Changchai Company Limited Annual Report 2022
CHANGCHAI COMPANY LIMITED
ANNUALREPORT 2022
April 2023
1Changchai Company Limited Annual Report 2022
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.Shi Xinkun the Company’s legal representative Zhang Xin the Company’s 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 RMB0.10 (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 2022
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.........................46
Part V Environmental and Social Responsibility...... 65
Part VI Significant Events.......................... 66
Part VII Share Changes and Shareholder Information...77
Part VIII Preferred Shares...........................86
Part IX Bonds....................................... 87
Part X Financial Statements..........................88
3Changchai Company Limited Annual Report 2022
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 2022
Definitions
Term Definition
“Changchai” the “Company” or Changchai Company Limited and its consolidated
“we” subsidiaries 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 EquipmentCo. Ltd.Changchai Robin Changzhou Fuji Changchai Robin Gasoline Engine Co.Ltd.Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co. Ltd.Changchai Machinery Jiangsu Changchai Machinery Co. Ltd.Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.RMB RMB’0000 Expressed in the Chinese currency of Renminbi expressedin tens of thousands of Renminbi
The “Reporting Period” or “CurrentPeriod” The period from 1 January 2022 to 31 December 2022
5Changchai Company Limited Annual Report 2022
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) CHANGCAHI CO.LTD.Legal representative Shi Xinkun
Registered address 123 Huaide Middle Road Changzhou Jiangsu China
Registered addresses previously used N/A
Zip code 213002
Office address 123 Huaide Middle Road Changzhou Jiangsu China
Zip code 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
Newspapers designated by the Company for
Securities Times Ta Kung Pao (HK)
information disclosure
Website designated by CSRC for publication of
http://www.cninfo.com.cn
this Report
Place where this Report is lodged Board Secretariat of the Company
IV Change to Company Registered Information
Unified social credit code 91320400134792410W
6Changchai Company Limited Annual Report 2022
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 Government transferred its entire holdings of 170845236 shares in the
shareholder since incorporation 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 Gongzheng Tianye Certified Public Accountants LLP
Office address Yingtong Commerce Building Changzhou Jiangsu China
Accountants writing signatures Wang Wenkai Qin Zhijun
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
√ Applicable □ Not applicable
Name Office address Representatives Supervision period
10/F China Industrial
China Industrial Securities Plaza 36 Wang Lingxiao Li 5 July 2021-31
Securities Co. Ltd. Changliu Road Pudong Lihong December 2022
New District Shanghai
6/F Donghai Securities
Donghai Securities Co. Plaza 1928 Dongfang 5 July 2021-31
Wang Jiangqin Xu Qin
Ltd. Road Pudong New District December 2022
Shanghai
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
2022-over-2021
202220212020
change (%)
Operating revenue
2182043095.612452430515.60-11.03%2296464711.24
(RMB)
Net profit attributable to
the listed company’s 76684796.91 103006232.54 -25.55% 52432443.05
shareholders (RMB)
Net profit attributable to
-73636511.025329092.87——25483147.57
the listed company’s
7Changchai Company Limited Annual Report 2022
shareholders before
exceptional gains and
losses (RMB)
Net cash generated
from/used in operating 364930277.84 -266323779.30 —— 251796654.53
activities (RMB)
Basic earnings per share
0.10870.1657-34.40%0.0934
(RMB/share)
Diluted earnings per
0.10870.1657-34.40%0.0934
share (RMB/share)
Weighted average return
2.51%3.86%-1.35%2.40%
on equity (%)
Change of 31
31 December December 2022
31 December 2022 31 December 2020
2021 over 31 December
2021(%)
Total assets (RMB) 5219359853.42 4860382961.26 7.39% 3952954464.45
Equity attributable to the
listed company’s 3284710665.90 3077550018.33 6.73% 2273349347.02
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
Item 2022 2021 Note
Production and sales of the
Operating revenue (RMB) 2182043095.61 2452430515.60 Company’s primary products ofdiesel engines gasoline engines
etc.Deductions from operating Other business revenue than the
revenue (RMB) 36475111.66 48310768.54 main operations
Operating revenue exclusive of
deductions (RMB) 2145567983.95 2404119747.06
Diesel engines gasoline engines
and accessories
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
8Changchai Company Limited Annual Report 2022
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 675718729.65 502503762.39 545599669.07 458220934.50
Net profit attributable to the
-31087265.8316491996.22150405621.57-59125555.05
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
-12317891.456508531.38-5566500.16-62260650.79
before exceptional gains and
losses
Net cash generated from/used in
-47199474.48-27101026.64-8250338.30447481117.26
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 2022 2021 2020 Note
Gain or loss on disposal of
non-current assets (inclusive
393161.73155515.49263408.53
of impairment allowance
write-offs)
Government grants through
profit or loss (exclusive of
government grants
consistently given in the
Company’s ordinary course 3774298.59 4268950.18 7763215.65
of business at fixed quotas or
amounts as per
governmental policies or
standards)
Capital occupation charges
344842.86
on non-financial enterprises
9Changchai Company Limited Annual Report 2022
that are recognized in profit
or loss
Increase in the fair
Gain or loss on fair-value value of the
Company’s interest
changes on held-for-trading in Jiangsu Horizon
financial assets and New Energy
liabilities & income from Technology Co.disposal of held-for-trading Ltd. as well asdecreased prices of
financial assets and
162319373.53 114738153.54 27526935.85 the shares held by
liabilities and wholly-owned
available-for-sale financial subsidiary HorizonInvestment in
assets (exclusive of the Jiangsu Liance
effective portion of hedges Electromechanical
that arise in the Company’s Technology Co.Ltd. and Kailong
ordinary course of business) High Technology
Co. Ltd.Reversed portions of
impairment allowances for
30000.00147611.25
receivables which are tested
individually for impairment
Non-operating income and
1735346.512400863.71-1571453.49
expense other than the above
Negative goodwill due to
business combination not 1904132.58
under common control
Less: Income tax effects 19859063.58 24027164.56 7122148.63
Non-controlling
-24058.576789.94255505.29
interests effects (net of tax)
Total 150321307.93 97677139.67 26949295.48 --
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 2022
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
In terms of policies at the beginning of 2023 the 20th No. 1 Document guiding the work on agriculture rural
areas and farmers issued by the central government demonstrated the government’s intention to attach greater
importance to agriculture and strengthen agricultural development. In a bid to do so the government will step up
efforts to enhance agricultural science and technology and provide more equipment drive to tackle key problems
of key and core technologies in agriculture and make agricultural machinery more intelligent and automated. In
terms of industry concerns the upgrade and conversion to products that meet the National Emission Standard IV
raise challenges to enterprises. At the end of 2022 the central government appropriated RMB211.5 billion of
agriculture-related transfer payment funds for 2023 in advance including RMB14.5 billion for subsidies of
agricultural machinery procurement and application. The central government allocated substantive funds for
subsidies and implemented policies to strengthen agriculture and benefit farmers indicating that the state will
continue to attach great importance to agricultural mechanization.In terms of industrial development after a ten-year golden period of development since 2016 the entire
agricultural machinery industry has entered a period of deep adjustment that has lasted for years. Although
short-term explosive growth was seen in 2020 it went down again entering a phase of updating existing
machinery from the growth of new machine procurement. 2022 the first year of switching to the National
Emission Standard IV for Non-road Vehicles the agricultural machinery industry faced pressures such as the
shrinking of the demand side premature market overdraft participation of tycoons from other industries and the
impact of new energy market on the traditional market. Currently multiple segmented scenarios still require
all-weather and continuous input and output which is an advantage of diesel engines that cannot be substituted in
a short time. Furthermore new development opportunities have been brought about in the process of national
strategic deployment and acceleration of transformation and upgrade. Therefore the traditional market of
agricultural machinery still has a brilliant future.
11Changchai Company Limited Annual Report 2022
China's diesel engine and gasoline engine industries present a pattern of multiple competitions. As the state adopts
increasingly strict environmental protection policy and the emission standards continue to upgrade the core
technology and key parts of internal combustion engines will be rapidly developed and applied and the research
development promoting and application of environmentally friendly and efficient diesel engines and gasoline
engines will become the mainstream trend which promotes the wide use of the fuel injection system
high-efficiency supercharger and high-efficiency after-treatment. In the new normal the internal combustion
engine industry and agricultural machinery industry will improve the industry's capability of independent
innovation support the whole machine development and organize and implement green manufacturing and
intelligent manufacturing so as to improve the overall strength of the industry. The market share of diesel and
gasoline engines is gradually concentrated in a few large-scale enterprises with technical and capital strength.The present development trend of internal combustion engine industry is as follows: (1) energy saving and
emission reduction; (2) intelligent manufacturing; (3) lightweight. Medium- and low-end internal combustion
engines with low technical content and low added value will be gradually squeezed out of the market. The
upgrade of emission standards and the market's demand for high-end products will eliminate those small
enterprises with low level of research and development or less technology reserves.
(3) Sales of internal combustion engine industry in 2022
The total volume of the market dropped significantly due to factors such as subsidy policy change tight supply
chain upgrading of the National Emission Standard IV for Non-road Vehicles and intensified existing
competition. The total sales of internal combustion engines in 2022 were 43154700 units a decrease of 14.51%
compared to 2021. The total sales of diesel engines for the year were 4286600 units down by 29.82% year on
year. Specifically 837200 engines for construction machinery 1222300 engines for agricultural machinery
39700 engines for shipborne machinery and 311700 engines for electricity generation were sold. The sales of
gasoline internal combustion engines were 38856000 a drop of 12.39% year on year.On the whole the internal combustion engine market showed a declining tendency for the whole year with the
construction and agricultural machinery still showing an adjustment trend. The agricultural machinery industry
faced a major shakeout focusing on the switching of products that meet the China IV emission standards for
non-road mobile machinery. According to the information on the subsidies of agricultural machinery procurement
the main terminal products that need to be upgraded to meet China IV emission standards are large and medium
tractors wheat harvesters forage harvesters and spray rod-type sprayers. The market paid more attention to
whether they can be adequately verified to meet China IV emission standards and whether mass production can be
realized. In the second half of 2022 the sales of large and medium tractors wheat harvesters and corn harvesters
peaked showing that the traditional demand cycle was altered.In terms of the segments of the internal combustion engine market in 2022 897300 units of construction
machinery were sold down by 21.00% year on year; 4141300 units of agricultural machinery were sold down
by 22.87% year on year; 39700 units of shipborne machinery were sold down by 1.18% year on year; 1253000
units of generator sets were sold down by 19.02 year on year; and 1645400 units of horticultural machinery
were sold down by 34.15% year on year. Compared with last year the year-over-year growth of all kinds of
machinery was negative.Due to the impact of international trade and the characteristics of the enterprise scale the internal combustion
engine industry was steady and showed a positive trend on the whole. In 2022 the total volume of imports and
exports was USD30086 million down by 2.47% year on year; specifically the import volume was USD8803
million down by 18.63% year on year and the export volume was USD21284 million up by 6.27% year on year.
12Changchai Company Limited Annual Report 2022
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 light commercial vehicles 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
Graphic display Product description
products features fields
Our diesel engine products include
single-cylinder diesel engines and
High power low Agricultural
multi-cylinder engines covering
oil consumption machinery
power range from 1.62kW to
low noise construction
Diesel 117.6kW and cylinder diameters from
compact machinery
engine 65mm to 135mm with one or more
structure low generator sets
cylinders. Besides sale in domestic
emission good shipborne
market our diesel engines are sold to
reliability machinery
Southeast Asia South America the
Middle East and Africa.Our gasoline engines are mainly
general-purpose small gasoline
engines covering the power range Simple structure Agricultural
Gasoline from 1.5kW to 7.0kW. Besides sale in good reliability machinery small
engine domestic market our gasoline engines easy construction
are sold to Southeast Asia the Middle maintenance machinery
East Europe and America Africa
Japan and other countries and regions.
3. Major Business Models
(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
13Changchai Company Limited Annual Report 2022
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 various departments of the state have introduced a series of preferential policies to encourage the
development of internal combustion engine industry. In terms of agricultural machinery the central government
has taken solving the problems relating to "agriculture rural areas and farmers" as the top priority of the work of
the Party and the government and issued a series of policies to benefit farmers creating a good atmosphere for
promoting the development of agriculture and economy and society in rural areas; in terms of construction
machinery the strategy of "western development" the "eight vertical and eight horizontal" high-speed railway
network plan and the policy of "new rural construction" have all created a good policy environment for the
application of internal combustion engine in downstream construction machinery.
(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
14Changchai Company Limited Annual Report 2022
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 construction machinery and
commercial vehicles show excellent performance in power range reliability power per litre 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 national industrial enterprise with a history of over one hundred years. It is one of the earliest
professional manufacturers of internal combustion engines in China. The brand "Changchai" is the earliest
domestic trademark of production goods known as China's well-known trademarks. The diesel engine of
"Changchai" brand is China's brand-name product. The enterprise has been certified by ISO9001 and IATF16949
quality systems ISO14001 environmental management system IATF16949 automotive product quality
management system and accessed to the national export-free enterprise qualification. Changchai was honorably
ranked among “the Top One Hundred Chinese Enterprises in Engineering Industry” and “China PacesetterEnterprise of Industrial Industry” for several times and was awarded the honorary title of “State-level Enterpriseof Observing Contracts and Keeping Promise” “China's Agricultural Machinery Parts and Components LeadingEnterprises” “China's Agricultural Machinery AAA Credit Enterprise” “Quality Management Excellence Awardof Jiangsu Province” and “Mayor Quality Award of Changzhou City”. The Company has been among the 10
users’ most satisfied leading brands in “Jing Geng” competition for many years. In 2022 the Company was
awarded honorary titles such as Top 500 Machinery Industry In China National Demonstration Enterprise of
Product and Service Quality Integrity National Quality Leader of Internal Combustion Engine Industry National
Quality Leading Brand of Internal Combustion Engine Industry Product with Guaranteed Quality and Reputation
in China Stable Qualified Product in National Quality Inspection Top Ten Enterprises of Agricultural Machinery
and Equipment Industry in Jiangsu Province and Three Star Enterprise in Changzhou. 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.
2. Advantages in Technology
The Company has a state-level technology center and post-doctoral research station and a research center of small
and medium-power internal combustion engine engineering and technology in Jiangsu Province. Currently it is
mainly engaged in production of small and medium-power single-cylinder and multi-cylinder diesel engine. It has
a complete product range a wide power level coverage a high reputation and intellectual property rights for its
main products. During the Reporting Period the Company obtained the Re-assessment Certificate of the National
Enterprise Technology Centre and seven models including EH36 and ZN490B were recognized as High-tech
15Changchai Company Limited Annual Report 2022
Products of Changzhou City. In addition the Company won the honor of the research and development base of the
intelligent and lightweight diesel engine of the agricultural machinery and equipment industry in Jiangsu Province.During the Reporting Period the Company was granted 23 patents. As of the end of 2022 it has a total of 159
valid patents at home and abroad including 13 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country with 5 sales business units 26 sales
service centers and 698 designated maintenance stations. In addition in order to meet the National Emission
Standard IV for Non-Road Vehicles and provide better after-sales service for customers a service monitoring
platform with Changchai characteristics has been put in place. With a perfect diesel sales service network system
the Company is able to provide high quality efficient and timely services for customers.IV Core Business Analysis
1. Overview
In 2022 the domestic and international political and economic situation was complex and volatile. China’s
economy continued to face multiple pressures such as shrinking demand supply interruptions and weakened
expectations. The total volume of the market dropped due to factors such as subsidy policy change tight supply
chain upgrading of the National Emission Standard IV for Non-road Vehicles and intensified existing
competition. Facing the new normal of the complicated and volatile development and declining trend of the
agricultural machinery industry the Company united all employees and further focused on products market and
quality to seek progress while maintaining stability and innovation. The Company spared no effort to advance the
implementation of the annual operation policy and objectives effectively combined product operation and capital
management and accelerated production upgrade and industrial chain expansion to maintain a stable and orderly
development tendency. During the Reporting Period the Company sold approximately 607300 diesel engines
gasoline engines and generator sets including approximately 147000 gasoline engines generating total sales
revenue of RMB2.182 billion a decrease of 11.03% year-on-year.In terms of product development and support the Company completed the development and support certification
for mainstream models of single-cylinder and multi-cylinder engines that met the National Emission Standard IV
for Non-road Vehicles and launched them to the market through mass production. The Company orderly advanced
the extension of multi-cylinder engines’ upper and lower power ranges. The high-power multi-cylinder engines
were launched to the market through mass production after completing support verification and the optimized
multi-cylinder products with small cylinder diameters made breakthroughs in terms of the supporting fields. In
addition the development of the diesel outboard engine made phased progress and passed RCD MED EU
certification and CCS certification.In terms of market services domestic and overseas sales maintained the stability of the foundation and expanded
new markets. The single-cylinder orderly completed the switch of accessories that met the National Emission
Standard IV for Non-Road Engines of main engine factories and promoted the sales of products in the
non-agriculture fields by active guidance and network optimization. In terms of multi-cylinder engines the market
share of accessories in the key fields was increased. In addition the foreign trade market maintained sales growth
in core market segments and made breakthroughs in the emerging market. The Company stepped up efforts to
manage the appraisals of service sites in the service process and further optimized the resource allocation of the
service sites. The Company completed the function iteration and development of the remote monitoring platform
of engines which will provide effective technical support for the Company’s product design and development and
16Changchai Company Limited Annual Report 2022
the after-sales services of repair replacement and return.In terms of quality management the Company stepped up efforts to develop the quality management system
implemented the quality responsibility system strengthened the quality loss control of the entire production and
manufacturing process and effectively reduced quality loss. The Company organized to implement the
management review internal review of the quality system product review and process review and properly adjust
the content of the system documents based on reality and successfully passed the annual external audit of the
quality management system.In terms of internal management the Company continued to carry out the three-year action of special safety
rectification of safety production promoted the “safety code” in all respects made the hidden risk screening and
governance institutionalized and standardized and successfully passed the ISO14001 environmental system
supervision and review during the year. The Company initiated the standard implementation of the management
system of the integration of “information technology and industrialization” within the year and successfully
passed the assessment of the AA-grade integration of “information technology and industrialization” management
system. During the Reporting Period the Company adopted multiple measures to reduce costs and increase
efficiency to cope with the continuous rise in raw material prices at home and abroad. Great efforts were made to
resolutely crack down on infringements in the market and the Company’s intellectual property was effectively
safeguarded through innovative measures.In the Reporting Period the Company acquired 41.5% of the equity of Zhenjiang Siyang Diesel Engine
Manufacturing Co. Ltd. by bidding. On 16 May 2022 Zhenjiang Siyang convened a general meeting of
shareholders a meeting of the Board of Directors and a meeting of the Supervisory Committee to re-elect
members for the Board of Directors the Supervisory Committee and management. Zhenjiang Siyang has been
included in the consolidated financial statements of the Company.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
20222021
As % of
As % of total
total Change (%)
Operating revenue operating Operating revenue
operating
revenue (%)
revenue (%)
Total 2182043095.61 100% 2452430515.60 100% -11.03%
By operating division
Internal
combustion 2145567983.95 98.33% 2404119747.06 98.03% -10.75%
engines
Other 36475111.66 1.67% 48310768.54 1.97% -24.50%
By product category
Diesel engines 1971005207.88 90.33% 2241032641.05 91.38% -12.05%
Gasoline
148144749.686.79%149717934.826.10%-1.05%
engines
Other 62893138.05 2.88% 61679939.73 2.52% 1.97%
17Changchai Company Limited Annual Report 2022
By operating segment
Domestic 1857845869.48 85.14% 2038317678.97 83.11% -8.85%
Overseas 324197226.13 14.86% 414112836.63 16.89% -21.71%
By marketing model
Distribution 770975653.30 35.33% 689413386.97 28.11% 11.83%
Direct sales 1411067442.31 64.67% 1763017128.63 71.89% -19.96%
(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 change
YoY change YoY change
Operating Gross profit in gross
Cost of sales in operating in cost of
revenue margin profit margin
revenue (%) sales (%)
(%)
By operating division
Internal
214556798192420935
combustion 10.32% -10.75% -6.22% -4.33%
3.950.48
engines
By product category
Diesel 197100520 179521408 8.92% -12.05% -6.77% -5.16%
engines 7.88 0.08
Gasoline 148144749. 125625016.
15.20%-1.05%-2.60%1.35%
engines 68 85
By operating segment
185784586163346007
Domestic 12.08% -8.85% -3.08% -5.23%
9.483.55
324197226.315216962.
Overseas 2.77% -21.71% -21.69% -0.03%
1397
By marketing model
770975653.678293018.
Distribution 12.02% 11.83% 18.49% -4.95%
3021
141106744127038401
Direct sales 9.97% -19.96% -16.17% -4.07%
2.318.31
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
Item Unit 2022 2021 Change (%)
division
Diesel engines Unit sales Unit 458300 596279.00 -23.14%
18Changchai Company Limited Annual Report 2022
Output Unit 439604 601253.00 -26.89%
Inventory Unit 64867 83563.00 -22.37%
Any over 30% YoYmovements in the data above and why:
□ Applicable √ Not applicable
(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
20222021
As % of As % of
Product
Item total cost total cost Change (%)
category Cost of sales Cost of sales
of sales of sales
(%)(%)
Diesel Raw 1560381852.91 80.07% 1659710451.07 79.61% -5.98%
engines materials
Diesel Labor cost 229434494.85 11.77% 240110930.78 11.52% -4.45%
engines
Diesel Depreciation 56624131.58 2.91% 71198110.78 3.42% -20.47%
engines
Diesel Energy 15340866.19 0.79% 30044125.27 1.44% -48.94%
engines
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√ Yes □ No
The Sixth Extraordinary Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021
deliberated on and approved the Proposal on Participation in Bidding for 41.5% Equity Interests in Zhenjiang
Siyang Diesel Engine Manufacturing Co. Ltd. authorizing the Management of the Company to participate in
bidding for 41.5% equity interest in Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. (hereinafter referred
to as "Zhenjiang Siyang") that had been put out for sale by Jiangsu Keda Assets Marketing Co. Ltd. (hereinafter
“Keda Assets”). On 12 January 2022 Jiangsu Assets and Equity Exchange Co. Ltd. issued the Confirmation of
Transaction on the Transfer of 41.5% Equity Interests (Corresponding to Capital Contribution of RMB830000) in
Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. The Company won the bid for the 41.5% equity
interests in Zhenjiang Siyang at a price of RMB33520800.00. On 23 February 2022 the Company signed the
Contract on Transfer of State-owned Property Rights with Keda Assets. On 9 March 2022 Zhenjiang Siyang has
completed the relevant registration alteration formalities with the competent industrial and commercial
administration. On 16 May 2022 Zhenjiang Siyang held meetings of shareholders the Board of Directors and the
Supervisory Committee to elect and appoint new members for the Board of Directors the Supervisory Committee
and management with the Company taking over half of the seats in the Board of Zhenjiang Siyang. As such
Zhenjiang Siyang has been included in the consolidated financial statements of the Company bringing the number
of consolidated subsidiaries to eight.
19Changchai Company Limited Annual Report 2022
(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) 1054121258.48
Total sales to top five customers as % of total sales of the
48.31%
Reporting Period (%)
Total sales to related parties among top five customers as % of
0.00%
total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed for the As % of total sales revenue
No. Customer
Reporting Period (RMB) (%)
1 Customer 1 550073305.21 25.21%
2 Customer 2 207614866.65 9.51%
3 Customer 3 174674496.40 8.01%
4 Customer 4 66280122.00 3.04%
5 Customer 5 55478468.22 2.54%
Total -- 1054121258.48 48.31%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 288156794.05
Total purchases from top five suppliers as % of total purchases
of the Reporting Period (%) 18.39%
Total purchases from related parties among top five suppliers
0.00%
as % of total purchases of the Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting Period
No. Supplier As % of total purchases (%)
(RMB)
1 Supplier 1 128212300.00 8.18%
2 Supplier 2 57147375.28 3.65%
3 Supplier 3 43433746.37 2.77%
4 Supplier 4 35757706.62 2.28%
5 Supplier 5 23605665.79 1.51%
Total -- 288156794.05 18.39%
Other information about major suppliers:
□ Applicable √ Not applicable
20Changchai Company Limited Annual Report 2022
3. Expense
Unit: RMB
Reason for any
2022 2021 Change (%)
significant change
Selling expense 102630223.71 117242290.32 -12.46%
Administrative
119511189.7298890284.2220.85%
expense
Increased exchange
Finance costs -21589704.63 1203615.80 —— gains and interest
income
R&D expenses 81239597.06 82390284.14 -1.40%
4. R&D Investments
√ Applicable □ Not applicable
Major R&D Expected impact on the
Purpose Progress Specific objectives
project Company
Developing the
Optimizing and upgrading
multi-cylinder
based on the M series diesel
diesel engine with
engine. Increasing engine After the
small cylinder
Development power by adopting the implementation of the
diameters that can
project of the high-pressure common rail project the upgraded
meet the supporting
lightweight system electronic control diesel engine will have
requirements of rice In
low-emission technical route supercharger a broad and good
transplanters plant progress
diesel engine and post-processing market application
protection spray
of common rail technology to meet the prospects and will be
machines tractors
series National Emission Standard more competitive in the
small construction
IV for Non-Road Vehicles and market.machinery and
expand market supporting
horticultural
fields.machinery
Making an optimal design of
After the
the engine’s structure and
implementation of the
performance to significantly
Developing project the product will
improve product indicators
The power and efficient meet the requirements
such as reliability fuel
assembly R&D eco-friendly and of the National
In consumption and emission to
project of energy-saving Emission Standard IV
progress meet the advanced level of
diesel outboard power and for Non-road Vehicles
similar products abroad as
engines assembly of diesel and will have extensive
well as the requirements of
outboard engines. application scenarios
the National Emission
and broad market
Standard IV for Non-road
prospects.Vehicles.Development Developing In Realizing energy saving After the
21Changchai Company Limited Annual Report 2022
project of the efficient progress meeting the requirements of implementation of the
special diesel eco-friendly and the National Emission project the product will
engine of the energy-saving Standard IV for Non-road have salient advantages
high outboard engines Vehicles and meeting the in terms of power
horsepower supporting requirements of performance safety
outboard various types of small fishery economic efficiency
engines machinery by applying and environmental
high-performance protection and meet the
technologies such as diesel requirements of the
engine energy saving noise National Emission
reduction environmental Standard IV for
protection material saving Non-road Vehicles.and service life extension.Developing Diversifying the
Making major optimization of
lightweight Company’s products
the diesel engine’s structure
Development single-cylinder further expanding the
and performance to meet the
project of the water-cooled power market and
In advanced level of similar
special diesel high-speed diesel meeting non-emission
progress products abroad as well as the
engine of the engines to meet the regulatory requirements
requirements of the National
motorcycle power requirements can bring about new
Emission Standard IV for
of motor-tricycle in growth points for the
Three-wheelers.the market Company’s benefits.After the
Further making diesel engines
implementation of the
more technical and lowering
project the upgraded
the harmful substance
diesel engine will meet
Developing diesel emissions of diesel engines to
the requirements of the
Development engines that have make their indicators better
National Emission
project of higher performance In meet domestically advanced
Standard IV for
4G29 diesel and meet the progress level in terms of economic
Non-road Vehicles and
engine emission efficiency and power
drive the Company’s
requirements performance and meet the
non-road vehicle
requirements of the National
technologies to be more
Emission Standard IV for
mature and
Non-road Vehicles.well-developed.Development Developing Improving diesel engine’s After the
project of single-cylinder power performance economic implementation of the
single-cylinder diesel engines with efficiency of fuel and other project the product will
diesel engines a mechanical pump performance indicators as meet the requirements
In
with a that have higher well as service life and of the National
progress
mechanical performance and making the emission Emission Standard IV
pump that can meet the National indicators meet the National for Non-road Vehicles
meet the Emission Standard Emission Standard IV for in terms of the emission
National IV for Non-road Non-road Vehicles indicators and meet the
22Changchai Company Limited Annual Report 2022
Emission Vehicles supporting
Standard IV requirements of
for Non-road machinery bringing
Vehicles about new growth
points for the
Company’s benefits.After the
implementation of the
project the product will
Developing a
Conducting structural meet the requirements
higher-performance
Development optimization of diesel engine of non-road China IV
light multi-cylinder In
of V402 diesel components to improve vehicle emission
diesel engine that progress
engine product performance and regulations the
meets the emission
reliability. supporting
requirements
requirements of
machinery and market
demand.Conducting major design After the
Developing more optimization of the engine implementation of the
efficient structure and performance to project the product will
Development
environmentally improve the reliability fuel meet the requirements
of D15 diesel In
friendly and consumption emissions and of non-road China IV
outboard progress
energy-saving other indicators of the vehicle emission
engine
diesel-powered product so as to reach the regulations and open up
products advanced level of similar the market of ship
foreign products. machinery.After the
implementation of the
project the product
Improving the emission meets the market
Developing
Development characteristics and economic demand and makes the
efficient and
of characteristics of goods quality and
environmentally In
diesel-electric diesel-electric hybrid diesel logistics efficiency of
friendly progress
hybrid engines to enhance the energy the cold chain timely
diesel-powered
products efficiency endurance and safe and efficient
products
reliability. providing a
whole-procedure
temperature and quality
management solution.Details about R&D personnel:
2022 2021 Change (%)
Number of R&D
personnel 236 264 -10.61%
R&D personnel as % of 8.89% 9.55% -0.66%
23Changchai Company Limited Annual Report 2022
total employees
Educational background of R&D personnel
Bachelor’s degree 101 117 -13.68%
Master’s degree 7 13 -46.15%
Age structure of R&D personnel
Below 30 25 34 -26.47%
30~408495-11.59%
Details about R&D investments:
2022 2021 Change (%)
R&D investments (RMB) 81239597.06 82390284.14 -1.40%
R&D investments as % of operating
revenue 3.72% 3.36% 0.36%
Capitalized R&D investments (RMB) 0.00 0.00 ——
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 2022 2021 Change (%)
Subtotal of cash generated from
2150597784.381878728640.4714.47%
operating activities
Subtotal of cash used in
1785667506.542145052419.77-16.75%
operating activities
Net cash generated from/used in
364930277.84-266323779.30——
operating activities
Subtotal of cash generated from
944067348.19385166151.68145.11%
investing activities
Subtotal of cash used in
1082020854.62850680343.3427.19%
investing activities
Net cash generated from/used in
-137953506.43-465514191.66——
investing activities
Subtotal of cash generated from
135437700.65711844747.79-80.97%
financing activities
Subtotal of cash used in
114312925.5445328892.65152.19%
financing activities
Net cash generated from/used in
21124775.11666515855.14-96.83%
financing activities
Net increase in cash and cash 247948744.46 -67537318.91 ——
24Changchai Company Limited Annual Report 2022
equivalents
Explanation of why any of the data above varies significantly:
√Applicable□ Not applicable
The significant year-on-year change in net cash generated from/used in operating activities was primarily because
the Company strengthened the collection of payments by customers destocked due to the rising emission
standards (resulting in decreased procurement expenditure) and discounted certain bank acceptance notes from
customers with high credit levels for cash management purposes in pursuit of higher income in the Reporting
Period.The significant year-on-year change in net cash generated from/used in investing activities was primarily due to
the Company’s acquisition of a 41.5% interest in Zhenjiang Siyang a capital increase to Jiangsu Horizon New
Energy Technology Co. Ltd. and the proper use of idle funds for cash management purposes in the Reporting
Period.The significant year-on-year change in net cash generated from/used in financing activities was primarily because
the Company raised a gross amount of RMB634999936.40 (net proceeds: RMB620665733.97) in a private
placement of 144318181 shares of the RMB-denominated ordinary stock (A-stock) last year while there were no
such financing activities during the Reporting Period.Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√Applicable□ Not applicable
The big difference between the net operating cash flow and the net profit for this Reporting Period was mainly
because of the impact on the current income of the fair value changes of the financial assets held by the Company
and the discounting of certain bank acceptance notes with high credit levels.V Analysis of Non-Core Businesses
√Applicable□ Not applicable
Unit: RMB
Amount As % of Source Recurrentgross profit or not
Return on 7969467.19 9.75% Stock dividends and income from cashinvestment management Yes
increased fair value of the Company’s
interest in Jiangsu Horizon New Energy
Gains/losses on Technology Co. Ltd. as well as the
changes in fair 145243457.17 177.75% decreased prices of the shares held by
value wholly-owned subsidiary Horizon
No
Investment in Jiangsu Liance
Electromechanical Technology Co. Ltd.and Kailong High Technology Co. Ltd.Asset impairment
loss -14367197.27 -17.58% Inventory valuation loss No
Non-operating Negative goodwill and amounts that
income 4257942.65 5.21% require no payment due to business Nocombination not under common control
Non-operating
expense 618463.56 0.76% Loss on retirement of non-current assets No
25Changchai Company Limited Annual Report 2022
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2022 1 January 2022 Change
As % As % of in Reason for any
Amount of total Amount total percenta significant change
assets assets ge (%)
The strengthened
collection of payments
Monetary by customers and the
930013350.97 17.82% 707966678.74 14.57% 3.25% discounting of certain
assets bank acceptance notes
from customers in the
Reporting Period.Accounts
370322179.777.10%375209126.487.72%-0.62%
receivable
Inventories 571996881.74 10.96% 651083758.18 13.40% -2.44%
Investment
42160779.650.81%44597255.210.92%-0.11%
property
Majority-owned
subsidiary Changchai
Machinery’s
lightweight engine and
Fixed assets 720061387.76 13.80% 402915521.65 8.29% 5.51% casting relocationproject was transferred
from construction in
progress to fixed
assets in the Reporting
Period.Majority-owned
subsidiary Changchai
Machinery’s
lightweight engine and
Construction
30281547.56 0.58% 270305690.91 5.56% -4.98% casting relocation
in progress project was transferred
from construction in
progress to fixed
assets in the Reporting
Period.Certain bank
acceptance notes with
Short-term low credit levels were
115437700.65 2.21% 73971466.65 1.52% 0.69% discounted in the
borrowings Reporting Period
which were undue at
the period-end.Contract
32843692.830.63%26864081.970.55%0.08%
liabilities
Indicate whether overseas assets take up a high percentage in total assets.
26Changchai Company Limited Annual Report 2022
□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss
Cumulati Impairme
on
ve nt Purchase Sold in
fair-value
Beginnin fair-value allowance d in the the Other Ending
Item changes
g amount changes for the Reporting Reporting change amount
in the
charged Reporting Period Period
Reporting
to equity Period
Period
Financial assets
1.
Held-for-t
rading
financial
assets
4040532-428367969060796017363701036
(derivativ
61.5741.1967.0084.8102.57
e
financial
assets
exclusive
)
4.
Investme
nt in
779877677099029555602
other
46.5340.0840.08
equity
instrumen
ts
Subtotal
of 1183930 -428367 7709902 9690607 9601736 1325663
financial 908.10 41.19 40.08 67.00 84.81 842.65
assets
1503982187411375000004128095
Other
26.3961.540.0087.93
Total of 1334329 1445746 7709902 1044060 9601736 1738473
above 134.49 20.35 40.08 767.00 84.81 430.58
Financial
0.000.00
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
27Changchai Company Limited Annual Report 2022
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Item Ending carrying value Reasons
Security deposits associated with bank acceptance
Monetary assets 95662384.92
notes environment etc.Buildings 1530890.90Collateral for bank loan
Land use right 879275.35Collateral for bank loan
Plant and equipment 31222420.22Collateral for bank loan
Payment obligations in relation to
110000000.00
discounted notes that were undue
Payment obligations in relation to
66395231.83
transferred notes that were undue
Total 305690203.22
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)
108520800.00160000000.00-32.17%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Profi
ts or
Prog losse
ress s of Invo
Shar Disc Disc
Inve Inve Capi as of Esti inve lvin
Mai ehol Inve Type losur losur
stme stme tal the mate stme g in
Inve n ding Part stme of e e
nt nt reso bala d nt in laws
stee busi perc ner nt prod date inde
meth amo urce nce inco the uit
ness enta term ucts (if x (if
od unt s shee me Rep or
ge any) any)
t ortin not
date g
Peri
od
28Changchai Company Limited Annual Report 2022
Zhe Man Man
Tran
njian ufact ufact
sacti
urin urin ong
Siya g g
com
ng and and
plete
Dies mar mar
d
el ketin Acq 335 Self- Lon ketin
with 29
g of 208 41.5 NonEngi uisiti fund g-ter g of
the 190
dies 00.0 0% dies relev 0.00 413 Not
Octo 2021
ne eel on 0 ed m el ant 2.58
ber -068
Man equit 2021
ufact engi engi y
urin ne nesets sets interg for for estsCo. trans
Ltd. ship ships s ferred
Own
ershi
p
Jian chan
gsu ge
Hori regis
zon Lithi Lithi teredNew Capi 750 Self- Lon
Ener um tal 000 5.36 Non um
with 186 27
diap fund g-ter diap the 0.00 000 Aug 2022gy hrag incre 00.0 % e hrag indu 000.Not ust -049
Tech ase 0 ed mm m strial 00 2022nolo and
gy com
Co. merc
Ltd. ial
admi
nistr
ation
108187
Tota -- -- 520l 800. -- -- -- -- -- -- 0.00
904
132.------
0058
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Varie Code Nam Initia Acco Begi Gain/ Accu Purc Sold Gain/ Endi Acco Fund
untin nnin loss mula hase in loss ng
ty of of e of l g g on ted d in the in carry untin ing
29Changchai Company Limited Annual Report 2022
secur secur secur inves meas carry fair fair the Repo the ing g sourc
ity ity ity tmen urem ing value value Repo rting Repo amouent amou chan chan rting Perio rting nt title e
t cost meth nt ges ges Perio d Perio
od in the recor d d
Repo ded
rting in
Perio equit
d y
Inves
tmen
Dom t in
Foto Fair
estic/ 4178 4970 364 406 other Self-n value
forei 6001 4000 8000 0.00 26166 000. 0.00 0.00 0.00
045
000. equit fundMoto meth
gn .00 0.00 y ed
r od 00 00
stock instr
umen
ts
Inves
tmen
Dom t in
Bank Fair
estic/
6009 of 4278 value 1364
127 170 other Self-
forei 19 6000 2200 0.00
800
000.0.000.000.00
586
000. equit fundJiang
gn .00
meth 0.00
su od 00 00
y ed
stock instr
umen
ts
Kailo Held
Dom
ng Fair -for-t
estic/ -105 radin Self-
3009 High 2000 value 2413 -105forei 1268 6339 4392 0.00 0.00 0.00 439
135
1228.09241
g
Tech .00 meth .00 8.00 1.00 finan
fund
gn
nolo od 0 cial
ed
stock asset
gy s
Held
Dom Lian
Fair -for-t
estic/ ce 7200 8784 -277 -277 600 radin Self-6881 valueforei 13 Tech 000. 0000 7760 0.00 0.00 0.00
776 624 g fund
meth
gn nolo 00 .00 0.00
00.0 00.0 finan
0 0 cial edod
stock gy asset
s
Held
Dom
Fair -for-t
estic/ Lanti -420 247 radin Self-value
forei 6053 1607 2890 -42068 an 44.76 00.00 00.00 0.00 0.00 0.00 00.0 000.g
finan fundmeth
gn Gas 0 00
od cial
ed
stock asset
s
Dom 8328 Stars 3600 Fair 9675 -483 0.00 0.00 0.00 -483 483 Held Self-
30Changchai Company Limited Annual Report 2022
estic/ 85 Scien 000. value 000. 7500 750 750 -for-t fund
forei ce 00 meth 00 .00 0.00 0.00 rading ed
gn and od finan
stock Tech cial
nolo asset
s
gy
11557554-432492-432655
Total 3201 -- 4233 0102 061 0.00 0.00 010 370 -- --
2.769.008.00000.28.0311.00000
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Overall Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0000
Total
Proport Raised
Total raised
Total Total ion of Total Use funds
raised funds
raised accumu total raised and that
funds with
funds lative accumu funds owners have
Year Method that altered
Total that raised lative that hip been
for of have purpos
raised have funds raised have change left
fund-ra fund-ra been es
funds been with funds not of unused
ising ising used in during
used altered with been unused for
the the
accumu purpos altered used raised over
current Reporti
latively es purpos yet funds two
period ng
es years
Period
Special
account
Non-pu
for
blic
202163500.8944.434682.0.000.000.00%28817.
offerin 00 5 81 19
deposit 0.00
ing
g
raised
funds
Total -- 63500. 8944.4 34682.00 5 81 0.00 0.00 0.00%
28817.
19--0.00
31Changchai Company Limited Annual Report 2022
Explanation of the overall use of raised funds
On 17 December 2020 the Company received the Reply Concerning the Approval of the Non-public Offering
of Shares of Changchai Co. Ltd. (CSRC Permit [2020] No. 3374) from the China Securities Regulatory
Commission which approved the non-public offering of up to 168412297 shares of the Company. On June 11
2021 the subscribers of this non-public offering have fully remitted the subscription funds to the bank account
designated by the sponsor institution and the total amount of funds raised was RMB634999996.40. After the
capital verification by Gongzheng Tianye Accounting Firm (Special General Partnership) the Capital
Verification Report of the Funds Raised by the Non-public Issuance of Changchai Co. Ltd. (S.G.W [2021]
B061) was issued. With the issuance expenses deducted the actual net funds raised were RMB620665733.97.On June 15 2021 the aforementioned raised funds were remitted to the special account set up by the Company
for raised funds from the non-public offering of shares. After the capital verification by Gongzheng Tianye
Accounting Firm (Special General Partnership) the Capital Verification Report of the Funds Raised by the
Non-public Issuance of Changchai Co. Ltd. (S.G.W [2021] B062) was issued. The raised funds have all been
deposited in the special account for the raised funds and a tripartite supervision agreement has been signed with
the sponsor institution and the account opening bank for the funds raised. There is no material difference
between the tripartite supervision agreement and the model tripartite supervision agreement of Shenzhen Stock
Exchange and the Company strictly complies with it when using the raised funds. As of 31 December 2022
RMB346.8281 million of raised funds has been used cumulatively with the unused raised funds being
RMB288.1719 million.
(2) Committed Projects of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0000
Accu
Wheth Wheth
mulati Invest
er er
The ve ment Date
projec Benefi there
Total invest invest progre when Wheth
ts Adjust ts are
Committed comm ment ment ss as the er the
have ed record materi
investment itted amou amou of the projec estima
been total ed al
projects and invest nt nt as end of ts are ted
altere invest during chang
investment of ment during of the the ready benefi
d ment the es in
excessive raised with the end of Repor for ts are
(inclu amou Repor the
funds raised Repor the ting their reache
ding nt (1) ting projec
funds ting Repor Period intend d
partial Period t
Period ting (3) = ed use
altern feasibi
Period (2)/(1)
ation) lity
(2)
Committed investment projects
Relocation project 31
of light engines No 5476 5476 8311. 3241 59.19 -16396.71 6.71 17 8.32 % May .88 No No
and casting 2022
Innovation 31 Not Not
capacity building
No 8733. 7299. 633.2 759.2 10.40 Dece applic applic No
project of the 29 86 8 1 % mber
able able
technical center 2023
Subtotal of -- 6350 6206 8944. 3317 -- -- -1639.88 -- --
32Changchai Company Limited Annual Report 2022
committed 0.00 6.57 45 7.53
investment
projects
Investment of excessive raised funds
Not applicable
635062068944.3317
Total -- -- -- -1639 -- --
0.006.57457.53.88
The reasons for the failure to realize the benefits of the relocation project of light engines
and casting during the Reporting Period: The project met the hoped condition for use in
May 2022. However due to market factors the production line failed to achieve the
expected production volume. The sales revenue of the products was inadequate to cover
the costs of the depreciation of new fixed assets and administrative expenses. As a result
the project failed to achieve the anticipated benefit as of 31 December 2022.The reasons for the slow payment progress of the relocation project of light engines and
Cases and reasons casting: As of 31 December 2022 the project did not complete the final account audit and
for failing to final acceptance inspection of equipment compromising the payment progress. As of 31
reach the planned March 2023 the payment amount reached RMB476.1310 million accounting for 86.94%
progress or of the total amount. The unpaid funds mainly refer to the supporting working capital and
predicted return the balance of the remaining unaccepted equipment.(by specific The reasons for the slow payment progress of the innovation capacity construction of the
projects) technology centre: As of 31 December 2022 half of the construction period of the
innovation capacity construction of the technology centre was passed and some R&D
objectives were achieved. However the payment progress of the project was slow for the
following specific reasons: 1. From the beginning of the project initiation the Company
adhered to the principles of saving capital and increasing the asset utilisation rate. It
utilised existing equipment to complete some of the R&D processes saving some
expenses of equipment. 2. The balance of some signed contracts was not paid. 2. The
balance of some signed contracts was not paid.Explanations of
the material
Not applicable
changes in the
project feasibility
Amount use and
use progress of
Not applicable
excessive raised
funds
Applicable
Implementation Occurred during the Reporting Period
of location The Proposal on Adding Implementation Location to the Private Placement Raised Funds
changes in the Investment Project of Innovation Capacity Building of the Technical Centre was approved
investment at the 13th Meeting of the 9th Board of Directors and the 12th Meeting of the 9th
projects with the Supervisory Committee of the Company on 22 August 2022. The Company decided to
raised funds add the sites of certain branches of the Company as the parent and wholly-owned
subsidiary Changchai Machinery as locations to place the R&D equipment and
33Changchai Company Limited Annual Report 2022
implement the R&D project. This change will not re-purpose the raised funds and will
help carry forward the technical innovation project.Implementation
of method
adjustments to the
Not applicable
investment
projects with the
raised funds
Applicable
Prior to the availability of the raised funds in order to ensure the smooth implementation
of the investment projects with raised funds the Company used its own funds to invest in
part of the investment projects with raised funds and paid part of the issuance expenses.As of 17 June 2021 the cumulative amount of the Company's self-financing funds
pre-invested in the investment projects with raised funds was RMB181803327.94 the
amount of issuance expenses advanced was RMB2358490.56 totaling
RMB184161818.50 and the proposed replacement amount was RMB184161818.50.The capitals were verified by the Gongzheng Tianye Accounting Firm (Special General
Early investment
Partnership) and the Verification Report on the Pre-investment of Self-financing Funds
and placement
into the Investment Project with Raised Funds and the Payment of Issuance Expenses by
concerning the
Self-financing Funds of Changchai Co. Ltd. (S.G.W [2021] E1347) was issued on 25
investment
June 2021. On 28 June 2021 the Third Interim Meeting of the Board of Directors of the
projects with the
Company in 2021 deliberated and approved the Proposal on Replacing the Funds
raised funds
Pre-invested in the Project and Advanced Issuance Expenses with the Raised Funds
agreeing to use the raised funds from the non-public offering of shares to replace the
self-financing funds totaling RMB184161818.50 that had been pre-invested in the
project prior to the availability of the raised funds. In addition Xingye Securities Co.Ltd. and Donghai Securities Co. Ltd. issued a verification opinion on the use of raised
funds to replace self-financing funds that had been invested in advance in the projects
with raised funds. For details see the Announcement on the Use of Raised Funds to
Replace Pre-invested Project Funds and Advanced Issue Expenses (Announcement No.
2021-036) published on Cninfo (http://www.cninfo.com.cn) on 30 June 2021.
Temporary
replenishment of
working capital Not applicable
with the idle
raised funds
Surplus raised
funds for project
implementation Not applicable
and reasons for
the surplus
Use and
Some are deposited in the special account for raised funds and some temporarily idle
ownership change
raised funds are used to purchase wealth management products
of unused raised
34Changchai Company Limited Annual Report 2022
funds
On 13 July 2021 the Fourth Interim Meeting of the Board of Directors of the Company in
2021 deliberated and approved the Proposal on Changing the Implementation Entity of
Some Investment Projects with Raised Funds agreeing to change the implementation
entity of the Company's investment projects with funds raised through non-public
offering of shares the "relocation project of light engines and casting" from Changchai
Problems in the Machinery a wholly-owned subsidiary of the Company to the parent company of
use of raised Changchai Co. Ltd. The matter did not change the use and implementation of the funds
funds and raised and was not a significant change in the investment projects with raised funds.disclosure or The Proposal on Adding Implementation Entity to the Private Placement Raised Funds
other cases Investment Project of Relocation of Light Engines and Casting was approved at the 13th
Meeting of the 9th Board of Directors and the 12th Meeting of the 9th Supervisory
Committee of the Company on 22 August 2022. As such the Company has added
Changchai Machinery as another operating entity with the Company as the parent to joint
operate the relocation project for better operational flexibility and stronger market
competitiveness.
(3) Altered Projects of Raised Funds
□ Applicable √ Not applicable
VIII Sale of Major Assets and Equity Interests
1. Sale of MajorAssets
□ 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
Relations
hip with Principal Registere Total Operating Operating
Name Net assets Net profit
the activity d capital assets revenue profit
Company
Changcha Subsidiar Productio 55063000.00 1550377 8005038 1906318 -963375 -832325
35Changchai Company Limited Annual Report 2022
i Benniu y n of 13.45 1.90 59.08 8.49 6.01
diesel
engine
accessori
es
Changcha Diesel
Subsidiar 8500000 7036172 4926410 3428125 -658955. -652107.i engine
y 0.00 7.25 8.12 2.72 59 80
Wanzhou assembly
External
Horizon investme
Subsidiar 9444663
Investme nt and 4000000 8093110 -409712
-304378
y 0.00 5.52 1.39
0.0043.2409.17
nt consultin
g
agricultur
Horizon al
Agricultu machiner
Subsidiar 9071468 -150544 3513853 -420935 -420935
ral y product 1000000
y 0.00 .38 66.60 .60 8.80 8.80
Equipme of rice
nt transplant
er etc.Gasoline
Changcha Subsidiar 1075569 8638380 1481447 1240378 1145234
engines 3725000
i Robin y 0.00 55.89 8.82 49.68 4.38 7.12
assembly
Internal
combusti
Changcha
on engine
i Subsidiar 3000000 5774670 2774522 2720081 -239843 -186914and
Machiner y 00.00 39.02 20.47 2.94 44.72 34.92
related
y
accessori
es
Xingshen Real
g Real estate
Subsidiar
Estate managem 1000000
2614116559218.04640127197076.5141777.6
y .00 .80 4 .66 1 4
Managem ent
ent service
Manufact
uring and
Zhenjiang Subsidiar marketing 2000000 1085953 8836005 3544098 4616942 4885811
Siyang y of diesel .00 10.06 3.89 3.37 .04 .05
engines
for ships
Subsidiaries obtained or disposed of in the Reporting Period:
√ Applicable □ Not applicable
Company name How the subsidiary was obtained or disposed Impact on the Company’sof in the Reporting Period operations and operating results
36Changchai Company Limited Annual Report 2022
The Company won the bid of RMB33.5208
Zhenjiang Siyang Diesel million of own funds for the 41.5% equity
This transaction will help the
Engine Manufacturing interests in Zhenjiang Siyang Diesel Engine
Company expand its product
Co. Ltd. Manufacturing Co. Ltd. which was put out for
chain complete its business
sale by Jiangsu Keda Assets Marketing Co. portfolio and promote long-term
Ltd. development.Other information about principal subsidiaries and joint stock companies: N/A
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 state’s existing policies and new policies on comprehensively promoting rural revitalization and accelerating
to build China into an agricultural power will bring about significant and positive impacts for the industry. The
Company will make full use of the policy-based dividend of strong national support for agricultural production
and development of agricultural machinery and continue to promote innovative development talent recruitment
quality improvement brand building and capital boost to accelerate the technological upgrade of traditional
power products expand new markets in new fields and also to achieve diversified development of the industry.The Company’s main development directions are as follows:
(1) Accelerating technological upgrading and area expansion for traditional products
First the Company will continue to promote the mass production of the full range of models that meet the
National Emission Standard IV for Non-road Vehicles. It will further optimize the products that meet the National
Emission Standard IV for Non-road Vehicles and develop its capability of production manufacturing and
after-sales service to ensure that the products’ power performance economic efficiency and reliability can meet
market demands.Second traditional products will be developed in the direction of intelligent and networked high-end products.Based on the electronic networked and intelligent characteristics of the development of agricultural machinery
products the Company will promote the application of advanced technologies such as the Internet big data
artificial intelligence and new materials to product development further improve the diesel engines’ functions of
intelligent control real-time monitoring and big data collection and analysis accelerate the R&D of intelligent
terminals and hybrid power promote the products to develop towards the high end strengthen the existing
advantageous products and raise the added value of products to better meet user demands.Third traditional products will be developed in the terminal direction. The diesel engine is an intermediate
product and a core product to develop in the terminal direction. At present the Company’s main products are
small and medium-power diesel engines and general gasoline engines the market of supporting facilities is mainly
distributed in agricultural machinery plant protection machinery construction machinery shipborne machinery
and other non-road areas. The Company is now focusing on terminal fields such as generating sets outboard
engines cold chains fishing boats and iron towers with a broad prospect. Currently the Company has
successfully acquired 41.5% of the equity of Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.(“Zhenjiang Siyang”) becoming the largest shareholder and gaining control. Zhenjiang Siyang mainly engages in
the diesel engine units of lifeboats and rescue boats which is a top 1 brand of the main engine of lifeboats in the
37Changchai Company Limited Annual Report 2022
world. Meanwhile the outboard engine project has made phased progress with the small-power outboard engines
gradually completing market verification. In addition a domestic and overseas market sales system has been built
which is conducive to expanding the product chain and improving the business structure. The Company will make
full use of the capital platform of the listed company to cut in at the right time through joint venture cooperation
mergers and acquisitions restructuring etc. to accelerate the extension of the industrial chain and build new
competitive advantages.
(2) Promoting industrial transformation and development in the direction of combination with new energy
The irreversible development of new energy has impacted internal combustion engine products but the
opportunity exists for a long time. While tapping the advantages of traditional industries internal combustion
engines should develop with the development of new energy as well. At present the Company has invested in
Jiangsu Horizon New Energy Technology Co. Ltd. through equity participation mainly engaging in the products
of the project of wet-process separator film for lithium batteries with a good development momentum. In the
future the Company will seize the development opportunities of the “carbon peaking and carbon neutrality”
strategy raised by the state continue to increase its efforts to explore new energy areas such as lithium battery and
hydrogen fuel promote cooperation and penetration of related green industry and drive it to expand to new fields.
2. Operation plan for the Year 2023:
The Company will consolidate the traditional market of agricultural machinery explore the emerging area of
power raise quality to create fine products with core technologies highlight efficiency by integrating resources
stimulate vitality by deepening reform and leverage capital to promote development. In 2023 sales revenue is
expected to be RMB2.2 billion with revenue of USD52 million through export.The above operation plan does not represent the profit forecast of Y2023 by the listed company and whether can
be realized depends on various factors on the changes of market conditions and the effort level of the management
team. There is a lot of uncertainty and investors should pay special attention on it.
3. Possible future risks and countermeasures of the Company
(1) Market risk:
The total volume of the market will drop due to factors such as subsidy policy change tight supply chain
upgrading of the National Emission Standard IV for Non-road Vehicles and intensified existing competition. In
recent years the agricultural machinery industry has still been in a period of deep adjustment. The diesel engine
market faces limited total demand the delivery capacity and environment of products need to be improved and
the lower user revenue compromises the increase in the demand side.Countermeasures: First the Company solidifies the traditional supporting fields further expands the Company’s
advantages in the field of agricultural machinery and continues to promote the mass production of the full range
of models that meet the National Emission Standard IV for Non-road Vehicles to ensure the continuous supply
level of supply chains and meet market demands. Second the Company expands applications in shipborne
generator sets high-speed rice transplanters cold chain vehicles excavators and other small construction
machinery conducts in-depth research and development in new areas and development and supporting of key
products. Third the Company creates the “internal combustion engine+” mode actively promotes the application
of advanced technologies such as the Internet big data artificial intelligence and new materials to product
development further improves the diesel engines’ functions of intelligent control real-time monitoring and big
data collection and analysis accelerates the R&D of intelligent terminals and hybrid power promotes the products
to develop towards the high end and builds new competitive edges.
(2) Industrial risk
In recent years the state advocates energy conservation and emission reduction. New energy power represented
by pure electric hybrid power and hydrogen fuel power has grabbed the market share of diesel engine to a certain
38Changchai Company Limited Annual Report 2022
extent. At present new energy power is mainly used in vehicles. Its use in agricultural machinery is still facing
problems such as high cost and complex operating environment. However as breakthroughs have been made in
new energy battery technology the local application scenario of diesel engine may be replaced by new energy
power.Countermeasures: The Company strengthens exploration in the new energy sector and actively promotes project
construction and development. Meanwhile the Company makes proper efforts in product R&D develops efficient
and eco-friendly products and expands new development directions and application areas.
(3) Foreign trade risk
In the context of the complex and changeable global economic environment and the turmoil in the breadbasket of
Europe caused by the Russia-Ukraine conflict the prices of imported agricultural products fertilizer feed oil and
gas increase which directly compromise the planting costs and purchasing power of farmers. The unstable factors
have brought about certain impacts on product export.Countermeasures: The Company will actively deal with the foreign trade market changes strengthen the
maintenance and management of overseas key markets and customers intensify efforts in the development of
emerging markets and new users and endeavor to improve the sales of high-value-added products.
(4) Foreign exchange risk
Some of the Company’s exports are settled in USD. In the future due to the significant exchange rate fluctuation
of RMB against USD the Company may face the risk of adverse impact on product sales due to exchange rate
fluctuation.Countermeasures: First the Company will enhance risk control to ensure its capital security constantly pay
attention to the depreciation of currencies and shortage of USD in the market and lower risk by changing
payment methods change and insuring export credit insurance. Second the Company will promptly adjust product
prices and payment terms to cope with fluctuations in exchange rates and material prices.
(5) Talent risk:
The Company needs high-level talents highly skilled talents and lacks talents to help the Company improve its
operational efficiency and strengthen technological innovation to cope with the increasingly fierce market
competition and industry development trend. Therefore the demand for professional talents and senior
management talents has increased significantly.Countermeasures: First the Company has stepped up efforts to cultivate and appoint young leaders and recruited
more professional talents. Second the Company has promoted the reform program of appraisal and motivation
recruited advanced talents through multiple approaches and constantly enhanced the development of skill experts
technical and management personnel and workers and technicians so as to raise the contribution rate of human
resources in all respects.XII Communications with the Investment Community such as Researches Inquiries and
Interviews during the Reporting Period
√ Applicable □ Not applicable
Type
Way Index to
Place of of Contents and materials
Date of visit of Visitor main inquiry
visit visit provided
visit information
or
http://irm.cn Othe Indiv Individual Product usage of Horizon http://irm.cni
4 January 2022
info.com.cn r idual investor New Energy Technology nfo.com.cn
39Changchai Company Limited Annual Report 2022
Co. Ltd.Development products
http://irm.cn Othe Indiv Individual
6 January 2022 and financing of Horizon http://irm.cni
info.com.cn r idual investor New Energy Technology nfo.com.cn
Co. Ltd.Product status and
http://irm.cn Othe Indiv Individual
12 January 2022 development suggestions http://irm.cni
info.com.cn r idual investor of Horizon New Energy nfo.com.cn
Technology Co. Ltd.http://irm.cn Othe Indiv Individual Company’s production
18 January 2022 and operation status and http://irm.cni
info.com.cn r idual investor product suggestions nfo.com.cn
http://irm.cn Othe Indiv Individual Impact of the results of
20 January 2022 Horizon New Energy on http://irm.cni
info.com.cn r idual investor the Company nfo.com.cn
http://irm.cn Othe Indiv Individual The intention of the
27 January 2022 Company to repurchase http://irm.cni
info.com.cn r idual investor shares nfo.com.cn
The Company’s product
http://irm.cn Othe Indiv Individual R&D market
31 January 2022 advantages and situation http://irm.cni
info.com.cn r idual investor of the outboard engine nfo.com.cn
product
http://irm.cn Othe Indiv Individual The Company’s product
8 February 2022 R&D application and http://irm.cni
info.com.cn r idual investor market advantages nfo.com.cn
Product production and
sales of Horizon New
http://irm.cn Othe Indiv Individual Energy Technology Co.
9 February 2022 Ltd. the progress of the http://irm.cni
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project and product
application
Product capacity release
http://irm.cn Othe Indiv Individual
10 February 2022 of Phase II Shanxi Base http://irm.cni
info.com.cn r idual investor Project of Horizon New nfo.com.cn
Energy
Impact of the
development direction of
http://irm.cn Othe Indiv Individual Horizon New Energy
13 February 2022 Technology Co. Ltd. and http://irm.cni
info.com.cn r idual investor progress of the nfo.com.cn
Company’s relocation
project on the Company
http://irm.cn Othe Indiv Individual
22 February 2022 The Company’s monthly http://irm.cni
info.com.cn r idual investor production capacity nfo.com.cn
http://irm.cn Othe Indiv Individual The monthly production
28 February 2022 capacity of Horizon New http://irm.cni
info.com.cn r idual investor Energy Co. Ltd. nfo.com.cn
http://irm.cn Othe Indiv Individual
3 March 2022 The Company’s overseas http://irm.cni
info.com.cn r idual investor customers nfo.com.cn
18 March 2022 http://irm.cn Othe Indiv Individual Product application of http://irm.cni
40Changchai Company Limited Annual Report 2022
info.com.cn r idual investor Horizon New Energy nfo.com.cn
Technology Co. Ltd.The Company’s share
repurchase intention
http://irm.cn Othe Indiv Individual
21 March 2022 production and sales http://irm.cni
info.com.cn r idual investor and the results of nfo.com.cn
Horizon New Energy
Technology Co. Ltd.The Company’s product
expansion and R&D the
http://irm.cn Othe Indiv Individual customer profile and
30 March 2022 production capacity in http://irm.cni
info.com.cn r idual investor 2021 of Horizon New nfo.com.cn
Energy Technology Co.Ltd.The monthly production
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Energy
Information
on 000570
Changchai’s
Results
Investors The Company’s
Online Othe Othe
21 April 2022 and the production and operating
Presentation
meeting r r activities and
and
public investments Roadshow onwww.cninfo.com.cn dated
21 April
2022
The Company’s assets
http://irm.cn Othe Indiv Individual
28 April 2022 and intention to sell the http://irm.cni
info.com.cn r idual investor held Liance Technology nfo.com.cn
shares
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6 May 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cnhttp://irm.cn Othe Indiv Individual The impact of the “Belt
11 May 2022 and Road” on the http://irm.cni
info.com.cn r idual investor Company nfo.com.cn
http://irm.cn Othe Indiv Individual
16 May 2022 The Company’s sales in http://irm.cni
info.com.cn r idual investor Q1 and customers nfo.com.cn
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13 June 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
http://irm.cn Othe Indiv Individual Company’s shareholding
14 June 2022 in Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
The Company’s
http://irm.cn Othe Indiv Individual relocation project the
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info.com.cn r idual investor nfo.com.cnproduct R&D progress
the Company’s
41Changchai Company Limited Annual Report 2022
development direction
and progress assistance
of controlling
shareholders to the
Company and operation
and customers of
Horizon New Energy
Technology Co. Ltd.http://irm.cn Othe Indiv Individual Product application
17 June 2022 fields of the subsidiary http://irm.cni
info.com.cn r idual investor Zhenjiang Siyang nfo.com.cn
http://irm.cn Othe Indiv Individual
20 June 2022 Purchase and storage http://irm.cni
info.com.cn r idual investor nfo.com.cn
http://irm.cn Othe Indiv Individual The Company’s
23 June 2022 application fields of http://irm.cni
info.com.cn r idual investor diesel engine products nfo.com.cn
http://irm.cn Othe Indiv Individual The development
27 June 2022 intentions of the http://irm.cni
info.com.cn r idual investor Company’s subsidiaries nfo.com.cn
http://irm.cn Othe Indiv Individual The shipments in Q2 of
19 July 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
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21 July 2022 intentions of the http://irm.cni
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23 July 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
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24 July 2022 Horizon New Energy http://irm.cni
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http://irm.cn Othe Indiv Individual
25 July 2022 The companies invested http://irm.cni
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http://irm.cn Othe Indiv Individual Product applicability of
26 July 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
Product applicability of
Horizon New Energy
http://irm.cn Othe Indiv Individual
27 July 2022 Technology Co. Ltd. and http://irm.cni
info.com.cn r idual investor the situation of its nfo.com.cn
subsidiary Horizon New
Material
http://irm.cn Othe Indiv Individual
1 August 2022 Number of shareholders http://irm.cni
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2 August 2022 Suggestions on the http://irm.cni
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http://irm.cn Othe Indiv Individual Equity situation of
3 August 2022 http://irm.cniChangzhou Synergetic
info.com.cn r idual investor nfo.com.cnInnovation Private
42Changchai Company Limited Annual Report 2022
Equity Fund invested by
the Company
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5 August 2022 The Company’s business http://irm.cni
info.com.cn r idual investor nfo.com.cn
The product capacity of
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info.com.cn r idual investor nfo.com.cn
http://irm.cn Othe Indiv Individual
17 August 2022 The Company’s products http://irm.cni
info.com.cn r idual investor and business nfo.com.cn
http://irm.cn Othe Indiv Individual
18 August 2022 The Company’s products http://irm.cni
info.com.cn r idual investor and business nfo.com.cn
http://irm.cn Othe Indiv Individual The application of the
19 August 2022 Company’s products in http://irm.cni
info.com.cn r idual investor shipborne machinery nfo.com.cn
The Company
http://irm.cn Othe Indiv Individual development suggestions
22 August 2022 and progress in http://irm.cni
info.com.cn r idual investor relocation purchase and nfo.com.cn
storage
Impact of the results of
http://irm.cn Othe Indiv Individual Horizon New Energy and
25 August 2022 subsidies of agricultural http://irm.cni
info.com.cn r idual investor machinery on the nfo.com.cn
Company’s sales
http://irm.cn Othe Indiv Individual
26 August 2022 The Company’s http://irm.cni
info.com.cn r idual investor development nfo.com.cn
Impact of the Company’s
investment in Changzhou
http://irm.cn Othe Indiv Individual
31 August 2022 Synergetic Innovation http://irm.cni
info.com.cn r idual investor Private Equity Fund nfo.com.cn
(Limited Partnership) of
the Company
The Company’s capital
http://irm.cn Othe Indiv Individual
1 September 2022 increase in Horizon New http://irm.cni
info.com.cn r idual investor Energy Technology Co. nfo.com.cn
Ltd.http://irm.cn Othe Indiv Individual
13 September 2022 The Company’s product http://irm.cni
info.com.cn r idual investor export nfo.com.cn
http://irm.cn Othe Indiv Individual
30 September 2022 The supporting fields of http://irm.cni
info.com.cn r idual investor the Company’s products nfo.com.cn
The Company’s progress
in purchase and storage
http://irm.cn Othe Indiv Individual
12 October 2022 investment shareholding http://irm.cni
info.com.cn r idual investor intentions of employees nfo.com.cn
and production capacity
after the relocation
43Changchai Company Limited Annual Report 2022
Customers of Horizon
http://irm.cn Othe Indiv Individual New Material a
20 October 2022 subsidiary of Horizon http://irm.cni
info.com.cn r idual investor New Energy Technology nfo.com.cn
Co. Ltd.Customers of Horizon
http://irm.cn Othe Indiv Individual New Material a
25 October 2022 subsidiary of Horizon http://irm.cni
info.com.cn r idual investor New Energy Technology nfo.com.cn
Co. Ltd.http://irm.cn Othe Indiv Individual
8 November 2022 Relocation expenses http://irm.cni
info.com.cn r idual investor nfo.com.cn
Impact of the National
Emission Standard IV for
Non-road Vehicles on the
http://irm.cn Othe Indiv Individual
16 November 2022 Company’s products and http://irm.cni
info.com.cn r idual investor sales and the Company’s nfo.com.cn
product certification and
featured service
monitoring platforms
The Company’s
production sales and
http://irm.cn Othe Indiv Individual
17 November 2022 market of diesel engines http://irm.cni
info.com.cn r idual investor that meet the National nfo.com.cn
Emission Standard IV for
Non-road Vehicles
The intention of going
public product
http://irm.cn Othe Indiv Individual
24 November 2022 applicability and product http://irm.cni
info.com.cn r idual investor orders of Horizon New nfo.com.cn
Energy Technology Co.Ltd.http://irm.cn Othe Indiv Individual Customer cooperation of
27 November 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
The Company’s product
application and sales
purchase and storage
prototyping testing of the
http://irm.cn Othe Indiv Individual
30 November 2022 cold chain hybrid power http://irm.cni
info.com.cn r idual investor product and extension of nfo.com.cn
Changzhou Synergetic
Innovation Private
Equity Fund (Limited
Partnership)
http://irm.cn Othe Indiv Individual
5 December 2022 Supporting fields of http://irm.cni
info.com.cn r idual investor generating sets nfo.com.cn
The Company’s
development
http://irm.cn Othe Indiv Individual suggestions and the
21 December 2022 production line and http://irm.cni
info.com.cn r idual investor product capacity of nfo.com.cn
Horizon New Energy
Technology Co. Ltd.
44Changchai Company Limited Annual Report 2022
http://irm.cn Othe Indiv Individual Production capacity of
23 December 2022 Horizon New Energy http://irm.cni
info.com.cn r idual investor Technology Co. Ltd. nfo.com.cn
45Changchai Company Limited Annual Report 2022
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.
5. Business: The Company has an independent and complete business system with independent and autonomous
46Changchai Company Limited Annual Report 2022
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 the
Meeting Type participatio Disclosure date Resolution
meeting
n ratio
All proposals were
approved. See
The 2021
Annual Announcement No.Annual
General 32.33% 6 May 2022 7 May 2022 2022-027 on
General
Meeting Resolutions of the
Meeting
2021 Annual General
Meeting.
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
Ending
Incumbent Gende
Name Office title Age Start of tenure End of tenure
/Former r shareholding
(share)
Shi Chairman of the
Board Incumbent Male 59
18 October 2016 Ongoing 0
Xinkun
Zhang Director
Incumbent Male 57 18 October 2016 Ongoing 0
Xin General Manager
Lin Tian Director Incumbent Male 60 17 December 2018 Ongoing 0
Director
Xu Yi Incumbent Male 59 16 April 2020 Ongoing 0
Vice-general
47Changchai Company Limited Annual Report 2022
Manager
Director Chief
Jiang He Incumbent Male 51 16 April 2020 Ongoing 0
Accountant
Yang
Director Incumbent Male 51 16 April 2020 Ongoing 0
Feng
Wang Independent
Incumbent Male 60 16 April 2020 Ongoing 0
Mancang director
Xing Independent
Incumbent Male 69 16 April 2020 Ongoing 0
Min director
Zhang Independent Femal
Incumbent 53 16 April 2020 Ongoing 0
Yan director e
Yin Vice-general
Incumbent Male 59 18 October 2016 Ongoing 0
Lihou Manager
Xie
Vice-general
Guozhon Incumbent Male 54 16 April 2020 Ongoing 0
Manager
g
Sun
Vice-general
Jianzhon Incumbent Male 51 16 April 2020 Ongoing 0
Manager
g
Vice-general
He Manager and
Incumbent Male 44 18 October 2016 Ongoing 0
Jianjiang Secretary of the
Board
He Chairman of the
Jianguan Supervisory Incumbent Male 59 17 December 2020 Ongoing 0
g Committee
Lu
Zhonggu Supervisor Incumbent Male 56 18 October 2016 Ongoing 0
i
Liu Yi Supervisor Incumbent Male 54 18 October 2016 Ongoing 0
Chen Femal
Supervisor Incumbent 40 16 April 2020 Ongoing 0
Lijia e
48Changchai Company Limited Annual Report 2022
Ge Femal
Supervisor Incumbent 53 16 April 2020 Ongoing 0
Jiangli e
Total -- -- -- -- -- -- 0
Indicate whether any director supervisor or senior management resigned before the expiry of their tenure during
the Reporting Period.□ Yes √ No
Change of 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
supervisors and senior management:
Shi Xinkun: Now he acts as the Chairman of the Board and Party Secretary in the Company the Chairman of the
Board in Jiangsu Horizon New Energy Technology Co. Ltd. the Chairman of the Board in Shanxi Horizon New
Material Technology Co. Ltd. and an Investment and Development Advisor for Changzhou Investment Group
Co. Ltd.Zhang Xin: He successively took the posts of Sales Manager General Manager Assistant and vice-general
manager in our company. Now he acts as Director General Manager deputy Party Secretary of the Company and
executive director of Jiangsu Changchai Machinery Co. Ltd.Lin Tian: He successively worked as deputy director of enterprise development Dept. GM of investment
management Dept. II and I assistant president and vice president in Changzhou Investment Group Co. Ltd. Now
he is an Investment and Development Advisor for Changzhou Investment Group Co. Ltd. and the director of the
Company.Xu Yi: successively served as the director and assistant to the GM of the Company’s technology center and
currently serves as the director and deputy GM of the Company in addition to being a director of Horizon
Investment.Jiang He: successively served as the accountant assistant to the minister and vice minister of the financial
department of the Company. He is currently a director chief accountant and minister of the financial department
of the Company.Yang Feng: successively served as the business manager of the Shanghai Investment Banking Department of
China Economic Development Trust and Investment Co. Ltd. business director of the investment banking
department of Orient Securities Co. Ltd. GM of and assistant chairman of AJ Securities’ investment banking
department operation management headquarters worked in the development finance department and investment
banking department and served as the EGM in the equipment group investment recommendation group NEEQ
business department and comprehensive group of CITIC Securities Co. Ltd. Currently serving as an executive
director of De Xin Investment Manage Co. Limited and the director of the Company.Wang Mancang: successively served as a teacher and lecturer in the Department of Management as well as a
financial lecturer and professor in the Department of Finance of the School of Economics and Management of
Northwest University and currently serves as the director of the Department of Finance of the School of
Economics and Management of Northwest University counselor of Xi'an municipal government chairman of
49Changchai Company Limited Annual Report 2022
Shaanxi Securities Research Society as well as an independent director of Focuslight Technologies Inc. Ccoop
Group Co. Ltd. Shaanxi Construction Machinery Co. Ltd Xi'an Wonder Energy Chemical Co. Ltd. and the
Company.Xing Min: successively served as secretary of the Party Committee and administrative assistant general manager
(AGM) of China National Heavy Machinery Corporation; secretary of the Party Committee and GM of China
National Machine Tool Sales and Technical Service Corporation (CNMTC); currently Executive Vice Chairman
and Secretary-General of China Internal Combustion Engine Industry Association (CICEIA) Independent
Director of Zhejiang Zhongjian Technology Co. Ltd. Independent Director of Jiangsu Yunyi Electric Co. Ltd.Independent Director of Weifu High-Technology Group Co. Ltd. Independent Director of Zhejiang Xinchai Co.Ltd. director of ActBlue Co. Ltd. and Independent Director of the Company.Zhang Yan: successively served as chief accountant of Changzhou Zhengda Certified Public Accountants Co.Ltd. executive deputy chief accountant of Jiangsu Gongzheng Certified Public Accountants Co. Ltd. currently
associate professor of Business School of Jiangsu University of Technologyindependent non-executive director
of S-Enjoy Service Group Co. Limited director of Changzhou Communications Industry Group Co. Ltd. as well
as independent director of Wuxi SAHAT Electric Technology Co. Ltd. Jiangsu Tianmu Lake Tourism Co. Ltd.and the Company.Yin Lihou: He worked as Minister of Human Resources Department and General Manager Assistant. Now he acts
as Deputy General Manager of the Company and the Chairman of the Board of Changchai Robin.Xie Guozhong: He used to be General Manager Assistant Secretary of Party General Branch and Supervisor of
the Company. He is now Deputy GM of the Company GM of the Sales Company Chairman of the Board of
Changchai Wanzhou and Supervisor of Beiqi Foton Motor Co. Ltd.Sun Jianzhong: successively served as the director of the technical center and assistant to the general manager of
the Company. He is currently the deputy general manager of the Company the general manager of Changchai
Machinery and the chairman of the board of Changchai Benniu.He Jianjiang: He used to be the Staff Member Assistant to the Chief and Deputy Chief of the Investment and
Development Department and Securities Representative of the Company. Now he is Deputy General Manager
Secretary of the Board and Chief of the Investment and Development Department of the Company as well as
Chairman of the Board & GM of Horizon Investment Director of Horizon Agricultural Equipment and Changchai
Wanzhou Chairman of the Board of Zhenjiang Siyang and Supervisor of Donghai Securities Co. Ltd.He Jianguang: successively served as deputy chief of Design Section of Changzhou Diesel Engine Factory
engineer of Product Development Department deputy director of the Company’s Joint Venture Office deputy
director of Technology Center chief engineer director general manager vice chairman of Changzhou Diesel
Engine Factory a member of the Party committee secretary of the Discipline Inspection Commission and
supervisor of Changzhou Investment Group Co. Ltd. currently an investment and development advisor of
Changzhou Investment Group Co. Ltd. and chairman of the Supervisory Committee of the Company.Chen Lijia: Formerly vice president and general manager of risk control legal department of Changzhou
Investment Group Co. Ltd.; and currently deputy general manager of Changzhou Metro Group Co. Ltd. and
supervisor of the Company.
50Changchai Company Limited Annual Report 2022
Ge Jiangli: Formerly head of Human Resources Department of the Company and currently supervisor of the
Company.Lu Zhonggui: Now he acts as Minister of political Department of the Company Office Director Secretary of
Organ Party General Branch as well as employee supervisor of the Company and Director of Xingsheng Real
Estate Management.Liu Yi: He successively took the posts of Assistant Minister of Enterprise Management Department. Now he acts
as Director of Audit Department and Employee Supervisor of the Company Director of the Company Supervisor
of Changchai Wanzhou Changchai Benniu Horizon Investment Horizon Agricultural Equipment Changchai
Robin Changchai Machinery Xingsheng Real Estate Management and Jiangsu Horizon New Energy Technology
Co. Ltd.Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
Name Shareholding entity Office held in the
Remuneration or
shareholding entity Start of tenure
End of
tenure allowance from theshareholding entity
Investment and
Changzhou Investment
Lin Tian Development October 2021 Yes
Group Co. Ltd.Advisor
Investment and
Changzhou Investment December
Shi Xinkun Development No
Group Co. Ltd. 2022
Advisor
Investment and
He Changzhou Investment December
Development Yes
Jianguang Group Co. Ltd. 2022
Advisor
Notes N/A
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Name Other entity Office held in the
Remuneration or
entity Start of tenure
End of
tenure allowance fromthe entity
Jiangsu Horizon New Energy Chairman of the
19 November 2021
Shi Technology Co. Ltd. Board No
Xinkun Shanxi Horizon New Material Chairman of the 7 February 2021
Technology Co. Ltd. Board No
He
Donghai Securities Co. Ltd. Supervisor 18 January 2023 No
Jianjiang
Xie
Guozhon Beiqi Foton Motor Co. Ltd. Supervisor 15 November 2022 Yes
g
51Changchai Company Limited Annual Report 2022
Yang De Xin Investment Manage Co. Executive
1 June 2022
Feng Limited Director
No
Finance Department of School of
Economics & Management Teacher 1 October 1996
Northwest University
Xi’an Government Consultant 1 October 2015
Shaanxi Securities Research Society Chairman 1 October 2017
Xi’an Focuslight Technology Co. Independent
Wang 2 May 2019
Ltd. Director Yes
Mancang Independent
Ccoop Group Co. Ltd. 1 September 2020
Director
Shaanxi Construction Machinery Independent
16 November 2018
Co. Ltd. Director
Xi'an Wonder Energy Chemical Co. Independent
1 June 2020
Ltd. Director
Standing Vice
China Internal Combustion Engine
Chairman and 1 December 2021
Industry Association
Secretary-general
Independent
Zhongjian Technology Co.Ltd 20 June 2017
Director
Independent
Xing Min Jiangsu Yunyi Electronic Co.Ltd. 15 July 2019 May 2022Director Yes
Weifu High-Technology Group Co. Independent
20 May 2021
Ltd. Director
Independent September
Zhejiang Xinchai Co. Ltd. 6 December 2019
Director 2022
ActBlue Co. Ltd. Director 22 November 2021
Associate
Jiangsu University of Technology 1 August 2008
professor
Changzhou Communications Director
1 May 2022
Industry Group Co. Ltd.Wuxi SAHAT Electric Technology Independent
Zhang 2 November 2020
Co. Ltd. Director Yes
Yan
Jiangsu Tianmu Lake Tourism Co. Independent
8 February 2021
Ltd. Director
Independent
S-Enjoy Service Group Co. Limited non-executive 20 October 2018
director
Notes None
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:
52Changchai Company Limited Annual Report 2022
□ 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 2022 the monthly salaries of directors supervisors and senior executives in the Company were in line with the
stipulations of relevant salary management and grade standards and the benefits of the Company and assessment
results. Director Lin Tian and Supervisors He Jianguang obtained salaries in shareholders' entities.Remuneration of directors supervisors and senior management for the Reporting Period
Unit: RMB’0000
Total
Any
before-tax
Incumbent/For remuneration
Name Office title Gender Age remuneration
mer from related
from the
party
Company
Chairman of the
Shi Xinkun
Board Male 59 Incumbent
85.49 No
Director 85.49
Zhang Xin Male 57 Incumbent NoGeneral Manager
Lin Tian Director Male 60 Incumbent 0.00 Yes
Director
Xu Yi Vice-general Male 59 Incumbent 74.51 No
Manager
Director Chief
Jiang He
Accountant Male 51 Incumbent
73.99 No
Yang Feng Director Male 51 Incumbent 0.00 No
Wang Independent
10.00 No
Mancang director Male 60 Incumbent
Independent
Xing Min 10.00 No
director Male 69 Incumbent
Independent
Zhang Yan Female 53 Incumbent 10.00 Nodirector
Vice-general
Yin Lihou
Manager Male 59 Incumbent
73.99 No
Vice-general
Xie Guozhong
Manager Male 54 Incumbent
74.51 No
Vice-general
Sun Jianzhong Male 51 Incumbent 74.51 NoManager
He Jianjiang Vice-general Male 44 Incumbent 74.51 No
53Changchai Company Limited Annual Report 2022
Manager and
Secretary of the
Board
Chairman of the
He Jianguang Supervisory Male 59 Incumbent 0.00 Yes
Committee
Chen Lijia Supervisor Female 40 Incumbent 0.00 Yes
Lu Zhonggui Supervisor Male 56 Incumbent 19.92 No
Ge Jiangli Supervisor Female 53 Incumbent 20.91 No
Liu Yi Supervisor Male 54 Incumbent 23.18 No
Total -- -- -- -- 711.01 --
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Date of
Meeting Disclosure date Resolution
meeting
The 1st
Extraordinary 19 January 21 January The meeting deliberated on and approved the
Meeting of the Obligations on Conducting Forward Foreign
Board of Directors 2022 2022 Exchange Settlement
in 2022
The meeting deliberated on and approved the Report
on the Work of the General Manager for the Year
2021 the Business Policy Objectives of the
The 11th Meeting 21 January Company for the Year 2022 the Results of the
of the 9th Board of —— Performance Appraisal of the Senior Management of
Directors 2022 the Company for the Year 2021 the Contract on the
Performance Appraisal of the Senior Management of
the Company for the Year 2022 and the Proposal on
Application for Bank Credit Line
The meeting deliberated on and approved the Annual
Report for 2021 and Its Summary the Annual Work
Report of the Board of Directors for 2021 Plan of
the Profit Distribution and Conversion of Surplus
Reserves into Share Capital for 2021 Proposal on
the Re-appointment of the Financial Audit Institution
for 2022 and Its Audit Expenses Proposal on the
The 12th Meeting Re-appointment of the Internal Control Audit
of the 9th Board of 11April 2022 13 April 2022 Institution for 2022 Proposal on Expanding the
Directors Business Scope of the Company and Amending theArticles of Association of the Company Proposal on
Amending the Rules of Procedure of the Board
Meeting the Proposal on Amending the Rules of
Procedure of the General Meeting the Proposal on
Amending the Policy of Independent Directors
Special Report on the Deposit and Use of Raised
Funds for 2021 the Annual Self-Evaluation Report
on Internal Control for 2021 the Proposal on the
54Changchai Company Limited Annual Report 2022
Provision of Reserves for Credit Impairment and
Asset Impairment the 2021 Social Responsibility
Report and Proposal on Convening the Annual
General Meeting of the Company for 2021
The 2nd
Extraordinary
Meeting of the 28 April 2022 30 April 2022 The meeting deliberated on and approved the Report
Board of Directors for the First Quarter of 2022
in 2022
The 3rd The meeting deliberated on and approved the
Extraordinary Proposal on Using Own Idle Funds to Purchase
Meeting of the 11 July 2022 12 July 2022 Wealth Management Products and Proposal on
Board of Directors Using Idle Funds to Purchase Wealth Management
in 2022 Products
The meeting deliberated on and approved the
Semi-annual Report for 2022 and Its Summary
Proposal on Provision of Reserves for Credit
Impairment and Asset Impairment Proposal on
Change of Accounting Policy Special Report on the
The 13th Meeting 22 August Deposit and Use of Raised Funds for the
of the 9th Board of 24 August 2022 Semi-annual Period of 2022 Proposal on Adding
Directors 2022 Implementation Location to the Private Placement
Raised Funds Investment Project of Innovation
Capacity Building of the Technical Centre Proposal
on Adding Implementation Entity to the Private
Placement Raised Funds Investment Project of
Relocation of Light Engines and Casting
The 4th The meeting deliberated on and approved the
Extraordinary Proposal on Planning to Participate in Capital25 August
Meeting of the 27 August 2022 Increase and Share Expansion and Related
Board of Directors 2022 Transactions of Jiangsu Horizon New Energy
in 2022 Technology Co. Ltd. and the Proposal on Planningto Sell Part of the Trading Financial Assets
The 5th
Extraordinary The meeting deliberated on and approved the29 September 30 September
Meeting of the Proposal on Planning to Use Bank Acceptances for
Board of Directors 2022 2022 Part of the Payments of Fund-raising Projects and
in 2022 Equal Replacement of Raised Funds
The 6th
Extraordinary The meeting deliberated on and approved the17 October 18 October
Meeting of the Proposal on Planning to Extend the Operation Period
Board of Directors 2022 2022 of Changzhou Synergetic Innovation Private Equity
in 2022 Fund (Limited Partnership)
The 14th Meeting
of the 9th
28 October 29 October
Board of The meeting deliberated on and approved the Report
Directors 2022 2022 of the Third Quarter of 2022
55Changchai Company Limited Annual Report 2022
The 7th
Extraordinary 15 December 16 December The meeting deliberated on and approved the
Meeting of the Proposal on Using Idle Funds to Purchase the Limit
Board of Directors 2022 2022 of Wealth Management Products
in 2022
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
board Board meetings failed to
meetings meetings General
meetings meetings attended by attend two
Director attended the director meetings
the director attended on way of consecutiv
through a failed to attended
was site telecommu e board
proxy attend
eligible to nication meetings
attend (yes/no)
Shi Xinkun 11 2 9 0 0 No 1
Zhang Xin 11 2 9 0 0 No 1
Lin Tian 11 1 9 1 0 No 1
Xu Yi 11 2 9 0 0 No 1
Jiang He 11 2 9 0 0 No 1
Yang Feng 11 2 9 0 0 No 1
Xing Min 11 2 9 0 0 No 1
Wang
Mancang 11 2 9 0 0 No 1
Zhang Yan 11 2 9 0 0 No 1
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 Work Rules 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
56Changchai Company Limited Annual Report 2022
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 2022 disclosed by the Company on http://www.cninfo.com.cn dated 12 April 2023.VII Special Committees under the Board of Directors during the Reporting Period
Number Specific
Important Other
Name of of Date of disputed
Members Contents comments and performance
committee meetings meeting matters
suggestions of duties
convened (if any)
The Company's
financial statements
have been prepared
in accordance with
the new Accounting
Standards for
Business
The meeting discussed and Enterprises and the
approved the Report on provisions of the
Financial Pre-audit in 2021 Company's relevant
Report on Audit Plan financial policies
19 Arrangement for 2021 and presented fairly
January Report on Internal Audit in all material
2022 Work in 2021 and Internal respects the
Audit Plan for 2022 and financial status of
Report on the Deposit and the Company as of
Use of Raised Funds for 31 December 2021
2021 and the operating
Zhang results and cash
flows for 2021. The
Audit Yan Company's financial
Committee Wang 3 and accounting
Mancang statements are
authentic and
Lin Tian accurate.The meeting reviewed and
approved the Annual
Financial Statements of the
Company for 2021 Proposal
on Provision of Reserves for
Asset Impairment Special It was consented
Report on the Deposit and
Use of Raised Funds for that both the
7 April 2021 the Annual proposals shall be
2022 Self-Evaluation Report on submitted to the
Internal Control for 2021 Board of Directors
Proposal on the
Re-appointment of the for discussion
Financial Audit Institution
for 2022 and Its Audit
Expenses and Proposal on
the Re-appointment of the
Internal Control Audit
57Changchai Company Limited Annual Report 2022
Institution for 2022
The meeting deliberated on
and approved the
Semi-annual Work Summary
of the Audit Department for
2022 the Semi-annual
Report for 2022 Proposal on
Provision of Reserves for
Credit Impairment and Asset
Impairment Special Report
on the Deposit and Use of
Raised Funds for the It was consented
Semi-annual Period of 2022 that both the
18 Proposal on Change of proposals shall be
August Accounting Policy Proposal
on Adding Implementation submitted to the2022
Location to the Private Board of Directors
Placement Raised Funds for discussion
Investment Project of
Innovation Capacity
Building of the Technical
Centre and Proposal on
Adding Implementation
Entity to the Private
Placement Raised Funds
Investment Project of
Relocation of Light Engines
and Casting
The meeting deliberated on
and approved the Contract
Xing on the Performance It was consented
Remuneration Min Appraisal of the Senior that both the
20
and Wang Management of the proposals shall be
1 January Company for the Year 2021
Evaluation Mancang
2022 and the Contract on the
submitted to the
Committee Shi Performance Appraisal of Board of Directors
Xinkun the Senior Management of for discussion
the Company for the Year
2022
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.IX Employees
1. Number Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the parent at
2114
the period-end
58Changchai Company Limited Annual Report 2022
Number of in-service employees of major subsidiaries at the
542
period-end
Total number of in-service employees at the period-end 2656
Total number of paid employees in the Reporting Period 2656
Number of retirees to whom the Company as the parent or its
0
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 1731
Sales 195
Technical 356
Financial 42
Administrative 288
Other 44
Total 2656
Educational backgrounds
Educational background Employees
Junior high school graduates and below 1133
High school graduates 747
College graduates and technical secondary school graduates 487
Bachelors 271
Masters and above 18
Total 2656
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.
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
59Changchai Company Limited Annual Report 2022
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 profits distribution proposal the Independent Directors stated the
independent advices and fully respected the advices from the medium and small shareholders. The profits
distribution preplan 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
Yes
resolution of general meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played their
Yes
due role
Non-controlling interests are able to fully express their opinion and
Yes
desire and their legal rights and interests are fully protected
In case of adjusting or changing the cash dividend policy the
conditions and procedures involved are in compliance with applicable N/A
regulations and transparent
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
Dividend for every 10 shares (RMB) (tax inclusive) 0.10
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) 915495909.35
Total cash dividends (including those in other forms) as % of
100%
total profit distribution
60Changchai Company Limited Annual Report 2022
Cash dividend policy
Other
Particulars about the dividend plan
The Board has approved a final dividend plan as follows: based on the total share capital of the Company at 31
December 2022 a cash dividend of RMB0.10 (tax inclusive) per 10 shares is to be distributed to the
shareholders with no bonus issue from either profit or capital reserves.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
XIII Management of Subsidiaries by the Company during the Reporting Period
Problem
Solutio Subseq
s found
Solution n uent
Subsidiary Integration plan Progress on integration in
s taken progre solutio
integrati
ss n
on
Zhenjiang As the largest On 16 May 2022 Zhenjiang
Siyang shareholder of Siyang convened a meeting of
Diesel Zhenjiang Siyang shareholders the Board of
Engine N/A N/A N/A N/Athe Company Directors and the Board of
Manufacturi nominated Supervisors to elect new
ng Co. Ltd. directors members of the Board of
61Changchai Company Limited Annual Report 2022
supervisors and Directors the Board of
Management Supervisors and the
personnel for the Management. The directors
new Board of designated by the Company
Directors and accounted for more than half
Board of and Zhenjiang Siyang was
Supervisors and included in the Company’s
dispatched consolidated report. The
Management Company designated three
financial and Management personnel to
technical personnel Zhenjiang Siyang for routine
to Zhenjiang management financial and
Siyang for technical posts.production and
operations
management.XIV Self-Evaluation Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Evaluation Report
Disclosure date of the internal
12 April 2023
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
Weaknesses in internal control over Weaknesses in internal control
Type
financial reporting not related to financial reporting
The Company classified the defects Defects with the following
as serious defect important defect random characteristics should be
and general defect according to the recognized as serious defect:
influence degree from the internal 1) Seriously violated the national
control: laws and administrative
(1) Serious defect: refers to one or regulations and the normative
multiple groups with control defect documents;
which may lead the enterprise 2) “three significant one great”
Nature standard seriously deviates the control target; event had not been through the(2) Important defect: refers to one or collective decision-making
multiple groups with control defect process;
with the severity and the economic 3) the significant events involved
results lower than the great defect with the production and
but may still lead the enterprise operation of the Company lacked
seriously deviates the control target; of systematic control or the
(3) General defect: refers to other institutional system was invalid;
defect except for the great defect 4) the internal control of the
and significant defect. information disclosure was
62Changchai Company Limited Annual Report 2022
Nature standards: invalid which led the Company
defects with the following random be open condemned by the
characteristics should be recognized supervision department;
as serious defect: 5) the serious defect from the
1) the defect involves with the assessment results of the internal
malpractice of the Directors control had not been revised.Supervisors and Senior Executives;
2) revised the disclosed financial
report;
3) CPAs discovered the great
misstatement among the current
financial statement while which
could not be found during the
operating process of the internal
control;
4) the supervision from the Audit
Committee and the internal audit
institution of the enterprise was
invalid.Refer to the quantitative criteria
Quantitative standards: of the internal control defect of
The quantitative standards of the financial report to recognize
recognizing the significant degree of the quantitative criteria of the
the misstatement (including the false significant degree of the internal
negatives) of the consolidated control defect of the
financial report of the Company non-financial report of the
based on the data from the 2022 Company as:
Quantitative standard consolidated statements was as: Serious defect: possibly caused
Serious defect: misstatement≥5% of directly losses≥0.1% of the net
the annual profits assets
Important defect: 2.5% of the annual Important defect: 0.05% of the
profits≤ misstatement 5% of the net assets≤ possibly caused＜
annual profits directly losses＜0.1% of the net
General defect＜2.5% of the annual assets
profits General defect: possibly causeddirectly losses＜0.05% of the 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
internal control not related to 0
financial reporting
63Changchai Company Limited Annual Report 2022
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
2022.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 10 April 2023
Index to such report disclosed S.G. W[2023] E1111
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
N/A
64Changchai Company Limited Annual Report 2022
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
Actions taken during the Reporting Period to reduce carbon emissions and the impact:
√ Applicable □ Not applicable
See the 2022 Social Responsibility Report of Changchai Company Limited disclosed on
http://www.cninfo.com.cn dated 12 April 2023.Reasons for not disclosing other environment-related information:
N/A
II Social Responsibility
See the 2022 Social Responsibility Report of Changchai Company Limited disclosed on
http://www.cninfo.com.cn dated 12 April 2023.III Efforts in Poverty Alleviation and Rural Revitalization
N/A
65Changchai Company Limited Annual Report 2022
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
Da
Ty te
pe of
of co
Ful
co m Term of
fill
Commitment Promisor m Details of commitment mi commit
me
mi tm ment
nt
tm ent
en ma
t kin
g
1. The company and its controlled related
parties have not reduced their holdings of
A
shares of Changchai Company from the
bo
six months prior to the announcement of
ut
the decision of the Board of Directors of
sh 29
Changchai Company Limited 10
ar Se
("Changchai Company") concerning the October
eh pte Ex
Changzhou Investment proposal to consider the non-public 2019
ol mb pir
Group Co. Ltd. offering of shares to the date of issuance -30
di er ed
of this Letter of Commitment. June
ng 20
2. The company and its controlled related 2022
Commitments made in re 20parties have no plan to reduce their
refinancing du
holdings of shares of Changchai Company
cti
from the date of issuance of this Letter of
on
Commitment to six months after the
completion of this issuance.A
bo It will not transfer the shares it has 5
5 July
ut obtained in the private placement of Jul On
Changzhou Investment 2021 -5
sh Changchai within 36 months starting from y goi
Group Co. Ltd. July
ar the date when the private placement of 20 ng
2024
e A-shares is allowed for public trading. 21
tra
66Changchai Company Limited Annual Report 2022
di
ng
re
str
ict
io
n
1. It undertakes not to interfere in the
Company's operation and management
activities beyond its authority and not to
encroach on the Company's interests;
2. It undertakes not to transfer benefits to
other entities or individuals free of charge
or on unfair terms nor to impair the
interests of the Company by any other
means;
3. After the issuance of this Letter of
Commitment and before the completion of
the Company's non-public offering of
shares if the China Securities Regulatory 11 11April
Ot Commission (CSRC) makes other new Ap 2020 On
Changzhou Investment
he regulatory provisions on the return filling ril -31 goi
Group Co. Ltd.r measures and commitments and the 20 Decemb ng
aforesaid commitments cannot meet such 20 er 9999
provisions of the CSRC it undertakes to
issue supplementary commitments in
accordance with the latest provisions of
the CSRC;
4. It undertakes to effectively implement
the Company's measures to fill the return
and any commitments made thereon. If the
Company breaches such commitments and
causes losses to the Company or the
investors the Company is willing to
compensate the Company or the investors
according to law.UBSAG Caitong Fund A
Management Co. Ltd. bo I/We undertake that I/we will not transfer
5
Changzhou Traffic ut the shares I/we have obtained in the 5 July
Jul Ex
Construction Investment sh private placement of Changchai within 6 2021-5
y pir
Development General ar months starting from the date when the January
20 ed
Company Chen Beiwen e private placement of A-shares is allowed 2022
21
Guotai Asset Management tra for public trading.Co. Ltd. Jiangxi Jintou di
67Changchai Company Limited Annual Report 2022
Industrial Development ng
Co. Ltd. Li Xueqin re
Nanhua Fund Co. Ltd. str
Enjoy (Ningbo) Asset ict
Management L.P. Nuode io
Asset Management Co. n
Ltd. Sun Meichun
Minmetals Securities Co.Ltd. Yao Jianquan China
National Gold Group
Asset Management Co.Ltd. and Zhou Zhiheng
Rewards Plan for Shareholders in Next
Three Years(2020-2022)
Under the premise of positive distributive
profit (remaining after-tax profits after
making up for the loss and extracting for
A the common reserves) in this year or half
bo year and abundant money flow and no 8
ut
Other commitments influence on the following-up going M Year ExChangchai Company di
made to minority concern after cash bonus the profits ay 2020-20 pir
shareholders Limited vi
de allocated by cash every year shouldn’t be 20 22 ed
nd lower than 10% of the allocable profits 20
s from parent company. Meanwhile the
accumulated allocable profits by cash in
the arbitrary continuous three accounting
years should not be lower than 30% of the
annual average allocable profits in those
three years.Fulfilled on time or not Yes
Specific reasons for
failing to fulfill
commitments on time N/A
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
68Changchai Company Limited Annual Report 2022
No such cases in the Reporting Period.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
Changes to the accounting policies and why Approval process RemarkThe Company starts to implement the “Accountingtreatment for sales of products or by-products by
On 22 August 2022 the 13th Meeting
enterprises generated from fixed assets before reaching the
of the 9th Board of Directors and theNotes ofintended state of availability or from the period of R&D”
12th Meeting of the 9th Supervisorychanges to
and “Judgment on onerous contracts” and “Presentation ofCommittee were held by the Companyaccountingcentralized capital management” stipulated in the
on which the Proposal on Changes ofpolicies-(1)
Accounting Standards for Business Enterprises
Accounting Policies was approved.Interpretation No. 15 issued by the Ministry of Finance in
2021 since 1 January 2022.The Company starts to implement the “accountingtreatment of the income tax effect of financial instrument
related dividend whose issuer is classified as equity
Notes ofinstrument” and “accounting treatment of share-basedchanges to
payment in cash settlement modified into share-based /
accountingpayment in equity settlement by the enterprise” stipulated
policies-(2)
in the Accounting Standards for Business Enterprises
Interpretation No. 16 issued by the Ministry of Finance in
2022 since 13 December 2022.
Description of changes in accounting policies:
69Changchai Company Limited Annual Report 2022
(1) The impact of implementing the Interpretation No. 15 of Accounting Standards for Business Enterprises on the
Company
On 31 December 2021 the Ministry of Finance issued the Interpretation No. 15 of Accounting Standards for
Business Enterprises (C.K. [2021] No. 35) (hereinafter referred to as “Interpretation No. 15”). Contents of“accounting treatment of external sales of products or by-product produced by the enterprise before the fixedassets reach the intended usable state or during the research and development process (hereinafter referred to as‘Trial Sales’)” and “judgment on loss-making contracts” came into force on 1 January 2022.The Company implemented Interpretation No. 15 since the date of issuance and the implementation has no
material impact on the financial statements during the reporting period.
(2) The impact of implementing the Interpretation No. 16 of Accounting Standards for Business Enterprises on the
Company
On 13 December 2022 the Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for
Business Enterprises (C.K. [2022] No. 31) (hereinafter referred to as “Interpretation No. 16”). The regulations of“accounting treatment for deferred income tax relating to assets and liabilities arising from a single transactionthat is not subject to the initial recognition exemption” came into force on 1 January 2023 allowing companies to
implement the exemption prior to the year of issuance which has not been implemented by the Company inadvance this year. In addition the contents of “accounting treatment of the income tax effect of financialinstrument related dividend whose issuer is classified as equity instrument” and “accounting treatment ofshare-based payment in cash settlement modified into share-based payment in equity settlement by the enterprise”
came into force on the issuance date.The Company implemented Interpretation No. 16 since the date of issuance and the implementation has no
material impact on the financial statements during the reporting period.VII YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
The Sixth Extraordinary Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021
deliberated on and approved the Proposal on Participation in Bidding for 41.5% Equity Interests in Zhenjiang
Siyang Diesel Engine Manufacturing Co. Ltd. authorizing the Management of the Company to participate in
bidding for 41.5% equity interest in Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. (hereinafter referred
to as "Zhenjiang Siyang") that had been put out for sale by Jiangsu Keda Assets Marketing Co. Ltd. (hereinafter
“Keda Assets”). On 12 January 2022 Jiangsu Assets and Equity Exchange Co. Ltd. issued the Confirmation of
Transaction on the Transfer of 41.5% Equity Interests (Corresponding to Capital Contribution of RMB830000) in
Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. The Company won the bid for the 41.5% equity
interests in Zhenjiang Siyang at a price of RMB33520800.00. On 23 February 2022 the Company signed the
Contract on Transfer of State-owned Property Rights with Keda Assets. On 9 March 2022 Zhenjiang Siyang has
completed the relevant registration alteration formalities with the competent industrial and commercial
administration. On 16 May 2022 Zhenjiang Siyang held meetings of shareholders the Board of Directors and the
Supervisory Committee to elect and appoint new members for the Board of Directors the Supervisory Committee
and management. The Company holds more than half of the board seats of Zhejiang Siyang and Zhenjiang Siyang
has been included in the consolidated financial statements of the Company. Since then the number of subsidiaries
within the consolidation scope of the Company increases to eight from seven.
70Changchai Company Limited Annual Report 2022
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor:
Gongzheng Tianye 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
21
auditor has provided audit service for the Company
Names of the certified public accountants from the
domestic independent auditor writing signatures on the Wang Wenkai Qin Zhijun
auditor’s report
How many consecutive years the certified public
Two years for Wang Wenkai two years for Qin
accountants have provided audit service for the
Zhijun
Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.□ Yes √ No
Independent auditor financial advisor or sponsor engaged for the audit of internal controls:
√Applicable □ Not applicable
In this year the Company retained Gongzheng Tianye Certified Public Accountants (Special General Partnership)
as the audit institution for its internal control at the audit fees of RMB120000.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.XII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
71Changchai Company Limited Annual Report 2022
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
involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
√Applicable □ Not applicable
72Changchai Company Limited Annual Report 2022
On 25 August 2022 the Company held the Fourth Interim Meeting of the Board of Directors and the Fourth
Interim Meeting of the Supervisory Committee in 2022 and deliberated and approved the Proposal on Planning to
Participate in Capital Increase and Share Expansion and Related Transactions of Jiangsu Horizon New Energy
Technology Co. Ltd. agreeing to increase RMB75 million capital to Horizon New Energy for the subscription of
its newly registered capital of RMB18844200 and authorizing Shi Xinkun the Company’s Chairman to sign
capital increase agreements with related parties. In August 2022 Horizon New Energy and its shareholders signed
the Capital Increase Agreement of Jiangsu Horizon New Energy Technology Co. Ltd. agreeing that the registered
capital of Horizon New Energy was increased from RMB1405622491 to RMB1.75 billion. In October 2022
Horizon New Energy completed the industrial and commercial change registration procedures according to the
aforesaid capital increase agreement and obtained the new business license.Index to the public announcements about the said related-party transactions disclosed
Title of public announcement Disclosure date Disclosure website
Proposal on Planning to Participate in Capital
Increase and Share Expansion and Related
27 August 2022 www.cninfo.com.cn
Transactions of Jiangsu Horizon New Energy
Technology Co. Ltd.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
Unit: RMB'0000
Guarantees provided by the Company for external parties (exclusive of those for subsidiaries)
Disclos Line of Actual Actual Havin Guara
Guarantee-receiv Type of Term of
ure date guarant occurrence guarante g ntee
ing entity guarantee guarantee
of the ee date e expire for a
73Changchai Company Limited Annual Report 2022
guarant (agreement amount d or relate
ee line signing date) not d
announc party
ement or not
Guarantees provided by the Company as the parent for its subsidiaries
Disclos Guara
ure date Actual Havin ntee
Actual
of the Line of occurrence g for a
Guarantee-receiv guarante Type of Term of
guarant guarant date expire relate
ing entity e guarantee guarantee
ee line ee (agreement d or d
amount
announ signing date) not party
cement or not
Changzhou
Changchai
Horizon 15 April Joint
2000 7 May 2021 2000 1 year Yes No
Agricultural 2021 liability
Equipment Co.Ltd.Total actual amount
Total approved line for such
of such guarantees in
guarantees in the Reporting 0 500
the Reporting Period
Period (B1)
(B2)
Total actual balance
Total approved line for such of such guarantees at
guarantees at the end of the 0 the end of the 0
Reporting Period (B3) Reporting Period
(B4)
Guarantees between subsidiaries
Disclos
Guara
ure date Actual Havin
Actual ntee
of the Line of occurrence g
Guarantee-receiv guarante Type of Term of for a
guarant guarant date expire
ing entity e guarantee guarantee related
ee line ee (agreement d or
amount party
announ signing date) not
or not
cement
Total guarantee amount (total of the three kinds of guarantees above)
Total actual
Total guarantee line
guarantee amount in
approved in the Reporting 0 500
the Reporting Period
Period (A1+B1+C1)
(A2+B2+C2)
Total approved guarantee Total actual
line at the end of the guarantee balance at
00
Reporting Period the end of the
(A3+B3+C3) Reporting Period
74Changchai Company Limited Annual Report 2022
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
0.00%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders the de
0
facto controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for entities with an over 70% debt/asset ratio 0
(E)
Amount by which the total guarantee amount exceeds
0
50% of the Company’s net assets (F)
Total of the three amounts above (D+E+F) 0
Possibility of having to execute joint liability on
N/A
outstanding guarantees (if any)
Irregularities in the provision of guarantees to external
N/A
parties (if any)
Compound guarantees: N/A
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 overdue
Capital
Specific type Amount incurred Undue balance overdue amount with
resources
amount provision for
impairment
Broker
financial Self-funded 885 600 0 0
products
Bank financial
Self-funded 18200 18200 0 0
products
Broker
financial Raised-funded 5000 0 0 0
products
Bank financial
Raised-funded 28000 10000 0 0
products
Total 52085 28800 0 0
75Changchai Company Limited Annual Report 2022
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 an 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
XVII Significant Events of Subsidiaries
□ Applicable √ Not applicable
76Changchai Company Limited Annual Report 2022
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 divide
Ne divide nd
Percent w nd conver Percent
Number Other Subtotal Number
age (%) issu conver ted age (%)
es ted from
from capital
profit reserv
es
1. Restricted 144318 20.45% -8750000 -8750000 5681818
shares 181 0.00 0.00 1
8.05%
1.1 Shares held
00.00%0.000.0000.00%
by government
1.2 Shares held
by state-owned 72045453 10.21%
-1522727-15227275681818
2.002.001.008.05%
legal persons
1.3 Shares held
by other 688636 9.76% -6886363 -6886363
domestic 38 8.00 8.00
00.00%
investors
Among which:
Shares held by 488181
786.92%
-4881817-4881817
domestic legal 8.00 8.00
00.00%
persons
S
hares held by 200454 2.84% -2004546 -200454660 0.00 0.00 0 0.00%domestic
natural persons
1.4 Shares held
by foreign 3409090 0.48%
-3409090-3409090.00.0000.00%
investors
Among which:
Shares held by 340909
00.48%
-3409090-3409090
foreign legal .00 .00
00.00%
persons
77Changchai Company Limited Annual Report 2022
S
hares held by
00.00%0000.00%
foreign natural
persons
2. Unrestricted 561374 79.55% 8750000 8750000 6488743
shares 326 0.00 0.00 26
91.95%
2.1
RMB-denomin 411374 58.29% 8750000 8750000 4988743326 0.00 0.00 26 70.69%ated ordinary
shares
2.2
Domestically 150000 21.26% 0 0 1500000 21.26%
listed foreign 000 00
shares
2.3 Oversea
listed foreign 0 0.00% 0 0 0 0.00%
shares
2.4 Other 0 0.00% 0 0 0 0.00%
3. Total shares 705692 100.00 0 0 7056925 100.00507 % 07 %
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
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
Restricted
Restricted
shares Restricted Restricted shares
Name of the amount at shares shares Restricted shares
relieved of increased amount at Restricted reasonsshareholders the
the period of the
relieved date
the
period-begi period
period-end
n
Additional issuance
UBS AG 3409090 3409090 0 0 5 January 2022
of 3409090 shares
78Changchai Company Limited Annual Report 2022
through the private
placement of shares
Additional issuance
Caitong Fund
of 7909090 shares
Management 7909090 7909090 0 0 5 January 2022
through the private
Co. Ltd.placement of shares
Jiangxi
Additional issuance
Jintou
of 4545454 shares
Industrial 4545454 4545454 0 0 5 January 2022
through the private
Development
placement of shares
Co. Ltd.Additional issuance
Guotai Asset
of 8181818 shares
Management 8181818 8181818 0 0 5 January 2022
through the private
Co. Ltd.placement of shares
Enjoy
Additional issuance
(Ningbo)
of 6818181 shares
Asset 6818181 6818181 0 0 5 January 2022
through the private
Management
placement of shares
L.P.Additional issuance
Zhou of 3409090 shares
3409090 3409090 0 0 5 January 2022
Zhiheng through the private
placement of shares
China
Additional issuance
National
of 10681818
Gold Group
10681818 10681818 0 0 shares through the 5 January 2022
Asset
private placement
Management
of shares
Co. Ltd.Additional issuance
of 4545454 shares
Sun Meichun 4545454 4545454 0 0 5 January 2022
through the private
placement of shares
Additional issuance
Nuode Asset of 11363636
Management 11363636 11363636 0 0 shares through the 5 January 2022
Co. Ltd. private placement
of shares
Additional issuance
Minmetals
of 4545454 shares
Securities 4545454 4545454 0 0 5 January 2022
through the private
Co. Ltd.placement of shares
79Changchai Company Limited Annual Report 2022
Additional issuance
of 7272727 shares
Chen Beiwen 7272727 7272727 0 0 5 January 2022
through the private
placement of shares
Additional issuance
Nanhua Fund of 5454545 shares
5454545 5454545 0 0 5 January 2022
Co. Ltd. through the private
placement of shares
Additional issuance
of 4545454 shares
Yao Jianquan 4545454 4545454 0 0 5 January 2022
through the private
placement of shares
Changzhou
Transportatio
Additional issuance
n
of 4545454 shares
Construction 4545454 4545454 0 0 5 January 2022
through the private
Investment
placement of shares
Development
Co. Ltd.Additional issuance
of 272735 shares
Li Xueqin 272735 272735 0 0 5 January 2022
through the private
placement of shares
Total 87500000 87500000 0 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
Unit: share
80Changchai Company Limited Annual Report 2022
Number of
Number of
preferred
ordinary Number of
shareholders with
Number of shareholders at preferred
resumed voting
ordinary 50886 the month-end 49998 shareholders 0 0
rights at the
shareholders prior to the with resumed
month-end prior
disclosure of this voting rights
to the disclosure
Report
of this Report
5% or greater shareholders or top 10 shareholders
Increase/d Shares in pledge
Shareho
Total shares ecrease in or frozen
Name of Nature of lding Restricted Unrestricted
held at the the
shareholder shareholder percent shares held shares held
period-end Reporting Status Shares
age
Period
Changzhou
State-owned
Investment Group 32.26% 227663417 56818181 170845236
legal person
Co. Ltd
Domestic
Chen Jian natural 0.71% 4979900 4979900
person
MORGAN
STANLEY & CO. Foreign legal
INTERNATIONA person 0.45% 3146392 3146392
L PLC.KGI ASIA Foreign legal
LIMITED person 0.44% 3101695 3101695
Domestic
Yang Xuee natural 0.37% 2611500 2611500
person
China Minsheng
Bank-Goldstate
Yuanqi Dynamic
Asset Allocation Other 0.36% 2530800 2530800
Mixed Type
Securities
Investment Fund
CLSAAsset
Management Foreign legal
Limited-Clients’ person 0.25% 1780068 1780068
Capital
Domestic
Dai Wenping natural 0.25% 1776200 1776200
person
Domestic
Li Suinan natural 0.22% 1569100 1569100
person
Domestic
Huang Guoliang natural 0.22% 1528891 1528891
person
Strategic investor or general legal N/A
81Changchai Company Limited Annual Report 2022
person becoming a top-10
ordinary shareholder 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
parties as defined in the Administrative Measures for Information Regarding
above
Shareholding Alteration.Above shareholders involved in
entrusting/being entrusted with
N/A
voting rights and giving up voting
rights
Special account for share
repurchases (if any) among the N/A
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 RMB-denominated
170845236170845236
Co. Ltd ordinary share
RMB-denominated
Chen Jian 4979900 4979900
ordinary share
MORGAN STANLEY & CO. RMB-denominated
INTERNATIONAL PLC. 3146392 3146392ordinary share
Domestically listed
KGI ASIA LIMITED 3101695 3101695
foreign share
RMB-denominated
Yang Xuee 2611500 2611500
ordinary share
China Minsheng Bank-Goldstate
Yuanqi Dynamic Asset RMB-denominated
Allocation Mixed Type 2530800 2530800ordinary share
Securities Investment Fund
CLSAAsset Management RMB-denominated
Limited-Clients’ Capital 1780068 1780068ordinary share
RMB-denominated
Dai Wenping 1776200 1776200
ordinary share
Li Suinan 1569100 Domestically listedforeign share 1569100
Huang Guoliang 1528891 Domestically listedforeign share 1528891
Related or acting-in-concert
parties among top 10 unrestricted It is unknown whether there is among the top 10 public shareholders and the
public 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 10 Shareholding Alteration.shareholders
82Changchai Company Limited Annual Report 2022
Top 10 ordinary shareholders
Shareholders Chen Jian and Dai Wenping held 3320000 and 1610200 shares
involved in securities margin
respectively in the Company through their margin accounts.trading (if any)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the 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
Legal
Name of controlling representative/ Date of Unified social
Principal activity
shareholder person in establishment credit code
charge
Changzhou Investment 913204004672839 Property investment
Chen Limin 20 June 2002
Group Co. Ltd 80X and management
Controlling shareholder’s
holdings in other listed
companies at home or None
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 Wang
11320400014110251M Not applicable
Commission of Wenzhuo
Changzhou Municipal
People’s Government
Other listed companies at
home or abroad None
controlled by the actual
83Changchai Company Limited Annual Report 2022
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:
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
Changzhou Investment Group Co. Ltd. the controlling shareholder of the Company participated in the
non-public offering of shares of the Company and was allotted 56818181 shares with a subscription amount of
RMB249999996.40. The shares were listed on 5 July 2021 with a 36-month lock-up period and a release date of
5 July 2024.
84Changchai Company Limited Annual Report 2022
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
85Changchai Company Limited Annual Report 2022
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
86Changchai Company Limited Annual Report 2022
Part IX Bonds
□ Applicable √ Not applicable
87Changchai Company Limited Annual Report 2022
Part X Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 10th April 2023
Gongzheng Tianye Certified Public Accountants
Name of the independent auditor
(Special General Partnership)
No. of the auditor’s report S.G. No.W[2023]A351
Name of the certified public accountants Wang Wenkai Qin Zhijun
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 “Company”) which comprise the
parent’s and consolidated balance sheets as at 31 December 2022 the parent’s and consolidated income statements
the parent’s and consolidated cash flow statements the parent’s and consolidated statements of changes in owners’
equity for the year then ended as well as the notes to the financial statements.In our opinion the financial statements attached were prepared in line with the regulations of 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 Limited. As at 31 December 2022 and the consolidated and
parent business performance and cash flow for 2022.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 of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on
these matters. And key audit matter identified in our audit is summarized as follows:
(I) Recognition of revenue
1. Description of the item
For details and analysis of the accounting policies for revenue recognition please refer to accounting policies
stated in the notes to financial statements “III. 30. Revenue” and “V. 37. Operating income and operating cost”. In
2022 the operating income of Changchai Company amounted to RMB2182043100.
Since the operating revenue is one of key performance indicators of the Company and there is the inherent risk
that the management may manipulate the timing of revenue recognition for the purpose of achieving certain goals
or expectations so we identify the revenue recognition as a key audit item.
88Changchai Company Limited Annual Report 2022
2. Response for audit
(1) Know the key internal control related to revenue recognition evaluate whether its design and execution are
valid or not and test the operation effectiveness of the related internal control.
(2) Interview the management know about the recognition policies regarding revenue of the Company get and
check contracts or agreements of the Company signed with customers identify contract terms related to the
recognition of sales revenue of products and evaluate whether the revenue recognition of the Company meets the
requirements of accounting standards for business enterprises.
(3) For sales revenue conducting sampling tests on supporting documents related to revenue recognition so as to
check supporting documents such as terms associated with control transfer of commodities in sales contracts and
documentation collected and acknowledged by auxiliary manufacturers (including but not limited to sales
contracts orders sales invoices delivery notes export customs declarations etc.);
(4) Check the operating revenue recognized before and after the balance sheet date to the supporting documents
such as shipping order declaration for exportation and etc by sampling method to assess whether the operating
revenue is recognized within appropriate period.
(5) Implement the confirmation by drawing sample to recognize the balance of accounts receivable and the
amount of sales revenue according to the features and natures of customer transaction.(II) Bad debt provision for accounts receivable
1. Description of the item
As accounting policies stated in the notes to financial statements “III. 10. Impairment of financial instruments”
and “V. 4. Accounts receivable”. On 31 December 2022 the book balance of accounts receivable of Changchai
Company stood at RMB522168300 the bad debt provision amounted to RMB151846100 million and the book
value was RMB370322200 accounting for 7.10% of the total assets at the end of the reporting period. As the
balance of accounts receivable is significant and the judgement of the Management is involved in the withdrawal
of bad debt provision of accounts receivable we consider this as a key audit matter.
2. Response for audit
(1) Access Changchai’s internal control systems of sales and accounts receivable management to understand and
evaluate the design of internal control and carry out walk-through test to confirm the implementation of internal
control systems.
(2) Analyze and confirm the reasonableness of Changchai’s accounting estimates of bad debt provision for
accounts receivable including the basis for determining the combination of accounts receivable the expected
credit loss rate and the judgment of impairment test of accounts receivable evaluated individually.
(3) Combined bad debt provision policy for accounts receivable verifying the accuracy of the basis for
determining accounts receivable portfolio and the reasonableness of bad debt provision separately accrued;
(4) Access and check the account receivable details aging schedule statement of provisions for bad debts and
confirm the reasonableness of bad debt provision for accounts receivable by combining with the request of
confirmation of balance and subsequent collection inspection;
(5) For accounts receivable with bad debt provision by single item referring to corresponding contracts and other
information to obtain an understanding of sales and repayments and determine whether the bad debt provision by
single item is adequately withdrawn.
(6) Send request for confirmation of balance and confirm the authenticity and accuracy of the amount of accounts
receivable on the balance sheet date by combining with subsequent inspection and other procedures.IV Other Information
The Company’s management (hereinafter referred to as “management”) is responsible for the other information.The other information comprises all of the information included in the Company’s 2022 Annual Report other than
89Changchai Company Limited Annual Report 2022
the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form 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. If based on the work we have
performed we conclude that there is a material misstatement of this other information; we are required to report
that fact. We have nothing to report in this regard.V Responsibilities of Management and Those Charged with Governance for Financial Statements
The management is responsible for the preparation of the financial statements that give a fair view in accordance
with CAS and for designing implementing and maintaining such internal control as the management determines
is necessary to enable the preparation of financial statements that are free from material misstatement whether
due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s ability to
continue as a going concern disclosing matters related to going concern (if applicable) and using the going
concern basis of accounting unless the management either intends to liquidate the Company or to cease operations
or have 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 Audit of Financial Statements
Our objectives are 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 auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if individually or in the aggregate they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with CAS we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error
design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and
appropriate to provide a basis for our 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 control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and based
on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists we are required by CAS to draw users’ attention in our auditor’s report to the related
disclosures in the financial statements. If such disclosures are inadequate we need to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However future events
or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements and whether the financial
90Changchai Company Limited Annual Report 2022
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the
direction supervision and performance of the Company audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding the planned scope and timing of the audit and
significant audit findings including any noteworthy deficiencies in internal control that we identify during our
audit.We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when 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 of such communication.Gongzheng Tianye Certified Public Accountants Chinese CPA: Wang Wenkai
(Special General Partnership) (Engagement Partner)
Chinese CPA: Qin Zhijun
Wuxi · China 10th April 2023
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 2022
Unit: RMB
Item 31 December 2022 1 January 2022
Current assets:
Monetary assets 930013350.97 707966678.74
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 370103602.57 404053261.57
Derivative financial assets
Notes receivable 297125872.54 334311236.78
Accounts receivable 370322179.77 375209126.48
Accounts receivable financing 242813392.79 497388826.02
Prepayments 6330202.69 8197418.39
Premiums receivable
91Changchai Company Limited Annual Report 2022
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 32938305.16 19515350.52
Including: Interest receivable
Dividends
receivable
Financial assets purchased under
resale agreements
Inventories 571996881.74 651083758.18
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 49279022.49 44060822.57
Total current assets 2870922810.72 3041786479.25
Non-current assets:
Loans and advances to
customers
Investments in debt obligations 39309587.93 37898226.39
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
955560240.08779877646.53
instruments
Other non-current financial
373500000.00112500000.00
assets
Investment property 42160779.65 44597255.21
Fixed assets 720061387.76 402915521.65
Construction in progress 30281547.56 270305690.91
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 157392217.54 155154745.91
Development costs
Goodwill
Long-term prepaid expense 3279970.32 110345.30
Deferred income tax assets 26220575.93 10693809.23
Other non-current assets 670735.93 4543240.88
Total non-current assets 2348437042.70 1818596482.01
Total assets 5219359853.42 4860382961.26
Current liabilities:
Short-term borrowings 115437700.65 73971466.65
92Changchai Company Limited Annual Report 2022
Borrowings from the central
bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 471876397.72 550774400.00
Accounts payable 747010098.88 666186668.82
Advances from customers 837425.55 660965.62
Contract liabilities 32843692.83 26864081.97
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 49351022.47 45385667.48
Taxes payable 8570175.39 5306378.82
Other payables 160046882.93 148361373.29
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 78645741.16 88938192.79
Total current liabilities 1664619137.58 1606449195.44
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 36205625.94 39615355.40
93Changchai Company Limited Annual Report 2022
Deferred income tax liabilities 161360251.33 117344161.11
Other non-current liabilities
Total non-current liabilities 197565877.27 156959516.51
Total liabilities 1862185014.85 1763408711.95
Owners’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 640133963.01 640676218.40
Less: Treasury stock
Other comprehensive income 655341704.07 506011499.55
Specific reserve 18848856.75 18812950.04
Surplus reserves 349197725.72 334144488.46
General reserve
Retained earnings 915495909.35 872212354.88
Total equity attributable to owners
3284710665.903077550018.33
of the Company as the parent
Non-controlling interests 72464172.67 19424230.98
Total owners’ equity 3357174838.57 3096974249.31
Total liabilities and owners’ equity 5219359853.42 4860382961.26
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
94Changchai Company Limited Annual Report 2022
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2022 1 January 2022
Current assets:
Monetary assets 792744709.77 615184387.01
Held-for-trading financial assets 280354111.11 262004030.14
Derivative financial assets
Notes receivable 282556327.54 312118296.88
Accounts receivable 329060940.50 349135255.42
Accounts receivable financing 291837385.00 497388826.02
Prepayments 3097586.07 2727652.23
Other receivables 179596495.57 26497081.34
Including: Interest receivable
Dividends
receivable
Inventories 397626837.43 516588187.24
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 15594949.05 21292211.46
Total current assets 2572469342.04 2602935927.74
Non-current assets:
Investments in debt obligations 39309587.93 37898226.39
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 569273530.03 535752730.03
Investments in other equity
955560240.08779877646.53
instruments
Other non-current financial
373500000.00112500000.00
assets
Investment property 42160779.65 44597255.21
Fixed assets 249558305.21 325034679.67
Construction in progress 18366604.84 15557418.76
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 64783364.89 66621426.26
Development costs
Goodwill
Long-term prepaid expense
Deferred income tax assets 19860262.43 9613375.32
Other non-current assets
95Changchai Company Limited Annual Report 2022
Total non-current assets 2332372675.06 1927452758.17
Total assets 4904842017.10 4530388685.91
Current liabilities:
Short-term borrowings 108437700.65 58971466.65
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 518918596.58 544444400.00
Accounts payable 541911517.64 546689207.59
Advances from customers 837425.55 660965.62
Contract liabilities 24129579.35 24730270.44
Employee benefits payable 41558489.86 37861577.50
Taxes payable 3119171.69 2955053.82
Other payables 151206684.89 135773368.98
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 67810395.33 63535570.11
Total current liabilities 1457929561.54 1415621880.71
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 36205625.94 39615355.40
Deferred income tax liabilities 149039152.68 95034251.50
Other non-current liabilities
Total non-current liabilities 185244778.62 134649606.90
Total liabilities 1643174340.16 1550271487.61
Owners’ equity:
Share capital 705692507.00 705692507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659418700.67 659418700.67
Less: Treasury stock
96Changchai Company Limited Annual Report 2022
Other comprehensive income 655341704.07 506011499.55
Specific reserve 18848856.75 18812950.04
Surplus reserves 349197725.72 334144488.46
Retained earnings 873168182.73 756037052.58
Total owners’ equity 3261667676.94 2980117198.30
Total liabilities and owners’ equity 4904842017.10 4530388685.91
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
97Changchai Company Limited Annual Report 2022
3. Consolidated Income Statement
Unit: RMB
Item 2022 2021
1. Revenue 2182043095.61 2452430515.60
Including: Operating revenue 2182043095.61 2452430515.60
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 2247441538.64 2399524185.52
Including: Cost of sales 1948677036.52 2084671762.08
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 16973196.26 15125948.96
Selling expense 102630223.71 117242290.32
Administrative expense 119511189.72 98890284.22
R&D expense 81239597.06 82390284.14
Finance costs -21589704.63 1203615.80
Including: Interest expense 1993453.71 5907625.42
Interest income 12804077.19 7921535.62
Add: Other income 7184028.05 6633332.38
Return on investment (“-” for loss) 7969467.19 9327296.95
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 145243457.17 104570498.36
Credit impairment loss (“-” for loss) -2953740.73 -52017151.82
Asset impairment loss (“-” for loss) -14367197.27 -8676024.20
Asset disposal income (“-” for loss) 393161.73 155515.49
3. Operating profit (“-” for loss) 78070733.11 112899797.24
Add: Non-operating income 4257942.65 4037896.76
Less: Non-operating expense 618463.56 1637033.05
4. Profit before tax (“-” for loss) 81710212.20 115300660.95
Less: Income tax expense 2464079.74 12368786.58
5. Net profit (“-” for net loss) 79246132.46 102931874.37
5.1 By operating continuity
98Changchai Company Limited Annual Report 2022
5.1.1 Net profit from continuing operations (“-” for net
79246132.46102931874.37
loss)
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to shareholders of the
76684796.91103006232.54
Company as the parent
5.2.1 Net profit attributable to non-controlling interests 2561335.55 -74358.17
6. Other comprehensive income net of tax 149330204.52 80528741.31
Attributable to owners of the Company as the parent 149330204.52 80528741.31
6.1 Items that will not be reclassified to profit or loss 149330204.52 80528741.31
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
149330204.5280528741.31
equity instruments
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 228576336.98 183460615.68
Attributable to owners of the Company as the parent 226015001.43 183534973.85
Attributable to non-controlling interests 2561335.55 -74358.17
8. Earnings per share
8.1 Basic earnings per share 0.1087 0.1657
8.2 Diluted earnings per share 0.1087 0.1657
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
99Changchai Company Limited Annual Report 2022
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2022 2021
1. Operating revenue 1988473044.55 2267232119.78
Less: Cost of sales 1784345704.10 1944820462.59
Taxes and surcharges 11846885.20 11893439.38
Selling expense 97601117.35 106770873.83
Administrative expense 90150661.31 80635862.36
R&D expense 72372647.10 75021386.36
Finance costs -22274862.27 -2350968.39
Including: Interest expense 1531942.32 3932469.12
Interest income 15122552.35 8354523.54
Add: Other income 6504428.46 5810480.10
Return on investment (“-” for loss) 36604658.62 8352714.26
Including: Share of profit or loss of joint ventures
28800000.00
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 186354111.11 35754030.14
Credit impairment loss (“-” for loss) -8854137.91 -16143004.02
Asset impairment loss (“-” for loss) -11526145.82 -3866890.01
Asset disposal income (“-” for loss) 4181548.77 6642.47
2. Operating profit (“-” for loss) 167695354.99 80355036.59
Add: Non-operating income 345409.40 3441588.57
Less: Non-operating expense 102766.76 1086173.24
3. Profit before tax (“-” for loss) 167937997.63 82710451.92
Less: Income tax expense 17405625.04 -4219121.23
4. Net profit (“-” for net loss) 150532372.59 86929573.15
4.1 Net profit from continuing operations (“-” for net loss) 150532372.59 86929573.15
4.2 Net profit from discontinued operations (“-” for net
loss)
5. Other comprehensive income net of tax 149330204.52 80528741.31
5.1 Items that will not be reclassified to profit or loss 149330204.52 80528741.31
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
149330204.5280528741.31
equity instruments
5.1.4 Changes in the fair value arising from changes in
own credit risk
5.1.5 Other
5.2 Items that will be reclassified to profit or loss
100Changchai Company Limited Annual Report 2022
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 299862577.11 167458314.46
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
101Changchai Company Limited Annual Report 2022
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2022 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2089127900.17 1806075487.79
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 38479590.77 50016426.49
Cash generated from other operating activities 22990293.44 22636726.19
Subtotal of cash generated from operating activities 2150597784.38 1878728640.47
Payments for commodities and services 1312012931.69 1648743526.28
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 313119839.28 323020547.09
Taxes paid 52344111.33 31276348.44
Cash used in other operating activities 108190624.24 142011997.96
Subtotal of cash used in operating activities 1785667506.54 2145052419.77
Net cash generated from/used in operating activities 364930277.84 -266323779.30
2. Cash flows from investing activities:
Proceeds from disinvestment 914060767.00 373180033.58
Return on investment 17913476.59 11396891.86
Net proceeds from the disposal of fixed assets intangible assets
692980.99589226.24
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities 11400123.61
Subtotal of cash generated from investing activities 944067348.19 385166151.68
Payments for the acquisition of fixed assets intangible assets and
48439287.62139772849.33
other long-lived assets
Payments for investments 1033581567.00 709038171.10
Net increase in pledged loans granted
102Changchai Company Limited Annual Report 2022
Net payments for the acquisition of subsidiaries and other business
units
Cash used in other investing activities 1869322.91
Subtotal of cash used in investing activities 1082020854.62 850680343.34
Net cash generated from/used in investing activities -137953506.43 -465514191.66
3. Cash flows from financing activities:
Capital contributions received 633873281.14
Including: Capital contributions by non-controlling interests to
subsidiaries
Borrowings raised 7000000.00 19000000.00
Cash generated from other financing activities 128437700.65 58971466.65
Subtotal of cash generated from financing activities 135437700.65 711844747.79
Repayment of borrowings 12000000.00 29000000.00
Interest and dividends paid 18689380.47 1707729.02
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 83623545.07 14621163.63
Subtotal of cash used in financing activities 114312925.54 45328892.65
Net cash generated from/used in financing activities 21124775.11 666515855.14
4. Effect of foreign exchange rates changes on cash and cash
-152802.06-2215203.09
equivalents
5. Net increase in cash and cash equivalents 247948744.46 -67537318.91
Add: Cash and cash equivalents beginning of the period 562402221.59 629939540.50
6. Cash and cash equivalents end of the period 810350966.05 562402221.59
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
103Changchai Company Limited Annual Report 2022
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2022 2021
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2040092339.55 1721407332.48
Tax rebates 27588745.34 39451775.67
Cash generated from other operating activities 21378587.89 16788453.39
Subtotal of cash generated from operating activities 2089059672.78 1777647561.54
Payments for commodities and services 1330893073.67 1632770616.35
Cash paid to and for employees 243134907.26 267953154.75
Taxes paid 39870320.72 21295926.17
Cash used in other operating activities 222082917.91 129115999.33
Subtotal of cash used in operating activities 1835981219.56 2051135696.60
Net cash generated from/used in operating activities 253078453.22 -273488135.06
2. Cash flows from investing activities:
Proceeds from disinvestment 855000000.00
Return on investment 45708640.27 10222037.17
Net proceeds from the disposal of fixed assets intangible assets
38250224.61124954.89
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 938958864.88 10346992.06
Payments for the acquisition of fixed assets intangible assets and
8002707.775665400.94
other long-lived assets
Payments for investments 983520800.00 484148226.39
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 1869322.91
Subtotal of cash used in investing activities 991523507.77 491682950.24
Net cash generated from/used in investing activities -52564642.89 -481335958.18
3. Cash flows from financing activities:
Capital contributions received 633873281.14
Borrowings raised 5000000.00
Cash generated from other financing activities 128437700.65 58971466.65
Subtotal of cash generated from financing activities 128437700.65 697844747.79
Repayment of borrowings 10000000.00
Interest and dividends paid 18348005.18 160362.10
Cash used in other financing activities 80503408.97 14621163.63
Subtotal of cash used in financing activities 98851414.15 24781525.73
Net cash generated from/used in financing activities 29586286.50 673063222.06
4. Effect of foreign exchange rates changes on cash and cash
-1851060.10-1401721.22
equivalents
5. Net increase in cash and cash equivalents 228249036.73 -83162592.40
104Changchai Company Limited Annual Report 2022
Add: Cash and cash equivalents beginning of the period 476410739.41 559573331.81
6. Cash and cash equivalents end of the period 704659776.14 476410739.41
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
105Changchai Company Limited Annual Report 2022
7. Consolidated Statements of Changes in Owners’ Equity
2022
Unit: RMB
2022
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s
:
G
P T
P e
re r
er n
fe e Other Non-cont Total
Item p er Ot
Share rr Capital a compre Specific Surplus Retained rolling owners’
et al he Subtotal
capital e O reserves s hensive reserve reserves earnings interests equity
u re r
d th u income
al se
s er r
b rv
h y
o e
ar s
n
e t
ds
s o
c
k
1. Balance as at the end of the 705692 640676 506011 18812 334144 872212 307755 194242 309697
prior year 507.00 218.40 499.55 950.04 488.46 354.88 0018.33 30.98 4249.31
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Adjustment for business
106Changchai Company Limited Annual Report 2022
combination under common
control
Other adjustments
2. Balance as at the beginning 705692 640676 506011 18812 334144 872212 307755 194242 309697
of the year 507.00 218.40 499.55 950.04 488.46 354.88 0018.33 30.98 4249.31
3. Increase/ decrease in the -54225 149330 35906. 150532 432835 207160 530399 260200
period (“-” for decrease) 5.39 204.52 71 37.26 54.47 647.57 41.69 589.26
3.1 Total comprehensive 149330 766847 226015 256133 228576
income 204.52 96.91 001.43 5.55 336.98
3.2 Capital increased and -54225 -54225 504786 499363
reduced by owners 5.39 5.39 06.14 50.75
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based
payments included in owners’
equity
3.2.4 Other -54225 -54225 504786 4993635.39 5.39 06.14 50.75
3.3 Profit distribution 150532 -33401 -18348 -1834837.26 242.44 005.18 005.18
3.3.1 Appropriation to 150532 -15053
surplus reserves 37.26 237.26
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to -18348 -18348 -18348
owners (or shareholders) 005.18 005.18 005.18
3.3.4 Other
3.4 Transfers within owners’
107Changchai Company Limited Annual Report 2022
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve 35906. 35906.7 35906.771 1 1
3.5.1 Increase in the period 48772 487723 48772332.12 2.12 2.12
3.5.2 Used in the period 48413 484132 48413225.41 5.41 5.41
3.6 Other
4. Balance as at the end of the 705692 640133 655341 18848 349197 915495 328471 724641 335717
period 507.00 963.01 704.07 856.75 725.72 909.35 0665.90 72.67 4838.57
2021
Unit: RMB
2021
Item
Equity attributable to owners of the Company as the parent Non-cont Total
108Changchai Company Limited Annual Report 2022
Other L rolling owners’
equity e interests equity
instruments s
s
:
G
P T
P e
re r
er n
fe e Other
p er Ot
Share rr Capital a compre Specific Surplus Retained
et al he Subtotal
capital e O reserves s hensive reserve reserves earnings
u re r
d th u income
al se
s er r
b rv
h y
o e
ar s
n
e t
ds
s o
c
k
1. Balance as at the end of the 561374 164328 425482 18812 325451 777899 227334 194985 229284
prior year 326.00 665.43 758.24 986.55 531.14 079.66 9347.02 89.15 7936.17
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning 561374 164328 425482 18812 325451 777899 227334 194985 229284
of the year 326.00 665.43 758.24 986.55 531.14 079.66 9347.02 89.15 7936.17
109Changchai Company Limited Annual Report 2022
3. Increase/ decrease in the 144318 476347 80528 869295 943132 804200 -74358. 804126
-36.51
period (“-” for decrease) 181.00 552.97 741.31 7.32 75.22 671.31 17 313.14
3.1 Total comprehensive 80528 103006 183534 -74358. 183460
income 741.31 232.54 973.85 17 615.68
3.2 Capital increased and 144318 476347 620665 620665
reduced by owners 181.00 552.97 733.97 733.97
3.2.1 Ordinary shares 144318 476347 620665 620665
increased by owners 181.00 552.97 733.97 733.97
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based
payments included in owners’
equity
3.2.4 Other
869295-86929
3.3 Profit distribution
7.3257.32
3.3.1 Appropriation to 869295 -86929
surplus reserves 7.32 57.32
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
owners (or shareholders)
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
110Changchai Company Limited Annual Report 2022
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve -36.51 -36.51 -36.51
40232402320402320
3.5.1 Increase in the period
00.240.240.24
40232402323402323
3.5.2 Used in the period
36.756.756.75
3.6 Other
4. Balance as at the end of the 705692 640676 506011 18812 334144 872212 307755 194242 309697
period 507.00 218.40 499.55 950.04 488.46 354.88 0018.33 30.98 4249.31
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
111Changchai Company Limited Annual Report 2022
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2022
Unit: RMB
2022
Other equity
instruments Le
Pe ss:
Pr
rp Tr Other
efe O Total
Item et Capital eas comprehe Specific Surplus Retained
Share capital rre O th owners’
ua reserves ur nsive reserve reserves earnings
d th er equity
l y income
sh er
bo sto
are
nd ck
s
s
1. Balance as at the end of the 705692507.0 65941870 5056631 18812950. 334144488 756385421. 29801171
prior year 0 0.67 30.88 04 .46 25 98.30
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 5056631 18812950. 334144488 756385421. 29801171
the year 0 0.67 30.88 04 .46 25 98.30
3. Increase/ decrease in the 1493302
04.5235906.71
15053237.117131130.28155047
period (“-” for decrease) 26 15 8.64
3.1 Total comprehensive 1493302 150532372. 29986257
income 04.52 59 7.11
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
112Changchai Company Limited Annual Report 2022
increased by owners
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution 15053237. -33401242. -183480026 44 5.18
3.3.1 Appropriation to 15053237. -15053237.
surplus reserves 26 26
3.3.2 Appropriation to -18348005. -1834800
owners (or shareholders) 18 5.18
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
113Changchai Company Limited Annual Report 2022
3.4.6 Other
3.5 Specific reserve 35906.71 35906.71
3.5.1 Increase in the period 4877232.1 4877232.12 2
3.5.2 Used in the period 4841325.4 4841325.41 1
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 6549933 18848856. 349197725 873516551. 32616676
period 0 0.67 35.40 75 .72 40 76.94
2021
Unit: RMB
2021
Other equity
instruments
Le
P
ss:
Pr er
Tr Other
efe pe O Total
Item Capital eas comprehe Specific Surplus Retained
Share capital rre tu Ot th owners’
reserves ur nsive reserve reserves earnings
d al he er equity
y income
sh b r
sto
are o
ck
s n
ds
1. Balance as at the end of the 561374326.0 18307114 4254827 18812986. 325451531 677800436. 21919931
prior year 0 7.70 58.24 55 .14 75 86.38
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
114Changchai Company Limited Annual Report 2022
2. Balance as at the beginning of 561374326.0 18307114 4254827 18812986. 325451531 677800436. 21919931
the year 0 7.70 58.24 55 .14 75 86.38
3. Increase/ decrease in the 144318181.0 47634755 8052874 8692957.3 78236615.8 78812401
-36.51
period (“-” for decrease) 0 2.97 1.31 2 3 1.92
3.1 Total comprehensive 8052874 86929573.1 16745831
income 1.31 5 4.46
3.2 Capital increased and 144318181.0 47634755 62066573
reduced by owners 0 2.97 3.97
3.2.1 Ordinary shares 144318181.0 47634755 62066573
increased by owners 0 2.97 3.97
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
8692957.3-8692957.3
3.3 Profit distribution
22
3.3.1 Appropriation to 8692957.3 -8692957.3
surplus reserves 2 2
3.3.2 Appropriation to
owners (or shareholders)
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
115Changchai Company Limited Annual Report 2022
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve -36.51 -36.51
4023200.24023200.2
3.5.1 Increase in the period
44
4023236.74023236.7
3.5.2 Used in the period
55
3.6 Other
4. Balance as at the end of the 705692507.0 65941870 5060114 18812950. 334144488 756037052. 29801171
period 0 0.67 99.55 04 .46 58 98.30
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
116Changchai Company Limited Annual Report 2022
III. Company Profile
Changchai Company Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994 which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approved of 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 “Su Changchai A” for
short of stock as well as “0570” as stock code (present stock code is “000570”).In 1996 with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH [1996]
No. 13 as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ [1996] No.
24 and approval of the State Council Securities Commission ZWF [1996] No. 27 the Company issued 100
million B shares to qualified investors on 27 August 1996 to 30 August 1996 getting listed on 13 September
1996.
On 9 June 2006 the Company held a shareholders’ general meeting related to A shares market to examine and
approve share merger reform plan and performed the share merger reform on 19 June 2006.As examined and approved at the 2nd Extraordinary General Meeting of 2009 in September 2009 based on the
total share capital of 374249551 shares as at 30 June 2009 the Company implemented the profit distribution plan
i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares with registered capital increased by
RMB187124775.00 as well as registered capital of RMB561374326.00 after change which verified by Jiangsu
Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC
[2010] No. B002.A non-public offering of up to 168412297 new shares was deliberated on and approved as a resolution of the
2020 Annual General Meeting held on 7 May 2021 and approved by the Approval of the Non-public Offering of
Shares of Changchai Co. Ltd. (CSRC Permit [2020] No. 3374) issued by Changchai Company Limited the China
Securities Regulatory Commission. On 16 June 2021 the capital verification report "S.G. W [2021] B062" was
issued by Gongzheng Tianye Accounting Firm (Special General Partnership) confirming that the Company had
issued 144318181 RMB ordinary shares (A shares) in a non-public offering with an additional paid-in capital
(share capital) of RMB144318181. The total amount raised was RMB634999996.40; the net amount raised was
RMB620665733.97 which increased the capital reserve (share capital premium) by RMB476347552.97. As of
31 December 2021 the total share capital of the Company was RMB705692507.
Credibility code of the Company’s License of Business Corporation: 91320400134792410W.The Company’s registered address is situated at No. 123 Huaide Middle Road Changzhou Jiangsu as well as its
head office located at No. 123 Huaide Middle Road Changzhou Jiangsu.The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine
diesel engines part and casting grain harvesting machine rotary cultivators walking tractor mould and fixtures
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors combine harvest
models light commercial vehicle farm equipment small-sized construction machinery generating sets and
shipborne machinery and equipment etc. The Company’s main business remained unchanged in the Reporting
117Changchai Company Limited Annual Report 2022
Period.The Company established the Shareholders’ General Meeting the Board of Directors and the Supervisory
Committee Corporate office Financial Department Political Department Investment and Development
Department Audit Department Human Recourses Department Production Department Procurement Department
Sales Company Chief Engineer Office Technology Center QA Department Foundry Branch Machine
Processing Branch Single-cylinder Engine branch Multi-cylinder Engine Branch and Overseas Business
Department in the Company.The financial report has been approved to be issued by the Board of Directors on 10 April 2023.The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 8
subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation please
refer to the changes of the consolidated scope of the notes to the financial report and the notes to the equities
among other entities.IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred
the Group prepared financial statements in accordance with The Accounting Standards for Business
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 2014)
by China Securities Regulatory Commission.In accordance with relevant provisions of the Accounting Standards for Business Enterprises the Group adopted
the accrual basis in accounting. Except for some financial instruments where impairment occurred on an asset an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the Reporting Period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.The financial statement compiled base on the continuous operation.V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE formulated certain specific accounting policies and accounting
estimations which mainly reflected in the financial instruments withdrawal method of the bad debt provision of
the accounts receivable the measurement of the inventory and the depreciation of the fixed assets etc.
118Changchai Company Limited Annual Report 2022
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises which factually and completely present the Company’s and the Group’s
financial positions business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase the fiscal year is from 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.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not
under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.For the merger of enterprises under the same control if the consideration of the merging enterprise is that it makes
payment in cash transfers non-cash assets or bear its debts it shall on the date of merger regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.The difference between the initial cost of the long-term equity investment and the payment in cash non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute the retained earnings shall be adjusted.If the consideration of the merging enterprise is that it issues equity securities it shall on the date of merger
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute the retained earnings shall be
adjusted.All direct costs for the business combination including expenses for audit evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc premium income of deducting the equity securities and as for the premium income was
insufficient to dilute the retained earnings shall be written down.Owning to the reasons such as the additional investment for the equity investment held before acquiring the
119Changchai Company Limited Annual Report 2022
control right of the combined parties the confirmed relevant gains and losses other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.For the business combinations not under the same control realized through step by step multiple transaction as for
the equity interests that the Group holds in the acquiree before the acquiring date they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual
control right into the consolidated financial statement.The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance investment transaction and the unrealized profits should be written off when compiling the
consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of a
subsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under shareholders’ equity and net
profits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the period
that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by
minority shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’
equity minority interests are offset.The accounting policy or accounting period of each subsidiary is different from which of the Company which
120Changchai Company Limited Annual Report 2022
shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Company
when preparing the consolidated financial statements.As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financial
statement shall adjust individual financial statement based on the fair value of the identifiable net assets on the
acquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financial
statement shall not adjust the financial statement of the subsidiaries namely survived by integration as
participating in the consolidation when the final control party starts implementing control and should adjust the
period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.As for the disposed subsidiaries the operation result and the cash flow should be included in the consolidated
income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period should not be adjusted the period-begin amount of the consolidated balance sheet.Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other
reasons the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the
residual equity interests minus the portion in the original subsidiary’s net assets measured on a continuous basis
from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the
subsidiary is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Other
comprehensive incomes in relation to the equity investment and the other owners’ equities changes except for the
net gains and losses other comprehensive income and profits distribution in the original subsidiary are treated on
the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is except for the
changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary the rest shall all be transferred into current investment gains) when such control ceases. And
subsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standard
for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.For the disposal of equity investment belongs to a package deal should be considered as a transaction and conduct
accounting treatment. However Before losing control every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements which together transferred into the current profits and losses in the loss of control when the Group
losing control on its subsidiary.For the disposal of the equity investment not belongs to a package deal should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
121Changchai Company Limited Annual Report 2022
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding cash and cash equivalents include cash on hand any deposit that can be used for
cover and short-term (usually due within 3 months since the day of purchase) and high circulating investments
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred the foreign currency shall be converted into the
recording currency according to the middle price of the market exchange rate disclosed by the People’s Bank of
China on the date of the transaction. Among the said transactions that occurred those involving foreign exchanges
shall be converted according to the exchange rates adopted in the actual transactions.On the balance sheet date the foreign-currency monetary assets and the balance of the liability account shall be
converted into the recoding currency according to the middle price of the market exchange rates disclosed by the
People’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount
converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency
amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the
foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of
capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded
into the establishment expense; others shall be recorded into the financial expenses for the current period.On the balance sheet date the foreign-currency non-monetary items measured by historical cost shall be converted
according to the middle price of the market exchange disclosed by the People’s Bank of China on the date of the
transaction with no changes in the original recording-currency amount; while the foreign-currency non-monetary
items measured by fair value shall be converted according to the middle price of the market exchange disclosed by
the People’s Bank of China on the date when the fair value is recognized and the exchange gain/loss caused
thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spotexchange rate on the balance sheet date. Among the owner’s equity items except for the items as “undistributedprofits” other items shall be translated at the spot exchange rate at the time when they are incurred. And the
revenues and expenses items among the balance sheet of the foreign operation shall be translated at the
approximate exchange rate of the transaction date. The difference caused from the above transaction of the foreign
currency statement should be listed in the other comprehensive income among the owners’ equities.
122Changchai Company Limited Annual Report 2022
10. Financial Instruments
(1) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories based on
the business model for financial assets management and characteristics of contractual cash flow of financial assets:
financial assets measured at amortized cost financial assets at fair value through other comprehensive income
(debt instruments) and financial assets at fair value through profit or loss
Financial liabilities were classifies when initially recognized into financial liabilities at fair value through profit or
loss and financial liabilities measured at amortized cost.
(2) Recognition Basis and Measurement Method for Financial Instruments
* Financial assets measured at amortized cost
Financial assets at amortized cost include notes receivable accounts receivable other receivables long-term
receivables and investment in debt obligations which are initially measured at fair value and related transaction
cost shall be recorded into the initial recognized amount. For accounts receivable excluding significant financing
and accounts receivable that the Company decides not to consider financing components less than one year the
initial measurement shall be made at the contract transaction price. The interest calculated with actual rates for the
holding period shall be recorded into the current profit or loss. When recovered or disposed the difference
between the price obtained and the carrying value of the financial assets shall be recorded into the current profit or
loss.* Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets at fair value through other comprehensive income (debt instruments) include accounts receivable
financing and investment in other debt obligations which are initially measured at fair value and related
transaction cost shall be recorded into the initial recognized amount. The subsequent measurement of the financial
assets shall be at fair value and changes of fair value except for interest calculated with actual rates impairment
losses or gains and exchange gains or losses shall be recorded into other comprehensive income. When
derecognized the accumulated gains or losses originally recorded into other comprehensive income shall be
transferred into the current profit or loss.* Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in
other equity instruments etc. which are initially measured at fair value and related transaction cost shall be
recorded into the initial recognized amount. The subsequent measurement of the financial assets shall be at fair
value and changes of fair value shall be recorded into other comprehensive income. The dividends obtained shall
be recorded into the current profit or loss. When derecognized the accumulated gains or losses originally recorded
into other comprehensive income shall be transferred into retained earnings.* Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets derivative financial
assets and other non-current financial assets which are initially measured at fair value and the related transaction
cost shall be recorded into the current profit or loss. The subsequent measurement of the financial assets shall be
at fair value and the changes of fair value shall be recorded into the current profit or loss.* Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and derivative
financial liabilities which are initially measured at fair value and the related transaction cost shall be recorded into
the current profit or loss. The subsequent measurement of the financial liabilities shall be at fair value and the
changes of fair value shall be recorded into the current profit or loss. When derecognized the difference between
123Changchai Company Limited Annual Report 2022
the carrying value and the paid consideration shall be recorded into the current profit or loss.* Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings notes payable accounts payable other
payables long-term borrowings bonds payable and long-term payables which are initially measured at fair value
and the related transaction cost shall be recorded into the initial recognized amount. The interest calculated with
actual rates for the holding period shall be recorded into the current profit or loss. When derecognized the
difference between the paid consideration and the carrying value of the financial liabilities shall be recorded into
the current profit or loss.
(3) Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial
asset to the transferee it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks and
rewards related to the ownership of the financial asset it shall continue to recognize the transferred financial asset.Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset it shall deal with it according to the circumstances as follows respectively: (1) If it gives up its
control over the financial asset it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the
financial asset it shall according to the extent of its continuous involvement in the transferred financial asset
recognize the related financial asset and recognize the relevant liability accordingly.If the transfer of an entire financial asset satisfies the conditions for stopping recognition the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The
carrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration received
from the transfer of financial assets and derecognition amount among the accumulative amount of the changes of
the fair value originally recorded in the other comprehensive income (the financial assets involve transfer are
investments in debt instruments at fair value through other comprehensive income. If the transfer of partial
financial asset satisfies the conditions to stop the recognition the entire carrying value of the transferred financial
asset shall between the portion whose recognition has been stopped and the portion whose recognition has not
been stopped be apportioned according to their respective relative fair value on the transfer date and the
difference between the amounts of the following two items shall be included into the profits and losses of the
current period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum of
consideration of the portion whose recognition has been stopped and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the active
market. For financial instruments without active market the fair value is determined by valuation techniques. The
Company adopts the valuation techniques applicable to the current conditions which are supported by sufficient
data and other information for valuation and selects the input values consistent with the characteristics of assets
or liabilities considered by market participants in asset or liability transactions with priority to observable input
values. Unobservable input values are used only when relevant observable input values are not available or
practical.
124Changchai Company Limited Annual Report 2022
(6) Impairment of financial instrument
* Impairment measurement and accounting handling of financial instrument
Based on expected credit loss the Company conducts impairment handling and confirms credit impairment loss
for financial assets which is measured by amortized cost debt instrument investment which is measured by fair
value and whose change is calculated into other comprehensive profits financial guarantee contract.Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of
contract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow which
is converted into cash according to actual interest rate and receivable according to contract and all cash flow
which to be charged as expected i.e. current value of all cash shortage. Among it as for financial asset purchased
or original which has had credit impairment it should be converted into cash according actual interest rate of this
financial asset after credit adjustment.Lifetime expected credit losses refer to those caused by possible defaults during the entire expected duration of a
financial instrument.The expected credit losses in the next 12 months refers to those caused by the default events of the financial
instrument that may occur within 12 months (or the expected duration if the expected duration of the financial
instrument is less than 12 months) after the balance sheet date and is part of the expected credit losses in the
entire duration.On each balance sheet date the Company respectively measured the expected credit losses of financial
instruments in different stages. If the credit risk of a financial instrument has had no significant increase since its
initial recognition the instrument shall fall in the first stage for which the Company would measure the loss
reserves according to the expected credit losses in the future 12 months. If the credit risk of a financial instrument
has had a significant increase since its initial recognition but no credit impairment has occurred the instrument
shall fall in the second stage for which the Company would measure the loss reserves according to the expected
credit losses in the entire duration of the instrument. If the credit impairment has occurred since its initial
recognition the financial instrument shall fall in the third stage for which the Company would measure the loss
reserves according to the expected credit losses in the entire duration of the instrument.As for a financial instrument with low credit risks on the balance sheet date the Company measured the loss
reserves according to the expected credit losses in the future 12 months assuming that its credit risk has had no
significant increase since its initial recognition.For financial instruments with low credit risks in stages 1 and 2 the Company calculated the interest income at the
effective interest rate and on the carrying amount of the instruments without deductions for provisions for asset
impairment. For financial instruments in stage 3 interest income was calculated at the effective interest rates and
on the amortized cost by reducing the provisions for asset impairment from the carrying amount.For notes receivables accounts receivables and financing receivables whether there was a significant financial
component or not the Company measured the loss reserves based on the expected credit losses for the entire
duration.A. Accounts receivable
For notes receivable accounts receivable other receivables and accounts receivable financing with objective
evidence indicating impairment and those suitable for individual evaluation the Company carries out impairment
test separately to confirm expected credit loss and prepare provision for impairment of single items. For notes
receivable accounts receivable other receivables accounts receivable financing contract assets and long-term
receivables without objective evidence of impairment or a single financial asset with expected credit loss
impossible to be assessed at a reasonable cost the Company divides the notes receivable accounts receivable
other receivables and accounts receivable financing into groups according to the characteristics of credit risk and
calculates the expected credit loss based on receivable groups. The basis for recognizing groups is as follows:
125Changchai Company Limited Annual Report 2022
Item Recognition basis Method of measuring expected credit losses
Group 1 of notes Consulting historical experience in credit losses
All commercial bills
receivable combining current situation and prediction for future
Bank’s acceptance bills economic situation the expected credit loss shall be
Group 2 of notes
with low credit rating accounted through exposure at default and the expected
receivable
credit loss rate over the entire life
Bank’s acceptance bills Consulting historical experience in credit losses
with high credit rating combining current situation and prediction for future
Accounts receivable
economic situation the expected credit loss shall be
financing
accounted through exposure at default and the expected
credit loss rate over the entire life
Prepare the comparative list between aging of accounts
receivable and expected credit loss rate over the entire
life and calculate the expected credit loss by consulting
Accounts Accounts receivable
historical experience in credit losses combining current
receivable-credit risk portfolio with credit
situation and prediction for future economic situation.characteristics group period
The Company takes aging as credit risk characteristics
groups and calculates the expected credit loss for
accounts receivable.Accounts Consulting historical experience in credit losses
receivable-intercourse combining current situation and prediction for future
Related party within the
funds among related economic situation the expected credit loss shall be
consolidation scope
party group within the accounted through exposure at default and the expected
consolidation scope credit loss rate over the entire life
Basis for recognizing groups of other receivables is as follows:
Item Recognition basis Method of measuring expected credit losses
Consulting historical experience in credit losses
Other receivables combining current situation and prediction for future
excluding those from economic situation the expected credit loss shall be
Group 1 of other receivables
related parties-aging accounted through exposure at default and the expected
group credit loss rate within the next 12 months or over the
entire life
Consulting historical experience in credit losses
combining current situation and prediction for future
Related party within
economic situation the expected credit loss shall be
Group 2 of other receivables the consolidation
accounted through exposure at default and the expected
scope
credit loss rate within the next 12 months or over the
entire life
11. Accounts Receivable
See “10. Financial Instruments”.
126Changchai Company Limited Annual Report 2022
12. Accounts Receivable Financing
See “10. Financial Instruments”.
13. Other Receivables
See “10. Financial Instruments”.
14. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities goods in process materials consumed in
the production process or the process providing the labor service etc. Inventory is mainly including the raw
materials low priced and easily worn articles unfinished products inventories and work in process–outsourced
etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling
price of inventory
At the balance sheet date inventories are measured at the lower of the costs and net realizable value. When all the
inventories are checked roundly for those which were destroyed outdated in all or in part sold at a loss etc the
Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the
year-end. Where the cost of the single inventory item is higher than the net realizable value the inventory falling
price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the
normal production and operating process as for the commodities inventory directly for sales such as the finished
products commodities and the materials for sales should recognize the net realizable value according to the
amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant
taxes; as for the materials inventory needs to be processed in the normal production and operating process should
recognize its net realizable value according to the amount of the estimated selling price of the finished products
minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as
the relevant taxes; on the balance sheet date for the same inventory with one part agreed by the contract price
and other parts not by the contract price should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area have the same
or similar end users or purposes and cannot be practicably evaluated separately from other items in that product
line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumables and packages
One time amortization method is adopted for low-value consumables and packages.
127Changchai Company Limited Annual Report 2022
15. Contract Assets
Contract Assets means that the Company is endowed with the right to charge the consideration through
transferring any commodity or service to the client and such right depends on other factors except the passing of
time. The Company’s unconditional right (only depending on the passing of time) of charging the consideration
from the client shall be separately presented as receivables.The recognition method and accounting treatment method of the estimated credit loss of contract assets are
consistent with that specified in Notes V.11.
16. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting from
the acquiring of contract) is predicted to be retrieved it shall be recognized as an assets amortized by adopting
the same basis with the recognition of commodities or service revenues related to the assets and included into the
current profit and loss. If the assets’ amortization period does not exceed one year it shall be immediately
included into the current profit and loss. Other expenses resulting from the Company’s acquiring of contract shall
also be included into the current profit and loss unless it is explicitly borne by the client.
(2) Costs from Executing Contract
The Company’s costs from executing contract is not covered by other ASBE except for Revenue Standards and
when the following situations are met such costs can be recognized as an assets: * the costs are directly related
to a current or predicted contract; * the costs increase the Company’s resources applied to fulfill performance
obligations in the future; * the costs are predicted to be retrieved. The recognized assets shall be amortized by
adopting the same basis with the recognition of commodities or service revenues related to the assets and included
into the current profit and loss.If the book value of contract costs is higher than the difference of the following two items corresponding
depreciation reserves shall be counted and withdrawn and it shall be recognized as the assets depreciation loss: *
the residual consideration predicted to be acquired by transferring commodities related to the assets; * the costs
predicted to occur due to the transfer of related commodities.If the difference between * and * is higher than the book value of contract costs due to any change in various
factors causing depreciation in previous periods it shall be restituted to the withdrawn assets depreciation reserves
and included in the current profit and loss. However the book value of restituted contract costs shall not exceed
the book value of the assets on the day of restitution based on the hypothesis that depreciation reserves are not
counted and withdrawn.
17. Assets Held for Sale
The Company recognizes the components (or the non-current assets) which meet with the following conditions as
assets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of
components under the current conditions;
(2) The Company had made solutions on disposing the components (or the non-current assets) for example the
Company should gain the approval from the shareholders according to the regulations and had acquired the
approved from the Annual General Meeting or the relevant authority institutions;
128Changchai Company Limited Annual Report 2022
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
18. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control refers to the control jointly owned according to the relevant agreement on an arrangement by the
Company and the relevant activities of the arrangement should be decided only after the participants which share
the control right make consensus. Significant influence refers to the power of the Company which could anticipate
in the finance and the operation polices of the investees but could not control or jointly control the formulation of
the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways
in accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine if the combine party takes the cash
payment non-cash assets transformation liabilities assumption or equity securities issuance as the combination
consideration should take the shares of the book value by the ultimate control party in the consolidate financial
statement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. The
difference between the initial investment cost and the book value of the paid combination consideration or the
total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the
capital reserve is insufficient to dilute the retained earnings shall be adjusted. To include each direct relevant
expense occurred when executing the enterprise merger into the current gains and losses; while the handling
charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger
should be included in the initial measurement amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same control its
initial investment cost shall regard as the combination cost calculated by the fair value of the assets equity
instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the
acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)
undertaken on the combining date shall be measured at the fair value without considering the amount of minority
interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
into the consolidated income statement directly. The agent expense and other relevant management expenses such
as the audit legal service and evaluation consultation occurs from the enterprise merger should be included in the
current gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement amount of
the shareholders’ equities or the liabilities.
3) Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement the unfair value stipulated in the contract or agreement shall be measured at fair value.As for long-term investment obtained by the exchange of non-monetary assets where it is commercial in nature
129Changchai Company Limited Annual Report 2022
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold and is able to do equity investment with control over an invested entity the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50% or while the
Company holds the shares of an entity below 50% but has a real control to the said entity then the said entity
shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold and is able to do equity investment with joint control with other parties over an
invested entity the invested entity shall be its joint enterprise. Where the Company hold and is able to have
equity investment with significant influences on an invested entity the invested entity shall be its associated
entity.After the Company acquired the long-term equity investment should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses other comprehensive income and the
owners’ equity except for the profits distribution of the investees should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .The investing enterprise shall on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.If the accounting policy adopted by the investees is not accord with that of the Company should be adjusted
according to the accounting policies of the Company and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.For the transaction happened between the Company and associated enterprises as well as joint ventures if the
assets launched or sold not form into business the portion of the unrealized gains and losses of the internal
transaction which belongs to the Company according to the calculation of the enjoyed proportion should
recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the transferred assets
should not be neutralized.The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of
all to write down the book value of the long-term equity investment. Secondly if the book value of the long-term
equity investment is insufficient for written down should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
down the book value of the long-term accounts receivable etc. Lastly through the above handling for those
should still undertake the additional obligations according to the investment contracts or the agreements it shall
130Changchai Company Limited Annual Report 2022
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later the Company shall after the
amount of its attributable share of profits offsets against its attributable share of the un-recognized losses resume
recognizing its attributable share of profits.In the preparation for the financial statements the balance existed between the long-term equity investment
increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by
the increased shares held since the purchase date (or combination date) the capital reserves shall be adjusted if
the capital reserves are not sufficient to offset the retained profits shall be adjusted; the Company disposed part of
the long-term equity investment on subsidiaries without losing its controlling right on them the balance between
the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be
recorded into owners’ equity.For other ways on disposal of long-term equity investment the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.For the long-term equity investment measured by adopting equity method if the remained equity after disposal
still adopts the equity method for measurement the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses other comprehensive income and the profits
distribution of the investees should be transferred into the current gains and losses according to the proportion.For the long-term equity investment which adopts the cost method of measurement if the remained equity still
adopt the cost method the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement should be carried forward into the current gains and losses according to the proportion.For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Company acquired the control of the investees should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the
control of them while the changes of the other owners’ equity except for the net gains and losses other
comprehensive income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement should be carried forward into the current gains and losses
according to the proportion. Of which for the disposed remained equity which adopted the equity method for
measurement the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
131Changchai Company Limited Annual Report 2022
the recognition and measurement standards of financial instrument the other comprehensive income and the other
owners’ equity should be carried forward in full amount.For those the Company lost the control of the investees by disposing part of the equity investment the disposed
remained equity should change to calculate according to the recognition and measurement standards of financial
instrument and difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses other comprehensive income and the profits distribution of the
investees should be transferred into the current investment income with full amount when terminate adopting the
equity method.
19. Investment Real Estate
Measurement mode of investment real estate:
Measurement of cost method
Depreciation or amortization method
The investment real estate shall be measured at its cost. Of which the cost of an investment real estate by
acquisition consists of the acquisition price relevant taxes and other expense directly relegated to the asset; the
cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped
condition for use. The investment real estate invested by investors shall be recorded at the value stipulated in the
investment contracts or agreements but the unfair value appointed in the contract or agreement shall be entered
into the account book at the fair value.As for withdrawal basis of provision for impairment of investment real estates please refer to withdrawal method
for provision for impairment of fixed assets.
20. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for
the sake of producing commodities rendering labor service renting or business management; and (b) their useful
life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits
probably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
Category of fixed assets Method Useful life Annual deprecation
Housing and building Average method of
20-40 years 2.50%-5%
useful life
Machinery equipment Average method of
6-15 years 6.67%-16.67%
useful life
Transportation Average method of
5-10 years 10%-20%
equipment useful life
Average method of
Other equipment 5-10 years 10%-20%
useful life
(3) Recognition Basis Pricing and Depreciation Method of Fixed Assets by Finance Lease
132Changchai Company Limited Annual Report 2022
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance
lease:
1) The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions on
the lease starting date) when the lease term expires the ownership of leasing the fixed assets could be transferred
to the Company;
2) The Company owns the choosing right for purchasing and leasing the fixed assets with the set purchase price
which is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosing
right so the Company could execute the choosing right reasonably on the lease starting date;
3) Even if the ownership of the fixed assets not be transferred the lease period is of 75% or above of the useful
life of the lease fixed assets;
4) The current value of the minimum lease payment on the lease starting date of the Company is equal to 90% or
above of the fair value of the lease fixed assets on the lease starting date; the current value of the minimum lease
receipts on the lease starting date of the leaser is equal to 90% or above of the fair value of the lease fixed assets
on the lease starting date;
5) The nature of the lease assets is special that only the Company could use it if not execute large transformation.
The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and the
current value of the minimum lease payment on the lease starting date as the entry value. As for the minimum
lease payment which be regarded as the entry value of the long-term accounts payable its difference should be
regarded as the unrecognized financing expense. For the initial direct expenses occur in the lease negotiations and
the signing process of the lease contracts that attribute to the handling expenses counsel fees travel expenses and
stamp taxes of the lease items should be included in the charter-in assets value. The unrecognized financing
expenses should be amortized by adopting the actual interest rate during the period of the lease term.The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is
reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires
the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will
obtain the ownership of the leased asset at the expiry of the lease term the leased asset shall be fully depreciated
over the shorter one of the lease term or its useful life
21. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct
materials direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed cost of installation
trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses
which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process of which the fixed assets reach to the predicted condition for use shall carry forward
fixed assets on schedule. The one that has not audited the final accounting shall recognize the cost and make
depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its
historical cost but not adjust the depreciation that has been made after auditing the final accounting.
22. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings amortization of discounts or premiums on
133Changchai Company Limited Annual Report 2022
borrowings ancillary expenses and exchange balance on foreign currency borrowings. Where the borrowing
costs occurred belong to specifically borrowed loan or general borrowing used for the acquisition and construction
of investment real estates and inventories over one year (including one year) shall be capitalized and record into
relevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amount
incurred and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalized
unless they simultaneously meet the following three requirements: (1) The asset disbursements have already
incurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or production
activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets investment real estates and
inventories if they meet the above-mentioned capitalization conditions the capitalization of the borrowing costs
shall be measured into asset cost before such assets reach to the intended use or sale Where acquisition and
construction of fixed assets investment real estates and inventories is interrupted abnormally and the interruption
period lasts for more than 3 months the capitalization of the borrowing costs shall be suspended and recorded
into the current expense till the acquisition and construction of the assets restarts. When the qualified asset is
ready for the intended use or sale the capitalization of the borrowing costs shall be ceased the borrowing costs
occurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible for
capitalization the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred of
the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing
loans as a deposit in the bank or as a temporary investment.Where a general borrowing is used for the acquisition and construction or production of assets eligible for
capitalization the enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The
capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general
borrowing.
23. Intangible Assets
(1) Pricing Method Service Life and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements however for the value of the contracts or agreements is not fair the actual
cost should be recognized according to the fair value.For the intangible assets acquires from the exchange of the non-currency assets if own the commercial nature
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature
should be recorded according to the book value of the swap-out assets.For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life which are amortized by straight-line method when it is
available for use within the service period shall be recorded into the current profits and losses. The Company
shall at least at the end of each year check the service life and the amortization method of intangible assets with
134Changchai Company Limited Annual Report 2022
limited service life. When the service life and the amortization method of intangible assets are different from those
before the years and method of the amortization shall be changed.Intangible assets with uncertain service life may not be amortized. However the Company shall check the service
life of intangible assets with uncertain service life during each accounting period. Where there are evidences to
prove the intangible assets have limited service life it shall be estimated of its service life and be amortized
according to the above method mentioned.The rights to use land of the Company shall be amortized according to the rest service life.
(2) Accounting Polices of Internal R & D Costs
The internal research and development projects of an enterprise shall be classified into research phase and
development phase: the term “research” refers to the creative and planned investigation to acquire and understand
new scientific or technological knowledge; the term “development” refers to the application of research
achievements and other knowledge to a certain plan or design prior to the commercial production or use so as to
produce any new material device or product or substantially improved material device and product.The Company collects the costs of the corresponding phases according to the above standard of classifying the
research phase and the development phase. The research expenditures for its internal research and development
projects of an enterprise shall be recorded into the profit or loss for the current period. The development costs for
its internal research and development projects of an enterprise may be capitalized when they satisfy the following
conditions simultaneously: it is feasible technically to finish intangible assets for use or sale; it is intended to
finish and use or sell the intangible assets; the usefulness of methods for intangible assets to generate economic
benefits shall be proved including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the
intangible assets will be used internally; it is able to finish the development of the intangible assets and able to
use or sell the intangible assets with the support of sufficient technologies financial resources and other resources;
the development costs of the intangible assets can be reliably measured.
24. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets projects under construction intangible Assets with limited
service life investing real estate with cost model long-term equity investment of subsidiaries cooperative
enterprises and joint ventures the Company should judge whether decrease in value exists on the date of balance
sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation
and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no
matter whether it exists.If the recoverable amount is less than book value in impairment test results the provision for impairment of
differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair
value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined
according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market fair
value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active
market exists asset fair value could be acquired on the basis of best information available. Disposal expenses
include legal fees taxes cartage or other direct expenses of merchantable Assets related to asset disposal. Present
value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service
and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single
Assets. If it is difficult to predict the recoverable amounts for single Assets recoverable amounts should be
determined according to the belonging asset group. Asset group is the minimum asset combination producing cash
135Changchai Company Limited Annual Report 2022
flow independently.In impairment test book value of the business reputation in financial report should be shared to beneficial asset
group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable
amounts of shared business reputation asset group or asset group combination are lower than book value it should
determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of
business reputation of asset group or asset group combination then deduct book value of all assets according to
proportions of other book value of above assets in asset group or asset group combination except business
reputation.After the asset impairment loss is determined recoverable value amounts would not be returned in future.
25. Long-term Deferred Expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure and amortized
averagely within benefit period. In case of no benefit in the future accounting period the amortized value of such
project that fails to be amortized shall be transferred into the profits and losses of the current period.
26. Contract Liabilities
Contract liabilities refer to the Company’s obligations in transferring commodities or services to the client for the
received or predicted consideration. Contract assets and contract liabilities under the same contract shall be
presented based on the net amount.
27. Employee Benefits
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary bonus allowances and subsidies employee services and
benefits medical insurance premiums birth insurance premium industrial injury insurance premium housing
fund labor union expenditure and personnel education fund non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost.Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit
plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the
Company and the employees or the regulations or methods formulated by the Company for providing the welfare
after demission for the employees. Of which defined contribution plans refers to the welfare plans after demission
that the Company no more undertake the further payment obligations after the payment of the fixed expenses for
the independent funds; defined benefit plans refers to the welfare plans after demission except for the defined
contribution plans.Defined contribution plans
During the accounting period that the Company providing the service for the employees the Company should
recognize the liabilities according to the deposited amount calculated by defined contribution plans and should be
included in the current gains and losses or the relevant assets cost.
136Changchai Company Limited Annual Report 2022
(3) Accounting Treatment of the Demission Welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the
earlier date between the following two conditions and include which in the current gains and losses when
providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission
welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the
costs or expenses related to the reorganization involves with the demission welfare payments.
28. Lease Liabilities
On the commencement date of the lease term the Company recognizes the present value of unpaid lease payments
as lease liabilities. Lease payments include: fixed payment and substantial fixed payment and the relevant amount
after the lease incentive (if any) is deducted; variable lease payments that depend on indexation or ratio which are
determined according to the indexation or ratio on the commencement date of the lease term in the initial
measurement; exercise price of the purchased option provided that the lessee reasonably determines that the
option will be exercised; the amount to be paid for the exercise of the lease termination options provided that the
lease term reflects that the lessee will exercise the options to terminate the lease; and estimated payments due to
the guaranteed residual value provided by the lessee.The Company uses the interest rate implicit in lease as the rate of discount when calculating the present value of
the lease payments. The incremental lending rate of the lessee will be used as the rate of discount if the interest
rate implicit in lease cannot be determined. The Company calculates the interest charge of the lease liabilities in
each period of the lease term at a fixed periodic interest rate and includes it in the profit or loss of the current
period unless such interest charge is stipulated to be included in the underlying asset costs. Variable lease
payments that are not included in the measurement of the lease liabilities should be included in the profit or loss of
the current period when they are actually incurred unless such payments are stipulated to be included in the
underlying asset costs. The Company will re-calculate the lease liabilities using the present value of the changed
lease payments if the substantial fixed payment the estimated payments due to the guaranteed residual value the
index or rate used to determine the lease payments or the assessment result of the call option the renewal option
or the termination option or the actual exercise changes after the commencement date of the lease term.
29. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
137Changchai Company Limited Annual Report 2022
The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any conclusive
evidence proving that the said book value can’t truly reflect the current best estimate the Company shall subject
to change make adjustment to carrying value to reflect the current best estimate.
30. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control over
related commodities or services) revenues shall be recognized based on the obligation’s amortized transaction
price. Performance Obligation refers to the Company’s promise of transferring commodities or services that can
be clearly defined to the client. Transaction Price refers to the consideration amount duly charged by the Company
for transferring commodities or services to the client excluding any amount charged by the third party and any
amount predicted to be returned to the client. Control Over Relevant Commodities means that the use of
commodities can be controlled and almost all economic interests can be obtained.On the contract commencement day the Company shall evaluate the contract recognize individual performance
obligation and confirm that individual performance obligation is fulfilled in a certain period. When one of the
following conditions is met such performance obligation shall be deemed as fulfilled in a certain period and the
Company shall recognize it as revenue within a certain period according to the performance schedule: (1) the
client obtains and consumes the economic interests resulting from the Company’s performance of contract while
performing the contract; (2) the client is able to control the commodities under construction during the
performance; (3) commodities produced by the Company during the performance possess the irreplaceable
purpose and the Company has the right to charge all finished parts during the contract period; otherwise the
Company shall recognize the revenue when the client obtains the control over relevant commodities or services.The Company shall adopt the Input Method to determine the Performance Schedule. Namely the Performance
Schedule shall be determined according to the Company’s input for fulfilling performance obligations. When the
Performance Schedule cannot be reasonably determined and all resulting costs are predicted to be compensated
the Company shall recognize the revenue based on the resulting cost amount till the Performance Schedule can be
reasonably determined.When the contract involves two or more than two performance obligations the transaction price shall be
amortized to each single performance obligation on the contract commencement day according to the relative
proportion of the independent selling price of commodities or services under each single performance obligation.If any solid evidence proves that the contract discount or variable consideration only relates to one or more than
one (not all) performance obligation under the contract the Company shall amortize the contract discount or
variable consideration to one or more than one related performance obligations. Independent selling price refers to
the price adopted by the Company to independently sell commodities or services to the client. However
independent selling price cannot be directly observed. The Company shall estimate the independent selling price
by comprehensively considering all related information that can be reasonably obtained and maximally adopting
the observable input value.Variable Consideration
If any variable consideration exists in the contract the Company shall determine the optimal estimation of the
variable consideration based on the expected values or the most possible amount. The variable consideration’s
transaction price shall be included without exceeding the total revenue amount recognized without the risk of
significant restitution when all uncertainties are eliminated. On each balance sheet day the Company shall
re-estimate the variable consideration amount to be included in the transaction price.
138Changchai Company Limited Annual Report 2022
Consideration Payable to the Client
If any consideration payable to the client exists in the contract the Company shall use such consideration to offset
the transaction price unless such consideration is paid for acquiring other clearly-defined commodities or services
from the client and write down the current revenue at the later time between the time of recognizing relevant
revenues and the time of paying (or promising the payment) the consideration to the client.Sales with the Quality Assurance
For sales with the Quality Assurance if the Quality Assurance involves another separate service except for the
guarantee of all sold commodities or services meeting all established standards the Quality Assurance shall
constitute a single Performance Obligation; otherwise the Company shall make corresponding accounting
treatment to the Quality Assurance according to ASBE No.13--Contingency.Main Responsibility Person/Agent
According to whether the control over commodities or services is obtained before they are transferred to the client
the Company can judge whether it is Main Responsibility Person or Agent based on its status during the
transaction. If the Company can control commodities or services before they are transferred to the client the
Company shall be Main Responsibility Person and revenues shall be recognized according to the total
consideration amount received or to be received; otherwise the Company shall be Agent and revenues shall be
recognized according to the commission or service fees predicted to be duly charged. However such amount shall
be determined based on the net amount after deducting other amounts payable to other related parties from the
total consideration received or to be duly received or the fixed commission amount or proportion.Specific methods
The specific methods of the Company's revenue recognition are as follows:
The sale contract between the Company and its customers usually contains only the performance obligation for
the transfer of goods which is satisfied at a point in time.The following requirements must be met to confirm the revenue of domestic products: The Company has
delivered the goods to the customer in accordance with the contract and the customer has accepted the goods. The
payment has been recovered or the receipt voucher has been obtained and the relevant economic benefits are
likely to flow in. The customer has obtained control of the relevant goods. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.The following requirements must be met to confirm the revenue of export products: The Company has declared
the products in accordance with the contract obtained the bills of lading and received the payment or obtained the
receipt voucher and the related economic benefits are likely to flow in. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.Interest Revenue
Interest Revenue shall be determined according to the time of the Company’s use of monetary capital and the
actual interest rate.
31. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government grants consist of the government grants pertinent to assets and government grants
pertinent to income according to the relevant government documents.For those the government documents not definite stipulate the assistance object the judgment basis of the
139Changchai Company Limited Annual Report 2022
Company classifies the government grants pertinent to assets and government subsidies pertinent to income is:
whether are used for purchasing or constructing or for forming the long-term assets by other methods.
(2) Recognition of Government Subsidies
The government subsidies should be recognized only when meet with the attached conditions of the government
grants as well as could be acquired.If the government grants are the monetary assets should be measured according to the received or receivable
amount; and for the government grants are the non-monetary assets should be measured by fair value.
(3) Accounting Treatment
The government grants pertinent to assets shall be recognized as deferred income and included in the current
gains and losses or offset the book value of related assets within the useful lives of the relevant assets with a
reasonable and systematic method. Government grants pertinent to income used to compensate the relevant costs
expenses or losses of the Company in the subsequent period shall be recognized as deferred income and shall be
included in the current profit and loss during the period of confirming the relevant costs expenses or losses; those
used to compensate the relevant costs expenses or losses of the Company already happened shall be included in
the current gains and losses or used to offset relevant costs directly.For government grants that include both assets-related and income-related parts they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished they should be
classified as income-related.Government grants related to the daily activities of the Company shall be included into other income or used to
offset relevant costs by the nature of economic business; those unrelated shall be included into non-operating
income.The government grants recognized with relevant deferred income balance but need to return shall be used to offset
the book balance of relevant deferred income the excessive part shall be included in the current gains and losses
or adjusting the book value of assets for the government grants assets-related that offset the book value of relevant
assets when they are initially recognized; those belong to other cases shall be directly included in the current gains
and losses.
32. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis a deferred tax
asset shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.The recognition of the deferred income tax assets is limited by the income tax payable that the Company probably
gains for deducting the deductible temporary differences. At the balance sheet date where there is strong evidence
showing that sufficient taxable profit will be available against which the deductible temporary difference can be
utilized the deferred tax asset unrecognized in prior period shall be recognized.The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that
sufficient taxable profit will not be available against which the deductible temporary difference can be utilized the
Company shall write down the carrying amount of deferred tax asset or reverse the amount written down later
when it’s probable that sufficient taxable profit will be available.
(2) Basis of recognizing the deferred income tax liabilities
140Changchai Company Limited Annual Report 2022
According to the difference between the book value of the assets and liabilities and their tax basis A deferred tax
liability shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
33. Lease
The term "lease" refers to a contract whereby the lessor transfers the right of use regarding the leased asset(s) to
the lessee within a specified time in exchange for consideration. From the effective date of a contract the
Company assesses whether the contract is a lease or includes any lease. If a party to the contract transferred the
right allowing the control over the use of one or more assets that have been identified within a certain period in
exchange for a consideration such contract is a lease or includes a lease. If a contract contains multiple single
leases at the same time the Company will split the contract and conduct accounting treatment of each single lease
respectively. If a contract contains both lease and non-lease parts at the same time the lessee and lessor will split
the lease and non-lease parts.
(1) The Company as the lessee
See Note 28 (lease liabilities) for the general accounting treatment of the Company as the lessee.For short-term leases with a lease term not exceeding 12 months and leases of low-value assets when single leased
assets are brand new assets the Company chooses not to recognize right-of-use assets and lease liabilities and
records relevant rental expenses into the profit or loss of the current period or the underlying asset costs on a
straight-line basis in each period within the lease term.If a lease changes and meets the following conditions at the same time the Company will account for the lease
change as a separate lease: the lease change expands the lease scope by increasing the right to use one or more
leased assets; the increased consideration is equivalent to the separate price of the expanded lease scope adjusted
according to the contract. Where the lease change is not accounted for as a separate lease on the effective date of
the lease change the Company will allocate the consideration of the changed contract and re-determine the
changed lease term. The present value determined based on the changed lease payments and the revised rate of
discount are used to remeasure the lease liabilities.
(2) The Company as the lessor
On the commencement date of the lease term the Company classifies the leases that substantially transfer almost
all risks and rewards related to the ownership of the leased assets as finance leases and leases other than finance
leases as operating leases.
1) Operating lease
The Company recognizes the lease payments receivable as rentals in each period within the lease term on a
straight-line basis. The Company capitalizes the initial direct costs related to operating leases upon incurrence
thereof and apportions and includes such costs in the profit or loss of the current period on the basis same as the
recognition of rentals. The received variable lease payments related to operating leases that are not included in the
lease payments receivable are included in profit or loss of the current period when they are actually incurred.
2) Financial lease
On the commencement date of the lease term the Company recognizes the finance lease receivables on the basis
of net investment in the lease (the sum of the unguaranteed residual value and the present value of the lease
payments receivable not yet received on the commencement date of the lease term discounted at the interest rate
implicit in lease) and derecognizes the leased asset of the finance lease. The Company calculates and recognizes
interest income based on the interest rate implicit in lease in each period within the lease term. The received
141Changchai Company Limited Annual Report 2022
variable lease payments that are not covered in the measurement of the net investment in the lease are included in
the profit or loss of the current period when actually incurred.
(3) Sale and leaseback
The Company assesses whether the asset transfer in a sale and leaseback transaction is a sale in accordance with
relevant provisions of the Accounting Standards for Business Enterprises No. 14 - Income.
1) The Company as the lessee
If the asset transfer in a sale and leaseback transaction is a sale the Company measures the right-of-use assets
formed by the sale and leaseback based on the portion of the original asset's carrying value that is related to the
use right acquired by the leaseback and recognizes related gains or losses only for the right transferred to the
lessor.If the asset transfer in a sale and leaseback transaction is not a sale the Company continues to recognize the
transferred asset and at the same time recognizes a financial liability equivalent to the transfer income and
conducts corresponding accounting treatment for the financial liability in accordance with the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
2) The Company as the lessor
If the asset transfer in a sale and leaseback transaction is a sale the Company applies other accounting standards
for business enterprises to the accounting treatment for asset purchase and conducts corresponding accounting
treatment for asset lease in accordance with the Accounting Standard for Business Enterprises No. 21 - Leases.If the asset transfer in a sale and leaseback transaction is not a sale the Company does not recognize the
transferred asset but recognizes a financial asset equivalent to the transfer income and conducts corresponding
accounting treatment for the financial asset in accordance with the Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments.
34. Other Significant Accounting Policies and Accounting Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an ongoing basis
based on historical experience and other factors including reasonable expectations of future events. Important
accounting estimates and critical assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next fiscal year are listed as follows:
(1) Classification of financial assets
The significant judgments involved when the Company determines the classification of financial assets include
analysis of business models and contractual cash flow characteristics. The Company determines the business
model for managing financial assets at the level of the financial asset portfolio taking into account factors such as
the approach of evaluating and reporting the performance of financial assets to key management personnel the
risks affecting the performance of financial assets and the manner in which they are managed and way in which
the relevant business management personnel are compensated.The following main judgments exist in assessing whether the contractual cash flows of financial assets are
consistent with the basic lending arrangements:
Whether the time distribution or amount of the principal amount during the duration may change due to early
repayment or for other reasons; whether the interest includes only the time value of money credit risk other basic
lending risks and consideration against costs and profits. For example whether the amount of early repayment
reflects only the outstanding principal and interest based on the outstanding principal as well as reasonable
compensation paid for early termination of the contract.
142Changchai Company Limited Annual Report 2022
(2) Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to default risk of
accounts receivable and the expected credit loss ratio and determines the expected credit loss ratio based on the
probability of default and the default loss ratio. When determining the expected credit loss ratio the Company
uses data such as internal historical credit loss experience and adjusts historical data to take into account current
conditions and forward-looking information. When considering forward-looking information the Company uses
indicators such as the risk of economic downturn and changes in the external market environment technological
environment and customer profile. The Company regularly monitors and reviews the assumptions related to the
calculation of expected credit losses.
(3) Inventory falling price reserves
The Company follows the inventory accounting policy and carries out measurement based on which is smaller
between the cost and the net realizable value. If the cost of inventories is higher than its net realizable value then
the inventory falling prices reserves were implemented. The impairment of inventories to net realizable value is
based on an assessment of the marketability of the inventories and their net realizable value. The management
shall determine the impairment of inventories after obtaining reliable evidence while taking into account the
purpose of holding inventories the effect of items after the balance sheet date and other factors. Differences
between actual results and original estimates will affect the carrying value of inventories and the provision or
reversal of reverses for falling prices of inventories in the period in which the estimates are changed.
(4) Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the current discount
rate for items with similar terms and risk characteristics. Such valuation requires the Company to estimate
expected future cash flows and discount rates and is therefore subject to uncertainty. Under limited circumstances
if the information used to determine fair value is insufficient or if the range of possible estimates of fair value is
wide and the cost represents the best estimate of fair value within that range the cost may represent its appropriate
estimate of fair value within that range of distribution.
(5) Reserves for long-term assets impairment
The Company determines at the balance sheet date whether there is any indication that a non-current asset other
than a financial asset may be impaired. For intangible assets with an uncertain useful life impairment tests shall
be conducted when there is an indication of impairment besides the annual impairment test. Other non-current
assets other than financial assets shall be tested for impairment when there is an indication that the carrying
amount is irrecoverable.An impairment is indicated when the carrying amount of an asset or asset group is greater than the recoverable
amount which is the higher of the fair value minus disposal expenses and the present value of estimated future
cash flows.The net value of the fair value minus disposal expenses is determined by referring to the negotiable sale price or
observable market price of similar assets in a fair transaction and deducting incremental costs directly attributable
to the disposal of the asset.Estimating the present value of future cash flows requires significant judgments with respect to the production
volume of the asset (or asset group) the selling price the related operating costs and the discount rate used in
calculating the present value. The Company uses all available relevant information in estimating recoverable
amounts including projections of volumes selling prices and related operating costs based on reasonable and
supportable assumptions.
(6) Depreciation and amortization
143Changchai Company Limited Annual Report 2022
The Company depreciates and amortizes investment properties fixed assets and intangible assets on a straight-line
basis within their service lives after taking into account their residual values. The Company regularly reviews
service lives to determine the amount of depreciation and amortization expenses to be included in each reporting
period. The service life is determined by the Company based on past experience with similar assets and expected
technological updates. Depreciation and amortization expenses will be adjusted in the future period if there is a
significant change in previous estimates.
(7) Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses the Company
recognizes deferred income tax assets for all unused tax losses. This requires the Company's management to use
many judgments to estimate the timing and amount of future taxable profits taking into account tax planning
strategies so as to determine the amount of deferred income tax assets to be recognized.
(8) Income tax
In the normal operating activities of the Company the ultimate tax treatment and calculation of certain
transactions are subject to certain uncertainties. Whether some items can be disbursed before tax requires the
approval of the tax authorities. If the final determination of these tax matters differs from the amounts initially
estimated the difference will have an impact on current and deferred income taxes in the period in which they are
finally determined.
35. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changes to the accounting policies and why Approval process RemarkThe Company starts to implement the “Accountingtreatment for sales of products or by-products by
On 22 August 2022 the 13th Meeting
enterprises generated from fixed assets before reaching the
of the 9th Board of Directors and theNotes ofintended state of availability or from the period of R&D”
12th Meeting of the 9th Supervisorychanges to
and “Judgment on onerous contracts” and “Presentation ofCommittee were held by the Companyaccountingcentralized capital management” stipulated in the
on which the Proposal on Changes ofpolicies-(1)
Accounting Standards for Business Enterprises
Accounting Policies was approved.Interpretation No. 15 issued by the Ministry of Finance in
2021 since 1 January 2022.The Company starts to implement the “accountingtreatment of the income tax effect of financial instrument
related dividend whose issuer is classified as equity
Notes ofinstrument” and “accounting treatment of share-basedchanges to
payment in cash settlement modified into share-based /
accountingpayment in equity settlement by the enterprise” stipulated
policies-(2)
in the Accounting Standards for Business Enterprises
Interpretation No. 16 issued by the Ministry of Finance in
2022 since 13 December 2022.
Description of changes in accounting policies:
144Changchai Company Limited Annual Report 2022
(1) The impact of implementing the Interpretation No. 15 of Accounting Standards for Business Enterprises on the
Company
On 31 December 2021 the Ministry of Finance issued the Interpretation No. 15 of Accounting Standards for
Business Enterprises (C.K. [2021] No. 35) (hereinafter referred to as “Interpretation No. 15”). Contents of“accounting treatment of external sales of products or by-product produced by the enterprise before the fixedassets reach the intended usable state or during the research and development process (hereinafter referred to as‘Trial Sales’)” and “judgment on loss-making contracts” came into force on 1 January 2022.The Company implemented Interpretation No. 15 since the date of issuance and the implementation has no
material impact on the financial statements during the reporting period.
(2) The impact of implementing the Interpretation No. 16 of Accounting Standards for Business Enterprises on the
Company
On 13 December 2022 the Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for
Business Enterprises (C.K. [2022] No. 31) (hereinafter referred to as “Interpretation No. 16”). The regulations of“accounting treatment for deferred income tax relating to assets and liabilities arising from a single transactionthat is not subject to the initial recognition exemption” came into force on 1 January 2023 allowing companies to
implement the exemption prior to the year of issuance which has not been implemented by the Company inadvance this year. In addition the contents of “accounting treatment of the income tax effect of financialinstrument related dividend whose issuer is classified as equity instrument” and “accounting treatment ofshare-based payment in cash settlement modified into share-based payment in equity settlement by the enterprise”
came into force on the issuance date.The Company implemented Interpretation No. 16 since the date of issuance and the implementation has no
material impact on the financial statements during the reporting period.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Payable to sales revenue 13% 9% 6% 5%
Urban maintenance and Tax paid in accordance with the tax
Taxable turnover amount
construction tax regulations of tax units location
Enterprise income tax Taxable income 25% 15% 2.5%
Education surcharge Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Changchai Company Limited 15%
Changchai Wanzhou Diesel Engine Co. Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co. Ltd. 25%
Changzhou Horizon Investment Co. Ltd. 25%
Changzhou Changchai Horizon Agricultural Equipment Co. 25%
145Changchai Company Limited Annual Report 2022
Ltd.Changzhou Fuji Changchai Robin Gasoline Engine Co. Ltd. 15%
Jiangsu Changchai Machinery Co. Ltd. 25%
Changzhou Xingsheng Real Estate Management Co. Ltd. 2.5%
Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd. 15%
2. Tax Preference
On 30 November 2021 the Company obtained the Certificates for High-tech Enterprises again and it still enjoys
15-percent preferential rate for corporate income tax during the Reporting Period; the Company’s controlling
subsidiary-Changchai Wanzhou Diesel Engine Co. Ltd. the controlling subsidiary company shall pay the
corporate income tax at tax rate 15% from 1 January 2011 to 31 December 2030 in accordance with the Notice of
the Ministry of Finance the General Administration of Customs of PRC and the National Administration of
Taxation about the Preferential Tax Policies for the Western Development and Ministry of Finance Announcement
No. 23 [2020] Announcement of the Ministry of Finance the State Administration of Taxation and the National
Development and Reform Commission on Continuing the Enterprise Income Tax Policy for the Great Western
Development. On 2 December 2020 the wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline
Engine Co. Ltd. obtained the "High-tech Enterprise Certificate" and enjoyed a 15% preferential corporate income
tax rate during the Reporting Period; The wholly-owned subsidiary Changzhou Xingsheng Real Estate
Management Co. Ltd. is eligible small enterprise with low profits and shall pay the corporate income tax at tax
rate 2.5% for small enterprises with low profits during the Reporting Period; The subsidiary Zhenjiang Siyang
Diesel Engine Manufacturing Co. Ltd. acquired in the year has obtained the "High-tech Enterprise Certificate"
and enjoyed a 15% preferential corporate income tax rate during the Reporting Period.VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 251965.06 145594.98
Bank deposits 830914999.19 561746767.12
Other monetary assets 98846386.72 146074316.64
Total 930013350.97 707966678.74
Of which: Total amount deposited
overseas
Total amount of
restriction in use by mortgage 95662384.92 145564457.15
pledge or freeze
At the period-end the restricted monetary assets of the Company was RMB95662384.92 of which
RMB91084933.63 was the cash deposit for bank acceptance bills RMB2993220.00 was cash deposit for L/G
RMB871348.35 was cash deposit for environment and RMB712882.94 was cash deposit for credit.
146Changchai Company Limited Annual Report 2022
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
370103602.57404053261.57
through profit or loss
Of which: Stocks 78739311.00 121940343.76
Financial products 291364291.57 282112917.81
Total 370103602.57 404053261.57
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 297125872.54 334311236.78
Total 297125872.54 334311236.78
If the bad debt provision for notes receivable was withdrawn in accordance with the general model of expected
credit losses information related to bad debt provision shall be disclosed by reference to the disclosure method of
other receivables:
□ Applicable √ Not applicable
(2) Notes Receivable Pledged by the Company at the Period-end: None
(3) 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 176395231.83
Total 176395231.83
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to
Execute the Contract or Agreement at the Period-end
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
147Changchai Company Limited Annual Report 2022
Accounts
receivable for
517534361738504344054
which bad debt 66.40 87.34 63830
7257.9.91%7361.9896.7453.9.10%367.1
provision % % 86.48
998316635
separately
accrued
Of which:
Accounts
receivable for
470411743529504013526
which bad debt 90.09 24.97 90.90 26.83 368826
11047875322892726680.
provision % % % % 040.00
2.158.543.610.0808
accrued by
group
Of which:
Accounts
receivable for
which bad debt 4704 1174 3529 5040 13526
90.0924.9790.9026.83368826
provision 1104 7875 3228 9272 6680.%%%%040.00
accrued by 2.15 8.54 3.61 0.08 08
credit risk
features group
522115183703554517932
100.029.08100.0032.34375209
Total 6830 4612 2217 3017 1047.
0%%%%126.48
0.140.379.773.7123
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Reason of withdrawal
amount provision proportion
Customer 1 1470110.64 1470110.64 100.00% Difficult to recover
Customer 2 1902326.58 1902326.58 100.00% Difficult to recover
Customer 3 6215662.64 6215662.64 100.00% Difficult to recover
Customer 4 2797123.26 2194980.28 78.47% Expected to difficultly recover
Customer 5 3633081.23 2122165.73 58.41% Expected to difficultly recover
Customer 6 2584805.83 2584805.83 100.00% Difficult to recover
Customer 7 1731493.71 1731493.71 100.00% Difficult to recover
Customer 8 1511937.64 604775.06 40.00% Expected to difficultly recover
Customer 9 3329074.84 720031.71 21.63% Expected to difficultly recover
Customer 10 2025880.18 2025880.18 100.00% Difficult to recover
Customer 11 5972101.90 5972101.90 100.00% Difficult to recover
Customer 12 4592679.05 4592679.05 100.00% Difficult to recover
Total 37766277.50 32137013.31 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group:
148Changchai Company Limited Annual Report 2022
Unit: RMB
Ending balance
Aging
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 327927427.98 6558548.57 2.00 %
1 to 2 years 25360867.63 1268043.39 5.00 %
2 to 3 years 6764456.55 1014668.48 15.00 %
3 to 4 years 1377872.15 413361.64 30.00 %
4 to 5 years 1890703.46 1134422.08 60.00 %
Over 5 years 107089714.38 107089714.38 100.00 %
Total 470411042.15 117478758.54 --
Notes of the basis of determining the group:
The accounts receivable was adopted the aging analysis based on the months when the accounts incurred actually
among which the accounts incurred earlier will be priority to be settled in terms of the capital turnover.Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss combining with the prediction
of the present status and future financial situation the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 343017134.79
1 to 2 years 25903580.29
2 to 3 years 6917677.75
Over 3 years 146329907.31
3 to 4 years 3465761.24
4 to 5 years 3840453.02
Over 5 years 139023693.05
Total 522168300.14
(2) Bad Debt Provision Withdrawn Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning Reversal Transfer of
Category Ending balance
balance Withdrawal or Write-off consolidate
recovery d subsidiary
Bad debt
provision
44054367.15493726.4510180731.7734367361.83
withdrawn
separately
149Changchai Company Limited Annual Report 2022
Bad debt
provision
135266680.082632425.8020769169.67348822.33117478758.54
withdrawn
by group
Total 179321047.23 3126152.25 30949901.44 348822.33 151846120.37
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Verified amount
Accounts receivable with actual verification 30949901.44
Of which the verification of significant accounts receivable:
Unit: RMB
Arising
from
Nature of the Verification
Name of the Verified related-par
accounts Reason for verification procedures
entity amount ty
receivable performed
transactio
ns or not
Customer 1 2837045.23
Customer 2 2790920.00 With accounts Changchai
Customer 3 2589892.74 receivable aging over 5 Wanzhou Diesel
Engine Co. Ltd.Customer 4 2173984.00 years the debtors have
no assets for debt held the 1
st
Customer 5 1962873.80 Extraordinary
Customer 6 Accounts 1635047.54
extinguishment due to General Meeting
Customer 7 receivable for 1444186.14
the counterpart on 20 December Not
Customer 8 goods 1266654.55
company being 2022 and
revoked or cancelled approved theCustomer 9 1209883.25
Customer 10 1128969.12 or debt reorganisation
Proposal on
Verification of
bankruptcy clearing or
Customer 11 1068019.00 Some Accounts
judicial litigation and Receivable.Customer 12 1062062.94 other reasons.Customer 13 1043064.00
Total 22212602.31
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Name of the Ending balance of Proportion to total ending balance of Ending balance of
entity accounts receivable accounts receivable bad debt provision
Customer 1 182469247.05 34.94% 3649384.94
Customer 2 40330698.62 7.72% 806613.97
Customer 3 20619430.63 3.95% 412388.61
150Changchai Company Limited Annual Report 2022
Customer 4 18538588.59 3.55% 913245.46
Customer 5 15564496.00 2.98% 311289.92
Total 277522460.89 53.14%
5. Accounts Receivable Financing
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 242813392.79 497388826.02
Total 242813392.79 497388826.02
Changes of accounts receivable financing and fair value thereof in the Reporting Period
√ Applicable □ Not applicable
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
financing.□ Applicable √ Not applicable
Other notes:
The Company discounts and endorses a portion of its bank acceptances based on its routine fund management
needs and the conditions for derecognition are met so the bank acceptances are classified as financial assets
measured at fair value whose change is included in other comprehensive income.On 31 December 2022 there was no bank acceptance for which bad debt provision accrued separately in the
Company. The Company measures the provision of bad debt provision on the basis of expected credit losses
throughout the duration. The Company believes that the credit risk characteristics of the bank acceptances it holds
are similar and there was no bank acceptance for which bad debt provision accrued separately. In addition there
was no significant credit risk in the bank acceptance and no significant loss would be caused by bank defaults.
(1) 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 Amount of not terminated
Item
termination at the period-end recognition at the period-end
Bank acceptance bill 511689991.87
Total 511689991.87
6. Prepayments
(1) List by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 5941708.21 93.86% 6706970.55 81.82%
1 to 2 years 289373.60 4.57% 94583.55 1.15%
151Changchai Company Limited Annual Report 2022
2 to 3 years 71654.18 1.13% 362397.67 4.42%
Over 3 years 27466.70 0.44% 1033466.62 12.61%
Total 6330202.69 -- 8197418.39 --
There was no prepayment with significant amount aging over one year as of the period-end.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
At the period-end the total top 5 of the ending balance of the prepayments collected according to the prepayment
target was RMB4798600 accounting for 75.80% of the total ending balance of prepayments.
7. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable
Dividend receivable
Other receivables 32938305.16 19515350.52
Total 32938305.16 19515350.52
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 2028096.87 1299600.00
Intercourse funds 48701034.90 35889738.80
Petty cash and borrowings by
742075.761184204.41
employees
Other 13635867.60 13630284.64
Total 65107075.13 52003827.85
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in Expected loss in
Expected credit
Bad debt provision the duration (credit the duration Total
loss of the next
impairment not (credit impairment
12 months
occurred) occurred)
Balance of 1 January
287609.4526486676.975714190.9132488477.33
2022
Balance of 1 January
2022 in the Current
Period
--Transfer to Second
-871.48871.48
stage
-- Transfer to Third stage -4266.68 -23342513.38 23346780.06
-- Reverse to Second
stage
152Changchai Company Limited Annual Report 2022
-- Reverse to First stage
Transfer of consolidated
3810.003810.00
subsidiary
Withdrawal of the
150404.27150404.27
Current Period
Reversal of the Current
148176.99174638.80322815.79
Period
Write-offs of the Current
Period
Verification of the
63002.9188102.93151105.84
Current Period
Other changes
Balance of 31 December
373682.652908755.1528886332.1732168769.97
2022
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 16050004.29
1 to 2 years 15783825.92
2 to 3 years 1164476.00
Over 3 years 32108768.92
3 to 4 years 420716.17
4 to 5 years 338457.65
Over 5 years 31349595.10
Total 65107075.13
3) Bad Debt Provision Withdrawn Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning Transfer of Ending
Category Withdraw Reversal or Write-
balance consolidate balance
al recovery off
d subsidiary
Bad debt
provision for
5714190.91177905.475536285.44
which accrued
separately
153Changchai Company Limited Annual Report 2022
Bad debt
provision for 15110
26774286.425493.953810.0026632484.53
which accrued by 5.84
group
15110
Total 32488477.33 5493.95 177905.47 3810.00 32168769.97
5.84
4) There Were No Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
Item Written-off amount
Other receivables with actual verification 151105.84
Of which the verification of significant other receivables:
Unit: RMB
Whether
occurred
Name of the Natur Written-off Reason for Verification procedures because of
entity e amount verification performed related-part
y
transactions
Customer 1 21472.28 With accounts Approved by the administrative
receivable aging office meeting of Changzhou
Customer 2 41530.63 over 5 years the Changchai Benniu Diesel Engine
counterpart Parts Co. Ltd. a subsidiary.Customer 3 company beingOther 9020.00
Customer 4 interc 8357.60
revoked or
Customer 5 7933.63 cancelled or debt Notourse The Proposal on the Write-off of
Customer 6 7800.00 reorganisationfunds Certain Other Receivables was
bankruptcy
Customer 7 6700.00 approved at the Party Committee
clearing or the
Customer 8 6000.00 and Office Meeting.debtors have no
Customer 9 6000.00 assets for debt
Customer 10 5525.00 extinguishment
Total 120339.14 -- -- --
5) 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 %
154Changchai Company Limited Annual Report 2022
Changzhou Compressor Intercourse
2940000.00 Over 5 years 4.52% 2940000.00
Factory funds
Changchai Group Imp. & Intercourse
2853188.02 Over 5 years 4.38% 2853188.02
Exp. Co. Ltd. funds
Changzhou New District Intercourse
1626483.25 Over 5 years 2.50% 1626483.25
Accounting Center funds
Changchai Group Intercourse 1140722.16
1140722.16 Over 5 years 1.75%
Settlement Center funds
Changzhou Huadi
Engineerin
Engineering Guarantee 1065400.00 2-3 years 1.64% 159810.00
g deposit
Co. Ltd.Total 9625793.43 14.78% 8720203.43
8. Inventory
Whether the Company needs to comply with the requirements of real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Raw 163954131. 157971844. 148617321. 141356757.
5982286.517260564.47
materials 27 76 85 38
Materials
12299968.912299968.913877280.613877280.6
processed on
8800
commission
Goods in 110883778. 10725860.4 100157918. 119354374. 15534236.3 103820137.process 58 3 15 14 5 79
Finished 322959181. 22755460.8 300203720. 403855588. 13029104.2 390826484.goods 08 0 28 94 6 68
Low priced
and easily 1363429.57 1363429.57 1203097.73 1203097.73
worn articles
611460489.39463607.7571996881.686907663.35823905.0651083758.
Total
4847426818
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
Item Beginning Increase Decrease Ending balance
155Changchai Company Limited Annual Report 2022
balance Transf
er of
consol Reversal or
Withdrawal Other
idated write-off
subsid
iary
4917
Raw materials 7260564.47 1473329.89 3243314.87 5982286.51
07.02
Goods in
15534236.354808375.9210725860.43
process
Finished goods 13029104.26 13441573.49 3715216.95 22755460.80
4917
Total 35823905.08 14914903.38 11766907.74 39463607.74
07.02
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories.
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 47682930.23 37806274.29
Prepaid corporate income tax 1505424.80 6143886.15
Prepaid expense 90667.46 110662.13
Total 49279022.49 44060822.57
10. Investments in Debt Obligations
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Three-year
39309587.939309587.937898226.337898226.3
fixed term
3399
deposit
39309587.939309587.937898226.337898226.3
Total
3399
Significant investments in debt obligations
Unit: RMB
Ending balance Beginning balance
Actual Actual
Item Par Coupon Maturity Par Coupon Maturity
interest interest
value rate date value rate date
rate rate
Three-year fixed 370000 26 April 370000 26 Apri
3.80%3.72%3.80%
term deposit 00.00 2024 00.00 l 2024
156Changchai Company Limited Annual Report 2022
370000370000
Total —— —— —— —— —— ——
00.0000.00
Changes of carrying amount with significant amount changed of loss provision in the reporting period
□ Applicable √ Not applicable
11. Long-term Equity Investment
Unit: RMB
Increase/decrease
Gain Adjust Endin
Begin Cash Endin
or loss ment Withd g
ning bonus g
recogn of rawal balanc
balanc Additi Reduc Chang or balanc
Invest ized other of e of
e onal ed es in profit e
ees under compr deprec Other deprec
(carryi invest invest other annou (carryi
the ehensi iation iation
ng ment ment equity nced ng
equity ve reserv reserv
value) to value)
metho incom es es
issue
d e
II. Associated enterprises
Beijin
g
Tsingh
ua
Indust
rial 44182
0.000.00
Invest .50
ment
Mana
gemen
t Co.Ltd.Subtot 44182
0.000.00
al .50
44182
Total 0.00 0.00 .50
12. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
Changzhou Synergetic Innovation Private Equity
378929240.08146375646.53
Fund (Limited Partnership)
157Changchai Company Limited Annual Report 2022
Other equity instrument investment measured by
576631000.00633502000.00
fair value
Total 955560240.08 779877646.53
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
Amount of Reason for assigning
other
Accu other to measure by fair
Dividend comprehensi
Accumulative mulat comprehensiv value of which
Item income ve income
gains ive e transferred changes be included to
recognized transferred to
losses to retained other comprehensive
retained
earnings income
earnings
Foton Motor Co. Non-trading equity
364261000.00
Ltd. investment
Non-trading equity
Bank of Jiangsu 9360000.00 127800000.00
investment
Changzhou
Synergetic
Innovation Non-trading equity
278929240.08
Private Equity investment
Fund (Limited
Partnership)
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 350000 shares of Foton
Motor Co. Ltd.
13. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Jiangsu Horizon New Energy Technology
373500000.00112500000.00
Co. Ltd.Total 373500000.00 112500000.00
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
158Changchai Company Limited Annual Report 2022
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 48480224.31 48480224.31
2. Increased amount of the period 2436475.56 2436475.56
(1) Withdrawal or amortization 2436475.56 2436475.56
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 50916699.87 50916699.87
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 42160779.65 42160779.65
2. Beginning carrying value 44597255.21 44597255.21
15. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 720061387.76 402915521.65
Disposal of fixed assets
Total 720061387.76 402915521.65
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
159Changchai Company Limited Annual Report 2022
I. Original
carrying value
1. Beginning 1012550535.1
457375409.9515509653.3841354837.041526790435.49
balance 2
2. Increased
amount of the 253254929.43 125801337.31 4237121.43 18442087.47 401735475.64
period
(1) Purchase 39329.44 1242576.10 603856.90 2296172.76 4181935.20
(2) Transfer
from
232659718.43117139454.393010897.3215794897.09368604967.23
construction in
progress
(3) Enterprise
combination 20555881.56 7419306.82 622367.21 351017.62 28948573.21
increase
3. Decreased
amount of the 26299.50 19654185.78 614584.34 2771002.52 23066072.14
period
(1) Disposal or
26299.5019654185.78614584.342771002.5223066072.14
scrap
4. Ending 1118697686.6
710604039.8819132190.4757025921.991905459838.99
balance 5
II.Accumulative
depreciation
1. Beginning
309538003.02765592089.0612399386.8235864760.691123394239.59
balance
2. Increased
amount of the 21330936.61 58002318.90 1645043.30 3596006.84 84574305.65
period
(1) Withdrawal 18617538.65 54407073.34 1103512.47 3362056.95 77490181.41
(2) Transfer
from 2713397.96 3595245.56 541530.83 233949.89 7084124.24
combination
3. Decreased
amount of the 23799.50 19648705.40 598206.35 2722626.79 22993338.04
period
(1) Disposal or
23799.5019648705.40598206.352722626.7922993338.04
scrap
4. Ending
330845140.13803945702.5613446223.7736738140.741184975207.20
balance
III.Depreciation
reserves
160Changchai Company Limited Annual Report 2022
1. Beginning
480674.25480674.25
balance
2. Increased
amount of the
period
(1) Withdrawal
3. Decreased
amount of the 57430.22 57430.22
period
(1) Disposal or
57430.2257430.22
scrap
4. Ending
423244.03423244.03
balance
IV. Carrying
value
1. Ending
379758899.75314328740.065685966.7020287781.25720061387.76
carrying value
2. Beginning
147837406.93246477771.813110266.565490076.35402915521.65
carrying value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Machinery
476507.5053263.47423244.03
equipment
16. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 30259647.16 268417880.66
Engineering materials 21900.40 1887810.25
Total 30281547.56 270305690.91
(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
161Changchai Company Limited Annual Report 2022
Expansion
capacity of
multi-cylinde 1097435.90 1097435.90
r (The 2nd
Period)
Innovation
capacity
construction
5443764.335443764.333714601.763714601.76
of
technology
center
Relocation
project of 254748122.4 254748122.4
11155119.7011155119.70
light engine 9 9
and casting
Equipment to
be installed
13660763.1313660763.138857720.518857720.51
and payment
for projects
268417880.6268417880.6
Total 30259647.16 30259647.16
66
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat Amo on
mulat ed unt of rate
Trans Other
Begin Incre Endin ed amou capita of Capit
ferred decre Job
Budg ning ased g invest nt of lized intere al
Item in ased sched
et balan amou balan ment intere intere sts for resou
fixed amou ule
ce nt ce in st sts for the rces
assets nt
constr capita the Repor
uctio lizati Repor ting
ns to on ting Perio
budge Perio d
t d
162Changchai Company Limited Annual Report 2022
Expa
nsion
capac
ity of
multi- 1097 1097
Comp
cylin 435. 435. Self-r
leted aised
der 90 90
(The
2nd
Perio
d)
Innov
ation
capac
ity Self-r
9606 3714 1950 5443 Unco
constr 2217 5.90 aised
6200 601. 929. 764. mplet and
uctio 66.66 %.00 76 23 33 ed raised
n of funds
techn
ology
center
Reloc
ation
proje
Self-r
ct of 4747 2547 1207 3611 3240 1115 Unco aised
light 0600 4827 7506 2821 000. 5119. 79.11 mplet and
engin 0.00 2.15 5.42 7.87 00 70 % ed raised
funds
e and
castin
g
570725951227362432401659
Total 7220 6030 2599 4742 000. 8884 -- -- --
0.009.814.650.4300.03
(3) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Carrying Carrying Depreciation Carrying
on
amount value amount reserves value
reserves
Engineerin
21900.4021900.401887810.251887810.25
g materials
Total 21900.40 21900.40 1887810.25 1887810.25
163Changchai Company Limited Annual Report 2022
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 206783546.68 15736719.66 5488000.00 1650973.47 229659239.81
2. Increased amount of
the period 7404229.03 2110482.48 50000.00 9564711.51
(1) Purchase 1933758.50 1933758.50
(2) Internal R&D
(3) Business
combination increase 7404229.03 176723.98 50000.00 7630953.01
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 214187775.71 17847202.14 5538000.00 1650973.47 239223951.32
II. Accumulated
amortization
1. Beginning balance 58805643.96 12856960.12 2652533.14 189356.68 74504493.90
2. Increased amount of
the period 5026881.78 1539099.16 594217.03 167041.92 7327239.89
(1) Withdrawal 4298126.15 1426192.17 551717.03 167041.92 6443077.27
(2) Combination
increase 728755.63 112906.99 42500.00 884162.62
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 63832525.74 14396059.28 3246750.17 356398.60 81831733.79
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
164Changchai Company Limited Annual Report 2022
1. Ending carrying
value 150355249.97 3451142.87 2291249.83 1294574.87 157392217.54
2. Beginning carrying
value 147977902.72 2879759.54 2835466.86 1461616.79 155154745.91
18. Long-term Prepaid Expenses
Beginning Amortized
Item Increase Decrease Ending balance
balance amount
Trademark
110345.30105518.0313893.01201970.32
renewal fee
External power
line access 3240000.00 162000.00 3078000.00
project
Total 110345.30 3345518.03 175893.01 3279970.32
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
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt provision 6853948.19 1048165.04 7196880.38 1087755.38
Deductible loss 149230051.55 24713867.00 59064221.02 9085419.14
Inventory falling
2633715.26395057.292990223.81448533.57
price reserves
Impairment of fixed
423244.0363486.60480674.2572101.14
assets
Total 159140959.03 26220575.93 69731999.46 10693809.23
(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
5677718.36851657.753643147.16546472.07
combination not
under the same
control
165Changchai Company Limited Annual Report 2022
Changes of fair
1039472114.80160508593.58720658981.89116797689.04
value
Total 1045149833.16 161360251.33 724302129.05 117344161.11
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Bad debt provision 177160942.15 204612644.18
Falling price reserves of
36829892.4832833681.27
inventories
Deductible loss 22257409.96 14716019.78
Total 236248244.59 252162345.23
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Years Ending amount Beginning amount Note
2022434000.66
20231146746.13940673.56
20243605384.256538363.99
20255250820.812279179.37
20267372277.944523802.20
20274882180.83
Total 22257409.96 14716019.78 --
20. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Depreciati Depreciati
Item Carrying Carrying
on Carrying value on Carrying value
amount amount
reserves reserves
Advances
payment of 670735.93 670735.93 4543240.88 4543240.88
equipments
Total 670735.93 670735.93 4543240.88 4543240.88
21. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 7000000.00 7000000.00
Guaranteed loans 5000000.00
Obligation to pay bills discounted
108437700.6561971466.65
before maturity
166Changchai Company Limited Annual Report 2022
Total 115437700.65 73971466.65
(2) There Was No Short-term Borrowings Overdue but Unpaid.
22. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 471876397.72 550774400.00
Total 471876397.72 550774400.00
At the end of the current period there were no notes payable due and not paid.
23. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 747010098.88 666186668.82
Total 747010098.88 666186668.82
(2) Significant Accounts Payable Aging over One Year
Item Ending balance Unpaid/ Un-carry-over reason
Supplier terminates cooperation
Payment for goods 53297351.52
pending payment
Payment for equipment 40637976.87 Equipment warranty
Total 93935328.39
24. Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Advance payment of house rent 837425.55 660965.62
Total 837425.55 660965.62
There were no significant advances from customers aging over one year at the end of the period.
25. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 32843692.83 26864081.97
Total 32843692.83 26864081.97
There were no significant contract liabilities aging over one year at the end of the period.
167Changchai Company Limited Annual Report 2022
26. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
I. Short-term salary 45385667.48 279381408.55 275616053.56 49151022.47
II.Post-employment
benefit-defined 37243881.82 37243881.82
contribution plans
III. Termination
459903.90259903.90200000.00
benefits
IV. Current portion of
other benefits
Total 45385667.48 317085194.27 313119839.28 49351022.47
(2) List of Short-term Salary
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
1. Salary bonus
37375772.77229118091.49225610345.4940883518.77
allowance subsidy
2.Employee welfare 1592.74 3138764.51 3138764.51 1592.74
3. Social insurance 21460410.40 21460410.40
Of which: Medical
17834836.4417834836.44
insurance premiums
Work-related injury
2049942.682049942.68
insurance
Maternity insurance 1575631.28 1575631.28
4. Housing fund 21244377.54 21244377.54
5.Labor union budget
and employee education 8008301.97 4419764.61 4162155.62 8265910.96
budget
6. Short-term absence
with salary
7. Short-term profit
sharing scheme
Total 45385667.48 279381408.55 275616053.56 49151022.47
(3) List of Defined Contribution Plans
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
168Changchai Company Limited Annual Report 2022
1. Basic pension
36127234.7036127234.70
benefits
2. Unemployment
1116647.121116647.12
insurance
3. Enterprise annuities
Total 37243881.82 37243881.82
27. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 2240512.82 372401.11
Corporate income tax 1272876.86 470363.07
Personal income tax 68629.73 76559.47
Urban maintenance and
1151395.75957520.42
construction tax
Property tax 1172973.71 1160865.33
Land use tax 1041594.39 1026217.69
Stamp duty 286018.61 44759.84
Education Surcharge 229345.14 90862.46
Comprehensive fees 1075134.76 1075134.76
Environmental protection tax 31693.62 31694.67
Total 8570175.39 5306378.82
28. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable
Dividends payable 3891433.83 3891433.83
Other payables 156155449.10 144469939.46
Total 160046882.93 148361373.29
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3243179.97 3243179.97
Interest of preferred shares/
perpetual bond classified as equity
instrument
Dividends for non-controlling
648253.86648253.86
shareholders
169Changchai Company Limited Annual Report 2022
Other
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 4293474.88 5045246.58
Intercourse funds among units 7831477.01 8364769.41
Intercourse funds among
397761.04402661.04
individuals
Sales discount and three
126787544.75114581855.32
guarantees
Other 16845191.42 16075407.11
Total 156155449.10 144469939.46
2) Significant Other Payables Aging over One Year
The significant other payables aging over one year at the period-end mainly referred to the unsettled temporary
credits and charges owned.
29. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 806555.29 460437.94
Transportation storage fee 597090.12 870397.06
Electric charge 1467332.18 3131920.88
Tax to be transferred 2821340.54 2250515.65
Estimated share value added tax 1909715.09 3989913.45
Obligation to pay bills transferred
66395231.8372391302.15
before maturity
Other withholding expenses 4648476.11 5843705.66
Total 78645741.16 88938192.79
30. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
39615355.403409729.4636205625.94
grants appropriation
Total 39615355.40 3409729.46 36205625.94 --
Item involving government grants:
Unit: RMB
170Changchai Company Limited Annual Report 2022
Amount
recorded Amount
Amou into recorded Amount Related
Beginni nt of non-oper into other offset Other Ending to
Item ng new ating income in cost in the chan balanc assets/re
balance subsid income in the Reporting ges e lated
y the Reporting Period income
Reporting Period
Period
National major
project special
allocations- Flexible 13040 1519266. 11521 Related
processing production 367.00 00 101.00 to assets
line for cylinders of
diesel engines
17847
18513 665973.6 Related
Remove 790.3
763.98 2 to assets
compensation 6
Research and
development and
industrialization
allocations of national 80612 1224489. 6836 Related
III/IV standard 24.42 84 734.58 to assets
high-powered
efficient diesel engine
for agricultural use
31. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 70569250 70569250
shares 7.00 7.00
32. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
620338243.21620338243.21
(premium on stock)
Other capital reserves 20337975.19 -542255.39 19795719.80
Total 640676218.40 -542255.39 640133963.01
171Changchai Company Limited Annual Report 2022
Other notes including changes and reasons thereof:
Increase for the current period: The original shareholding ratio of the parent company to the subsidiary companyChangzhou Changchai Horizon Agricultural Equipment Co. Ltd. (hereinafter referred to as “Horizon AgriculturalEquipment”) is 95%. The original minority shareholders of Horizon Agricultural Equipment transferred their 5%
shares to the parent company for free this year and was included in long-term equity investment and capital
surplus as 5% of the opening net assets of Horizon Agricultural Equipment.
33. Other Comprehensive Income
Unit: RMB
Reporting Period
Less:
Record
Less: ed in
Recorded other
in other compre
comprehe hensiv Attribu
nsive e table to Attribu
Income
income in income owners table to
before Less: Endin
Beginni prior in prior of the non-co
taxatio Income g
Item ng period period Compa ntrollin
n in the tax balan
balance and and ny as g
Curren expens ce
transferre transfe the interest
t e
d in rred in parent s after
Period
profit or retaine after tax
loss in d tax
the earning
Current s in the
Period Curren
t
Period
I. Other comprehensive 17568 14933 6553
50601126352
income that will not be 2593.5 0204.5 4170
499.55389.03
reclassified to profit or loss 5 2 4.07
Of which: Changes caused
by re-measurements on
defined benefit pension
schemes
Share of other
comprehensive income of
investees that will not be
reclassified to profit or loss
under equity method
172Changchai Company Limited Annual Report 2022
Changes in fair value of 17568 14933 6553
50601126352
other equity instrument 2593.5 0204.5 4170
499.55389.03
investment 5 2 4.07
Changes in fair value of
corporate credit risk
II. Other comprehensive
income that may
subsequently be
reclassified to profit or loss
Of which: Share of other
comprehensive income of
investees that will be
reclassified to profit or loss
under equity method
Changes in fair value of
investment in other debt
obligations
Amount of financial assets
reclassified to other
comprehensive income
Credit depreciation
reserves of investment in
other debt obligations
Reserves for cash flow
hedges
Differences arising from
translation of foreign
currency-denominated
financial statements
17568149336553
Total of other 506011 26352
2593.50204.54170
comprehensive income 499.55 389.03
524.07
34. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
18812950.044877232.124841325.4118848856.75
cost
Total 18812950.04 4877232.12 4841325.41 18848856.75
173Changchai Company Limited Annual Report 2022
35. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
320987630.5615053237.26336040867.82
reserves
Discretional surplus
13156857.9013156857.90
reserves
Total 334144488.46 15053237.26 349197725.72
36. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
872212354.88777899079.66
adjustments
Total retained earnings at the beginning of the
adjustment period (“+” means up “-” means
down)
Beginning balance of retained earnings after
872212354.88777899079.66
adjustments
Add: Net profit attributable to owners of the
76684796.91103006232.54
Company as the parent
Less: Withdrawal of statutory surplus reserves 15053237.26 8692957.32
Withdrawal of discretional surplus
reserves
Withdrawal of general reserve
Dividend of ordinary shares payable 18348005.18
Dividends of ordinary shares transferred as
share capital
Ending retained earnings 915495909.35 872212354.88
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same
control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
37. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Same period of last year
174Changchai Company Limited Annual Report 2022
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2145567983.95 1924209350.48 2404119747.06 2051932677.42
Other operations 36475111.66 24467686.04 48310768.54 32739084.66
Total 2182043095.61 1948677036.52 2452430515.60 2084671762.08
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is
negative
√ Yes □ No
Unit: RMB
Item 2022 Specific deduction 2021 Specific deduction
The main business The main business
of the Company is of the Company is
Operating revenue 2182043095.61 the production and 2452430515.60 the production andsales of diesel sales of diesel
engines and engines and
gasoline engines gasoline engines
Total operating Other business Other business
income with 36475111.66 income other than 48310768.54 income other than
deduction main operations main operations
The proportion of
total operating income
with deduction in 1.67% 1.97%
operating revenue
I. Business income not
related to the main
business
1. Other business
income outside
normal business. E.g.income from the lease
of fixed assets
intangible assets
packaging materials
sales materials
non-monetary asset Income from sales Income from sales
exchange with 36475111.66 of materialshousing rental 48310768.54
of materials
materials and housing rental
operation of entrusted fees property and fees property and
management business utility charges utility charges
and income that is
included in the
income from primary
business but is outside
the normal business of
the listed company.Income from sales Income from sales
Subtotal of business of materials of materials
income not related to 36475111.66 housing rental 48310768.54 housing rental
the main business fees property and fees property and
utility charges utility charges
II. Income without
commercial substance
Subtotal of income 0.00 None 0.00 None
175Changchai Company Limited Annual Report 2022
without commercial
substance
III. Other income not
related to the main
business or without 0.00 None 0.00 None
commercial substance
Diesel engines Diesel engines
Operating revenue 2145567983.95 gasoline enginesafter deduction and fittings 2404119747.06
gasoline engines
and fittings
business business
Relevant information of revenue:
Unit: RMB
Category of contracts Total
Product Types
Of which:
Single-cylinder diesel engines 814545044.55
Multi-cylinder diesel engines 1055889184.19
Other products 212223234.20
Fittings 62910521.01
Classified by business area
Of which:
Sales in domestic market 1821370757.82
Export sales 324197226.13
Total 2145567983.95
Information related to performance obligations: none
38. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
2905289.191472605.59
construction tax
Education surcharge 2073990.11 1051826.51
Property tax 6312819.28 6157554.67
Land use tax 4474736.13 5226882.22
Vehicle and vessel use tax 3092.64 2875.00
Stamp duty 898751.20 969210.59
Environment tax 293572.90 204133.44
Other 10944.81 40860.94
Total 16973196.26 15125948.96
176Changchai Company Limited Annual Report 2022
39. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 41414480.36 42968060.55
Office expenses 9191582.99 11247378.94
Sales promotional expense 1435536.25
Three guarantees 50709187.02 60722393.46
Transport charge 320853.84
Other 1314973.34 548067.28
Total 102630223.71 117242290.32
40. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 62242258.03 51646790.82
Office expenses 9510389.69 9359397.93
Depreciation and amortization 16116539.74 9925872.31
Safety expenses 4877232.12 4023200.24
Repair charge 1736442.58 1985784.26
Inventory scrap and inventory loss
-333858.145218542.74
(profit)
Other 25362185.70 16730695.92
Total 119511189.72 98890284.22
41. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 43996939.37 49871973.96
Employee benefits 24608063.95 21059641.45
Depreciation and amortization 4570577.95 4240194.24
Design costs 250000.00
Entrusted development charges 6509898.89 5521861.13
Other 1554116.90 1446613.36
Total 81239597.06 82390284.14
42. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
177Changchai Company Limited Annual Report 2022
Interest expense 1993453.71 5907625.42
Less: Interest income 12804077.19 7921535.62
Net foreign exchange gains or
-10929750.573969634.63
losses
Other 150669.42 -752108.63
Total -21589704.63 1203615.80
43. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government grants directly
recorded into the current profit or 3749273.00 4234711.29
loss
Government grants related to
3409729.462364382.20
deferred income
Others 25025.59 34238.89
44. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income accounted by
equity method
Investment income from disposal of long-term
equity investment
Investment income from holding of trading
financial assets
Investment income from disposal of trading
12262.47450637.63
financial assets
Dividend income from holding of other equity
9360000.007394400.00
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
1411361.54
obligations
Interest income from holding of investment in
other debt obligations
Investment income from disposal of investment in
other debt obligations
Income from debt reorganization
178Changchai Company Limited Annual Report 2022
Investment income from disposal of other
-221711.92
non-current financial assets
Dividend income from holding of held-for-trading
296740.00189085.80
financial assets
Income from refinancing operations 136003.96 1028964.68
Investment income from financial products 5995552.35 2292008.67
Forward income from foreign exchange settlement 63235.00
Accounts receivable financing-discount interest of
-9242453.13-1869322.91
bank acceptance bills
Total 7969467.19 9327296.95
45. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets -40756542.83 70820498.36
Other non-current financial assets 186000000.00 33750000.00
Total 145243457.17 104570498.36
46. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables 172411.52 -562856.87
Bad debt loss of accounts
-3126152.25-51454294.95
receivable
Total -2953740.73 -52017151.82
47. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss
II. Loss on inventory valuation and contract
-14367197.27-8676024.20
performance cost
III. Impairment loss on long-term equity
investment
IV. Impairment loss on investment property
V. Impairment loss on fixed assets
VI. Impairment loss on engineering materials
VII. Impairment loss on construction in progress
VIII. Impairment loss on productive living assets
IX. Impairment loss on oil and gas assets
179Changchai Company Limited Annual Report 2022
X. Impairment loss on intangible assets
XI. Impairment loss on goodwill
XII. Other
Total -14367197.27 -8676024.20
48. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets 393161.73 155515.49
49. Non-operating Income
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Income from scrap of
236284.295825.24236284.29
fixed assets
Income from scrap of
2089369.81
construction in progress
Income from penalty 93140.00 398143.00 93140.00
Accounts not required to
1714502.081429558.711714502.08
be paid
Negative goodwill
generated from
1904132.581904132.58
combination not under
the same control
Other 309883.70 115000.00 309883.70
Total 4257942.65 4037896.76 4257942.65
50. Non-operating Expense
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Retirement loss of
148926.1122405.72148926.11
non-current assets
Compensation for quality 208884.78 507265.91 208884.78
Donation 168300.00 168300.00
Other 92352.67 1107361.42 92352.67
Total 618463.56 1637033.05 618463.56
180Changchai Company Limited Annual Report 2022
51. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 1267934.70 443034.91
Deferred income tax expense 1930017.97 15999671.86
Adjustment of income tax of prior
-733872.93-4073920.19
years
Total 2464079.74 12368786.58
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 81710212.20
Current income tax expense accounted at statutory/applicable tax rate 12256531.82
Influence of applying different tax rates by subsidiaries -7278933.33
Influence of income tax before adjustment -733872.93
Influence of non-taxable income -1430654.07
Influence of non-deductable costs expenses and losses 3725995.40
Influence of deductable losses of unrecognized deferred income tax at the
172794.49
beginning of the Reporting Period
Influence of deductable temporary difference or deductable losses of
4019365.61
unrecognized deferred income tax assets in the Reporting Period
Tax preference from eligible expenditures -8267147.25
Income tax expense 2464079.74
52. Other Comprehensive Income
See Note 33 for details.
53. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 3751451.59 4240292.03
Other intercourses in cash 4962530.66 6603764.28
Interest income 12804077.19 7921535.62
Other 1472234.00 3871134.26
Total 22990293.44 22636726.19
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
181Changchai Company Limited Annual Report 2022
Selling and administrative expense
89311871.19101602750.69
paid in cash
Handling charges 1212912.33 1220112.47
Other 16260652.67 15807386.22
Other transactions 1405188.05 23381748.58
Total 108190624.24 142011997.96
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Cash and cash equivalents from
11400123.61
combination of subsidiary
Total 11400123.61
(4) Cash Used in Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Accounts receivable financing-discount
1869322.91
interest from bank acceptance bills
Total 1869322.91
(5) Cash Generated from Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Discount of bank acceptance bills with
128437700.6558971466.65
low credit rating
Total 128437700.65 58971466.65
(6) Cash Used in Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Intermediary agency fees for private
10849056.61
placement
Discount of bank acceptance bills
83623545.073772107.02
with low credit rating
Total 83623545.07 14621163.63
54. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of last
Supplemental information Reporting Period
year
1. Reconciliation of net profit to net cash flows generated
----
from operating activities
Net profit 79246132.46 102931874.37
182Changchai Company Limited Annual Report 2022
Add: Provision for impairment of assets 17320938.00 60693176.02
Depreciation of fixed assets of oil and gas assets of
79926656.9776128177.44
productive living assets
Depreciation of right-of-use assets
Amortization of intangible assets 5824591.44 4711649.34
Amortization of long-term deferred expenses 175893.01 17605.33
Losses on disposal of fixed assets intangible assets and other
-393161.73-155515.49
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) -87358.18 -2072789.33
Losses on the changes in fair value (gains by “-”) -145243457.17 -104570498.36
Financial expenses (gains by “-”) 2146237.77 8122828.51
Investment losses (gains by “-”) -17211920.32 -9327296.95
Decrease in deferred income tax assets (increase by “-”) -15400115.80 -6461936.08
Increase in deferred income tax liabilities (decrease by “-”) 17330133.77 22461607.94
Decrease in inventory (increase by “-”) 89813152.96 -53079441.83
Decrease in accounts receivable from operating activities
-33140187.50-286670314.47
(increase by “-”)
Increase in payables from operating activities (decrease by
286526874.74-79052905.74
“-”)
Other -1904132.58
Net cash flows generated from operating activities 364930277.84 -266323779.30
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 810350966.05 562402221.59
Less: Beginning balance of cash 562402221.59 629939540.50
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 247948744.46 -67537318.91
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 810350966.05 562402221.59
Including: Cash on hand 251965.06 145594.98
Bank deposit on demand 806914999.19 561746767.12
Other monetary assets on demand 3184001.80 509859.49
Accounts deposited in the central bank
available for payment
Deposits in other banks
183Changchai Company Limited Annual Report 2022
Accounts of interbank
II. Cash equivalents
Of which: Bond investment expired within
three months
III. Ending balance of cash and cash
810350966.05562402221.59
equivalents
Of which: Cash and cash equivalents with
restriction in use for the Company as the
parent or subsidiaries of the Group
55. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reason for restriction
As cash deposit for bank acceptance bill
Monetary assets 95662384.92
and for environment
Houses and buildings 1530890.90 Mortgaged for borrowings from banks
Land use right 879275.35 Mortgaged for borrowings from banks
Machinery equipment 31222420.22 Mortgaged for borrowings from banks
Obligation to pay bills discounted
110000000.00
before maturity
Obligation to pay bills transferred
before maturity 66395231.83
Total 305690203.22
56. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance
Item Exchange rate
balance converted to RMB
Monetary assets -- --
Of which: USD 13543608.99 6.9646 94325820.43
HKD 320344.50 0.8933 286163.74
Accounts receivable
Of which: USD 8596374.27 6.9646 59870308.38
GBP -67212.27 8.3941 -564186.52
Accounts payable
Of which: USD 302.60 6.9646 2107.49
Contract liabilities
Of which: USD 635740.16 6.9646 4427675.94
EUR 117145.84 7.4229 869561.86
184Changchai Company Limited Annual Report 2022
(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
57. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Amount recorded in
Category Amount Listed items the current profit or
loss
Subsidies for stabilizing and increasing job
positions and retaining workers 2396713.00 Other income 2396713.00
Special funds for business development 102800.00 Other income 102800.00
Membership dues return 4760.00 Other income 4760.00
Municipal special funds for environmental
protection 10000.00 Other income 10000.00
2021 Enterprise Technical Innovation Award 50000.00 Other income 50000.00
Financial Assistance to the 19th Batch of
Technology Plans in Changzhou in 2021 200000.00 Other income 200000.00
The 9th Batch of Special Funds for Talents in
2022 50000.00 Other income 50000.00
Support Funds for Agricultural Machinery
Guild in Zhonglou Distrcit of Changzhou in 250000.00 Other income 250000.00
2022
Incentives and subsidies for earlier phase-out
and scrapping of high-emission old cars in 59800.00 Other income 59800.00
Changzhou
Financial Assistance to the 2rd Batch of
Technology Plans in Chanzhou 110000.00 Other income 110000.00
The 25th Batch of Special Funds for Talents in
2022 120000.00 Other income 120000.00
Industrial development funds 1500.00 Other income 1500.00
Incentives for R&D spending on No. 208 47000.00 Other income 47000.00
185Changchai Company Limited Annual Report 2022
Incentives for provincial technology transfer
acceptor 27700.00 Other income 27700.00
Employment and apprenticeship subsidies 11000.00 Other income 11000.00
Subsidies for high-quality invention 2000.00 Other income 2000.00
Tax Contribution Award 30000.00 Other income 30000.00
Subsidies for work-based training 45000.00 Other income 45000.00
Innovation-driven incentives 31000.00 Other income 31000.00
Re-affirm and declare incentives for high and
new tech enterprises 200000.00 Other income 200000.00
Demolition compensation (replacing Zou
Village with Hehai Road) 13344397.90 Deferred income 267333.48
Demolition compensation - main workshops
in the base in Hehai Road 11864289.02 Deferred income 398640.14
The national major special project - the
flexible processing production line for diesel 13800000.00 Deferred income 1519266.00
engine cylinder blocks
National III/IV Appropriation for the research
and development and industrialization of
standard high-horsepower high-efficiency 10000000.00 Deferred income 1224489.84
agricultural diesel engine
Return of Government Grants
□ Applicable √ Not applicable
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control in the Reporting Period
Unit: RMB
Income Net
of profits of
Recogniti
Time and acquiree acquiree
Cost of Proportio Way to on basis
Name of place of Purchase from the from the
gaining n of gain the of
acquiree gaining date purchase purchase
the equity equity equity purchase
the equity date to date to
date
period-en period-en
d d
186Changchai Company Limited Annual Report 2022
On 16
May
2022 the
Board of
Directors
of
Zhenjiang
Siyang
was
reorganiz
ed and its
Articles
of
Associati
on were
amended
after
Zhenjiang which
Siyang directors
Diesel 23 appointed 3544098 4824237
Engine February 33520800.00 41.50%
Acquisiti 31 May by
Manufact 2022 on in cash 2022 Changcha
3.37.05
uring Co. i
Ltd. Companyare in the
majority.In May
2022
Changcha
i
appointed
managers
to
participat
e in the
productio
n and
operation
managem
ent of
Zhenjiang
Siyang.
(2) Combination Cost and Goodwill
Unit: RMB
Combination cost
--Cash 33520800.00
--Fair value of non-cash assets
--Fair value of debts issued or undertaken
--Fair value of equity securities issued
--Fair value of contingent consideration
--Fair value of equities held before the purchase date on the purchase date
--Other
Total combination cost 33520800.00
Less: fair value of identifiable net assets acquired 35424932.58
187Changchai Company Limited Annual Report 2022
The amount of goodwill/combined cost less than the fair value share of
-1904132.58
identifiable net assets obtained
Note to determination method of the fair value of the combination cost consideration and changes:
Combination cost: According to the Confirmation of Transaction on the Transfer of 41.5% Equity Interest
(Corresponding to Capital Contribution of RMB830000) in Zhenjiang Siyang Diesel Engine Manufacturing Co.
Ltd. issued by Jiangsu Property Rights Exchange Co. Ltd. on 12 January 2022 the transaction price is
RMB33520800.00 and Changchai Company Limited paid a one-time payment of RMB33520800.00 on 23
February 2022.Determination method of fair value: Zhenjiang Siyang's base date of assets evaluation is 31 March 2021. The
evaluated value of assets of Zhenjiang Siyang on 31 March 2021 is used as the fair value. The fair value of
Zhenjiang Siyang continuously measured from 31 May 2022 is calculated which is multiplied by the
shareholding ratio of Changchai Company Limited to obtain the fair value share of the identifiable net assets
obtained by Changchai Company Limited.The main reasons for the formation of large-value goodwill: Not applicable
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Unit: RMB
Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.Fair value on purchase date Carrying value on purchase date
Assets: 99167047.96 96946440.05
Monetary assets 19400123.61 19400123.61
Accounts receivable 24790090.34 24790090.34
Inventories 25093473.79 25096648.68
Fixed assets 21864448.97 21427812.03
Intangible assets 6746790.39 4959644.53
Other current assets 697629.25 697629.25
Construction in progress 447840.71 447840.71
Deferred income tax assets 126650.90 126650.90
Liabilities: 13805764.63 13472197.21
Borrowings
Accounts payable 13472197.21 13472197.21
Deferred income tax liabilities 333567.42
Net assets 85361283.33 83474242.84
Less: Non-controlling interests 49936350.75 48832432.06
Net assets acquired 35424932.58 34641810.78
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and
gaining the control during the Reporting Period
□ Yes √ No
188Changchai Company Limited Annual Report 2022
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree
that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
Not applicable
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Natur Holding percentage
Main Registrat
e of (%) Way of
Name operatin ion
busin Indirectl gaining
g place place Directly
ess y
Changchai Wanzhou Diesel Engine Chongq Chongqi Indus
60.00% Set-up
Co. Ltd. ing ng try
Changzhou Changchai Benniu Diesel Changz Changzh Indus
99.00% 1.00% Set-up
Engine Fittings Co. Ltd. hou ou try
Changzhou Horizon Investment Co. Changz Changzh Servi
100.00% Set-up
Ltd. hou ou ce
Changzhou Changchai Horizon Changz Changzh Indus
75.00% 25.00% Set-up
Agricultural Equipment Co. Ltd. hou ou try
Combination
Changzhou Fuji Changchai Robin Changz Changzh Indus
100.00% not under the
Gasoline Engine Co. Ltd. hou ou try
same control
Jiangsu Changchai Machinery Co. Changz Changzh Indus
100.00% Set-up
Ltd. hou ou try
Changzhou Xingsheng Property Changz Changzh Servi
100.00% Set-up
Management Co. Ltd. hou ou ce
Zhenjiang Siyang Diesel Engine Zhenjia Zhenjian Indus Combination
Manufacturing Co. Ltd. ng g try 41.50% not under thesame control
Explanation: the company holds 41.5% of the shares in Zhenjiang Siyang Diesel Engine Manufacturing Co. Ltd.Our company is the largest shareholder and the other shareholders are employee and non employee shares which
are relatively scattered. There are no other shareholders with a high shareholding ratio that is close to the actual
controller's shareholding ratio; Among the 7 members of the board of directors of Zhenjiang Siyang 5 are
dispatched by our company. The chairman of Zhenjiang Siyang is dispatched by our company and our company
is the substantive controller of Zhenjiang Siyang which constitutes the conditions for merger.
(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
189Changchai Company Limited Annual Report 2022
Changchai
Wanzhou Diesel 40.00% -260843.12 19705643.25
Engine Co. Ltd.Zhenjiang Siyang
Diesel Engine
Manufacturing Co. 58.50% 2822178.67 52758529.42
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
Curre curre Total Curre curre Total
Name curre 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 4713 2322 7036 2109 2109 4820 2414 7234 2242 2242
Diese 3617 8110. 1727 7619 7619 0342 1889 2232 6016 6016
l .16 09 .25 .13 .13 .77 .90 .67 .75 .75
Engin
e Co.Ltd.Zhenj
iang
Siyan
g
Diese
l 8269 2804 1107 2023 20553227
Engin 7983 5494 4347 5256 7957 —— —— —— —— —— ——
e 01.42.58 .39 7.97 .17 .59
Manu
factur
ing
Co.Ltd.Chan
gzho
u
Chan
gchai
Hori 1450 1483 2567 2567
zon 3243—— —— —— —— —— —— 5888 0191 5299 5299
Agri 02.84.53 .37 .17 .17
cultu
ral
Equi
pme
nt
190Changchai Company Limited Annual Report 2022
Co.Ltd.Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
flows flows
Name Operating comprehe Operating comprehe
Net profit from Net profit from
revenue nsive revenue nsive
operating operating
income income
activities activities
Changcha
i
Wanzhou 3428125 -652107. -652107. 650437.0 4262937 386567.2 386567.2 2563679
Diesel 2.72 80 80 3 9.24 7 7 .17
Engine
Co. Ltd.Zhenjian
g Siyang
Diesel 3544098 4824237 4824237 -929153
Engine —— —— —— ——
Manufact 3.37 .05 .05 7.82
uring
Co. Ltd.Changz
hou
Changc
hai
Horizon 1436287 -457970 -457970 6216842
Agricult —— —— —— —— 2.77 1.60 1.60 .70
ural
Equipm
ent 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. 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 Equity
Investment Partnership Enterprise (Limited) Shenzhen Jiaxin One Venture Capital Partnership (limited
partnership)and Zhong Wende. 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.
191Changchai Company Limited Annual Report 2022
X. The Risk Related to Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income and reduced
the negative impact to the operation performance of the Company in the lowest level and maximized the interests
of shareholders and other equity investors. Base on the risk management goal the basis strategy of the Company’s
risk management was to recognized and analyze all kinds of risk that the Company faced set up suitable risk
bottom line and conduct risk management and supervised the risks timely and reliably and control the risk within
the limited scope.The main risks of the Company due to financial instruments were credit risk liquidity risk and market risk. The
management level had reviewed and approved the policies to manage the risks which summarized as follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party.The credit of risk of the Company mainly was related to account receivable in order to control the risk the
Company conduct the following methods.The Company only conducts related transaction with approved and reputable third party in line with the policy of
the Company the Company need to conduct credit-check for the clients adopting way of credit to conduct
transaction. In addition the Company continuously monitors the balance of account receivable to ensure the
Company would not face the significant bad debt risk.(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way
of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time and the
rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilities
under the case of all reasonable prediction.(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change
of market price including foreign exchange rate risk interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
to the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the Company’s
export business customers will be given a certain credit term if the RMB appreciates against the dollar the
company's accounts receivable will incur foreign currency exchange loss.XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Item Ending fair value
192Changchai Company Limited Annual Report 2022
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
78739311.00291364291.57370103602.57
assets
1. Financial assets
at fair value through 78739311.00 291364291.57 370103602.57
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument 78739311.00 78739311.00
investment
(3) Derivative
financial assets
Wealth
management 291364291.57 291364291.57
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 576631000.00 378929240.08 955560240.08
investment
(IV) Investment
property
1. Land use right
for lease
2. Buildings leased
out
3. Land use right
193Changchai Company Limited Annual Report 2022
held and planned to
be transferred once
appreciating
(V) Living assets
1. Consumptive
living assets
2. Productive living
assets
Accounts receivable
financing 242813392.79 242813392.79
Other non-current
financial assets 373500000.00 373500000.00
Total assets
consistently
655370311.00291364291.57995242632.871941977235.44
measured by fair
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
194Changchai Company Limited Annual Report 2022
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.
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 the other non-current financial assets: for the investments in equity instrument of Jiangsu Horizon New
Energy Technology Co. Ltd. Jiangsu Horizon New Energy Technology Co. Ltd. entrusted an appraisal agency to
evaluate the value of all its shareholders’ equity due to the need for capital increase and share expansion in 2022
and confirmed the premium rate of capital increase based on the appreciation rate of the equity value. The
company’s new investors signed the investment agreements on 29 August 2022. Therefore the fair value of the
equity investment had been adjusted and confirmed accordingly based on the premium rate of the new round of
financing.
(3) Among other equity investment instruments the total investment in Chengdu Changwan Diesel Engine
Distribution Co. Ltd. Chongqing Wanzhou Changwan Diesel Engine Parts Co. Ltd. Changzhou Economic and
Technological Development Company Changzhou Tractor Company Changzhou Economic Commission
Industrial Capital Mutual Aid Association Beijing Engineering Machinery Agricultural Machinery Company was
RMB 1.21 million and the fair value was RMB 0.00 due to the difficulty in recovering the investment.Since its establishment in October 2017 Changzhou Synergetic Innovation Private Equity Fund (Limited
Partnership) had increased the equity of partners at the end of the year due to the change in fair value of the equity
held by it. In addition the company's business environment operating conditions and financial status had not
undergone major changes. Therefore the company determined its fair value on the basis of the net book assets of
the partnership at the end of the period.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
195Changchai Company Limited Annual Report 2022
Not applicable
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
Not applicable
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Not applicable
8. Fair Value 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.
9. Other
During the year there was no conversion between Level 1 and Level 2 nor was there any transfer to or from
Level 3 for the fair value measurement of the Company's financial assets and financial liabilities.XII. 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
Registration Nature of Registered the Company as owned by the
Name
place business capital the parent Company as the
against the parent against
Company the Company
Investment and
operations of
state-owned
assets assets
Changzhou management
Investment Changzhou (excluding RMB1.2 billion 32.26% 32.26%
Group Co. Ltd. financial
business)
investment
consulting
(excluding
196Changchai Company Limited Annual Report 2022
consulting on
investment in
securities and
options) etc.Notes: Information on the Company as the parent
The parent company of the Company is Changzhou Investment Group Co. Ltd. According to the guiding
principle of the Notice of Provincial Government on Issuing the Implementation Plan for Transferring Part of
State-owned Capital to Boost Social Security Fund in Jiangsu Province (SZF [2020] No. 27) the Notice on
Transferring Part of State-owned Capital to Cities and Counties to Boost Social Security Fund (SCGM [2020] No.
139) from the Department of Finance of Jiangsu Province and other five departments and the Notice on
Transferring Part of State-owned Capital at Urban (District) Level to Boost Social Security Fund (CCGM [2020]
No. 4) from Changzhou Finance Bureau and other four departments the 10% state-owned equity of the
Investment Group held by Changzhou Municipal People's Government is transferred to the Department of
Finance of Jiangsu Province free of charge. After the share transfer Changzhou People’s Government holds 90%
state-owned equity of the Investment Group and the Department of Finance of Jiangsu Province holds 10%
state-owned equity of the Investment Group. In accordance with Changzhou People’s Government Document
(CZF [2006] No. 62) Changzhou Investment Group Co. Ltd. is an enterprise which Changzhou People’s
Government authorizes Changzhou Government State-owned Assets Supervision and Administration Commission
to perform duties of investors. Thus Changzhou Investment Group Co. Ltd. is the controlling shareholder of the
Company and Changzhou Government State-owned Assets Supervision and Administration Commission is still
the actual controller of the Company. The final controller of the Company is Changzhou Government State-owned
Assets Supervision and Administration Commission.
2. Subsidiaries of the Company
Refer to Note IX for details.
3、Situation of joint ventures and associated enterprises of the company
None
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
Donghai Securities Co. Ltd. Controlled by the same Company as the parent
5.Related Party Transactions
(1)Compensation for key management personnel
Unit: RMB
197Changchai Company Limited Annual Report 2022
Amount incurred in the previous
Item Current amount incurred
period
Compensation for key
7110100.007667300.00
management personnel
(2) Other Related-party Transaction
1) On 25 August 2022 the Company held the Fourth Interim Meeting of the Board of Directors and the Fourth
Interim Meeting of the Supervisory Committee in 2022 and deliberated and approved the Proposal on Planning to
Participate in Capital Increase and Share Expansion and Related Transactions of Jiangsu Horizon New Energy
Technology Co. Ltd. agreeing to increase RMB75 million capital to Horizon New Energy for the subscription of
its newly registered capital of RMB18844200 and authorizing Shi Xinkun the Company’s Chairman to sign
capital increase agreements with related parties. In August 2022 Horizon New Energy and its shareholders signed
the Capital Increase Agreement of Jiangsu Horizon New Energy Technology Co. Ltd. agreeing that the registered
capital of Horizon New Energy was increased from RMB1405622491 to RMB1.75 billion. In October 2022
Horizon New Energy completed the industrial and commercial change registration procedures according to the
aforesaid capital increase agreement and obtained the new business license.
2) The Proposal on Using Idle Funds to Purchase Wealth Management Products was deliberated and approved at
the Fourth Interim Meeting of the Board of Directors in 2021 and the Second Interim Meeting of the Board of
Supervisors in 2021 held by the Company on 13 July 2021 allowing the Company and its wholly-owned
subsidiaries to use no more than RMB350 million of idle raised funds to purchase wealth management products
for cash management on the premise that the investment projects with raised funds are carried out normally and
the use of raised funds is not affected.On 27 July 2021 the Company entered into a subscription agreement with Donghai Securities Co. Ltd. for the
product "Donghai Securities Long Gain Return Certificate June Type Customized Issue No. 13". The subscription
amount is RMB50 million and the source of funds is idle raised funds. The return certificate matured on 25
January 2022 with a total of RMB50949315.07 in principal and return actually received which is recognized as
gains on changes of fair value of RMB817465.75 in 2021 and as investment income of RMB131849.32 in 2022.XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 31 December 2022 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.
198Changchai Company Limited Annual Report 2022
XIV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Profits or dividends to be distributed 7056925.07
2. Sales Return
None
3. Notes to Other Events after Balance Sheet Date
There was no other event after balance sheet date.XV. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retrospective Restatement
None
(2) Prospective Application
None
2. Debt Restructuring
Not applicable
3. Assets Replacement
Not applicable
4. Pension Plans
Not applicable
5. Discontinued Operations
Not applicable
6. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar the Company conducts common
199Changchai Company Limited Annual Report 2022
management and did not divide business unit so the Company only made single branch report.
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
None
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
273621605756275021126
which bad debt 78.96 76.80 63830
4067.6.22%7429.637.89745.6.00%658.8
provision % % 86.48
34504335
separately
accrued
Of which:
Accounts
receivable for
412789463233430788019
which bad debt 93.78 21.67 94.00 20.43 342752
69154855.04307191743.0
provision % % % % 168.94
8.39732.662.039
accrued by
group
Of which:
Accounts
receivable for
which bad debt 4127 8946 3233 4307 88019
93.7821.6794.0020.43342752
provision 6915 4855. 0430 7191 743.0
%%%%168.94
accrued by 8.39 73 2.66 2.03 9
credit risk
features group
440111103290458210914
100.025.24100.0023.82349135
Total 3322 7228 6094 8165 6401.
0%%%%255.42
5.735.230.507.3694
200Changchai Company Limited Annual Report 2022
Accounts receivable with significant single amount for which bad debt provision separately accrued at the end of
the period:
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Withdrawal reason
amount provision proportion
Customer 1 1470110.64 1470110.64 100.00% Difficult to recover
Customer 2 1902326.58 1902326.58 100.00% Difficult to recover
Customer 3 6215662.64 6215662.64 100.00% Difficult to recover
Customer 4 2797123.26 2194980.28 78.47% Expected to difficultly recover
Customer 5 3633081.23 2122165.73 58.41% Expected to difficultly recover
Customer 6 2584805.83 2584805.83 100.00% Difficult to recover
Customer 7 1731493.71 1731493.71 100.00% Difficult to recover
Customer 8 1511937.64 604775.06 40.00% Expected to difficultly recover
Customer 9 3329074.84 720031.71 21.63% Expected to difficultly recover
Total 25175616.37 19546352.18 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group
Unit: RMB
Ending balance
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 300792980.52 6015859.61 2.00 %
1 to 2 years 25189130.52 1259456.53 5.00 %
2 to 3 years 4391594.73 658739.21 15.00%
3 to 4 years 829958.37 248987.51 30.00%
4 to 5 years 709203.46 425522.08 60.00%
Over 5 years 80856290.79 80856290.79 100.00%
Total 412769158.39 89464855.73
Notes to the basis for the determination of the groups:
The accounts receivable was adopted the aging analysis based on the months when the accounts occurred actually
among which the accounts occurred earlier will be priority to be settled in terms of the capital turnover.Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss combining with the prediction
of the present status and future financial situation the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 304249429.01
1 to 2 years 25731843.18
2 to 3 years 4391594.73
201Changchai Company Limited Annual Report 2022
Over 3 years 105760358.81
3 to 4 years 2917847.46
4 to 5 years 2658953.02
Over 5 years 100183558.33
Total 440133225.73
(2) Bad Debt Provision Withdrawn Reversed or Recovered in the Reporting Period
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision
21126658.85480770.6521607429.50
withdrawn
separately
Bad debt
provision
88019743.092150511.77705399.1389464855.73
withdrawn
by group
Total 109146401.94 2631282.42 705399.13 111072285.23
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Amount verified
Accounts receivable with actual verification 705399.13
Of which the verification of significant accounts receivable:
Unit: RMB
Whether
generated
from
Name of the Amount Performance of verification
Nature Reason related-pa
entity verified procedures
rty
transactio
n
Customer 1 256244.04 With accounts
Customer 2 69529.81 receivable aging over The Party Committee and the
Customer 3 5 years the office meeting reviewed andAccount 72967.54
Customer 4 59625.69 counterpart company approved the Proposal on thes
Customer 5 being revoked or Verification of Accountsreceivab 44647.49 Not
Customer 6 71769.00 cancelled or debt Receivable of the Overseasle of
reorganisation Business Department Due to
goods
bankruptcy clearing or Pending Prototypes and
Customer 7 40120.00 the debtors have no Pending Quality Issues
assets for debt
202Changchai Company Limited Annual Report 2022
extinguishment
Total 614903.57 -- -- --
(4) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Ending balance
Ending balance of Proportion to total ending
Name of the entity of bad debt
accounts receivable balance of accounts receivable
provision
Customer 1 182469247.05 41.46% 3649384.94
Customer 2 40330698.62 9.16% 806613.97
Customer 3 20619430.63 4.68% 412388.61
Customer 4 18538588.59 4.21% 913245.46
Customer 5 15564496.00 3.54% 311289.92
Total 277522460.89 63.05%
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 179596495.57 26497081.34
Total 179596495.57 26497081.34
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
Beginning carrying
Nature Ending carrying amount
amount
Cash deposit and Margin 1300.00 4200.00
Intercourse funds among units 214624107.53 55450919.93
Petty cash and borrowings by employees 671817.84 613410.65
Other 13635256.64 13629784.64
Total 228932482.01 69698315.22
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the
Expected credit Expected loss in the
Bad debt provision duration (credit Total
loss of the next duration (credit
impairment not
12 months impairment occurred)
occurred)
Balance of 1
209613.5323809010.5819182609.7743201233.88
January 2022
Balance of 1
January 2022 in the —— —— —— ——
Current Period
203Changchai Company Limited Annual Report 2022
--Transfer to
Second stage
-- Transfer to Third
-23342513.3823342513.38
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
6574799.606574799.60
Current Period
Reversal of the
183426.54168517.57351944.11
Current Period
Write-offs of the
Current Period
Verification of the
88102.9388102.93
Current Period
Other changes
Balance of 31
26186.99209876.7049099922.7549335986.44
December 2022
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 182815353.08
1 to 2 years 16778473.11
2 to 3 years 99076.00
Over 3 years 29239579.82
3 to 4 years 420716.17
4 to 5 years 333939.40
Over 5 years 28484924.25
Total 228932482.01
3) Bad Debt Provision Withdrawn Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Write-of Ending balance
balance Withdrawal Other
recovery f
204Changchai Company Limited Annual Report 2022
Bad debt
provision
19182609.776574799.6025757409.37
withdrawn
separately
Bad debt
provision 88102.9
24018624.11351944.1123578577.07
withdrawn by 3
group
88102.9
Total 43201233.88 6574799.60 351944.11 49335986.44
3
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
Item Written-off amount
Other receivables with actual verification 88102.93
Of which the verification of significant other receivables:
Unit: RMB
Whether
occurred
Verification
Name of the Natur Written-of because of
Reason for verification procedures
entity e f amount related-part
performed
y
transactions
Customer 1 9020.00 With accounts receivable aging
Customer 2 8357.60 The Proposal on theover 5 years the counterpart
Other Write-off of Certain
Customer 3 7933.63 company being revoked or
interc Other Receivables
Customer 4 cancelled or debt reorganisation Notourse 7800.00 was approved at the
Customer 5 funds 6700.00
bankruptcy clearing or the
Party Committee and
Customer 6 6000.00 debtors have no assets for debt Office Meeting.extinguishment
Customer 7 6000.00
Total 51811.23 -- -- --
5) 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
205Changchai Company Limited Annual Report 2022
Jiangsu Changchai Interco
Machinery urse 135735255.26 Within 1 year 59.29%
Manufacturing Co. Ltd. funds
Within 1 year
with
Changzhou Changchai Interco
RMB18996476.Horizon Agricultural urse 20221123.93 8.83% 20221123.93
74 1-2 years with
Equipment Co. Ltd. funds
RMB1224647.1
9
Interco
Changzhou Changniu
urse 9000000.00 1-2 years 3.93%
Machinery Co. Ltd.funds
Interco
Changzhou Compressors
urse 2940000.00 Over 5 years 1.28% 2940000.00
Factory
funds
Interco
Changchai Group Imp.urse 2853188.02 Over 5 years 1.25% 2853188.02
& Exp. Co. Ltd.funds
Total -- 170749567.21 74.58% 26014311.95
6) Derecognition of Other Receivables due to the Transfer of Financial Assets: none
7) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables: none
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 576273530. 569273530. 542752730. 535752730.
7000000.007000000.00
subsidiaries 03 03 03 03
Investment to
joint ventures
and 44182.50 44182.50 44182.50 44182.50
associated
enterprises
576317712.569273530.542796912.535752730.
Total 7044182.50 7044182.50
53035303
(1) Investment to Subsidiaries
Unit: RMB
Beginning Increase/decrease Ending Ending
Investee balance balance balance of
Additional Reduced Withdrawa Other
(carrying (carrying depreciatio
206Changchai Company Limited Annual Report 2022
value) investment investment l of value) n reserve
depreciatio
n reserve
Changchai
Wanzhou
5100000051000000
Diesel.00.00
Engine Co.Ltd.Changzhou
Changchai
Benniu
9646650096466500
Diesel.00.00
Engine
Fittings Co.Ltd.Changzhou
Horizon 40000000 40000000
Investment .00 .00
Co. Ltd.Changzhou
Changchai
Horizon 7000000.
0.000.00
Agricultural 00
Equipment
Co. Ltd.Changzhou
Fuji
Changchai
4728623047286230
Robin.03.03
Gasoline
Engine Co.Ltd.Jiangsu
Changchai 30000000 30000000
Machinery 0.00 0.00
Co. Ltd.Changzhou
Xingsheng
1000000.1000000.
Property
0000
Managemen
t Co. Ltd.Zhenjiang
Siyang 33520800 33520800.00 .00
Diesel
207Changchai Company Limited Annual Report 2022
Engine
Manufacturi
ng Co. Ltd.Total 53575273 33520800 56927353 7000000.0.03 .00 0.03 00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Gains
Adjust Endin
Begin and Cash Endin
ment Withd g
ning losses bonus g
of rawal balanc
balanc Additi Reduc recogn Chang or balanc
Invest other of e of
e onal ed ized es of profits e
ee compr impair Other deprec
(carryi invest invest under other annou (carryi
ehensi ment iation
ng ment ment the equity nced ng
ve provis reserv
value) equity to value)
incom ion e
metho issue
e
d
II. Associated enterprises
Beijin
g
Tsingh
ua
Xingy
e
Indust 44182
0.000.00
rial .50
Invest
ment
Mana
gemen
t Co.Ltd.Subtot 44182
0.000.00
al .50
44182
Total 0.00 0.00.50
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
208Changchai Company Limited Annual Report 2022
Main operations 1937402949.98 1743767173.55 2221914222.25 1913817106.36
Other operations 51070094.57 40578530.55 45317897.53 31003356.23
Total 1988473044.55 1784345704.10 2267232119.78 1944820462.59
Information on revenue:
Unit: RMB
Category of contracts Total
Product Types
Of which:
Single-cylinder diesel engines 810033457.43
Multi-cylinder diesel engines 1068550094.42
Other products 31841402.73
Fittings 26977995.40
Classified by business area
Of which:
Sales in domestic market 1717395940.92
Export sales 220007009.06
Total 1937402949.98
Information related to performance obligations: none
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Dividend income from holding of other equity
instrument investment 9360000.00 7394400.00
Income from refinancing operations 136003.96 1028964.68
Dividends under cost accounting 28800000.00
Interest income from holding of debt obligation
investments 1411361.54
Investment income from disposal of
5408606.171798672.49
held-for-trading financial assets
Accounts receivable financing-discount interest of
-8511313.05-1869322.91
bank acceptance bills
Total 36604658.62 8352714.26
XVII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
209Changchai Company Limited Annual Report 2022
Item Amount Note
Gain or loss on disposal of non-current assets 393161.73
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the
Company’s ordinary course of business at fixed quotas 3774298.59
or amounts as per the government’s uniform
standards)
Increase in the fair value of the
equity of Jiangsu Horizon
New Energy Technology Co.Gain/loss from change of fair value of trading Ltd. held by the Company and
financial assets and liabilities and investment gains price falling of stocks of
from disposal of trading financial assets and liabilities Jiangsu Liance
162319373.53
and derivative financial assets and liabilities and Electromechanical Technology
available-for-sale financial assets other than valid Co. Ltd. and Kailong High
hedging related to the Company’s common businesses Technology Co. Ltd. held by
the wholly-owned subsidiary
Horizon Investment during the
Reporting Period.Reverse of provision for impairment of accounts
30000.00
receivable individually conducting impairment test
Other non-operating income and expenses other than
1735346.51
the above
Negative goodwill due to business combination not
1904132.58
under common control
Less: Income tax effects 19859063.58
Non-controlling interests effects (after tax) -24058.57
Total 150321307.93 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.□ Applicable √ Not applicable
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
2.51%0.10870.1087
shareholders of the Company
210Changchai Company Limited Annual Report 2022
Net profit attributable to ordinary
shareholders of the Company after
-2.41%-0.1043-0.1043
deduction of non-recurring profit
or loss
The Board of Directors
Changchai Company Limited
10 April 2023
211
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