens
ified market expa
nsion efforts duri
ng the reporting
period and approp
riately extended c
redit terms result
ing in a significa
nt increase in acc
ounts receivable.Inventories 819201998.42 15.22% 789220185.68 15.30% -0.08%
Investment
property 37740844.55 0.70% 39837558.11 0.77% -0.07%
Fixed assets 615414505.40 11.43% 675596920.95 13.09% -1.66%
Construction
in progress 3376866.69 0.06% 4275622.18 0.08% -0.02%
The variance was
principally
attributable to the
Company's
discounting of
bank acceptance
Short-term bills with lower
borrowings 94471787.41 1.76% 0.00 0.00% 1.76% credit ratings
during the
reporting period
as no such
transactions were
conducted in the
previous period.Contract
liabilities 31640879.59 0.59% 33352877.66 0.65% -0.06%
Indicate whether overseas assets take up a high percentage in total assets.□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
26Changchai Company Limited Annual Report 2024
Unit: RMB
Gain/loss
on Cumulati Impairme
fair-value ve nt Purchase Sold in
Item Beginnin changes fair-value allowance d in the the Other Endingg amount in the changes for the Reporting Reporting change amount
Reporting charged Reporting Period Period
Period to equity Period
Financial assets
1.
Held-for-t
rading
financial
assets 2256414 -330239 1179550 1068500 3036674
(derivativ 0.00 0.00 0.00
e 29.94 70.29 000.00 000.00 59.65
financial
assets
exclusive
)
2.
Investme
nt in 9694880 7565500 9411200
other 0.00 0.00 0.00 0.00 0.00
equity 25.67 58.72 58.72
instrumen
ts
Subtotal
of 1195129 -330239 7565500 1179550 1068500 1244787
financial 0.00 0.00455.61 70.29 58.72 000.00 000.00 518.37
assets
4536880-3504533778692
Other 0.00 0.00 0.00 0.00 0.00
86.5559.3117.49
Total of 1648817 -680693 7565500 1179550 1068500 1622656
above 0.00 0.00542.16 29.60 58.72 000.00 000.00 735.86
Financial
liabilities 0.00 0.00
Contents of other change: N/A
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Unit: RMB
Item At the period-end Reason for restriction
Bank acceptance bill guarantee deposits、Letter of guarantee
Monetary assets 171018607.75 deposits、Performance bond deposits、Term deposits and acc
rued interest
Notes receivable 70878200.00 Payment obligations for undiscounted but discounted bills
27Changchai Company Limited Annual Report 2024
Notes receivable 163858135.20 Payment obligations for undiscounted but transferred bills
VII Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Investments made in Reporting Investments made in same period
Period (RMB) of last year (RMB) +/-%
291835919.917170000.003970.24%
The Company increased its capital contribution in its wholly-owned subsidiary Jiangsu Changchai Machinery Co.Ltd. by RMB291835919.91 (including unpaid loan interest of RMB4958090.18) through a "debt-to-capital
reserve" arrangement with the entire amount being recorded as capital reserve.
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain/ Accu
loss mula
Acco Begi on ted Purc Gain/
Initia untin nnin fair fair hase
Sold loss Endi
Varie Code Nam l g g value value d in
in in ng Acco Fund
ty of of e of the
secur secur secur inves
meas carry chan chan the the carry untin ing
tmen urem ing ges ges Repo
Repo Repo ing g sourc
ity ity ity t cost ent amou in the recor rting
rting
meth Repo ded Perio Perio
rting amou title e
nt Perio ntod rting in d d d
Perio equit
d y
Inves
Dom
estic/ Foto 4178 Fair
320362
3944 tmen Self-
6001 n value 911 695forei 4000 8500 0.00 0.00 0.00 0.00 t in fund
gn 66 Motor .00
meth 000. 000.
0.00 other ed
stock od 00 00 equit
y
28Changchai Company Limited Annual Report 2024
instr
umen
ts
Inves
tmen
t in
Dom Bank Fair 187 181 229estic/ 1565 other Self-6009 of 4278 value 002 630 788forei 19 Jiang 6000 meth 4600 0.00 0.00 0.00 equit fundgn .00 000. 80.0 000.0.00 y ed
stock su od 00 0 00
instr
umen
ts
Held
-for-t
Dom Kailo 115 radin
estic/ ng3009 High 2000
Fair 1811 -654 -654 Self-
701 g
forei 12 Tech 1268
value
meth 986 9711 0.00 0.00 0.00 971 fundgn .00 50.0 finannolo od 1.00 .00 1.00 edstock gy 0 cial
asset
s
Held
-for-t
Dom Lian -238 407 radin
estic/ ce 7200 Fair 6687 -261 Self-644 088 g
forei 688113 Tech 000.value 360 6480 0.00 0.00 0.00 fund
gn nolo 00 meth 13.5 00.0 finan0.00 0.00 ed
stock gy od 9 0 cial
asset
s
Held
-for-t
Dom Fair radinestic/ Lanti 585 320 Self-6053 1607 value 3015 1848 gforei 68 an 0.00 0.00 0.00 77.3 040. fundgn Gas 44.76 meth 60.00 0.00 finanod 6 00 edstock cial
asset
s
507-121645-1219
11196363-326
9139240812467.
Total 3201 -- 2602 9603 0.00 0.00 23 --
000.67.2990.
2.761.001.00
00300
29Changchai Company Limited Annual Report 2024
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
□ Applicable √ Not applicable
During the reporting period the Company did not have any utilization of raised capital.VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
IX Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RMB
Relatio
nship
with Principal Registere Total Net Operatin Operating Net
Name
the activity d capital assets assets g revenue profit profit
Compa
ny
Production
Changchai Subsidi of diesel 550630 167733 673293 197317 -993969 -962465
Benniu ary engine 00.00 258.21 03.86 344.78 8.59 9.68
accessories
Diesel
Changchai Subsidi 850000 664530 511181 407382 827260.0 679056.engine
Wanzhou ary 00.00 54.91 30.95 84.52 3 41
assembly
Horizon Subsidi External 400000 762802 692999 -300415 -2232350.00
Investment ary investment 00.00 78.94 25.93 48.20 11.82
30Changchai Company Limited Annual Report 2024
and
consulting
agricultural
Horizon machinery
Agricultura Subsidi product of 100000 657162. -162455 201690 -483407. -242516.l ary rice 00.00 26 94.49 6.93 44 86
Equipment transplanter
etc.Gasoline
Changchai Subsidi 372500 124877 106160 127473 6480470 592100
engines
Robin ary 00.00 704.42 750.36 497.67 .70 4.60
assembly
Internal
combustion
Changchai Subsidi 300000 807891 510083 863773 721291.8 102653.engine and
Machinery ary 000.00 051.24 511.24 492.51 2 19
related
accessories
Xingsheng
Real estate
Real Estate Subsidi 100000 356146 196799 310220 526235.3 508897.manageme
Manageme ary 0.00 1.17 9.30 9.12 2 27
nt service
nt
Manufactur
ing and
Zhenjiang Subsidi marketing 200000 127544 110945 694790 1292671 114824
Siyang ary of diesel 0.00 513.83 413.11 46.40 7.65 43.77
engines for
ships
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information about principal subsidiaries and joint stock companies:
1. Equity Ownership and Control of Zhenjiang Siyang
As of the end of the reporting period the Company holds a 49% equity interest in Zhenjiang Siyang making it the
largest shareholder. Given that other shareholders are highly dispersed and considering that 4 out of 7 board seats
(including the Chairman) are appointed by the Company the Company exercises actual control over Zhenjiang
Siyang. Accordingly Zhenjiang Siyang meets the criteria for consolidation under applicable accounting standards.
2. Acquisition of Remaining Stake in Horizon Agricultural Equipment (Horizon Agricultural Equipment)
In June 2024 the Company acquired the remaining 25% equity interest in Horizon Agricultural Equipment from
Horizon Investment. As of the reporting period end the Company now holds 100% Ownership of Horizon
Agricultural Equipment.
31Changchai Company Limited Annual Report 2024
X Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
XI Prospects
1. Development strategy of the Company
The Company’s development strategy is to base on farm machinery become stronger in the engine business
explore more markets and develop in a scientific way.The comprehensive national policies on rural revitalization and accelerated development of an agricultural
powerhouse will generate significant positive impacts on the industry. The Company will fully capitalize on
policy dividends from the government's strong support for agricultural production and farm machinery
development. We will steadfastly advance:
(1) Accelerating Technological Upgrades and Market Expansion for Existing Products
First the Company will prioritize the optimization and enhancement of its core products.
1）By aligning with market demand and leveraging the Company's competitive products and technologies we will
stabilize supply share with major OEM partners for single-cylinder engines increase market penetration in key
industrial clusters tap into high-potential sales regions and consolidate our industry leadership position. For
multi-cylinder engines we will accelerate product optimization and upgrades expedite R&D and
commercialization of policy-compliant new products enhance profitability of existing products expand product
line offerings strengthen supporting services in core market segments and increase market share in specialized
applications.
2）To meet overseas market demands we will innovatively upgrade existing product technologies and develop
export-oriented models with enhanced reliability and superior performance. Leveraging OEM partners' global
distribution channels we will expand our international market presence. Through optimized resource allocation
and synergies we aim to improve overall export efficiency enhance market service quality and actively increase
customer satisfaction.Second we will focus on value chain extension by developing premium product offerings.
1）The Company will continue to optimize its power unit products and distribution network pursuing premium
and specialized development in niche markets to move up the value chain. This includes expanding applications in
specialized vehicles UAV crop protection stationary power and telecommunications markets. Our independently
developed integrated UAV charging system has been launched with positive market feedback.
2）Aligned with the industry trends of electrification connectivity and intelligently in agricultural machinery the
Company is integrating advanced technologies including Internet of Things (IoT) big data analytics artificial
intelligence and new materials into product development. These innovations enhance intelligent control systems
real-time monitoring capabilities and big data collection/analysis functions in diesel engines thereby increasing
product value-added features and better meeting end-user requirements.Third we will extend its market reach toward end-user applications. The Company's core products consist of
small-to-medium power diesel engines and general-purpose gasoline engines primarily serving off-road
applications including agricultural machinery crop protection equipment construction machinery and marine
engines. We are intensifying R&D efforts and market penetration in generator sets outboard motors cold chain
systems fishing vessels and telecommunication tower applications.Through our subsidiary Zhenjiang Siyang we continue to optimize our marine engine business structure and
32Changchai Company Limited Annual Report 2024
strengthen collaborative partnerships to ensure sustainable development. Ongoing improvements to our outboard
motor power platforms include:
* Establishing comprehensive domestic and international sales networks
* Continuous product optimization based on market demand and feedback
* Expanding product line offerings
* Enhancing overall business structure.
(2) Driving Industrial Transformation Through New Energy Integration
While the rapid advancement of new energy technologies has impacted traditional power systems in certain
applications creating substitution risks long-term opportunities for conventional engines remain. Leveraging our
expertise in light-duty power solutions we are:
* Expanding New Energy Product Lines: Developing hybrid power systems and advancing their
integration across multiple downstream applications
* Accelerating Alternative Fuel R&D: Intensifying efforts in hydrogen combustion technology and other
clean energy solutions
* Strengthening Industry Collaboration: Building strategic partnerships with green technology providers
to enhance market penetration
2. 2025 Operational Plan
Strengthen our position in the traditional agricultural machinery market while expanding into emerging power
segments. We will enhance product quality to solidify our core competitiveness drive continuous innovation to
boost vitality implement lean management to improve efficiency and optimize resource allocation for
high-performance operations. The Company targets RMB 2.4 billion in sales revenue for 2025 including USD 55
million in export revenue.
3. Potential Risks and the Company's Countermeasures
(1) Market Risks
The agricultural machinery industry has entered a period of deep adjustment dominated by optimization and
upgrading. Due to the impact of national equipment purchase subsidy policies industrial development policies
and environmental regulations the traditional product market is declining competition in the existing market is
intensifying and the industry is moving toward high-end and intelligent development. Most companies are
continuously strengthening product R&D and optimization in line with market demand increasing market
maintenance and expansion efforts. With the full market entry of China IV emission standard products industry
competition has further intensified.Countermeasures: First closely follow policy guidance optimize product structure adhere to the principle of
profitable sales and strengthen both domestic and international markets. Second focus on market demand
accelerate product R&D and innovation consolidate traditional supporting fields make further breakthroughs in
advantageous areas and expand product applications in high-end industrial chain markets. Third enhance
innovation awareness actively promote the application of advanced technologies such as internet big data
artificial intelligence and new materials accelerate the development of smart terminals and hybrid power systems
and build new competitive advantages. Fourth aim for quality improvement and efficiency enhancement
strengthen internal and external quality responsibilities and improve corporate governance and operational
efficiency. Fifth emphasize talent development use human resources as support and promote efficient internal
collaboration.
(2) Industry Risks
33Changchai Company Limited Annual Report 2024
The advancement of new energy application technologies and related policies has prompted enterprises to
accelerate research application and market deployment in new energy power systems which has affected the
market share of diesel engines in certain supporting fields to some extent. Currently new energy power systems
still face challenges such as high costs and complex operating environments in agricultural machinery applications.However with continuous breakthroughs in new energy technologies some application scenarios of non-road
diesel engines may be replaced by new energy power systems.Countermeasures: First develop products that comply with national energy conservation and emission reduction
policies optimize and upgrade product lines according to market demand strengthen the application of artificial
intelligence and new materials enhance product added value and competitiveness and consolidate market
advantages. Second accelerate the research and development of new energy power systems leverage the
company's advantages in light-duty power systems to expand new energy hybrid products and supporting fields
and promote sustainable corporate development. Third maintain coordinated development between product
operations and capital operations focus on emerging industries and utilize capital markets to accelerate the pace
of external expansion.
(3) International Trade Risks
In recent years the global landscape has become increasingly complex with frequent geopolitical conflicts and
international trade disputes. These developments have severely impacted regional politics and security global
economic recovery food and energy security and ecological environments leading to varying degrees of
influence on foreign trade policies worldwide. Significant changes in the political stability or trade policies of
overseas markets could substantially affect our export sales.Countermeasures: First enhance collaborative service capabilities through complementary sharing of
internal/external resources information and products to drive incremental market demand and improve overall
trade efficiency. Second innovate and adapt products according to overseas market needs expanding promotion
of high-performance products and new application solutions. Third cultivate key markets by leveraging overseas
distribution channels of downstream OEMs strengthening local service personnel training service capacity
building and authorized overseas service stations.
(4) Exchange Rate Risks
Recent years have seen growing challenges and uncertainties in the global political and economic environment
with increased volatility in exchange rates. As our products are widely exported currency fluctuations may
adversely affect sales.Countermeasures: First closely monitor exchange rate movements selecting optimal currencies for
pricing/settlement while mitigating risks through payment method adjustments and export credit insurance.Second implement timely measures like product price adjustments and revised payment terms to address
exchange rate and material cost fluctuations. Third enhance product and service competitiveness to reduce the
impact of currency volatility on sales.
(5) Raw Material Price Volatility Risk
The market prices of raw materials are subject to fluctuations due to macroeconomic conditions production
capacity and demand changes. Price volatility of key inputs such as steel and pig iron will increase our
manufacturing costs and impact corporate profitability.Countermeasures: First we will strengthen internal management through technological improvements and
enhanced cost control measures to optimize workflows and improve production efficiency. Second we will
continue implementing supply assurance initiatives to build a stable efficient and reliable supply system. Third
we will closely monitor market trends and strengthen inventory management to mitigate the adverse impacts of
34Changchai Company Limited Annual Report 2024
raw material price fluctuations.
(6) Talent Risk
Talent is one of the key factors for the Company's development. We require talented personnel to enhance
operational efficiency and accelerate development. If the Company's compensation policies and talent incentive
mechanisms are inadequate it may lead to insufficient high-level management and technical talents as well as a
lack of talent reserves ultimately affecting R&D innovation capabilities and core competitiveness.Countermeasures: First in accordance with the Company's development plan and actual operational needs we
will continuously improve talent recruitment mechanisms and talent cultivation systems optimize workforce
structure and comprehensively enhance overall employee quality. Second based on business development
requirements we will consistently upgrade employees' professional capabilities through systematic training
programs. Third we will refine talent incentive methods and performance evaluation systems accelerate the
rejuvenation of management teams and improve overall human resource contribution efficiency. Fourth we will
strengthen the employee representative congress system and union services to create a harmonious development
environment and enhance employees' sense of belonging and well-being.XII Communications with the Investment Community such as Researches Inquiries and Interviews during
the Reporting Period
√ Applicable □ Not applicable
Place
Date of visit of Way of Type of
Contents and
Visitor materials Index to main inquiry
visit visit visitor provided information
The Company’s
production and Information on 00057
Onlin Investors operation 0 Changchai’s Result
23 April 2024 e Onlinemeeti exchange Other and the
development and s Presentation and R
public construction oadshow on www.cning investment and nfo.com.cn dated 23
wealth April 2024
management etc.XIII Implementation of Market Value Management System and Valuation Enhancement Plan
Indicate whether the Company has disclosed the Market Value Management System
□ Yes √ No
Indicate whether the Company has disclosed the Valuation Enhancement Plan
□ Yes √ No
XIV. Implementation Status of the "Dual Enhancement of Quality and Returns" Initiative
Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.□ Yes √ No
35Changchai Company Limited Annual Report 2024
Part IV Corporate Governance
I General Information of Corporate Governance
In the Reporting Period the Company was strictly in line with laws statutes such as Company Law Securities
Laws Code of Corporate Governance of Listed Companies Guide Opinion on Establishment of Independent
Director System by Listed Companies and Guidelines on Internal Controls of Listed Companies and so on
continuously perfected corporate governance established and accomplished internal management and control
system consistently and deeply put forward corporate governance activities so as to further normalized operation
of the Company raising corporate governance level laying a guard for steady and healthy development of the
Company protect legal rights and interests of the Company and all shareholders.The Company promulgated or revised a series of internal control system through all aspects of normal operation
and management activities in accordance with each national laws and regulations characteristics of the industry
operation and self-managing business and improved it continuously and finally formed a normative management
system. And formulated a series of management system process and standard covered each operation link and
level of the financial assets control human resources management quality environment management and internal
audit supervisor etc. which ensured all the work had rules to follow.Indicate by tick market whether there is any material incompliance with the applicable laws administrative
regulations and regulations issued by the CSRC governing the governance of listed companies.□ Yes √ No
No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder and Actual Controller in Asset
Personnel Financial Affairs Organization and Business
The Company was independent from the controlling shareholder Changzhou Investment Group Co. Ltd in terms
of assets business personnel organization and financing with independent & complete business and capability to
operate independently.
1. Assets: The property rights relationship between the Company and the controlling shareholder is clear assets
are clearly defined and there are no funds assets and other resources being occupied or used without
compensation between them.
2. Personnel: The Company and the controlling shareholder are independent of each other in terms of labor
personnel and salary management and each has an independent management organization a sound management
policy and an independent personnel appraisal and assessment system.
3. Finance: The Company has set up a special finance department established an independent accounting system
and financial management policy opened an independent bank account and implemented independent accounting
and independent tax payments. There is no interference in the financial activities of the Company by the
controlling shareholder.
4. Institution: The Company has a complete and independent corporate governance structure and has established a
sound organizational system that meets its own production and operation needs which operates independently and
well and there is no subordinate relationship with the functional departments of the controlling shareholder.
36Changchai Company Limited Annual Report 2024
5. Business: The Company has an independent and complete business system with independent and autonomous
production and operational capability. The Company conducts related transactions reasonably on the principle of
independence.III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Date of
Disclosur
Meeting Type participatio the Resolution
e date
n ratio meeting
The 2023 A All proposals were approved. See
nnual Gener Annual General Meeting 32.34%
8 May 2 9 May 2 Announcement No. 2024-016 on
al Meeting 024 024 Resolutions of the 2023 Annual General Meeting.The 1st Extr All proposals were approved. See
aordinary G ExtraordinaryGeneral Meeti 32.58% 30 July 31 July Announcement No. 2024-024 oneneral Meeti ng 2024 2024 Resolutions of the 1
st Extraordinar
ng of 2024 y General Meeting of 2024.
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
V Directors Supervisors and Senior Management
1. General Information
Begin Endin
ning g+/-
Name Gend
Incum share
er Age Office title bent/F Start of tenure
End of shareh
ormer tenure olding
(share holdi
(share ) ng
) (share)
Li 1
Desen Male 43
Chairman of Incum
the Board bent 12 June 2023 January 0 0 02025
Zhang Vice
Xin Male 58 Chairman of
Incum Ongoin
the Board bent
12 June 2023 g 0 0 0
Xie Male 55 Director Incum 12 June 2023 Ongoin 0 0 0
37Changchai Company Limited Annual Report 2024
Guozho General bent g
ng Manager
Tan Jie Fema 45 Director Incum 12 June 2023 Ongoinle bent g 0 0 0
Jiang Director
He Male 52
Incum Ongoin
Chief bent 16 April 2020 g 0 0 0
Accountant
Yang
Feng Male 52 Director
Incum
bent 16 April 2020
Ongoin
g 0 0 0
Wang
Mancan Male 61 Independent Incum 16 April 2020 Ongoin 0 0 0
g director bent g
Zhang Fema Independent Incum Ongoin
Yan le 54 director bent 16 April 2020 g 0 0 0
Jia Bin Male 46 Independent Incumdirector bent 12 June 2023
Ongoin
g 0 0 0
Ni Chairman of
Minglia Male 57 the Incum Ongoin
ng Supervisory bent
12 June 2023 g 0 0 0
Committee
Shi Fema
Xingyu le 44 Supervisor
Incum
bent 12 June 2023
Ongoin
g 0 0 0
Lu
Zhongg Male 57 Supervisor Incumbent 18 October 2016
Ongoin
g 0 0 0ui
Liu Yi Male 55 Supervisor Incum Ongoinbent 18 October 2016 g 0 0 0
Lin Wei Male 42 Supervisor Incumbent 12 June 2023
Ongoin
g 0 0 0
Sun
Jianzho Male 52 Vice-general IncumManager bent 16 April 2020
Ongoin
ng g
000
He Vice-generalManager Incum 13 December 2021Jianjian Male 45 Ongoin
g Secretary of bent
000
the Board 18 October 2016
g
Wang Male 37 Vice-general IncumJing Manager bent 12 June 2023
Ongoin
g 0 0 0
Wang Chief Incum Ongoin
Weifeng Male 53 Engineer bent 12 June 2023 g 0 0 0
Total -- -- -- -- -- -- 0 0 0
Disclosures on Departures of Directors Supervisors and Dismissals of Senior Management During the Reporting
Period
□ Yes √ No
Changes in the Company's Directors Supervisors and Senior Management
□ Applicable √ Not applicable
2. Biographical Information
Professional backgrounds major work experience and current duties in the Company of the incumbent directors
38Changchai Company Limited Annual Report 2024
supervisors and senior management:
Li Desen: Previously served as Director of the Office of Qishuyan Rail Transit Industrial Park Management
Committee Deputy Secretary of the Qishuyan Subdistrict Party Working Committee and Director of the
Subdistrict Office Director of the Financial Development Bureau of Changzhou Economic Development Zone
Deputy Director and Party Leadership Group Member of Changzhou Local Financial Supervision Bureau
Standing Committee Member of Wujin District Committee of Changzhou Minister of the United Front Work
Department Deputy District Chief and Party Leadership Group Member of the District Government Deputy
Secretary of the Party Leadership Group of the District Political Consultative Conference Chairman of the Board
of Directors and Party Committee Secretary of Changzhou Investment Group Co. Ltd. and Party Committee
Secretary and Chairman of the Board of Directors of the Company. Currently serves as Deputy Secretary and
District Chief of Changzhou Zhonglou District. (On January 1 2025 Mr. Li Desen resigned from his positions as
Chairman of the Board Director Chairman and Member of the Board Strategy Committee and Member of the
Board Remuneration and Appraisal Committee of the Company due to work reassignment. Following his
resignation from the above positions Mr. Li Desen no longer holds any other positions in the Company.)
Zhang Xin: Previously served as Manager of the Company's Sales Company Assistant General Manager Deputy
General Manager and General Manager. Currently serves as Vice Chairman of the Board of Directors of the
Company acting on behalf of the Chairman's duties.Xie Guozhong: Previously served as General Manager Assistant General Manager and Deputy General Manager
of the Company's Sales Company. Currently serves as Deputy Secretary of the Party Committee Director
General Manager of the Company Director of Changchai Machinery and Supervisor of Beiqi Foton Motor Co.Ltd.Tan Jie: Previously served as Deputy Director of the Accounting Department and Deputy Director of the
Personnel and Education Department of Changzhou Municipal Finance Bureau Deputy Secretary-General of
Changzhou Certified Public Accountants Association and Secretary of the Youth League Committee Director of
the Comprehensive Department Director of the Agriculture Department Director of the Agriculture and Rural
Affairs Department and Director of the Administrative and Political-Legal Department of Changzhou Municipal
Finance Bureau and Assistant President of Changzhou Investment Group Co. Ltd. Currently serves as Member
of the Party Committee Director and Vice President of Changzhou Investment Group Co. Ltd. and Director of
the Company.Jiang He: Previously served as Accountant Assistant Minister and Deputy Minister of the Finance Department of
the Company. Currently serves as Director Chief Accountant and Minister of the Finance Department of the
Company.Yang Feng: Previously served as Business Manager of the Shanghai Investment Banking Department of China
Economic Development Trust & Investment Corp. Business Director of the Investment Banking Department of
Orient Securities Co. Ltd. General Manager of the Investment Banking Department and Operation Management
Headquarters and Assistant to the Chairman of AJ Securities Executive General Manager of the Corporate
Development Financing Department and Investment Banking Department of CITIC Securities Co. Ltd. and
Managing Director of Daiwa Securities China Co. Ltd. Currently serves as Executive Director of De Xin
Investment Management (Hong Kong) Co. Ltd. Independent Director of Shanghai Kindly Enterprise
Development Group Co. Ltd. and Director of the Company.Wang Mancang: Previously served as Teacher and Lecturer in the Department of Management Lecturer and
Professor in the Department of Finance at Northwest University School of Economics and Management.Currently serves as Director of the Department of Finance at Northwest University School of Economics and
Management Director of the Public Economics Research Institute Counselor of Xi'an Municipal Government
39Changchai Company Limited Annual Report 2024
Expert of the "Finance and Fiscal Group" of the Government Decision-making Advisory Committee Independent
Director of Xi'an Focuslight Technologies Co. Ltd. Independent Director of Xi'an Wonder Energy Chemical Co.Ltd. and Independent Director of the Company.Zhang Yan: Previously served as Chief Accountant of Changzhou Zhengda Certified Public Accountants Co. Ltd.and Executive Deputy Chief Accountant of Jiangsu Gongzheng Certified Public Accountants Co. Ltd. Currently
serves as Associate Professor at Jiangsu University of Technology School of Management Director of Changzhou
Communications Holding Group Co. Ltd. Director of Changzhou Transportation Industry Group Co. Ltd.Independent Director of DinoPark Cultural Tourism Group Co. Ltd. Independent Non-executive Director of
Seazen Enjoy Services Group Limited Independent Director of Jiangsu Tianmu Lake Tourism Co. Ltd. and
Independent Director of the Company.Jia Bin: Previously served as Deputy Director of the First Research Office of Tianjin Internal Combustion Engine
Research Institute Assistant Secretary-General and Deputy Secretary-General of China Internal Combustion
Engine Industry Association and Secretary-General of Small Gasoline Engine Branch of China Internal
Combustion Engine Industry Association. Currently serves as Director of the First Research Office of Tianjin
Internal Combustion Engine Research Institute (Tianjin Motorcycle Technology Center) Secretary-General of
China Internal Combustion Engine Industry Association Independent Director of Lutian Machinery Co. Ltd.Director of Tianjin Tianbo Keda Technology Co. Ltd. and Independent Director of the Company.Ni Mingliang: Previously served as Clerk and Vice Chairman of the Labor Union of the Company. Currently
serves as Deputy Secretary of the Party Committee Chairman of the Board of Supervisors Chairman of the Labor
Union of the Company Chairman of the Board of Directors of the Property Management Company and Director
of Horizon Investment.Shi Xingyu: Previously served as Clerk Section Chief Deputy General Manager and General Manager of the
Finance Department of Changzhou Investment Group Co. Ltd. Currently serves as General Manager of
Changzhou Xinhui Venture Capital Co. Ltd. Director of Donghai Securities Co. Ltd. and Supervisor of the
Company.Lu Zhonggui: Previously served as Clerk of the Organization and Personnel Department Full-time Discipline
Inspector of the Discipline Inspection Commission and Deputy Secretary of the Organ Party General Branch of
the Company. Currently serves as Secretary of the Organ Party General Branch Minister of the Political
Department Director of the Office Employee Supervisor of the Company and Director of Xingsheng Real Estate
Management.Liu Yi: Previously served as Assistant Minister of the Enterprise Management Department Deputy Minister of the
Finance Department and Deputy Minister of the Auditing Department of the Company. Currently serves as
Minister of the Auditing Department Employee Supervisor of the Company Director of Zhenjiang Siyang
Supervisor of Changchai Wanzhou Supervisor of Changchai Benniu Supervisor of Horizon Investment
Supervisor of Horizon Agricultural Equipment Supervisor of Changchai Robin Supervisor of Changchai
Machinery and Supervisor of Xingsheng Real Estate Management.Lin Wei: Previously served as Clerk Deputy Minister and Minister of the Enterprise Management Department
and Deputy General Manager of Changchai Machinery of the Company. Currently serves as Supervisor and
Minister of the Human Resources Department of the Company.Sun Jianzhong: Previously served as Director of the Technology Center and Assistant General Manager of the
Company. Currently serves as Deputy General Manager of the Company and General Manager of Changchai
Machinery.He Jianjiang: Previously served as Clerk Assistant Minister and Deputy Minister of the Investment and
Development Department and Securities Affairs Representative of the Company. Currently serves as Deputy
40Changchai Company Limited Annual Report 2024
General Manager Board Secretary and Minister of the Investment and Development Department of the Company
Chairman and General Manager of Horizon Investment Director of Horizon Agricultural Equipment Chairman of
Zhenjiang Siyang Director of Jiangsu Horizon New Energy Technology Co. Ltd. and Supervisor of Donghai
Securities Co. Ltd.Wang Jing: Previously served as Foreign Trade Salesperson of the Overseas Business Division Technician
Deputy Workshop Director Assistant Factory Director Deputy Factory Director and Secretary of the
Single-Cylinder Party General Branch of the Single-Cylinder Engine Factory and Assistant General Manager of
the Company. Currently serves as Deputy General Manager of the Company and Chairman of Changchai Benniu.Wang Weifeng: Previously served as Designer of the Development Department Designer of the Technology
Center and Deputy Chief Engineer of the Company. Currently serves as Chief Engineer and Deputy Director of
the Technology Center of the Company.Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
Remuneratio
n or
Name Shareholding Office held in the allowanceentity shareholding entity Start of tenure End of tenure from the
shareholding
entity
Li Secretary of the Party
Desen Committee Chairman of the January 2024 January 2025 Yes
Changzhou Board
Investment Member of the Party
Tan Jie Group Co. Committee Director Vice April 2023 Ongoing Yes
Ltd. President
Shi General Manager of Finance
Xingyu Department November 2021 May 2024 Yes
Notes Nil
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Rem
uner
ation
or
Office allo
Name Other entity held in the Start of tenure End of tenure wan
entity ce
from
the
entit
y
Xie
Guozho Beiqi Foton Motor Co. Ltd.Superviso
r 15 November 2022 Ongoing No
ng
He Donghai Securities Co. Ltd.Superviso
r 18 January 2023 Ongoing No
41Changchai Company Limited Annual Report 2024
Jianjian Jiangsu Horizon New Energy Technology
g Co. Ltd.Director 28 July 2023 Ongoing
De Xin Investment Manage Co. Limited ExecutiveDirector 1 June 2022 Ongoing NoYang
Feng Shanghai Kindly Enterprise Development
Independe
Group Co. Ltd. nt 17 April 2023 OngoingDirector
Shi Donghai Securities Co. Ltd. Director 20 May 2021 Ongoing No
Xingyu Changzhou Xinhui Venture Capital Co. General
Ltd. Manager 11 November 2024 Ongoing
Yes
Department of Finance of the School of Head of Yes
Economics and Management of Department 1 September 2006 OngoingNorthwest University Professor
Public Economics Research Institute Director Ongoing
Xi'an Municipal Government Counselor Ongoing
Financial and Fiscal Affairs Panel of the
Government Decision-making Advisory Expert Ongoing
Committee
Independe
Wang Focuslight Technologies Inc. nt 2 May 2019 Ongoing Yes
Director
Mancan
Independe Yes
g Xi'an Wonder Energy Chemical Co. Ltd. nt 24 June 2020 Ongoing
Director
Independe Yes
Ccoop Group Co. Ltd. nt 18 September 2020 26 April 2024
Director
Independe Yes
Shaanxi Construction Machinery Co. Ltd. nt 16 November 2018 5 February 2024
Director
Chang'an International Trust Co. Ltd. Director 1 September 2018 11 November 2024
Xi'an Guolian Quality Testing Technology
Co. Ltd. Director 1 June 2020 2 September 2024
Director
Tianjin Internal Combustion Engine of the
Research Institute First March 2009 Ongoing YesResearch
Office
China Internal Combustion Engine Secretary-
Industry Association General December 2024 Ongoing No
Jia Bin Independe Yes
Lutian Machinery Co. Ltd. nt 31 December 2019 Ongoing
Director
Suzhou Parsun Power Machinery Co. Independe Yes
Ltd. nt 31 July 2021 31 October 2024Director
Tianjin Tianbo Keda Technology Co. Ltd. Director 18 August 2020 Ongoing No
42Changchai Company Limited Annual Report 2024
Jiangsu University of Technology Associateprofessor August 2008 Ongoing
Yes
Independe Yes
Jiangsu Tianmu Lake Tourism Co. Ltd. nt 8 February 2021 Ongoing
Director
Independe Yes
nt
Zhang S-Enjoy Service Group Co. Limited non-execu 20 October 2018 Ongoingtive
Yan Director
DinoPark Cultural Tourism Group Co. Independe Yes
Ltd. nt September 2024 OngoingDirector
Changzhou Communications Holding Yes
Group Co. Ltd. Director 23 April 2024 Ongoing
Changzhou Transportation Industrial
Group Co. Ltd. Director 14 April 2022 Ongoing Yes
Notes Nil
Punishments imposed in the recent three years by the securities regulator on the incumbent directors supervisors
and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
3. Remuneration of Directors Supervisors and Senior Management
Decision-making procedure determination basis and actual payments of remuneration for directors supervisors
and senior management:
In 2024 the monthly salaries of directors supervisors and senior management personnel who received
remuneration from the Company were disbursed in accordance with the Company’s regulations on salary
management and grade standards. Year-end incentive compensation was paid based on the Company’s
performance and assessment results. Current directors Li Desen and Tan Jie as well as supervisor Shi Xingyu
receive their remuneration from shareholder entities.Remuneration of directors supervisors and senior management for the Reporting Period
Unit: RMB’0000
Total before-tax Any
Name Gender Age Office title Incumbent/Former remuneration from
remuneration
the Company from relatedparty
Chairman of
Li Desen Male 43 Incumbent 0 Yes
the Board
Vice
Zhang
Male 58 Chairman of Incumbent 90.11 No
Xin
the Board
43Changchai Company Limited Annual Report 2024
Xie Director
Guozhon Male 55 General Incumbent 90.11 No
g Manager
Tan Jie Female 45 Director Incumbent 0 Yes
Director
Jiang He Male 52 Chief Incumbent 78.26 No
Accountant
Yang
Male 52 Director Incumbent 0 No
Feng
Wang Independent
Male 61 Incumbent 10 No
Mancang director
Zhang Independent
Female 54 Incumbent 10 No
Yan director
Independent
Jia Bin male 46 Incumbent 10 No
director
Chairman of
Ni
the
Minglian Male 57 Incumbent 85.36 No
Supervisory
g
Committee
Shi
Female 44 Supervisor Incumbent 0 Yes
Xingyu
Lu
Male 57 Supervisor Incumbent 26.59 No
Zhonggui
Liu Yi Male 55 Supervisor Incumbent 26.05 No
Lin Wei Male 42 Supervisor Incumbent 24.72 No
Sun
Vice-general
Jianzhon male 52 Incumbent 77.86 No
Manager
g
He Male 45 Vice-general Incumbent 76.23 No
44Changchai Company Limited Annual Report 2024
Jianjiang Manager
Secretary of
the Board
Wang Vice-general
Male 37 Incumbent 77.86 No
Jing Manager
Wang Chief
Male 53 Incumbent 78.67 No
Weifeng Engineer
Total -- -- -- -- 761.82 --
Other situation explanations：
□ Applicable √ Not applicable
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Meeting Date ofmeeting Disclosure date Resolution
The meeting reviewed and approved the "2023
The 4th Meeting of General Manager Work Report" "2024 Company
the 10th Board of January 26 / Operational Policy Objectives" "2023 Senior
Directors 2024 Management Performance Evaluation Results""2024 Senior Management Assessment Plan" and
"Proposal on Applying for 2024 Bank Credit Lines."
The meeting reviewed and approved the "2023
Annual Report and Its Summary" "2023 Board of
Directors Work Report" "Proposal on Amending the
Articles of Association" "Proposal on Amending the
Rules of Procedure for Shareholders' Meetings"
"Proposal on Amending the Rules of Procedure for
Board Meetings" "Proposal on Amending the
Independent Director System" "Proposal on
The 5th Meeting of Revising the Three-Year (2023–2025) Shareholder
the 10th Board of April 10 2024 April 12 2024 Return Plan" "2023 Profit Distribution and Capital
Directors Reserve Capitalization Proposal" "Proposal on
Establishing the 'Accounting Firm Selection Policy'"
"Proposal on Making 2023 Credit Impairment and
Asset Impairment Provisions" "Special Report on
the Deposit and Use of 2023 Raised Funds" "2023
Internal Control Self-Assessment Report" "2023
Corporate Social Responsibility and ESG Report"
and "Proposal on Convening the 2023 Annual
General Meeting of Shareholders."
The 1st
Extraordinary
Meeting of the April 29 2024 April 30 2024 The meeting reviewed and approved the "2024 First
Board of Directors Quarter Report."
in 2024
45Changchai Company Limited Annual Report 2024
The 2nd The meeting reviewed and approved the "Proposal
Extraordinary on Appointing the 2024 Financial Audit Firm and Its
Meeting of the July 12 2024 July 13 2024 Audit Fees" "Proposal on Appointing the 2024
Board of Directors Internal Control Audit Firm and Its Audit Fees" and
in 2024 "Proposal on Convening the 2024 FirstExtraordinary General Meeting of Shareholders."
The 3rd
Extraordinary The meeting reviewed and approved the "2024
Meeting of the August 21 August 23 Interim Report" and "Proposal on Making 2024
Board of Directors 2024 2024 Interim Credit Impairment and Asset Impairment
in 2024 Provisions."
The 4th
Extraordinary The meeting reviewed and approved the "Proposal
Meeting of the August 29 August 30 on Capital Increase in Jiangsu Changchai Machinery
Board of Directors 2024 2024 Co. Ltd."
in 2024
The 6th Meeting of
the 10th Board of October 28 October 30 The meeting reviewed and approved the "2024 Third
Directors 2024 2024 Quarter Report."
The meeting reviewed and approved the "Proposal
on Continuing to Use Idle Own Funds for Wealth
The 5th Management Products" "Proposal on the Merger of
Extraordinary
Meeting of the November 22 November 23
Changzhou Changchai Horizon Agricultural
2024 2024 Equipment Co. Ltd. and Changzhou Fuji ChangchaiBoard of Directors Robin Gasoline Engine Co. Ltd." and "Proposal on
in 2024 Extending the Operating Period of Changzhou
Collaborative Innovation Equity Investment
Partnership (Limited Partnership)."
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total The
number of Board director
board Board meetings Board Board
meetings meetings attended by meetings meetings
failed to
Director attended the director attend two
General
the director attended on way of meetings
was site telecommu through a failed to
consecutiv
e board attended
eligible to nication proxy attend meetings
attend (yes/no)
Li Desen 8 2 6 0 0 No 1
Zhang Xin 8 2 6 0 0 No 2
Xie
Guozhong 8 2 6 0 0 No 2
Tan Jie 8 2 6 0 0 No 2
Jiang He 8 2 6 0 0 No 2
Yang Feng 8 2 6 0 0 No 2
Wang
Mancang 8 2 6 0 0 No 2
Zhang Yan 8 2 6 0 0 No 2
Jia Bin 8 0 8 0 0 No 2
46Changchai Company Limited Annual Report 2024
Explanation of why any director failed to attend two consecutive board meetings: N/A
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.□ Yes √ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.√ Yes □ No
Suggestions from directors adopted or not adopted by the Company:
All directors of the Company in line with the law rules normative documents and obligations given by the
Company of the Company law Article of Associations Rules of Procedure of the Board and Independent
Directors System comprehensively focused on the development and operation of the Company actively attended
the general meeting of shareholder and meeting of board of directors. Independent directors given independent
opinions for the significant events of the Company and effectively maintained the profits of the Company and all
the shareholders. The Company actively listened to the suggestions from directors upon the significant events and
adopted them. For more details please refer to the Report on the Work of the Board of Directors for 2024
disclosed by the Company on http://www.cninfo.com.cn dated 11April 2025.VII Special Committees under the Board of Directors during the Reporting Period
Speci
Num
ber Other
fic
Name of Date perfo
detail
of Member meeti of Contents Important comments and rman
s of
commit s ngs meeti suggestions ce of
the
tee ng dutie objecconv tion
ened s matte
r
Janua The meeting reviewed
ry 4 and approved the "2023
2024 Annual Report Audit
Nil
Plan."
Zhang The meeting reviewed The Company's 2023
Yan
Audit and approved the annual report audit plan is
Wang "Preliminary Review relatively reasonable andCommi 8 Communication Matters
Mancan the key communication
Nil Nil
ttee Janua for the 2023 Annual matters align with the
g ry Report" "Audit Company's actual situation.Lin Tian 25 Department's 2023 Work It is expected that the
2024 Summary and 2024 Work Company's management
Plan" and "Special will continue to work
Report on the Deposit closely with the accounting
and Use of 2023 Raised firm to ensure the smooth
Funds." completion of the disclosure
47Changchai Company Limited Annual Report 2024
of the Company's 2023
annual report.The meeting reviewed The financial statements
and approved the "2023 fairly present in all material
Annual Report" respects the Company's
"Proposal on Making financial position as of
2023 Credit Impairment December 31 2023 as well
and Asset Impairment as its operating results and
Provisions" "Proposal on cash flows for the year
April Establishing the 2023. It is agreed to submit
7 'Accounting Firm the "2023 Annual Report"
2024 Selection Policy'" and the "Proposal on Making
"2023 Assessment Report 2023 Credit Impairment and
on the Accounting Firm's Asset Impairment
Performance and the Provisions" and the
Board Audit Committee's "Proposal on Establishing
Report on Supervisory the 'Accounting Firm
Duties over the Selection Policy'" to the
Accounting Firm." Board of Directors forreview.The meeting reviewed
April the "Audit Department'sQ1 2024 Work Agreed to submit the26 Summary" and approved proposal to the Board of2024 the "2024 First Quarter Directors for review.Report."
The content of the
Company's "2024
Accounting Firm Selection
Work Plan" is scientific and
reasonable. The selection
method workflow and
evaluation criteria for the
June The meeting reviewed
accounting firm comply
and approved the "2024 with the requirements of the6 Accounting Firm "Accounting Firm Selection2024 Selection Work Plan." Policy." It is agreed that theCompany's selection
working group shall
implement this work plan
and submit it for internal
decision-making procedures
for review and approval
after the bidding results are
finalized.
48Changchai Company Limited Annual Report 2024
July The meeting reviewed
8 and approved the
Agreed to submit the
"Proposal on Changing proposal to the Board of2024 the Accounting Firm." Directors for review.The meeting reviewed
and approved the "2024
Augu Interim Report" and Agreed to submit the
st 20 "Proposal on Making proposal to the Board of
2024 2024 Interim Credit Directors for review.
Impairment and Asset
Impairment Provisions."
Octo The meeting reviewed
ber the "Audit Department's
Agreed to submit the "2024
25 Q3 2024 Work Report"
Third Quarter Report" to
and approved the "2024 the Board of Directors for2024 Third Quarter Report." review.Li
Desen
Zhang
Strategi
c Xin Xie
The meeting reviewed
Janua and approved the "2023
Develo Guozho ry General Manager Work Agreed to submit all
pment 1ng 26 Report" and "2024
proposals to the Board of
Commi 2024 Company Operational Directors for review.ttee Wang Policy Objectives."
Mancan
g Jia
Bin
Remun Wang The meeting reviewed
eration Janua and approved the "2023and Mancan Senior Management Agreed to submit all
Apprais g Li 1 ry26 Assessment Results" and proposals to the Board ofal Desen 2024 "2024 Senior Directors for review.Commi Management Assessment
ttee Jia Bin Plan."
VIII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the Reporting Period.□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
49Changchai Company Limited Annual Report 2024
IX Employees
1. Number Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent at
1886
the period-end
Number of in-service employees of major subsidiaries at the
535
period-end
Total number of in-service employees at the period-end 2421
Total number of paid employees in the Reporting Period 2421
Number of retirees to whom the Company as the parent or its
0
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 1574
Sales 179
Technical 327
Financial 43
Administrative 262
Other 36
Total 2421
Educational backgrounds
Educational background Employees
Junior high school graduates and below 982
High school graduates 633
College graduates and technical secondary school graduates 494
Bachelors 292
Masters and above 20
Total 2421
2. Employee Remuneration Policy
The Company always adhered to the principle of tilting the remuneration incentive mechanism towards excellent
talents so as to display the roles of various professional technicians management staffs and skilled backbones.Besides it adhered to the principle of increasing the employee’s income integrated with increasing labor
production efficiency and production & operation efficiency so as to perfect the salary structure and further
increase employees’ income steadily.
50Changchai Company Limited Annual Report 2024
3. Employee Training Plans
The Company established the Management Rules on the Education & Training for Employees aiming to enhance
employees’ quality and try its best to cultivate a team of faithful and highly professional talents. Besides it
innovated the training mechanism optimized the training environment and reinforced to encourage employees to
attend various training so as to inspire the employees’ potential to the maximum extent and further promote the
sustainable development of the Company.
4. Labor Outsourcing
□ Applicable √ Not applicable
X Profit Distributions (in the Form of Cash and/or Stock)
How the profit distribution policy especially the cash dividend policy was formulated executed or revised in the
Reporting Period:
√ Applicable □ Not applicable
In Articles of Association which had confirmed the specific profits distribution and cleared out the conditions
standards and proportion of the cash bonus stipulated the decision-making progress of the formulation and
alternation of the profits distribution policies and the chapters as well as the regulations fully ensure the
opportunities for the medium and small shareholders to exert the functions and to provide advices as well as
appeals. The cash bonus of recent 3 years of the Company met with the regulations of the Articles of Association
and during the decision-making process of the profit’s distribution proposal fully respected the advices from the
medium and small shareholders. The profits distribution pre-plan and the turning capital reserve into share capital
preplan of the Company were both met with the relevant regulations of the Articles of Association and so on.Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and resolution of general meeting Yes
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played their due role Yes
Specific reasons and the next steps it intend to take to enhance the investor return level if the
Company did not pay cash dividend: N/A
Non-controlling interests are able to fully express their opinion and desire and their legal
rights and interests are fully protected Yes
In case of adjusting or changing the cash dividend policy the conditions and procedures
involved are in compliance with applicable regulations and transparent N/A
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to
shareholders are positive.□ Applicable √ Not applicable
Final dividend plan for the Reporting Period:
√ Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
51Changchai Company Limited Annual Report 2024
Dividend for every 10 shares (RMB) (tax inclusive) 0.1
Additional shares to be converted from capital reserve for every
0
10 shares (share)
Total shares as the basis for the profit distribution proposal
705692507
(share)
Cash dividends (RMB) (tax inclusive) 7056925.07
Cash dividends in other forms (such as share repurchase) (RMB) 0
Total cash dividends (including those in other forms) (RMB) 7056925.07
Distributable profit (RMB) 983627999.95
Total cash dividends (including those in other forms) as % of
100%
total profit distribution
Cash dividend policy
Other
Particulars about the dividend plan
The profit distribution plan approved by the Board of Directors is as follows: Based on the Company's total
share capital as of December 31 2024 a cash dividend of RMB 0.1 per 10 shares (tax inclusive) will be
distributed to all shareholders with no bonus shares issued and no capital reserve converted into share capital.XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.XII Formulation and Implementation of Internal Control System during the Reporting Period
1. Internal Control Formulation and Implementation
During the Reporting Period the Company strictly complied with national laws and regulations and relevant
regulations such as the Basic Code for Internal Control of Enterprises and the Guidelines for Application of
Enterprise Internal Control as well as the provisions and requirements of the Company's internal control standards
and optimized important business processes and improved and perfected the internal control system through
continuous supervision and effective evaluation of the operation of the Company's internal control so as to adapt
to the changing external environment and internal management requirements and improve the efficiency of the
Company's operation and management. By doing so the Company effectively prevented risks in operation and
management and promoted the achievement of internal control objectives. The Company's internal control system
can cover the major aspects of the Company's operation and management and the internal control design is sound
and reasonable with no material omissions.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
52Changchai Company Limited Annual Report 2024
XIII Management of Subsidiaries by the Company during the Reporting Period
Subsidiary Integration Progress on
Problems
found in Solutions Solution Subsequentplan integration integration taken progress solution
Nil Nil Nil Nil Nil Nil Nil
XIV Self-Evaluation Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Evaluation Report
Disclosure date of the internal
11April 2024
control self-evaluation report
Index to the disclosed internal
control self-evaluation report
Evaluated entities’ combined assets
100.00%
as % of consolidated total assets
Evaluated entities’ combined
operating revenue as % of 100.00%
consolidated operating revenue
Identification standards for internal control weaknesses
Type Financial reporting Non-financial reporting
The Company classifies internal A deficiency shall be identified
control deficiencies based on their as a material weakness if it
impact severity into material exhibits any of the following
weaknesses significant deficiencies characteristics:
and general deficiencies: (1) Serious violations of national
(1) Material Weakness: One or more laws administrative regulations
control deficiencies that could result and regulatory documents;
in a severe deviation from control (2) Failure to follow collective
objectives; decision-making procedures for
Nature standard (2) Significant Deficiency: One or
"three major and one big"
more control deficiencies with lesser matters;
severity and economic consequences (3) Lack of systematic controls
than a material weakness but still or complete failure of control
likely to cause deviation from systems for critical business
control objectives; operations related to corporate
(3) General Deficiency: Deficiencies production and management;
not classified as material (4) Failure of internal controls
weaknesses or significant over information disclosure
deficiencies. resulting in public censure by
Qualitative Criteria: A deficiency regulatory authorities;
53Changchai Company Limited Annual Report 2024
shall be identified as a material (5) Material weaknesses
weakness if it exhibits any of the identified in internal control
following characteristics: assessments that remain
(1) Involves fraud by directors unaddressed.
supervisors or senior management;
Requires restatement of previously
issued financial statements;
(2) External auditors identify a
material misstatement in current
financial statements that internal
controls failed to detect;
(3) The Audit Committee and
internal audit function are
ineffective in overseeing internal
controls.Quantitative Criteria: With
Quantitative Criteria: Based on the reference to the quantitative
2024 consolidated financial standards for internal control
statements data the quantitative deficiencies in financial
thresholds for determining the reporting the quantitative
materiality of misstatements thresholds for determining the
(including omissions) in the significance of non-financial
Company's consolidated financial reporting internal control
Quantitative standard statements are as follows: deficiencies in the listed
Material Weakness: Misstatement ≥ company are as follows:
5% of annual profit; Material Weakness: Potential
Significant Deficiency: 2.5% of direct loss ≥ 0.1% of net assets;
annual profit ≤ Misstatement < 5% Significant Deficiency: 0.05% of
of annual profit; net assets ≤ potential direct loss <
General Deficiency: Misstatement < 0.1% of net assets;
2.5% of annual profit. General Deficiency: Potential
direct loss < 0.05% of net assets.Number of material weaknesses in
internal control over financial 0
reporting
Number of material weaknesses in
internal control not related to 0
financial reporting
Number of serious weaknesses in
internal control over financial 0
reporting
Number of serious weaknesses in 0
54Changchai Company Limited Annual Report 2024
internal control not related to
financial reporting
2. Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believed that Changchai Company Limited maintained effective internal control of the financial report in
significant aspects according to the Basic Norms of Internal Control and relevant regulations on 31 December
2024.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 11April 2025
Index to such report disclosed Zhongxinghua Audit (2025) No. 020590
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the
Company’s internal control.□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent
with the internal control self-evaluation report issued by the Company’s Board.√ Yes □ No
XV Remediation of Problems Identified by Self-inspection in the Special Action on the Governance of
Listed Companies
Nil
55Changchai Company Limited Annual Report 2024
Part V Environmental and Social Responsibility
I Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries was identified as a key polluter by the
environment authorities.□ Yes √ No
Administrative punishments received in the Reporting Period due to environmental issues:
Rectification
Company or Reason for Impact on the
Violation Punishment measures of the
subsidiary punishment Company
Company
N/A N/A N/A N/A N/A N/A
Other environmental information disclosed with reference to key polluters:
N/A
Actions taken during the Reporting Period to reduce carbon emissions and the impact:
√ Applicable □ Not applicable
See the 2024 Social Responsibility and ESG Report of Changchai Company Limited disclosed on
http://www.cninfo.com.cn dated 11April 2025.The reason for not disclosing other environmental information: The Company and its subsidiaries are not listed as
key polluting units by the environmental protection department. The production and operation of the Company
and its subsidiaries strictly comply with relevant national laws and regulations. The Company will continue to
strengthen environmental supervision and management to ensure that the development of the enterprise complies
with environmental protection policies and regulations.II Social Responsibility
See the 2024 Social Responsibility and ESG Report of Changchai Company Limited disclosed on
http://www.cninfo.com.cn dated 11April 2025.III Efforts in Poverty Alleviation and Rural Revitalization
Nil
56Changchai Company Limited Annual Report 2024
Part VI Significant Events
I Fulfillment of Commitments
1. Commitments of the Company’s De Facto Controller Shareholders Related Parties and Acquirers as
well as the Company Itself and Other Entities Fulfilled in the Reporting Period or Ongoing at the
Period-End
√ Applicable □ Not applicable
Type of Date of Term of Fulf
Commitment Promisor commitme Details of commitment commitme commit illm
nt nt making ment ent
The shares subscribed by our
Commitment Changzhou About company in this private placement July 5
Full
y
s made in Investment share shall not be transferred within 36 July 5 2021 -
refinancing Group Co. trading months from the listing date of 2021 July 5
Perf
Ltd. restriction Changchai Co. Ltd.'s 2024 orm
non-publicly issued A-shares. ed
1. Commit to not overstep
authority in interfering with the
Company's operational and
management activities and not to
appropriate the Company's
interests;
2. Commit to not providing
benefits to other entities or
individuals free of charge or
under unfair conditions nor
taking any other actions that may
harm the Company's interests;
Commitment 3. From the date of this
s Made Changzhou commitment until the completion April 11
During Initial Investment of the Company's current privateOther April 11
2020 - Ong
Public Group Co. placement if the China Securities 2020 Decemb oing
Offering or Ltd. Regulatory Commission (CSRC) er 31
Refinancing issues new regulatory 9999
requirements regarding measures
to mitigate dilution of returns and
related commitments and if the
above commitments do not satisfy
such CSRC requirements the
undersigned further commits to
supplementing this undertaking in
accordance with the CSRC's latest
regulations;
4. Commit to earnestly fulfilling
the Company's measures to
mitigate dilution of returns and
any related commitments made
57Changchai Company Limited Annual Report 2024
herein. If the undersigned violates
these commitments and causes
losses to the Company or its
investors it shall bear
corresponding compensation
liabilities in accordance with the
law.Shareholder Return Plan for the
Next Three Years (2023-2025):
Under the premise that the
Company's distributable profit
(i.e. after-tax profit after making
up for losses and withdrawing
statutory reserves) is positive in a
given year or semi-annual period
Other and that the Company has
commitments Changchai Dividend sufficient cash flow to ensure that
made to Company Commitm cash dividend distribution will not May 18 2023 - Ong
minority Limited ent affect its sustainable operations 2023 2025 oing
shareholders the Company shall distribute noless than 10% of the annual
distributable profit of the parent
company in cash each year.Additionally the cumulative cash
dividends distributed over any
three consecutive fiscal years
shall be no less than 30% of the
average annual distributable profit
during those three years.Fulfilled on
time or not Yes
Specific
reasons for
failing to
fulfill
commitments N/A
on time and
plans for next
step (if any)
2. Where there had been an-earnings forecast for an asset or project and the Reporting Period was still
within the forecast period explain why the forecast has been reached for the Reporting Period.□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for
Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
58Changchai Company Limited Annual Report 2024
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.IV Explanations Given by the Board of Directors Regarding the Independent Auditor's “Modified Opinion”
on the Financial Statements of the Latest Period
□ Applicable √ Not applicable
V Explanations Given by the Board of Directors the Supervisory Board and the Independent Directors (if
any) Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the
Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies Estimates and Correction of Material Accounting Errors
√Applicable □ Not applicable
Impact on the
Changes to the accounting policies and why Company's financial Impact Amount
statements
1. Implementation of "Accounting Standards for Business Enterprises
Interpretation No. 17"
In October 2023 the Ministry of Finance issued "Accounting Standards The implementation
for Business Enterprises Interpretation No. 17" (Cai Kuai [2023] No. of Interpretation
21) which stipulates provisions regarding "the classification of current No. 17 has no
and non-current liabilities" "disclosures for supplier financing material impact on 0.00
arrangements" and "accounting treatment for sale-and-leaseback the Company's
transactions". This interpretation became effective on January 1 2024. financial statements
The Company has adopted the provisions of Interpretation No. 17 for the reporting
starting from January 1 2024. The application of Interpretation No. 17 period.has no material impact on the Company's financial statements for the
reporting period.
2. Implementation of "Accounting Standards for Business Enterprises
Interpretation No. 18"
In December 2024 the Ministry of Finance issued "Accounting Refer to "Notes toRefer to "Notes to
Standards for Business Enterprises Interpretation No. 18" (Cai Kuai Changes inChanges in
[2024] No. 24) which stipulates that for assurance-type warranties that AccountingAccounting
do not constitute separate performance obligations entities shall account Policies" forPolicies" for details.for them in accordance with the relevant provisions of "Accounting details.Standards for Business Enterprises No. 13 - Contingencies".Specifically entities shall debit "Cost of Main Business" or "Cost of
59Changchai Company Limited Annual Report 2024
Other Business" and credit "Estimated Liabilities" based on the
determined amount of provisions. This interpretation became effective
upon issuance and allows early adoption in the year of release.Notes to Changes in Accounting Policies:
Implementation of "Accounting Standards for Business Enterprises Interpretation No. 18" had the following
impacts on the financial statements as of January 1 2024:
Unit: RMB
Consolidated Financial Statements Parent Company Financial Statements
Items Amount as of Amount as of Amount as of Amount as of
December 31 2023 January 1 2024 December 31 2023 January 1 2024
(Before) (After) (Before) (After)
Provisions 60070382.24 60070382.24
Other Payables 159023382.81 98953000.57 151919473.64 91849091.40
(continued)
FY2023
Consolidated Financial Statements Parent Company Financial Statements
Items
Amount before Amount before
Amount after change Amount after change
change change
Operating Costs 1838755831.41 1884289338.95 1788129884.67 1831801124.99
Selling Expenses 99603282.16 54069774.62 92935731.73 49264491.41
VII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable √ Not applicable
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor:
Zhongxinghua Certified Public Accountants
Name of the domestic independent auditor
(Special General Partnership)
The Company’s payment to the domestic independent
60
auditor (RMB’0000)
How many consecutive years the domestic independent
1
auditor has provided audit service for the Company
Names of the certified public accountants from the
domestic independent auditor writing signatures on the Wang Jun Pan Daliang
auditor’s report
How many consecutive years the certified public One year for Wang Jun One year for Pan Daliang
accountants have provided audit service for the
60Changchai Company Limited Annual Report 2024
Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.√ Yes □ No
Whether There Was a Change of Accounting Firms During the Audit Period
□ Yes √ No
Whether the Replacement of the Accounting Firm Complied with Approval Procedures
√ Yes □ No
Detailed Explanation Regarding the Change of Accounting Firm
The Company's former auditing firm Gongzheng Tianye Certified Public Accountants (Special General
Partnership) had provided audit services for the Company for 22 consecutive years. In accordance with the
"Measures for the Selection and Appointment of Accounting Firms by State-Owned Enterprises and Listed
Companies" and the "Changchai Co. Ltd. Accounting Firm Selection Policy" and to ensure the compliance
independence and objectivity of the Company's audit work the Company decided not to renew its engagement
with Gongzheng Tianye as the annual audit firm.The Company conducted an open competitive bidding process to select the 2024 auditing firm with
Zhongxinghua Certified Public Accountants (Special General Partnership) being the winning bidder. On July 12
2024 the Company held the Second Interim Board Meeting of 2024 where the following proposals were
reviewed and approved: (1) "Proposal on Appointing the 2024 Financial Audit Firm and Its Audit Fees" (2)
"Proposal on Appointing the 2024 Internal Control Audit Firm and Its Audit Fees". This matter was further
approved at the 2024 First Extraordinary General Meeting of Shareholders on July 30 2024 formally appointing
Zhongxinghua Certified Public Accountants (Special General Partnership) as the Company's financial and internal
control audit service provider for 2024.Engagement of Internal Control Audit Accounting Firm Financial Advisor or Sponsor
√ Applicable □ Not applicable
During the current year the Company engaged Zhongxinghua Certified Public Accountants (Special General
Partnership) as its internal control audit firm with audit fees amounting to RMB 135000.IX Possibility of Delisting after Disclosure of this Report
□ Applicable √ Not applicable
X Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.XI Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
61Changchai Company Limited Annual Report 2024
XII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
√ Applicable □ Not applicable
The de facto controller of the Company is SASAC of Changzhou People’s Government and the controlling
shareholder of it is Changzhou Investment Group Co. Ltd. There is no such case that the controlling shareholder
fails to perform any legally effective judgment of courts or to pay off matured debts with a large amount.XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□ Applicable √ Not applicable
The Company did not make deposits in receive loans or credit from and was not involved in any other finance
business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□ Applicable √ Not applicable
The finance company controlled by the Company did not make deposits receive loans or credit from and was not
62Changchai Company Limited Annual Report 2024
involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.XV Major Contracts and Execution thereof
1. Entrustment Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted for Wealth Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB’0000
Unrecovered
Unrecovered
Capital overdue amount
Specific type Amount incurred Undue balance overdue
resources with provision for
amount
impairment
Bank financial Self-funded 42675 23075 0 0
63Changchai Company Limited Annual Report 2024
products
Broker
financial Self-funded 5924.43 500 0 0
products
Total 48599.43 23575 0 0
High-risk wealth management transactions with a significant single amount or with low security low liquidity:
□ Applicable √ Not applicable
Situation where the principal is expectedly irrecoverable or impairment may be incurred:
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVI Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.XVII Significant Events of Subsidiaries
√ Applicable □ Not applicable
1. Capital Increase to Changchai Machinery via "Debt-to-Capital Reserve" Conversion
On August 29 2024 the Company convened the Fourth Interim Board Meeting of 2024 and reviewed and
approved the "Proposal on Capital Increase to Jiangsu Changchai Machinery Co. Ltd." The Board agreed to
increase capital to its wholly-owned subsidiary Jiangsu Changchai Machinery Co. Ltd. by RMB 291835919.91
(including unpaid loan interest of RMB 4958090.18) through a "debt-to-capital reserve" arrangement with the
entire amount recorded as capital reserve. As of the reporting period end the Company had completed this capital
increase in Jiangsu Changchai Machinery Co. Ltd.
2. Absorption Merger of Horizon Agricultural Equipment by Changchai Robin
On November 22 2024 the Company convened the Fifth Interim Board Meeting of 2024 and reviewed and
approved the "Proposal on the Merger between Changzhou Changchai Horizon Agricultural Equipment Co. Ltd.and Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd." The Board agreed that the wholly-owned
subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd. would acquire all assets liabilities
business operations and other rights and obligations of the wholly-owned subsidiary Changzhou Changchai
Horizon Agricultural Equipment Co. Ltd. through statutory absorption merger. Post-merger Changchai Robin
continues normal operations while Horizon Agricultural Equipment's legal entity status has been deregistered. In
64Changchai Company Limited Annual Report 2024
February 2025 the Company received the Registration Notice (No. Dengzi [2025] 02270081) issued by the
Government Services Management Office of Changzhou High-Tech Industrial Development Zone (Xinbei
District) confirming completion of Horizon Agricultural Equipment's industrial and commercial deregistration
procedures.
65Changchai Company Limited Annual Report 2024
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares Shares
as as
Percenta New dividend dividendNumber ge (%) issues converte converte Other Subtotal Number
Percenta
ge (%)
d from d from
profit capitalreserves
1.
Restricte 568181 8.05% 0 0 0 -56818 -56818 0 0.00%
d shares 81 181 181
1.1
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
governm
ent
1.2
Shares
held by
state-ow 568181 8.05% 0 0 0 -56818 -56818
ned 81.00 181 181
00.00%
legal
persons
1.3
Shares
held by
other
domesti 0 0.00% 0 0 0 0 0 0 0.00%
c
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domesti
c legal
persons
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domesti
c natural
66Changchai Company Limited Annual Report 2024
persons
1.4
Shares
held by
foreign 0 0.00% 0 0 0 0 0 0 0.00%
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
foreign
legal
persons
Shares
held by
foreign 0 0.00% 0 0 0 0 0 0 0.00%
natural
persons
2.
Unrestri 648874
cted 326 91.95% 0 0 0
568181568181705692100.00
8181507%
shares
2.1
RMB-de
nominat 498874 70.69% 0 0 0 568181 568181 555692ed 326 81 81 507 78.74%
ordinary
shares
2.2
Domesti
cally 150000 150000
listed 000 21.26% 0 0 0 0 0 000 21.26%
foreign
shares
2.3
Oversea
listed 0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
2.4
Other 0 0.00% 0 0 0 0 0 0 0.00%
3. Total 705692 100.00
shares 507 % 0 0 0 0 0
705692100.00
507%
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share Ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share equity per share attributable to the
67Changchai Company Limited Annual Report 2024
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period
respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Increase in Lifted
Opening Restricted Restricted
Name Restricted Shares Shares
Closing Reasons for Lift Date of
During the During the Restricted Share ShareShares Reporting Reporting Shares Restrictions Restrictions
Period Period
Private
Changzhou Placement
Investment
Group Co. 56818181 0 56818181 0
Issuance of
56818181 July 5 2024
Ltd. Additional
Shares
Total 56818181 0 56818181 0 -- --
II Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Shareholder Structure and Holdings
Unit: share
Number of Number of Number of Number of
ordinary 47819 ordinary 53790 preferred preferredshareholder 0 0shareholders shareholders shareholders with
s at the with resumed voting
68Changchai Company Limited Annual Report 2024
month-end resumed rights at the
prior to the voting rights month-end prior
disclosure to the disclosure
of this of this Report
Report
5% or greater shareholders or top 10 shareholders
Shares in
Shareh Increase/d pledge or
Name of Nature of olding Total shares ecrease in Restricte Unrestricte frozen
shareholder shareholder percent held at the the d shares d shares
age period-end Reporting held held
Sh
Period Status are
s
Changzhou
Investment State-owned
Group Co. legal person 32.26% 227663417 0 0
22766341
7
Ltd
Domestic
Chen Jian natural 0.51% 3627800 149200 0 3627800
person
KGI ASIA Foreign legal
LIMITED person 0.44% 3100195 -1500 0 3100195
Wang Domestic
Shuiqing natural 0.27% 1899100 1899100 0 1899100person
Domestic
Li Suinan natural 0.23% 1600300 6500 0 1600300
person N/A 0
Zhang Domestic
Wenbing natural 0.22% 1556700 0 0 1556700person
Huang Domestic
Guoliang natural 0.22% 1547891 19000 0 1547891person
Domestic
Wang Ying natural 0.22% 1525200 1525200 0 1525200
person
Domestic
Xie Deqing natural 0.21% 1456800 536400 0 1456800
person
Domestic
Lu Zhang natural 0.20% 1384743 -451900 0 1384743
person
Strategic investor or general
legal person becoming a
top-10 ordinary shareholder N/A
due to rights issue (if any)
It is unknown whether there is among the top 10 public shareholders and the
Related or acting-in-concert top 10 unrestricted public shareholders any related parties or acting-in-concert
parties among the
shareholders above parties as defined in the Administrative Measures for Information Regarding
Shareholding Alteration.Above shareholders involved
in entrusting/being entrusted N/A
with voting rights and giving
69Changchai Company Limited Annual Report 2024
up voting rights
Special account for share
repurchases (if any) among N/A
the top 10 shareholders
Top 10 unrestricted shareholders
Unrestricted shares held at the Shares by type
Name of shareholder
period-end Type Shares
Changzhou Investment
Group Co. Ltd 227663417
RMB-denominated
ordinary share 227663417
Chen Jian 3627800 RMB-denominatedordinary share 3627800
KGI ASIA LIMITED 3100195 Domestically listedforeign share 3100195
Wang Shuiqing 1899100 RMB-denominatedordinary share 1899100
Li Suinan 1600300 Domestically listedforeign share 1600300
Zhang Wenbing 1556700 RMB-denominatedordinary share 1556700
Huang Guoliang 1547891 Domestically listedforeign share 1547891
Wang Ying 1525200 RMB-denominatedordinary share 1525200
Xie Deqing 1456800 Domestically listedforeign share 1456800
Lu Zhang 1384743 Domestically listedforeign share 1384743
Related or acting-in-concert
parties among top 10
unrestricted public It is unknown whether there is among the top 10 public shareholders and the
shareholders as well as top 10 unrestricted public shareholders any related parties or acting-in-concert
between top 10 unrestricted parties as defined in the Administrative Measures for Information Regarding
public shareholders and top Shareholding Alteration.
10 shareholders
Top 10 ordinary shareholders Shareholders Chen Jian Wan Shuiqing and Wang Ying hold 3627800 shares
involved in securities margin 1114400 shares and 1525200 shares of the Company's stock respectively
trading (if any) through margin trading accounts.Top 10 shareholders involved in refinancing shares lending
□ Applicable √ Not applicable
Changes in Top 10 Shareholders Due to Securities Lending/Return Activities
□ Applicable √ Not applicable
Repurchase Agreements Involving Top 10 Shareholders During Reporting Period
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: Legal person
70Changchai Company Limited Annual Report 2024
Legal
Name of controlling representati Date of Unified social credit
Principal activity
shareholder ve/person establishment code
in charge
Property
Changzhou Investment
Li Desen 20 June 2002 91320400467283980X investment and
Group Co. Ltd
management
Controlling shareholder’s
holdings in other listed
companies at home or Nil
abroad in the Reporting
Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: Legal person
Legal
representativ Date of
Name of actual controller Unified social credit code Principal activity
e/person in establishment
charge
State-owned Assets
Supervision and
Administration
Shi Jiangshui 11320400014110251M Not applicable
Commission of
Changzhou Municipal
People’s Government
Other listed companies at
home or abroad
controlled by the actual None
controller in the
Reporting Period
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
71Changchai Company Limited Annual Report 2024
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.□ Applicable √ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held
by Them
□ Applicable √ Not applicable
5. Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual Controller
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV Specific Implementation of Share Repurchase during the Reporting Period
Progress on any share repurchase
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
72Changchai Company Limited Annual Report 2024
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.Part IX Bonds
□ Applicable √ Not applicable
73Changchai Company Limited Annual Report 2024
Part X Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 9 April 2025
Zhongxinghua Certified Public Accountants (Special
Name of the independent auditor
General Partnership)
No. of the auditor’s report Zhongxinghua Audit (2025) No. 020589
Name of the certified public accountants Wang Jun Pan Daliang
Text of the Independent Auditor’s Report
To the Shareholders of Changchai Company Limited
I Opinion
We have audited the accompanying financial statements of Changchai Company Limited. (together with its
consolidated subsidiaries included in the consolidated financial statements the “Changchai Company”) which
comprise the parent’s and consolidated balance sheets as at 31 December 2024 the parent’s and consolidated
income statements the parent’s and consolidated cash flow statements the parent’s and consolidated statements of
changes in shareholders’ equity for the year then ended as well as the notes to the financial statements.In our opinion the financial statements attached were prepared in line with the regulations of Accounting
Standards for Business Enterprises in all significant aspects which gave a true and fair view of the consolidated
and parent financial position of Changchai Company. As at 31 December 2024 and the consolidated and parent
business performance and cash flow for 2024.II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants and we have fulfilled our other ethical responsibilities in accordance with
the said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.III Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of
the financial statements for the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and we do not provide a separate opinion on these matters. We have determined
the following matters to be the key audit matters to be communicated in the audit report.(I) Revenue Recognition
1. Matter Description
Changchai Company's operating revenue primarily derives from the sales of diesel engines and related
components. For details on the accounting policies for revenue recognition and the analysis of revenue please
refer to the accounting policies described in Note IV.27 "Significant Accounting Policies and Estimates" and Note
74Changchai Company Limited Annual Report 2024
V.39 "Consolidated Financial Statement Items" in the notes to the consolidated financial statements. For the year
2024 Changchai Company reported operating revenue of RMB 2415869028.32.
As operating revenue is one of Changchai Company’s key performance indicators there is an inherent risk that
management (hereinafter referred to as "Management") may recognize revenue inappropriately to achieve specific
targets or expectations. Therefore we identified the recognition and measurement of Changchai Company’s
revenue as a key audit matter.
2. Audit Response
(1) Gained an understanding of key internal controls related to revenue recognition evaluated the design of these
controls determined whether they were implemented and tested the operating effectiveness of relevant internal
controls;
(2) Conducted interviews with Management to understand Changchai Company’s revenue recognition policies;
(3) Reviewed sales contracts to understand key contractual terms and conditions and assessed whether the revenue
recognition methods were appropriate;
(4) Performed analytical procedures on operating revenue and gross profit margin by month product and
customer to identify any significant or unusual fluctuations and investigated the reasons for such fluctuations;
(5) Examined supporting documents related to revenue recognition on a sample basis including but not limited to
sales contracts purchase orders sales invoices delivery notes customer acknowledgments settlement documents
export declarations and bills of lading;
(6) Conducted confirmations of sales revenue and accounts receivable balances with major customers to verify the
authenticity and accuracy of revenue recognition;
(7) Performed sample testing on sales revenue recognized around the balance sheet date to assess whether revenue
was recorded in the appropriate period;
(8) Obtained business registration information of Changchai Company’s major customers and inquired with
relevant personnel to confirm whether any related-party relationships existed between major customers and
Changchai Company;
(9) Reviewed whether information related to operating revenue was appropriately presented in the financial
statements.(II) Impairment of Accounts Receivable
1. Matter Description
As of December 31 2024 the gross carrying amount of accounts receivable in the consolidated balance sheet of
Changchai Company was RMB 589230509.70 with an allowance for doubtful accounts of RMB 144976269.68
resulting in a net carrying amount of RMB 444254240.02.Management of Changchai Company measures the allowance for impairment based on the expected credit losses
over the lifetime of the receivables either individually or collectively according to the credit risk characteristics
of the accounts receivable. For accounts receivable measured individually for expected credit losses Management
considers reasonable and supportable information about past events current conditions and forecasts of future
economic conditions to estimate the expected collectible cash flows thereby determining the appropriate
allowance. For accounts receivable measured collectively for expected credit losses they are grouped based on
aging and the allowance is determined by referencing historical credit loss experience adjusted for
forward-looking estimates. An aging analysis of accounts receivable is prepared and matched with expected credit
loss rates to calculate the allowance.Given the materiality of accounts receivable and the significant management judgment involved in impairment
75Changchai Company Limited Annual Report 2024
assessment we identified the impairment of accounts receivable as a key audit matter.
2. Audit Response
(1) Gained an understanding of key internal controls related to accounts receivable impairment evaluated their
design determined whether they were implemented and tested the operating effectiveness of relevant controls;
(2) Reviewed subsequent actual write-offs or reversals of allowances for doubtful accounts from prior years to
assess the accuracy of Management’s past estimates;
(3) Evaluated Management’s considerations and supporting evidence in assessing the credit risk of accounts
receivable to determine whether credit risk characteristics were appropriately identified;
(4) For individually assessed accounts receivable obtained and examined Management’s cash flow projections
assessed the reasonableness of key assumptions and data accuracy and corroborated them with external evidence;
(5) For collectively assessed accounts receivable evaluated the appropriateness of grouping based on credit risk
characteristics and assessed the reasonableness of the aging analysis and expected credit loss rates by comparing
them with historical loss experience and forward-looking adjustments;
(6) Tested the accuracy and completeness of data used by Management and verified the correctness of the
allowance calculation;
(7) Performed confirmations on a sample of year-end accounts receivable balances discussed collection status and
potential risks with Management and examined subsequent collections to assess the reasonableness of the
allowance;
(8) Reviewed whether disclosures related to accounts receivable impairment were appropriately presented in the
financial statements.IV. Other Information
The management of Changchai Company (hereinafter referred to as "Management") is responsible for the other
information. The other information comprises the information included in the 2024 Annual Report of Changchai
Company but does not include the financial statements and our audit report.Our opinion on the financial statements does not cover the other information nor do we express any form of
assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in
doing so consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.Based on the work we have performed if we conclude that there is a material misstatement in the other
information we are required to report that fact. In this regard we have nothing to report.V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
the Accounting Standards for Business Enterprises and for the design implementation and maintenance of
internal control relevant to the preparation of financial statements that are free from material misstatement
whether due to fraud or error.In preparing the financial statements Management is responsible for assessing Changchai Company’s ability to
continue as a going concern disclosing matters related to going concern (as applicable) and using the going
concern basis of accounting unless Management either intends to liquidate the Company cease operations or has
no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.VI. Auditor’s Responsibilities for the Audit of the Financial Statements
76Changchai Company Limited Annual Report 2024
Our objective is to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement whether due to fraud or error and to issue an audit report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with auditing standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if individually or in aggregate they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.In conducting the audit in accordance with auditing standards we exercised professional judgment and maintained
professional skepticism. Furthermore we:
(1) Identified and assessed the risks of material misstatement of the financial statements whether due to fraud or
error; designed and performed audit procedures responsive to those risks; and obtained sufficient and appropriate
audit evidence as a basis for our audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal controls.
(2) Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluated the appropriateness of accounting policies used by management and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Concluded on the appropriateness of management’s use of the going concern basis of accounting. Based on the
audit evidence obtained we concluded whether a material uncertainty exists related to events or conditions that
may cast significant doubt on Changchai Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists auditing standards require us to draw attention in our audit report to the related
disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our
conclusions are based on the information available to us up to the date of the audit report. However future events
or conditions may cause Changchai Company to cease to continue as a going concern.
(5) Evaluated the overall presentation structure and content of the financial statements and assessed whether the
financial statements represent the underlying transactions and events fairly.
(6) Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within Changchai Company to express an opinion on the financial statements. We were
responsible for directing supervising and performing the group audit and remain solely responsible for our audit
opinion.We communicated with those charged with governance regarding among other matters the planned scope and
timing of the audit significant audit findings and any significant deficiencies in internal control identified during
our audit.We also provided those charged with governance with a statement that we complied with relevant ethical
requirements regarding independence and communicated all relationships and other matters that may reasonably
be thought to bear on our independence including relevant safeguards (where applicable).From the matters communicated with those charged with governance we determined those matters that were of
most significance in the audit of the financial statements of the current period and were therefore the key audit
matters. We describe these matters in our audit report unless law or regulation precludes public disclosure or in
extremely rare circumstances we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits.
77Changchai Company Limited Annual Report 2024
Zhongxinghua Certified Public Accountants LLP Chinese CPA: Wang Jun
(Special General Partnership) (Engagement Partner)
Chinese CPA: Pan Daliang
Beijing · China 9 April 2025
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company Limited
31 December 2024
Unit: RMB
Item 31 December 2024 1 January 2024
Current assets:
Monetary assets 1063700492.59 1083867966.87
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 303667459.65 225641429.94
Derivative financial assets
Notes receivable 318814017.13 161632567.94
Accounts receivable 444254240.02 316543159.91
Accounts receivable financing 223261002.76 195875948.92
Prepayments 12725958.70 12333310.85
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 9847441.82 49699753.61
Including: Interest receivable
Dividends receivable 7165080.00
Financial assets purchased under
resale agreements
Inventories 819201998.42 789220185.68
Including: Data resources
Contract assets
Assets held for sale
78Changchai Company Limited Annual Report 2024
Current portion of non-current
assets 40773509.75
Other current assets 54605021.67 20910504.84
Total current assets 3250077632.76 2896498338.31
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
instruments 941120058.72 969488025.67
Other non-current financial assets 377869217.49 412914576.80
Investment property 37740844.55 39837558.11
Fixed assets 615414505.40 675596920.95
Construction in progress 3376866.69 4275622.18
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 142805785.86 148458185.68
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term prepaid expense 2664557.06 8227958.66
Deferred income tax assets 6458337.99 1518995.79
Other non-current assets 4373097.30 2578776.77
Total non-current assets 2131823271.06 2262896620.61
Total assets 5381900903.82 5159394958.92
Current liabilities:
Short-term borrowings 94471787.41
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
79Changchai Company Limited Annual Report 2024
Notes payable 491643629.88 528139582.33
Accounts payable 690733575.75 641484184.05
Advances from customers 30183376.84 1647441.22
Contract liabilities 31640879.59 33352877.66
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 48792254.98 47738883.57
Taxes payable 4214324.70 6231169.74
Other payables 117736961.52 98953000.57
Including: Interest payable
Dividends payable 3891433.83 3891433.83
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 175064677.93 67069965.96
Total current liabilities 1684481468.60 1424617105.10
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 73002860.52 60070382.24
Deferred income 29386167.02 32795896.48
Deferred income tax liabilities 154449852.33 171843455.52
80Changchai Company Limited Annual Report 2024
Other non-current liabilities
Total non-current liabilities 256838879.87 264709734.24
Total liabilities 1941320348.47 1689326839.34
Shareholders’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 640509675.84 640509675.84
Less: Treasury stock
Other comprehensive income 643067549.91 667180321.82
Specific reserve 21959066.35 19432089.52
Surplus reserves 367826665.27 363695592.34
General reserve
Retained earnings 983627999.95 1002436724.71
Total equity attributable to
Shareholders of the Company as 3362683464.32 3398946911.23
the parent
Non-controlling interests 77897091.03 71121208.35
Total shareholders’ equity 3440580555.35 3470068119.58
Total liabilities and shareholders’
equity 5381900903.82 5159394958.92
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
81Changchai Company Limited Annual Report 2024
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2024 1 January 2024
Current assets:
Monetary assets 932456827.90 971143382.52
Held-for-trading financial assets 200209027.78 100437916.67
Derivative financial assets
Notes receivable 291060042.38 152906979.84
Accounts receivable 424946666.41 291996837.94
Accounts receivable financing 215854639.00 193679203.92
Prepayments 8720127.77 5850589.29
Other receivables 24288767.65 399142024.92
Including: Interest receivable
Dividends receivable 7165080.00
Inventories 551350588.20 475538711.10
Including: Data resources
Contract assets
Assets held for sale
Current portion of non-current
assets 40773509.75
Other current assets 31935179.39 5839708.73
Total current assets 2680821866.48 2637308864.68
Non-current assets:
Investments in debt obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 868279449.94 576443530.03
Investments in other equity
instruments 941120058.72 969488025.67
Other non-current financial assets 377869217.49 412914576.80
Investment property 37740844.55 39837558.11
Fixed assets 188539011.23 229931726.27
Construction in progress 3132433.82 2166940.74
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 56046446.22 58781756.11
Including: Data resources
Development costs
82Changchai Company Limited Annual Report 2024
Including: Data resources
Goodwill
Long-term prepaid expense
Deferred income tax assets 5814276.42 920609.18
Other non-current assets 3755279.00 830991.15
Total non-current assets 2482297017.39 2291315714.06
Total assets 5163118883.87 4928624578.74
Current liabilities:
Short-term borrowings 49843838.91
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 652752618.33 524671742.33
Accounts payable 572396386.79 526544716.02
Advances from customers 30183376.84 1647441.22
Contract liabilities 23493204.39 26149334.52
Employee benefits payable 39221119.16 40766429.54
Taxes payable 2116355.96 2069482.65
Other payables 111060096.07 91849091.40
Including: Interest payable
Dividends payable 3243179.97 3243179.97
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 39139067.15 53417011.96
Total current liabilities 1520206063.60 1267115249.64
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 70293055.65 60070382.24
Deferred income 29386167.02 32795896.48
Deferred income tax liabilities 147506745.60 157053077.87
Other non-current liabilities
Total non-current liabilities 247185968.27 249919356.59
83Changchai Company Limited Annual Report 2024
Total liabilities 1767392031.87 1517034606.23
Shareholders’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659418700.67 659418700.67
Less: Treasury stock
Other comprehensive income 643067549.91 667180321.82
Specific reserve 19117263.36 19010793.43
Surplus reserves 367826665.27 363695592.34
Retained earnings 1000604165.79 996592057.25
Total shareholders’ equity 3395726852.00 3411589972.51
Total liabilities and shareholders’
equity 5163118883.87 4928624578.74
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
84Changchai Company Limited Annual Report 2024
3. Consolidated Income Statement
Unit: RMB
Item 2024 2023
1. Revenue 2415869028.32 2155698787.49
Including: Operating revenue 2415869028.32 2155698787.49
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 2371544119.17 2156452273.22
Including: Cost of sales 2119300466.07 1884289338.95
Interest expense
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 16181617.86 15057398.25
Selling expense 60617254.43 54069774.62
Administrative expense 115466341.90 123981333.99
R&D expense 83401477.60 90339104.33
Finance costs -23423038.69 -11284676.92
Including: Interest expense 341136.21 1825195.98
Interest income 17940638.39 9008657.82
Add: Other income 23621255.14 6788111.97
Return on investment (“-” for loss) 24265851.27 19102348.95
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of
financial assets at amortized cost (“-” for loss) -3313989.60 -5709875.91
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -65938196.89 49816098.68
Credit impairment loss (“-” for loss) 1229820.12 -172171.65
Asset impairment loss (“-” for loss) -14403371.83 -27893895.75
Asset disposal income (“-” for loss) 304377.71 105702551.01
3. Operating profit (“-” for loss) 13404644.67 152589557.48
Add: Non-operating income 2838603.42 927993.65
Less: Non-operating expense 886507.69 1182537.54
85Changchai Company Limited Annual Report 2024
4. Profit before tax (“-” for loss) 15356740.40 152335013.59
Less: Income tax expense -9260824.48 37636658.03
5. Net profit (“-” for net loss) 24617564.88 114698355.56
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for
net loss) 24617564.88 114698355.56
5.1.2 Net profit from discontinued operations (“-” for
net loss)
5.2 By shareholders’ equity
5.2.1 Net profit attributable to shareholders of the
Company as the parent 18489896.00 108495607.05
5.2.1 Net profit attributable to non-controlling interests 6127668.88 6202748.51
6. Other comprehensive income net of tax -24112771.91 11838617.75
Attributable to shareholders of the Company as the parent -24112771.91 11838617.75
6.1 Items that will not be reclassified to profit or loss -24112771.91 11838617.75
6.1.1 Changes caused by remeasurements on defined
benefit schemes
6.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in other
equity instruments -24112771.91 11838617.75
6.1.4 Changes in the fair value arising from changes in
own credit risk
6.1.5 Other
6.2 Items that will be reclassified to profit or loss
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other
debt obligations
6.2.3 Other comprehensive income arising from the
reclassification of financial assets
6.2.4 Credit impairment allowance for investments in
other debt obligations
6.2.5 Reserve for cash flow hedges
6.2.6 Differences arising from the translation of foreign
currency-denominated financial statements
6.2.7 Other
Attributable to non-controlling interests
7. Total comprehensive income 504792.97 126536973.31
Attributable to shareholders of the Company as the parent -5622875.91 120334224.80
Attributable to non-controlling interests 6127668.88 6202748.51
8. Earnings per share
8.1 Basic earnings per share 0.0262 0.1537
8.2 Diluted earnings per share 0.0262 0.1537
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
86Changchai Company Limited Annual Report 2024
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2024 2023
1. Operating revenue 2261596684.92 2057120913.33
Less: Cost of sales 2025918153.26 1831801124.99
Taxes and surcharges 9757870.85 8602178.79
Selling expense 54333372.12 49264491.41
Administrative expense 86953834.51 87122617.94
R&D expense 74555192.15 79855291.69
Finance costs -26393666.49 -19194141.71
Including: Interest expense 14172.26 1562299.35
Interest income 21371554.39 17311210.31
Add: Other income 22448967.24 6016229.41
Return on investment (“-” for loss) 22651325.15 15102581.80
Including: Share of profit or loss of joint ventures and
associates
Income from the derecognition of financial
assets at amortized cost (“-” for loss) -2778698.46 -4894619.98
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -34836331.53 39852493.47
Credit impairment loss (“-” for loss) 621287.63 3495307.23
Asset impairment loss (“-” for loss) -11574638.78 -20288104.38
Asset disposal income (“-” for loss) 428278.54 105727630.80
2. Operating profit (“-” for loss) 36210816.77 169575488.55
Add: Non-operating income 1069126.99 319236.80
Less: Non-operating expense 7440.00 51648.54
3. Profit before tax (“-” for loss) 37272503.76 169843076.81
Less: Income tax expense -4038225.54 24864410.60
4. Net profit (“-” for net loss) 41310729.30 144978666.21
4.1 Net profit from continuing operations (“-” for net loss) 41310729.30 144978666.21
4.2 Net profit from discontinued operations (“-” for net
loss)
5. Other comprehensive income net of tax -24112771.91 11838617.75
5.1 Items that will not be reclassified to profit or loss -24112771.91 11838617.75
5.1.1 Changes caused by remeasurements on defined
benefit schemes
5.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in other
equity instruments -24112771.91 11838617.75
5.1.4 Changes in the fair value arising from changes in
own credit risk
5.1.5 Other
87Changchai Company Limited Annual Report 2024
5.2 Items that will be reclassified to profit or loss
5.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in other
debt obligations
5.2.3 Other comprehensive income arising from the
reclassification of financial assets
5.2.4 Credit impairment allowance for investments in
other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the translation of foreign
currency-denominated financial statements
5.2.7 Other
6. Total comprehensive income 17197957.39 156817283.96
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
88Changchai Company Limited Annual Report 2024
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2024 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2238358650.77 2031067538.52
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates 19164629.21 98155472.59
Cash generated from other operating activities 67860339.28 40082851.79
Subtotal of cash generated from operating activities 2325383619.26 2169305862.90
Payments for commodities and services 1962599108.34 1533814952.73
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in
interbank loans granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 327926688.72 310775202.76
Taxes paid 50158557.19 33394657.94
Cash used in other operating activities 138992233.71 154131222.12
Subtotal of cash used in operating activities 2479676587.96 2032116035.55
Net cash generated from/used in operating activities -154292968.70 137189827.35
2. Cash flows from investing activities:
Proceeds from disinvestment 1118117547.48 1101955152.04
Return on investment 11949697.38 23632366.98
Net proceeds from the disposal of fixed assets intangible
assets and other long-lived assets 76848662.26 71562956.31
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 1206915907.12 1197150475.33
89Changchai Company Limited Annual Report 2024
Payments for the acquisition of fixed assets intangible assets
and other long-lived assets 19328172.96 97110602.27
Payments for investments 1179550000.00 947055152.04
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 1198878172.96 1044165754.31
Net cash generated from/used in investing activities 8037734.16 152984721.02
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests
to subsidiaries
Borrowings raised 94412090.20
Cash generated from other financing activities
Subtotal of cash generated from financing activities 94412090.20
Repayment of borrowings 7000000.00
Interest and dividends paid 33168340.22 7195400.07
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 117170000.00
Subtotal of cash used in financing activities 33168340.22 131365400.07
Net cash generated from/used in financing activities 61243749.98 -131365400.07
4. Effect of foreign exchange rates changes on cash and cash
equivalents 6063845.94 2469409.11
5. Net increase in cash and cash equivalents -78947638.62 161278557.41
Add: Cash and cash equivalents beginning of the period 971629523.46 810350966.05
6. Cash and cash equivalents end of the period 892681884.84 971629523.46
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
90Changchai Company Limited Annual Report 2024
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2024 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 1986603574.57 2151742371.58
Tax rebates 13751464.43 40874390.40
Cash generated from other operating activities 27621885.18 21935914.65
Subtotal of cash generated from operating activities 2027976924.18 2214552676.63
Payments for commodities and services 1860419699.59 1636385419.97
Cash paid to and for employees 188575870.97 212298042.01
Taxes paid 30952518.43 8731121.51
Cash used in other operating activities 86011290.15 302274673.41
Subtotal of cash used in operating activities 2165959379.14 2159689256.90
Net cash generated from/used in operating activities -137982454.96 54863419.73
2. Cash flows from investing activities:
Proceeds from disinvestment 1004382432.65 1010000000.00
Return on investment 11093937.38 18887391.07
Net proceeds from the disposal of fixed assets intangible
assets and other long-lived assets 76459461.84 71055306.33
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 1177096.12
Subtotal of cash generated from investing activities 1093112927.99 1099942697.40
Payments for the acquisition of fixed assets intangible assets
and other long-lived assets 9040777.20 7558187.67
Payments for investments 1056000000.00 837170000.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 6000000.00
Subtotal of cash used in investing activities 1071040777.20 844728187.67
Net cash generated from/used in investing activities 22072150.79 255214509.73
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised 49829666.65
Cash generated from other financing activities
Subtotal of cash generated from financing activities 49829666.65
Repayment of borrowings
Interest and dividends paid 33167547.83 7056925.07
Cash used in other financing activities 110000000.00
Subtotal of cash used in financing activities 33167547.83 117056925.07
91Changchai Company Limited Annual Report 2024
Net cash generated from/used in financing activities 16662118.82 -117056925.07
4. Effect of foreign exchange rates changes on cash and cash
equivalents 5173303.38 2008960.07
5. Net increase in cash and cash equivalents -94074881.97 195029964.46
Add: Cash and cash equivalents beginning of the period 899689740.60 704659776.14
6. Cash and cash equivalents end of the period 805614858.63 899689740.60
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
92Changchai Company Limited Annual Report 2024
7. Consolidated Statements of Changes in Shareholders’ Equity
2024
Unit: RMB
2024
Equity attributable to shareholders of the Company as the parent
Other equity G
instruments en Total
Item Other er Non-contPer Capital Less: shareholdShare compreh Specific Surplus al Retained Ot rolling
capital Preferr pet
reserve Treasury Subtotal ers’
Oth ensive reserve reserves re earnings her interests
ed ual s stock equity
er income se
shares bon rv
ds e
1. Balance as at
the end of the 705692507
6405066718019432036369510024333989471121203470068.00 9675.84 321.82 89.52 592.34 6724.71 6911.23 8.35 119.58prior year
Add: Adjustment
for change in
accounting
policy
Adjustment for
correction of
previous error
93Changchai Company Limited Annual Report 2024
Other
adjustments
2. Balance as at 64050
the beginning of 705692507 9675.8 667180 194320 363695 100243 339894 7112120 3470068.00 4 321.82 89.52 592.34 6724.71 6911.23 8.35 119.58the year
3. Increase/
decrease in the -24112 252697 413107 -188087 -36263 6775882 -294875
period (“-” for 771.91 6.83 2.93 24.76 446.91 .68 64.23
decrease)
3.1 Total
comprehensive -24112 184898 -56228 6127668 504792.9771.91 96.00 75.91 .88 7
income
3.2 Capital
increased and
reduced by
shareholders
3.2.1 Ordinary
shares increased
by shareholders
3.2.2 Capital
increased by
holders of other
equity
instruments
94Changchai Company Limited Annual Report 2024
3.2.3
Share-based
payments
included in
shareholders’
equity
3.2.4 Other
3.3 Profit 413107 -372986 -33167 -331675
distribution 2.93 20.76 547.83 47.83
3.3.1
Appropriation to 413107 -4131072.93 2.93
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
Appropriation to -331675 -33167 -33167547.83 547.83 47.83
shareholders
3.3.4 Other
3.4 Transfers
within
shareholders’
equity
95Changchai Company Limited Annual Report 2024
3.4.1 Increase in
capital (or share
capital) from
capital reserves
3.4.2 Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss offset
by surplus
reserves
3.4.4 Changes in
defined benefit
schemes
transferred to
retained earnings
3.4.5 Other
comprehensive
income
transferred to
retained earnings
3.4.6 Other
3.5 Specific 252697 252697 648213.8 3175190
reserve 6.83 6.83 0 .63
3.5.1 Increase in 995801 995801 912151.3 1087016
the period 6.52 6.52 0 7.82
96Changchai Company Limited Annual Report 2024
3.5.2 Used in the 743103 743103 263937.5 7694977
period 9.69 9.69 0 .19
3.6 Other
4. Balance as at 64050
the end of the 705692507.00 9675.8
64306721959036782698362733626877897093440580
4 549.91 66.35 665.27 999.95 3464.32 1.03 555.35period
2023
2023
Equity attributable to shareholders of the Company as the parent
Other equity G
instruments en Total
Item Less: Other er Non-cont sharehold
Share Perpe Capital Trea compreh Specific Surplus al Retained Ot rolling
Ot Subtotal ers’capital Preferred tual reserves sury ensive reserve reserves re earnings her interests
he equity
shares bond stock income se
r
s rv
e
1. Balance as
at the end of 7056925 6401339 655341 188488 349197 915495 328471 7246417 335717407.00 63.01 704.07 56.75 725.72 909.35 0665.90 2.67 838.57
the prior year
97Changchai Company Limited Annual Report 2024
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Other
adjustments
2. Balance as
at the 7056925 6401339 655341 188488 349197 915495 328471 7246417 3357174
beginning of 07.00 63.01 704.07 56.75 725.72 909.35 0665.90 2.67 838.57
the year
3. Increase/
decrease in the 375712.8 118386 583232. 144978 869408 114236 -134296 1128932
period (“-” for 3 17.75 77 66.62 15.36 245.33 4.32 81.01
decrease)
3.1 Total
comprehensive 118386 108495 120334 6202748 126536917.75 607.05 224.80 .51 73.31
income
3.2 Capital
increased and 375712.8 375712. -754571 -717000
reduced by 3 83 2.83 0.00
shareholders
98Changchai Company Limited Annual Report 2024
3.2.1 Ordinary
shares
increased by
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
3.2.3
Share-based
payments
included in
shareholders’
equity
3.2.4 Other 375712.8 375712. -754571 -7170003 83 2.83 0.00
3.3 Profit 144978 -215547 -70569 -705692
distribution 66.62 91.69 25.07 5.07
3.3.1
Appropriation 144978 -144978
to surplus 66.62 66.62
reserves
3.3.2
Appropriation
to general
reserve
99Changchai Company Limited Annual Report 2024
3.3.3
Appropriation -705692 -70569 -7056925.07 25.07 5.07
to shareholders
3.3.4 Other
3.4 Transfers
within
shareholders’
equity
3.4.1 Increase
in capital (or
share capital)
from capital
reserves
3.4.2 Increase
in capital (or
share capital)
from surplus
reserves
3.4.3 Loss
offset by
surplus
reserves
100Changchai Company Limited Annual Report 2024
3.4.4 Changes
in defined
benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific 583232. 583232. 583232.7
reserve 77 77 7
3.5.1 Increase 513698 513698 5136988
in the period 8.70 8.70 .70
3.5.2 Used in 455375 455375 4553755
the period 5.93 5.93 .93
3.6 Other
4. Balance as
at the end of 7056925 6405096 667180 194320 363695 100243 339894 7112120 347006807.00 75.84 321.82 89.52 592.34 6724.71 6911.23 8.35 119.58
the period
Unit: RMB
101Changchai Company Limited Annual Report 2024
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
102Changchai Company Limited Annual Report 2024
8. Statements of Changes in Shareholders’ Equity of the Company as the Parent
2024
Unit: RMB
2024
Other equity
instruments
Le
Pe ss:
rp Other
Item Pre Tre Ot Totalet Capital comprehen Specific Surplus RetainedShare capital fer Ot asu he shareholders
ua reserves sive reserve reserves earnings
red he ry r ’ equity
l income
sha r sto
bo
res ck
nd
s
1. Balance as at the end of the 705692507.0 65941870 66718032 19010793. 363695592. 996592057. 34115899
prior year 0 0.67 1.82 43 34 25 72.51
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 705692507.0 65941870 66718032 19010793. 363695592. 996592057. 34115899
the year 0 0.67 1.82 43 34 25 72.51
3. Increase/ decrease in the period -2411277
1.91106469.934131072.934012108.54
-15863120.(“-” for decrease) 51
103Changchai Company Limited Annual Report 2024
3.1 Total comprehensive income -2411277 41310729.3 17197957.1.91 0 39
3.2 Capital increased and reduced
by shareholders
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders
of other equity instruments
3.2.3 Share-based payments
included in shareholders’ equity
3.2.4 Other
3.3 Profit distribution 4131072.93 -37298620.7 -33167547.6 83
3.3.1 Appropriation to surplus
4131072.93-4131072.93
reserves
3.3.2 Appropriation to -33167547.8 -33167547.
shareholders 3 83
3.3.3 Other
3.4 Transfers within shareholders’
equity
3.4.1 Increase in capital (or share
capital) from capital reserves
3.4.2 Increase in capital (or share
capital) from surplus reserves
104Changchai Company Limited Annual Report 2024
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined benefit
schemes transferred to retained
earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve 106469.93 106469.93
3.5.1 Increase in the period 4667120.9 4667120.91 1
3.5.2 Used in the period 4560650.9 4560650.98 8
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 64306754 19117263. 367826665. 100060416 33957268
period 0 0.67 9.91 36 27 5.79 52.00
2023
Unit: RMB
2023
Item Other equity Capital
Share capital Le Other
Specific Surplus Retained Ot Total
instruments reserves ss: comprehen reserve reserves earnings he shareholders
105Changchai Company Limited Annual Report 2024
Pe Tre sive r ’ equity
rp asu income
Pre
et ry
fer Ot
ua sto
red he
l ck
sha r
bo
res
nd
s
1. Balance as at the end of the 705692507.0 65941870 65534170 18848856. 349197725. 873168182. 32616676
prior year 0 0.67 4.07 75 72 73 76.94
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 705692507.0 65941870 65534170 18848856. 349197725. 873168182. 32616676
the year 0 0.67 4.07 75 72 73 76.94
3. Increase/ decrease in the period 11838617 161936.68 14497866.6 123423874. 149922295
(“-” for decrease) .75 2 52 .57
3.1 Total comprehensive 11838617 144978666. 156817283
income .75 21 .96
3.2 Capital increased and
reduced by shareholders
3.2.1 Ordinary shares increased by
shareholders
106Changchai Company Limited Annual Report 2024
3.2.2 Capital increased by holders
of other equity instruments
3.2.3 Share-based payments
included in shareholders’ equity
3.2.4 Other
3.3 Profit distribution 14497866.6 -21554791.6 -7056925.02 9 7
3.3.1 Appropriation to 14497866.6 -14497866.6
surplus reserves 2 2
3.3.2 Appropriation to
-7056925.07-7056925.0
shareholders 7
3.3.3 Other
3.4 Transfers within
shareholders’ equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
107Changchai Company Limited Annual Report 2024
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve 161936.68 161936.68
3.5.1 Increase in the period 4598473.0 4598473.04 4
3.5.2 Used in the period 4436536.3 4436536.36 6
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 66718032 19010793. 363695592. 996592057. 34115899
period 0 0.67 1.82 43 34 25 72.51
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
108Changchai Company Limited Annual Report 2024
III. Company Profile
1. Registered location organization form and headquarter address of the Company
Changchai Company Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994 which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approved of 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 March 1994 to 30
March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15 such
tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Changchai” for short of
stock as well as “0570” as stock code (present stock code is “000570”).In 1996 upon recommendation by Document No. 13 [1996] of the General Office of Jiangsu Provincial People's
Government preliminary review by Document No. 24 [1996] of Shenzhen Securities Regulatory Office and
approval by Document No. 27 [1996] of the State Council Securities Commission the Company privately placed
100 million B-shares to qualified investors from August 27 to August 30 1996. The shares were listed on
September 13 1996 with the stock abbreviation "Changchai B" and stock code "2570" (current stock code:
"200570").Through years of bonus share distributions rights offerings capital reserve conversions and additional share
issuances as of December 31 2024 the Company's total issued share capital reached 705692507 shares with
registered capital of RMB 705692507.Registered Address: 123 Huaide Middle Road Changzhou Jiangsu Province
Headquarters Address: 123 Huaide Middle Road Changzhou Jiangsu Province
Unified Social Credit Code: 91320400134792410W
2. Principal Business Operations of the Company
The Company operates in the manufacturing industry with its business scope primarily covering: the
manufacturing and sales of diesel engines diesel engine components and castings gasoline engines gasoline
engine components grain harvesting machinery rotary tillers walking tractors molds and fixtures as well as the
assembly and sales of diesel engine units and gasoline engine units.The Company's main products or services include: the production and sales of small and medium-sized
single-cylinder and multi-cylinder diesel engines under the "Changchai" brand. The diesel engines produced and
sold by the Company are mainly used in tractors combine harvesters light commercial vehicles agricultural
equipment small construction machinery generator sets and marine engines.During the reporting period there were no changes to the Company's core business operations.
3. Authorization of Financial Statements
The financial report has been approved to be issued by the Board of Directors on April 9 2025.IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred
the Group prepared financial statements in accordance with The Accounting Standards for Business
109Changchai Company Limited Annual Report 2024
Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.
76 the various specific accounting standards the Application Guidance of Accounting Standards for Business
Enterprises the Interpretation of Accounting Standards for Business Enterprises and other regulations issued andrevised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for BusinessEnterprises” “China Accounting Standards” or “CAS”) as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2023)
by China Securities Regulatory Commission.In accordance with relevant provisions of the Accounting Standards for Business Enterprises the Group adopted
the accrual basis in accounting. Except for some financial instruments where impairment occurred on an asset an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
These financial statements are prepared on a going concern basis. The Company has the ability to continue as a
going concern for at least 12 months from the end of the reporting period.V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and its subsidiaries are principally engaged in the production and sales of small-to-medium sized
single-cylinder and multi-cylinder diesel engines under the 'Changchai' trademark. In accordance with their actual
production and operating characteristics and the relevant Accounting Standards for Business Enterprises the
Company and its subsidiaries have formulated specific accounting policies and accounting estimates for various
transactions and events as detailed in the following descriptions.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of the Accounting Standards for
Business Enterprises (ASBE) and present fairly in all material respects the consolidated and parent company's
financial position as of December 31 2024 and the consolidated and parent company's operating results and cash
flows for the year then ended.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase the fiscal year is from January 1 to December 31
and as the metaphase included monthly quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months which is also the classification criterion for the
liquidity of its assets and liabilities.
110Changchai Company Limited Annual Report 2024
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
Business Combination refers to transactions or events that integrate two or more separate enterprises into a single
reporting entity. Business combinations are categorized into Business Combinations under the Same Control and
Business Combinations not under the Same Control.
(1) Business combinations under the same control
The enterprises involved in combination are ultimately controlled by the same party or parties before and after the
combination. The control is not temporary and the combination is under the same control. For business
combination under the same control the party that obtains control over other participating enterprises on the
purchase date is the acquirer and other enterprises that participate in the combination are the acquirees.Combination date refers to the date on which the combing party actually obtains control to the combined party.The Company measures the assets and liabilities obtained from consolidation of enterprises according to the book
value of consolidated party’s assets and liabilities (including the goodwill arising from ultimate controller’s
acquisition of the consolidated party) in the ultimate controller’s consolidated financial statement on the
consolidation date; adjusts the capital premium in capital reserve by the difference between obtained net asset
book value and paid consolidated consideration book value (or total par value of shares issued) and adjusts
retained earnings if the capital premium in capital reserve is insufficient to offset.The direct expenses generated by the acquirer for the purpose of business combinations shall be recorded into the
profits and losses for the current period.
(2) Business combinations not under the same control
A business combination involving enterprises that are not ultimately controlled by the same party or parties both
before and after the combination is a business combination not under common control. In a business combination
not under common control the party that obtains control over the other combining enterprises on the acquisition
date is the acquirer and the other enterprises participating in the combination are the acquirees. The acquisition
date is the date on which the acquirer effectively obtains control of the acquiree.For a business combination not under common control the cost of combination includes the fair value at the
acquisition date of assets given liabilities incurred or assumed and equity instruments issued by the acquirer in
exchange for control of the acquiree. Professional fees such as audit legal valuation and consulting services as
well as other administrative costs related to the business combination are expensed as incurred. Transaction costs
incurred by the acquirer in issuing equity or debt instruments as consideration for the combination are included in
the initial recognition amount of the equity or debt instruments. Any contingent consideration is included in the
cost of combination at its fair value at the acquisition date. If new or additional evidence relating to circumstances
existing at the acquisition date arises within twelve months after the acquisition date and results in an adjustment
to the contingent consideration the amount of goodwill is adjusted accordingly. The acquirer measures the cost of
combination and the identifiable assets and liabilities acquired at their fair values at the acquisition date. The
excess of the cost of combination over the acquirer's interest in the fair value of the identifiable net assets of the
acquiree at the acquisition date is recognized as goodwill. If the cost of combination is less than the acquirer's
interest in the fair value of the identifiable net assets of the acquiree the acquirer first reassesses the measurement
of the identifiable assets liabilities and contingent liabilities acquired and the cost of combination. If the cost of
111Changchai Company Limited Annual Report 2024
combination remains less than the acquirer's interest in the fair value of the identifiable net assets of the acquiree
after the reassessment the difference is recognized in profit or loss for the period.If the acquirer obtains deductible temporary differences of the acquiree that do not meet the recognition criteria
for deferred tax assets at the acquisition date and are therefore not recognized and if within twelve months after
the acquisition date new or additional information becomes available indicating that the relevant circumstances
existed at the acquisition date and that the economic benefits associated with the deductible temporary differences
of the acquiree at the acquisition date are probable the related deferred tax assets are recognized with a
corresponding decrease in goodwill. If the goodwill is insufficient to absorb the decrease the excess is recognized
in profit or loss. In all other cases deferred tax assets arising from a business combination are recognized in profit
or loss.A business combination not under common control achieved in stages through multiple transactions is accounted
for by reference to the preceding paragraphs and Note V.14 "Long-term equity investments" if the transactions are
part of a single arrangement. If the transactions are not part of a single arrangement the accounting treatment is
differentiated between the separate financial statements and the consolidated financial statements:
In the separate financial statements the initial cost of the investment is the sum of the carrying amount of the
equity investment in the acquiree held prior to the acquisition date and the cost of the additional investment
incurred on the acquisition date. If the equity investment in the acquiree held prior to the acquisition date involves
other comprehensive income the related other comprehensive income is accounted for on the same basis as if the
acquiree had directly disposed of the related assets or liabilities when the investment is disposed of (i.e. except
for the relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities
or assets accounted for under the equity method the remainder is reclassified to investment income in the current
period).In the consolidated financial statements the equity investment in the acquiree held prior to the acquisition date is
remeasured at its fair value on the acquisition date with any difference between the fair value and the carrying
amount recognized in investment income for the period. If the equity investment in the acquiree held prior to the
acquisition date involves other comprehensive income the related other comprehensive income is accounted for
on the same basis as if the acquiree had directly disposed of the related assets or liabilities (i.e. except for the
relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities or assets
accounted for under the equity method the remainder is reclassified to investment income in the period in which
the acquisition date falls).
6. Criteria for Determining Control and Methods for Preparing Consolidated Financial Statements
(1) Criteria for Determining Control
The scope of consolidation is determined based on control. Control means that the Company has power over an
investee is exposed or has rights to variable returns from its involvement with the investee and has the ability to
use its power over the investee to affect the amount of the returns. This generally includes situations where: the
parent holds more than half of the voting rights of the investee; or the parent holds half or less of the voting rights
but has more than half of the voting rights through agreements with other investors; or has the power to govern the
financial and operating policies of the investee under the investee’s articles of association or agreements; or has
the power to appoint or remove the majority of the members of the board of directors of the investee; or has the
majority of voting rights at the board of directors of the investee.
(2) Methods for Preparing Consolidated Financial Statements
The Company includes subsidiaries in the consolidated financial statements from the date on which it obtains
112Changchai Company Limited Annual Report 2024
control over the subsidiaries’ net assets and operating decisions and excludes them from the date on which such
control ceases. For subsidiaries disposed of the results of operations and cash flows prior to the disposal date are
properly included in the consolidated income statement and consolidated cash flow statement; for subsidiaries
disposed of during the period the opening balances of the consolidated balance sheet are not adjusted. For
subsidiaries acquired in business combinations not under common control their results of operations and cash
flows after the acquisition date are properly included in the consolidated income statement and consolidated cash
flow statement and the opening balances and comparative figures in the consolidated financial statements are not
adjusted. For subsidiaries acquired in business combinations under common control and entities acquired through
mergers their results of operations and cash flows from the beginning of the period in which the combination
occurs to the combination date are properly included in the consolidated income statement and consolidated cash
flow statement and the comparative figures in the consolidated financial statements are adjusted accordingly.When preparing the consolidated financial statements if the accounting policies or reporting periods adopted by a
subsidiary differ from those of the Company the subsidiary’s financial statements are adjusted to conform to the
Company’s accounting policies and reporting periods. For subsidiaries acquired in business combinations not
under common control their financial statements are adjusted based on the fair values of the identifiable net assets
at the acquisition date.All significant intercompany balances transactions and unrealized profits are eliminated in full in the consolidated
financial statements.The portion of equity and net profit or loss of subsidiaries attributable to non-controlling interests is presented
separately in the consolidated financial statements under equity and net profit respectively. The portion of net
profit or loss of subsidiaries attributable to non-controlling interests is presented as “non-controlling interests”
under net profit in the consolidated income statement. Losses attributable to non-controlling interests in a
subsidiary that exceed the non-controlling interests’ share of equity in the subsidiary at the beginning of the period
are allocated against non-controlling interests.When control over a former subsidiary is lost due to disposal of part of the equity investment or other reasons the
remaining equity interest is remeasured at its fair value at the date when control is lost. The difference between the
sum of the consideration received from the disposal and the fair value of the remaining equity interest and the
share of the carrying amount of the former subsidiary’s net assets attributable to the original equity interest from
the acquisition date is recognized in profit or loss for the period in which control is lost. Other comprehensive
income related to the equity investment in the former subsidiary is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities when control is lost (i.e. except for the relevant
share of changes arising from the investee’s remeasurement of defined benefit plan net liabilities or assets the
remainder is reclassified to profit or loss for the current period). Subsequently the remaining equity interest is
accounted for in accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 2
– Long-term Equity Investments or Accounting Standards for Business Enterprises No. 22 – Recognition and
Measurement of Financial Instruments. For details see Note 5.14 “Long-term Equity Investments” or Note V.10
“Financial Instruments”.When the Company loses control over a subsidiary through multiple transactions that involve disposing of equity
investments in the subsidiary step by step it is necessary to determine whether the transactions should be
accounted for as a single transaction. The terms conditions and economic effects of the transactions meet one or
more of the following circumstances which generally indicate that the transactions should be accounted for as a
single transaction: (1) the transactions are entered into simultaneously or in contemplation of one another; (2) the
transactions form a single transaction to achieve an overall commercial effect; (3) the occurrence of one
transaction depends on the occurrence of at least one other transaction; or (4) one transaction considered alone is
113Changchai Company Limited Annual Report 2024
not economically justified but is economically justified when considered together with other transactions. If the
transactions are not part of a single transaction each transaction is accounted for separately as appropriate underthe principles applicable to “partial disposal of long-term equity investments in subsidiaries without loss ofcontrol” and “loss of control over former subsidiaries due to disposal of part of equity investments or otherreasons”. If the transactions are part of a single transaction they are accounted for as a single transaction
involving disposal of the subsidiary and loss of control; however the difference between the consideration
received from each disposal before the loss of control and the share of the subsidiary’s net assets attributable to
the disposed investment is recognized as other comprehensive income in the consolidated financial statements and
reclassified to profit or loss for the period in which control is lost.
7. Classification of Joint Arrangements and Accounting Treatment for Joint Operations
A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies
joint arrangements into joint operations and joint ventures based on the rights and obligations arising from the
arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets and
obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement whereby the
Company has rights to the net assets of the arrangement.The Company accounts for its investments in joint ventures using the equity method applying the accounting
policies described in Note V.14(2) * "Long-term Equity Investments Accounted for Using the Equity Method".As a joint operator in a joint operation the Company recognizes its individually held assets and assumed liabilities
as well as its share of jointly held assets and jointly assumed liabilities; recognizes revenue from the sale of its
share of the output from the joint operation; recognizes its share of revenue arising from the sale of output by the
joint operation; and recognizes expenses it incurs individually as well as its share of expenses incurred by the joint
operation.When the Company as a joint operator contributes or sells assets (which do not constitute a business the same
below) to a joint operation or purchases assets from a joint operation the Company only recognizes the portion of
gains or losses arising from the transaction that is attributable to the other joint operators until such assets are sold
to third parties. If these assets meet the criteria for impairment losses as stipulated in Accounting Standards for
Business Enterprises No. 8 - Impairment of Assets and other relevant standards the Company fully recognizes
such losses for assets contributed or sold to the joint operation by the Company and recognizes its share of such
losses for assets purchased from the joint operation by the Company.
8. Determination of cash and cash equivalents
The Company’s cash and cash equivalents include cash on hand deposits that can be used for payment at any time
investments that owned by the Company which are in short-term (usually due within three months from the
purchase date) highly liquid easy to convert to a known amount of cash low risk of value change.
9. Foreign currency operations
(1) Translation Methods for Foreign Currency Transactions
The Company translates foreign currency transactions into the functional currency amount at the spot exchange
rate on the transaction date upon initial recognition. However for foreign currency exchange transactions or
transactions involving currency exchange conducted by the Company the actual exchange rate adopted is used for
114Changchai Company Limited Annual Report 2024
translation into the functional currency amount.
(2) Translation Methods for Foreign Currency Monetary Items and Non-monetary Items
At the balance sheet date foreign currency monetary items are translated using the spot exchange rate on that date.The resulting exchange differences are recognized in profit or loss except for: * exchange differences arising
from foreign currency-specific borrowings related to the acquisition or construction of qualifying assets which
are accounted for in accordance with the principles for capitalizing borrowing costs; and * exchange differences
arising from changes in the carrying amount of available-for-sale foreign currency monetary items other than
amortized cost which are recognized in other comprehensive income.Non-monetary items denominated in foreign currency and measured at historical cost continue to be translated
using the spot exchange rate on the transaction date. Non-monetary items denominated in foreign currency and
measured at fair value are translated using the spot exchange rate on the date when the fair value is determined.The difference between the translated functional currency amount and the original functional currency amount is
treated as a fair value change (including exchange rate effects) and recognized in profit or loss or other
comprehensive income.
10. Financial Instruments
A financial asset or financial liability is recognized when the Company becomes a party to the financial
instrument contract.
(1) Classification confirmation and measurement of financial assets
Based on business model of managing financial assets and contractual cash flow characteristics of financial assets
the Company divides financial assets into: financial assets measured at amortized cost; financial assets measured
at fair value with changes included in other comprehensive income; financial assets measured at fair value through
profit and loss.Financial assets are measured at fair value at initial recognition. For the financial assets at fair value and through
current profit or loss the transaction expenses thereof should be recognized directly in profit or loss; for other
categories of financial assets the transaction expenses thereof should be recognized into initially recognized
amount. For the accounts receivable or bills receivable arising from product sales or labor service provision
excluding or not considering significant financing components the Company regards the amount of consideration
expected to charge as the initial recognition amount.* Financial assets measured at amortized costs
The corporate business model for managing financial assets measured at amortized cost aims at charging
contractual cash flow and the contractual cash flow characteristics of such financial assets are consistent with
basic borrowing and loan arrangements namely cash flow is generated on a specific date only for payment of
principal and interests based on outstanding principal amount. The Company utilizes effective interest rate method
for such financial assets and performs subsequent measurement as per amortized cost with gains or losses arising
from amortization or impairment included in current profits and losses.* Financial assets measured at fair value with changes included in other comprehensive income
The corporate business model for managing such financial assets aims at both contractual cash flow charging and
sales and the contractual cash flow characteristics of such financial assets are consistent with basic borrowing and
loan arrangements. The Company measures such financial assets at fair value with changes included in other
comprehensive income but impairment losses or gains exchange gains and losses and interest income calculated
according to the actual interest rate method are included in current profits and losses.
115Changchai Company Limited Annual Report 2024
In addition the Company designates some non-trading equity instrument investments as financial assets measured
at fair value with changes included in other comprehensive income. The Company records relevant dividend
income of such financial assets into current profits and losses and records fair value changes into other
comprehensive income. When such financial assets are derecognized the cumulative gains or losses previously
recorded in other comprehensive income will transfer from other comprehensive income into retained earnings
excluded in current profits and losses.* Financial Liabilities measured at fair value through profit and loss
The Company classifies the above financial assets measured at amortized cost and the financial assets other than
the financial assets measured at fair value with changes included in other comprehensive income as the financial
assets measured at fair value through profit and loss. In addition during initial recognition in order to eliminate or
significantly reduce accounting mismatches the Company designates some financial assets as financial assets
measured at fair value through profit and loss. For such financial assets the Company uses fair value for
subsequent measurement and fair value changes are included in current profits and losses.
(2) Classification recognition and measurement of financial liabilities
Financial liabilities are classified during initial recognition as the financial liabilities measured at fair value
through profit and loss and other financial liabilities. For financial liabilities at fair value through profit or loss
the transaction expenses thereof should be recognized directly in current profit or loss and for other financial
liabilities the transaction expenses thereof should be recognized into initially recognized amount.* Financial liabilities measured at fair value through profit and loss
Financial liabilities measured at fair value through profit and loss contain transactional financial liabilities
(including derivatives that belong to financial liabilities) and financial liabilities designated as measured at fair
value during initial recognition with changes included in current profits and losses.Transactional financial liabilities (including derivatives that belong to financial liabilities) are subsequently
measured at fair value and except for hedge accounting-related the fair value changes are included in current
profits and losses.The financial liabilities designated as measured at fair value with changes included in current profits and losses
such liabilities are caused by the Company’s own credit risk changes with fair value changes included in other
comprehensive income and when the liabilities are derecognized they are included in other comprehensive
income caused by own credit risk changes with cumulative fair value changes transferred into retained earnings.The remaining fair value changes are included in current profits and losses. If treatment of own credit risk change
impact of such financial liabilities in the above manner will cause or expand accounting mismatch in profits and
losses the Company includes all gains or losses of such financial liabilities (including the amount of corporate
own credit risk change impact) in current profits and losses.* Other financial liabilities
Except the financial liabilities and financial guarantee contract arising from financial asset transfer at variance
with derecognition conditions or continuous involvement of transferred financial assets other financial liabilities
are classified as financial liabilities measured at amortized cost and subsequently measured at amortized cost
with gains or losses resulting from derecognition or amortization included in current profits and losses.
(3) Recognition basis and measurement method of financial assets transfer
Financial assets are derecognized in one of the following conditions: * the contractual right to receive cash flow
of such financial assets is terminated; * such financial assets have been transferred and almost all risks and
rewards on the financial asset Ownership are transferred to the transferee; * such financial assets have been
transferred and although the Company has neither transferred nor retained almost all risks and rewards on the
116Changchai Company Limited Annual Report 2024
financial asset Ownership it has given up control of such financial assets.If the enterprise neither transfers nor retains substantially all the risks and rewards of Ownership of a financial
asset and it has not abandoned the control of that financial asset the relevant financial asset is recognized at the
extent of continuing involvement in the transferred financial asset and the corresponding liability is recognized
accordingly. The degree of continuous involvement in the transferred financial asset refers to the risk level that the
enterprise faces due to the change of the value of the financial asset.Where a transfer of a financial asset in its entirely meets the criteria of de-recognition the difference between the
carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and
any cumulative change in fair value that has been recognized in other comprehensive income is recognized in
current profit or loss.Where a transfer of financial asset partly meets the criteria of de-recognition the carrying amount of the financial
asset transferred should be amortized between the part that is derecognized and the part that is not derecognized
according to the fair value and the difference between the sum of the consideration received from the transfer and
any cumulative change in fair value that has been recognized in other comprehensive income and should be
amortized to the derecognized part and the amortized above-mentioned carrying amount shall be recorded into
current profit or loss.When the Company uses financial assets sold with recourse or sells financial assets held in an endorsement it
must determine whether all risks and rewards of Ownership of the financial assets have been almost transferred. If
all the risks and rewards of Ownership of the financial asset are almost transferred to the transferee and the
financial asset is derecognized; if all the risks and rewards on the Ownership of the financial asset are retained the
financial asset is not derecognized; all the risks and rewards of Ownership of financial assets are not almost
transferred or retained continue to determine whether the Company retains the control over the assets and
perform the accounting operation based on the principles described in the preceding paragraphs.
(4) De-recognition of financial liabilities
If current obligations of financial liabilities (or a part thereof) are removed the Company derecognizes such
financial liabilities (or a part thereof). If the Company (borrower) signs an agreement with the lender to replace
the original financial liabilities by bearing new financial liabilities and contract clauses of new financial liabilities
and original financial liabilities are substantially different the original financial liabilities are derecognized while
recognizing a new financial liability. If the Company makes substantial modification to the contractual clauses of
original financial liabilities (or a part thereof) the original financial liabilities are derecognized and a new
financial liability is recognized according to the clauses after modification.If financial liabilities (or a part thereof) are derecognized the Company records the difference between their book
value and consideration paid (including non-cash assets transferred out or liabilities assumed) into current profits
and losses.
(5) Offset of financial assets and financial liabilities
When the Company has legal right to offset financial assets and financial liabilities of the recognized amount and
such legal rights are currently enforceable meanwhile the Company plans to settle by net assets or concurrently
liquidate such financial assets and repay such financial liabilities financial assets and financial liabilities are
presented in the balance sheet by net amounts after mutual offset. In addition financial assets and financial
liabilities are separately presented in the balance sheet which are not offset by each other.
(6) Determining method of the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can be received for the sale of an asset or the price he needs
to pay for transferring a liability in an orderly transaction occurring on the measurement date. Where the financial
117Changchai Company Limited Annual Report 2024
instruments exist on active market the Company determines their fair value by using quotation on active market.Quoted market prices in an active market refer to the prices that are readily to get regularly from the exchange the
broker the trade association pricing services institution etc. and they represent the actual market transaction
prices in the fair transactions. Where the financial instruments do not exist on active market the Company
determines their fair value by using valuation techniques. Valuation techniques include refers to the prices used in
recent market transactions by the parties that are familiar to the situation and are voluntary to participate in the
transaction refers to the current fair values of other essentially the same financial instruments discount cash flow
valuation option pricing models etc. At the time of valuation the Company leverages valuation techniques that
are applicable in the current circumstances and adequately supported by available data and other information
chooses the input value consistent with the characteristics of assets or liabilities considered by market participants
in transaction of relevant assets or liabilities and prefers to use the relevant observable input value. The value that
cannot be inputted is utilized when the relevant observable input value is unavailable or unfeasible to obtain.
11. Impairment of financial assets
The Company assesses impairment losses for the following financial assets: Financial assets measured at
amortized cost; Debt instruments measured at fair value through other comprehensive income (FVOCI); These
primarily include: Notes receivable; Accounts receivable; Contract assets; Other receivables; Debt investments;
Other debt investments; Long-term receivables; Additionally impairment provisions and credit impairment losses
for certain financial guarantee contracts are recognized in accordance with the accounting policies outlined below.
(1) Method for Recognizing Impairment Provisions
The Company measures expected credit losses (ECL) for the above items using either the general approach or the
simplified approach depending on their applicability and recognizes corresponding credit impairment losses.Credit loss refers to the present value of all contractual cash flows the Company is entitled to receive under the
contract discounted at the original effective interest rate minus the present value of all expected cash flows to be
collected. For purchased or originated credit-impaired (POCI) financial assets the discount rate applied is the
credit-adjusted effective interest rate.General Approach for ECL Measurement
At each reporting date the Company assesses whether the credit risk of a financial asset has increased
significantly since initial recognition:
If credit risk has increased significantly the Company measures the loss allowance at an amount equal to lifetime
ECL.If credit risk has not increased significantly the loss allowance is measured at 12-month ECL.The assessment incorporates all reasonable and supportable information including forward-looking data.For financial instruments with low credit risk at the reporting date the Company assumes no significant increase
in credit risk since initial recognition and applies the 12-month ECL approach.
(2) Criteria for Determining Significant Increase in Credit Risk
A significant increase in credit risk is presumed if the probability of default (PD) over the remaining lifetime at
the reporting date is substantially higher than the PD estimated at initial recognition. Unless exceptional
circumstances exist the Company uses changes in the 12-month PD as a reasonable proxy for lifetime PD
changes to determine whether credit risk has increased significantly.Factors considered in assessing significant increases in credit risk:
Actual or expected material deterioration in the debtor’s operating performance;
118Changchai Company Limited Annual Report 2024
Material adverse changes in the debtor’s regulatory economic or technological environment;
Significant decline in collateral value or quality of third-party guarantees/credit enhancements which may reduce
the debtor’s economic incentive to repay or affect PD;
Material changes in the debtor’s expected behavior or repayment patterns;
Changes in the Company’s credit management practices for the financial instrument.Low credit risk presumption:
At the reporting date if a financial instrument is determined to have low credit risk the Company assumes no
significant increase in credit risk since initial recognition. A financial instrument is considered low risk if:
The debtor has a strong capacity to meet short-term contractual cash flow obligations;
Adverse economic or operational conditions over a longer period would not necessarily impair the debtor’s ability
to fulfill its obligations.
(3) Portfolio-Based Assessment of Expected Credit Risk
The Company evaluates credit risk individually for financial assets with distinctly different risk profiles such as:
Receivables under dispute litigation or arbitration;
Receivables with clear evidence indicating the debtor’s inability to repay.For all other financial assets the Company groups them based on shared credit risk characteristics including:
Financial instrument type
Credit risk rating
Aging profile (e.g. current overdue segments)
(4) Accounting Treatment for Financial Asset Impairment
At period-end the Company calculates ECL for each category of financial assets:
If the ECL exceeds the current carrying amount of the impairment allowance the difference is recognized as an
impairment loss;
If the ECL is lower than the current allowance the difference is recognized as an impairment gain.
(5) Method for recognizing credit losses of various financial assets
* Bills receivable
The Company measures loss provision for bills receivable based on the amount equivalent to expected credit
losses throughout the existence period. Based on credit risk characteristics of bills receivable they are divided into
different portfolios:
Items Basis of determining the portfolio
Bank acceptance bill Acceptors are banks with low credit risks
Bank Acceptance Draft (Issued by Finance Companies) Issued by Finance Companies
Commercial acceptance bill All of commercial acceptance bill
* Accounts receivable and contract assets
With regard to accounts receivable and contract assets excluding major financing components the Company
measures loss reserve at the amount equivalent to the expected credit loss throughout the duration.With regard to accounts receivable and contract assets including major financing components the Company
chooses to always measure loss reserve at the amount equivalent to the expected credit loss throughout the
duration.
119Changchai Company Limited Annual Report 2024
In addition to accounts receivable with individual assessment of credit risks they are divided into different
portfolios based on their credit risk characteristics:
Items Basis of determining the portfolio
Credit risk characteristics portfolio Portfolio based on aging of receivables as credit risk characteristic
Related party within consolidation scope Related party within consolidation scope
a. The aging of the Company's receivables is calculated from the date of occurrence.For the portfolio the aging-based grouping method is adopted to measure expected credit losses (ECL):
Provision ratios of notes Provision ratios of Provision ratios of Provision ratios of other
Aging
Receivable (%) accounts receivable (%) contract assets (%) receivables (%)
Within 1 2.00 2.00 2.00 2.00
year
1-2 years 5.00 5.00 5.00 5.00
2-3 years 15.00 15.00 15.00 15.00
3-4 years 30.00 30.00 30.00 30.00
4-5 years 60.00 60.00 60.00 60.00
Over 5 100.00 100.00 100.00 100.00
years
b. Criteria for Recognizing Individually Assessed Bad Debt Provisions:
A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the
asset's expected future cash flows occur. Observable evidence of credit impairment includes but is not limited to
the following:
The issuer or debtor is experiencing significant financial difficulties.The debtor has breached contractual terms such as defaulting or delaying payments of interest or principal.The creditor has granted concessions to the debtor (e.g. payment extensions reduced interest rates or principal
forgiveness) that would not otherwise be considered due to the debtor's financial distress.The debtor is likely to enter bankruptcy or undergo financial restructuring.The active market for the financial asset has disappeared due to the financial difficulties of the issuer or debtor.The financial asset was acquired or originated at a significant discount reflecting incurred credit losses.Credit impairment may result from a combination of factors and does not necessarily stem from a single
identifiable event.* Receivables Financing
Financial assets classified as notes receivable and accounts receivable measured at fair value through other
comprehensive income (FVTOCI) shall be presented as follows:
"Receivables financing" for portions with original maturities of one year or less from the date of acquisition;
"Other debt investments" for portions with original maturities exceeding one year from the date of acquisition.
120Changchai Company Limited Annual Report 2024
Except for individually assessed accounts receivable these financial assets are grouped into different portfolios
based on their credit risk characteristics.Item Basis of determining the portfolio
Notes receivable Bank acceptance drafts issued by banks with high credit ratings
Accounts receivable This portfolio uses the aging of receivables as the credit risk characteristic.* Other receivables
The Company measures impairment losses based on whether the credit risks of other receivables have increased
significantly since initial recognition by using the amount equivalent to expected credit losses within the next 12
months or throughout the existence period. In addition to other receivables with individual assessment of credit
risks they are divided into different portfolios based on their credit risk characteristics:
Item Basis of determining the portfolio
Aging portfolio Other receivables excluding related parties
Related party within consolidation
Other receivables from related parties within the scope of consolidation
scope
12. Inventories
(1) Classification of Inventories
Inventories mainly include raw materials materials in outside processing work in progress finished goods and
low-value consumables.
(2) Measurement Method for Issuance
All categories of inventories are purchased and received at planned costs and issued using the weighted average
method. Finished goods costs are transferred at actual costs incurred during the period while cost of sales is
recognized using the weighted average method.
(3) Inventory Counting System
The perpetual inventory system is adopted.
(4) Amortization Method for Low-Value Consumables and Packaging Materials
Low-value consumables are fully amortized upon issuance (one-time amortization method). Packaging materials
are fully amortized upon issuance (one-time amortization method).
(5) Recognition Criteria and Provision Method for Inventory Write-Down
The net realizable value (NRV) of inventory refers to the estimated selling price in the ordinary course of business
minus the estimated costs to complete selling expenses and related taxes. The determination of NRV is based on
reliable evidence while also considering the purpose of holding the inventory and the impact of events after the
reporting period.At the balance sheet date inventories are measured at the lower of cost or NRV. Based on a comprehensive
year-end physical count provisions are made for inventories that are damaged obsolete priced below cost or
otherwise unrecoverable. Write-downs are recognized for individual inventory items where cost exceeds NRV
with the loss recorded in profit or loss.Methods for Determining NRV:
121Changchai Company Limited Annual Report 2024
Finished goods merchandise and materials held for sale: NRV = Estimated selling price ? Estimated
selling expenses ? Related taxes.Materials requiring further processing: NRV = Estimated selling price of finished products ? Estimated
costs to complete ? Estimated selling expenses ? Related taxes.Partial contract pricing: If part of an inventory item has a contract price while the remainder does not
NRV is determined separately.Aggregate assessment: For inventories with similar use or produced/sold in the same region
write-downs are assessed collectively if individual valuation is impractical.High-volume low-cost items: Write-downs are assessed by inventory category.If the factors that previously caused inventory write-downs no longer exist resulting in NRV exceeding the
carrying amount the reversal (limited to the original provision amount) is recognized in profit or loss.
13. Held-for-sale and Discontinued Operations
(1) Non-current Assets and Disposal Groups Held-for-sale
The Company classifies a non-current asset or disposal group as held-for-sale if its carrying amount will be
recovered principally through a sale transaction (including non-monetary asset exchanges with commercial
substance the same applies below) rather than through continuing use. The specific criteria are that all of the
following conditions are met: (i) the non-current asset or disposal group is available for immediate sale in its
present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; (ii)
the Company has approved the sale plan and obtained a firm purchase commitment; and (iii) the sale is expected
to be completed within one year. A disposal group refers to a group of assets to be disposed of by sale or
otherwise together as a group in a single transaction and liabilities directly associated with those assets that will
be transferred in the transaction. If the goodwill acquired in a business combination was allocated to a
cash-generating unit or group of cash-generating units to which the disposal group belongs under Accounting
Standards for Business Enterprises No. 8—Impairment of Assets the disposal group shall include the goodwill
allocated to it.When initially measuring or remeasuring non-current assets or disposal groups classified as held-for-sale at the
balance sheet date if their carrying amount exceeds their fair value less costs to sell the carrying amount is
written down to fair value less costs to sell. The amount of the write-down is recognized as an impairment loss in
profit or loss for the current period and a provision for impairment of held-for-sale assets is made. For disposal
groups the recognized impairment loss is first allocated to reduce the carrying amount of any goodwill in the
disposal group and then to reduce the carrying amounts of the other non-current assets in the disposal group that
are subject to the measurement requirements of Accounting Standards for Business Enterprises No.
42—Non-current Assets Held-for-sale and Discontinued Operations (hereinafter referred to as the "held-for-sale
standards") on a pro-rata basis. If the fair value less costs to sell of a held-for-sale disposal group increases in
subsequent balance sheet dates the previously recognized impairment loss shall be reversed. The reversal is
limited to the cumulative impairment loss recognized for the non-current assets in the disposal group that are
subject to the measurement requirements of the held-for-sale standards after classification as held-for-sale and the
reversal amount is recognized in profit or loss for the current period. The carrying amounts of the non-current
assets in the disposal group that are subject to the measurement requirements of the held-for-sale standards
(excluding goodwill) are increased on a pro-rata basis according to their relative carrying amounts. The carrying
amount of goodwill that has been reduced as well as impairment losses recognized for non-current assets subject
to the measurement requirements of the held-for-sale standards before classification as held-for-sale shall not be
122Changchai Company Limited Annual Report 2024
reversed.Non-current assets in a disposal group classified as held-for-sale are not depreciated or amortized while interest
and other expenses on liabilities in a held-for-sale disposal group continue to be recognized.When a non-current asset or disposal group no longer meets the criteria for classification as held-for-sale the
Company ceases to classify it as held-for-sale or removes the non-current asset from the held-for-sale disposal
group and measures it at the lower of: (i) its carrying amount before classification as held-for-sale adjusted for
any depreciation amortization or impairment that would have been recognized had it not been classified as
held-for-sale; and (ii) its recoverable amount.
(2) Criteria for Identifying and Presentation Methods for Discontinued Operations
A discontinued operation is a component of the Company that either has been disposed of or is classified as
held-for-sale and meets any of the following criteria: (i) the component represents a separate major line of
business or geographical area of operations; (ii) the component is part of a single coordinated plan to dispose of a
separate major line of business or geographical area of operations; or (iii) the component is a subsidiary acquired
exclusively with a view to resale.The Company presents the relevant profit or loss from discontinued operations in the income statement and
discloses the effects of discontinued operations in the notes.
14. Long-term Equity Investments
The long-term equity investments referred to in this section are those in which the Company has control joint
control or significant influence over the investee. Long-term equity investments in which the Company does not
have control joint control or significant influence are accounted for as financial assets measured at fair value
through profit or loss. For non-trading investments the Company may elect at initial recognition to classify them
as financial assets measured at fair value through other comprehensive income as detailed in Note V.10 "Financial
Instruments."
Joint control refers to the Company's shared control over an arrangement in accordance with relevant agreements
where decisions regarding the relevant activities of the arrangement require unanimous consent from all parties
sharing control. Significant influence refers to the Company's power to participate in the financial and operating
policy decisions of the investee but not to control or jointly control those policies with other parties.
(1) Determination of Investment Cost
For long-term equity investments acquired through business combinations under common control the initial
investment cost is measured at the share of the carrying value of the acquiree's equity in the consolidated financial
statements of the ultimate controlling party on the combination date. The difference between the initial investment
cost and the sum of the cash paid the carrying value of non-cash assets transferred and liabilities assumed is
adjusted against capital reserve. If capital reserve is insufficient the remaining difference is adjusted against
retained earnings. If equity instruments are issued as consideration the initial investment cost is measured at the
share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate
controlling party on the combination date with the total par value of the shares issued recognized as share capital.The difference between the initial investment cost and the total par value of the shares issued is adjusted against
capital reserve. If capital reserve is insufficient the remaining difference is adjusted against retained earnings. For
step-by-step acquisitions of equity in an acquiree under common control that ultimately result in a business
combination under common control the transactions are accounted for separately based on whether they
constitute a "package transaction." If they constitute a "package transaction" the transactions are treated as a
single transaction to obtain control. If not the initial investment cost on the combination date is measured at the
123Changchai Company Limited Annual Report 2024
share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate
controlling party. The difference between the initial investment cost and the sum of the carrying value of the
long-term equity investment before the combination and the carrying value of additional consideration paid on the
combination date is adjusted against capital reserve. If capital reserve is insufficient the remaining difference is
adjusted against retained earnings. Other comprehensive income recognized for equity investments held before the
combination date under the equity method or as financial assets measured at fair value through other
comprehensive income is not accounted for at this stage.For long-term equity investments acquired through business combinations not under common control the initial
investment cost is measured at the combination cost on the acquisition date. The combination cost includes the
sum of the fair value of assets paid liabilities incurred or assumed and equity instruments issued by the acquirer.For step-by-step acquisitions of equity in an acquiree that ultimately result in a business combination not under
common control the transactions are accounted for separately based on whether they constitute a "package
transaction." If they constitute a "package transaction" the transactions are treated as a single transaction to obtain
control. If not the initial investment cost of the long-term equity investment accounted for under the cost method
is the sum of the carrying value of the previously held equity investment and the additional investment cost. Other
comprehensive income related to the previously held equity investment accounted for under the equity method is
not accounted for at this stage.Intermediary fees such as audit legal and valuation consulting services as well as other related administrative
expenses incurred by the combining or acquiring party for the business combination are recognized in profit or
loss when incurred.For other equity investments not formed through business combinations the initial measurement is based on cost
which is determined according to the actual cash purchase price paid by the Company the fair value of equity
instruments issued by the Company the value agreed in the investment contract or agreement the fair value or
original carrying value of assets exchanged in non-monetary asset exchanges or the fair value of the long-term
equity investment itself. Directly attributable costs taxes and other necessary expenses are also included in the
investment cost. For additional investments that enable the Company to exert significant influence or joint control
over the investee (but not control) the cost of the long-term equity investment is the sum of the fair value of the
previously held equity investment determined in accordance with Accounting Standards for Business Enterprises
No. 22—Recognition and Measurement of Financial Instruments and the additional investment cost.
(2) Subsequent Measurement and Profit/Loss Recognition Methods
Long-term equity investments in which the Company has joint control (excluding joint operations) or significant
influence are accounted for using the equity method. Additionally the Company's financial statements use the cost
method to account for long-term equity investments that enable the Company to control the investee.* Long-term Equity Investments Accounted for Using the Cost Method
Under the cost method long-term equity investments are measured at initial investment cost with adjustments
made for additional investments or disposals. Investment income for the period is recognized based on the
Company's share of cash dividends or profits declared by the investee excluding any dividends or profits declared
but not yet distributed at the time of investment.* Long-term Equity Investments Accounted for Using the Equity Method
Under the equity method if the initial investment cost exceeds the Company's share of the investee's identifiable
net assets at fair value at the investment date the initial investment cost is not adjusted. If the initial investment
cost is less than the Company's share of the investee's identifiable net assets at fair value at the investment date
the difference is recognized in profit or loss and the cost of the long-term equity investment is adjusted
124Changchai Company Limited Annual Report 2024
accordingly.Under the equity method the Company recognizes investment income and other comprehensive income based on
its share of the investee's net profit or loss and other comprehensive income adjusting the carrying value of the
long-term equity investment accordingly. The carrying value is reduced by the Company's share of profits or cash
dividends declared by the investee. For other changes in the investee's equity not included in net profit or loss
other comprehensive income or profit distribution the carrying value of the long-term equity investment is
adjusted and recognized in capital reserve. When recognizing the share of the investee's net profit or loss the
investee's net profit is adjusted based on the fair value of identifiable assets at the investment date. If the investee's
accounting policies or reporting periods differ from the Company's the investee's financial statements are adjusted
to align with the Company's policies and periods before recognizing investment income and other comprehensive
income.For transactions between the Company and its associates or joint ventures where the assets contributed or sold do
not constitute a business unrealized internal transaction profits or losses attributable to the Company are
eliminated based on the Company's share and investment income is recognized after this adjustment. However
unrealized internal transaction losses attributable to impairment losses on the transferred assets are not eliminated.If the Company contributes assets constituting a business to a joint venture or associate and obtains long-term
equity investment without control the fair value of the contributed business is used as the initial investment cost
of the new long-term equity investment. The difference between the initial investment cost and the carrying value
of the contributed business is fully recognized in profit or loss. Similarly if the Company sells assets constituting
a business to a joint venture or associate the difference between the consideration received and the carrying value
of the business is fully recognized in profit or loss. If the Company purchases assets constituting a business from
an associate or joint venture the transaction is accounted for under Accounting Standards for Business Enterprises
No. 20—Business Combinations with gains or losses fully recognized.When recognizing the share of the investee's net losses the carrying value of the long-term equity investment and
other long-term interests that substantially constitute a net investment in the investee are reduced to zero. If the
Company has an obligation to assume additional losses a provision is recognized for the estimated obligation and
included in investment losses for the period. If the investee subsequently reports net profits the Company resumes
recognizing its share of profits after offsetting unconfirmed loss shares.* Acquisition of Minority Interests
When preparing consolidated financial statements the difference between the additional long-term equity
investment from acquiring minority interests and the share of the subsidiary's net assets calculated based on the
additional Ownership percentage continuously measured from the acquisition date (or combination date) is
adjusted against capital reserve. If capital reserve is insufficient the remaining difference is adjusted against
retained earnings.* Disposal of Long-term Equity Investments
In consolidated financial statements if the parent partially disposes of its long-term equity investment in a
subsidiary without losing control the difference between the disposal proceeds and the share of the subsidiary's
net assets corresponding to the disposed long-term equity investment is recognized in equity. If the partial disposal
results in loss of control over the subsidiary the relevant accounting policy described in Note 5.6(2) "Preparation
Methods for Consolidated Financial Statements" applies.For other disposals of long-term equity investments the difference between the carrying value of the disposed
equity and the actual proceeds is recognized in profit or loss.For long-term equity investments accounted for under the equity method if the remaining equity after disposal
125Changchai Company Limited Annual Report 2024
continues to be accounted for under the equity method the portion of other comprehensive income previously
recognized in equity is accounted for on the same basis as if the investee had directly disposed of the related assets
or liabilities. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or
loss other comprehensive income and profit distribution) are proportionally reclassified to profit or loss.For long-term equity investments accounted for under the cost method if the remaining equity after disposal
continues to be accounted for under the cost method other comprehensive income recognized before obtaining
control under the equity method or financial instrument standards is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities and proportionally reclassified to profit or loss.Changes in equity recognized under the equity method due to other changes in the investee's equity (excluding net
profit or loss other comprehensive income and profit distribution) are proportionally reclassified to profit or loss.If the Company loses control of an investee due to partial disposal of equity investments in its separate financial
statements the remaining equity that enables the Company to exert joint control or significant influence over the
investee is reclassified to the equity method with adjustments made as if the equity method had been applied from
the initial acquisition. If the remaining equity does not enable joint control or significant influence it is
reclassified under the financial instrument standards with the difference between fair value and carrying value at
the date of losing control recognized in profit or loss. Other comprehensive income recognized before obtaining
control under the equity method or financial instrument standards is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities. Changes in equity recognized under the equity
method due to other changes in the investee's equity (excluding net profit or loss other comprehensive income
and profit distribution) are reclassified to profit or loss at the date of losing control. For remaining equity
accounted for under the equity method other comprehensive income and other equity changes are proportionally
reclassified. For remaining equity reclassified under the financial instrument standards other comprehensive
income and other equity changes are fully reclassified.If the Company loses joint control or significant influence over an investee due to partial disposal of equity
investments the remaining equity is reclassified under the financial instrument standards with the difference
between fair value and carrying value at the date of losing joint control or significant influence recognized in
profit or loss. Other comprehensive income recognized under the equity method is accounted for on the same
basis as if the investee had directly disposed of the related assets or liabilities when the equity method is
discontinued. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or
loss other comprehensive income and profit distribution) are fully reclassified to investment income when the
equity method is discontinued.If the Company disposes of its equity investments in a subsidiary step-by-step through multiple transactions until
control is lost and these transactions constitute a "package transaction" they are treated as a single transaction to
dispose of the subsidiary's equity investments and lose control. Before losing control the difference between the
disposal proceeds and the carrying value of the disposed equity corresponding to the long-term equity investment
is initially recognized in other comprehensive income and reclassified to profit or loss at the time control is lost.
15. Investment Properties
Investment properties refer to properties held to earn rental income or for capital appreciation or both. These
include leased land use rights land use rights held for future appreciation and transfer and leased buildings.Investment properties are initially measured at cost. Subsequent expenditures related to investment properties are
capitalized if it is probable that future economic benefits associated with the property will flow to the Company
and the cost can be measured reliably. All other subsequent expenditures are recognized in profit or loss as
126Changchai Company Limited Annual Report 2024
incurred.The Company applies the cost model for subsequent measurement of investment properties and depreciates or
amortizes them using policies consistent with those applied to buildings or land use rights.The impairment testing method and provision method for investment properties are detailed in Note V.20
"Impairment of Long-term Assets."
When owner-occupied properties or inventories are converted to investment properties or vice versa the carrying
amount prior to conversion is used as the post-conversion carrying amount.When the use of an investment property changes to owner-occupied the property is reclassified as fixed assets or
intangible assets from the date of change. When the use of owner-occupied property changes to rental or capital
appreciation purposes the fixed asset or intangible asset is reclassified as an investment property from the date of
change.For conversions:
To investment properties measured using the cost model the pre-conversion carrying amount is used as the
post-conversion carrying amount.To investment properties measured using the fair value model the fair value at the conversion date is used as the
post-conversion carrying amount.An investment property is derecognized when disposed of or permanently withdrawn from use with no expected
future economic benefits. Gains or losses from the sale transfer retirement or damage of investment properties
are calculated as the disposal proceeds minus the carrying amount and related taxes/expenses and are recognized
in profit or loss.
16. Fixed Assets
(1) Recognition Criteria for Fixed Assets
Fixed assets are tangible assets held for the production of goods provision of services rental or administrative
purposes with a useful life exceeding one accounting year. Fixed assets are recognized only when it is probable
that related economic benefits will flow to the Company and their costs can be reliably measured. Fixed assets are
initially measured at cost taking into account the effects of estimated abandonment costs.
(2) Depreciation Methods for Various Categories of Fixed Assets
Depreciation of fixed assets is calculated on a straight-line basis over their useful lives commencing from the
month following the date when the assets are ready for intended use. The useful lives estimated residual values
and annual depreciation rates for each category of fixed assets are as follows:
Estimated useful life
Category Depreciation method Depreciation rate (%)
(years)
Houses and buildings Straight-line method 20-40 2.50-5
Machinery equipment Straight-line method 6-15 6.67-16.67
Transportation equipment Straight-line method 5-10 10-20
Other equipment Straight-line method 5-10 10-20
(2) Estimated residual value refers to the amount that the Company currently expects to obtain from disposal of
the asset after deducting estimated disposal expenses assuming the fixed asset has reached the end of its expected
127Changchai Company Limited Annual Report 2024
useful life and is in the expected condition at that time.
(3) The impairment testing method and provision method for fixed assets are detailed in Note V.20 "Impairment of
Long-term Assets."
(4) Other Disclosures
Subsequent expenditures related to fixed assets are capitalized if it is probable that future economic benefits
associated with the fixed asset will flow to the Company and the cost can be measured reliably. The carrying
amount of replaced parts is derecognized. All other subsequent expenditures are recognized in profit or loss as
incurred.A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected from its use
or disposal. Gains or losses arising from the sale transfer retirement or damage of fixed assets are calculated as
the disposal proceeds minus the carrying amount and related taxes/expenses and are recognized in profit or loss.The Company reviews the useful lives estimated residual values and depreciation methods of fixed assets at least
at each financial year-end. Changes in estimates are accounted for as changes in accounting estimates.
17. Construction in progress
The Company classifies construction in progress into two types: self-constructed and contractor-constructed.Construction in progress is transferred to fixed assets when the project is completed and reaches the intended
usable condition. The criteria for determining the intended usable condition shall meet any of the following
circumstances:
The physical construction (including installation) of the fixed asset has been fully completed or
substantially completed;
Trial production or test operation has been conducted and the results indicate that the asset can operate
normally or stably produce qualified products or the test operation results show that it can operate or
function normally;
The amount of expenditures on the construction of the fixed asset is minimal or almost no longer
occurs;
The constructed or acquired fixed asset has met or substantially met the design or contract requirements.When construction in progress reaches the intended usable condition it is transferred to fixed assets at the actual
project cost. For projects that have reached the intended usable condition but have not yet completed final
settlement they are first transferred to fixed assets at an estimated value. After final settlement is completed the
original provisional value is adjusted to the actual cost but no adjustment is made to previously calculated
depreciation.The impairment testing method and provision method for construction in progress are detailed in Note V.20
"Impairment of Long-term Assets."
18. Borrowing Costs
Borrowing costs include interest expenses on borrowings amortization of discounts or premiums ancillary costs
and exchange differences arising from foreign currency borrowings. Borrowing costs directly attributable to the
acquisition construction or production of a qualifying asset are capitalized when:
Expenditures for the asset have been incurred;
Borrowing costs have been incurred; and
128Changchai Company Limited Annual Report 2024
Activities necessary to prepare the asset for its intended use or sale have commenced.Capitalization ceases when the qualifying asset reaches its intended usable or saleable condition. All other
borrowing costs are recognized as expenses in the period in which they are incurred.For specific borrowings the amount to be capitalized is the actual interest expense incurred during the period less
any interest income earned on the unused portion of the borrowings deposited in banks or from temporary
investments.For general borrowings the amount to be capitalized is determined by multiplying the weighted average of
accumulated expenditures on the qualifying asset in excess of specific borrowings by the capitalization rate
applicable to the general borrowings. The capitalization rate is calculated based on the weighted average interest
rate of the general borrowings.During the capitalization period exchange differences on foreign currency specific borrowings are fully
capitalized while exchange differences on foreign currency general borrowings are recognized in profit or loss.A qualifying asset refers to assets such as fixed assets investment properties and inventories that require a
substantial period of time for their acquisition construction or production before they are ready for their intended
use or sale.If the acquisition construction or production of a qualifying asset is interrupted abnormally and the interruption
lasts for more than three consecutive months the capitalization of borrowing costs shall be suspended until the
acquisition construction or production activities recommence.A qualifying asset refers to assets such as fixed assets investment properties and inventories that require a
substantial period of time for their acquisition construction or production before they are ready for their intended
use or sale.
19. Intangible Assets
(1) Intangible Assets
Intangible assets refer to identifiable non-monetary assets without physical form that are owned or controlled by
the Company.Intangible assets are initially measured at cost. Expenditures related to intangible assets are capitalized if it is
probable that future economic benefits will flow to the Company and the costs can be reliably measured. All other
expenditures are recognized as expenses when incurred.Land use rights acquired are normally accounted for as intangible assets. For self-constructed buildings such as
factories the related land use rights expenditures and building construction costs are accounted for as intangible
assets and fixed assets separately. For purchased buildings the purchase price is allocated between the land use
rights and buildings. If the allocation cannot be made reasonably the entire amount is accounted for as fixed
assets.Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives
from the date when they are available for use based on the original cost less estimated residual value and
accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized.At the end of each period the useful lives and amortization methods of intangible assets with finite useful lives
are reviewed. Any changes are treated as changes in accounting estimates. In addition the useful lives of
intangible assets with indefinite useful lives are reviewed. If evidence indicates that the period of economic
benefits from the intangible asset is foreseeable its useful life is estimated and amortized according to the policy
for intangible assets with finite useful lives.
129Changchai Company Limited Annual Report 2024
(2) Research and Development Expenditures
The Company classifies internal research and development project expenditures into research phase expenditures
and development phase expenditures.Expenditures in the research phase are recognized as expenses when incurred.The Company's R&D expenditures include materials consumed labor and service costs amortization of R&D
equipment amortization of other intangible assets and fixed assets used in the development process and utilities
expenses.The Company's specific criteria for distinguishing between research phase and development phase expenditures:
The research phase refers to the stage of original and planned investigation undertaken to gain new scientific or
technical knowledge. The development phase refers to the stage of applying research findings or other knowledge
to a plan or design to produce new or substantially improved materials devices products etc. before commercial
production or use.Development phase expenditures are recognized as intangible assets only when all the following conditions are
met. Otherwise they are recognized as expenses when incurred:
* Technical feasibility of completing the intangible asset for use or sale;
* Intention to complete and use or sell the intangible asset;
* Ability to generate economic benefits including demonstrating a market for products using the intangible asset
or for the intangible asset itself or its usefulness for internal use;
* Availability of adequate technical financial and other resources to complete development and to use or sell the
intangible asset;
* Ability to reliably measure expenditures attributable to the development phase.The Company's specific conditions for capitalizing development phase expenditures: technical feasibility of
completion; intention to complete and use/sell; ability to generate economic benefits; availability of adequate
resources; and reliable measurement of attributable expenditures.If research phase and development phase expenditures cannot be distinguished all R&D expenditures are
recognized as expenses when incurred.
(3) Impairment Testing Method and Provision Method for Intangible Assets
The impairment testing method and provision method for intangible assets are detailed in Note V.20 "Impairment
of Long-term Assets."
20. Long-term Asset Impairment
For non-current non-financial assets such as fixed assets construction in progress intangible assets with finite
useful lives right-of-use assets investment properties measured at cost model and long-term equity investments
in subsidiaries joint ventures and associates the Company assesses at each balance sheet date whether there is
any indication of impairment. If any such indication exists the recoverable amount of the asset is estimated to
determine the impairment loss. Goodwill intangible assets with indefinite useful lives and intangible assets not
yet available for use are tested for impairment annually regardless of whether there is any indication of
impairment.When the recoverable amount is less than the carrying amount an impairment loss is recognized for the difference.The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Fair value
is determined based on the price in the sales agreement under fair transactions; if there is no sales agreement but
130Changchai Company Limited Annual Report 2024
an active market exists fair value is determined based on the asset's bid price; if neither exists fair value is
estimated based on the best available information. Costs of disposal include legal fees related taxes
transportation costs and other direct costs to bring the asset to a saleable condition. Value in use is determined by
discounting the estimated future cash flows expected from the asset's continuing use and ultimate disposal at an
appropriate discount rate. Impairment losses are calculated and recognized for individual assets. If it is difficult to
estimate the recoverable amount of an individual asset the recoverable amount is determined for the
cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets
that generates cash inflows independently.For goodwill presented separately in the financial statements the carrying amount of goodwill is allocated to
cash-generating units or groups of cash-generating units expected to benefit from the synergies of the business
combination when performing impairment tests. If the recoverable amount of a cash-generating unit or group of
units including allocated goodwill is less than its carrying amount the impairment loss is recognized. The
impairment loss is first allocated to reduce the carrying amount of goodwill allocated to the unit or group then to
other assets of the unit or group pro rata based on their carrying amounts.Once recognized impairment losses for the above assets are not reversed in subsequent periods.
21. Long-term Deferred Expenses
Long-term deferred expenses refer to expenses incurred but to be amortized over more than one year in the current
and future periods. The Company measures long-term deferred expenses at actual cost and amortizes them evenly
over the expected benefit period. For long-term deferred expenses that will not benefit future accounting periods
their carrying amounts are fully recognized in profit or loss when determined.
22. Contract Liabilities
Contract liabilities represent the Company's obligation to transfer goods or services to customers for which
consideration has been received or is receivable. If the customer has paid consideration or the Company has
obtained an unconditional right to payment before transferring goods or services the Company presents the
amount received or receivable as a contract liability at the earlier of when payment is actually received or when
payment is due. Contract assets and liabilities under the same contract are presented net while those under
different contracts are not offset.
23. Employee Benefits
The Company's employee benefits mainly include short-term employee benefits post-employment benefits and
termination benefits.Short-term benefits mainly include wages bonuses allowances and subsidies employee welfare expenses
medical insurance maternity insurance work injury insurance housing provident fund labor union funds and
employee education funds and non-monetary benefits. The Company recognizes actual short-term employee
benefits as liabilities during the accounting periods when employees render services and charges them to profit or
loss or relevant asset costs. Non-monetary benefits are measured at fair value.Post-employment benefits mainly include basic pension insurance and unemployment insurance.Post-employment benefit plans include defined contribution plans. For defined contribution plans the
corresponding payable amounts are charged to relevant asset costs or profit or loss when incurred.
131Changchai Company Limited Annual Report 2024
Termination benefits are recognized as employee benefit liabilities when the Company can no longer unilaterally
withdraw the termination benefits offered under the redundancy plan or proposal or when the Company
recognizes costs related to restructuring involving termination benefits whichever is earlier and charged to profit
or loss. However termination benefits expected to be paid more than twelve months after the reporting period are
treated as other long-term employee benefits.Internal retirement plans are accounted for using the same principles as termination benefits above. The Company
recognizes salaries and social insurance contributions to be paid to internally retired employees from the date they
stop rendering services to the normal retirement date as profit or loss (termination benefits) when the recognition
criteria for provisions are met.Other long-term employee benefits provided by the Company are accounted for as defined contribution plans if
they meet the criteria; otherwise they are accounted for as defined benefit plans.
24. Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.Provisions are initially measured at the best estimate of the expenditure required to settle the present obligation
and the carrying amounts are reviewed at each balance sheet date.If all or part of the expenditure required to settle a provision is expected to be reimbursed by a third party the
reimbursement is recognized as a separate asset when its receipt is virtually certain and the amount recognized
does not exceed the carrying amount of the provision.
25. Share-based Payment
(1) Accounting Treatment for Share-based Payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities based on equity
instruments are assumed in exchange for services provided by employees or other parties. Share-based payments
are classified into equity-settled share-based payments and cash-settled share-based payments.* Equity-settled Share-based Payment
For equity-settled share-based payments to obtain employee services the fair value of the equity instruments
granted is measured at the grant date.If the vesting of the equity instruments is conditional upon completing a specified service period or meeting
performance conditions the fair value is recognized over the vesting period on a straight-line basis based on
the best estimate of the number of instruments expected to vest with corresponding increases in capital
reserves.If the equity instruments vest immediately upon grant the fair value is recognized as an expense on the grant
date with a corresponding increase in capital reserves.At each balance sheet date during the vesting period the Company revises its estimate of the number of equity
instruments expected to vest based on the latest information (e.g. changes in the number of employees eligible for
vesting). Any adjustments are recognized in the current period’s costs or expenses with corresponding
adjustments to capital reserves.For equity-settled share-based payments to obtain services from non-employees:
132Changchai Company Limited Annual Report 2024
If the fair value of the services received can be reliably measured the expense is recognized based on the fair
value of the services at the acquisition date.If the fair value of the services cannot be reliably measured but the fair value of the equity instruments can the
expense is recognized based on the fair value of the equity instruments at the service acquisition date with a
corresponding increase in shareholders’ equity.* Cash-settled Share-based Payment
Cash-settled share-based payments are measured at the fair value of the liability incurred determined based on
shares or other equity instruments.If the instruments vest immediately upon grant the liability is recognized on the grant date as an expense.If vesting is conditional upon completing a service period or meeting performance conditions the expense is
recognized over the vesting period based on the best estimate of the number of instruments expected to vest
with a corresponding increase in liabilities.At each balance sheet date until settlement the liability is remeasured at fair value with changes recognized in
profit or loss.
(2) Accounting for Modifications or Terminations of Share-based Payment Plans
If a modification increases the fair value of the equity instruments granted the incremental fair value (i.e.the difference between the fair value before and after modification) is recognized as additional service cost.If a modification reduces the total fair value or is otherwise unfavorable to employees the original
accounting treatment continues as if the modification never occurred unless the equity instruments are
partially or fully canceled.If granted equity instruments are canceled during the vesting period the remaining unvested amount is
recognized immediately in profit or loss as an accelerated vesting expense with a corresponding adjustment
to capital reserves. If employees or other parties fail to meet non-vesting conditions (despite having the
option to do so) the grant is treated as canceled.
(3) Accounting for Share-based Payments Involving the Company’s shareholders or Controlling Parties
For share-based payment transactions between the Company and its shareholders or controlling parties where one
party (the settlement entity) is within the Company’s consolidated scope and the other (the service recipient) is
outside:
Consolidated Financial Statements Treatment:
If the settlement entity settles using its own equity instruments the transaction is treated as an equity-settled
share-based payment. Otherwise it is treated as a cash-settled share-based payment.If the settlement entity is an investor in the service recipient it recognizes a long-term equity investment at
the grant-date fair value of the equity instruments or liability with a corresponding increase in capital
reserves (other capital reserves) or liabilities.If the service recipient has no settlement obligation or grants its own equity instruments to employees the
transaction is treated as equity-settled. If the service recipient has a settlement obligation and grants
instruments other than its own equity the transaction is treated as cash-settled.Individual Financial Statements Treatment:
For transactions between entities within the Company’s consolidated scope where the service recipient and
settlement entity differ each entity accounts for the transaction in its individual financial statements following the
above principles.
133Changchai Company Limited Annual Report 2024
26. Other Financial Instruments Such as Preference Shares and Perpetual Bonds
(1) Classification of Perpetual Bonds and Preference Shares
Financial instruments such as perpetual bonds and preference shares issued by the Company shall be classified as
equity instruments only if they meet all of the following conditions:
* The instrument does not impose any contractual obligation to deliver cash or other financial assets to another
party or to exchange financial assets or liabilities under potentially unfavorable conditions;
* If settlement may or must occur using the Company’s own equity instruments in the future:
For non-derivative instruments there is no contractual obligation to deliver a variable number of the
Company’s own equity instruments for settlement;
For derivative instruments settlement can only be made by exchanging a fixed number of the Company’s
own equity instruments for a fixed amount of cash or other financial assets.Financial instruments issued by the Company that do not meet the above conditions shall be classified as financial
liabilities.For compound financial instruments issued by the Company:
The liability component is measured at fair value and recognized as a liability.The residual amount (total proceeds received minus the fair value of the liability component) is recognized as
"other equity instruments."
Transaction costs are allocated between the liability and equity components in proportion to their respective
shares of the total issuance proceeds.
(2) Accounting Treatment for Perpetual Bonds and Preference Shares
For perpetual bonds and preference shares classified as financial liabilities:
Interest dividends gains/losses and gains/losses from redemption or refinancing are recognized in profit or loss
except for borrowing costs eligible for capitalization (see Note V.18 "Borrowing Costs").For perpetual bonds and preference shares classified as equity instruments:
Issuance (including refinancing) repurchase sale or cancellation is treated as a change in equity with related
transaction costs deducted from equity.Distributions to holders of equity instruments are treated as profit distributions.The Company does not recognize changes in the fair value of equity instruments.
27. Revenue
The Company recognizes revenue when control of the relevant goods is transferred to the customer provided all
the following conditions are met: the contract has been approved by all parties who are committed to fulfilling
their respective obligations; the contract clearly specifies the rights and obligations of each party regarding the
goods or services to be transferred; the contract contains clear payment terms related to the goods to be transferred;
the contract has commercial substance meaning its performance will change the risk timing or amount of the
Company's future cash flows; and the consideration to which the Company is entitled for transferring goods to the
customer is probable of collection.At contract inception the Company identifies the distinct performance obligations in the contract and allocates the
transaction price to each performance obligation based on the relative stand-alone selling prices of the goods or
services promised. In determining the transaction price the Company considers the effects of variable
134Changchai Company Limited Annual Report 2024
consideration significant financing components in the contract non-cash consideration and consideration payable
to customers.For each performance obligation the Company recognizes revenue over time by measuring progress toward
complete satisfaction of that performance obligation if any of the following criteria are met: the customer
simultaneously receives and consumes the benefits as the Company performs; the customer controls the asset as it
is created or enhanced; or the asset has no alternative use and the Company has an enforceable right to payment
for performance completed to date. Progress is measured using an input method appropriate to the nature of the
goods transferred. When progress cannot be reasonably measured revenue is recognized to the extent of costs
incurred that are expected to be recoverable until progress can be reasonably measured.If none of the above criteria are met revenue is recognized at the point in time when control of the goods is
transferred to the customer. In assessing whether control has transferred the Company considers indicators
including: the Company's present right to payment; transfer of legal title; physical possession; transfer of
significant risks and rewards of Ownership; customer acceptance; and other indicators of control transfer.For contracts with variable consideration the Company estimates the amount using either the expected value or
most likely amount method. The transaction price including variable consideration does not exceed the amount for
which it is highly probable that cumulative revenue recognized will not reverse when uncertainty is resolved. At
each reporting date the Company reassesses estimates of variable consideration included in the transaction price.Consideration payable to a customer is deducted from the transaction price unless it is for distinct goods or
services with the reduction recognized at the later of revenue recognition or payment (or commitment to pay)
date.The Company assesses whether it is a principal or agent based on whether it controls the goods or services before
transfer to the customer. As principal revenue is recognized at the gross amount of consideration; as agent
revenue is recognized at the net amount retained after paying other parties.The Company's specific revenue recognition methods are as follows:
Sales contracts typically contain a single performance obligation to transfer goods satisfied at a point in time.Domestic sales revenue is recognized when: goods are delivered and accepted per contract; payment is received or
collectability is probable; significant risks/rewards are transferred; and legal title passes.Export sales revenue is recognized when: goods are cleared through customs with bill of lading obtained; payment
is received or collectability is probable; significant risks/rewards are transferred; and legal title passes.Interest income is recognized based on time and effective interest rate.
28. Contract Costs
Contract costs comprise costs to fulfill and costs to obtain contracts.Costs to fulfill are capitalized as assets if:
(1) Directly related to a contract (labor materials overhead client-reimbursable costs);
(2) Enhance resources for future performance; and
(3) Probable of recovery.
Incremental costs to obtain contracts are capitalized if probable of recovery unless the amortization period would
be one year or less.Capitalized contract costs are amortized consistently with revenue recognition.Impairment losses are recognized when carrying amount exceeds the higher of:
135Changchai Company Limited Annual Report 2024
(1) Expected remaining consideration; and
(2) Estimated costs to complete transfer.
Reversals cannot exceed the carrying amount that would have existed without impairment.
29. Government Grants
Government grants refer to monetary or non-monetary assets obtained by the Company from the government
without compensation excluding capital contributions made by the government as an investor with corresponding
Ownership rights. Government grants are classified into asset-related government grants and income-related
government grants. Grants obtained for the acquisition or construction of long-term assets through other means
are defined as asset-related government grants; other government grants are defined as income-related
government grants. If government documents do not explicitly specify the grant recipient the following methods
are used to classify the grants:
(1) For government documents that specify particular projects classification is based on the relative proportion of
expenditures forming assets versus expenses in the project budget with this proportion reviewed at each balance
sheet date and adjusted if necessary;
(2) For government documents that only provide general descriptions of usage without specifying particular
projects the grants are treated as income-related government grants.Government grants in the form of monetary assets are measured at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot be reliably
determined they are measured at nominal amount. Government grants measured at nominal amount are directly
recognized in current period profit or loss.The Company generally recognizes and measures government grants based on the actual amount received.However at period-end if there is conclusive evidence that the Company meets the relevant conditions of fiscal
support policies and expects to receive fiscal support funds the grants are measured at the receivable amount.Government grants measured at receivable amount must simultaneously meet the following conditions:
(1) The receivable grant amount has been confirmed by the competent government authority or can be reasonably
estimated based on officially released fiscal fund management regulations with no significant uncertainty
expected in the amount;
(2) The grants are based on fiscal support projects and corresponding fiscal fund management regulations
officially released by local finance departments in accordance with the "Government Information Disclosure
Regulations" and such regulations must be universally applicable (available to any enterprise meeting the
specified conditions) rather than specifically designed for particular enterprises;
(3) The relevant grant approval documents clearly specify the payment timeline and the payment is supported by
corresponding fiscal budgets thereby reasonably ensuring receipt within the stipulated period.Asset-related government grants are recognized as deferred income and systematically amortized into current
period profit or loss over the useful life of the relevant assets. Income-related government grants used to
compensate for future related costs expenses or losses are recognized as deferred income and amortized into
current period profit or loss when the related costs expenses or losses are recognized; those used to compensate
for already incurred related costs expenses or losses are directly recognized in current period profit or loss.Government grants containing both asset-related and income-related components are accounted for separately by
component; if the components cannot be reasonably distinguished the entire grant is classified as income-related.Government grants related to the Company's ordinary activities are recognized in other income or offset against
136Changchai Company Limited Annual Report 2024
related costs and expenses based on the economic substance of the transaction; grants unrelated to ordinary
activities are recognized in non-operating income or expenses.When recognized government grants need to be returned any remaining deferred income balance is first
offset with any excess recognized in current period profit or loss; in other cases the return is directly recognized
in current period profit or loss.
30. Deferred Tax Assets/Deferred Tax Liabilities
Deferred tax assets or deferred tax liabilities are recognized based on the differences between the carrying
amounts and tax bases of assets and liabilities (including items not recognized as assets or liabilities but having
determinable tax bases under tax laws) calculated using the applicable tax rates expected to apply when the assets
are recovered or liabilities are settled.Deferred tax assets are recognized only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences can be utilized. At the balance sheet date if there is conclusive
evidence indicating sufficient taxable profit will likely be available in future periods to utilize deductible
temporary differences previously unrecognized deferred tax assets are recognized.At each balance sheet date the carrying amounts of deferred tax assets are reviewed. If it is no longer probable
that sufficient taxable profit will be available to realize the benefit of the deferred tax asset the carrying amount is
reduced. The reduction is reversed when it becomes probable that sufficient taxable profit will be available.The Company's current tax and deferred tax are recognized as income tax expense or income in profit or loss
except for income taxes arising from: business combinations; and transactions or events recognized directly in
equity.When the Company has a legally enforceable right to settle current tax assets and liabilities on a net basis and
intends either to settle on a net basis or to realize the asset and settle the liability simultaneously current tax assets
and current tax liabilities are presented net.
31. Leases
(1) The Company as a Lessee
The Company's leased assets are primarily buildings.At the commencement date of the lease term the Company recognizes right-of-use assets and lease liabilities for
leases other than short-term leases and leases of low-value assets and recognizes depreciation expenses and
interest expenses separately during the lease term.For short-term leases and leases of low-value assets the Company recognizes lease payments on a straight-line
basis as expenses in the respective periods of the lease term.* Right-of-use Assets
Right-of-use assets represent the lessee's right to use the leased asset during the lease term. At the commencement
date of the lease term right-of-use assets are initially measured at cost which includes:
The initial measurement amount of the lease liability;
Lease payments made at or before the commencement date less any lease incentives received;
Initial direct costs incurred by the lessee;
Estimated costs to be incurred by the lessee for dismantling and removing the leased asset restoring the site where
the asset is located or returning the asset to the condition required by the lease terms.
137Changchai Company Limited Annual Report 2024
The Company depreciates right-of-use assets using the straight-line method by category. For assets where
Ownership is reasonably certain to be obtained at the end of the lease term depreciation is calculated over the
remaining useful life of the leased asset. For assets where Ownership cannot be reasonably determined
depreciation is calculated over the shorter of the lease term or the remaining useful life of the leased asset.The Company determines whether right-of-use assets are impaired and accounts for them in accordance with the
relevant provisions of Accounting Standards for Business Enterprises No. 8—Impairment of Assets.* Lease Liabilities
Lease liabilities are initially measured at the present value of lease payments not yet paid at the commencement
date of the lease term. Lease payments include:
Fixed payments (including in-substance fixed payments) less any lease incentives;
Variable lease payments that depend on an index or rate;
Amounts expected to be payable under residual value guarantees provided by the lessee;
The exercise price of purchase options if the lessee is reasonably certain to exercise the option;
Payments required to exercise termination options if the lease term reflects the lessee exercising the termination
option.The Company uses the interest rate implicit in the lease as the discount rate; if this cannot be reasonably
determined the Company's incremental borrowing rate is used. Interest expenses on lease liabilities are calculated
using a fixed periodic interest rate and recorded in financial expenses. The periodic interest rate is the discount
rate or revised discount rate used by the Company.Variable lease payments not included in the measurement of lease liabilities are recognized in profit or loss when
incurred.When the Company's assessment of renewal options termination options or purchase options changes the lease
liability is remeasured at the present value of the revised lease payments using the revised discount rate with
corresponding adjustments to the carrying amount of the right-of-use asset. When in-substance fixed payments
expected payments under residual value guarantees or variable lease payments dependent on an index or rate
change the lease liability is remeasured at the present value of the revised lease payments using the original
discount rate with corresponding adjustments to the carrying amount of the right-of-use asset.* Short-term Leases and Leases of Low-value Assets
For short-term leases (leases with a term of 12 months or less at commencement date) and leases of low-value
assets (value below RMB 2000) the Company applies a simplified approach by not recognizing right-of-use
assets or lease liabilities and instead recognizes lease payments on a straight-line basis or another systematic and
rational basis as expenses in the respective periods of the lease term.
(2) The Company as a Lessor
* Operating Leases
The Company recognizes lease receipts from operating leases as rental income on a straight-line basis over the
lease term. Variable lease payments not included in lease receipts are recognized in profit or loss when incurred.* Finance Leases
At the commencement date of the lease term the Company recognizes finance lease receivables and derecognizes
the leased assets. Finance lease receivables are initially measured at the net investment in the lease (the sum of the
unguaranteed residual value and the present value of lease receipts not yet received at the commencement date
discounted using the interest rate implicit in the lease) with interest income recognized during the lease term
using a fixed periodic interest rate. Variable lease payments not included in the measurement of the net investment
138Changchai Company Limited Annual Report 2024
in the lease are recognized in profit or loss when incurred.
32. Methods for Determining Materiality Thresholds and Basis for Selection
√ Applicable □ Not applicable
Disclosure Matters Involving Materiality Materiality Threshold Determination Methods and Selection
Judgment Criteria Basis
Significant individually assessed receivables Receivables with ending balance exceeding RMB
with specific bad debt provisions 1000000
Construction in progress projects either transferred to fixed
Material construction in progress
assets or with ending balance exceeding RMB 3000000
Significant accounts payable aged over one Accounts payable with ending balance exceeding RMB
year or past due 1000000
Advance receipts with ending balance exceeding RMB
Material advance receipts aged over one year
1000000
Contract liabilities with ending balance exceeding RMB
Material contract liabilities aged over one year
1000000
Other payables with ending balance exceeding RMB
Material other payables aged over one year
1000000
Significant cash receipts related to investing Individual investing activities with cash inflows exceeding
activities RMB 3000000
Significant cash payments related to investing Individual investing activities with cash outflows exceeding
activities RMB 3000000
Subsidiaries whose total assets exceed 5% of consolidated
Material non-wholly owned subsidiaries
total assets
33. Other Significant Accounting Policies and Accounting Estimates
Debt Restructuring
(1) Timing of Recognizing Debt Restructuring Gains and Losses
The Company may derecognize the relevant receivables and payables and recognize gains and losses related to
debt restructuring only on the debt restructuring completion date when the derecognition conditions for financial
assets and financial liabilities are met. The debt restructuring completion date refers to the date when the board of
directors and shareholders' meeting resolutions have been approved the debt restructuring agreement has been
signed or the court ruling has been issued the relevant assets have been transferred to the creditor the debt has
been converted into capital or the modified debt terms have commenced execution.
139Changchai Company Limited Annual Report 2024
For debt restructuring through asset settlement the recognition point is when the relevant assets have been
delivered and the Ownership transfer procedures have been completed. For debt restructuring through conversion
of debt into equity the recognition point is when the industrial and commercial registration procedures or the
equity registration with the registration authority have been completed. For debt restructuring through
modification of debt terms the recognition point is when it is determined that the terms can be performed and
execution has commenced. Debt restructuring negotiations that commenced during the reporting period but were
completed after the balance sheet date are not treated as post-balance-sheet events.
(2) Accounting Treatment by the Creditor
When the Company acts as a creditor the difference between the fair value of the relinquished claim and its
carrying amount is recognized in profit or loss.
(3) Accounting Treatment by the Debtor
A. For debt restructuring through asset settlement the relevant assets and the settled debt are derecognized when
the derecognition conditions are met. The difference between the carrying amount of the settled debt and the
carrying amount of the transferred assets is recognized in profit or loss.B. For debt restructuring through conversion of debt into equity instruments the settled debt is derecognized when
the derecognition conditions are met. The difference between the carrying amount of the settled debt and the
amount determined based on the fair value of the equity instruments is recognized in profit or loss.C. For debt restructuring through modification of other terms the restructured debt is re-recognized and
remeasured. The difference between the remeasured debt and the original debt is recognized in profit or loss.D. For debt restructuring through settlement with multiple assets or a combination of methods the equity
instruments and restructured debt are recognized and measured in accordance with the Accounting Standards for
Business Enterprises. The difference between the carrying amount of the settled debt and the sum of the carrying
amounts of the transferred assets and the recognized amounts of the equity instruments and restructured debt is
recognized in profit or loss.
34. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Unit: RMB
Name of report items
Changes to the accounting policies and why that are significantly Affected amount
affected
1. Implementation of "Accounting Standards for Business Enterprises
The implementation
Interpretation No. 17"
of Interpretation No.In October 2023 the Ministry of Finance issued "Accounting 17 has not had any
Standards for Business Enterprises Interpretation No. 17" (Cai Kuai material impact on
[2023] No. 21) which stipulates relevant contents regarding "the 0.00the Company's
classification of current liabilities and non-current liabilities" financial statements
"disclosures about supplier financing arrangements" and "accounting for the reporting
treatment for sale and leaseback transactions". This interpretation shall period.be applied from January 1 2024. Our company has implemented the
140Changchai Company Limited Annual Report 2024
provisions of Interpretation No. 17 from January 1 2024. The
implementation of the relevant provisions of Interpretation No. 17 has
no material impact on our company's financial statements for the
reporting period.
2. Implementation of "Accounting Standards for Business Enterprises
Interpretation No. 18"
In December 2024 the Ministry of Finance issued "Accounting
Standards for Business Enterprises Interpretation No. 18" (Cai Kuai
[2024] No. 24) which stipulates that for warranty-type quality Refer to "Notes to
assurance that does not constitute a separate performance obligation Refer to "Notes to Changes in
the accounting treatment shall follow the relevant provisions of Changes in Accounting
"Accounting Standards for Business Enterprises No. 13 - Accounting Policies" Policies" for
Contingencies". Specifically the estimated liability amount shall be for details. details.recorded by debiting accounts such as "Cost of Main Business" and
"Cost of Other Business" and crediting the "Estimated Liabilities"
account. This interpretation shall be effective from the date of issuance
with early adoption permitted for the fiscal year in which it is
published.Notes to Changes in Accounting Policies:
Implementation of "Accounting Standards for Business Enterprises Interpretation No. 18" had the following
impacts on the financial statements as of January 1 2024:
Unit: RMB
Consolidated Financial Statements Parent Company Financial Statements
Items Amount as of Amount as of Amount as of Amount as of
December 31 2023 January 1 2024 December 31 2023 January 1 2024
(Before) (After) (Before) (After)
Provisions 60070382.24 60070382.24
Other Payables 159023382.81 98953000.57 151919473.64 91849091.40
(continued)
FY2023
Consolidated Financial Statements Parent Company Financial Statements
Items
Amount before Amount before
Amount after change Amount after change
change change
Operating Costs 1838755831.41 1884289338.95 1788129884.67 1831801124.99
Selling Expenses 99603282.16 54069774.62 92935731.73 49264491.41
141Changchai Company Limited Annual Report 2024
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of
the NewAccounting Standards Implemented since 2024
√ Applicable □ Not applicable
Implementation of "Accounting Standards for Business Enterprises Interpretation No. 18" had the following
impacts on the financial statements as of January 1 2024:
Unit: RMB
Consolidated Financial Statements Parent Company Financial Statements
Items Amount as of Amount as of Amount as of Amount as of
December 31 January 1 2024 December 31 2023 January 1 2024
2023 (Before) (After) (Before) (After)
Provisions 60070382.24 60070382.24
Other Payables 159023382.81 98953000.57 151919473.64 91849091.40
(continued)
FY2023
Consolidated Financial Statements Parent Company Financial Statements
Items
Amount before Amount before
Amount after change Amount after change
change change
Operating Costs 1838755831.41 1884289338.95 1788129884.67 1831801124.99
Selling Expenses 99603282.16 54069774.62 92935731.73 49264491.41
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax rate
Output VAT is calculated on taxable revenue at rates of 13% 9% 6%
VAT and 5% with VAT payable being the balance after deducting input VAT
credits allowable in the current period.Urban maintenance and Payment is calculated and made in accordance with local tax regulations
construction tax applicable to each tax-paying unit.Enterprise income tax See the table below for details.Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Changchai Company Limited 15%
142Changchai Company Limited Annual Report 2024
Changchai Wanzhou Diesel Engine Co. Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co. Ltd. 25%
Changzhou Horizon Investment Co. Ltd. 25%
Changzhou Changchai Horizon Agricultural Equipment Co. Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd. 15%
Jiangsu Changchai Machinery Co. Ltd. 25%
Changzhou Xingsheng Real Estate Management Co. Ltd. 5%
Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. 15%
2. Tax Preference
(1) Preferential Corporate Income Tax Rates
On November 6 2024 the Company was re-certified as a High-Tech Enterprise and continues to enjoy a
preferential corporate income tax rate of 15% during the reporting period.
(2) Western Development Policy Benefit
The controlling subsidiary Changchai Wanzhou Diesel Engine Co. Ltd. qualifies for the Western Development
tax incentive under:
Notice on Tax Policies for the Implementation of Western Development Strategy (jointly issued by the Ministry of
Finance GAC and SAT)
Announcement No. 23 [2020] of the Ministry of Finance (extending the Western Development corporate income
tax policy)
From January 1 2011 to December 31 2030 it is subject to a reduced tax rate of 15%.
(3) High-Tech Subsidiary
On November 6 2023 the wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd.was re-certified as a High-Tech Enterprise and applies a 15% preferential tax rate during the reporting period.
(4) Small and Micro Enterprise
The wholly-owned subsidiary Changzhou Xingsheng Real Estate Management Co. Ltd. qualifies as an eligible
small and low-profit enterprise and is taxed at 5% during the reporting period.
(5) High-Tech Certification
On December 12 2022 the subsidiary Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. obtained
High-Tech Enterprise certification and benefits from a 15% tax rate during the reporting period.
143Changchai Company Limited Annual Report 2024
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 84482.59 157238.05
Bank deposits 933972475.61 963604998.68
Other monetary assets 129643534.39 120105730.14
Total 1063700492.59 1083867966.87
Including: Total amount of funds
deposited overseas
Total amount of funds with usage
restrictions due to mortgage 171018607.75 112238443.41
pledge freezing or other reasons
Other Disclosures:
As of the period-end the other monetary funds within cash and cash equivalents include:
Accrued interest on time deposits: RMB 380122.48
Restricted funds:
Bills guarantee deposits: RMB 126841969.27
Bid/tender bonds and performance bonds: RMB 1796516.00
Time deposits and accrued interest (restricted): RMB 42380122.48
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
through profit or loss 303667459.65 225641429.94
Of which:
Stocks 52598990.00 85295021.00
Bank financial products 251068469.65 140346408.94
Of which:
Total 303667459.65 225641429.94
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
144Changchai Company Limited Annual Report 2024
Bank acceptance bill 318814017.13 161632567.94
Total 318814017.13 161632567.94
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debtprovision Carrying amount
Bad debt
provision
Category Carryi CarryWithdr ng Withdr ing
Amou Propor Amou awal value Amoun Proport Amoun awal value
nt tion nt propor t ion t proport
tion ion
Notes
receivable for
which bad
debt 0.00 0.00% 0.00 0.00% 0.00 0.00 0.00% 0.00 0.00% 0.00
provision
separately
accrued
Of which:
Notes
receivable for
which bad 31881
debt 4017. 100.00
31881161631616
%0.000.00%4017.2567.9
100.00
% 0.00 0.00% 3256provision 13 13 4 7.94
accrued by
group
Of which:
Bank 31881 31881 16163 1616
acceptance 4017. 100.00% 0.00 0.00% 4017. 2567.9
100.00
% 0.00 0.00% 3256bills 13 13 4 7.94
3188131881161631616
Total 4017. —— 0.00 0.00% 4017. 2567.9 —— 0.00 0.00% 3256
131347.94
Number of categories under the portfolio approach: 1
Provision for Bad Debts by Portfolio: the provision for bad debts is calculated based on the bank acceptance bills
portfolio
Unit: RMB
Ending balance
Category
Carrying amount Bad debt provision Withdrawal proportion
Bank acceptance bill 318814017.13 0.00 0.00%
Total 318814017.13 0.00
145Changchai Company Limited Annual Report 2024
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable √ Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
Bank acceptance bill 234736335.20
Total 234736335.20
(5) Notes Transferred to Accounts Receivable Due to Non-performance by Issuers at Period-end
As of the period-end there were no notes transferred to accounts receivable due to non-performance by issuers.
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 441388545.87 313597375.85
1 to 2 years 6801120.23 1873298.19
2 to 3 years 936696.44 4436548.28
Over 3 years 140104147.16 144403241.11
3 to 4 years 4100421.27 5278022.33
4 to 5 years 4863744.65 1815570.52
Over 5 years 131139981.24 137309648.26
Total 589230509.70 464310463.43
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying Bad debt Carryi Carrying Bad debt Carryin
amount provision ng amount provision g value
146Changchai Company Limited Annual Report 2024
Withd value Withd
Amou Propo Amou rawal Amou Propor Amou rawal
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable
withdrawal of 2685 2685 3380 33805
100.0100.0
Bad debt 6788. 4.56% 6788. 0.00 5182. 7.28% 182.7 0.00
0%0%
provision 69 69 71 1
separately
accrued
Of which:
Accounts
receivable
562311814442430511396
withdrawal of 95.44 21.00 92.72 26.47 316543
73721948542405282120.
bad debt % % % % 159.91
1.010.990.020.7281
provision of by
group
Of which:
Accounts
receivable for
which bad debt 5623 1181 4442 4305 11396
95.4421.0092.7226.47316543
provision 7372 1948 5424 0528 2120.%%%%159.91
accrued by 1.01 0.99 0.02 0.72 81
credit risk
features group
589214494442464314776
316543
Total 3050 —— 7626 —— 5424 1046 —— 7303. ——
159.91
9.709.680.023.4352
Number of categories of bad debt provision by individual item: 1
Individually Assessed Bad Debt Provisions: RMB26856788.69 including significant impairment items of
RMB25079184.81. The details are presented below:
Unit: RMB
Beginning balance Ending balance
Withdraw
Name ReasonCarrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Customer 1 5972101.90 5972101.90 5972101.90 5972101.90 100.00% Difficultto recover
Customer 2 4592679.05 4592679.05 4592679.05 4592679.05 100.00% Difficultto recover
147Changchai Company Limited Annual Report 2024
Customer 3 2797123.26 2797123.26 2797123.26 2797123.26 100.00% Difficultto recover
Customer 4 2584805.83 2584805.83 2584805.83 2584805.83 100.00% Difficultto recover
Customer 5 2025880.18 2025880.18 2025880.18 2025880.18 100.00% Difficultto recover
Customer 6 1902326.58 1902326.58 1902326.58 1902326.58 100.00% Difficultto recover
Customer 7 1726935.65 1726935.65 1759397.30 1759397.30 100.00% Difficultto recover
Customer 8 0.00 0.00 1564000.07 1564000.07 100.00% Difficultto recover
Customer 9 1470110.64 1470110.64 1470110.64 1470110.64 100.00% Difficultto recover
Customer 10 420000.00 420000.00 410760.00 410760.00 100.00% Difficultto recover
Total 23491963.09 23491963.09 25079184.81 25079184.81 -- --
Number of categories of bad debt provision by group: 1
Withdrawal of bad debt provision by group: Provision for bad debts by credit risk characteristic group
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 441388545.87 8827770.92 2.00%
1 to 2 years 6801120.23 340056.01 5.00%
2 to 3 years 936696.44 140504.47 15.00%
3 to 4 years 3558158.61 1067447.59 30.00%
4 to 5 years 4863744.65 2918246.79 60.00%
Over 5 years 104825455.21 104825455.21 100.00%
Total 562373721.01 118119480.99 --
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category
balance Reversed or
Ending balance
Withdrawal Verification Others
recovered
148Changchai Company Limited Annual Report 2024
Bad debt
provision
33805182.711598787.127735818.14811363.0026856788.69
separately
accrued
Withdrawal
of bad debt
113962120.814553431.31396071.13118119480.99
provision by
group
Total 147767303.52 6152218.43 7735818.14 1207434.13 144976269.68
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period:
Unit: RMB
Name Reversed orrecovered Method of Recovery
Basis and Rationale for Determining the
Original Provision for Bad Debt Ratios
Recovered in cash
Customer 1 6215662.64 through mutual Accounts receivable aged over 5 years
mediation fully provided for bad debts
Recovered in cash
Customer 2 1510915.50 through mutual Accounts receivable aged over 5 years
mediation fully provided for bad debts
Total 7726578.14
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1207434.13
Of which the verification of significant accounts receivable:
Unit: RMB
Name of the Nature of the Verification
Arising from
entity accounts
Verified Reason for procedures related-party
receivable amount verification performed transactions ornot
Accounts The portion Minutes of the
Customer 1 receivable for 811363.00 unrecoverable after Executive No
goods mutual mediation Office
Total 811363.00
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to
Arrears Party
Unit: RMB
Name of the Ending balance Ending balance
Ending balance Proportion to Ending balance
of accounts of contract of accounts total ending of bad debtentity receivable assets receivable and balance of provision ofcontract assets accounts accounts
149Changchai Company Limited Annual Report 2024
receivable and receivable and
contract assets impairment
provision for
contract assets
Customer 1 137231328.98 0.00 137231328.98 23.29% 2744626.58
Customer 2 136022798.00 0.00 136022798.00 23.08% 2869530.46
Customer 3 37488328.71 0.00 37488328.71 6.36% 749766.57
Customer 4 25787025.82 0.00 25787025.82 4.38% 515740.52
Customer 5 21455202.45 0.00 21455202.45 3.64% 429104.05
Total 357984683.96 0.00 357984683.96 60.75% 7308768.18
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 223261002.76 195875948.92
Total 223261002.76 195875948.92
(2) Notes Receivable Pledged by the Company at the Period-end: None
(3) Accounts receivable financing which had endorsed by the Company or had discounted but had not due
at the period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Category
at the period-end recognition at the period-end
Bank acceptance bill 865680649.89
Total 865680649.89
(4) Changes in Receivables Financing and Fair Value Fluctuations During the Reporting Period
Unit: RMB
Beginning balance Changes in the current period Ending balance
Item FairFair Value Fair Value
Cost Cost Cost Value
Changes Changes
Changes
Notes
195875948.9227385053.84223261002.76
Receivable
150Changchai Company Limited Annual Report 2024
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable
Dividend receivable 7165080.00
Other receivables 2682361.82 49699753.61
Total 9847441.82 49699753.61
（1）Dividend receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Jiangsu Bank 2024 Interim
Dividend Announcement 7165080.00
Total 7165080.00
（2）Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 1300.00 595723.55
Intercourse funds 23292830.56 69845564.95
Petty cash and borrowings by
865253.08922370.54
employees
Other 14177743.14 13638079.94
Total 38337126.78 85001738.98
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 2514999.73 49610086.44
1 to 2 years 103639.66 115776.00
2 to 3 years 354590.84 12802.00
Over 3 years 35363896.55 35263074.54
151Changchai Company Limited Annual Report 2024
3 to 4 years 281647.36 30300.00
4 to 5 years 30300.00 321735.17
Over 5 years 35051949.19 34911039.37
Total 38337126.78 85001738.98
3) Disclosure by Withdrawal Methods for Bad Debts
√Applicable □Not applicable
Provision for bad debts based on general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected loss in Expected loss in
Bad debt provision Expected credit the duration (credit the duration Total
loss of the next
impairment not (credit impairment
12 months
occurred) occurred)
Balance of 1 January
211671.732715705.9932374607.6535301985.37
2024
Balance of 1 January
2024 in the Current
Period
--Transfer to Second
-2072.792072.79
stage
-- Transfer to Third stage -2698996.89 2698996.89
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
-159302.3525607.09487474.85353779.59
Current Period
Reversal of the Current
Period
Write-offs of the Current
Period
Verification of the
1000.001000.00
Current Period
Other changes
Balance of 31 December
50296.5944388.9835560079.3935654764.96
2024
The basis for the division of each stage and the withdrawal proportion of bad debt provision: None
152Changchai Company Limited Annual Report 2024
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning Ending
Category
balance Reversed or Charged-off OtherWithdrawal balance
recovered /Written-off s
Bad debt
provision
5282163.35333706.205615869.55
separately
accrued
Withdrawal of
bad debt
30019822.0220073.391000.0030038895.41
provision by
group
Total 35301985.37 353779.59 1000.00 35654764.96
5）Write-off of Other Receivables During the Reporting Period
Unit: RMB
Item Write-off Amount
Write-off of Other Receivables 1000.00
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending
Name of the entity Nature Ending balance Aging balance of balance of bad
other debt provision
receivables %
Changzhou Compressor Intercourse
2940000.00 Over 5 years 7.67% 2940000.00
Factory funds
Changchai Group Imp. Intercourse
2853188.02 Over 5 years 7.44% 2853188.02
& Exp. Co. Ltd. funds
Changzhou New
Intercourse
District Accounting 1626483.25 Over 5 years 4.24% 1626483.25
funds
Center
153Changchai Company Limited Annual Report 2024
Changchai Group Intercourse
1128676.16 Over 5 years 2.94% 1128676.16
Settlement Center funds
Chuangye Diesel Intercourse
1000000.00 Over 5 years 2.61% 1000000.00
Engine Repair Factory funds
Total 9548347.43 24.90% 9548347.43
7. Prepayments
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 11874660.61 93.32% 11196498.47 90.78%
1 to 2 years 355228.45 2.79% 840617.01 6.82%
2 to 3 years 489219.64 3.84% 289345.37 2.35%
Over 3 years 6850.00 0.05% 6850.00 0.05%
Total 12725958.70 -- 12333310.85 --
(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment Target
Unit: RMB
Name of the entity Ending balance Proportion of Total PrepaymentBalance at Period-End (%)
Supplier1 3570770.82 28.06%
Supplier2 1962319.51 15.42%
Supplier3 1860501.67 14.62%
Supplier4 686364.94 5.39%
Supplier5 653239.74 5.13%
Total 8733196.68 68.62%
8. Inventories
Whether the Company needs to comply with the disclosure requirements for the real estate industry
No
(1) Category of Inventory
Unit: RMB
154Changchai Company Limited Annual Report 2024
Ending balance Beginning balance
Depreciation Depreciation
reserves of reserves of
inventories inventories
Item or orCarrying Carrying Carrying Carrying
impairment impairment
amount value amount value
provision for provision for
contract contract
performance performance
costs costs
Raw 210549278.
779266290.45
201282988.199751010.
32257529878.82
192221131.
materials 43
Materials
processed on 13598683.1 0.00 13598683.1 12422107.03 3 2 0.00
12422107.0
commission
Goods in 79357978.3 4128144.66 75229833.6 90202210.0 6761129.14 83441080.9
process 4 8 5 1
Finished 559878239. 32330091.1 527548148. 527412149. 27690142.4 499722006.goods 54 6 38 21 2 79
Low priced
and easily 1542344.91 0.00 1542344.91 1413859.53 0.00 1413859.53
worn articles
Total 864926524. 45724526.2 819201998. 831201336. 41981150.3 789220185.69 7 42 06 8 68
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
Increase Decrease
Beginning
Item Transferred-ba Other Ending balancebalance Withdrawal Others ck or
s
charged-off
Raw materials 7529878.82 1979765.82 243354.19 9266290.45
Goods in
6761129.14331582.562964567.044128144.66
process
Finished goods 27690142.42 12097868.82 7457920.08 32330091.16
Total 41981150.38 14409217.20 10665841.31 45724526.27
155Changchai Company Limited Annual Report 2024
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories.
9. Non-current assets due within one year
Unit: RMB
Item Ending balance Beginning balance Note
Investments in debt obligations Three-year time deposits
0.0040773509.75
due within one year maturing within one year
Total 0.00 40773509.75
(1) Investments in Debt Obligations Due within One Year
√Applicable □Not applicable
1）Investments in Debt Obligations Due within One Year
Unit: RMB
Ending balance Beginning balance
Group name Carrying Fallingprice Carrying Carrying
Falling Carrying
amount reserves value amount
price
reserves value
Three-year fixed
term deposit 0.00 0.00 40773509.75 40773509.75
Total 0.00 0.00 40773509.75 40773509.75
10. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 51823671.46 19940871.92
Prepaid corporate income tax 2705816.46 908233.33
Prepaid expense 75533.75 61399.59
Total 54605021.67 20910504.84
11. Other Equity Instrument Investment
Unit: RMB
Gains Losses Accumul Accumul Reason
recorded recorded ative ative Dividend for
in other in other gains losses income assigning
Item Ending Beginnin comprehe comprehe recorded recorded recognize tobalance g balance nsive nsive in other in other d in measure
income in income in comprehe comprehe current in fair
the the nsive nsive year value of
current current income in income in which
156Changchai Company Limited Annual Report 2024
period period the the changes
current current included
period period other
comprehe
nsive
income
Non-tradi Non-tradi
ng equity 9411200 9694880 7324200 1016099 7565500 1816308 ng equity
investme 58.72 25.67 0.00 66.95 58.72 0.00 investme
nt nt
941120096948807324200101609975655001816308
Total
58.7225.670.0066.9558.720.00
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
assigning to
Amount of measure by Reason for
Dividend other fair value of
other
Item income Accumulativ Accumulativ comprehensi which
comprehensi
recognized e gains e losses ve transferred changes be
ve income
to retained included to transferred to
earnings other retained
comprehensi earnings
ve income
Changzhou
Synergetic
Innovation Non-trading
248637058.
Private equity
72
Equity Fund investment
(Limited
Partnership)
Non-trading
Foton Motor 320911000.equity
Co. Ltd. 00
investment
Bank of Non-trading
18163080.0187002000.
Jiangsu Co. equity
000
Ltd. investment
12. Long-term Equity Investment
Unit: RMB
Begin Begin Increase/decrease Endin Endin
ning ning
Addit Redu Gain Adjus Chan Cash Withd
g g
Invest balan balan balan balan
ees ce ce of ional ced
or tment ges in bonus rawal
loss of or of Other ce ce of
(carry depre invest invest other
ment ment recog other equity profit depre
(carry depre
ing ciatio nized comp annou ciatio ing ciatio
157Changchai Company Limited Annual Report 2024
value) n under rehen nced n value) n
reserv the sive to reserv reserv
es equity incom issue es es
metho e
d
I. Joint venture
Subto
tal 0.00 0.00 0.00 0.00
II. Associated enterprises
Beijin
g
Tsing
hua
Indust
rial
44184418
Invest 0.00 0.00
2.502.50
ment
Mana
geme
nt
Co.Ltd.Subto 4418 4418
tal 0.00 0.002.50 2.50
44184418
Total 0.00 0.00
2.502.50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
13. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial Assets at Fair Value Through Profit or
Loss (Including: Equity Instrument Investments) 377869217.49 412914576.80
Total 377869217.49 412914576.80
158Changchai Company Limited Annual Report 2024
14. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Total
I. Original carrying value
1. Beginning balance 93077479.52 93077479.52
2. Increased amount of the period
(1) Outsourcing
(2) Transfer from inventories/fixed
assets/construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 93077479.52 93077479.52
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 53239921.41 53239921.41
2. Increased amount of the period 2096713.56 2096713.56
(1) Withdrawal or amortization 2096713.56 2096713.56
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 55336634.97 55336634.97
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
159Changchai Company Limited Annual Report 2024
1. Ending carrying value 37740844.55 37740844.55
2. Beginning carrying value 39837558.11 39837558.11
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
15. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 615414505.40 675596920.95
Disposal of fixed assets
Total 615414505.40 675596920.95
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original
carrying value
1. Beginning
683973527.801117118836.8916527248.9361820174.731879439788.35
balance
2. Increased
amount of the 6505869.57 17670002.80 166991.14 1586115.85 25928979.36
period
(1) Purchase 1212045.63 5007147.44 5309.73 340386.83 6564889.63
(2) Transfer
from
5293823.9412662855.36161681.411245729.0219364089.73
construction in
progress
(3) Enterprise
combination
increase
160Changchai Company Limited Annual Report 2024
3. Decreased
amount of the 47976401.54 14818301.47 652187.97 1178213.20 64625104.18
period
(1) Disposal or
1962362.6214467299.97652187.971000734.4818082585.04
scrap
(2) Transfer
from
169416.42177478.72346895.14
construction in
progress
(3) Others
46014038.92181585.0846195624.00
(Note 1)
4. Ending
642502995.831119970538.2216042052.1062228077.381840743663.53
balance
II. Accumulated
Depreciation
1. Beginning
331778938.87822480700.9610101717.8039184289.071203545646.70
balance
2. Increased
amount of the 19921195.02 55334455.58 1325317.19 5646380.17 82227347.96
period
(1) Withdraw 19921195.02 55334455.58 1325317.19 5646380.17 82227347.96
3. Decreased
amount of the 44564770.15 14360225.31 652187.97 1163873.80 60741057.23
period
(1) Disposal or
1475019.0814009223.81652187.97986395.0817122825.94
scrap
(2) Transfer
from
169416.42177478.72346895.14
construction in
progress
(3) Others
43089751.07181585.0843271336.15
(Note 1)
4. Ending
307135363.74863454931.2310774847.0243666795.441225031937.43
balance
III. Impairment
Provision
1. Beginning
297220.70297220.70
balance
161Changchai Company Limited Annual Report 2024
2. Increased
amount of the 20122.51 20122.51
period
(1) Withdraw 20122.51 20122.51
3. Decreased
amount of the 20122.51 20122.51
period
(1) Disposal or
20122.5120122.51
scrap
4. Ending
297220.70297220.70
balance
IV. Carrying
value
1. Ending
335367632.09256218386.295267205.0818561281.94615414505.40
carrying value
2. Beginning
352194588.93294340915.236425531.1322635885.66675596920.95
carrying value
Note 1: The "Other Disposals" of fixed assets relate to buildings and equipment demolished for the urban
redevelopment project at the Changchai Co. Ltd. Sanjing Branch site (see Note VII. 20 for details).
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Houses and
59157112.1652780229.966376882.20
buildings
Transportation Refer to note 2
15654026.8614125584.981528441.88
equipment
Other equipment 55205.86 40841.58 14364.28
Machinery
309407.5012186.80297220.70
equipment
Note 2: Due to public interest requirements for urban redevelopment the Xinbei District People's Government of
Changzhou has decided to implement the expropriation of buildings within the Phase I scope of the Sanjing
162Changchai Company Limited Annual Report 2024
Subdistrict Foundry Plant and surrounding area urban renewal project. The expropriation area covers the
Company's former foundry production base where portions of the fixed assets were in an idle state.
16. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 3376866.69 4253721.78
Engineering materials 21900.40
Total 3376866.69 4275622.18
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciati Carrying
amount n reserves value amount on reserves value
Technology
Center
Innovation
898041.60898041.60981532.17981532.17
Capability
Construction
Project
Equipment
Installation
2478825.092478825.092866348.902866348.90
Pending
Project
Miscellaneou
s
405840.71405840.71
Engineering
Works
Total 3376866.69 3376866.69 4253721.78 4253721.78
(2) Significant Changes in Construction-in-Progress Projects During the Current Period
Unit: RMB
Transfers to
Beginning Transfers to Ending Sources of
Item New additions intangible
balance fixed assets balance Funds
assets
163Changchai Company Limited Annual Report 2024
Equipme
nt Equity
2866348.9018055852.7917344261.501099115.102478825.09
Installatio Funds
n Works
Total 2866348.90 18055852.79 17344261.50 1099115.10 2478825.09 --
（3）Impairment Test of Construction in Progress
□Applicable□Not applicable
（4）Engineering Materials
Unit: RMB
Ending balance Beginning balance
Item ImpairmeCarrying Carrying Carrying Impairment Carrying
nt
amount value amount provision value
provision
Engineerin
0.000.0021900.4021900.40
g materials
Total 0.00 0.00 21900.40 21900.40
17. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Trademark use
Item Land use right Software License fee Total
right
I. Original carrying
value
1. Beginning balance 205187775.71 20419604.15 5538000.00 1650973.47 232796353.33
2. Increased amount of
1154048.731154048.73
the period
(1) Purchase 54933.63 54933.63
(2) Internal R&D
(3) Business
combination increase
(4) Transfer from
construction in 1099115.10 1099115.10
progress
164Changchai Company Limited Annual Report 2024
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 205187775.71 21573652.88 5538000.00 1650973.47 233950402.06
II. Accumulated
amortization
1. Beginning balance 63473422.16 16541171.87 3800133.10 523440.52 84338167.65
2. Increased amount of
4181823.361910163.91548799.96165661.326806448.55
the period
(1) Withdrawal 4181823.36 1910163.91 548799.96 165661.32 6806448.55
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 67655245.52 18451335.78 4348933.06 689101.84 91144616.20
III. Depreciation
reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying
137532530.193122317.101189066.94961871.63142805785.86
value
2. Beginning carrying
141714353.553878432.281737866.901127532.95148458185.68
value
18. Long-term Prepaid Expenses
Unit: RMB
Beginning Amortized Ending
Item Increase Decrease
balance amount balance
Trademark renewal
268208.1241732.6733556.84276383.95
fee
External power line 2754000.00 319370.91 46455.98 2388173.11
165Changchai Company Limited Annual Report 2024
access project
Processing reserved
floor paving and
5205750.545205750.54
lighting installation
works
Total 8227958.66 41732.67 352927.75 5252206.52 2664557.06
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible DeductibleDeferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt provision 12526884.12 1949082.99 9431907.00 1518995.79
Provisions 61700.00 9255.00
Advance tax paid
on pre-collected
demolition 30000000.00 4500000.00
compensation
Total 42588584.12 6458337.99 9431907.00 1518995.79
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Assets evaluation
appreciation for
business
combination not 5308792.40 796318.85 5489891.06 823483.65
under the same
control
Changes of fair
value of other
equity instrument 1008689955.98 153653533.48 1102931935.12 171019971.87
investments
Total 1013998748.38 154449852.33 1108421826.18 171843455.52
166Changchai Company Limited Annual Report 2024
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary differences 214123380.22 215915752.97
Deductible tax losses 94504005.70 137917562.93
Total 308627385.92 353833315.90
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending balance
20294463227.36
20301489106.18
20311470853.20
203227506664.76
203350340092.01
20349234062.19
Total 94504005.70
20. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item Depreciati DepreciatiCarrying Carrying
on Carrying value on Carrying value
amount amount
reserves reserves
Prepayments
for the
acquisition 1448809.45 1448809.45 2578776.77 2578776.77
of long-term
assets
Assets held
for disposal 2924287.85 2924287.85
Total 4373097.30 4373097.30 2578776.77 2578776.77
Other Notes:
The assets held for disposal relate to buildings and equipment demolished under the old town redevelopment
project at Changchai Co. Ltd.'s Changzhou Sanjing Branch (see Note XVI.2). The company has currently
received the first compensation payment of RMB 30000000.00 which is expected to cover the associated
demolition losses. Since the related expropriation process is anticipated to take more than one year to complete
the company has reclassified the carrying value of the demolished fixed assets to other non-current assets.
167Changchai Company Limited Annual Report 2024
21. Assets with Restricted Ownership or Right of Use
Unit: RMB
Ending balance Beginning balance
Item Carrying Carrying Type of Status of Carrying Carrying Type of Status of
amount value restriction restriction amount value restriction restriction
Bank Bank
acceptanc acceptanc
e bill e bill
guarantee guarantee
deposits、 deposits、
Letter of Letter of
guarantee guarantee
Occupied Occupied
Monetary 1710186 1710186 deposits、 7623844 7623844 deposits、
as cash as cash
assets 07.75 07.75 Performa 3.41 3.41 Performa
deposit deposit
nce bond nce bond
deposits、 deposits、
Term Term
deposits deposits
and and
accrued accrued
interest interest
Discounte
d by the
Notes Payment
Company
receivabl obligation
at the
e -- s for
7087820 7087820 period-en
outstandi undiscou
0.00 0.00 d and not
ng nted but
due on
discounte discounte
the
d notes d bills
balance
sheet date
Endorsed
by the
Notes Payment Endorsed
Company Undue
receivabl obligation bills not
at the transferre
e -- s for yet
1638581 1638581 period-en 5597983 5597983 d bill
outstandi undiscou matured
35.20 35.20 d and not 2.64 2.64 payment
ng nted but at the
due on obligation
transferre transferre balance
the s
d notes d bills sheet date
balance
sheet date
Fixed Mortgage
1332812 1332812 Mortgage
Assets - d for
168Changchai Company Limited Annual Report 2024
Houses .48 .48 d issuing
and bank
buildings acceptanc
e bills
Mortgage
Intangible d for
Assets - 847162.2 847162.2 Mortgage issuing
Land Use 8 8 d bank
Rights acceptanc
e bills
Fixed Mortgage
Assets - d for
Machiner 2372873 2372873 Mortgage issuing
y 3.18 3.18 d bank
equipmen acceptanc
t e bills
4057549405754915812691581269
Total
42.9542.9583.9983.99
22. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills with
94471787.41
financing nature
Total 94471787.41
23. Notes Payable
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 491643629.88 528139582.33
Total 491643629.88 528139582.33
At the end of the current period there were no notes payable due and not paid.
24. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
169Changchai Company Limited Annual Report 2024
Item Ending balance Beginning balance
Payment for goods 690733575.75 641484184.05
Total 690733575.75 641484184.05
(2) Significant Accounts Payable Aging over One Year or Overdue
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Payables for goods and services 76052261.47 Not yet settled
Payables for construction works
and equipment 6736282.92 Not yet settled
Total 82788544.39
25. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable 0.00 0.00
Dividends payable 3891433.83 3891433.83
Other payables 113845527.69 95061566.74
Total 117736961.52 98953000.57
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3243179.97 3243179.97
Dividends for non-controlling
648253.86648253.86
shareholders
Total 3891433.83 3891433.83
The reason for non-payment for over one year: Not gotten by shareholders yet.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 2595993.50 2671042.33
170Changchai Company Limited Annual Report 2024
Intercompany balances 14989385.23 11107514.80
Personal advances and receivables 647001.19 398761.04
Sales discounts and product
78652203.8665026250.12
warranties
Other 16960943.91 15857998.45
Total 113845527.69 95061566.74
2) Significant Other Payables Aging over One Year
The significant other payables with aging over one year at period-end mainly consist of unsettled temporary
receipts and outstanding payables.
26. Advances from customers
(1) List of Advances from customers
Unit: RMB
Item Ending balance Beginning balance
Advance rental receipts 183376.84 647441.22
Advance receipts for land
30000000.001000000.00
compensation
Total 30183376.84 1647441.22
(2) Significant changes in the carrying amount during the current period and the reasons thereof
Unit: RMB
Item Amount of change Reason for change
Advance receipts During the current period the Company received demolition
for land 29000000.00 compensation payments for the old town renovation project at the
compensation Changzhou Sanjing Branch site of Changchai Co. Ltd.
27. Contract liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 31640879.59 33352877.66
Total 31640879.59 33352877.66
171Changchai Company Limited Annual Report 2024
28. Employee benefits payable
(1) List of employee benefits payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 47738883.57 295899743.45 294846372.04 48792254.98
II.Post-employment
33075703.0733075703.07
benefit-defined
contribution plans
III. Termination
benefits
IV. Current portion
of other benefits
Total 47738883.57 328975446.52 327922075.11 48792254.98
(2) List of Short-term Salary
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
1. Salary bonus
40196939.41244255226.90243761424.2440690742.07
allowance subsidy
2.Employee welfare 1592.74 8747217.24 8747217.24 1592.74
3. Social insurance 19369371.09 19369371.09
Of which: Medical
16089051.7816089051.78
insurance premiums
Work-related injury
1751915.101751915.10
insurance
Maternity insurance 1528404.21 1528404.21
4. Housing fund 19303926.23 19303926.23
5.Labor union budget
and employee education 7540351.42 4224001.99 3664433.24 8099920.17
budget
6. Short-term absence
with salary
172Changchai Company Limited Annual Report 2024
7. Short-term profit
sharing scheme
Total 47738883.57 295899743.45 294846372.04 48792254.98
(3) List of Defined Contribution Plans
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
1. Basic pension
32068582.8132068582.81
benefits
2. Unemployment
1007120.261007120.26
insurance
3. Enterprise annuities
Total 33075703.07 33075703.07
29. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 239602.32 189045.23
Corporate income tax 611800.65 1686812.32
Personal income tax 210290.78 312930.09
Urban maintenance and
construction tax 19983.59 881885.27
Property tax 1715080.20 1678590.95
Land use tax 943261.64 943261.64
Stamp duty 437390.87 349554.08
Education Surcharge 14240.95 36841.50
Comprehensive fees 120291.58
Environmental protection tax 22673.70 31957.08
Total 4214324.70 6231169.74
30. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 485055.17 393790.53
173Changchai Company Limited Annual Report 2024
Transportation storage fee 353692.31 830881.27
Electric charge 2530866.25 1457500.39
Tax to be transferred 3818328.30 2830696.17
Estimated share value added tax 745360.75 2230084.52
Obligation to pay bills transferred
163858135.2055979832.64
before maturity
Other withholding expenses 3273239.95 3347180.44
Total 175064677.93 67069965.96
31. Provisions
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Estimated after-sales
Product warranty 73002860.52 60070382.24
expenses
Total 73002860.52 60070382.24
32. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
32795896.483409729.4629386167.02
grants appropriation
Total 32795896.48 3409729.46 29386167.02 --
Note:
Liability items involving government grants
Unit: RMB
Amount
recorded into
Related to
Beginning Amount of other income
Item Ending balance assets/related
balance new subsidy in the
income
Reporting
Period
National major project
special allocations- Flexible
processing production line 10001835.00 1519266.00 8482569.00 Related to assets
for cylinders of diesel
engines
Remove compensation 17181816.74 665973.62 16515843.12 Related to assets
174Changchai Company Limited Annual Report 2024
Research and development
and industrialization
allocations of national III/IV
5612244.74 1224489.84 4387754.90 Related to assets
standard high-powered
efficient diesel engine for
agricultural use
Total 32795896.48 3409729.46 29386167.02 ——
33. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
balance New shares Bonus issue from Other Subtotal balance
issued shares
profit
The sum of 70569250 70569250
shares 7.00 7.00
34. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
620338243.21620338243.21
(premium on stock)
Other capital reserves 20171432.63 20171432.63
Total 640509675.84 640509675.84
35. Other Comprehensive Income
Unit: RMB
Item Beginni Reporting Period Endin
175Changchai Company Limited Annual Report 2024
ng Less: g
balance Record balan
Less: ed in ce
Recorded other
in other compre
comprehe hensiv
Attribu
nsive e Attribu
Income table to
income in income table to
before Less: the
prior in prior non-co
taxatio Income Compa
period period ntrollin
n in the tax ny as
and and g
Curren expens the
transferre transfe interest
t e parent
d in rred in s after
Period after
profit or retaine tax
tax
loss in d
the earning
Current s in the
Period Curren
t
Period
I. Other comprehensive -2836 -2411 6430667180 -4255
income that will not be 7966.9 2771.9 6754
reclassified to profit or loss 321.82 195.045 1 9.91
Changes in fair value of -2836 -2411 6430667180 -4255
other equity instrument 7966.9 2771.9 6754
investment 321.82 195.045 1 9.91
-2836-24116430
Total of other 667180 -4255
7966.92771.96754
comprehensive income 321.82 195.04
519.91
Other notes including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized
amount: None
36. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
19432089.529958016.527431039.6921959066.35
cost
Total 19432089.52 9958016.52 7431039.69 21959066.35
176Changchai Company Limited Annual Report 2024
37. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
reserves 350538734.44 4131072.93 354669807.37
Discretional surplus
reserves 13156857.90 13156857.90
Total 363695592.34 4131072.93 367826665.27
Surplus reserve explanation: Pursuant to the Company Law of the People's Republic of China and the company's
articles of association the Company appropriates 10% of its net profit as statutory surplus reserve.
38. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained
earnings before adjustments 1002436724.71 915495909.35
Total retained earnings at the
beginning of the adjustment period
(“+” means up “-” means down)
Beginning balance of retained
earnings after adjustments 1002436724.71 915495909.35
Add: Net profit attributable to
shareholders of the Company as 18489896.00 108495607.05
the parent
Less: Withdrawal of statutory
4131072.9314497866.62
surplus reserves
Withdrawal of discretional
surplus reserves
Withdrawal of general
reserve
Dividend of ordinary shares
33167547.837056925.07
payable
Dividends of ordinary shares
transferred as share capital
Ending retained earnings 983627999.95 1002436724.71
Adjustments to opening retained earnings details:
(1) Retrospective adjustment due to the Accounting Standards for Business Enterprises and related new
regulations: RMB 0.00 impact on opening retained earnings.
(2) Change in accounting policies: RMB 0.00 impact on opening retained earnings.
(3) Correction of material accounting errors: RMB 0.00 impact on opening retained earnings.
(4) Changes in consolidation scope due to transactions under common control: RMB 0.00 impact on opening
177Changchai Company Limited Annual Report 2024
retained earnings.
(5) Other adjustments net impact on opening retained earnings: RMB 0.00.
39. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2371931691.41 2084092192.19 2110376920.43 1858767201.32
Other operations 43937336.91 35208273.88 45321867.06 25522137.63
Total 2415869028.32 2119300466.07 2155698787.49 1884289338.95
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is
negative
□ Yes √No
Revenue-related information:
Unit: RMB
Contract Segment revenue 1 Total
Classification Operating revenue Cost of sales Operating revenue Cost of sales
By business type
Of which:
Diesel Engines -
901718157.69774338404.49901718157.69774338404.49
Single-Cylinder
Diesel Engines -
1184603268.881059649606.201184603268.881059649606.20
Multi-Cylinder
Other Products 176108095.29 154164550.29 176108095.29 154164550.29
Parts &
109502169.5595939631.21109502169.5595939631.21
Accessories
By geographical
segment
Of which:
Domestic Sales 2015685665.82 1740075174.50 2015685665.82 1740075174.50
Export sales 356246025.59 344017017.69 356246025.59 344017017.69
Total 2371931691.41 2084092192.19 2371931691.41 2084092192.19
The revenue amount corresponding to performance obligations under contracts signed as of the end of the
reporting period that have not yet been fulfilled or partially fulfilled is RMB 0.00.
40. Taxes and Surtaxes
Unit: RMB
178Changchai Company Limited Annual Report 2024
Item Reporting Period Same period of last year
Urban maintenance and
1722364.511195680.92
construction tax
Education surcharge 1230223.15 854061.84
Property tax 7045665.54 7027411.47
Land use tax 4013319.52 4209985.02
Vehicle and vessel use tax 2803.52 2803.52
Stamp duty 2043184.49 1546467.17
Environment tax 124057.13 204264.65
Other 16723.66
Total 16181617.86 15057398.25
41. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 61402397.77 51674294.80
Office expenses 10322299.02 10787236.38
Depreciation and amortization 16092889.89 24825227.36
Safety expenses 5823550.54 4782552.29
Repair charge 196736.76 741750.01
Inventory scrap and inventory loss
(profit) -149986.94 6291477.71
Consulting fees 4933152.81 2380158.31
Insurance premiums 1852716.96 2170875.39
Utilities expenses 2438996.99 2492684.37
Other 12553588.10 17835077.37
Total 115466341.90 123981333.99
42. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 45964550.56 42024752.56
Office expenses 11079843.97 10212761.75
Advertising and exhibition
expenses 1494362.92 773352.98
Depreciation and amortization 716473.37 665547.75
179Changchai Company Limited Annual Report 2024
Other 1362023.61 393359.58
Total 60617254.43 54069774.62
43. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 46708069.23 51504815.69
Employee benefits 24323024.76 24744156.04
Depreciation and amortization 5756990.16 4895983.48
Entrusted development charges 704000.00 684195.77
Other 5909393.45 8509953.35
Total 83401477.60 90339104.33
44. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 341136.21 1825195.98
Less: Interest income 17940638.39 9008657.82
Net foreign exchange gains or
-6063845.94-4234188.82
losses
Other 240309.43 132973.74
Total -23423038.69 -11284676.92
45. Other Income
Unit: RMB
Amount included in
Same period of last non-recurring profit or
Sources Reporting Period
year loss for the current
period
VAT additional deduction 16017274.94 294256.13
Withholding individual income
50685.3674552.51
tax handling fee refund
Government grants recognized
directly in current period profit 4143565.38 3009573.87 3477338.38
or loss
Government grants related to
deferred income 3409729.46 3409729.46
180Changchai Company Limited Annual Report 2024
The details of government subsidies are as follows:
Unit: RMB
Asset-related grants/
Items Reporting Period
Income-related grants
National Major Special Fund Allocation - Flexible
Machining Production Line for Diesel Engine Cylinder 1519266.00 Asset-related grants
Blocks
Demolition Compensation - Hehai Road Land 267333.49 Asset-related grants
Demolition Compensation - Hehai Road Base Main
398640.13 Asset-related grants
Workshop
Grant for R&D and Industrialization of High-Efficiency
Agricultural Diesel Engines Meeting National Phase III/IV 1224489.84 Asset-related grants
Emission Standards
Changzhou Financial Development Special Fund (for
2000000.00 Income-related grants
Enterprise Shareholding Reform and Listing)
Provincial-Level Commerce Development Special Fund 525300.00 Income-related grants
Changzhou Innovation Development Special Fund (2023
150000.00 Income-related grants
Support for Enterprise R&D Investment)
Talent Special Fund 42000.00 Income-related grants
2024 High-Tech Zone Industrial and Information
30000.00 Income-related grants
Technology Special Fund
Municipal Science and Technology Innovation Fund
56973.38 Income-related grants
Project
Financial Subsidy 12000.00 Income-related grants
"Four Above" Units Statistical Quality Assessment Reward 800.00 Income-related grants
High-Quality Development Excellence Award 30000.00 Income-related grants
Coordination Technology Award 20000.00 Income-related grants
Subsidy and Bonus for Employing Disabled Persons
31920.00 Income-related grants
(Meeting/Exceeding Quota)
VAT Deduction for Employing Poverty-Alleviation
22100.00 Income-related grants
Workforce
2023 Party Fee Reimbursement for "Two New" and
16945.00 Income-related grants
Retiring Party Organizations
Longcheng Talent Plan - Foreign Talent Special Subsidy 100000.00 Income-related grants
Enterprise Technology-Driven Innovation Award 51000.00 Income-related grants
2023 Innovation Entity Cultivation Bonus 100000.00 Income-related grants
Patent Award 300.00 Income-related grants
2023 First Batch Patent Application and Utilization Award 8000.00 Income-related grants
181Changchai Company Limited Annual Report 2024
Asset-related grants/
Items Reporting Period
Income-related grants
Intellectual Property Standardization Certification Reward 50000.00 Income-related grants
2024 Industrial High-Quality Development Special Fund 200000.00 Income-related grants
2023 First Batch District-Level Manufacturing
30000.00 Income-related grants
High-Quality Development Special Fund
Employment Stabilization Subsidy 666227.00 Income-related grants
Total 7553294.84 ——
46. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets -30892837.58 10401521.88
Other non-current financial assets -35045359.31 39414576.80
Total -65938196.89 49816098.68
47. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income accounted by
equity method
Investment income from disposal of long-term
equity investment
Investment income from holding of trading
855760.00343730.00
financial assets
Investment income from disposal of trading
6671015.983820476.37
financial assets
Dividend income from holding of other equity
18163080.0011482380.00
instrument investment
Income from re-measurement of residual stock
rights at fair value after losing control power
Interest income from holding of investment in debt
499990.251463921.82
obligations
Interest income from holding of investment in
other debt obligations
182Changchai Company Limited Annual Report 2024
Investment income from disposal of investment in
other debt obligations
Debt restructuring gains 267434.70
Securities lending and borrowing business income 95937.38 28498.48
Investment income from wealth management
1026622.567673218.19
products
Accounts receivable financing - Discount interest
-3313989.60-5709875.91
on bank acceptance bills
Total 24265851.27 19102348.95
48. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of accounts
1583599.712961043.75
receivable
Bad debt loss of other receivables -353779.59 -3133215.40
Total 1229820.12 -172171.65
49. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Loss on inventory valuation and
contract performance cost -14383249.32 -27893895.75
Impairment loss on property
plant and equipment -20122.51
Total -14403371.83 -27893895.75
50. Asset Disposal Income
Unit: RMB
Amount included in
Same period of last non-recurring profit or
Sources Reporting Period
year loss for the current
period
Disposal income of fixed assets
304377.71105702551.01304377.71
and intangible assets
183Changchai Company Limited Annual Report 2024
51. Non-operating Income
Unit: RMB
Amount included in
Item Reporting Period Same period of last year non-recurring profit or
loss for the current period
Income from disposal of
222436.80
fixed assets
Income from penalty 97216.00 10840.00 97216.00
Accounts not required to be
1556125.20263791.001556125.20
paid
Other 1185262.22 430925.85 1185262.22
Total 2838603.42 927993.65 2838603.42
52. Non-operating Expense
Unit: RMB
Amount included in
Item Reporting Period Same period of last year non-recurring profit or
loss for the current period
Loss on disposal of fixed
assets 418860.88 206219.59 418860.88
Donation 250000.00 150000.00 250000.00
Other 217646.81 826317.95 217646.81
Total 886507.69 1182537.54 886507.69
53. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 8816925.87 4541041.54
Deferred income tax expense -18077750.35 33095616.49
Total -9260824.48 37636658.03
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
184Changchai Company Limited Annual Report 2024
Profit before taxation 15356740.40
Current income tax expense accounted at statutory/applicable tax rate 2303511.06
Influence of applying different tax rates by subsidiaries -4209583.50
Influence of income tax before adjustment 80224.15
Influence of non-taxable income -2938402.00
Impact of non-deductible costs expenses and losses 1307320.76
Impact of utilizing previously unrecognized deductible tax losses -9319890.92
Impact of unrecognized deductible temporary differences and tax losses in
9568669.34
current period
Impact of super-deduction incentives on income tax -6052673.37
Income tax expense -9260824.48
54. Other Comprehensive Income
See Note VII 35 for details.
55. Cash Flow Statement
(1) Cash Related to Operating Activities
Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 4121465.38 3084694.38
Other intercourses in cash 6834709.31 2744200.31
Interest income 17560515.91 9008657.82
Recovery of time deposits at
36000000.0024000000.00
maturity
Other 3343648.68 1245299.28
Total 67860339.28 40082851.79
Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense
95660891.03114918107.53
paid in cash
Time deposits withdrawn 42000000.00 36000000.00
Other transactions 851981.36 1580265.70
185Changchai Company Limited Annual Report 2024
Other 479361.32 1632848.89
Total 138992233.71 154131222.12
(2) Cash Related to Investing Activities
Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Cash paid for acquisition of minority
7170000.00
interests in subsidiaries
Discounting of bank acceptance bills
110000000.00
with low credit ratings
Total 117170000.00
Changes in liabilities arising from financing activities
□Applicable √Not applicable
56. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of lastyear
1. Reconciliation of net profit to net cash flows generated from
operating activities
Net profit 24617564.88 114698355.56
Add: Provision for impairment of assets 14403371.83 27893895.75
Credit impairment loss -1229820.12 172171.65
Depreciation of fixed assets of investment properties 84324061.52 88980118.41
Depreciation of right-of-use assets
Amortization of intangible assets 6806448.55 7081433.87
Amortization of long-term deferred expenses 352927.75 349871.11
Losses on disposal of fixed assets intangible assets and
other long-term assets (gains by “-”) -304377.71 -105702551.01
Losses on the scrapping of fixed assets (gains by “-”) 418860.88 -16217.21
Losses on the changes in fair value (gains by “-”) 65938196.89 -49816098.68
Financial expenses (gains by “-”) -5722709.73 -644213.13
Investment losses (gains by “-”) -27579840.87 -24812224.86
Decrease in deferred income tax assets (increase by “-”) -4939342.20 24701580.14
186Changchai Company Limited Annual Report 2024
Increase in deferred income tax liabilities (decrease by
“-”)-13138408.158394036.35
Decrease in inventory (increase by “-”) -44365062.06 -245117199.69
Decrease in accounts receivable from operating
activities (increase by “-”) -515169470.57 27662484.38
Increase in payables from operating activities (decrease
by “-”) 264499562.26 263364384.71
Other -3204931.85
Net cash flows generated from operating activities -154292968.70 137189827.35
2. Investing and financing activities that do not involving cash
receipts and payment:
Debt transferred as capital
Convertible corporate bond due within one year
Fixed assets from financing lease
3. Net increase in cash and cash equivalents
Ending balance of cash 892681884.84 971629523.46
Less: Beginning balance of cash 971629523.46 810350966.05
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -78947638.62 161278557.41
(2) Cash Flows from Significant Investing Activities Received or Paid
Unit: RMB
Item Reporting Period
Cash received from significant investing activities
Including: Cash Received from Redemption of Wealth
Management Products Structured Deposits and Debt 1118117547.48
Investments
Cash paid for significant investing activities
Including: Cash paid for purchase of wealth management
products and structured deposits 1179550000.00
(3) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 892681884.84 971629523.46
Including: Cash on hand 84482.59 157238.05
Bank deposit on demand 891972475.61 963604998.68
187Changchai Company Limited Annual Report 2024
Other monetary assets on demand 624926.64 7867286.73
Accounts deposited in the central bank
available for payment
Deposits in other banks
Accounts of interbank
II. Cash equivalents
Of which: Bond investment expired within
three months
III. Ending balance of cash and cash
892681884.84971629523.46
equivalents
Of which: Cash and cash equivalents with
restriction in use for the Company as the
parent or subsidiaries of the Group
(4) Disclosure of changes in financing-related liabilities from opening to closing balances by category
Unit: RMB
Increase Decrease
Opening Closing
Item
balance Non-cash Cash Non-cashCash changes balance
changes changes changes
Short-term
borrowing 94412090.20 59697.21 94471787.41
s
Other
payables-d
3891433.833891433.83
ividends
payable
Total 3891433.83 94412090.20 59697.21 98363221.24
57. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Item Ending foreign currency Exchange rate Ending balance convertedbalance to RMB
Monetary assets 224364347.14
Of which: USD 31162617.52 7.1884 224009359.79
188Changchai Company Limited Annual Report 2024
HKD 383339.11 0.92604 354987.35
Accounts receivable 110124478.86
Of which: USD 15197105.67 7.1884 109242874.42
EUR 117145.84 7.5257 881604.44
Accounts payable 2175.21
Of which: USD 302.60 7.1884 2175.21
(2) Notes to Overseas Entities Including: for Significant Oversea Entities Main Operating Place Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency Relevant
Reasons Shall Be Disclosed.□ Applicable √ Not applicable
58. Lease
(1) The Company Was Lessor:
Operating leases with the Company as lessor
√Applicable□Not applicable
Unit: RMB
Of which: income related to
Item Rental income variable lease payments not
included in lease receipts
Lease income 2441811.39
Total 2441811.39
Finance leases with the Company as lessor
□Applicable √Not applicable
Undiscounted lease receipts for each of the next five years
□Applicable √Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases: Not applicable
VIII. Research and Development Expenditure
Unit: RMB
Item Amount for the current period Amount for the previous period
Direct input 46708069.23 51504815.69
Employee remuneration 24323024.76 24744156.04
Depreciation and amortization 5756990.16 4895983.48
Outsourcing development fees 704000.00 684195.77
Others 5909393.45 8509953.35
Total 83401477.60 90339104.33
189Changchai Company Limited Annual Report 2024
Of which: Expensed research and
development expenditure 83401477.60 90339104.33
Capitalized research
and development expenditure
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Unit: RMB
Nature Holding percentage
Main Registra
Registere of (%) Way of
Name operating tion
d capital busine gaining
place place Indirect
ss Directly ly
Changchai Wanzhou Diesel 8500000 Chongqi Chongqi Indust
60.00% Set-up
Engine Co. Ltd. 0.00 ng ng ry
Changzhou Changchai
5506300 Changzh Changz Indust
Benniu Diesel Engine 99.00% 1.00% Set-up
0.00 ou hou ry
Fittings Co. Ltd.Changzhou Horizon 4000000 Changzh Changz Servic
100.00% Set-up
Investment Co. Ltd. 0.00 ou hou e
Changzhou Changchai
1000000 Changzh Changz Indust
Horizon Agricultural 100.00% Set-up
0.00 ou hou ry
Equipment Co. Ltd.Combinati
Changzhou Fuji Changchai on not
3725000 Changzh Changz Indust
Robin Gasoline Engine Co. 100.00% under the
0.00 ou hou ry
Ltd. same
control
Jiangsu Changchai 3000000 Changzh Changz Indust
100.00% Set-up
Machinery Co. Ltd. 00.00 ou hou ry
Changzhou Xingsheng
1000000 Changzh Changz Servic
Property Management Co. 100.00% Set-up.00 ou hou e
Ltd.Combinati
Zhenjiang Siyang Diesel 2000000
Engine Manufacturing Co. Zhenjian Zhenjia Indust
on not
49.00% under the
Ltd. .00 g ng ry same
control
Note: The Company holds a 49% equity interest in Zhenjiang Siyang making it the largest shareholder. With
other shareholders being relatively dispersed and given that the Company appoints 4 out of the 7 board members
190Changchai Company Limited Annual Report 2024
of Zhenjiang Siyang (including the Chairman) the Company is the de facto controlling party of Zhenjiang Siyang
meeting the consolidation criteria.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai
Wanzhou Diesel 40.00% 271622.56 20447252.38
Engine Co. Ltd.Zhenjiang Siyang
Diesel Engine
Manufacturing Co. 51.00% 5856046.32 57449838.65
Ltd.Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non- Non-
Non- Curre Non- Curre
Name Curre curre Total Curre curre Totalcurre Total nt curre Total nt
nt nt liabili nt nt liabili
nt assets liabili nt assets liabili
assets liabili ties assets liabili ties
assets ties assets ties
ty ty
Chan
gchai
Wanz
hou 4492 2153 6645 1533 1533 4117 2235 6353 1358 1358
Diese 0697 2357 3054 4923 4923 9375 1977 1353 4154 4154
l .17 .74 .91 .96 .96 .84 .78 .62 .77 .77
Engin
e Co.Ltd.
191Changchai Company Limited Annual Report 2024
Zhenj
iang
Siyan
g
Diese
l 1048 2269 1275 1653 1659 9474 2439 1191 2029 2029
6170
Engin 4937 5139 4451 7400 9100 7199 6092 4329 5436 5436
0.00
e 4.35 .48 3.83 .72 .72 .90 .80 2.70 .96 .96
Manu
factur
ing
Co.Ltd.Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
Name flows flowsOperating comprehe Operating comprehe
Net profit from Net profit from
revenue nsive revenue nsive
operating operating
income income
activities activities
Changcha
i
Wanzhou 4073828 679056.4 679056.4 2764335 4336424 261794.6 261794.6 -845101
Diesel 4.52 1 1 .63 6.66 4 4 3.52
Engine
Co. Ltd.Zhenjian
g Siyang
Diesel 6947904 1148244 1148244 3116694 6693515 1042398 1042398 1349693
Engine
Manufact 6.40 3.77 3.77 .39 6.33 4.02 4.02 .24
uring
Co. Ltd.
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
In 2017 the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with
Synergetic Innovation Fund Management Co. Ltd. through joint investment. On 18 October 2018 and 3
December 2020 new partners were respectively added. Partnership Shares transfer was made on 29 December
2022 and 10 October 2023. In line with the revised Partnership Agreement the general partner is Synergetic
Innovation Fund Management Co. Ltd. and the limited partners are Changchai Company Limited Changzhou
Zhongyou Petroleum Sales Co. Ltd. Changzhou Fuel Co. Ltd. Tong Yinzhu Tong Yinxin Anhui Haiyunzhou
192Changchai Company Limited Annual Report 2024
Equity Investment Partnership Enterprise (Limited) Shenzhen Jiaxin One Venture Capital Partnership (limited
partnership)Zhong Wende and Qingdao Yinjiahui Industrial Investment Partnership Enterprise (Limited
Partnership). In accordance with the Partnership Agreement the limited partner does not execute the partnership
affairs. Thus the Company does not control Changzhou Xietong Private Equity Fund (Limited Partnership) and
did not include it into the scope of consolidated financial statements.X. Government Grants
1. Government Grants Recognized at the End of the Reporting Period at the Amount Receivable
□Applicable□Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in time
□Applicable□Not applicable
2. Liability Items Involving Government Grants
□Applicable □Not applicable
Unit: RMB
Amount
recorded Amount
into recorded
Accounting Beginning Amount ofnew non-operati
into other Related to
items balance ng income income in
Other Ending
subsidy the changes balance
assets/relat
in the ed income
Reporting Reporting
Period Period
Deferred 32795896 3409729. 29386167 Related to
income .48 46 .02 assets
3. Government Grants Recognized as Current Profit or Loss
□Applicable □Not applicable
Unit: RMB
Accounting items Amount for the current period Amount for the previous period
Other income 7553294.84 6419303.33
XI. The Risk Related to Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The Company’s principal financial instruments include financial assets at fair value through profit or loss other
equity instrument investments other non-current financial assets accounts receivable accounts payable etc.Detailed disclosures of these financial instruments are provided in the relevant sections of Note VII. The risks
associated with these financial instruments as well as the Company’s risk management policies to mitigate such
risks are described below. The Company’s management manages and monitors these risk exposures to ensure
they remain within defined limits.
193Changchai Company Limited Annual Report 2024
The Company employs sensitivity analysis to assess the potential impact of reasonably possible changes in risk
variables on current period profit or loss or shareholders’ equity. Since risk variables rarely change in isolation and
the correlation between variables significantly influences the ultimate impact of changes in any single variable
the following analysis assumes each variable changes independently.
1. Risk Management Objectives and Policies
The Company’s risk management objectives are to achieve an appropriate balance between risk and return
minimize the adverse impact of risks on operational performance and maximize the interests of shareholders and
other equity investors. Based on these objectives the Company’s fundamental risk management strategy involves
identifying and analyzing risks establishing risk tolerance thresholds implementing risk management measures
and conducting reliable monitoring to maintain risks within defined limits.
(1) Market Risk
* Foreign Exchange Risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations. The Company is primarily
exposed to foreign exchange risk related to USD and EUR. Apart from overseas operations denominated in USD
and EUR the Company’s other major business activities are settled in RMB. As of December 31 2024 the
Company’s foreign currency monetary items include cash and cash equivalents accounts receivable and accounts
payable (see Note VII.57). The foreign exchange risk arising from these assets and liabilities may impact the
Company’s financial performance.The Company closely monitors the effects of exchange rate fluctuations on its foreign exchange risk exposure.* Interest Rate Risk – Cash Flow Variability Risk
The Company’s exposure to cash flow variability due to interest rate changes primarily relates to floating-rate
bank deposits. The Company’s policy is to maintain these deposits at floating rates.* Other Price Risk
The Company’s investments classified as financial assets at fair value through profit or loss or fair value through
other comprehensive income are measured at fair value at the balance sheet date. Consequently the Company is
exposed to price volatility in the securities market. The Company mitigates equity price risk by maintaining a
diversified portfolio of equity securities.
(2) Credit Risk
Credit risk refers to the risk that one party to a financial instrument fails to fulfill its obligations resulting in
financial loss to the other party.The Company’s credit risk primarily arises from receivables. To manage this risk the Company has implemented
the following measures:
* Transactions are conducted only with approved and creditworthy third parties.* Credit assessments are performed for all customers requesting credit terms.* Accounts receivable balances are continuously monitored to avoid significant bad debt exposure.Credit Risk Exposure:
* Cash and bank acceptance bills have low credit risk as they involve reputable highly rated banks.* Other financial assets (e.g. accounts receivable other receivables) are exposed to counterparty default risk
with maximum exposure equal to their carrying amounts.The Company does not require collateral as it transacts only with approved and creditworthy parties. Credit risk
concentration is managed by customer. As of December 31 2024 60.75% (December 31 2023: 54.66%) of the
Company’s accounts receivable balance was attributable to its top five customers. No collateral or credit
enhancements are held for accounts receivable.Criteria for Significant Increase in Credit Risk:
194Changchai Company Limited Annual Report 2024
At each reporting date the Company assesses whether credit risk has increased significantly since initial
recognition. This evaluation considers qualitative and quantitative factors including historical data external credit
ratings and forward-looking information.A significant increase in credit risk is deemed to occur when one or more of the following triggers are met:
* Quantitative: Probability of default (PD) increases by a material margin compared to initial recognition.* Qualitative: Material adverse changes in the debtor’s financial condition or inclusion in a watchlist.Definition of Credit-Impaired Assets:
To determine credit impairment the Company aligns with internal risk management objectives and considers
quantitative and qualitative indicators including:
* Significant financial difficulty of the debtor;
* Breach of contract (e.g. payment default or delinquency);
* Concessions granted due to the debtor’s financial distress;
* Likelihood of bankruptcy or restructuring;
* Disappearance of an active market for the asset;
* Purchase or origination of a financial asset at a deep discount reflecting credit loss.Expected Credit Loss (ECL) Measurement Parameters:
ECL is measured based on 12-month or lifetime expected credit losses depending on whether credit risk has
increased significantly or impairment has occurred. Key parameters include:
* Probability of Default (PD): Likelihood of default within 12 months or the remaining lifetime. Adjusted for
forward-looking macroeconomic factors.* Loss Given Default (LGD): Expected loss severity upon default varying by counterparty type recourse and
collateral.* Exposure at Default (EAD): Amount expected to be owed at the time of default.Forward-Looking Information:
ECL calculations incorporate forward-looking macroeconomic indicators analyzed through historical data
regression and expert judgment.
(3) Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents monitored to meet
operational needs and mitigate cash flow volatility. Management ensures compliance with borrowing agreements
and monitors bank loan utilization.
2. Financial Assets
(1) Classification of Transfer Methods
□Applicable □Not applicable
Unit: RMB
Transfer Nature of Amount of Recognition
method transferred transferred termination or Basis for recognition terminationfinancial assets financial assets not
Endorsement Notes
/discount receivable 234736335.20
Not The Company retains substantially all
derecognized of the risks and rewards including the
195Changchai Company Limited Annual Report 2024
risk of default associated with its
Endorsement Accountsreceivable 865680649.89 Derecognized The Company transfers almost all the/discount financing risks and rewards
Total 1100416985.09
(2) Financial Assets Derecognized due to Transfer
□Applicable □Not applicable
Unit: RMB
Item Transfer method of Amount of derecognized Gains or losses related tofinancial assets financial assets derecognition
Accounts
receivable Endorsement 301693937.09
financing
Accounts
receivable Discount 563986712.80 -3313989.60
financing
Total 865680649.89 -3313989.60
(3) Continued Involvement in the Transfer of Assets Financial Assets
□Applicable □Not applicable
Unit: RMB
Item Transfer method of Amount of assets resulting from Amount of liabilities resultingassets continued involvement from continued involvement
Notes receivable Endorsement 163858135.20 163858135.20
Notes receivable Discount 70878200.00 70878200.00
Total 234736335.20 234736335.20
XII. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Item Fair value Fair value Fair value
measurement items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair
value measurement -- -- -- --
(I) Trading financial
assets
1. Financial assets
at fair value through
profit or loss
196Changchai Company Limited Annual Report 2024
(1) Debt instrument
investment
(2) Equity
instrument 52598990.00 52598990.00
investment
(3) Derivative
financial assets
(4) Wealth
management 251068469.65 251068469.65
investments
2. Financial assets
designated to be
measured at fair
value and the
changes included
into the current
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument
investment
(II) Other
investments in debt
obligations
(III)Other equity
instrument 592483000.00 348637058.72 941120058.72
investment
(IV) Investment
property
1. Land use right
for lease
2. Buildings leased
out
3. Land use right
held and planned to
be transferred once
appreciating
(V) Living assets
1. Consumptive
living assets
2. Productive living
assets
Accounts receivable
financing 223261002.76 223261002.76
Other non-current
financial assets 377869217.49 377869217.49
Total assets
consistently 645081990.00 251068469.65 949767278.97 1845917738.62
measured by fair
197Changchai Company Limited Annual Report 2024
value
(VI) Trading
financial liabilities
Of which: Issued
trading bonds
Derivative financial
liabilities
Other
(VII) Financial
liabilities
designated to be
measured at fair
value and the
changes recorded
into the current
profit or loss
Total liabilities
consistently
measured by fair
value
II. Inconsistent fair
value measurement
(1) Assets held for
sale
Total assets
inconsistently
measured by fair
value
Total liabilities
inconsistently
measured by fair
value
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value
the closing market price on the balance sheet date was the basis for the measurement of fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Wealth management and investment: The underlying assets of investment in wealth management products include
bond assets deposit assets fund assets etc. The portfolio of investment assets should be dynamically managed.The fair value of wealth management products should be adjusted according to the yield of similar products
provided by the counterparty.
198Changchai Company Limited Annual Report 2024
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating
short maturity and low risk. The par amount is close to the fair value and is used as the fair value.
(2) Among other non-current financial assets:
The equity instrument investment in Jiangsu Horizon New Energy Technology Co. Ltd. (a manufacturer of
lithium battery separators whose main products include coated products and base films primarily used in new
energy vehicle power batteries 3C consumer batteries and energy storage batteries) is characterized by high
technical complexity lengthy R&D cycles and substantial capital investment. The company is in a rapid
development phase with numerous investment projects still under construction that have not yet generated stable
revenue or profits. However financing activities have been frequent with five equity financings conducted in the
past three years. Accordingly the Company has determined the fair value of this equity investment using the most
recent financing price adjustment method and engaged an appraisal firm to validate the valuation.
(3) Among other equity instrument investments:
The investments in Chengdu Changwan Diesel Engine Sales Co. Ltd. Chongqing Wanzhou Changwan Diesel
Engine Parts Co. Ltd. Changzhou Economic and Technological Development Company Changzhou Tractor
Company Changzhou Industrial Capital Mutual Aid Association of the Economic Commission and Beijing
Engineering Machinery Agricultural Machinery Company totaling RMB 1.21 million are measured at a fair
value of RMB 0.00 due to the recoverability of the invested amounts.For Changzhou Collaborative Innovation Equity Investment Partnership (Limited Partnership) established in
October 2017 the year-end partners' equity has increased due to fair value changes in its equity holdings. No
material changes have occurred in its operating environment business conditions or financial position. Thus the
Company has determined its fair value based on the partnership’s net asset value at the period-end.
5. Transfers Between Fair Value Hierarchy Levels for Recurring Fair Value Measurements: Reasons for
Transfers and Policies for Determining Transfer Timing
During the current year no transfers occurred between Level 1 and Level 2 of the fair value hierarchy for the
Company’s financial assets and liabilities nor were there any transfers into or out of Level 3.
6. Changes in Valuation Techniques and Reasons for Such Changes During the Period
No changes were made to valuation techniques during the reporting period.
7. Fair Value Information of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and liabilities measured at amortization cost mainly include notes receivable accounts
receivable other receivables short-term borrowings accounts payable other payables etc. The difference
between the carrying value and fair value for financial assets and liabilities not measured at fair value is small.
199Changchai Company Limited Annual Report 2024
XIII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
Regist
Registered the Company as owned by the
Name ration Nature of business
capital the parent Company as the
place
against the parent against
Company the Company
Investment and operations of
state-owned assets assets
Changzhou
management (excluding
Investment Chang RMB1.2
financial business) investment 32.26% 32.26%
Group Co. zhou billion
consulting (excluding
Ltd.consulting on investment in
securities and options) etc.Information about the parent company of the enterprise:
The parent company of the enterprise is Changzhou Investment Group Co. Ltd. According to the
"Implementation Plan for Transferring Part of State-owned Capital to Enrich Social Security Funds in Jiangsu
Province" (Su Zhengfa [2020] No. 27) issued by the provincial government the "Notice on Transferring Part of
State-owned Capital in Cities and Counties to Enrich Social Security Funds" (Su Caigongmao [2020] No. 139)
issued by Jiangsu Provincial Department of Finance and five other departments and the "Notice on Transferring
Part of Municipal (District) State-owned Capital to Enrich Social Security Funds" (Chang Caigongmao [2020] No.
4) issued by Changzhou Municipal Finance Bureau and four other departments 10% of the state-owned equity of
the Investment Group held by the People's Government of Changzhou City was transferred to Jiangsu Provincial
Department of Finance without compensation. After the equity transfer the People's Government of Changzhou
City holds 90% of the state-owned equity of Changzhou Investment Group Co. Ltd. and Jiangsu Provincial
Department of Finance holds 10% of the state-owned equity of Changzhou Investment Group Co. Ltd. According
to the document of the People's Government of Changzhou City (Chang Zhengfa [2006] No. 62) Changzhou
Investment Group Co. Ltd. is an enterprise where the State-owned Assets Supervision and Administration
Commission of Changzhou City performs the investor's responsibilities as authorized by the People's Government
of Changzhou City. Therefore Changzhou Investment Group Co. Ltd. is the controlling shareholder of the
company and the State-owned Assets Supervision and Administration Commission of Changzhou City remains
the actual controller of the company. The ultimate controlling party of the enterprise is the State-owned Assets
Supervision and Administration Commission of Changzhou City.
2. Subsidiaries of the Company
Refer to Note IX for details.
3. Situation of joint ventures and associated enterprises of the company
Refer to Note VII. 12.Long term Equity Investments for details.
200Changchai Company Limited Annual Report 2024
4. Information on Other Related Parties
Name Relationship with the Company
Changzhou Synergetic Innovation Private Equity Participated in establishing the industrial investment
Fund (Limited Partnership) fund
Jiangsu Horizon New Energy Technology Co. Ltd. Shareholding enterprise of the Company
5. Related Party Transactions
(1) Compensation for key management personnel
Unit: RMB
Amount incurred in the previous
Item Current amount incurred
period
Compensation for key
8896700.007820700.00
management personnel
6. Related-party receivables and payables
There were no related-party receivables or payables during the reporting period.XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 31 December 2024 there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
None
(2) In Despite of no Significant Contingency to Disclose the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.XV. Events after Balance Sheet Date
1. Profit Distribution
Dividend to be distributed for every 10 shares (RMB) 0.1
Bonus shares to be distributed for every 10 shares 0
201Changchai Company Limited Annual Report 2024
(share)
Additional shares to be converted from capital reserve
for every 10 shares (share) 0
Dividend for every 10 shares (RMB) declared after
review and approval 0.1
Bonus shares to be distributed for every 10 shares
(share) declared after review and approval 0
Additional shares to be converted from capital reserve
for every 10 shares (share) declared after review and 0
approval
On April 9 2025 the eighth meeting of the tenth
Board of Directors of the Company approved the 2024
profit distribution plan proposing a cash dividend
Profit distribution plan
distribution of RMB 7056925.07. This distribution
plan remains subject to review and approval by the
shareholders' general meeting.
2. Sales Return
None
3. Notes to Other Events after Balance Sheet Date
There was no other event after balance sheet date.XVI. Other Significant Events
1. Segment Information
(1) Basis for Determining Reportable Segments and Accounting Policies
As the Company and its major subsidiaries operate similar business activities under unified management without
separate business units the Company operates as a single reportable segment.
2. Other Significant Transactions and Events Relevant to Investors' Decision-Making
The Xinbei District People's Government of Changzhou ("Notice of Expropriation Decision on State-owned Land
Housing" Changxin Zheng Gao [2022] No. 6) decided to expropriate the houses within the scope of the old town
renovation project at the site of Changchai Co. Ltd.'s (hereinafter referred to as "the Company") single-cylinder
engine plant i.e. Changchai Co. Ltd. Changzhou Sanjing Branch. On November 29 2023 the Company signed a
compensation agreement with the Housing and Urban-Rural Development Bureau of Changzhou National
Hi-Tech District (Xinbei) and the Housing Expropriation and Compensation Service Center of Sanjing Subdistrict
Xinbei District Changzhou (hereinafter referred to as "Sanjing Subdistrict") with a total agreed compensation
amount of RMB 99929868. According to the payment terms stipulated in the Compensation Agreement the
Company has received the first installment of compensation (30% of the compensation amount) of RMB
30000000 (including RMB 1000000 received on December 29 2023 and RMB 29000000 received on January
202Changchai Company Limited Annual Report 2024
3 2024). The relevant land expropriation work is currently in progress.
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including 1 year) 421962024.85 289665029.12
One to two years 6757507.16 1642898.19
Two to three years 936696.44 4274309.13
More than three years 99831716.27 103238762.39
Three to four years 4041196.12 4376325.51
Four to five years 4363228.39 1398123.34
Over 5 years 91427291.76 97464313.54
Total 529487944.72 398820998.83
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Bad debt
Carrying amount
amount provision provision
Category Carry CarryiWithd ing Withd ng
Amou Propor Amou rawal value Amoun Propor Amou rawal value
nt tion nt propor t tion nt propo
tion rtion
Accounts
receivable
withdrawal of 1410 14107 21058
100.021058100.0
Bad debt 7982. 2.66% 982.7 0.00 5.28% 702.1 0.00
0%702.180%
provision 76 6 8
separately
accrued
Of which:
203Changchai Company Limited Annual Report 2024
Accounts
receivable
515390433424937776857652919
withdrawal of 97.34 17.55 94.72 22.70
7996295.546662296.6458.79683
bad debt % % % %
1.9656.41517.94
provision of by
group
Of which:
Accounts
receivable with
provision for 5147 90433 4242 37776 85765 2919
97.2117.5794.7222.70
bad debts based 0428 295.5 7099 2296.6 458.7 9683
%%%%
on credit risk 6.47 5 0.92 5 1 7.94
characteristics
portfolio
Accounts
receivable with
provision for
bad debts based
on related-party 6756 6756
0.13%0.000.000.000.000.000.000.00
transactions 75.49 75.49
portfolio within
the
consolidation
scope
529410454424939882106822919
Total 8794 —— 1278. —— 4666 0998.8 —— 4160. —— 9683
4.72316.413897.94
Number of categories of bad debt provision by individual item: 1
Provision for bad debts assessed individually: RMB14107982.76 including significant impairment items totaling
RMB12488523.68. The details are as follows:
Unit: RMB
Beginning balance Ending balance
Withdraw
Name ReasonCarrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Difficult
Customer 1 2797123.26 2797123.26 2797123.26 2797123.26 100.00%
to recover
Difficult
Customer 2 2584805.83 2584805.83 2584805.83 2584805.83 100.00%
to recover
204Changchai Company Limited Annual Report 2024
Difficult
Customer 3 1902326.58 1902326.58 1902326.58 1902326.58 100.00%
to recover
Difficult
Customer 4 1726935.65 1726935.65 1759397.30 1759397.30 100.00%
to recover
Difficult
Customer 5 0.00 0.00 1564000.07 1564000.07 100.00%
to recover
Difficult
Customer 6 1470110.64 1470110.64 1470110.64 1470110.64 100.00%
to recover
Difficult
Customer 7 420000.00 420000.00 410760.00 410760.00 100.00%
to recover
Total 10901301.96 10901301.96 12488523.68 12488523.68 -- --
Number of categories of bad debt provision by group: 1
Withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Item
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 421286349.36 8425726.99 2.00 %
1 to 2 years 6757507.16 337875.36 5.00 %
2 to 3 years 936696.44 140504.47 15.00%
3 to 4 years 3498933.46 1049680.04 30.00%
4 to 5 years 4363228.39 2617937.03 60.00%
Over 5 years 77861571.66 77861571.66 100.00%
Total 514704286.47 90433295.55
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Current Period
Unit: RMB
Changes in the current period
Beginning
Category Ending balance
balance Reversed orWithdrawal Verification Others
recovered
Bad debt
provision
21058702.181596461.727735818.14811363.0014107982.76
accrued by
item
205Changchai Company Limited Annual Report 2024
Withdrawal
of bad debt
85765458.714882766.98214930.1490433295.55
provision by
group
Total 106824160.89 6479228.70 7735818.14 1026293.14 104541278.31
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
Unit: RMB
Name Reversed orrecovered Method of Recovery
Basis and Rationale for Determining the
Original Provision for Bad Debt Ratios
Recovered in cash
Customer 1 6215662.64 through mutual Accounts receivable aged over 5 years
mediation fully provided for bad debts
Recovered in cash
Customer 2 1510915.50 through mutual Accounts receivable aged over 5 years
mediation fully provided for bad debts
Total 7726578.14
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1026293.14
Of which the verification of significant accounts receivable:
Unit: RMB
Nature of the Arising from
Name of the entity accounts Verified Reason for
Verification
amount verification procedures
related-party
receivable performed transactions ornot
Accounts The portion Minutes of
Customer 1 receivable 811363.00 unrecoverable after the
for goods mutual mediation Executive
No
Office
Total 811363.00
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to
Arrears Party
Unit: RMB
Ending balance
Proportion to of bad debt
Ending balance Ending balance Ending balance total ending provision ofName of the of accounts of contract of accounts balance of accountsentity receivable assets receivable and accounts receivable andcontract assets receivable and impairment
contract assets provision for
contract assets
206Changchai Company Limited Annual Report 2024
Customer 1 137231328.98 0.00 137231328.98 25.92% 2744626.58
Customer 2 136022798.00 0.00 136022798.00 25.69% 2869530.46
Customer 3 37488328.71 0.00 37488328.71 7.08% 749766.57
Customer 4 25787025.82 0.00 25787025.82 4.87% 515740.52
Customer 5 21455202.45 0.00 21455202.45 4.05% 429104.05
Total 357984683.96 0.00 357984683.96 67.61% 7308768.18
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable
Dividend receivable 7165080.00
Other receivables 17123687.65 399142024.92
Total 24288767.65 399142024.92
(1) Dividend receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Jiangsu Bank 2024 Interim
Dividend Announcement 7165080.00
Total 7165080.00
(2) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Related-party transactions within
31828957.95366245432.00
the consolidation scope
Margin and cash pledge 1300.00 1300.00
Other entity current accounts 20438842.07 67344009.68
Petty cash and borrowings by
763839.63884233.75
employees
Other 13697080.26 13638079.94
Total 66730019.91 448113055.37
207Changchai Company Limited Annual Report 2024
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 5982988.63 301730833.26
1 to 2 years 11494533.03 113974034.71
2 to 3 years 16754590.84 12802.00
Over 3 years 32497907.41 32395385.40
3 to 4 years 281647.36 30300.00
4 to 5 years 30300.00 321735.17
Over 5 years 32185960.05 32043350.23
Total 66730019.91 448113055.37
3) Disclosure by Withdrawal Methods for Bad Debts
Provision for bad debts based on general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected loss in the
Bad debt provision Expected credit Expected loss in theduration (credit Total
loss of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1
46873.2016709.1048907448.1548971030.45
January 2024
Balance of 1
January 2024 in the —— —— —— ——
Current Period
--Transfer to
-5181.985181.98
Second stage
-- Transfer to Third
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
-2796.1422497.90615600.05635301.81
Current Period
Reversal of the
Current Period
208Changchai Company Limited Annual Report 2024
Write-offs of the
Current Period
Verification of the
Current Period
Other changes
Balance of 31
38895.0844388.9849523048.2049606332.26
December 2024
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category ChargedReversed or Ending balancebalance Withdrawal -off/Writ Others
recovered
ten-off
Bad debt
provision
21844634.06600193.4422444827.50
separately
accrued
Withdrawal of
bad debt
27126396.3935108.3727161504.76
provision by
group
Total 48971030.45 635301.81 49606332.26
5）Write-off of Other Receivables During the Reporting Period: Nil
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending balance
Name of the entity Nature Ending balance Aging balance of of bad debt
other provision
receivables %
209Changchai Company Limited Annual Report 2024
Related-part
Changzhou y
Changchai Horizon transactions
16828957.95 1-3 years 25.22% 16828957.95
Agricultural within the
Equipment Co. Ltd. consolidatio
n scope
Related-part
Changzhou y
Changchai Benniu transactions
15000000.00 1-3 years 22.48%
Diesel Engine within the
Fittings Co. Ltd. consolidatio
n scope
Changzhou Current
2940000.00 Over 5 years 4.41% 2940000.00
Compressor Factory accounts
Changchai Group Current
Imp. & Exp. Co. accounts 2853188.02 Over 5 years 4.28% 2853188.02
Ltd.Changzhou New Current
District Accounting accounts 1626483.25 Over 5 years 2.44% 1626483.25
Center
Total 39248629.22 58.83% 24248629.22
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 875279449. 868279449. 583443530. 576443530.
7000000.007000000.00
subsidiaries 94 94 03 03
Investment to
joint ventures
and 44182.50 44182.50 44182.50 44182.50
associated
enterprises
875323632.868279449.583487712.576443530.
Total 7044182.50 7044182.50
44945303
(1) Investment to Subsidiaries
Unit: RMB
210Changchai Company Limited Annual Report 2024
Increase/decrease for the current period
Beginnin Ending
Beginning g balance Withdra Ending balance
balance of Addition wal ofReduced balance ofInvestee
(carrying depreciat al impairminvestme Others (Carrying depreciat
value) ion investme entnt value) ion
reserve nt provisio reserve
n
Changchai
Wanzhou
51000005100000
Diesel
0.000.00
Engine Co.Ltd.Changzhou
Changchai
Benniu
96466509646650
Diesel
0.000.00
Engine
Fittings Co.Ltd.Changzhou
Horizon 4000000 4000000
Investment 0.00 0.00
Co. Ltd.Changzhou
Changchai
Horizon 700000 700000
0.000.00
Agricultural 0.00 0.00
Equipment
Co. Ltd.Changzhou
Fuji
Changchai
47286234728623
Robin
0.030.03
Gasoline
Engine Co.Ltd.Jiangsu
Changchai 3000000 291835 5918359
Machinery 00.00 919.91 19.91
Co. Ltd.
211Changchai Company Limited Annual Report 2024
Changzhou
Xingsheng
1000000.1000000.
Property
0000
Managemen
t Co. Ltd.Zhenjiang
Siyang
Diesel 4069080 4069080
Engine 0.00 0.00
Manufacturi
ng Co. Ltd.
57644357000002918358682794700000
Total
30.030.00919.9149.940.00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease for the current period
Begin Gains Endin
Begin ning and Adjus Cash Endin g
ning balan losses tment bonus Withd g balan
Invest balan ce of Addit Redu recog
of Chan or rawal balan ce ofother profit of
ee ce depre ional ced nized ce depre(carry ciatio invest invest under comp
ges of s impai Otherother s (Carr ciatio
ing n ment ment the rehensive equity
annou rment ying n
value) reserv equity nced provis value) reserv
e metho incom to ion e
d e issue
I. Joint ventures
Subto
tal 0.00 0.00 0.00 0.00
II. Associated enterprises
Beijin
g
Tsing
hua
Xingy
e 4418 4418
Indust 0.00 0.002.50 2.50
rial
Invest
ment
Mana
geme
nt
212Changchai Company Limited Annual Report 2024
Co.Ltd.Subto 4418 4418
tal 0.00 0.002.50 2.50
44184418
Total 0.00 0.00
2.502.50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2152289877.26 1923630912.50 1978548527.91 1769939205.73
Other operations 109306807.66 102287240.76 78572385.42 61861919.26
Total 2261596684.92 2025918153.26 2057120913.33 1831801124.99
Breakdown information of operating income and operating cost:
Unit: RMB
Category of Segment 1 Total
contracts Operating Revenue Operating cost Operating Revenue Operating cost
Business Type
Of which:
Single-cylinder
900810856.26824628837.72900810856.26824628837.72
diesel engines
Multi-cylinder
1142838583.701011740533.201142838583.701011740533.20
diesel engines
Other products 47720093.13 42848780.41 47720093.13 42848780.41
Fittings 60920344.17 44412761.17 60920344.17 44412761.17
Classification by
operating region
213Changchai Company Limited Annual Report 2024
Of which:
Sales in domestic
1872581326.841647638286.261872581326.841647638286.26
market
Export sales 279708550.42 275992626.24 279708550.42 275992626.24
Total 2152289877.26 1923630912.50 2152289877.26 1923630912.50
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income from disposal of
held-for-trading financial assets 6671015.98 7022401.48
Dividend income from holding of other equity
instrument investment 18163080.00 11482380.00
Interest income from holding of debt obligation
investments 499990.25 1463921.82
Accounts receivable financing-discount interest of
bank acceptance bills -2778698.46 -4894619.98
Income from refinancing operations 95937.38 28498.48
Total 22651325.15 15102581.80
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets 304377.71
The government subsidies included in
the current period's profit and loss
amounted to RMB7553294.84.Government subsidies charged to current profit or Deducting government grants related
loss (exclusive of government subsidies given in to assets transferred from deferred
the Company’s ordinary course of business at 3477338.38 income totaling RMB3409729.46 and
fixed quotas or amounts as per the government’s job retention subsidies of
uniform standards) RMB666227.00. The government
subsidies included in the current
period's non recurring profit and loss
amounted to RMB3477338.38.
214Changchai Company Limited Annual Report 2024
Gains or losses from changes in fair value of
financial assets and liabilities held by
non-financial enterprises and gains or losses from
disposal of financial assets and liabilities except -58411420.91
for effective hedging activities related to the
company's normal business operations
Gains or losses from entrusting others with
investments or asset management 1122559.94
Reversal of impairment provisions for receivables
that have undergone separate impairment testing 7735818.14
Gains or losses from debt restructuring 267434.70
Other non-operating income and expenses other
than the above 1952095.73
Less: Income tax effects -9444181.95
Non-controlling interests effects (after tax) 361173.09
Total -34468787.45
Others that meets the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Weighted average ROE EPS (Yuan/share)
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary
0.55%0.02620.0262
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
1.57%0.07500.0750
deduction of non-recurring profit
or loss
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
International Accounting Standards and Chinese Accounting Standards
□ Applicable□ Not applicable
215Changchai Company Limited Annual Report 2024
(2) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
Overseas Accounting Standards and Chinese Accounting Standards
□ Applicable□ Not applicable
(3) Explain Reasons for the Differences between Accounting Data Under Domestic and Overseas
Accounting Standards; for Any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent Such Foreign Auditing Agent's Name Shall Be Clearly Stated
□ Applicable□ Not applicable
The Board of Directors
Changchai Company Limited
11 April 2025
216
沪公网安备31011802005267号
