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苏常柴B:2022年年度报告(英文版) 下载公告
公告日期:2023-04-12

CHANGCHAICOMPANY,LIMITED

ANNUALREPORT2022

April2023

PartIImportantNotes,TableofContentsandDefinitions

TheBoardofDirectors(orthe“Board”),theSupervisoryCommitteeaswellasthedirectors,supervisorsandseniormanagementofChangchaiCompany,Limited(hereinafterreferredtoasthe“Company”)herebyguaranteethefactuality,accuracyandcompletenessofthecontentsofthisReportanditssummary,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein.ShiXinkun,theCompany’slegalrepresentative,ZhangXin,theCompany’sGeneralManager,andJiangHe,headoftheCompany’sfinancialdepartment(equivalenttofinancialmanager)herebyguaranteethattheFinancialStatementscarriedinthisReportarefactual,accurateandcomplete.AlltheCompany’sdirectorshaveattendedtheBoardmeetingforthereviewofthisReportanditssummary.Anyplansforthefutureandotherforward-lookingstatementsmentionedinthisReportshallNOTbeconsideredasabsolutepromisesoftheCompanytoinvestors.Therefore,investorsarekindlyremindedtopayattentiontopossibleinvestmentrisks.TheCompanyhasdescribedindetailtherisksitmightfacein“XIProspects”in“PartIIIManagementDiscussionandAnalysis”herein.TheBoardhasapprovedafinaldividendplanasfollows:basedonthe705,692,507shares,acashdividendofRMB0.10(taxinclusive)per10sharesistobedistributedtotheshareholders,withnobonusissuefromeitherprofitorcapitalreserves.

TableofContents

PartIImportantNotes,TableofContentsandDefinitions ...... 2

PartIICorporateInformationandKeyFinancialInformation ...... 6

PartIIIManagementDiscussionandAnalysis ...... 11

PartIVCorporateGovernance ...... 46

PartVEnvironmentalandSocialResponsibility ...... 65

PartVISignificantEvents ...... 66

PartVIIShareChangesandShareholderInformation ...... 77

PartVIIIPreferredShares ...... 86

PartIXBonds ...... 87

PartXFinancialStatements ...... 88

DocumentsAvailableforReference

1.ThefinancialstatementssignedandsealedbytheCompany’slegalrepresentative,GeneralManagerandheadofthefinancialdepartment.

2.TheoriginalcopyoftheIndependentAuditor’sReportsignedandsealedbytheCPAs,aswellassealedbytheCPAfirm.

3.TheoriginalsofalltheCompany’sdocumentsandannouncementswhichweredisclosedonSecuritiesTimeandTaKungPao(HK)(newspapersdesignatedbytheCSRCforinformationdisclosure)duringtheReportingPeriod.

4.TheAnnualReportdisclosedinothersecuritiesmarkets.Theabove-mentioneddocumentsavailableforreferenceareallkeptintheSecretariatoftheBoardofDirectorsoftheCompany.ThisReporthasbeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.

Definitions

TermDefinition
“Changchai”,the“Company”or“we”ChangchaiCompany,Limitedanditsconsolidatedsubsidiaries,exceptwherethecontextotherwiserequires
ChangchaiBenniuChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.
ChangchaiWanzhouChangchaiWanzhouDieselEngineCo.,Ltd.
HorizonInvestmentChangzhouHorizonInvestmentCo.,Ltd.
HorizonAgriculturalEquipmentChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.
ChangchaiRobinChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.
XingshengRealEstateManagementChangzhouXingshengRealEstateManagementCo.,Ltd.
ChangchaiMachineryJiangsuChangchaiMachineryCo.,Ltd.
ZhenjiangSiyangZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.
RMB,RMB’0,000ExpressedintheChinesecurrencyofRenminbi,expressedintensofthousandsofRenminbi
The“ReportingPeriod”or“CurrentPeriod”Theperiodfrom1January2022to31December2022

PartIICorporateInformationandKeyFinancialInformation

ICorporateInformation

StocknameChangchai,Changchai-BStockcode000570,200570
StockexchangeforstocklistingShenzhenStockExchange
CompanynameinChinese常柴股份有限公司
Abbr.苏常柴
CompanynameinEnglish(ifany)CHANGCHAICOMPANY,LIMITED
Abbr.(ifany)CHANGCAHICO.,LTD.
LegalrepresentativeShiXinkun
Registeredaddress123HuaideMiddleRoad,Changzhou,Jiangsu,China
RegisteredaddressespreviouslyusedN/A
Zipcode213002
Officeaddress123HuaideMiddleRoad,Changzhou,Jiangsu,China
Zipcode213002
Companywebsitehttp://www.changchai.com.cn
Emailaddresscctqm@public.cz.js.cn

IIContactInformation

BoardSecretarySecuritiesRepresentative
NameHeJianjiang
Address123HuaideMiddleRoad,Changzhou,Jiangsu,China
Tel.(86)519-68683155
Fax(86)519-86630954
Emailaddresscchjj@changchai.com

IIIMediaforInformationDisclosureandPlacewherethisReportIsLodged

NewspapersdesignatedbytheCompanyforinformationdisclosureSecuritiesTimes,TaKungPao(HK)
WebsitedesignatedbyCSRCforpublicationofthisReporthttp://www.cninfo.com.cn
PlacewherethisReportislodgedBoardSecretariatoftheCompany

IVChangetoCompanyRegisteredInformation

Unifiedsocialcreditcode91320400134792410W
ChangetoprincipalactivityoftheCompanysincegoingpublicNochange
EverychangeofcontrollingshareholdersinceincorporationOn22November2018,theState-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernmenttransferreditsentireholdingsof170,845,236sharesintheCompany(astakeof30.43%)toChangzhouInvestmentGroupCo.,Ltd.fornocompensation,whichhasthusbecomethecontrollingshareholderoftheCompany.

VOtherInformation

TheindependentauditfirmhiredbytheCompany:

NameGongzhengTianyeCertifiedPublicAccountantsLLP
OfficeaddressYingtongCommerceBuilding,Changzhou,Jiangsu,China
AccountantswritingsignaturesWangWenkai,QinZhijun

TheindependentsponsorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:

√Applicable□Notapplicable

NameOfficeaddressRepresentativesSupervisionperiod
ChinaIndustrialSecuritiesCo.,Ltd.10/F,ChinaIndustrialSecuritiesPlaza,36ChangliuRoad,PudongNewDistrict,ShanghaiWangLingxiao,LiLihong5July2021-31December2022
DonghaiSecuritiesCo.,Ltd.6/F,DonghaiSecuritiesPlaza,1928DongfangRoad,PudongNewDistrict,ShanghaiWangJiangqin,XuQin5July2021-31December2022

TheindependentfinancialadvisorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:

□Applicable√NotapplicableVIKeyFinancialInformation

Indicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow.

□Yes√No

202220212022-over-2021change(%)2020
Operatingrevenue(RMB)2,182,043,095.612,452,430,515.60-11.03%2,296,464,711.24
Netprofitattributabletothelistedcompany’sshareholders(RMB)76,684,796.91103,006,232.54-25.55%52,432,443.05
Netprofitattributabletothelistedcompany’s-73,636,511.025,329,092.87——25,483,147.57
shareholdersbeforeexceptionalgainsandlosses(RMB)
Netcashgeneratedfrom/usedinoperatingactivities(RMB)364,930,277.84-266,323,779.30——251,796,654.53
Basicearningspershare(RMB/share)0.10870.1657-34.40%0.0934
Dilutedearningspershare(RMB/share)0.10870.1657-34.40%0.0934
Weightedaveragereturnonequity(%)2.51%3.86%-1.35%2.40%
31December202231December2021Changeof31December2022over31December2021(%)31December2020
Totalassets(RMB)5,219,359,853.424,860,382,961.267.39%3,952,954,464.45
Equityattributabletothelistedcompany’sshareholders(RMB)3,284,710,665.903,077,550,018.336.73%2,273,349,347.02

Indicatebytickmarkwhetherthelowerofthenetprofitattributabletothelistedcompany’sshareholdersbeforeandafterexceptionalgainsandlosseswasnegativeforthelastthreeaccountingyears,andthelatestindependentauditor’sreportindicatedthattherewasuncertaintyabouttheCompany’sabilitytocontinueasagoingconcern.

□Yes√NoIndicatebytickmarkwhetherthelowerofthenetprofitattributabletothelistedcompany’sshareholdersbeforeandafterexceptionalgainsandlosseswasnegative.

√Yes□No

Item20222021Note
Operatingrevenue(RMB)2,182,043,095.612,452,430,515.60ProductionandsalesoftheCompany’sprimaryproductsofdieselengines,gasolineengines,etc.
Deductionsfromoperatingrevenue(RMB)36,475,111.6648,310,768.54Otherbusinessrevenuethanthemainoperations
Operatingrevenueexclusiveofdeductions(RMB)2,145,567,983.952,404,119,747.06Dieselengines,gasolineengines,andaccessories

VIIAccountingDataDifferencesunderChina’sAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards

1.NetProfitandEquityunderCASandIFRS

□Applicable√Notapplicable

NodifferencefortheReportingPeriod.

2.NetProfitandEquityunderCASandForeignAccountingStandards

□Applicable√NotapplicableNodifferencefortheReportingPeriod.

VIIIKeyFinancialInformationbyQuarter

Unit:RMB

Q1Q2Q3Q4
Operatingrevenue675,718,729.65502,503,762.39545,599,669.07458,220,934.50
Netprofitattributabletothelistedcompany’sshareholders-31,087,265.8316,491,996.22150,405,621.57-59,125,555.05
Netprofitattributabletothelistedcompany’sshareholdersbeforeexceptionalgainsandlosses-12,317,891.456,508,531.38-5,566,500.16-62,260,650.79
Netcashgeneratedfrom/usedinoperatingactivities-47,199,474.48-27,101,026.64-8,250,338.30447,481,117.26

IndicatebytickmarkwhetheranyofthequarterlyfinancialdatainthetableaboveortheirsummationsdiffersmateriallyfromwhathavebeendisclosedintheCompany’squarterlyorinterimreports.

□Yes√No

IXExceptionalGainsandLosses

√Applicable□Notapplicable

Unit:RMB

Item202220212020Note
Gainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)393,161.73155,515.49263,408.53
Governmentgrantsthroughprofitorloss(exclusiveofgovernmentgrantsconsistentlygivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsaspergovernmentalpoliciesorstandards)3,774,298.594,268,950.187,763,215.65
Capitaloccupationchargesonnon-financialenterprises344,842.86
thatarerecognizedinprofitorloss
Gainorlossonfair-valuechangesonheld-for-tradingfinancialassetsandliabilities&incomefromdisposalofheld-for-tradingfinancialassetsandliabilitiesandavailable-for-salefinancialassets(exclusiveoftheeffectiveportionofhedgesthatariseintheCompany’sordinarycourseofbusiness)162,319,373.53114,738,153.5427,526,935.85IncreaseinthefairvalueoftheCompany’sinterestinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,aswellasdecreasedpricesofthesharesheldbywholly-ownedsubsidiaryHorizonInvestmentinJiangsuLianceElectromechanicalTechnologyCo.,Ltd.andKailongHighTechnologyCo.,Ltd.
Reversedportionsofimpairmentallowancesforreceivableswhicharetestedindividuallyforimpairment30,000.00147,611.25
Non-operatingincomeandexpenseotherthantheabove1,735,346.512,400,863.71-1,571,453.49
Negativegoodwillduetobusinesscombinationnotundercommoncontrol1,904,132.58
Less:Incometaxeffects19,859,063.5824,027,164.567,122,148.63
Non-controllinginterestseffects(netoftax)-24,058.576,789.94255,505.29
Total150,321,307.9397,677,139.6726,949,295.48--

Particularsaboutotheritemsthatmeetthedefinitionofexceptionalgain/loss:

□Applicable√NotapplicableNosuchcasesfortheReportingPeriod.ExplanationofwhytheCompanyreclassifiesasrecurrentanexceptionalgain/lossitemlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—ExceptionalGain/LossItems:

□Applicable√NotapplicableNosuchcasesfortheReportingPeriod.

PartIIIManagementDiscussionandAnalysis

IIndustryOverviewfortheReportingPeriod

Weareamanufacturerofinternalcombustionenginesandfittingsingeneralequipmentmanufacturing.Accordingtotheclassificationoffuelused,internalcombustionenginesaremainlydividedintodieselenginesandgasolineengines.Ourdieselenginesandgasolineenginesaremainlyusedinnon-roadmobilemachineryfieldssuchasharvesters,tractors,plantprotectionmachinery,smallengineeringmachinery,andshipbornemachinery.

(1)BasicinformationontheindustryTheinternalcombustionengineisanimportantsupportforChina'smanufacturingindustrysecurity,energysecurityandnationaldefensesecurity,andanimportantbasicindustryofnationaleconomyandnationaldefenseconstruction.Theinternalcombustionengineisthemostpower-dense,thermallyefficientandwidelyusedheatenginepowerunit.Inordertoimplementthenationaloveralldevelopmentstrategyofenergyconservation,emissionreduction,transformation,andupgrading,theinternalcombustionengineindustryandagriculturalmachineryindustrywillstrengthenindependentinnovationandresearchanddevelopment,acceleratetheconstructionofacommonbasictechnologyplatform,optimizetheconstructionoftheupstreamanddownstreamindustrychain,implementintelligentmanufacturing,andactivelycarryoutinternationalexchangeandcooperationtoacceleratetherealizationofindustrialtechnologyupgrading.

(2)DevelopmentpatternandtrendoftheindustryIntermsofpolicies,atthebeginningof2023,the20thNo.1Documentguidingtheworkonagriculture,ruralareas,andfarmersissuedbythecentralgovernmentdemonstratedthegovernment’sintentiontoattachgreaterimportancetoagricultureandstrengthenagriculturaldevelopment.Inabidtodoso,thegovernmentwillstepupeffortstoenhanceagriculturalscienceandtechnologyandprovidemoreequipment,drivetotacklekeyproblemsofkeyandcoretechnologiesinagriculture,andmakeagriculturalmachinerymoreintelligentandautomated.Intermsofindustryconcerns,theupgradeandconversiontoproductsthatmeettheNationalEmissionStandardIVraisechallengestoenterprises.Attheendof2022,thecentralgovernmentappropriatedRMB211.5billionofagriculture-relatedtransferpaymentfundsfor2023inadvance,includingRMB14.5billionforsubsidiesofagriculturalmachineryprocurementandapplication.Thecentralgovernmentallocatedsubstantivefundsforsubsidiesandimplementedpoliciestostrengthenagricultureandbenefitfarmers,indicatingthatthestatewillcontinuetoattachgreatimportancetoagriculturalmechanization.Intermsofindustrialdevelopment,afteraten-yeargoldenperiodofdevelopment,since2016,theentireagriculturalmachineryindustryhasenteredaperiodofdeepadjustmentthathaslastedforyears.Althoughshort-termexplosivegrowthwasseenin2020,itwentdownagain,enteringaphaseofupdatingexistingmachineryfromthegrowthofnewmachineprocurement.2022,thefirstyearofswitchingtotheNationalEmissionStandardIVforNon-roadVehicles,theagriculturalmachineryindustryfacedpressuressuchastheshrinkingofthedemandside,prematuremarketoverdraft,participationoftycoonsfromotherindustries,andtheimpactofnewenergymarketonthetraditionalmarket.Currently,multiplesegmentedscenariosstillrequireall-weatherandcontinuousinputandoutput,whichisanadvantageofdieselenginesthatcannotbesubstitutedinashorttime.Furthermore,newdevelopmentopportunitieshavebeenbroughtaboutintheprocessofnationalstrategicdeploymentandaccelerationoftransformationandupgrade.Therefore,thetraditionalmarketofagriculturalmachinerystillhasabrilliantfuture.

China'sdieselengineandgasolineengineindustriespresentapatternofmultiplecompetitions.Asthestateadoptsincreasinglystrictenvironmentalprotectionpolicyandtheemissionstandardscontinuetoupgrade,thecoretechnologyandkeypartsofinternalcombustionengineswillberapidlydevelopedandapplied,andtheresearch,development,promotingandapplicationofenvironmentallyfriendlyandefficientdieselenginesandgasolineengineswillbecomethemainstreamtrend,whichpromotesthewideuseofthefuelinjectionsystem,high-efficiencysuperchargerandhigh-efficiencyafter-treatment.Inthenewnormal,theinternalcombustionengineindustryandagriculturalmachineryindustrywillimprovetheindustry'scapabilityofindependentinnovation,supportthewholemachinedevelopment,andorganizeandimplementgreenmanufacturingandintelligentmanufacturing,soastoimprovetheoverallstrengthoftheindustry.Themarketshareofdieselandgasolineenginesisgraduallyconcentratedinafewlarge-scaleenterpriseswithtechnicalandcapitalstrength.Thepresentdevelopmenttrendofinternalcombustionengineindustryisasfollows:(1)energysavingandemissionreduction;(2)intelligentmanufacturing;(3)lightweight.Medium-andlow-endinternalcombustionengineswithlowtechnicalcontentandlowaddedvaluewillbegraduallysqueezedoutofthemarket.Theupgradeofemissionstandardsandthemarket'sdemandforhigh-endproductswilleliminatethosesmallenterpriseswithlowlevelofresearchanddevelopmentorlesstechnologyreserves.

(3)Salesofinternalcombustionengineindustryin2022Thetotalvolumeofthemarketdroppedsignificantlyduetofactorssuchassubsidypolicychange,tightsupplychain,upgradingoftheNationalEmissionStandardIVforNon-roadVehicles,andintensifiedexistingcompetition.Thetotalsalesofinternalcombustionenginesin2022were43,154,700units,adecreaseof14.51%comparedto2021.Thetotalsalesofdieselenginesfortheyearwere4,286,600units,downby29.82%yearonyear.Specifically,837,200enginesforconstructionmachinery,1,222,300enginesforagriculturalmachinery,39,700enginesforshipbornemachinery,and311,700enginesforelectricitygenerationweresold.Thesalesofgasolineinternalcombustionengineswere38,856,000,adropof12.39%yearonyear.Onthewhole,theinternalcombustionenginemarketshowedadecliningtendencyforthewholeyear,withtheconstructionandagriculturalmachinerystillshowinganadjustmenttrend.Theagriculturalmachineryindustryfacedamajorshakeout,focusingontheswitchingofproductsthatmeettheChinaIVemissionstandardsfornon-roadmobilemachinery.Accordingtotheinformationonthesubsidiesofagriculturalmachineryprocurement,themainterminalproductsthatneedtobeupgradedtomeetChinaIVemissionstandardsarelargeandmediumtractors,wheatharvesters,forageharvesters,andsprayrod-typesprayers.ThemarketpaidmoreattentiontowhethertheycanbeadequatelyverifiedtomeetChinaIVemissionstandardsandwhethermassproductioncanberealized.Inthesecondhalfof2022,thesalesoflargeandmediumtractors,wheatharvesters,andcornharvesterspeaked,showingthatthetraditionaldemandcyclewasaltered.Intermsofthesegmentsoftheinternalcombustionenginemarket,in2022,897,300unitsofconstructionmachineryweresold,downby21.00%yearonyear;4,141,300unitsofagriculturalmachineryweresold,downby22.87%yearonyear;39,700unitsofshipbornemachineryweresold,downby1.18%yearonyear;1,253,000unitsofgeneratorsetsweresold,downby19.02yearonyear;and1,645,400unitsofhorticulturalmachineryweresold,downby34.15%yearonyear.Comparedwithlastyear,theyear-over-yeargrowthofallkindsofmachinerywasnegative.Duetotheimpactofinternationaltradeandthecharacteristicsoftheenterprisescale,theinternalcombustionengineindustrywassteadyandshowedapositivetrendonthewhole.In2022,thetotalvolumeofimportsandexportswasUSD30,086million,downby2.47%yearonyear;specifically,theimportvolumewasUSD8,803million,downby18.63%yearonyearandtheexportvolumewasUSD21,284million,upby6.27%yearonyear.

IIPrincipalActivityoftheCompanyintheReportingPeriod

1.PrincipalOperationsoftheCompanyWemainlyspecializeintheR&D,manufactureandsalesofdieselenginesunderthebrand"Changchai"andgasolineenginesunderthebrand"Robin".Ourproductsaremainlyusedinagriculturalmachinery,smallengineeringmachinery,lightcommercialvehicles,generatorsetsandshipbornemachineryandotherfieldscloselyrelatedtopeople'slivelihood.IntheReportingPeriod,therewerenomajorchangesintheCompany'scorebusinessandmainproducts.

2.MainProductsoftheCompanyOurmainproductsaredividedintotwocategories:dieselenginesandgasolineengines.Thedetailsareasfollows:

MainproductsGraphicdisplayProductdescriptionProductfeaturesApplicationfields
DieselengineOurdieselengineproductsincludesingle-cylinderdieselenginesandmulti-cylinderengines,coveringpowerrangefrom1.62kWto117.6kW,andcylinderdiametersfrom65mmto135mm,withoneormorecylinders.Besidessaleindomesticmarket,ourdieselenginesaresoldtoSoutheastAsia,SouthAmerica,theMiddleEastandAfrica.Highpower,lowoilconsumption,lownoise,compactstructure,lowemission,goodreliabilityAgriculturalmachinery,constructionmachinery,generatorsets,shipbornemachinery
GasolineengineOurgasolineenginesaremainlygeneral-purposesmallgasolineengines,coveringthepowerrangefrom1.5kWto7.0kW.Besidessaleindomesticmarket,ourgasolineenginesaresoldtoSoutheastAsia,theMiddleEast,EuropeandAmerica,Africa,Japanandothercountriesandregions.Simplestructure,goodreliability,easymaintenanceAgriculturalmachinery,smallconstructionmachinery

3.MajorBusinessModels

(1)R&DmodelWehaveestablishedaninnovativetechnologymanagementsystemforinternalcombustionenginebasedonmarketdemandandforward-lookingtechnologies.Priortothenewproductsornewtechnologiesdevelopment,themarketingdepartmentfirstconductsmarketassessmentandcustomerresearch,andtheninitiatesaprojectaccordingtotheforecastedmarketdemand;thetechnologycenterconductsdevelopmentaccordingtotheprojectmaterials,andcollectsfeedbackinformationfromthemarketandcustomersinrealtimeduringthedevelopmentprocesstoensuretechnologyleadershipandproductsuitability.

(2)PurchasingmodelWeadoptthe"purchase-to-order"purchasingmodel.TheERPsystemconvertsthesalesorders,thesalesplandevelopedbythesalesdepartmentandtheproductionplandrawnupbytheproductiondepartmentintothedemandofpartsneeded,andthepurchasingdepartmentorganizesthepurchaseaccordingtosuchdemand.Meanwhile,thepurchasingdepartmentmakesaplantoguidepartsprocurementaccordingtothesales

department'ssalesplan,andprovideittothesupplier,andurgethesuppliertoprepareforthegoods.

(3)ProductionmodelWeadoptthe"make-to-order"productionmanagementmodel.Thesalesdepartmentmakessalesplansfordifferentstagesaccordingtotheordersinhand,salesdatainpreviousyears,marketdemandjudgmentandfeedbackofexistingcustomers'purchasingintentions.TheCompany'sproductiondepartmentmakestheproductionplanaccordingtothesalesordersdisplayedintheERPsystem,thesalesplanmadebythesalesdepartmentandthereserveinventorydemand,andorganizestheproductiontaskinstrictaccordancewiththeplan.Duringtheproductionprocess,thequalityassurancedepartmentarrangesregularinspectiontoensuretheproductquality.

(4)SalemodelWeadoptthesalesmodelof"directselling+distribution",i.e.thedirectsellingmodelforthemainenginefactory,andthedistributionmodelfortheindividualcirculationmarketrepresentedbyfarmersandoverseasmarket.

4.TheCompany'spositioninthemarketWemainlyspecializeintheR&D,manufactureandsalesofdieselenginesunderthebrand"Changchai"andgasolineenginesunderthebrand"Robin".Uptonow,wehavesuccessfullydevelopedanumberofadvancedcoretechnologieswithindependentintellectualpropertyrights.Intermsofdieselengine,accordingtothestatisticsofChinaInternalCombustionEngineIndustryAssociation(CICEIA),asthelargestsmall-andmedium-sizedsingle-cylinderdieselenginemanufacturerintheagriculturalmachineryindustryofChina,wehavemaintainedahighmarketshareofsingle-cylinderengines,andourmarketshareofsingle-cylinderdieselenginesofsomepowerrangeshasrankedfirstinChina.Formanyyears,intheprocessofachievingsteadyeconomicdevelopmentoftheenterprise,wedevelopedinasoundmannerandcultivatedthe"Changchai"brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights.

5.KeyPerformanceDrivers

(1)NationalpolicydriverInrecentyears,variousdepartmentsofthestatehaveintroducedaseriesofpreferentialpoliciestoencouragethedevelopmentofinternalcombustionengineindustry.Intermsofagriculturalmachinery,thecentralgovernmenthastakensolvingtheproblemsrelatingto"agriculture,ruralareasandfarmers"asthetoppriorityoftheworkofthePartyandthegovernment,andissuedaseriesofpoliciestobenefitfarmers,creatingagoodatmosphereforpromotingthedevelopmentofagricultureandeconomyandsocietyinruralareas;intermsofconstructionmachinery,thestrategyof"westerndevelopment",the"eightverticalandeighthorizontal"high-speedrailwaynetworkplanandthepolicyof"newruralconstruction"haveallcreatedagoodpolicyenvironmentfortheapplicationofinternalcombustionengineindownstreamconstructionmachinery.

(2)IndustrialchainsynergyempowersthesustainabledevelopmentoftheCompanyWehavebuiltourowncastingmanufacturingandprocessingplantstomeettheuserequirementsofsomedieselengineparts.Intermsofproductionandquality,wehaveformedasignificantsynergywithitsowninternalcombustionengineassemblyteam.OurcastingmanufacturingteamandinternalcombustionengineassemblyteamworktogethertoformamutuallyreinforcingpositivefeedbacklooptoassisttheCompanyinintegratingtheinternalcombustionengineindustrychainandbuildingdifferentiatedindustrybarriers.Intermsofcollaborativeproduction,thereductionofexternalpurchaseisofgreatsignificancefortheCompanytoreduceprocessflow,reduceintermediateloss,improveproductionefficiency,shortendeliverytimeandincreasepurchasingbargainingpower.Intermsofqualitycoordination,theself-builtfoundrycanimproveourqualitycontrolofpartstoimprovetheyieldandreliabilityofinternalcombustionengines.

(3)StableandefficientR&DteamWehaveexperiencedtechnicalmanagementteamandperfecttechnicalsupportteam.Ourkeytechnicalpersonnel

andR&DmanagementpersonnelhavebeenengagedininternalcombustionengineR&Ddesign,productionandmanufacturingforalongtime.Withprofoundprofessionalknowledgeandrichpracticalexperience,theycanmakestrongforward-lookingandscientificjudgmentinthemarketdirectionandtechnicalroute.Also,wehaveestablishedaneffectivetrainingmechanismtofostertalentedpersonsforthefollow-upR&D.

(4)Well-knownbrandwithmanywell-knowncustomersTheCompany,formerlyknownasChangzhouDieselEngineFactory,isanationalindustrialenterprisewithahistoryofahundredyearsandoneoftheearliestprofessionalinternalcombustionenginemanufacturersinChina.Ourdieselandgasolineengines,aspowersourcesofagriculturalmachinery,constructionmachineryandcommercialvehicles,showexcellentperformanceinpowerrange,reliability,powerperlitre,noisecontrolandemissionstandards,andhavebeenrecognizedbycustomers.Wemaintainedalong-termpartnershipwithmajorcustomers,withcumulativepartnershiptimeexceeding15years.ManymainengineplantcustomersoftheCompanyarewell-knownenterprisesintheagriculturalmachineryindustry,withtheirmarketsharesbeingattheforefrontofthemarket.

IIICoreCompetitivenessAnalysis

1.AdvantagesinBrandChangchaiisanationalindustrialenterprisewithahistoryofoveronehundredyears.ItisoneoftheearliestprofessionalmanufacturersofinternalcombustionenginesinChina.Thebrand"Changchai"istheearliestdomestictrademarkofproductiongoodsknownasChina'swell-knowntrademarks.Thedieselengineof"Changchai"brandisChina'sbrand-nameproduct.TheenterprisehasbeencertifiedbyISO9001andIATF16949qualitysystems,ISO14001environmentalmanagementsystem,IATF16949automotiveproductqualitymanagementsystem,andaccessedtothenationalexport-freeenterprisequalification.Changchaiwashonorablyrankedamong“theTopOneHundredChineseEnterprisesinEngineeringIndustry”and“ChinaPacesetterEnterpriseofIndustrialIndustry”forseveraltimes,andwasawardedthehonorarytitleof“State-levelEnterpriseofObservingContractsandKeepingPromise”,“China'sAgriculturalMachineryPartsandComponentsLeadingEnterprises”,“China'sAgriculturalMachineryAAACreditEnterprise”,“QualityManagementExcellenceAwardofJiangsuProvince”and“MayorQualityAwardofChangzhouCity”.TheCompanyhasbeenamongthe10users’mostsatisfiedleadingbrandsin“JingGeng”competitionformanyyears.In2022,theCompanywasawardedhonorarytitlessuchasTop500MachineryIndustryInChina,NationalDemonstrationEnterpriseofProductandServiceQualityIntegrity,NationalQualityLeaderofInternalCombustionEngineIndustry,NationalQualityLeadingBrandofInternalCombustionEngineIndustry,ProductwithGuaranteedQualityandReputationinChina,StableQualifiedProductinNationalQualityInspection,TopTenEnterprisesofAgriculturalMachineryandEquipmentIndustryinJiangsuProvince,andThreeStarEnterpriseinChangzhou.Formanyyears,intheprocessofachievingsteadyeconomicdevelopmentoftheenterprise,wedevelopedinasoundmannerandcultivatedthe“Changchai”brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights.

2.AdvantagesinTechnologyTheCompanyhasastate-leveltechnologycenterandpost-doctoralresearchstation,andaresearchcenterofsmallandmedium-powerinternalcombustionengineengineeringandtechnologyinJiangsuProvince.Currently,itismainlyengagedinproductionofsmallandmedium-powersingle-cylinderandmulti-cylinderdieselengine.Ithasacompleteproductrange,awidepowerlevelcoverage,ahighreputationandintellectualpropertyrightsforitsmainproducts.DuringtheReportingPeriod,theCompanyobtainedtheRe-assessmentCertificateoftheNationalEnterpriseTechnologyCentre,andsevenmodelsincludingEH36andZN490BwererecognizedasHigh-tech

ProductsofChangzhouCity.Inaddition,theCompanywonthehonoroftheresearchanddevelopmentbaseoftheintelligentandlightweightdieselengineoftheagriculturalmachineryandequipmentindustryinJiangsuProvince.DuringtheReportingPeriod,theCompanywasgranted23patents.Asoftheendof2022,ithasatotalof159validpatentsathomeandabroad,including13inventionpatents.

3.AdvantagesinMarketingChangchaihasbuiltupasalesservicenetworkcoveringthewholecountry,with5salesbusinessunits,26salesservicecenters,and698designatedmaintenancestations.Inaddition,inordertomeettheNationalEmissionStandardIVforNon-RoadVehiclesandprovidebetterafter-salesserviceforcustomers,aservicemonitoringplatformwithChangchaicharacteristicshasbeenputinplace.Withaperfectdieselsalesservicenetworksystem,theCompanyisabletoprovidehighquality,efficientandtimelyservicesforcustomers.IVCoreBusinessAnalysis

1.OverviewIn2022,thedomesticandinternationalpoliticalandeconomicsituationwascomplexandvolatile.China’seconomycontinuedtofacemultiplepressuressuchasshrinkingdemand,supplyinterruptions,andweakenedexpectations.Thetotalvolumeofthemarketdroppedduetofactorssuchassubsidypolicychange,tightsupplychain,upgradingoftheNationalEmissionStandardIVforNon-roadVehicles,andintensifiedexistingcompetition.Facingthenewnormalofthecomplicatedandvolatiledevelopmentanddecliningtrendoftheagriculturalmachineryindustry,theCompanyunitedallemployeesandfurtherfocusedonproducts,market,andqualitytoseekprogresswhilemaintainingstabilityandinnovation.TheCompanysparednoefforttoadvancetheimplementationoftheannualoperationpolicyandobjectives,effectivelycombinedproductoperationandcapitalmanagement,andacceleratedproductionupgradeandindustrialchainexpansiontomaintainastableandorderlydevelopmenttendency.DuringtheReportingPeriod,theCompanysoldapproximately607,300dieselengines,gasolineenginesandgeneratorsets,includingapproximately147,000gasolineengines,generatingtotalsalesrevenueofRMB2.182billion,adecreaseof11.03%year-on-year.Intermsofproductdevelopmentandsupport,theCompanycompletedthedevelopmentandsupportcertificationformainstreammodelsofsingle-cylinderandmulti-cylinderenginesthatmettheNationalEmissionStandardIVforNon-roadVehiclesandlaunchedthemtothemarketthroughmassproduction.TheCompanyorderlyadvancedtheextensionofmulti-cylinderengines’upperandlowerpowerranges.Thehigh-powermulti-cylinderengineswerelaunchedtothemarketthroughmassproductionaftercompletingsupportverificationandtheoptimizedmulti-cylinderproductswithsmallcylinderdiametersmadebreakthroughsintermsofthesupportingfields.Inaddition,thedevelopmentofthedieseloutboardenginemadephasedprogressandpassedRCD,MEDEUcertification,andCCScertification.Intermsofmarketservices,domesticandoverseassalesmaintainedthestabilityofthefoundationandexpandednewmarkets.Thesingle-cylinderorderlycompletedtheswitchofaccessoriesthatmettheNationalEmissionStandardIVforNon-RoadEnginesofmainenginefactoriesandpromotedthesalesofproductsinthenon-agriculturefieldsbyactiveguidanceandnetworkoptimization.Intermsofmulti-cylinderengines,themarketshareofaccessoriesinthekeyfieldswasincreased.Inaddition,theforeigntrademarketmaintainedsalesgrowthincoremarketsegmentsandmadebreakthroughsintheemergingmarket.TheCompanysteppedupeffortstomanagetheappraisalsofservicesitesintheserviceprocessandfurtheroptimizedtheresourceallocationoftheservicesites.TheCompanycompletedthefunctioniterationanddevelopmentoftheremotemonitoringplatformofengines,whichwillprovideeffectivetechnicalsupportfortheCompany’sproductdesignanddevelopmentand

theafter-salesservicesofrepair,replacementandreturn.Intermsofqualitymanagement,theCompanysteppedupeffortstodevelopthequalitymanagementsystem,implementedthequalityresponsibilitysystem,strengthenedthequalitylosscontroloftheentireproductionandmanufacturingprocess,andeffectivelyreducedqualityloss.TheCompanyorganizedtoimplementthemanagementreview,internalreviewofthequalitysystem,productreview,andprocessreviewandproperlyadjustthecontentofthesystemdocumentsbasedonreality,andsuccessfullypassedtheannualexternalauditofthequalitymanagementsystem.Intermsofinternalmanagement,theCompanycontinuedtocarryoutthethree-yearactionofspecialsafetyrectificationofsafetyproduction,promotedthe“safetycode”inallrespects,madethehiddenriskscreeningandgovernanceinstitutionalizedandstandardized,andsuccessfullypassedtheISO14001environmentalsystemsupervisionandreviewduringtheyear.TheCompanyinitiatedthestandardimplementationofthemanagementsystemoftheintegrationof“informationtechnologyandindustrialization”withintheyearandsuccessfullypassedtheassessmentoftheAA-gradeintegrationof“informationtechnologyandindustrialization”managementsystem.DuringtheReportingPeriod,theCompanyadoptedmultiplemeasurestoreducecostsandincreaseefficiencytocopewiththecontinuousriseinrawmaterialpricesathomeandabroad.GreateffortsweremadetoresolutelycrackdownoninfringementsinthemarketandtheCompany’sintellectualpropertywaseffectivelysafeguardedthroughinnovativemeasures.IntheReportingPeriod,theCompanyacquired41.5%oftheequityofZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.bybidding.On16May2022,ZhenjiangSiyangconvenedageneralmeetingofshareholders,ameetingoftheBoardofDirectorsandameetingoftheSupervisoryCommitteetore-electmembersfortheBoardofDirectors,theSupervisoryCommitteeandmanagement.ZhenjiangSiyanghasbeenincludedintheconsolidatedfinancialstatementsoftheCompany.

2.RevenueandCostAnalysis

(1)BreakdownofOperatingRevenue

Unit:RMB

20222021Change(%)
OperatingrevenueAs%oftotaloperatingrevenue(%)OperatingrevenueAs%oftotaloperatingrevenue(%)
Total2,182,043,095.61100%2,452,430,515.60100%-11.03%
Byoperatingdivision
Internalcombustionengines2,145,567,983.9598.33%2,404,119,747.0698.03%-10.75%
Other36,475,111.661.67%48,310,768.541.97%-24.50%
Byproductcategory
Dieselengines1,971,005,207.8890.33%2,241,032,641.0591.38%-12.05%
Gasolineengines148,144,749.686.79%149,717,934.826.10%-1.05%
Other62,893,138.052.88%61,679,939.732.52%1.97%
Byoperatingsegment
Domestic1,857,845,869.4885.14%2,038,317,678.9783.11%-8.85%
Overseas324,197,226.1314.86%414,112,836.6316.89%-21.71%
Bymarketingmodel
Distribution770,975,653.3035.33%689,413,386.9728.11%11.83%
Directsales1,411,067,442.3164.67%1,763,017,128.6371.89%-19.96%

(2)OperatingDivision,ProductCategory,OperatingSegmentorMarketingModelContributingover10%ofOperatingRevenueorOperatingProfit

√Applicable□Notapplicable

Unit:RMB

OperatingrevenueCostofsalesGrossprofitmarginYoYchangeinoperatingrevenue(%)YoYchangeincostofsales(%)YoYchangeingrossprofitmargin(%)
Byoperatingdivision
Internalcombustionengines2,145,567,983.951,924,209,350.4810.32%-10.75%-6.22%-4.33%
Byproductcategory
Dieselengines1,971,005,207.881,795,214,080.088.92%-12.05%-6.77%-5.16%
Gasolineengines148,144,749.68125,625,016.8515.20%-1.05%-2.60%1.35%
Byoperatingsegment
Domestic1,857,845,869.481,633,460,073.5512.08%-8.85%-3.08%-5.23%
Overseas324,197,226.13315,216,962.972.77%-21.71%-21.69%-0.03%
Bymarketingmodel
Distribution770,975,653.30678,293,018.2112.02%11.83%18.49%-4.95%
Directsales1,411,067,442.311,270,384,018.319.97%-19.96%-16.17%-4.07%

CorebusinessdataoftheprioryearrestatedaccordingtothechangedstatisticalcaliberfortheReportingPeriod:

□Applicable√Notapplicable

(3)WhetherRevenuefromPhysicalSalesIsHigherthanServiceRevenue

√Yes□No

OperatingdivisionItemUnit20222021Change(%)
DieselenginesUnitsalesUnit458,300596,279.00-23.14%
OutputUnit439,604601,253.00-26.89%
InventoryUnit64,86783,563.00-22.37%

Anyover30%YoYmovementsinthedataaboveandwhy:

□Applicable√Notapplicable

(4)ExecutionProgressofMajorSignedSalesandPurchaseContractsintheReportingPeriod

□Applicable√Notapplicable

(5)BreakdownofCostofSales

Unit:RMB

ProductcategoryItem20222021Change(%)
CostofsalesAs%oftotalcostofsales(%)CostofsalesAs%oftotalcostofsales(%)
DieselenginesRawmaterials1,560,381,852.9180.07%1,659,710,451.0779.61%-5.98%
DieselenginesLaborcost229,434,494.8511.77%240,110,930.7811.52%-4.45%
DieselenginesDepreciation56,624,131.582.91%71,198,110.783.42%-20.47%
DieselenginesEnergy15,340,866.190.79%30,044,125.271.44%-48.94%

(6)ChangesintheScopeofConsolidatedFinancialStatementsfortheReportingPeriod

√Yes□NoTheSixthExtraordinaryMeetingoftheBoardofDirectorsin2021heldbytheCompanyon28October2021deliberatedonandapprovedtheProposalonParticipationinBiddingfor41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,authorizingtheManagementoftheCompanytoparticipateinbiddingfor41.5%equityinterestinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.(hereinafterreferredtoas"ZhenjiangSiyang")thathadbeenputoutforsalebyJiangsuKedaAssetsMarketingCo.,Ltd.(hereinafter,“KedaAssets”).On12January2022,JiangsuAssetsandEquityExchangeCo.,Ltd.issuedtheConfirmationofTransactionontheTransferof41.5%EquityInterests(CorrespondingtoCapitalContributionofRMB830,000)inZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.TheCompanywonthebidforthe41.5%equityinterestsinZhenjiangSiyangatapriceofRMB33,520,800.00.On23February2022,theCompanysignedtheContractonTransferofState-ownedPropertyRightswithKedaAssets.On9March2022,ZhenjiangSiyanghascompletedtherelevantregistrationalterationformalitieswiththecompetentindustrialandcommercialadministration.On16May2022,ZhenjiangSiyangheldmeetingsofshareholders,theBoardofDirectorsandtheSupervisoryCommitteetoelectandappointnewmembersfortheBoardofDirectors,theSupervisoryCommitteeandmanagement,withtheCompanytakingoverhalfoftheseatsintheBoardofZhenjiangSiyang.Assuch,ZhenjiangSiyanghasbeenincludedintheconsolidatedfinancialstatementsoftheCompany,bringingthenumberofconsolidatedsubsidiariestoeight.

(7)MajorChangestotheBusinessScopeorProductorServiceRangeintheReportingPeriod

□Applicable√Notapplicable

(8)MajorCustomersandSuppliersMajorcustomers:

Totalsalestotopfivecustomers(RMB)1,054,121,258.48
Totalsalestotopfivecustomersas%oftotalsalesoftheReportingPeriod(%)48.31%
Totalsalestorelatedpartiesamongtopfivecustomersas%oftotalsalesoftheReportingPeriod(%)0.00%

Informationabouttopfivecustomers:

No.CustomerSalesrevenuecontributedfortheReportingPeriod(RMB)As%oftotalsalesrevenue(%)
1Customer1550,073,305.2125.21%
2Customer2207,614,866.659.51%
3Customer3174,674,496.408.01%
4Customer466,280,122.003.04%
5Customer555,478,468.222.54%
Total--1,054,121,258.4848.31%

Otherinformationaboutmajorcustomers:

□Applicable√NotapplicableMajorsuppliers:

Totalpurchasesfromtopfivesuppliers(RMB)288,156,794.05
Totalpurchasesfromtopfivesuppliersas%oftotalpurchasesoftheReportingPeriod(%)18.39%
Totalpurchasesfromrelatedpartiesamongtopfivesuppliersas%oftotalpurchasesoftheReportingPeriod(%)0.00%

Informationabouttopfivesuppliers:

No.SupplierPurchaseintheReportingPeriod(RMB)As%oftotalpurchases(%)
1Supplier1128,212,300.008.18%
2Supplier257,147,375.283.65%
3Supplier343,433,746.372.77%
4Supplier435,757,706.622.28%
5Supplier523,605,665.791.51%
Total--288,156,794.0518.39%

Otherinformationaboutmajorsuppliers:

□Applicable√Notapplicable

3.Expense

Unit:RMB

20222021Change(%)Reasonforanysignificantchange
Sellingexpense102,630,223.71117,242,290.32-12.46%
Administrativeexpense119,511,189.7298,890,284.2220.85%
Financecosts-21,589,704.631,203,615.80——Increasedexchangegainsandinterestincome
R&Dexpenses81,239,597.0682,390,284.14-1.40%

4.R&DInvestments

√Applicable□Notapplicable

MajorR&DprojectPurposeProgressSpecificobjectivesExpectedimpactontheCompany
Developmentprojectofthelightweight,low-emissiondieselengineofcommonrailseriesDevelopingthemulti-cylinderdieselenginewithsmallcylinderdiametersthatcanmeetthesupportingrequirementsofricetransplanters,plantprotectionspraymachines,tractors,smallconstructionmachinery,andhorticulturalmachineryInprogressOptimizingandupgradingbasedontheMseriesdieselengine.Increasingenginepowerbyadoptingthehigh-pressurecommonrailsystem,electroniccontroltechnicalroute,superchargerandpost-processingtechnologytomeettheNationalEmissionStandardIVforNon-RoadVehiclesandexpandmarketsupportingfields.Aftertheimplementationoftheproject,theupgradeddieselenginewillhaveabroadandgoodmarketapplicationprospectsandwillbemorecompetitiveinthemarket.
ThepowerandassemblyR&DprojectofdieseloutboardenginesDevelopingefficient,eco-friendly,andenergy-savingpowerandassemblyofdieseloutboardengines.InprogressMakinganoptimaldesignoftheengine’sstructureandperformancetosignificantlyimproveproductindicatorssuchasreliability,fuelconsumption,andemissiontomeettheadvancedlevelofsimilarproductsabroadaswellastherequirementsoftheNationalEmissionStandardIVforNon-roadVehicles.Aftertheimplementationoftheproject,theproductwillmeettherequirementsoftheNationalEmissionStandardIVforNon-roadVehiclesandwillhaveextensiveapplicationscenariosandbroadmarketprospects.
DevelopmentDevelopingInRealizingenergysaving,Afterthe
projectofthespecialdieselengineofthehighhorsepoweroutboardenginesefficient,eco-friendly,andenergy-savingoutboardenginesprogressmeetingtherequirementsoftheNationalEmissionStandardIVforNon-roadVehicles,andmeetingthesupportingrequirementsofvarioustypesofsmallfisherymachinerybyapplyinghigh-performancetechnologiessuchasdieselengineenergysaving,noisereduction,environmentalprotection,materialsaving,andservicelifeextension.implementationoftheproject,theproductwillhavesalientadvantagesintermsofpowerperformance,safety,economicefficiency,andenvironmentalprotectionandmeettherequirementsoftheNationalEmissionStandardIVforNon-roadVehicles.
DevelopmentprojectofthespecialdieselengineofthemotorcycleDevelopinglightweightsingle-cylinder,water-cooled,high-speeddieselenginestomeetthepowerrequirementsofmotor-tricycleinthemarketInprogressMakingmajoroptimizationofthedieselengine’sstructureandperformancetomeettheadvancedlevelofsimilarproductsabroadaswellastherequirementsoftheNationalEmissionStandardIVforThree-wheelers.DiversifyingtheCompany’sproducts,furtherexpandingthepowermarket,andmeetingnon-emissionregulatoryrequirementscanbringaboutnewgrowthpointsfortheCompany’sbenefits.
Developmentprojectof4G29dieselengineDevelopingdieselenginesthathavehigherperformanceandmeettheemissionrequirementsInprogressFurthermakingdieselenginesmoretechnicalandloweringtheharmfulsubstanceemissionsofdieselenginestomaketheirindicatorsbetter,meetdomesticallyadvancedlevelintermsofeconomicefficiencyandpowerperformanceandmeettherequirementsoftheNationalEmissionStandardIVforNon-roadVehicles.Aftertheimplementationoftheproject,theupgradeddieselenginewillmeettherequirementsoftheNationalEmissionStandardIVforNon-roadVehiclesanddrivetheCompany’snon-roadvehicletechnologiestobemorematureandwell-developed.
Developmentprojectofsingle-cylinderdieselengineswithamechanicalpumpthatcanmeettheNationalDevelopingsingle-cylinderdieselengineswithamechanicalpumpthathavehigherperformanceandmeettheNationalEmissionStandardIVforNon-roadInprogressImprovingdieselengine’spowerperformance,economicefficiencyoffuel,andotherperformanceindicators,aswellasservicelifeandmakingtheemissionindicatorsmeettheNationalEmissionStandardIVforNon-roadVehiclesAftertheimplementationoftheproject,theproductwillmeettherequirementsoftheNationalEmissionStandardIVforNon-roadVehiclesintermsoftheemissionindicatorsandmeetthe
EmissionStandardIVforNon-roadVehiclesVehiclessupportingrequirementsofmachinery,bringingaboutnewgrowthpointsfortheCompany’sbenefits.
DevelopmentofV402dieselengineDevelopingahigher-performancelightmulti-cylinderdieselenginethatmeetstheemissionrequirementsInprogressConductingstructuraloptimizationofdieselenginecomponentstoimproveproductperformanceandreliability.Aftertheimplementationoftheproject,theproductwillmeettherequirementsofnon-roadChinaIVvehicleemissionregulations,thesupportingrequirementsofmachinery,andmarketdemand.
DevelopmentofD15dieseloutboardengineDevelopingmoreefficient,environmentallyfriendlyandenergy-savingdiesel-poweredproductsInprogressConductingmajordesignoptimizationoftheenginestructureandperformancetoimprovethereliability,fuelconsumption,emissionsandotherindicatorsoftheproduct,soastoreachtheadvancedlevelofsimilarforeignproducts.Aftertheimplementationoftheproject,theproductwillmeettherequirementsofnon-roadChinaIVvehicleemissionregulationsandopenupthemarketofshipmachinery.
Developmentofdiesel-electrichybridproductsDevelopingefficientandenvironmentallyfriendlydiesel-poweredproductsInprogressImprovingtheemissioncharacteristicsandeconomiccharacteristicsofdiesel-electrichybriddieselenginestoenhancetheenergyefficiency,enduranceandreliability.Aftertheimplementationoftheproject,theproductmeetsthemarketdemandandmakesthegoodsqualityandlogisticsefficiencyofthecoldchaintimely,safeandefficient,providingawhole-proceduretemperatureandqualitymanagementsolution.

DetailsaboutR&Dpersonnel:

20222021Change(%)
NumberofR&Dpersonnel236264-10.61%
R&Dpersonnelas%of8.89%9.55%-0.66%
totalemployees
EducationalbackgroundofR&Dpersonnel
Bachelor’sdegree101117-13.68%
Master’sdegree713-46.15%
AgestructureofR&Dpersonnel
Below302534-26.47%
30~408495-11.59%

DetailsaboutR&Dinvestments:

20222021Change(%)
R&Dinvestments(RMB)81,239,597.0682,390,284.14-1.40%
R&Dinvestmentsas%ofoperatingrevenue3.72%3.36%0.36%
CapitalizedR&Dinvestments(RMB)0.000.00——
CapitalizedR&Dinvestmentsas%oftotalR&Dinvestments0.00%0.00%——

ReasonsforanysignificantchangeinthecompositionofR&Dpersonnelandtheimpact:

□Applicable√NotapplicableReasonsforanysignificantYoYchangeinthepercentageofR&Dexpenseinoperatingrevenue:

□Applicable√NotapplicableReasonsforanysharpvariationinthepercentageofcapitalizedR&Dexpenseandrationale:

□Applicable√Notapplicable

5.CashFlows

Unit:RMB

Item20222021Change(%)
Subtotalofcashgeneratedfromoperatingactivities2,150,597,784.381,878,728,640.4714.47%
Subtotalofcashusedinoperatingactivities1,785,667,506.542,145,052,419.77-16.75%
Netcashgeneratedfrom/usedinoperatingactivities364,930,277.84-266,323,779.30——
Subtotalofcashgeneratedfrominvestingactivities944,067,348.19385,166,151.68145.11%
Subtotalofcashusedininvestingactivities1,082,020,854.62850,680,343.3427.19%
Netcashgeneratedfrom/usedininvestingactivities-137,953,506.43-465,514,191.66——
Subtotalofcashgeneratedfromfinancingactivities135,437,700.65711,844,747.79-80.97%
Subtotalofcashusedinfinancingactivities114,312,925.5445,328,892.65152.19%
Netcashgeneratedfrom/usedinfinancingactivities21,124,775.11666,515,855.14-96.83%
Netincreaseincashandcash247,948,744.46-67,537,318.91——

Explanationofwhyanyofthedataabovevariessignificantly:

√Applicable?NotapplicableThesignificantyear-on-yearchangeinnetcashgeneratedfrom/usedinoperatingactivitieswasprimarilybecausetheCompanystrengthenedthecollectionofpaymentsbycustomers,destockedduetotherisingemissionstandards(resultingindecreasedprocurementexpenditure),anddiscountedcertainbankacceptancenotesfromcustomerswithhighcreditlevelsforcashmanagementpurposesinpursuitofhigherincomeintheReportingPeriod.Thesignificantyear-on-yearchangeinnetcashgeneratedfrom/usedininvestingactivitieswasprimarilyduetotheCompany’sacquisitionofa41.5%interestinZhenjiangSiyang,acapitalincreasetoJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,andtheproperuseofidlefundsforcashmanagementpurposes,intheReportingPeriod.Thesignificantyear-on-yearchangeinnetcashgeneratedfrom/usedinfinancingactivitieswasprimarilybecausetheCompanyraisedagrossamountofRMB634,999,936.40(netproceeds:RMB620,665,733.97)inaprivateplacementof144,318,181sharesoftheRMB-denominatedordinarystock(A-stock)lastyear,whiletherewerenosuchfinancingactivitiesduringtheReportingPeriod.ReasonforanybigdifferencebetweenthenetoperatingcashflowandthenetprofitforthisReportingPeriod

√Applicable?NotapplicableThebigdifferencebetweenthenetoperatingcashflowandthenetprofitforthisReportingPeriodwasmainlybecauseoftheimpactonthecurrentincomeofthefairvaluechangesofthefinancialassetsheldbytheCompany,andthediscountingofcertainbankacceptancenoteswithhighcreditlevels.VAnalysisofNon-CoreBusinesses

√Applicable?Notapplicable

Unit:RMB

equivalents

Amount

AmountAs%ofgrossprofitSourceRecurrentornot
Returnoninvestment7,969,467.199.75%StockdividendsandincomefromcashmanagementYes
Gains/lossesonchangesinfairvalue145,243,457.17177.75%increasedfairvalueoftheCompany’sinterestinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,aswellasthedecreasedpricesofthesharesheldbywholly-ownedsubsidiaryHorizonInvestmentinJiangsuLianceElectromechanicalTechnologyCo.,Ltd.andKailongHighTechnologyCo.,Ltd.No
Assetimpairmentloss-14,367,197.27-17.58%InventoryvaluationlossNo
Non-operatingincome4,257,942.655.21%NegativegoodwillandamountsthatrequirenopaymentduetobusinesscombinationnotundercommoncontrolNo
Non-operatingexpense618,463.560.76%Lossonretirementofnon-currentassetsNo

VIAnalysisofAssetsandLiabilities

1.SignificantChangesinAssetComposition

Unit:RMB

31December20221January2022Changeinpercentage(%)Reasonforanysignificantchange
AmountAs%oftotalassetsAmountAs%oftotalassets
Monetaryassets930,013,350.9717.82%707,966,678.7414.57%3.25%Thestrengthenedcollectionofpaymentsbycustomers,andthediscountingofcertainbankacceptancenotesfromcustomersintheReportingPeriod.
Accountsreceivable370,322,179.777.10%375,209,126.487.72%-0.62%
Inventories571,996,881.7410.96%651,083,758.1813.40%-2.44%
Investmentproperty42,160,779.650.81%44,597,255.210.92%-0.11%
Fixedassets720,061,387.7613.80%402,915,521.658.29%5.51%Majority-ownedsubsidiaryChangchaiMachinery’slightweightengineandcastingrelocationprojectwastransferredfromconstructioninprogresstofixedassetsintheReportingPeriod.
Constructioninprogress30,281,547.560.58%270,305,690.915.56%-4.98%Majority-ownedsubsidiaryChangchaiMachinery’slightweightengineandcastingrelocationprojectwastransferredfromconstructioninprogresstofixedassetsintheReportingPeriod.
Short-termborrowings115,437,700.652.21%73,971,466.651.52%0.69%CertainbankacceptancenoteswithlowcreditlevelswerediscountedintheReportingPeriod,whichwereundueattheperiod-end.
Contractliabilities32,843,692.830.63%26,864,081.970.55%0.08%

Indicatewhetheroverseasassetstakeupahighpercentageintotalassets.

□Applicable√Notapplicable

2.AssetsandLiabilitiesatFairValue

√Applicable□Notapplicable

Unit:RMB

ItemBeginningamountGain/lossonfair-valuechangesintheReportingPeriodCumulativefair-valuechangeschargedtoequityImpairmentallowancefortheReportingPeriodPurchasedintheReportingPeriodSoldintheReportingPeriodOtherchangeEndingamount
Financialassets
1.Held-for-tradingfinancialassets(derivativefinancialassetsexclusive)404,053,261.57-42,836,741.19969,060,767.00960,173,684.81370,103,602.57
4.Investmentinotherequityinstruments779,877,646.53770,990,240.08955,560,240.08
Subtotaloffinancialassets1,183,930,908.10-42,836,741.19770,990,240.08969,060,767.00960,173,684.811,325,663,842.65
Other150,398,226.39187,411,361.5475,000,000.00412,809,587.93
Totalofabove1,334,329,134.49144,574,620.35770,990,240.081,044,060,767.00960,173,684.811,738,473,430.58
Financialliabilities0.000.00

SignificantchangestothemeasurementattributesofthemajorassetsintheReportingPeriod:

□Yes√No

3.RestrictedAssetRightsasatthePeriod-End

ItemEndingcarryingvalueReasons
Monetaryassets95,662,384.92Securitydepositsassociatedwithbankacceptancenotes,environment,etc.
Buildings1,530,890.90Collateralforbankloan
Landuseright879,275.35Collateralforbankloan
Plantandequipment31,222,420.22Collateralforbankloan
Paymentobligationsinrelationtodiscountednotesthatwereundue110,000,000.00
Paymentobligationsinrelationtotransferrednotesthatwereundue66,395,231.83
Total305,690,203.22

VIIInvestmentsMade

1.TotalInvestmentAmount

√Applicable□Notapplicable

InvestmentsmadeinReportingPeriod(RMB)Investmentsmadeinsameperiodoflastyear(RMB)+/-%
108,520,800.00160,000,000.00-32.17%

2.MajorEquityInvestmentsMadeintheReportingPeriod

√Applicable□Notapplicable

Unit:RMB

InvesteeMainbusinessInvestmentmethodInvestmentamountShareholdingpercentageCapitalresourcesPartnerInvestmenttermTypeofproductsProgressasofthebalancesheetdateEstimatedincomeProfitsorlossesofinvestmentintheReportingPeriodInvolvinginlawsuitornotDisclosuredate(ifany)Disclosureindex(ifany)
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.ManufacturingandmarketingofdieselenginesetsforshipsAcquisition33,520,800.0041.50%Self-fundedNoneLong-termManufacturingandmarketingofdieselenginesetsforshipsTransactioncompletedwiththerelevantequityintereststransferred0.001,904,132.58Not29October20212021-068
JiangsuHorizonNewEnergyTechnologyCo.,Ltd.LithiumdiaphragmCapitalincrease75,000,000.005.36%Self-fundedNoneLong-termLithiumdiaphragmOwnershipchangeregisteredwiththeindustrialandcommercialadministration0.00186,000,000.00Not27August20222022-049
Total----108,520,800.00------------0.00187,904,132.58------

3.MajorNon-EquityInvestmentsOngoingintheReportingPeriod

□Applicable√Notapplicable

4.FinancialInvestments

(1)SecuritiesInvestments

√Applicable□Notapplicable

Unit:RMB

VarietyofCodeofNameofInitialAccountingBeginningGain/lossonAccumulatedPurchasedinSoldintheGain/lossinEndingcarryAccountinFunding
securitysecuritysecurityinvestmentcostmeasurementmethodcarryingamountfairvaluechangesintheReportingPeriodfairvaluechangesrecordedinequitytheReportingPeriodReportingPeriodtheReportingPeriodingamountgtitlesource
Domestic/foreignstock600166FotonMotor41,784,000.00Fairvaluemethod497,080,000.000.00364,261,000.000.000.000.00406,045,000.00InvestmentinotherequityinstrumentsSelf-funded
Domestic/foreignstock600919BankofJiangsu42,786,000.00Fairvaluemethod136,422,000.000.00127,800,000.000.000.000.00170,586,000.00InvestmentinotherequityinstrumentsSelf-funded
Domestic/foreignstock300912KailongHighTechnology20,001,268.00Fairvaluemethod24,136,339.00-10,543,928.000.000.000.00-10,543,928.0013,592,411.00Held-for-tradingfinancialassetsSelf-funded
Domestic/foreignstock688113LianceTechnology7,200,000.00Fairvaluemethod87,840,000.00-27,777,600.000.000.000.00-27,777,600.0060,062,400.00Held-for-tradingfinancialassetsSelf-funded
Domestic/foreignstock605368LantianGas160,744.76Fairvaluemethod289,000.00-42,000.000.000.000.00-42,000.00247,000.00Held-for-tradingfinancialassetsSelf-funded
Dom8328Stars3,600Fair9,675-4,830.000.000.00-4,834,83HeldSelf-
estic/foreignstock85ScienceandTechnology,000.00valuemethod,000.007,500.007,500.007,500.00-for-tradingfinancialassetsfunded
Total115,532,012.76--755,442,339.00-43,201,028.00492,061,000.000.000.00-43,201,028.00655,370,311.00----

(2)InvestmentsinDerivativeFinancialInstruments

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

5.UseofRaisedFunds

√Applicable□Notapplicable

(1)OverallUseofRaisedFunds

√Applicable□Notapplicable

Unit:RMB’0,000

Yearforfund-raisingMethodoffund-raisingTotalraisedfundsTotalraisedfundsthathavebeenusedinthecurrentperiodTotalraisedfundsthathavebeenusedaccumulativelyTotalraisedfundswithalteredpurposesduringtheReportingPeriodTotalaccumulativeraisedfundswithalteredpurposesProportionoftotalaccumulativeraisedfundswithalteredpurposesTotalraisedfundsthathavenotbeenusedyetUseandownershipchangeofunusedraisedfundsRaisedfundsthathavebeenleftunusedforovertwoyears
2021Non-publicoffering63,500.008,944.4534,682.810.000.000.00%28,817.19Specialaccountfordepositingraisedfunds0.00
Total--63,500.008,944.4534,682.810.000.000.00%28,817.19--0.00
Explanationoftheoveralluseofraisedfunds
On17December2020,theCompanyreceivedtheReplyConcerningtheApprovaloftheNon-publicOfferingofSharesofChangchaiCo.,Ltd.(CSRCPermit[2020]No.3374)fromtheChinaSecuritiesRegulatoryCommission,whichapprovedthenon-publicofferingofupto168,412,297sharesoftheCompany.OnJune11,2021,thesubscribersofthisnon-publicofferinghavefullyremittedthesubscriptionfundstothebankaccountdesignatedbythesponsorinstitution,andthetotalamountoffundsraisedwasRMB634,999,996.40.AfterthecapitalverificationbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),theCapitalVerificationReportoftheFundsRaisedbytheNon-publicIssuanceofChangchaiCo.,Ltd.(S.G.W[2021]B061)wasissued.Withtheissuanceexpensesdeducted,theactualnetfundsraisedwereRMB620,665,733.97.OnJune15,2021,theaforementionedraisedfundswereremittedtothespecialaccountsetupbytheCompanyforraisedfundsfromthenon-publicofferingofshares.AfterthecapitalverificationbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),theCapitalVerificationReportoftheFundsRaisedbytheNon-publicIssuanceofChangchaiCo.,Ltd.(S.G.W[2021]B062)wasissued.Theraisedfundshaveallbeendepositedinthespecialaccountfortheraisedfundsandatripartitesupervisionagreementhasbeensignedwiththesponsorinstitutionandtheaccountopeningbankforthefundsraised.ThereisnomaterialdifferencebetweenthetripartitesupervisionagreementandthemodeltripartitesupervisionagreementofShenzhenStockExchange,andtheCompanystrictlycomplieswithitwhenusingtheraisedfunds.Asof31December2022,RMB346.8281millionofraisedfundshasbeenusedcumulatively,withtheunusedraisedfundsbeingRMB288.1719million.

(2)CommittedProjectsofRaisedFunds

√Applicable□Notapplicable

Unit:RMB’0,000

CommittedinvestmentprojectsandinvestmentofexcessiveraisedfundsWhetherprojectshavebeenaltered(includingpartialalternation)TotalcommittedinvestmentwithraisedfundsAdjustedtotalinvestmentamount(1)TheinvestmentamountduringtheReportingPeriodAccumulativeinvestmentamountasoftheendoftheReportingPeriod(2)InvestmentprogressasoftheendoftheReportingPeriod(3)=(2)/(1)DatewhentheprojectsarereadyfortheirintendeduseBenefitsrecordedduringtheReportingPeriodWhethertheestimatedbenefitsarereachedWhethertherearematerialchangesintheprojectfeasibility
Committedinvestmentprojects
RelocationprojectoflightenginesandcastingNo54,766.7154,766.718,311.1732,418.3259.19%31May2022-1,639.88NoNo
InnovationcapacitybuildingprojectofthetechnicalcenterNo8,733.297,299.86633.28759.2110.40%31December2023NotapplicableNotapplicableNo
Subtotalof--63,5062,068,944.33,17-----1,639.88----
committedinvestmentprojects0.006.57457.53
Investmentofexcessiveraisedfunds
Notapplicable
Total--63,500.0062,066.578,944.4533,177.53-----1,639.88----
Casesandreasonsforfailingtoreachtheplannedprogressorpredictedreturn(byspecificprojects)ThereasonsforthefailuretorealizethebenefitsoftherelocationprojectoflightenginesandcastingduringtheReportingPeriod:TheprojectmetthehopedconditionforuseinMay2022.However,duetomarketfactors,theproductionlinefailedtoachievetheexpectedproductionvolume.Thesalesrevenueoftheproductswasinadequatetocoverthecostsofthedepreciationofnewfixedassetsandadministrativeexpenses.Asaresult,theprojectfailedtoachievetheanticipatedbenefitasof31December2022.Thereasonsfortheslowpaymentprogressoftherelocationprojectoflightenginesandcasting:Asof31December2022,theprojectdidnotcompletethefinalaccountauditandfinalacceptanceinspectionofequipment,compromisingthepaymentprogress.Asof31March2023,thepaymentamountreachedRMB476.1310million,accountingfor86.94%ofthetotalamount.Theunpaidfundsmainlyrefertothesupportingworkingcapitalandthebalanceoftheremainingunacceptedequipment.Thereasonsfortheslowpaymentprogressoftheinnovationcapacityconstructionofthetechnologycentre:Asof31December2022,halfoftheconstructionperiodoftheinnovationcapacityconstructionofthetechnologycentrewaspassedandsomeR&Dobjectiveswereachieved.However,thepaymentprogressoftheprojectwasslowforthefollowingspecificreasons:1.Fromthebeginningoftheprojectinitiation,theCompanyadheredtotheprinciplesofsavingcapitalandincreasingtheassetutilisationrate.ItutilisedexistingequipmenttocompletesomeoftheR&Dprocesses,savingsomeexpensesofequipment.2.Thebalanceofsomesignedcontractswasnotpaid.2.Thebalanceofsomesignedcontractswasnotpaid.
ExplanationsofthematerialchangesintheprojectfeasibilityNotapplicable
Amount,use,anduseprogressofexcessiveraisedfundsNotapplicable
ImplementationoflocationchangesintheinvestmentprojectswiththeraisedfundsApplicable
OccurredduringtheReportingPeriod
TheProposalonAddingImplementationLocationtothePrivatePlacementRaisedFundsInvestmentProjectofInnovationCapacityBuildingoftheTechnicalCentrewasapprovedatthe13thMeetingofthe9thBoardofDirectorsandthe12thMeetingofthe9thSupervisoryCommitteeoftheCompanyon22August2022.TheCompanydecidedtoaddthesitesofcertainbranchesoftheCompanyastheparentandwholly-ownedsubsidiaryChangchaiMachineryaslocationstoplacetheR&Dequipmentand
implementtheR&Dproject.Thischangewillnotre-purposetheraisedfundsandwillhelpcarryforwardthetechnicalinnovationproject.
ImplementationofmethodadjustmentstotheinvestmentprojectswiththeraisedfundsNotapplicable
EarlyinvestmentandplacementconcerningtheinvestmentprojectswiththeraisedfundsApplicable
Priortotheavailabilityoftheraisedfunds,inordertoensurethesmoothimplementationoftheinvestmentprojectswithraisedfunds,theCompanyuseditsownfundstoinvestinpartoftheinvestmentprojectswithraisedfundsandpaidpartoftheissuanceexpenses.Asof17June2021,thecumulativeamountoftheCompany'sself-financingfundspre-investedintheinvestmentprojectswithraisedfundswasRMB181,803,327.94,theamountofissuanceexpensesadvancedwasRMB2,358,490.56,totalingRMB184,161,818.50,andtheproposedreplacementamountwasRMB184,161,818.50.ThecapitalswereverifiedbytheGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),andtheVerificationReportonthePre-investmentofSelf-financingFundsintotheInvestmentProjectwithRaisedFundsandthePaymentofIssuanceExpensesbySelf-financingFundsofChangchaiCo.,Ltd.(S.G.W[2021]E1347)wasissuedon25June2021.On28June2021,theThirdInterimMeetingoftheBoardofDirectorsoftheCompanyin2021deliberatedandapprovedtheProposalonReplacingtheFundsPre-investedintheProjectandAdvancedIssuanceExpenseswiththeRaisedFunds,agreeingtousetheraisedfundsfromthenon-publicofferingofsharestoreplacetheself-financingfundstotalingRMB184,161,818.50thathadbeenpre-investedintheprojectpriortotheavailabilityoftheraisedfunds.Inaddition,XingyeSecuritiesCo.,Ltd.andDonghaiSecuritiesCo.,Ltd.issuedaverificationopinionontheuseofraisedfundstoreplaceself-financingfundsthathadbeeninvestedinadvanceintheprojectswithraisedfunds.Fordetails,seetheAnnouncementontheUseofRaisedFundstoReplacePre-investedProjectFundsandAdvancedIssueExpenses(AnnouncementNo.2021-036)publishedonCninfo(http://www.cninfo.com.cn)on30June2021.
TemporaryreplenishmentofworkingcapitalwiththeidleraisedfundsNotapplicable
SurplusraisedfundsforprojectimplementationandreasonsforthesurplusNotapplicable
UseandownershipchangeofunusedraisedSomearedepositedinthespecialaccountforraisedfundsandsometemporarilyidleraisedfundsareusedtopurchasewealthmanagementproducts
funds
Problemsintheuseofraisedfundsanddisclosure,orothercasesOn13July2021,theFourthInterimMeetingoftheBoardofDirectorsoftheCompanyin2021deliberatedandapprovedtheProposalonChangingtheImplementationEntityofSomeInvestmentProjectswithRaisedFunds,agreeingtochangetheimplementationentityoftheCompany'sinvestmentprojectswithfundsraisedthroughnon-publicofferingofshares,the"relocationprojectoflightenginesandcasting",fromChangchaiMachinery,awholly-ownedsubsidiaryoftheCompany,totheparentcompanyofChangchaiCo.,Ltd.Thematterdidnotchangetheuseandimplementationofthefundsraisedandwasnotasignificantchangeintheinvestmentprojectswithraisedfunds.TheProposalonAddingImplementationEntitytothePrivatePlacementRaisedFundsInvestmentProjectofRelocationofLightEnginesandCastingwasapprovedatthe13thMeetingofthe9thBoardofDirectorsandthe12thMeetingofthe9thSupervisoryCommitteeoftheCompanyon22August2022.Assuch,theCompanyhasaddedChangchaiMachineryasanotheroperatingentitywiththeCompanyastheparenttojointoperatetherelocationprojectforbetteroperationalflexibilityandstrongermarketcompetitiveness.

(3)AlteredProjectsofRaisedFunds

□Applicable√NotapplicableVIIISaleofMajorAssetsandEquityInterests

1.SaleofMajorAssets

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.SaleofMajorEquityInterests

□Applicable√NotapplicableIXMajorSubsidiaries

√Applicable□NotapplicableMajorfully/majority-ownedsubsidiariesandthoseminority-ownedsubsidiarieswithanover10%effectontheCompany’snetprofit:

Unit:RMB

NameRelationshipwiththeCompanyPrincipalactivityRegisteredcapitalTotalassetsNetassetsOperatingrevenueOperatingprofitNetprofit
ChangchaSubsidiarProductio55,063,000.00155,037,780,050,38190,631,8-9,633,75-8,323,25
iBenniuynofdieselengineaccessories13.451.9059.088.496.01
ChangchaiWanzhouSubsidiaryDieselengineassembly85,000,000.0070,361,727.2549,264,108.1234,281,252.72-658,955.59-652,107.80
HorizonInvestmentSubsidiaryExternalinvestmentandconsulting40,000,000.0094,446,635.5280,931,101.390.00-40,971,243.24-30,437,809.17
HorizonAgriculturalEquipmentSubsidiaryagriculturalmachineryproductofricetransplanteretc.10,000,000.009,071,468.38-15,054,466.603,513,853.60-4,209,358.80-4,209,358.80
ChangchaiRobinSubsidiaryGasolineenginesassembly37,250,000.00107,556,955.8986,383,808.82148,144,749.6812,403,784.3811,452,347.12
ChangchaiMachinerySubsidiaryInternalcombustionengineandrelatedaccessories300,000,000.00577,467,039.02277,452,220.4727,200,812.94-23,984,344.72-18,691,434.92
XingshengRealEstateManagementSubsidiaryRealestatemanagementservice1,000,000.002,614,116.80559,218.044,640,127.66197,076.51141,777.64
ZhenjiangSiyangSubsidiaryManufacturingandmarketingofdieselenginesforships2,000,000.00108,595,310.0688,360,053.8935,440,983.374,616,942.044,885,811.05

SubsidiariesobtainedordisposedofintheReportingPeriod:

√Applicable□Notapplicable

CompanynameHowthesubsidiarywasobtainedordisposedofintheReportingPeriodImpactontheCompany’soperationsandoperatingresults
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.TheCompanywonthebidofRMB33.5208millionofownfundsforthe41.5%equityinterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,whichwasputoutforsalebyJiangsuKedaAssetsMarketingCo.,Ltd.ThistransactionwillhelptheCompanyexpanditsproductchain,completeitsbusinessportfolioandpromotelong-termdevelopment.

Otherinformationaboutprincipalsubsidiariesandjointstockcompanies:N/A

XStructuredBodiesControlledbytheCompany

□Applicable√Notapplicable

XIProspects

1.DevelopmentstrategyoftheCompanyTheCompany’sdevelopmentstrategyistobaseonfarmmachinery,becomestrongerintheenginebusiness,exploremoremarketsanddevelopinascientificway.Thestate’sexistingpoliciesandnewpoliciesoncomprehensivelypromotingruralrevitalizationandacceleratingtobuildChinaintoanagriculturalpowerwillbringaboutsignificantandpositiveimpactsfortheindustry.TheCompanywillmakefulluseofthepolicy-baseddividendofstrongnationalsupportforagriculturalproductionanddevelopmentofagriculturalmachineryandcontinuetopromoteinnovativedevelopment,talentrecruitment,qualityimprovement,brandbuilding,andcapitalboosttoacceleratethetechnologicalupgradeoftraditionalpowerproducts,expandnewmarketsinnewfields,andalsotoachievediversifieddevelopmentoftheindustry.TheCompany’smaindevelopmentdirectionsareasfollows:

(1)AcceleratingtechnologicalupgradingandareaexpansionfortraditionalproductsFirst,theCompanywillcontinuetopromotethemassproductionofthefullrangeofmodelsthatmeettheNationalEmissionStandardIVforNon-roadVehicles.ItwillfurtheroptimizetheproductsthatmeettheNationalEmissionStandardIVforNon-roadVehiclesanddevelopitscapabilityofproduction,manufacturing,andafter-salesservicetoensurethattheproducts’powerperformance,economicefficiency,andreliabilitycanmeetmarketdemands.Second,traditionalproductswillbedevelopedinthedirectionofintelligentandnetworkedhigh-endproducts.Basedontheelectronic,networkedandintelligentcharacteristicsofthedevelopmentofagriculturalmachineryproducts,theCompanywillpromotetheapplicationofadvancedtechnologiessuchastheInternet,bigdata,artificialintelligenceandnewmaterialstoproductdevelopment,furtherimprovethedieselengines’functionsofintelligentcontrol,real-timemonitoringandbigdatacollectionandanalysis,acceleratetheR&Dofintelligentterminalsandhybridpower,promotetheproductstodeveloptowardsthehighend,strengthentheexistingadvantageousproducts,andraisetheaddedvalueofproductstobettermeetuserdemands.Third,traditionalproductswillbedevelopedintheterminaldirection.Thedieselengineisanintermediateproductandacoreproducttodevelopintheterminaldirection.Atpresent,theCompany’smainproductsaresmallandmedium-powerdieselenginesandgeneralgasolineengines,themarketofsupportingfacilitiesismainlydistributedinagriculturalmachinery,plantprotectionmachinery,constructionmachinery,shipbornemachinery,andothernon-roadareas.TheCompanyisnowfocusingonterminalfieldssuchasgeneratingsets,outboardengines,coldchains,fishingboats,andirontowers,withabroadprospect.Currently,theCompanyhassuccessfullyacquired41.5%oftheequityofZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,(“ZhenjiangSiyang”)becomingthelargestshareholderandgainingcontrol.ZhenjiangSiyangmainlyengagesinthedieselengineunitsoflifeboatsandrescueboats,whichisatop1brandofthemainengineoflifeboatsinthe

world.Meanwhile,theoutboardengineprojecthasmadephasedprogress,withthesmall-poweroutboardenginesgraduallycompletingmarketverification.Inaddition,adomesticandoverseasmarketsalessystemhasbeenbuilt,whichisconducivetoexpandingtheproductchainandimprovingthebusinessstructure.TheCompanywillmakefulluseofthecapitalplatformofthelistedcompanytocutinattherighttimethroughjointventurecooperation,mergersandacquisitions,restructuring,etc.,toacceleratetheextensionoftheindustrialchainandbuildnewcompetitiveadvantages.

(2)PromotingindustrialtransformationanddevelopmentinthedirectionofcombinationwithnewenergyTheirreversibledevelopmentofnewenergyhasimpactedinternalcombustionengineproducts,buttheopportunityexistsforalongtime.Whiletappingtheadvantagesoftraditionalindustries,internalcombustionenginesshoulddevelopwiththedevelopmentofnewenergyaswell.Atpresent,theCompanyhasinvestedinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.throughequityparticipation,mainlyengagingintheproductsoftheprojectofwet-processseparatorfilmforlithiumbatteries,withagooddevelopmentmomentum.Inthefuture,theCompanywillseizethedevelopmentopportunitiesofthe“carbonpeakingandcarbonneutrality”strategyraisedbythestate,continuetoincreaseitseffortstoexplorenewenergyareassuchaslithiumbatteryandhydrogenfuel,promotecooperationandpenetrationofrelatedgreenindustry,anddriveittoexpandtonewfields.

2.OperationplanfortheYear2023:

TheCompanywillconsolidatethetraditionalmarketofagriculturalmachinery,exploretheemergingareaofpower,raisequalitytocreatefineproductswithcoretechnologies,highlightefficiencybyintegratingresources,stimulatevitalitybydeepeningreform,andleveragecapitaltopromotedevelopment.In2023,salesrevenueisexpectedtobeRMB2.2billion,withrevenueofUSD52millionthroughexport.TheaboveoperationplandoesnotrepresenttheprofitforecastofY2023bythelistedcompany,andwhethercanberealizeddependsonvariousfactorsonthechangesofmarketconditionsandtheeffortlevelofthemanagementteam.Thereisalotofuncertainty,andinvestorsshouldpayspecialattentiononit.

3.PossiblefuturerisksandcountermeasuresoftheCompany

(1)Marketrisk:

Thetotalvolumeofthemarketwilldropduetofactorssuchassubsidypolicychange,tightsupplychain,upgradingoftheNationalEmissionStandardIVforNon-roadVehicles,andintensifiedexistingcompetition.Inrecentyears,theagriculturalmachineryindustryhasstillbeeninaperiodofdeepadjustment.Thedieselenginemarketfaceslimitedtotaldemand,thedeliverycapacityandenvironmentofproductsneedtobeimproved,andtheloweruserrevenuecompromisestheincreaseinthedemandside.Countermeasures:First,theCompanysolidifiesthetraditionalsupportingfields,furtherexpandstheCompany’sadvantagesinthefieldofagriculturalmachinery,andcontinuestopromotethemassproductionofthefullrangeofmodelsthatmeettheNationalEmissionStandardIVforNon-roadVehiclestoensurethecontinuoussupplylevelofsupplychainsandmeetmarketdemands.Second,theCompanyexpandsapplicationsinshipbornegeneratorsets,high-speedricetransplanters,coldchainvehicles,excavatorsandothersmallconstructionmachinery,conductsin-depthresearchanddevelopmentinnewareasanddevelopmentandsupportingofkeyproducts.Third,theCompanycreatesthe“internalcombustionengine+”mode,activelypromotestheapplicationofadvancedtechnologiessuchastheInternet,bigdata,artificialintelligenceandnewmaterialstoproductdevelopment,furtherimprovesthedieselengines’functionsofintelligentcontrol,real-timemonitoringandbigdatacollectionandanalysis,acceleratestheR&Dofintelligentterminalsandhybridpower,promotestheproductstodeveloptowardsthehighend,andbuildsnewcompetitiveedges.

(2)IndustrialriskInrecentyears,thestateadvocatesenergyconservationandemissionreduction.Newenergypowerrepresentedbypureelectric,hybridpowerandhydrogenfuelpowerhasgrabbedthemarketshareofdieselenginetoacertain

extent.Atpresent,newenergypowerismainlyusedinvehicles.Itsuseinagriculturalmachineryisstillfacingproblemssuchashighcostandcomplexoperatingenvironment.However,asbreakthroughshavebeenmadeinnewenergybatterytechnology,thelocalapplicationscenarioofdieselenginemaybereplacedbynewenergypower.Countermeasures:TheCompanystrengthensexplorationinthenewenergysector,andactivelypromotesprojectconstructionanddevelopment.Meanwhile,theCompanymakespropereffortsinproductR&D,developsefficientandeco-friendlyproducts,andexpandsnewdevelopmentdirectionsandapplicationareas.

(3)ForeigntraderiskInthecontextofthecomplexandchangeableglobaleconomicenvironmentandtheturmoilinthebreadbasketofEuropecausedbytheRussia-Ukraineconflict,thepricesofimportedagriculturalproducts,fertilizer,feed,oil,andgasincrease,whichdirectlycompromisetheplantingcostsandpurchasingpoweroffarmers.Theunstablefactorshavebroughtaboutcertainimpactsonproductexport.Countermeasures:TheCompanywillactivelydealwiththeforeigntrademarketchanges,strengthenthemaintenanceandmanagementofoverseaskeymarketsandcustomers,intensifyeffortsinthedevelopmentofemergingmarketsandnewusers,andendeavortoimprovethesalesofhigh-value-addedproducts.

(4)ForeignexchangeriskSomeoftheCompany’sexportsaresettledinUSD.Inthefuture,duetothesignificantexchangeratefluctuationofRMBagainstUSD,theCompanymayfacetheriskofadverseimpactonproductsalesduetoexchangeratefluctuation.Countermeasures:First,theCompanywillenhanceriskcontroltoensureitscapitalsecurity,constantlypayattentiontothedepreciationofcurrenciesandshortageofUSDinthemarket,andlowerriskbychangingpaymentmethodschangeandinsuringexportcreditinsurance.Second,theCompanywillpromptlyadjustproductpricesandpaymenttermstocopewithfluctuationsinexchangeratesandmaterialprices.

(5)Talentrisk:

TheCompanyneedshigh-leveltalents,highlyskilledtalentsandlackstalentstohelptheCompanyimproveitsoperationalefficiencyandstrengthentechnologicalinnovationtocopewiththeincreasinglyfiercemarketcompetitionandindustrydevelopmenttrend.Therefore,thedemandforprofessionaltalentsandseniormanagementtalentshasincreasedsignificantly.Countermeasures:First,theCompanyhassteppedupeffortstocultivateandappointyoungleadersandrecruitedmoreprofessionaltalents.Second,theCompanyhaspromotedthereformprogramofappraisalandmotivation,recruitedadvancedtalentsthroughmultipleapproaches,andconstantlyenhancedthedevelopmentofskillexperts,technicalandmanagementpersonnel,andworkersandtechnicianssoastoraisethecontributionrateofhumanresourcesinallrespects.

XIICommunicationswiththeInvestmentCommunitysuchasResearches,InquiriesandInterviewsduringtheReportingPeriod

√Applicable□Notapplicable

DateofvisitPlaceofvisitWayofvisitTypeofvisitorVisitorContentsandmaterialsprovidedIndextomaininquiryinformation
4January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductusageofHorizonNewEnergyTechnologyhttp://irm.cninfo.com.cn
Co.,Ltd.
6January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorDevelopment,products,andfinancingofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
12January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductstatusanddevelopmentsuggestionsofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
18January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorCompany’sproductionandoperationstatusandproductsuggestionshttp://irm.cninfo.com.cn
20January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorImpactoftheresultsofHorizonNewEnergyontheCompanyhttp://irm.cninfo.com.cn
27January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheintentionoftheCompanytorepurchaseshareshttp://irm.cninfo.com.cn
31January2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductR&D,marketadvantages,andsituationoftheoutboardengineproducthttp://irm.cninfo.com.cn
8February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductR&D,application,andmarketadvantageshttp://irm.cninfo.com.cn
9February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductproductionandsalesofHorizonNewEnergyTechnologyCo.,Ltd.,theprogressoftheCompany’srelocationproject,andproductapplicationhttp://irm.cninfo.com.cn
10February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductcapacityreleaseofPhaseIIShanxiBaseProjectofHorizonNewEnergyhttp://irm.cninfo.com.cn
13February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorImpactofthedevelopmentdirectionofHorizonNewEnergyTechnologyCo.,Ltd.andprogressoftheCompany’srelocationprojectontheCompanyhttp://irm.cninfo.com.cn
22February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’smonthlyproductioncapacityhttp://irm.cninfo.com.cn
28February2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThemonthlyproductioncapacityofHorizonNewEnergyCo.,Ltd.http://irm.cninfo.com.cn
3March2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’soverseascustomershttp://irm.cninfo.com.cn
18March2022http://irm.cnOtheIndivIndividualProductapplicationofhttp://irm.cni
info.com.cnridualinvestorHorizonNewEnergyTechnologyCo.,Ltd.nfo.com.cn
21March2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’ssharerepurchaseintention,production,andsales,andtheresultsofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
30March2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductexpansionandR&D,thecustomerprofileandproductioncapacityin2021ofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
14April2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThemonthlyproductioncapacityoftheseparatorfilmofHorizonNewEnergyhttp://irm.cninfo.com.cn
21April2022OnlinemeetingOtherOtherInvestorsandthepublicTheCompany’sproductionandoperatingactivities,andinvestmentsInformationon000570Changchai’sResultsPresentationandRoadshowonwww.cninfo.com.cndated21April2022
28April2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sassets,andintentiontoselltheheldLianceTechnologyshareshttp://irm.cninfo.com.cn
6May2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheshipmentsinQ1ofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
11May2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheimpactofthe“BeltandRoad”ontheCompanyhttp://irm.cninfo.com.cn
16May2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’ssalesinQ1andcustomershttp://irm.cninfo.com.cn
13June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorSupplyandcustomersofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
14June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorCompany’sshareholdinginHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
15June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’srelocationproject,theuseofthefundsraised,productR&Dprogress,theCompany’shttp://irm.cninfo.com.cn
developmentdirectionandprogress,assistanceofcontrollingshareholderstotheCompany,andoperationandcustomersofHorizonNewEnergyTechnologyCo.,Ltd.
17June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductapplicationfieldsofthesubsidiary,ZhenjiangSiyanghttp://irm.cninfo.com.cn
20June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorPurchaseandstoragehttp://irm.cninfo.com.cn
23June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sapplicationfieldsofdieselengineproductshttp://irm.cninfo.com.cn
27June2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThedevelopmentintentionsoftheCompany’ssubsidiarieshttp://irm.cninfo.com.cn
19July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheshipmentsinQ2ofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
21July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThedevelopmentintentionsoftheCompanyhttp://irm.cninfo.com.cn
23July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheshipmentsofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
24July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheshipmentsofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
25July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThecompaniesinvestedbytheCompanyhttp://irm.cninfo.com.cn
26July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductapplicabilityofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
27July2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductapplicabilityofHorizonNewEnergyTechnologyCo.,Ltd.andthesituationofitssubsidiary,HorizonNewMaterialhttp://irm.cninfo.com.cn
1August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorNumberofshareholdershttp://irm.cninfo.com.cn
2August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorSuggestionsontheCompany’sdevelopmenthttp://irm.cninfo.com.cn
2August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorSuggestionsontheCompany’sdevelopmenthttp://irm.cninfo.com.cn
3August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorEquitysituationofChangzhouSynergeticInnovationPrivatehttp://irm.cninfo.com.cn
EquityFundinvestedbytheCompany
5August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sbusinesshttp://irm.cninfo.com.cn
8August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheproductcapacityofHorizonNewMaterial,asubsidiaryofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
11August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductshttp://irm.cninfo.com.cn
17August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductsandbusinesshttp://irm.cninfo.com.cn
18August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductsandbusinesshttp://irm.cninfo.com.cn
19August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheapplicationoftheCompany’sproductsinshipbornemachineryhttp://irm.cninfo.com.cn
22August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompanydevelopmentsuggestionsandprogressinrelocation,purchaseandstoragehttp://irm.cninfo.com.cn
25August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorImpactoftheresultsofHorizonNewEnergyandsubsidiesofagriculturalmachineryontheCompany’ssaleshttp://irm.cninfo.com.cn
26August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sdevelopmenthttp://irm.cninfo.com.cn
31August2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorImpactoftheCompany’sinvestmentinChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)oftheCompanyhttp://irm.cninfo.com.cn
1September2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’scapitalincreaseinHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
13September2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductexporthttp://irm.cninfo.com.cn
30September2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorThesupportingfieldsoftheCompany’sproductshttp://irm.cninfo.com.cn
12October2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sprogressinpurchaseandstorage,investment,shareholdingintentionsofemployees,andproductioncapacityaftertherelocationhttp://irm.cninfo.com.cn
20October2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorCustomersofHorizonNewMaterial,asubsidiaryofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
25October2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorCustomersofHorizonNewMaterial,asubsidiaryofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
8November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorRelocationexpenseshttp://irm.cninfo.com.cn
16November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorImpactoftheNationalEmissionStandardIVforNon-roadVehiclesontheCompany’sproductsandsales,andtheCompany’sproductcertificationandfeaturedservicemonitoringplatformshttp://irm.cninfo.com.cn
17November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproduction,sales,andmarketofdieselenginesthatmeettheNationalEmissionStandardIVforNon-roadVehicleshttp://irm.cninfo.com.cn
24November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheintentionofgoingpublic,productapplicability,andproductordersofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
27November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorCustomercooperationofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
30November2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sproductapplicationandsales,purchaseandstorage,prototypingtestingofthecoldchainhybridpowerproduct,andextensionofChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)http://irm.cninfo.com.cn
5December2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorSupportingfieldsofgeneratingsetshttp://irm.cninfo.com.cn
21December2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorTheCompany’sdevelopmentsuggestions,andtheproductionlineandproductcapacityofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn
23December2022http://irm.cninfo.com.cnOtherIndividualIndividualinvestorProductioncapacityofHorizonNewEnergyTechnologyCo.,Ltd.http://irm.cninfo.com.cn

PartIVCorporateGovernance

IGeneralInformationofCorporateGovernance

IntheReportingPeriod,theCompanywasstrictlyinlinewithlaws,statutessuchasCompanyLaw,SecuritiesLaws,CodeofCorporateGovernanceofListedCompanies,GuideOpiniononEstablishmentofIndependentDirectorSystembyListedCompaniesandGuidelinesonInternalControlsofListedCompaniesandsoon,continuouslyperfectedcorporategovernance,establishedandaccomplishedinternalmanagementandcontrolsystem,consistentlyanddeeplyputforwardcorporategovernanceactivities,soastofurthernormalizedoperationoftheCompany,raisingcorporategovernancelevel,layingaguardforsteadyandhealthydevelopmentoftheCompany,protectlegalrightsandinterestsoftheCompanyandallshareholders.TheCompanypromulgatedorrevisedaseriesofinternalcontrolsystemthroughallaspectsofnormaloperationandmanagementactivitiesinaccordancewitheachnationallawsandregulations,characteristicsoftheindustry,operationandself-managingbusiness,andimproveditcontinuously,andfinallyformedanormativemanagementsystem.Andformulatedaseriesofmanagementsystem,processandstandardcoveredeachoperationlinkandlevelofthefinancialassetscontrol,humanresourcesmanagement,qualityenvironmentmanagementandinternalauditsupervisoretc.,whichensuredalltheworkhadrulestofollow.Indicatebytickmarketwhetherthereisanymaterialincompliancewiththeapplicablelaws,administrativeregulationsandregulationsissuedbytheCSRCgoverningthegovernanceoflistedcompanies.

□Yes√NoNosuchcasesintheReportingPeriod.IITheCompany’sIndependencefromItsControllingShareholderandActualControllerinAsset,Personnel,FinancialAffairs,OrganizationandBusinessTheCompanywasindependentfromthecontrollingshareholderChangzhouInvestmentGroupCo.,Ltdintermsofassets,business,personnel,organizationandfinancing,withindependent&completebusinessandcapabilitytooperateindependently.

1.Assets:ThepropertyrightsrelationshipbetweentheCompanyandthecontrollingshareholderisclear,assetsareclearlydefined,andtherearenofunds,assetsandotherresourcesbeingoccupiedorusedwithoutcompensationbetweenthem.

2.Personnel:TheCompanyandthecontrollingshareholderareindependentofeachotherintermsoflabor,personnelandsalarymanagement,andeachhasanindependentmanagementorganization,asoundmanagementpolicy,andanindependentpersonnelappraisalandassessmentsystem.

3.Finance:TheCompanyhassetupaspecialfinancedepartment,establishedanindependentaccountingsystemandfinancialmanagementpolicy,openedanindependentbankaccount,andimplementedindependentaccountingandindependenttaxpayments.ThereisnointerferenceinthefinancialactivitiesoftheCompanybythecontrollingshareholder.

4.Institution:TheCompanyhasacompleteandindependentcorporategovernancestructureandhasestablishedasoundorganizationalsystemthatmeetsitsownproductionandoperationneeds,whichoperatesindependentlyandwell,andthereisnosubordinaterelationshipwiththefunctionaldepartmentsofthecontrollingshareholder.

5.Business:TheCompanyhasanindependentandcompletebusinesssystemwithindependentandautonomous

productionandoperationalcapability.TheCompanyconductsrelatedtransactionsreasonablyontheprincipleofindependence.IIIHorizontalCompetition

□Applicable√NotapplicableIVAnnualandSpecialGeneralMeetingsConvenedduringtheReportingPeriod

1.GeneralMeetingConvenedduringtheReportingPeriod

MeetingTypeInvestorparticipationratioDateofthemeetingDisclosuredateResolution
The2021AnnualGeneralMeetingAnnualGeneralMeeting32.33%6May20227May2022Allproposalswereapproved.SeeAnnouncementNo.2022-027onResolutionsofthe2021AnnualGeneralMeeting.

2.SpecialGeneralMeetingsConvenedattheRequestofPreferredShareholderswithResumedVotingRights

□Applicable√Notapplicable

VDirectors,SupervisorsandSeniorManagement

1.GeneralInformation

NameOfficetitleIncumbent/FormerGenderAgeStartoftenureEndoftenureEndingshareholding(share)
ShiXinkunChairmanoftheBoardIncumbentMale5918October2016Ongoing0
ZhangXinDirector,GeneralManagerIncumbentMale5718October2016Ongoing0
LinTianDirectorIncumbentMale6017December2018Ongoing0
XuYiDirector,Vice-generalIncumbentMale5916April2020Ongoing0
Manager
JiangHeDirector,ChiefAccountantIncumbentMale5116April2020Ongoing0
YangFengDirectorIncumbentMale5116April2020Ongoing0
WangMancangIndependentdirectorIncumbentMale6016April2020Ongoing0
XingMinIndependentdirectorIncumbentMale6916April2020Ongoing0
ZhangYanIndependentdirectorIncumbentFemale5316April2020Ongoing0
YinLihouVice-generalManagerIncumbentMale5918October2016Ongoing0
XieGuozhongVice-generalManagerIncumbentMale5416April2020Ongoing0
SunJianzhongVice-generalManagerIncumbentMale5116April2020Ongoing0
HeJianjiangVice-generalManagerandSecretaryoftheBoardIncumbentMale4418October2016Ongoing0
HeJianguangChairmanoftheSupervisoryCommitteeIncumbentMale5917December2020Ongoing0
LuZhongguiSupervisorIncumbentMale5618October2016Ongoing0
LiuYiSupervisorIncumbentMale5418October2016Ongoing0
ChenLijiaSupervisorIncumbentFemale4016April2020Ongoing0
GeJiangliSupervisorIncumbentFemale5316April2020Ongoing0
Total------------0

Indicatewhetheranydirector,supervisororseniormanagementresignedbeforetheexpiryoftheirtenureduring

theReportingPeriod.

□Yes√NoChangeofdirectors,supervisorsandseniormanagement:

□Applicable√Notapplicable

2.BiographicalInformationProfessionalbackgrounds,majorworkexperienceandcurrentdutiesintheCompanyoftheincumbentdirectors,supervisorsandseniormanagement:

ShiXinkun:NowheactsastheChairmanoftheBoardandPartySecretaryintheCompany,theChairmanoftheBoardinJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,theChairmanoftheBoardinShanxiHorizonNewMaterialTechnologyCo.,Ltd.,andanInvestmentandDevelopmentAdvisorforChangzhouInvestmentGroupCo.,Ltd.ZhangXin:HesuccessivelytookthepostsofSalesManager,GeneralManagerAssistant,andvice-generalmanagerinourcompany.Now,heactsasDirector,GeneralManager,deputyPartySecretaryoftheCompanyandexecutivedirectorofJiangsuChangchaiMachineryCo.,Ltd.LinTian:HesuccessivelyworkedasdeputydirectorofenterprisedevelopmentDept.,GMofinvestmentmanagementDept.IIandI,assistantpresidentandvicepresidentinChangzhouInvestmentGroupCo.,Ltd.NowheisanInvestmentandDevelopmentAdvisorforChangzhouInvestmentGroupCo.,Ltd.,andthedirectoroftheCompany.XuYi:successivelyservedasthedirectorandassistanttotheGMoftheCompany’stechnologycenter,andcurrentlyservesasthedirectoranddeputyGMoftheCompany,inadditiontobeingadirectorofHorizonInvestment.JiangHe:successivelyservedastheaccountant,assistanttotheminister,andviceministerofthefinancialdepartmentoftheCompany.Heiscurrentlyadirector,chiefaccountantandministerofthefinancialdepartmentoftheCompany.YangFeng:successivelyservedasthebusinessmanageroftheShanghaiInvestmentBankingDepartmentofChinaEconomicDevelopmentTrustandInvestmentCo.,Ltd.,businessdirectoroftheinvestmentbankingdepartmentofOrientSecuritiesCo.,Ltd.,GMofandassistantchairmanofAJSecurities’investmentbankingdepartment,operationmanagementheadquarters,workedinthedevelopmentfinancedepartmentandinvestmentbankingdepartment,andservedastheEGMintheequipmentgroup,investmentrecommendationgroup,NEEQbusinessdepartmentandcomprehensivegroupofCITICSecuritiesCo.,Ltd.CurrentlyservingasanexecutivedirectorofDeXinInvestmentManageCo.,Limited,andthedirectoroftheCompany.WangMancang:successivelyservedasateacherandlecturerintheDepartmentofManagement,aswellasafinanciallecturerandprofessorintheDepartmentofFinanceoftheSchoolofEconomicsandManagementofNorthwestUniversity,andcurrentlyservesasthedirectoroftheDepartmentofFinanceoftheSchoolofEconomicsandManagementofNorthwestUniversity,counselorofXi'anmunicipalgovernment,chairmanof

ShaanxiSecuritiesResearchSociety,aswellasanindependentdirectorofFocuslightTechnologiesInc.,CcoopGroupCo.,Ltd.,ShaanxiConstructionMachineryCo.,Ltd,Xi'anWonderEnergyChemicalCo.,Ltd.,andtheCompany.XingMin:successivelyservedassecretaryofthePartyCommitteeandadministrativeassistantgeneralmanager(AGM)ofChinaNationalHeavyMachineryCorporation;secretaryofthePartyCommitteeandGMofChinaNationalMachineToolSalesandTechnicalServiceCorporation(CNMTC);currentlyExecutiveViceChairmanandSecretary-GeneralofChinaInternalCombustionEngineIndustryAssociation(CICEIA),IndependentDirectorofZhejiangZhongjianTechnologyCo.,Ltd.,IndependentDirectorofJiangsuYunyiElectricCo.,Ltd.,IndependentDirectorofWeifuHigh-TechnologyGroupCo.,Ltd.,IndependentDirectorofZhejiangXinchaiCo.,Ltd.,directorofActBlueCo.,Ltd.,andIndependentDirectoroftheCompany.ZhangYan:successivelyservedaschiefaccountantofChangzhouZhengdaCertifiedPublicAccountantsCo.,Ltd.,executivedeputychiefaccountantofJiangsuGongzhengCertifiedPublicAccountantsCo.,Ltd.,currentlyassociateprofessorofBusinessSchoolofJiangsuUniversityofTechnology,independentnon-executivedirectorofS-EnjoyServiceGroupCo.,Limited,directorofChangzhouCommunicationsIndustryGroupCo.,Ltd.,aswellasindependentdirectorofWuxiSAHATElectricTechnologyCo.,Ltd.,JiangsuTianmuLakeTourismCo.,Ltd.,andtheCompany.YinLihou:HeworkedasMinisterofHumanResourcesDepartmentandGeneralManagerAssistant.NowheactsasDeputyGeneralManageroftheCompany,andtheChairmanoftheBoardofChangchaiRobin.XieGuozhong:HeusedtobeGeneralManagerAssistant,SecretaryofPartyGeneralBranchandSupervisoroftheCompany.HeisnowDeputyGMoftheCompany,GMoftheSalesCompany,ChairmanoftheBoardofChangchaiWanzhou,andSupervisorofBeiqiFotonMotorCo.,Ltd.SunJianzhong:successivelyservedasthedirectorofthetechnicalcenterandassistanttothegeneralmanageroftheCompany.HeiscurrentlythedeputygeneralmanageroftheCompany,thegeneralmanagerofChangchaiMachinery,andthechairmanoftheboardofChangchaiBenniu.HeJianjiang:HeusedtobetheStaffMember,AssistanttotheChief,andDeputyChiefoftheInvestmentandDevelopmentDepartment,andSecuritiesRepresentativeoftheCompany.NowheisDeputyGeneralManager,SecretaryoftheBoard,andChiefoftheInvestmentandDevelopmentDepartmentoftheCompany,aswellasChairmanoftheBoard&GMofHorizonInvestment,DirectorofHorizonAgriculturalEquipmentandChangchaiWanzhou,ChairmanoftheBoardofZhenjiangSiyang,andSupervisorofDonghaiSecuritiesCo.,Ltd.HeJianguang:successivelyservedasdeputychiefofDesignSectionofChangzhouDieselEngineFactory,engineerofProductDevelopmentDepartment,deputydirectoroftheCompany’sJointVentureOffice,deputydirectorofTechnologyCenter,chiefengineer,director,generalmanager,vicechairmanofChangzhouDieselEngineFactory,amemberofthePartycommittee,secretaryoftheDisciplineInspectionCommissionandsupervisorofChangzhouInvestmentGroupCo.,Ltd.,currentlyaninvestmentanddevelopmentadvisorofChangzhouInvestmentGroupCo.,Ltd.,andchairmanoftheSupervisoryCommitteeoftheCompany.ChenLijia:FormerlyvicepresidentandgeneralmanagerofriskcontrollegaldepartmentofChangzhouInvestmentGroupCo.,Ltd.;andcurrentlydeputygeneralmanagerofChangzhouMetroGroupCo.,Ltd.,andsupervisoroftheCompany.

GeJiangli:FormerlyheadofHumanResourcesDepartmentoftheCompany,andcurrentlysupervisoroftheCompany.LuZhonggui:NowheactsasMinisterofpoliticalDepartmentoftheCompany,OfficeDirector,SecretaryofOrganPartyGeneralBranchaswellasemployeesupervisoroftheCompanyandDirectorofXingshengRealEstateManagement.LiuYi:HesuccessivelytookthepostsofAssistantMinisterofEnterpriseManagementDepartment.NowheactsasDirectorofAuditDepartmentandEmployeeSupervisoroftheCompany,DirectoroftheCompany,SupervisorofChangchaiWanzhou,ChangchaiBenniu,HorizonInvestment,HorizonAgriculturalEquipment,ChangchaiRobin,ChangchaiMachinery,XingshengRealEstateManagementandJiangsuHorizonNewEnergyTechnologyCo.,Ltd.Officesheldconcurrentlyinshareholdingentities:

√Applicable□Notapplicable

NameShareholdingentityOfficeheldintheshareholdingentityStartoftenureEndoftenureRemunerationorallowancefromtheshareholdingentity
LinTianChangzhouInvestmentGroupCo.,Ltd.InvestmentandDevelopmentAdvisorOctober2021Yes
ShiXinkunChangzhouInvestmentGroupCo.,Ltd.InvestmentandDevelopmentAdvisorDecember2022No
HeJianguangChangzhouInvestmentGroupCo.,Ltd.InvestmentandDevelopmentAdvisorDecember2022Yes
NotesN/A

Officesheldconcurrentlyinotherentities:

√Applicable□Notapplicable

NameOtherentityOfficeheldintheentityStartoftenureEndoftenureRemunerationorallowancefromtheentity
ShiXinkunJiangsuHorizonNewEnergyTechnologyCo.,Ltd.ChairmanoftheBoard19November2021No
ShanxiHorizonNewMaterialTechnologyCo.,Ltd.ChairmanoftheBoard7February2021No
HeJianjiangDonghaiSecuritiesCo.,Ltd.Supervisor18January2023No
XieGuozhongBeiqiFotonMotorCo.,Ltd.Supervisor15November2022Yes
YangFengDeXinInvestmentManageCo.,LimitedExecutiveDirector1June2022No
WangMancangFinanceDepartmentofSchoolofEconomics&ManagementNorthwestUniversityTeacher1October1996Yes
Xi’anGovernmentConsultant1October2015
ShaanxiSecuritiesResearchSocietyChairman1October2017
Xi’anFocuslightTechnologyCo.,Ltd.IndependentDirector2May2019
CcoopGroupCo.,Ltd.IndependentDirector1September2020
ShaanxiConstructionMachineryCo.,Ltd.IndependentDirector16November2018
Xi'anWonderEnergyChemicalCo.,Ltd.IndependentDirector1June2020
XingMinChinaInternalCombustionEngineIndustryAssociationStandingViceChairmanandSecretary-general1December2021Yes
ZhongjianTechnologyCo.,LtdIndependentDirector20June2017
JiangsuYunyiElectronicCo.,Ltd.IndependentDirector15July2019May2022
WeifuHigh-TechnologyGroupCo.,Ltd.IndependentDirector20May2021
ZhejiangXinchaiCo.,Ltd.IndependentDirector6December2019September2022
ActBlueCo.,Ltd.Director22November2021
ZhangYanJiangsuUniversityofTechnologyAssociateprofessor1August2008Yes
ChangzhouCommunicationsIndustryGroupCo.,Ltd.Director1May2022
WuxiSAHATElectricTechnologyCo.,Ltd.IndependentDirector2November2020
JiangsuTianmuLakeTourismCo.,Ltd.IndependentDirector8February2021
S-EnjoyServiceGroupCo.,LimitedIndependentnon-executivedirector20October2018
NotesNone

Punishmentsimposedintherecentthreeyearsbythesecuritiesregulatorontheincumbentdirectors,supervisorsandseniormanagementaswellasthosewholeftintheReportingPeriod:

□Applicable√Notapplicable

3.RemunerationofDirectors,SupervisorsandSeniorManagementDecision-makingprocedure,determinationbasisandactualpaymentsofremunerationfordirectors,supervisorsandseniormanagement:

In2022,themonthlysalariesofdirectors,supervisorsandseniorexecutivesintheCompanywereinlinewiththestipulationsofrelevantsalarymanagementandgradestandards,andthebenefitsoftheCompanyandassessmentresults.DirectorLinTianandSupervisorsHeJianguangobtainedsalariesinshareholders'entities.Remunerationofdirectors,supervisorsandseniormanagementfortheReportingPeriod

Unit:RMB’0,000

NameOfficetitleGenderAgeIncumbent/FormerTotalbefore-taxremunerationfromtheCompanyAnyremunerationfromrelatedparty
ShiXinkunChairmanoftheBoardMale59Incumbent85.49No
ZhangXinDirector,GeneralManagerMale57Incumbent85.49No
LinTianDirectorMale60Incumbent0.00Yes
XuYiDirector,Vice-generalManagerMale59Incumbent74.51No
JiangHeDirector,ChiefAccountantMale51Incumbent73.99No
YangFengDirectorMale51Incumbent0.00No
WangMancangIndependentdirectorMale60Incumbent10.00No
XingMinIndependentdirectorMale69Incumbent10.00No
ZhangYanIndependentdirectorFemale53Incumbent10.00No
YinLihouVice-generalManagerMale59Incumbent73.99No
XieGuozhongVice-generalManagerMale54Incumbent74.51No
SunJianzhongVice-generalManagerMale51Incumbent74.51No
HeJianjiangVice-generalMale44Incumbent74.51No
ManagerandSecretaryoftheBoard
HeJianguangChairmanoftheSupervisoryCommitteeMale59Incumbent0.00Yes
ChenLijiaSupervisorFemale40Incumbent0.00Yes
LuZhongguiSupervisorMale56Incumbent19.92No
GeJiangliSupervisorFemale53Incumbent20.91No
LiuYiSupervisorMale54Incumbent23.18No
Total--------711.01--

VIPerformanceofDutybyDirectorsintheReportingPeriod

1.BoardMeetingsConvenedintheReportingPeriod

MeetingDateofmeetingDisclosuredateResolution
The1stExtraordinaryMeetingoftheBoardofDirectorsin202219January202221January2022ThemeetingdeliberatedonandapprovedtheObligationsonConductingForwardForeignExchangeSettlement
The11thMeetingofthe9thBoardofDirectors21January2022——ThemeetingdeliberatedonandapprovedtheReportontheWorkoftheGeneralManagerfortheYear2021,theBusinessPolicyObjectivesoftheCompanyfortheYear2022,theResultsofthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2021,theContractonthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2022,andtheProposalonApplicationforBankCreditLine
The12thMeetingofthe9thBoardofDirectors11April202213April2022ThemeetingdeliberatedonandapprovedtheAnnualReportfor2021andItsSummary,theAnnualWorkReportoftheBoardofDirectorsfor2021,PlanoftheProfitDistributionandConversionofSurplusReservesintoShareCapitalfor2021,ProposalontheRe-appointmentoftheFinancialAuditInstitutionfor2022andItsAuditExpenses,ProposalontheRe-appointmentoftheInternalControlAuditInstitutionfor2022,ProposalonExpandingtheBusinessScopeoftheCompanyandAmendingtheArticlesofAssociationoftheCompany,ProposalonAmendingtheRulesofProcedureoftheBoardMeeting,theProposalonAmendingtheRulesofProcedureoftheGeneralMeeting,theProposalonAmendingthePolicyofIndependentDirectors,SpecialReportontheDepositandUseofRaisedFundsfor2021,theAnnualSelf-EvaluationReportonInternalControlfor2021,theProposalonthe
ProvisionofReservesforCreditImpairmentandAssetImpairment,the2021SocialResponsibilityReport,andProposalonConveningtheAnnualGeneralMeetingoftheCompanyfor2021
The2ndExtraordinaryMeetingoftheBoardofDirectorsin202228April202230April2022ThemeetingdeliberatedonandapprovedtheReportfortheFirstQuarterof2022
The3rdExtraordinaryMeetingoftheBoardofDirectorsin202211July202212July2022ThemeetingdeliberatedonandapprovedtheProposalonUsingOwnIdleFundstoPurchaseWealthManagementProductsandProposalonUsingIdleFundstoPurchaseWealthManagementProducts
The13thMeetingofthe9thBoardofDirectors22August202224August2022ThemeetingdeliberatedonandapprovedtheSemi-annualReportfor2022andItsSummary,ProposalonProvisionofReservesforCreditImpairmentandAssetImpairment,ProposalonChangeofAccountingPolicy,SpecialReportontheDepositandUseofRaisedFundsfortheSemi-annualPeriodof2022,ProposalonAddingImplementationLocationtothePrivatePlacementRaisedFundsInvestmentProjectofInnovationCapacityBuildingoftheTechnicalCentre,ProposalonAddingImplementationEntitytothePrivatePlacementRaisedFundsInvestmentProjectofRelocationofLightEnginesandCasting
The4thExtraordinaryMeetingoftheBoardofDirectorsin202225August202227August2022ThemeetingdeliberatedonandapprovedtheProposalonPlanningtoParticipateinCapitalIncreaseandShareExpansionandRelatedTransactionsofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.andtheProposalonPlanningtoSellPartoftheTradingFinancialAssets
The5thExtraordinaryMeetingoftheBoardofDirectorsin202229September202230September2022ThemeetingdeliberatedonandapprovedtheProposalonPlanningtoUseBankAcceptancesforPartofthePaymentsofFund-raisingProjectsandEqualReplacementofRaisedFunds
The6thExtraordinaryMeetingoftheBoardofDirectorsin202217October202218October2022ThemeetingdeliberatedonandapprovedtheProposalonPlanningtoExtendtheOperationPeriodofChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)
The14thMeetingofthe9thBoardofDirectors28October202229October2022ThemeetingdeliberatedonandapprovedtheReportoftheThirdQuarterof2022
The7thExtraordinaryMeetingoftheBoardofDirectorsin202215December202216December2022ThemeetingdeliberatedonandapprovedtheProposalonUsingIdleFundstoPurchasetheLimitofWealthManagementProducts

2.AttendanceofDirectorsatBoardMeetingsandGeneralMeetings

Attendanceofdirectorsatboardmeetingsandgeneralmeetings
DirectorTotalnumberofboardmeetingsthedirectorwaseligibletoattendBoardmeetingsattendedonsiteBoardmeetingsattendedbywayoftelecommunicationBoardmeetingsattendedthroughaproxyBoardmeetingsthedirectorfailedtoattendThedirectorfailedtoattendtwoconsecutiveboardmeetings(yes/no)Generalmeetingsattended
ShiXinkun112900No1
ZhangXin112900No1
LinTian111910No1
XuYi112900No1
JiangHe112900No1
YangFeng112900No1
XingMin112900No1
WangMancang112900No1
ZhangYan112900No1

Explanationofwhyanydirectorfailedtoattendtwoconsecutiveboardmeetings:

N/A

3.ObjectionsRaisedbyDirectorsonMattersoftheCompanyIndicatebytickmarkwhetheranydirectorsraisedanyobjectionsonanymatteroftheCompany.

□Yes√NoNosuchcasesintheReportingPeriod.

4.OtherInformationaboutthePerformanceofDutybyDirectorsIndicatebytickmarkwhetheranysuggestionsfromdirectorswereadoptedbytheCompany.

√Yes□NoSuggestionsfromdirectorsadoptedornotadoptedbytheCompany:

AlldirectorsoftheCompanyinlinewiththelaw,rules,normativedocumentsandobligationsgivenbytheCompanyoftheCompanylaw,ArticleofAssociations,RulesofProcedureoftheBoardandIndependentDirectorsWorkRules,comprehensivelyfocusedonthedevelopmentandoperationoftheCompany,activelyattendedthegeneralmeetingofshareholderandmeetingofboardofdirectors.Independentdirectorsgiven

independentopinionsforthesignificanteventsoftheCompany,andeffectivelymaintainedtheprofitsoftheCompanyandalltheshareholders.TheCompanyactivelylistenedtothesuggestionsfromdirectorsuponthesignificanteventsandadoptedthem.Formoredetails,pleaserefertotheReportontheWorkoftheBoardofDirectorsfor2022disclosedbytheCompanyonhttp://www.cninfo.com.cndated12April2023.

VIISpecialCommitteesundertheBoardofDirectorsduringtheReportingPeriod

NameofcommitteeMembersNumberofmeetingsconvenedDateofmeetingContentsImportantcommentsandsuggestionsOtherperformanceofdutiesSpecificdisputedmatters(ifany)
AuditCommitteeZhangYan,WangMancang,LinTian319January2022ThemeetingdiscussedandapprovedtheReportonFinancialPre-auditin2021,ReportonAuditPlanArrangementfor2021,ReportonInternalAuditWorkin2021andInternalAuditPlanfor2022andReportontheDepositandUseofRaisedFundsfor2021TheCompany'sfinancialstatementshavebeenpreparedinaccordancewiththenewAccountingStandardsforBusinessEnterprisesandtheprovisionsoftheCompany'srelevantfinancialpoliciesandpresentedfairly,inallmaterialrespects,thefinancialstatusoftheCompanyasof31December2021andtheoperatingresultsandcashflowsfor2021.TheCompany'sfinancialandaccountingstatementsareauthenticandaccurate.
7April2022ThemeetingreviewedandapprovedtheAnnualFinancialStatementsoftheCompanyfor2021,ProposalonProvisionofReservesforAssetImpairment,SpecialReportontheDepositandUseofRaisedFundsfor2021,theAnnualSelf-EvaluationReportonInternalControlfor2021,ProposalontheRe-appointmentoftheFinancialAuditInstitutionfor2022andItsAuditExpenses,andProposalontheRe-appointmentoftheInternalControlAuditItwasconsentedthatboththeproposalsshallbesubmittedtotheBoardofDirectorsfordiscussion
Institutionfor2022
18August2022ThemeetingdeliberatedonandapprovedtheSemi-annualWorkSummaryoftheAuditDepartmentfor2022,theSemi-annualReportfor2022,ProposalonProvisionofReservesforCreditImpairmentandAssetImpairment,SpecialReportontheDepositandUseofRaisedFundsfortheSemi-annualPeriodof2022,ProposalonChangeofAccountingPolicy,ProposalonAddingImplementationLocationtothePrivatePlacementRaisedFundsInvestmentProjectofInnovationCapacityBuildingoftheTechnicalCentreandProposalonAddingImplementationEntitytothePrivatePlacementRaisedFundsInvestmentProjectofRelocationofLightEnginesandCastingItwasconsentedthatboththeproposalsshallbesubmittedtotheBoardofDirectorsfordiscussion
RemunerationandEvaluationCommitteeXingMin,WangMancang,ShiXinkun120January2022ThemeetingdeliberatedonandapprovedtheContractonthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2021andtheContractonthePerformanceAppraisaloftheSeniorManagementoftheCompanyfortheYear2022ItwasconsentedthatboththeproposalsshallbesubmittedtotheBoardofDirectorsfordiscussion

VIIIPerformanceofDutybytheSupervisoryCommittee

IndicatebytickmarkwhethertheSupervisoryCommitteefoundanyrisktotheCompanyduringitssupervisionintheReportingPeriod.

□Yes√NoTheSupervisoryCommitteeraisednoobjectionsintheReportingPeriod.IXEmployees

1.Number,FunctionsandEducationalBackgroundsofEmployees

Numberofin-serviceemployeesoftheCompanyastheparentattheperiod-end2,114
Numberofin-serviceemployeesofmajorsubsidiariesattheperiod-end542
Totalnumberofin-serviceemployeesattheperiod-end2,656
TotalnumberofpaidemployeesintheReportingPeriod2,656
NumberofretireestowhomtheCompanyastheparentoritsmajorsubsidiariesneedtopayretirementpensions0
Functions
FunctionEmployees
Production1,731
Sales195
Technical356
Financial42
Administrative288
Other44
Total2,656
Educationalbackgrounds
EducationalbackgroundEmployees
Juniorhighschoolgraduatesandbelow1,133
Highschoolgraduates747
Collegegraduatesandtechnicalsecondaryschoolgraduates487
Bachelors271
Mastersandabove18
Total2,656

2.EmployeeRemunerationPolicyTheCompanyalwaysadheredtotheprincipleoftiltingtheremunerationincentivemechanismtowardsexcellenttalents,soastodisplaytherolesofvariousprofessionaltechnicians,managementstaffsandskilledbackbones.Besides,itadheredtotheprincipleofincreasingtheemployee’sincomeintegratedwithincreasinglaborproductionefficiencyandproduction&operationefficiency,soastoperfectthesalarystructureandfurtherincreaseemployees’incomesteadily.

3.EmployeeTrainingPlansTheCompanyestablishedtheManagementRulesontheEducation&TrainingforEmployees,aimingtoenhanceemployees’qualityandtryitsbesttocultivateateamoffaithfulandhighlyprofessionaltalents.Besides,itinnovatedthetrainingmechanism,optimizedthetrainingenvironment,andreinforcedtoencourageemployeestoattendvarioustraining,soastoinspiretheemployees’potentialtothemaximumextentandfurtherpromotethesustainabledevelopmentoftheCompany.

4.LaborOutsourcing

□Applicable√Notapplicable

XProfitDistributions(intheFormofCashand/orStock)

Howtheprofitdistributionpolicy,especiallythecashdividendpolicy,wasformulated,executedorrevisedintheReportingPeriod:

√Applicable□NotapplicableInArticlesofAssociation,whichhadconfirmedthespecificprofitsdistributionandclearedouttheconditions,standardsandproportionofthecashbonus,stipulatedthedecision-makingprogressoftheformulationandalternationoftheprofitsdistributionpoliciesandthechaptersaswellastheregulationsfullyensuretheopportunitiesforthemediumandsmallshareholderstoexertthefunctionsandtoprovideadvicesaswellasappeals.Thecashbonusofrecent3yearsoftheCompanymetwiththeregulationsoftheArticlesofAssociationandduringthedecision-makingprocessoftheprofitsdistributionproposal,theIndependentDirectorsstatedtheindependentadvicesandfullyrespectedtheadvicesfromthemediumandsmallshareholders.TheprofitsdistributionpreplanandtheturningcapitalreserveintosharecapitalpreplanoftheCompanywerebothmetwiththerelevantregulationsoftheArticlesofAssociationandsoon.

Specialstatementaboutthecashdividendpolicy
IncompliancewiththeCompany’sArticlesofAssociationandresolutionofgeneralmeetingYes
SpecificandcleardividendstandardandratioYes
Completedecision-makingprocedureandmechanismYes
IndependentdirectorsfaithfullyperformedtheirdutiesandplayedtheirdueroleYes
Non-controllinginterestsareabletofullyexpresstheiropinionanddesireandtheirlegalrightsandinterestsarefullyprotectedYes
Incaseofadjustingorchangingthecashdividendpolicy,theconditionsandproceduresinvolvedareincompliancewithapplicableregulationsandtransparentN/A

IndicatebytickmarkwhethertheCompanyfailstoputforwardacashdividendproposaldespitethefactsthattheCompanyhasmadeprofitsintheReportingPeriodandtheprofitsoftheCompanyastheparentdistributabletoshareholdersarepositive.

□Applicable√NotapplicableFinaldividendplanfortheReportingPeriod:

√Applicable□Notapplicable

Bonussharesforevery10shares(share)0
Dividendforevery10shares(RMB)(taxinclusive)0.10
Additionalsharestobeconvertedfromcapitalreserveforevery10shares(share)0
Totalsharesasthebasisfortheprofitdistributionproposal(share)705,692,507
Cashdividends(RMB)(taxinclusive)7,056,925.07
Cashdividendsinotherforms(suchassharerepurchase)(RMB)0
Totalcashdividends(includingthoseinotherforms)(RMB)7,056,925.07
Distributableprofit(RMB)915,495,909.35
Totalcashdividends(includingthoseinotherforms)as%oftotalprofitdistribution100%
Cashdividendpolicy
Other
Particularsaboutthedividendplan
TheBoardhasapprovedafinaldividendplanasfollows:basedonthetotalsharecapitaloftheCompanyat31December2022,acashdividendofRMB0.10(taxinclusive)per10sharesistobedistributedtotheshareholders,withnobonusissuefromeitherprofitorcapitalreserves.

XIEquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XIIFormulationandImplementationofInternalControlSystemduringtheReportingPeriod

1.InternalControlFormulationandImplementationDuringtheReportingPeriod,theCompanystrictlycompliedwithnationallawsandregulationsandrelevantregulationssuchastheBasicCodeforInternalControlofEnterprisesandtheGuidelinesforApplicationofEnterpriseInternalControl,aswellastheprovisionsandrequirementsoftheCompany'sinternalcontrolstandards,andoptimizedimportantbusinessprocessesandimprovedandperfectedtheinternalcontrolsystemthroughcontinuoussupervisionandeffectiveevaluationoftheoperationoftheCompany'sinternalcontrol,soastoadapttothechangingexternalenvironmentandinternalmanagementrequirementsandimprovetheefficiencyoftheCompany'soperationandmanagement.Bydoingso,theCompanyeffectivelypreventedrisksinoperationandmanagement,andpromotedtheachievementofinternalcontrolobjectives.TheCompany'sinternalcontrolsystemcancoverthemajoraspectsoftheCompany'soperationandmanagement,andtheinternalcontroldesignissoundandreasonable,withnomaterialomissions.

2.MaterialInternalControlWeaknessesIdentifiedfortheReportingPeriod

□Yes√NoXIIIManagementofSubsidiariesbytheCompanyduringtheReportingPeriod

SubsidiaryIntegrationplanProgressonintegrationProblemsfoundinintegrationSolutionstakenSolutionprogressSubsequentsolution
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.AsthelargestshareholderofZhenjiangSiyang,theCompanynominateddirectors,On16May2022,ZhenjiangSiyangconvenedameetingofshareholders,theBoardofDirectors,andtheBoardofSupervisorstoelectnewmembersoftheBoardofN/AN/AN/AN/A
supervisors,andManagementpersonnelforthenewBoardofDirectorsandBoardofSupervisorsanddispatchedManagement,financial,andtechnicalpersonneltoZhenjiangSiyangforproductionandoperationsmanagement.Directors,theBoardofSupervisorsandtheManagement.ThedirectorsdesignatedbytheCompanyaccountedformorethanhalfandZhenjiangSiyangwasincludedintheCompany’sconsolidatedreport.TheCompanydesignatedthreeManagementpersonneltoZhenjiangSiyangforroutinemanagement,financial,andtechnicalposts.

XIVSelf-EvaluationReportorIndependentAuditor’sReportonInternalControl

1.InternalControlSelf-EvaluationReport

Disclosuredateoftheinternalcontrolself-evaluationreport12April2023
Indextothedisclosedinternalcontrolself-evaluationreport2023-011
Evaluatedentities’combinedassetsas%ofconsolidatedtotalassets100.00%
Evaluatedentities’combinedoperatingrevenueas%ofconsolidatedoperatingrevenue100.00%
Identificationstandardsforinternalcontrolweaknesses
TypeWeaknessesininternalcontroloverfinancialreportingWeaknessesininternalcontrolnotrelatedtofinancialreporting
NaturestandardTheCompanyclassifiedthedefectsasseriousdefect,importantdefectandgeneraldefectaccordingtotheinfluencedegreefromtheinternalcontrol:(1)Seriousdefect:referstooneormultiplegroupswithcontroldefectwhichmayleadtheenterpriseseriouslydeviatesthecontroltarget;(2)Importantdefect:referstooneormultiplegroupswithcontroldefectwiththeseverityandtheeconomicresultslowerthanthegreatdefectbutmaystillleadtheenterpriseseriouslydeviatesthecontroltarget;(3)Generaldefect:referstootherdefectexceptforthegreatdefectandsignificantdefect.Defectswiththefollowingrandomcharacteristicsshouldberecognizedasseriousdefect:1)Seriouslyviolatedthenationallawsandadministrativeregulationsandthenormativedocuments;2)“threesignificantonegreat”eventhadnotbeenthroughthecollectivedecision-makingprocess;3)thesignificanteventsinvolvedwiththeproductionandoperationoftheCompanylackedofsystematiccontrolortheinstitutionalsystemwasinvalid;4)theinternalcontroloftheinformationdisclosurewas
Naturestandards:defectswiththefollowingrandomcharacteristicsshouldberecognizedasseriousdefect:1)thedefectinvolveswiththemalpracticeoftheDirectors,SupervisorsandSeniorExecutives;2)revisedthedisclosedfinancialreport;3)CPAsdiscoveredthegreatmisstatementamongthecurrentfinancialstatementwhilewhichcouldnotbefoundduringtheoperatingprocessoftheinternalcontrol;4)thesupervisionfromtheAuditCommitteeandtheinternalauditinstitutionoftheenterprisewasinvalid.invalid,whichledtheCompanybeopencondemnedbythesupervisiondepartment;5)theseriousdefectfromtheassessmentresultsoftheinternalcontrolhadnotbeenrevised.
QuantitativestandardQuantitativestandards:Thequantitativestandardsofrecognizingthesignificantdegreeofthemisstatement(includingthefalsenegatives)oftheconsolidatedfinancialreportoftheCompanybasedonthedatafromthe2022consolidatedstatementswasas:Seriousdefect:misstatement≥5%oftheannualprofitsImportantdefect:2.5%oftheannualprofits≤misstatement<5%oftheannualprofitsGeneraldefect<2.5%oftheannualprofitsRefertothequantitativecriteriaoftheinternalcontroldefectofthefinancialreport,torecognizethequantitativecriteriaofthesignificantdegreeoftheinternalcontroldefectofthenon-financialreportoftheCompanyas:Seriousdefect:possiblycauseddirectlylosses≥0.1%ofthenetassetsImportantdefect:0.05%ofthenetassets≤possiblycauseddirectlylosses<0.1%ofthenetassetsGeneraldefect:possiblycauseddirectlylosses<0.05%ofthenetassets
Numberofmaterialweaknessesininternalcontroloverfinancialreporting0
Numberofmaterialweaknessesininternalcontrolnotrelatedtofinancialreporting0
Numberofseriousweaknessesininternalcontroloverfinancialreporting0
Numberofseriousweaknessesininternalcontrolnotrelatedtofinancialreporting0

2.IndependentAuditor’sReportonInternalControl

√Applicable□Notapplicable

Opinionparagraphintheindependentauditor’sreportoninternalcontrol
WebelievedthatChangchaiCompany,LimitedmaintainedeffectiveinternalcontrolofthefinancialreportinsignificantaspectsaccordingtotheBasicNormsofInternalControlandrelevantregulationson31December2022.
Independentauditor’sreportoninternalcontroldisclosedornotDisclosed
Disclosuredate10April2023
IndextosuchreportdisclosedS.G.W[2023]E1111
Typeoftheauditor’sopinionUnmodifiedunqualifiedopinion
MaterialweaknessesininternalcontrolnotrelatedtofinancialreportingNone

Indicatebytickmarkwhetheranymodifiedopinionisexpressedintheindependentauditor’sreportontheCompany’sinternalcontrol.

□Yes√NoIndicatebytickmarkwhethertheindependentauditor’sreportontheCompany’sinternalcontrolisconsistentwiththeinternalcontrolself-evaluationreportissuedbytheCompany’sBoard.

√Yes□NoXVRemediationofProblemsIdentifiedbySelf-inspectionintheSpecialActionontheGovernanceofListedCompaniesN/A

PartVEnvironmentalandSocialResponsibility

IMajorEnvironmentalIssuesIndicatebytickmarkwhethertheCompanyoranyofitssubsidiarieswasidentifiedasakeypolluterbytheenvironmentauthorities.

□Yes√NoAdministrativepunishmentsreceivedintheReportingPeriodduetoenvironmentalissues:

CompanyorsubsidiaryReasonforpunishmentViolationPunishmentImpactontheCompanyRectificationmeasuresoftheCompany
N/AN/AN/AN/AN/AN/A

ActionstakenduringtheReportingPeriodtoreducecarbonemissionsandtheimpact:

√Applicable□NotapplicableSeethe2022SocialResponsibilityReportofChangchaiCompany,Limiteddisclosedonhttp://www.cninfo.com.cndated12April2023.Reasonsfornotdisclosingotherenvironment-relatedinformation:

N/A

IISocialResponsibility

Seethe2022SocialResponsibilityReportofChangchaiCompany,Limiteddisclosedonhttp://www.cninfo.com.cndated12April2023.IIIEffortsinPovertyAlleviationandRuralRevitalizationN/A

PartVISignificantEventsIFulfillmentofCommitments

1.CommitmentsoftheCompany’sDeFactoController,Shareholders,RelatedPartiesandAcquirers,aswellastheCompanyItselfandOtherEntitiesFulfilledintheReportingPeriodorOngoingatthePeriod-End

√Applicable□Notapplicable

CommitmentPromisorTypeofcommitmentDetailsofcommitmentDateofcommitmentmakingTermofcommitmentFulfillment
CommitmentsmadeinrefinancingChangzhouInvestmentGroupCo.,Ltd.Aboutshareholdingreduction1.ThecompanyanditscontrolledrelatedpartieshavenotreducedtheirholdingsofsharesofChangchaiCompanyfromthesixmonthspriortotheannouncementofthedecisionoftheBoardofDirectorsofChangchaiCompany,Limited("ChangchaiCompany")concerningtheproposaltoconsiderthenon-publicofferingofsharestothedateofissuanceofthisLetterofCommitment.2.ThecompanyanditscontrolledrelatedpartieshavenoplantoreducetheirholdingsofsharesofChangchaiCompanyfromthedateofissuanceofthisLetterofCommitmenttosixmonthsafterthecompletionofthisissuance.29September202010October2019-30June2022Expired
ChangzhouInvestmentGroupCo.,Ltd.AboutsharetraItwillnottransferthesharesithasobtainedintheprivateplacementofChangchaiwithin36monthsstartingfromthedatewhentheprivateplacementofA-sharesisallowedforpublictrading.5July20215July2021-5July2024Ongoing
dingrestriction
ChangzhouInvestmentGroupCo.,Ltd.Other1.ItundertakesnottointerfereintheCompany'soperationandmanagementactivitiesbeyonditsauthorityandnottoencroachontheCompany'sinterests;2.Itundertakesnottotransferbenefitstootherentitiesorindividualsfreeofchargeoronunfairterms,nortoimpairtheinterestsoftheCompanybyanyothermeans;3.AftertheissuanceofthisLetterofCommitmentandbeforethecompletionoftheCompany'snon-publicofferingofshares,iftheChinaSecuritiesRegulatoryCommission(CSRC)makesothernewregulatoryprovisionsonthereturnfillingmeasuresandcommitments,andtheaforesaidcommitmentscannotmeetsuchprovisionsoftheCSRC,itundertakestoissuesupplementarycommitmentsinaccordancewiththelatestprovisionsoftheCSRC;4.ItundertakestoeffectivelyimplementtheCompany'smeasurestofillthereturnandanycommitmentsmadethereon.IftheCompanybreachessuchcommitmentsandcauseslossestotheCompanyortheinvestors,theCompanyiswillingtocompensatetheCompanyortheinvestorsaccordingtolaw.11April202011April2020-31December9999Ongoing
UBSAG,CaitongFundManagementCo.,Ltd.,ChangzhouTrafficConstructionInvestmentDevelopmentGeneralCompany,ChenBeiwen,GuotaiAssetManagementCo.,Ltd.,JiangxiJintouAboutsharetradiI/WeundertakethatI/wewillnottransferthesharesI/wehaveobtainedintheprivateplacementofChangchaiwithin6monthsstartingfromthedatewhentheprivateplacementofA-sharesisallowedforpublictrading.5July20215July2021-5January2022Expired
IndustrialDevelopmentCo.,Ltd.,LiXueqin,NanhuaFundCo.,Ltd.,Enjoy(Ningbo)AssetManagementL.P.,NuodeAssetManagementCo.,Ltd.,SunMeichun,MinmetalsSecuritiesCo.,Ltd.,YaoJianquan,ChinaNationalGoldGroupAssetManagementCo.,Ltd.,andZhouZhihengngrestriction
OthercommitmentsmadetominorityshareholdersChangchaiCompany,LimitedAboutdividendsRewardsPlanforShareholdersinNextThreeYears(2020-2022)Underthepremiseofpositivedistributiveprofit(remainingafter-taxprofitsaftermakingupforthelossandextractingforthecommonreserves)inthisyearorhalfyearandabundantmoneyflowandnoinfluenceonthefollowing-upgoingconcernaftercashbonus,theprofitsallocatedbycasheveryyearshouldn’tbelowerthan10%oftheallocableprofitsfromparentcompany.Meanwhile,theaccumulatedallocableprofitsbycashinthearbitrarycontinuousthreeaccountingyearsshouldnotbelowerthan30%oftheannualaverageallocableprofitsinthosethreeyears.8May2020Year2020-2022Expired
FulfilledontimeornotYes
Specificreasonsforfailingtofulfillcommitmentsontimeandplansfornextstep(ifany)N/A

2.WheretherehadbeenanearningsforecastforanassetorprojectandtheReportingPeriodwasstillwithintheforecastperiod,explainwhytheforecasthasbeenreachedfortheReportingPeriod.

□Applicable√NotapplicableIIOccupationoftheCompany’sCapitalbytheControllingShareholderoranyofItsRelatedPartiesforNon-OperatingPurposes

□Applicable√Notapplicable

NosuchcasesintheReportingPeriod.

IIIIrregularitiesintheProvisionofGuarantees

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.IVExplanationsGivenbytheBoardofDirectorsRegardingtheIndependentAuditor's“ModifiedOpinion”ontheFinancialStatementsoftheLatestPeriod

□Applicable√Notapplicable

VExplanationsGivenbytheBoardofDirectors,theSupervisoryBoardandtheIndependentDirectors(ifany)RegardingtheIndependentAuditor's“ModifiedOpinion”ontheFinancialStatementsoftheReportingPeriod

□Applicable√NotapplicableVIYoYChangestoAccountingPolicies,EstimatesandCorrectionofMaterialAccountingErrors

√Applicable□Notapplicable

ChangestotheaccountingpoliciesandwhyApprovalprocessRemark
TheCompanystartstoimplementthe“Accountingtreatmentforsalesofproductsorby-productsbyenterprisesgeneratedfromfixedassetsbeforereachingtheintendedstateofavailabilityorfromtheperiodofR&D”and“Judgmentononerouscontracts”and“Presentationofcentralizedcapitalmanagement”stipulatedintheAccountingStandardsforBusinessEnterprisesInterpretationNo.15issuedbytheMinistryofFinancein2021since1January2022.On22August2022,the13thMeetingofthe9thBoardofDirectorsandthe12thMeetingofthe9thSupervisoryCommitteewereheldbytheCompanyonwhichtheProposalonChangesofAccountingPolicieswasapproved.Notesofchangestoaccountingpolicies-(1)
TheCompanystartstoimplementthe“accountingtreatmentoftheincometaxeffectoffinancialinstrumentrelateddividendwhoseissuerisclassifiedasequityinstrument”and“accountingtreatmentofshare-basedpaymentincashsettlementmodifiedintoshare-basedpaymentinequitysettlementbytheenterprise”stipulatedintheAccountingStandardsforBusinessEnterprisesInterpretationNo.16issuedbytheMinistryofFinancein2022since13December2022./Notesofchangestoaccountingpolicies-(2)

Descriptionofchangesinaccountingpolicies:

(1)TheimpactofimplementingtheInterpretationNo.15ofAccountingStandardsforBusinessEnterprisesontheCompanyOn31December2021,theMinistryofFinanceissuedtheInterpretationNo.15ofAccountingStandardsforBusinessEnterprises(C.K.[2021]No.35)(hereinafterreferredtoas“InterpretationNo.15”).Contentsof“accountingtreatmentofexternalsalesofproductsorby-productproducedbytheenterprisebeforethefixedassetsreachtheintendedusablestateorduringtheresearchanddevelopmentprocess(hereinafterreferredtoas‘TrialSales’)”and“judgmentonloss-makingcontracts”cameintoforceon1January2022.TheCompanyimplementedInterpretationNo.15sincethedateofissuance,andtheimplementationhasnomaterialimpactonthefinancialstatementsduringthereportingperiod.

(2)TheimpactofimplementingtheInterpretationNo.16ofAccountingStandardsforBusinessEnterprisesontheCompanyOn13December2022,theMinistryofFinanceissuedtheInterpretationNo.16ofAccountingStandardsforBusinessEnterprises(C.K.[2022]No.31)(hereinafterreferredtoas“InterpretationNo.16”).Theregulationsof“accountingtreatmentfordeferredincometaxrelatingtoassetsandliabilitiesarisingfromasingletransactionthatisnotsubjecttotheinitialrecognitionexemption”cameintoforceon1January2023,allowingcompaniestoimplementtheexemptionpriortotheyearofissuance,whichhasnotbeenimplementedbytheCompanyinadvancethisyear.Inaddition,thecontentsof“accountingtreatmentoftheincometaxeffectoffinancialinstrumentrelateddividendwhoseissuerisclassifiedasequityinstrument”and“accountingtreatmentofshare-basedpaymentincashsettlementmodifiedintoshare-basedpaymentinequitysettlementbytheenterprise”cameintoforceontheissuancedate.TheCompanyimplementedInterpretationNo.16sincethedateofissuance,andtheimplementationhasnomaterialimpactonthefinancialstatementsduringthereportingperiod.VIIYoYChangestotheScopeoftheConsolidatedFinancialStatements

√Applicable□NotapplicableTheSixthExtraordinaryMeetingoftheBoardofDirectorsin2021heldbytheCompanyon28October2021deliberatedonandapprovedtheProposalonParticipationinBiddingfor41.5%EquityInterestsinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.,authorizingtheManagementoftheCompanytoparticipateinbiddingfor41.5%equityinterestinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.(hereinafterreferredtoas"ZhenjiangSiyang")thathadbeenputoutforsalebyJiangsuKedaAssetsMarketingCo.,Ltd.(hereinafter,“KedaAssets”).On12January2022,JiangsuAssetsandEquityExchangeCo.,Ltd.issuedtheConfirmationofTransactionontheTransferof41.5%EquityInterests(CorrespondingtoCapitalContributionofRMB830,000)inZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.TheCompanywonthebidforthe41.5%equityinterestsinZhenjiangSiyangatapriceofRMB33,520,800.00.On23February2022,theCompanysignedtheContractonTransferofState-ownedPropertyRightswithKedaAssets.On9March2022,ZhenjiangSiyanghascompletedtherelevantregistrationalterationformalitieswiththecompetentindustrialandcommercialadministration.On16May2022,ZhenjiangSiyangheldmeetingsofshareholders,theBoardofDirectorsandtheSupervisoryCommitteetoelectandappointnewmembersfortheBoardofDirectors,theSupervisoryCommitteeandmanagement.TheCompanyholdsmorethanhalfoftheboardseatsofZhejiangSiyangandZhenjiangSiyanghasbeenincludedintheconsolidatedfinancialstatementsoftheCompany.Sincethen,thenumberofsubsidiarieswithintheconsolidationscopeoftheCompanyincreasestoeightfromseven.

VIIIEngagementandDisengagementofIndependentAuditor

Currentindependentauditor:

NameofthedomesticindependentauditorGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)
TheCompany’spaymenttothedomesticindependentauditor(RMB’0,000)60
HowmanyconsecutiveyearsthedomesticindependentauditorhasprovidedauditservicefortheCompany21
Namesofthecertifiedpublicaccountantsfromthedomesticindependentauditorwritingsignaturesontheauditor’sreportWangWenkai,QinZhijun
HowmanyconsecutiveyearsthecertifiedpublicaccountantshaveprovidedauditservicefortheCompanyTwoyearsforWangWenkai,twoyearsforQinZhijun

IndicatebytickmarkwhethertheindependentauditorwaschangedfortheReportingPeriod.

□Yes√NoIndependentauditor,financialadvisororsponsorengagedfortheauditofinternalcontrols:

√Applicable□NotapplicableInthisyear,theCompanyretainedGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)astheauditinstitutionforitsinternalcontrolattheauditfeesofRMB120,000.

IXPossibilityofDelistingafterDisclosureofthisReport

□Applicable√NotapplicableXInsolvencyandReorganization

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIMajorLegalMatters

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIIPunishmentsandRectifications

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XIIICreditQualityoftheCompanyaswellasItsControllingShareholderandActualController

√Applicable□NotapplicableThedefactocontrolleroftheCompanyisSASACofChangzhouPeople’sGovernmentandthecontrollingshareholderofitisChangzhouInvestmentGroupCo.,Ltd.Thereisnosuchcasethatthecontrollingshareholderfailstoperformanylegallyeffectivejudgmentofcourtsortopayoffmatureddebtswithalargeamount.XIVMajorRelated-PartyTransactions

1.ContinuingRelated-PartyTransactions

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.Related-PartyTransactionsRegardingPurchaseorDisposalofAssetsorEquityInvestments

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.Related-PartyTransactionsRegardingJointInvestmentsinThirdParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

4.AmountsDuetoandfromRelatedParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

5.TransactionswithRelatedFinanceCompanies

□Applicable√NotapplicableTheCompanydidnotmakedepositsin,receiveloansorcreditfromandwasnotinvolvedinanyotherfinancebusinesswithanyrelatedfinancecompanyoranyotherrelatedparties.

6.TransactionswithRelatedPartiesbyFinanceCompaniesControlledbytheCompany

□Applicable√NotapplicableThefinancecompanycontrolledbytheCompanydidnotmakedeposits,receiveloansorcreditfromandwasnotinvolvedinanyotherfinancebusinesswithanyrelatedparties.

7.OtherMajorRelated-PartyTransactions

√Applicable□Notapplicable

On25August2022,theCompanyheldtheFourthInterimMeetingoftheBoardofDirectorsandtheFourthInterimMeetingoftheSupervisoryCommitteein2022anddeliberatedandapprovedtheProposalonPlanningtoParticipateinCapitalIncreaseandShareExpansionandRelatedTransactionsofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,agreeingtoincreaseRMB75millioncapitaltoHorizonNewEnergyforthesubscriptionofitsnewlyregisteredcapitalofRMB18,844,200andauthorizingShiXinkun,theCompany’sChairman,tosigncapitalincreaseagreementswithrelatedparties.InAugust2022,HorizonNewEnergyanditsshareholderssignedtheCapitalIncreaseAgreementofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,agreeingthattheregisteredcapitalofHorizonNewEnergywasincreasedfromRMB1,405,622,491toRMB1.75billion.InOctober2022,HorizonNewEnergycompletedtheindustrialandcommercialchangeregistrationproceduresaccordingtotheaforesaidcapitalincreaseagreementandobtainedthenewbusinesslicense.Indextothepublicannouncementsaboutthesaidrelated-partytransactionsdisclosed

TitleofpublicannouncementDisclosuredateDisclosurewebsite
ProposalonPlanningtoParticipateinCapitalIncreaseandShareExpansionandRelatedTransactionsofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.27August2022www.cninfo.com.cn

XVMajorContractsandExecutionthereof

1.Entrustment,ContractingandLeases

(1)Entrustment

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(2)Contracting

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(3)Leases

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.MajorGuarantees

√Applicable□Notapplicable

Unit:RMB'0,000

GuaranteesprovidedbytheCompanyforexternalparties(exclusiveofthoseforsubsidiaries)
Guarantee-receivingentityDisclosuredateoftheLineofguaranteeActualoccurrencedateActualguaranteeTypeofguaranteeTermofguaranteeHavingexpireGuaranteefora
guaranteelineannouncement(agreementsigningdate)amountdornotrelatedpartyornot
GuaranteesprovidedbytheCompanyastheparentforitssubsidiaries
Guarantee-receivingentityDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.15April20212,0007May20212,000Jointliability1yearYesNo
TotalapprovedlineforsuchguaranteesintheReportingPeriod(B1)0TotalactualamountofsuchguaranteesintheReportingPeriod(B2)500
TotalapprovedlineforsuchguaranteesattheendoftheReportingPeriod(B3)0TotalactualbalanceofsuchguaranteesattheendoftheReportingPeriod(B4)0
Guaranteesbetweensubsidiaries
Guarantee-receivingentityDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
Totalguaranteeamount(totalofthethreekindsofguaranteesabove)
TotalguaranteelineapprovedintheReportingPeriod(A1+B1+C1)0TotalactualguaranteeamountintheReportingPeriod(A2+B2+C2)500
TotalapprovedguaranteelineattheendoftheReportingPeriod(A3+B3+C3)0TotalactualguaranteebalanceattheendoftheReportingPeriod0
(A4+B4+C4)
Totalactualguaranteeamount(A4+B4+C4)as%oftheCompany’snetassets0.00%
Ofwhich:
Balanceofguaranteesprovidedforshareholders,thedefactocontrollerandtheirrelatedparties(D)0
Balanceofdebtguaranteesprovideddirectlyorindirectlyforentitieswithanover70%debt/assetratio(E)0
Amountbywhichthetotalguaranteeamountexceeds50%oftheCompany’snetassets(F)0
Totalofthethreeamountsabove(D+E+F)0
Possibilityofhavingtoexecutejointliabilityonoutstandingguarantees(ifany)N/A
Irregularitiesintheprovisionofguaranteestoexternalparties(ifany)N/A

Compoundguarantees:N/A

3.CashEntrustedforWealthManagement

(1)CashEntrustedforWealthManagement

√Applicable□NotapplicableOverviewsofcashentrustedforwealthmanagementduringtheReportingPeriod

Unit:RMB’0,000

SpecifictypeCapitalresourcesAmountincurredUnduebalanceUnrecoveredoverdueamountUnrecoveredoverdueamountwithprovisionforimpairment
BrokerfinancialproductsSelf-funded88560000
BankfinancialproductsSelf-funded18,20018,20000
BrokerfinancialproductsRaised-funded5,000000
BankfinancialproductsRaised-funded28,00010,00000
Total52,08528,80000

High-riskwealthmanagementtransactionswithasignificantsingleamount,orwithlowsecurity,lowliquidity:

□Applicable√NotapplicableSituationwheretheprincipalisexpectedlyirrecoverableoranimpairmentmaybeincurred:

□Applicable√Notapplicable

(2)EntrustedLoans

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

4.OtherMajorContracts

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XVIOtherSignificantEvents

□Applicable√NotapplicableXVIISignificantEventsofSubsidiaries

□Applicable√Notapplicable

PartVIIShareChangesandShareholderInformation

IShareChanges

1.ShareChanges

Unit:share

BeforeIncrease/decreaseintheReportingPeriod(+/-)After
NumberPercentage(%)NewissuesSharesasdividendconvertedfromprofitSharesasdividendconvertedfromcapitalreservesOtherSubtotalNumberPercentage(%)
1.Restrictedshares144,318,18120.45%-87,500,000.00-87,500,000.0056,818,1818.05%
1.1Sharesheldbygovernment00.00%0.000.0000.00%
1.2Sharesheldbystate-ownedlegalpersons72,045,45310.21%-15,227,272.00-15,227,272.0056,818,181.008.05%
1.3Sharesheldbyotherdomesticinvestors68,863,6389.76%-68,863,638.00-68,863,638.0000.00%
Amongwhich:Sharesheldbydomesticlegalpersons48,818,1786.92%-48,818,178.00-48,818,178.0000.00%
Sharesheldbydomesticnaturalpersons20,045,4602.84%-20,045,460.00-20,045,460.0000.00%
1.4Sharesheldbyforeigninvestors3,409,0900.48%-3,409,090.00-3,409,090.0000.00%
Amongwhich:Sharesheldbyforeignlegalpersons3,409,0900.48%-3,409,090.00-3,409,090.0000.00%
Sharesheldbyforeignnaturalpersons00.00%0000.00%
2.Unrestrictedshares561,374,32679.55%87,500,000.0087,500,000.00648,874,32691.95%
2.1RMB-denominatedordinaryshares411,374,32658.29%87,500,000.0087,500,000.00498,874,32670.69%
2.2Domesticallylistedforeignshares150,000,00021.26%00150,000,00021.26%
2.3Oversealistedforeignshares00.00%0000.00%
2.4Other00.00%0000.00%
3.Totalshares705,692,507100.00%00705,692,507100.00%

Reasonsforthesharechanges:

□Applicable√NotapplicableApprovalofsharechanges:

□Applicable√NotapplicableTransferofshareownership:

□Applicable√NotapplicableEffectsofsharechangesonthebasicanddilutedearningspershare,equitypershareattributabletotheCompany’sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively:

□Applicable√NotapplicableOtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatortobedisclosed:

□Applicable√Notapplicable

2.ChangesinRestrictedShares

√Applicable□Notapplicable

Unit:share

NameoftheshareholdersRestrictedsharesamountattheperiod-beginRestrictedsharesrelievedoftheperiodRestrictedsharesincreasedoftheperiodRestrictedsharesamountattheperiod-endRestrictedreasonsRestrictedsharesrelieveddate
UBSAG3,409,0903,409,09000Additionalissuanceof3,409,090shares5January2022
throughtheprivateplacementofshares
CaitongFundManagementCo.,Ltd.7,909,0907,909,09000Additionalissuanceof7,909,090sharesthroughtheprivateplacementofshares5January2022
JiangxiJintouIndustrialDevelopmentCo.,Ltd.4,545,4544,545,45400Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares5January2022
GuotaiAssetManagementCo.,Ltd.8,181,8188,181,81800Additionalissuanceof8,181,818sharesthroughtheprivateplacementofshares5January2022
Enjoy(Ningbo)AssetManagementL.P.6,818,1816,818,18100Additionalissuanceof6,818,181sharesthroughtheprivateplacementofshares5January2022
ZhouZhiheng3,409,0903,409,09000Additionalissuanceof3,409,090sharesthroughtheprivateplacementofshares5January2022
ChinaNationalGoldGroupAssetManagementCo.,Ltd.10,681,81810,681,81800Additionalissuanceof10,681,818sharesthroughtheprivateplacementofshares5January2022
SunMeichun4,545,4544,545,45400Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares5January2022
NuodeAssetManagementCo.,Ltd.11,363,63611,363,63600Additionalissuanceof11,363,636sharesthroughtheprivateplacementofshares5January2022
MinmetalsSecuritiesCo.,Ltd.4,545,4544,545,45400Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares5January2022
ChenBeiwen7,272,7277,272,72700Additionalissuanceof7,272,727sharesthroughtheprivateplacementofshares5January2022
NanhuaFundCo.,Ltd.5,454,5455,454,54500Additionalissuanceof5,454,545sharesthroughtheprivateplacementofshares5January2022
YaoJianquan4,545,4544,545,45400Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares5January2022
ChangzhouTransportationConstructionInvestmentDevelopmentCo.,Ltd.4,545,4544,545,45400Additionalissuanceof4,545,454sharesthroughtheprivateplacementofshares5January2022
LiXueqin272,735272,73500Additionalissuanceof272,735sharesthroughtheprivateplacementofshares5January2022
Total87,500,00087,500,00000----

II.IssuanceandListingofSecurities

1.Securities(ExclusiveofPreferredShares)IssuedintheReportingPeriod

□Applicable√Notapplicable

2.ChangestoTotalShares,ShareholderStructureandAssetandLiabilityStructures

□Applicable√Notapplicable

3.ExistingStaff-HeldShares

□Applicable√NotapplicableIIIShareholdersandActualController

Unit:share

Numberofordinaryshareholders50,886Numberofordinaryshareholdersatthemonth-endpriortothedisclosureofthisReport49,998Numberofpreferredshareholderswithresumedvotingrights0Numberofpreferredshareholderswithresumedvotingrightsatthemonth-endpriortothedisclosureofthisReport0
5%orgreatershareholdersortop10shareholders
NameofshareholderNatureofshareholderShareholdingpercentageTotalsharesheldattheperiod-endIncrease/decreaseintheReportingPeriodRestrictedsharesheldUnrestrictedsharesheldSharesinpledgeorfrozen
StatusShares
ChangzhouInvestmentGroupCo.,LtdState-ownedlegalperson32.26%227,663,41756,818,181170,845,236
ChenJianDomesticnaturalperson0.71%4,979,9004,979,900
MORGANSTANLEY&CO.INTERNATIONALPLC.Foreignlegalperson0.45%3,146,3923,146,392
KGIASIALIMITEDForeignlegalperson0.44%3,101,6953,101,695
YangXueeDomesticnaturalperson0.37%2,611,5002,611,500
ChinaMinshengBank-GoldstateYuanqiDynamicAssetAllocationMixedTypeSecuritiesInvestmentFundOther0.36%2,530,8002,530,800
CLSAAssetManagementLimited-Clients’CapitalForeignlegalperson0.25%1,780,0681,780,068
DaiWenpingDomesticnaturalperson0.25%1,776,2001,776,200
LiSuinanDomesticnaturalperson0.22%1,569,1001,569,100
HuangGuoliangDomesticnaturalperson0.22%1,528,8911,528,891
StrategicinvestororgenerallegalN/A
personbecomingatop-10ordinaryshareholderduetorightsissue(ifany)
Relatedoracting-in-concertpartiesamongtheshareholdersaboveItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresforInformationRegardingShareholdingAlteration.
Aboveshareholdersinvolvedinentrusting/beingentrustedwithvotingrightsandgivingupvotingrightsN/A
Specialaccountforsharerepurchases(ifany)amongthetop10shareholdersN/A
Top10unrestrictedshareholders
NameofshareholderUnrestrictedsharesheldattheperiod-endSharesbytype
TypeShares
ChangzhouInvestmentGroupCo.,Ltd170,845,236RMB-denominatedordinaryshare170,845,236
ChenJian4,979,900RMB-denominatedordinaryshare4,979,900
MORGANSTANLEY&CO.INTERNATIONALPLC.3,146,392RMB-denominatedordinaryshare3,146,392
KGIASIALIMITED3,101,695Domesticallylistedforeignshare3,101,695
YangXuee2,611,500RMB-denominatedordinaryshare2,611,500
ChinaMinshengBank-GoldstateYuanqiDynamicAssetAllocationMixedTypeSecuritiesInvestmentFund2,530,800RMB-denominatedordinaryshare2,530,800
CLSAAssetManagementLimited-Clients’Capital1,780,068RMB-denominatedordinaryshare1,780,068
DaiWenping1,776,200RMB-denominatedordinaryshare1,776,200
LiSuinan1,569,100Domesticallylistedforeignshare1,569,100
HuangGuoliang1,528,891Domesticallylistedforeignshare1,528,891
Relatedoracting-in-concertpartiesamongtop10unrestrictedpublicshareholders,aswellasbetweentop10unrestrictedpublicshareholdersandtop10shareholdersItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresforInformationRegardingShareholdingAlteration.
Top10ordinaryshareholdersinvolvedinsecuritiesmargintrading(ifany)ShareholdersChenJianandDaiWenpingheld3,320,000and1,610,200sharesrespectivelyintheCompanythroughtheirmarginaccounts.

Indicatebytickmarkwhetheranyofthetop10ordinaryshareholdersorthetop10unrestrictedordinaryshareholdersoftheCompanyconductedanypromissoryrepoduringtheReportingPeriod.

□Yes√NoNosuchcasesintheReportingPeriod.

2.ControllingShareholderNatureofthecontrollingshareholder:Controlledbyalocalstate-ownedlegalpersonTypeofthecontrollingshareholder:Legalperson

NameofcontrollingshareholderLegalrepresentative/personinchargeDateofestablishmentUnifiedsocialcreditcodePrincipalactivity
ChangzhouInvestmentGroupCo.,LtdChenLimin20June200291320400467283980XPropertyinvestmentandmanagement
Controllingshareholder’sholdingsinotherlistedcompaniesathomeorabroadintheReportingPeriodNone

ChangeofthecontrollingshareholderintheReportingPeriod:

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.ActualControllerandItsActing-in-ConcertPartiesNatureoftheactualcontroller:Localinstitutionforstate-ownedassetsmanagementTypeoftheactualcontroller:Legalperson

NameofactualcontrollerLegalrepresentative/personinchargeDateofestablishmentUnifiedsocialcreditcodePrincipalactivity
State-ownedAssetsSupervisionandAdministrationCommissionofChangzhouMunicipalPeople’sGovernmentWangWenzhuo11320400014110251MNotapplicable
OtherlistedcompaniesathomeorabroadcontrolledbytheactualNone

ChangeoftheactualcontrollerduringtheReportingPeriod:

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.OwnershipandcontrolrelationsbetweentheactualcontrollerandtheCompany:

IndicatebytickmarkwhethertheactualcontrollercontrolstheCompanyviatrustorotherwaysofassetmanagement.

□Applicable√Notapplicable

4.NumberofAccumulativePledgedSharesheldbytheCompany’sControllingShareholderortheLargestShareholderaswellasItsActing-in-ConcertPartiesAccountsfor80%ofallsharesoftheCompanyheldbyThem

□Applicable√Notapplicable

5.Other10%orGreaterCorporateShareholders

□Applicable√Notapplicable

6.LimitationsonShareholdingDecreasebytheCompany’sControllingShareholder,ActualController,ReorganizerandOtherCommitmentMakers

√Applicable□NotapplicableChangzhouInvestmentGroupCo.,Ltd.,thecontrollingshareholderoftheCompany,participatedinthenon-publicofferingofsharesoftheCompanyandwasallotted56,818,181shareswithasubscriptionamountofRMB249,999,996.40.Theshareswerelistedon5July2021,witha36-monthlock-upperiodandareleasedateof5July2024.

IVSpecificImplementationofShareRepurchaseduringtheReportingPeriodProgressonanysharerepurchase

□Applicable√NotapplicableProgressonreducingtherepurchasedsharesbymeansofcentralizedbidding

□Applicable√Notapplicable

PartVIIIPreferenceShares

□Applicable√NotapplicableNopreferencesharesintheReportingPeriod.

PartIXBonds

□Applicable√Notapplicable

PartXFinancialStatements

IIndependentAuditor’sReport

Typeoftheindependentauditor’sopinionUnmodifiedunqualifiedopinion
Dateofsigningthisreport10thApril2023
NameoftheindependentauditorGongzhengTianyeCertifiedPublicAccountants(SpecialGeneralPartnership)
No.oftheauditor’sreportS.G.No.W[2023]A351
NameofthecertifiedpublicaccountantsWangWenkai,QinZhijun

TextoftheIndependentAuditor’sReport

TotheShareholdersofChangchaiCompany,Limited,

IOpinionWehaveauditedtheaccompanyingfinancialstatementsofChangchaiCompany,Limited.(togetherwithitsconsolidatedsubsidiariesincludedintheconsolidatedfinancialstatements,the“Company”),whichcomprisetheparent’sandconsolidatedbalancesheetsasat31December2022,theparent’sandconsolidatedincomestatements,theparent’sandconsolidatedcashflowstatements,theparent’sandconsolidatedstatementsofchangesinowners’equityfortheyearthenended,aswellasthenotestothefinancialstatements.Inouropinion,thefinancialstatementsattachedwerepreparedinlinewiththeregulationsofAccountingStandardsforBusinessEnterprisesinallsignificantaspectswhichgaveatrueandfairviewoftheconsolidatedandparentfinancialpositionofChangchaiCompany,Limited.Asat31December2022andtheconsolidatedandparentbusinessperformanceandcashflowfor2022.IIBasisforOpinionWeconductedourauditsinaccordancewiththeAuditStandardsforChineseRegisteredAccountants.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sResponsibilitiesforAuditofFinancialStatementssectionofourreport.WeareindependentoftheCompanyinaccordancewiththeChinaCodeofEthicsforCertifiedPublicAccountants,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththesaidCodeofEthics.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.IIIKeyAuditMattersKeyauditmattersarethosemattersthat,inourprofessionaljudgment,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Andkeyauditmatteridentifiedinourauditissummarizedasfollows:

(I)Recognitionofrevenue

1.DescriptionoftheitemFordetailsandanalysisoftheaccountingpoliciesforrevenuerecognition,pleaserefertoaccountingpoliciesstatedinthenotestofinancialstatements“III.30.Revenue”and“V.37.Operatingincomeandoperatingcost”.In2022,theoperatingincomeofChangchaiCompanyamountedtoRMB2,182,043,100.SincetheoperatingrevenueisoneofkeyperformanceindicatorsoftheCompany,andthereistheinherentriskthatthemanagementmaymanipulatethetimingofrevenuerecognitionforthepurposeofachievingcertaingoalsorexpectations,soweidentifytherevenuerecognitionasakeyaudititem.

2.Responseforaudit

(1)Knowthekeyinternalcontrolrelatedtorevenuerecognition,evaluatewhetheritsdesignandexecutionarevalidornot,andtesttheoperationeffectivenessoftherelatedinternalcontrol.

(2)Interviewthemanagement,knowabouttherecognitionpoliciesregardingrevenueoftheCompany,getandcheckcontractsoragreementsoftheCompanysignedwithcustomers,identifycontracttermsrelatedtotherecognitionofsalesrevenueofproductsandevaluatewhethertherevenuerecognitionoftheCompanymeetstherequirementsofaccountingstandardsforbusinessenterprises.

(3)Forsalesrevenue,conductingsamplingtestsonsupportingdocumentsrelatedtorevenuerecognition,soastochecksupportingdocumentssuchastermsassociatedwithcontroltransferofcommoditiesinsalescontractsanddocumentationcollectedandacknowledgedbyauxiliarymanufacturers(includingbutnotlimitedtosalescontracts,orders,salesinvoices,deliverynotes,exportcustomsdeclarations,etc.);

(4)Checktheoperatingrevenuerecognizedbeforeandafterthebalancesheetdatetothesupportingdocuments,suchasshippingorder,declarationforexportation,andetcbysamplingmethodtoassesswhethertheoperatingrevenueisrecognizedwithinappropriateperiod.

(5)Implementtheconfirmationbydrawingsampletorecognizethebalanceofaccountsreceivableandtheamountofsalesrevenueaccordingtothefeaturesandnaturesofcustomertransaction.(II)Baddebtprovisionforaccountsreceivable

1.DescriptionoftheitemAsaccountingpoliciesstatedinthenotestofinancialstatements“III.10.Impairmentoffinancialinstruments”and“V.4.Accountsreceivable”.On31December2022,thebookbalanceofaccountsreceivableofChangchaiCompanystoodatRMB522,168,300,thebaddebtprovisionamountedtoRMB151,846,100million,andthebookvaluewasRMB370,322,200,accountingfor7.10%ofthetotalassetsattheendofthereportingperiod.AsthebalanceofaccountsreceivableissignificantandthejudgementoftheManagementisinvolvedinthewithdrawalofbaddebtprovisionofaccountsreceivable,weconsiderthisasakeyauditmatter.

2.Responseforaudit

(1)AccessChangchai’sinternalcontrolsystemsofsalesandaccountsreceivablemanagementtounderstandandevaluatethedesignofinternalcontrol,andcarryoutwalk-throughtesttoconfirmtheimplementationofinternalcontrolsystems.

(2)AnalyzeandconfirmthereasonablenessofChangchai’saccountingestimatesofbaddebtprovisionforaccountsreceivable,includingthebasisfordeterminingthecombinationofaccountsreceivable,theexpectedcreditlossrateandthejudgmentofimpairmenttestofaccountsreceivableevaluatedindividually.

(3)Combinedbaddebtprovisionpolicyforaccountsreceivable,verifyingtheaccuracyofthebasisfordeterminingaccountsreceivableportfolioandthereasonablenessofbaddebtprovisionseparatelyaccrued;

(4)Accessandchecktheaccountreceivabledetails,agingschedule,statementofprovisionsforbaddebts,andconfirmthereasonablenessofbaddebtprovisionforaccountsreceivablebycombiningwiththerequestofconfirmationofbalanceandsubsequentcollectioninspection;

(5)Foraccountsreceivablewithbaddebtprovisionbysingleitem,referringtocorrespondingcontractsandotherinformationtoobtainanunderstandingofsalesandrepaymentsanddeterminewhetherthebaddebtprovisionbysingleitemisadequatelywithdrawn.

(6)Sendrequestforconfirmationofbalance,andconfirmtheauthenticityandaccuracyoftheamountofaccountsreceivableonthebalancesheetdatebycombiningwithsubsequentinspectionandotherprocedures.IVOtherInformationTheCompany’smanagement(hereinafterreferredtoas“management”)isresponsiblefortheotherinformation.TheotherinformationcomprisesalloftheinformationincludedintheCompany’s2022AnnualReportotherthan

thefinancialstatementsandourauditor’sreportthereon.Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation;wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.VResponsibilitiesofManagementandThoseChargedwithGovernanceforFinancialStatementsThemanagementisresponsibleforthepreparationofthefinancialstatementsthatgiveafairviewinaccordancewithCAS,andfordesigning,implementingandmaintainingsuchinternalcontrolasthemanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,themanagementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,mattersrelatedtogoingconcern(ifapplicable)andusingthegoingconcernbasisofaccountingunlessthemanagementeitherintendstoliquidatetheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingtheCompany’sfinancialreportingprocess.VIAuditor’sResponsibilitiesforAuditofFinancialStatementsOurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithCASwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.AspartofanauditinaccordancewithCAS,weexerciseprofessionaljudgmentandmaintainprofessionalskepticismthroughouttheaudit.Wealso:

(1)Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

(2)Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances.

(3)Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythemanagement.

(4)Concludeontheappropriatenessofthemanagement’suseofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredbyCAStodrawusers’attentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatements.Ifsuchdisclosuresareinadequate,weneedtomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.

(5)Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,andwhetherthefinancial

statementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

(6)ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheCompanytoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceoftheCompanyaudit.Weremainsolelyresponsibleforourauditopinion.Wecommunicatewiththosechargedwithgovernanceregardingtheplannedscopeandtimingoftheauditandsignificantauditfindings,includinganynoteworthydeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andcommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.GongzhengTianyeCertifiedPublicAccountantsChineseCPA:WangWenkai

(SpecialGeneralPartnership)(EngagementPartner)

ChineseCPA:QinZhijunWuxi·China10thApril2023IIFinancialStatementsCurrencyunitforthefinancialstatementsandthenotesthereto:RMB

1.ConsolidatedBalanceSheetPreparedbyChangchaiCompany,Limited

31December2022

Unit:RMB

Item31December20221January2022
Currentassets:
Monetaryassets930,013,350.97707,966,678.74
Settlementreserve
Interbankloansgranted
Held-for-tradingfinancialassets370,103,602.57404,053,261.57
Derivativefinancialassets
Notesreceivable297,125,872.54334,311,236.78
Accountsreceivable370,322,179.77375,209,126.48
Accountsreceivablefinancing242,813,392.79497,388,826.02
Prepayments6,330,202.698,197,418.39
Premiumsreceivable
Reinsurancereceivables
Receivablereinsurancecontractreserve
Otherreceivables32,938,305.1619,515,350.52
Including:Interestreceivable
Dividendsreceivable
Financialassetspurchasedunderresaleagreements
Inventories571,996,881.74651,083,758.18
Contractassets
Assetsheldforsale
Currentportionofnon-currentassets
Othercurrentassets49,279,022.4944,060,822.57
Totalcurrentassets2,870,922,810.723,041,786,479.25
Non-currentassets:
Loansandadvancestocustomers
Investmentsindebtobligations39,309,587.9337,898,226.39
Investmentsinotherdebtobligations
Long-termreceivables
Long-termequityinvestments
Investmentsinotherequityinstruments955,560,240.08779,877,646.53
Othernon-currentfinancialassets373,500,000.00112,500,000.00
Investmentproperty42,160,779.6544,597,255.21
Fixedassets720,061,387.76402,915,521.65
Constructioninprogress30,281,547.56270,305,690.91
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets157,392,217.54155,154,745.91
Developmentcosts
Goodwill
Long-termprepaidexpense3,279,970.32110,345.30
Deferredincometaxassets26,220,575.9310,693,809.23
Othernon-currentassets670,735.934,543,240.88
Totalnon-currentassets2,348,437,042.701,818,596,482.01
Totalassets5,219,359,853.424,860,382,961.26
Currentliabilities:
Short-termborrowings115,437,700.6573,971,466.65
Borrowingsfromthecentralbank
Interbankloansobtained
Held-for-tradingfinancialliabilities
Derivativefinancialliabilities
Notespayable471,876,397.72550,774,400.00
Accountspayable747,010,098.88666,186,668.82
Advancesfromcustomers837,425.55660,965.62
Contractliabilities32,843,692.8326,864,081.97
Financialassetssoldunderrepurchaseagreements
Customerdepositsandinterbankdeposits
Payablesforactingtradingofsecurities
Payablesforunderwritingofsecurities
Employeebenefitspayable49,351,022.4745,385,667.48
Taxespayable8,570,175.395,306,378.82
Otherpayables160,046,882.93148,361,373.29
Including:Interestpayable
Dividendspayable3,891,433.833,891,433.83
Handlingchargesandcommissionspayable
Reinsurancepayables
Liabilitiesdirectlyassociatedwithassetsheldforsale
Currentportionofnon-currentliabilities
Othercurrentliabilities78,645,741.1688,938,192.79
Totalcurrentliabilities1,664,619,137.581,606,449,195.44
Non-currentliabilities:
Insurancecontractreserve
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termemployeebenefitspayable
Provisions
Deferredincome36,205,625.9439,615,355.40
Deferredincometaxliabilities161,360,251.33117,344,161.11
Othernon-currentliabilities
Totalnon-currentliabilities197,565,877.27156,959,516.51
Totalliabilities1,862,185,014.851,763,408,711.95
Owners’equity:
Sharecapital705,692,507.00705,692,507.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves640,133,963.01640,676,218.40
Less:Treasurystock
Othercomprehensiveincome655,341,704.07506,011,499.55
Specificreserve18,848,856.7518,812,950.04
Surplusreserves349,197,725.72334,144,488.46
Generalreserve
Retainedearnings915,495,909.35872,212,354.88
TotalequityattributabletoownersoftheCompanyastheparent3,284,710,665.903,077,550,018.33
Non-controllinginterests72,464,172.6719,424,230.98
Totalowners’equity3,357,174,838.573,096,974,249.31
Totalliabilitiesandowners’equity5,219,359,853.424,860,382,961.26

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

2.BalanceSheetoftheCompanyastheParent

Unit:RMB

Item31December20221January2022
Currentassets:
Monetaryassets792,744,709.77615,184,387.01
Held-for-tradingfinancialassets280,354,111.11262,004,030.14
Derivativefinancialassets
Notesreceivable282,556,327.54312,118,296.88
Accountsreceivable329,060,940.50349,135,255.42
Accountsreceivablefinancing291,837,385.00497,388,826.02
Prepayments3,097,586.072,727,652.23
Otherreceivables179,596,495.5726,497,081.34
Including:Interestreceivable
Dividendsreceivable
Inventories397,626,837.43516,588,187.24
Contractassets
Assetsheldforsale
Currentportionofnon-currentassets
Othercurrentassets15,594,949.0521,292,211.46
Totalcurrentassets2,572,469,342.042,602,935,927.74
Non-currentassets:
Investmentsindebtobligations39,309,587.9337,898,226.39
Investmentsinotherdebtobligations
Long-termreceivables
Long-termequityinvestments569,273,530.03535,752,730.03
Investmentsinotherequityinstruments955,560,240.08779,877,646.53
Othernon-currentfinancialassets373,500,000.00112,500,000.00
Investmentproperty42,160,779.6544,597,255.21
Fixedassets249,558,305.21325,034,679.67
Constructioninprogress18,366,604.8415,557,418.76
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets64,783,364.8966,621,426.26
Developmentcosts
Goodwill
Long-termprepaidexpense
Deferredincometaxassets19,860,262.439,613,375.32
Othernon-currentassets
Totalnon-currentassets2,332,372,675.061,927,452,758.17
Totalassets4,904,842,017.104,530,388,685.91
Currentliabilities:
Short-termborrowings108,437,700.6558,971,466.65
Held-for-tradingfinancialliabilities
Derivativefinancialliabilities
Notespayable518,918,596.58544,444,400.00
Accountspayable541,911,517.64546,689,207.59
Advancesfromcustomers837,425.55660,965.62
Contractliabilities24,129,579.3524,730,270.44
Employeebenefitspayable41,558,489.8637,861,577.50
Taxespayable3,119,171.692,955,053.82
Otherpayables151,206,684.89135,773,368.98
Including:Interestpayable
Dividendspayable3,243,179.973,243,179.97
Liabilitiesdirectlyassociatedwithassetsheldforsale
Currentportionofnon-currentliabilities
Othercurrentliabilities67,810,395.3363,535,570.11
Totalcurrentliabilities1,457,929,561.541,415,621,880.71
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termemployeebenefitspayable
Provisions
Deferredincome36,205,625.9439,615,355.40
Deferredincometaxliabilities149,039,152.6895,034,251.50
Othernon-currentliabilities
Totalnon-currentliabilities185,244,778.62134,649,606.90
Totalliabilities1,643,174,340.161,550,271,487.61
Owners’equity:
Sharecapital705,692,507.00705,692,507.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves659,418,700.67659,418,700.67
Less:Treasurystock
Othercomprehensiveincome655,341,704.07506,011,499.55
Specificreserve18,848,856.7518,812,950.04
Surplusreserves349,197,725.72334,144,488.46
Retainedearnings873,168,182.73756,037,052.58
Totalowners’equity3,261,667,676.942,980,117,198.30
Totalliabilitiesandowners’equity4,904,842,017.104,530,388,685.91

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

3.ConsolidatedIncomeStatement

Unit:RMB

Item20222021
1.Revenue2,182,043,095.612,452,430,515.60
Including:Operatingrevenue2,182,043,095.612,452,430,515.60
Interestincome
Insurancepremiumincome
Handlingchargeandcommissionincome
2.Costsandexpenses2,247,441,538.642,399,524,185.52
Including:Costofsales1,948,677,036.522,084,671,762.08
Interestexpense
Handlingchargeandcommissionexpense
Surrenders
Netinsuranceclaimspaid
Netamountprovidedasinsurancecontractreserve
Expenditureonpolicydividends
Reinsurancepremiumexpense
Taxesandsurcharges16,973,196.2615,125,948.96
Sellingexpense102,630,223.71117,242,290.32
Administrativeexpense119,511,189.7298,890,284.22
R&Dexpense81,239,597.0682,390,284.14
Financecosts-21,589,704.631,203,615.80
Including:Interestexpense1,993,453.715,907,625.42
Interestincome12,804,077.197,921,535.62
Add:Otherincome7,184,028.056,633,332.38
Returnoninvestment(“-”forloss)7,969,467.199,327,296.95
Including:Shareofprofitorlossofjointventuresandassociates
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Exchangegain(“-”forloss)
Netgainonexposurehedges(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)145,243,457.17104,570,498.36
Creditimpairmentloss(“-”forloss)-2,953,740.73-52,017,151.82
Assetimpairmentloss(“-”forloss)-14,367,197.27-8,676,024.20
Assetdisposalincome(“-”forloss)393,161.73155,515.49
3.Operatingprofit(“-”forloss)78,070,733.11112,899,797.24
Add:Non-operatingincome4,257,942.654,037,896.76
Less:Non-operatingexpense618,463.561,637,033.05
4.Profitbeforetax(“-”forloss)81,710,212.20115,300,660.95
Less:Incometaxexpense2,464,079.7412,368,786.58
5.Netprofit(“-”fornetloss)79,246,132.46102,931,874.37
5.1Byoperatingcontinuity
5.1.1Netprofitfromcontinuingoperations(“-”fornetloss)79,246,132.46102,931,874.37
5.1.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.2Byownership
5.2.1NetprofitattributabletoshareholdersoftheCompanyastheparent76,684,796.91103,006,232.54
5.2.1Netprofitattributabletonon-controllinginterests2,561,335.55-74,358.17
6.Othercomprehensiveincome,netoftax149,330,204.5280,528,741.31
AttributabletoownersoftheCompanyastheparent149,330,204.5280,528,741.31
6.1Itemsthatwillnotbereclassifiedtoprofitorloss149,330,204.5280,528,741.31
6.1.1Changescausedbyremeasurementsondefinedbenefitschemes
6.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossundertheequitymethod
6.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments149,330,204.5280,528,741.31
6.1.4Changesinthefairvaluearisingfromchangesinowncreditrisk
6.1.5Other
6.2Itemsthatwillbereclassifiedtoprofitorloss
6.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
6.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
6.2.3Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
6.2.4Creditimpairmentallowanceforinvestmentsinotherdebtobligations
6.2.5Reserveforcashflowhedges
6.2.6Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
6.2.7Other
Attributabletonon-controllinginterests
7.Totalcomprehensiveincome228,576,336.98183,460,615.68
AttributabletoownersoftheCompanyastheparent226,015,001.43183,534,973.85
Attributabletonon-controllinginterests2,561,335.55-74,358.17
8.Earningspershare
8.1Basicearningspershare0.10870.1657
8.2Dilutedearningspershare0.10870.1657

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

4.IncomeStatementoftheCompanyastheParent

Unit:RMB

Item20222021
1.Operatingrevenue1,988,473,044.552,267,232,119.78
Less:Costofsales1,784,345,704.101,944,820,462.59
Taxesandsurcharges11,846,885.2011,893,439.38
Sellingexpense97,601,117.35106,770,873.83
Administrativeexpense90,150,661.3180,635,862.36
R&Dexpense72,372,647.1075,021,386.36
Financecosts-22,274,862.27-2,350,968.39
Including:Interestexpense1,531,942.323,932,469.12
Interestincome15,122,552.358,354,523.54
Add:Otherincome6,504,428.465,810,480.10
Returnoninvestment(“-”forloss)36,604,658.628,352,714.26
Including:Shareofprofitorlossofjointventuresandassociates28,800,000.00
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Netgainonexposurehedges(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)186,354,111.1135,754,030.14
Creditimpairmentloss(“-”forloss)-8,854,137.91-16,143,004.02
Assetimpairmentloss(“-”forloss)-11,526,145.82-3,866,890.01
Assetdisposalincome(“-”forloss)4,181,548.776,642.47
2.Operatingprofit(“-”forloss)167,695,354.9980,355,036.59
Add:Non-operatingincome345,409.403,441,588.57
Less:Non-operatingexpense102,766.761,086,173.24
3.Profitbeforetax(“-”forloss)167,937,997.6382,710,451.92
Less:Incometaxexpense17,405,625.04-4,219,121.23
4.Netprofit(“-”fornetloss)150,532,372.5986,929,573.15
4.1Netprofitfromcontinuingoperations(“-”fornetloss)150,532,372.5986,929,573.15
4.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.Othercomprehensiveincome,netoftax149,330,204.5280,528,741.31
5.1Itemsthatwillnotbereclassifiedtoprofitorloss149,330,204.5280,528,741.31
5.1.1Changescausedbyremeasurementsondefinedbenefitschemes
5.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossundertheequitymethod
5.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments149,330,204.5280,528,741.31
5.1.4Changesinthefairvaluearisingfromchangesinowncreditrisk
5.1.5Other
5.2Itemsthatwillbereclassifiedtoprofitorloss
5.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
5.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
5.2.3Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
5.2.4Creditimpairmentallowanceforinvestmentsinotherdebtobligations
5.2.5Reserveforcashflowhedges
5.2.6Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
5.2.7Other
6.Totalcomprehensiveincome299,862,577.11167,458,314.46
7.Earningspershare
7.1Basicearningspershare
7.2Dilutedearningspershare

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

5.ConsolidatedCashFlowStatement

Unit:RMB

Item20222021
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices2,089,127,900.171,806,075,487.79
Netincreaseincustomerdepositsandinterbankdeposits
Netincreaseinborrowingsfromthecentralbank
Netincreaseinloansfromotherfinancialinstitutions
Premiumsreceivedonoriginalinsurancecontracts
Netproceedsfromreinsurance
Netincreaseindepositsandinvestmentsofpolicyholders
Interest,handlingchargesandcommissionsreceived
Netincreaseininterbankloansobtained
Netincreaseinproceedsfromrepurchasetransactions
Netproceedsfromactingtradingofsecurities
Taxrebates38,479,590.7750,016,426.49
Cashgeneratedfromotheroperatingactivities22,990,293.4422,636,726.19
Subtotalofcashgeneratedfromoperatingactivities2,150,597,784.381,878,728,640.47
Paymentsforcommoditiesandservices1,312,012,931.691,648,743,526.28
Netincreaseinloansandadvancestocustomers
Netincreaseindepositsinthecentralbankandininterbankloansgranted
Paymentsforclaimsonoriginalinsurancecontracts
Netincreaseininterbankloansgranted
Interest,handlingchargesandcommissionspaid
Policydividendspaid
Cashpaidtoandforemployees313,119,839.28323,020,547.09
Taxespaid52,344,111.3331,276,348.44
Cashusedinotheroperatingactivities108,190,624.24142,011,997.96
Subtotalofcashusedinoperatingactivities1,785,667,506.542,145,052,419.77
Netcashgeneratedfrom/usedinoperatingactivities364,930,277.84-266,323,779.30
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment914,060,767.00373,180,033.58
Returnoninvestment17,913,476.5911,396,891.86
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets692,980.99589,226.24
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits
Cashgeneratedfromotherinvestingactivities11,400,123.61
Subtotalofcashgeneratedfrominvestingactivities944,067,348.19385,166,151.68
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets48,439,287.62139,772,849.33
Paymentsforinvestments1,033,581,567.00709,038,171.10
Netincreaseinpledgedloansgranted
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities1,869,322.91
Subtotalofcashusedininvestingactivities1,082,020,854.62850,680,343.34
Netcashgeneratedfrom/usedininvestingactivities-137,953,506.43-465,514,191.66
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived633,873,281.14
Including:Capitalcontributionsbynon-controllingintereststosubsidiaries
Borrowingsraised7,000,000.0019,000,000.00
Cashgeneratedfromotherfinancingactivities128,437,700.6558,971,466.65
Subtotalofcashgeneratedfromfinancingactivities135,437,700.65711,844,747.79
Repaymentofborrowings12,000,000.0029,000,000.00
Interestanddividendspaid18,689,380.471,707,729.02
Including:Dividendspaidbysubsidiariestonon-controllinginterests
Cashusedinotherfinancingactivities83,623,545.0714,621,163.63
Subtotalofcashusedinfinancingactivities114,312,925.5445,328,892.65
Netcashgeneratedfrom/usedinfinancingactivities21,124,775.11666,515,855.14
4.Effectofforeignexchangerateschangesoncashandcashequivalents-152,802.06-2,215,203.09
5.Netincreaseincashandcashequivalents247,948,744.46-67,537,318.91
Add:Cashandcashequivalents,beginningoftheperiod562,402,221.59629,939,540.50
6.Cashandcashequivalents,endoftheperiod810,350,966.05562,402,221.59

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

6.CashFlowStatementoftheCompanyastheParent

Unit:RMB

Item20222021
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices2,040,092,339.551,721,407,332.48
Taxrebates27,588,745.3439,451,775.67
Cashgeneratedfromotheroperatingactivities21,378,587.8916,788,453.39
Subtotalofcashgeneratedfromoperatingactivities2,089,059,672.781,777,647,561.54
Paymentsforcommoditiesandservices1,330,893,073.671,632,770,616.35
Cashpaidtoandforemployees243,134,907.26267,953,154.75
Taxespaid39,870,320.7221,295,926.17
Cashusedinotheroperatingactivities222,082,917.91129,115,999.33
Subtotalofcashusedinoperatingactivities1,835,981,219.562,051,135,696.60
Netcashgeneratedfrom/usedinoperatingactivities253,078,453.22-273,488,135.06
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment855,000,000.00
Returnoninvestment45,708,640.2710,222,037.17
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets38,250,224.61124,954.89
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits
Cashgeneratedfromotherinvestingactivities
Subtotalofcashgeneratedfrominvestingactivities938,958,864.8810,346,992.06
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets8,002,707.775,665,400.94
Paymentsforinvestments983,520,800.00484,148,226.39
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities1,869,322.91
Subtotalofcashusedininvestingactivities991,523,507.77491,682,950.24
Netcashgeneratedfrom/usedininvestingactivities-52,564,642.89-481,335,958.18
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived633,873,281.14
Borrowingsraised5,000,000.00
Cashgeneratedfromotherfinancingactivities128,437,700.6558,971,466.65
Subtotalofcashgeneratedfromfinancingactivities128,437,700.65697,844,747.79
Repaymentofborrowings10,000,000.00
Interestanddividendspaid18,348,005.18160,362.10
Cashusedinotherfinancingactivities80,503,408.9714,621,163.63
Subtotalofcashusedinfinancingactivities98,851,414.1524,781,525.73
Netcashgeneratedfrom/usedinfinancingactivities29,586,286.50673,063,222.06
4.Effectofforeignexchangerateschangesoncashandcashequivalents-1,851,060.10-1,401,721.22
5.Netincreaseincashandcashequivalents228,249,036.73-83,162,592.40
Add:Cashandcashequivalents,beginningoftheperiod476,410,739.41559,573,331.81
6.Cashandcashequivalents,endoftheperiod704,659,776.14476,410,739.41

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

7.ConsolidatedStatementsofChangesinOwners’Equity2022

Unit:RMB

Item2022
EquityattributabletoownersoftheCompanyastheparentNon-controllinginterestsTotalowners’equity
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesGeneralreserveRetainedearningsOtherSubtotal

Preferredshares

PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear705,692,507.00640,676,218.40506,011,499.5518,812,950.04334,144,488.46872,212,354.883,077,550,018.3319,424,230.983,096,974,249.31
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Adjustmentforbusiness
combinationundercommoncontrol
Otheradjustments
2.Balanceasatthebeginningoftheyear705,692,507.00640,676,218.40506,011,499.5518,812,950.04334,144,488.46872,212,354.883,077,550,018.3319,424,230.983,096,974,249.31
3.Increase/decreaseintheperiod(“-”fordecrease)-542,255.39149,330,204.5235,906.7115,053,237.2643,283,554.47207,160,647.5753,039,941.69260,200,589.26
3.1Totalcomprehensiveincome149,330,204.5276,684,796.91226,015,001.432,561,335.55228,576,336.98
3.2Capitalincreasedandreducedbyowners-542,255.39-542,255.3950,478,606.1449,936,350.75
3.2.1Ordinarysharesincreasedbyowners
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other-542,255.39-542,255.3950,478,606.1449,936,350.75
3.3Profitdistribution15,053,237.26-33,401,242.44-18,348,005.18-18,348,005.18
3.3.1Appropriationtosurplusreserves15,053,237.26-15,053,237.26
3.3.2Appropriationtogeneralreserve
3.3.3Appropriationtoowners(orshareholders)-18,348,005.18-18,348,005.18-18,348,005.18
3.3.4Other
3.4Transferswithinowners’
equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve35,906.7135,906.7135,906.71
3.5.1Increaseintheperiod4,877,232.124,877,232.124,877,232.12
3.5.2Usedintheperiod4,841,325.414,841,325.414,841,325.41
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00640,133,963.01655,341,704.0718,848,856.75349,197,725.72915,495,909.353,284,710,665.9072,464,172.673,357,174,838.57

2021

Unit:RMB

Item2021
EquityattributabletoownersoftheCompanyastheparentNon-contTotal
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesGeneralreserveRetainedearningsOtherSubtotalrollinginterestsowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00164,328,665.43425,482,758.2418,812,986.55325,451,531.14777,899,079.662,273,349,347.0219,498,589.152,292,847,936.17
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Adjustmentforbusinesscombinationundercommoncontrol
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00164,328,665.43425,482,758.2418,812,986.55325,451,531.14777,899,079.662,273,349,347.0219,498,589.152,292,847,936.17
3.Increase/decreaseintheperiod(“-”fordecrease)144,318,181.00476,347,552.9780,528,741.31-36.518,692,957.3294,313,275.22804,200,671.31-74,358.17804,126,313.14
3.1Totalcomprehensiveincome80,528,741.31103,006,232.54183,534,973.85-74,358.17183,460,615.68
3.2Capitalincreasedandreducedbyowners144,318,181.00476,347,552.97620,665,733.97620,665,733.97
3.2.1Ordinarysharesincreasedbyowners144,318,181.00476,347,552.97620,665,733.97620,665,733.97
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution8,692,957.32-8,692,957.32
3.3.1Appropriationtosurplusreserves8,692,957.32-8,692,957.32
3.3.2Appropriationtogeneralreserve
3.3.3Appropriationtoowners(orshareholders)
3.3.4Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve-36.51-36.51-36.51
3.5.1Increaseintheperiod4,023,200.244,023,200.244,023,200.24
3.5.2Usedintheperiod4,023,236.754,023,236.754,023,236.75
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00640,676,218.40506,011,499.5518,812,950.04334,144,488.46872,212,354.883,077,550,018.3319,424,230.983,096,974,249.31

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

8.StatementsofChangesinOwners’EquityoftheCompanyastheParent2022

Unit:RMB

Item2022
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear705,692,507.00659,418,700.67505,663,130.8818,812,950.04334,144,488.46756,385,421.252,980,117,198.30
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Otheradjustments
2.Balanceasatthebeginningoftheyear705,692,507.00659,418,700.67505,663,130.8818,812,950.04334,144,488.46756,385,421.252,980,117,198.30
3.Increase/decreaseintheperiod(“-”fordecrease)149,330,204.5235,906.7115,053,237.26117,131,130.15281,550,478.64
3.1Totalcomprehensiveincome149,330,204.52150,532,372.59299,862,577.11
3.2Capitalincreasedandreducedbyowners
3.2.1Ordinaryshares
increasedbyowners
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution15,053,237.26-33,401,242.44-18,348,005.18
3.3.1Appropriationtosurplusreserves15,053,237.26-15,053,237.26
3.3.2Appropriationtoowners(orshareholders)-18,348,005.18-18,348,005.18
3.3.3Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve35,906.7135,906.71
3.5.1Increaseintheperiod4,877,232.124,877,232.12
3.5.2Usedintheperiod4,841,325.414,841,325.41
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00659,418,700.67654,993,335.4018,848,856.75349,197,725.72873,516,551.403,261,667,676.94

2021

Unit:RMB

Item2021
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balanceasattheendoftheprioryear561,374,326.00183,071,147.70425,482,758.2418,812,986.55325,451,531.14677,800,436.752,191,993,186.38
Add:Adjustmentforchangeinaccountingpolicy
Adjustmentforcorrectionofpreviouserror
Otheradjustments
2.Balanceasatthebeginningoftheyear561,374,326.00183,071,147.70425,482,758.2418,812,986.55325,451,531.14677,800,436.752,191,993,186.38
3.Increase/decreaseintheperiod(“-”fordecrease)144,318,181.00476,347,552.9780,528,741.31-36.518,692,957.3278,236,615.83788,124,011.92
3.1Totalcomprehensiveincome80,528,741.3186,929,573.15167,458,314.46
3.2Capitalincreasedandreducedbyowners144,318,181.00476,347,552.97620,665,733.97
3.2.1Ordinarysharesincreasedbyowners144,318,181.00476,347,552.97620,665,733.97
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution8,692,957.32-8,692,957.32
3.3.1Appropriationtosurplusreserves8,692,957.32-8,692,957.32
3.3.2Appropriationtoowners(orshareholders)
3.3.3Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve-36.51-36.51
3.5.1Increaseintheperiod4,023,200.244,023,200.24
3.5.2Usedintheperiod4,023,236.754,023,236.75
3.6Other
4.Balanceasattheendoftheperiod705,692,507.00659,418,700.67506,011,499.5518,812,950.04334,144,488.46756,037,052.582,980,117,198.30

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

III.CompanyProfile

ChangchaiCompany,Limited(hereinafterreferredtoas“theCompany”)wasfoundedon5May1994,whichisacompanylimitedbysharespromotedsolelybyChangzhouDieselEnginePlantthroughtheapprovalbytheStateCommissionforRestructuringtheEconomicSystemswithdocumentTGS[1993]No.9on15January1993bywayofpublicofferingofshares.WiththeapprovedofthePeople’sGovernmentofJiangsuProvinceSZF[1993]No.67,aswellasreexaminedandapprovedbyChinaSecuritiesRegulatoryCommission(“CSRC”)throughdocumentZJFSZ(1994)No.9,theCompanyinitiallyissuedAsharestothepublicfrom15March1994to30March1994.AsapprovedbytheShenzhenStockExchangethroughdocumentSZSFZ(1994)No.15,suchtradablesharesofthepublicgotlistingon1July1994atShenzhenStockExchangewith“SuChangchaiA”forshortofstock,aswellas“0570”asstockcode(presentstockcodeis“000570”).In1996,withtherecommendationoftheOfficeofthePeople’sGovernmentofJiangsuProvinceSZBH[1996]No.13,aswellasfirstreviewbyShenzhenMunicipalSecuritiesAdministrationOfficethroughSZBZ[1996]No.24,andapprovaloftheStateCouncilSecuritiesCommissionZWF[1996]No.27,theCompanyissued100millionBsharestoqualifiedinvestorson27August1996to30August1996,gettinglistedon13September1996.On9June2006,theCompanyheldashareholders’generalmeetingrelatedtoAsharesmarkettoexamineandapprovesharemergerreformplan,andperformedthesharemergerreformon19June2006.Asexaminedandapprovedatthe2

nd

ExtraordinaryGeneralMeetingof2009inSeptember2009,basedonthetotalsharecapitalof374,249,551sharesasat30June2009,theCompanyimplementedtheprofitdistributionplan,i.e.todistribute5bonussharesandcashofRMB0.80forevery10shares,withregisteredcapitalincreasedbyRMB187,124,775.00,aswellasregisteredcapitalofRMB561,374,326.00afterchange,whichverifiedbyJiangsuGongzhengTianyeCertifiedPublicAccountantsCompanyLimitedwithissuingCapitalVerificationReportSGC[2010]No.B002.Anon-publicofferingofupto168,412,297newshareswasdeliberatedonandapprovedasaresolutionofthe2020AnnualGeneralMeetingheldon7May2021andapprovedbytheApprovaloftheNon-publicOfferingofSharesofChangchaiCo.,Ltd.(CSRCPermit[2020]No.3374)issuedbyChangchaiCompanyLimitedtheChinaSecuritiesRegulatoryCommission.On16June2021,thecapitalverificationreport"S.G.W[2021]B062"wasissuedbyGongzhengTianyeAccountingFirm(SpecialGeneralPartnership),confirmingthattheCompanyhadissued144,318,181RMBordinaryshares(Ashares)inanon-publicoffering,withanadditionalpaid-incapital(sharecapital)ofRMB144,318,181.ThetotalamountraisedwasRMB634,999,996.40;thenetamountraisedwasRMB620,665,733.97,whichincreasedthecapitalreserve(sharecapitalpremium)byRMB476,347,552.97.Asof31December2021,thetotalsharecapitaloftheCompanywasRMB705,692,507.CredibilitycodeoftheCompany’sLicenseofBusinessCorporation:91320400134792410W.TheCompany’sregisteredaddressissituatedatNo.123HuaideMiddleRoad,Changzhou,Jiangsu,aswellasitsheadofficelocatedatNo.123HuaideMiddleRoad,Changzhou,Jiangsu.TheCompanybelongstomanufacturingwithbusinessscopeincludingmanufacturingandsaleofdieselengine,dieselenginespartandcasting,grainharvestingmachine,rotarycultivators,walkingtractor,mouldandfixtures,assemblingandsaleofdieselgeneratingsetandpumpingunit.TheCompanymainlyengagedintheproductionandsalesofsmallandmedium-sizedsinglecylindersandmulti-cylinderdieselenginewiththelabelofChangchaiBrand.ThedieselengineproducedandsoldbytheCompanyweremainlyusedintractors,combineharvestmodels,lightcommercialvehicle,farmequipment,small-sizedconstructionmachinery,generatingsetsandshipbornemachineryandequipment,etc.TheCompany’smainbusinessremainedunchangedintheReporting

Period.TheCompanyestablishedtheShareholders’GeneralMeeting,theBoardofDirectorsandtheSupervisoryCommittee,Corporateoffice,FinancialDepartment,PoliticalDepartment,InvestmentandDevelopmentDepartment,AuditDepartment,HumanRecoursesDepartment,ProductionDepartment,ProcurementDepartment,SalesCompany,ChiefEngineerOffice,TechnologyCenter,QADepartment,FoundryBranch,MachineProcessingBranch,Single-cylinderEnginebranch,Multi-cylinderEngineBranchandOverseasBusinessDepartmentintheCompany.ThefinancialreporthasbeenapprovedtobeissuedbytheBoardofDirectorson10April2023.TheconsolidatedscopeoftheCompanyoftheReportingPeriodincludestheCompanyastheparentand8subsidiaries.ForthedetailsoftheconsolidatedscopeoftheReportingPeriodandthechangessituation,pleaserefertothechangesoftheconsolidatedscopeofthenotestothefinancialreportandthenotestotheequitiesamongotherentities.IV.BasisforPreparationoftheFinancialReport

1.BasisforPreparationWiththegoing-concernassumptionasthebasisandbasedontransactionsandothereventsthatactuallyoccurred,theGrouppreparedfinancialstatementsinaccordancewithTheAccountingStandardsforBusinessEnterprises—BasicStandardissuedbytheMinistryofFinancewithDecreeNo.33andrevisedwithDecreeNo.76,thevariousspecificaccountingstandards,theApplicationGuidanceofAccountingStandardsforBusinessEnterprises,theInterpretationofAccountingStandardsforBusinessEnterprisesandotherregulationsissuedandrevisedfrom15February2006onwards(hereinafterjointlyreferredtoas“theAccountingStandardsforBusinessEnterprises”,“ChinaAccountingStandards”or“CAS”),aswellastheRulesforPreparationConventionofDisclosureofPublicOfferingCompaniesNo.15–GeneralRegulationsforFinancialReporting(revisedin2014)byChinaSecuritiesRegulatoryCommission.InaccordancewithrelevantprovisionsoftheAccountingStandardsforBusinessEnterprises,theGroupadoptedtheaccrualbasisinaccounting.Exceptforsomefinancialinstruments,whereimpairmentoccurredonanasset,animpairmentreservewaswithdrawnaccordinglypursuanttorelevantrequirements.

2.ContinuationTheCompanycomprehensivelyevaluatedtheinformationacquiredrecentlythattherewouldbenosuchfactorsinthe12monthsfromtheendoftheReportingPeriodthatwouldobviouslyinfluencethecontinuationcapabilityoftheCompanyandpredictedthattheoperatingactivitieswouldcontinueinthefuture12monthsoftheCompany.Thefinancialstatementcompiledbaseonthecontinuousoperation.V.ImportantAccountingPoliciesandEstimationsNotificationofspecificaccountingpoliciesandaccountingestimations:

TheCompanyandeachsubsidiaryaccordingtotheactualproductionandoperationcharacteristicsandinaccordwiththeregulationsoftherelevantASBE,formulatedcertainspecificaccountingpoliciesandaccountingestimations,whichmainlyreflectedinthefinancialinstruments,withdrawalmethodofthebaddebtprovisionoftheaccountsreceivable,themeasurementoftheinventoryandthedepreciationofthefixedassetsetc.

1.StatementofCompliancewiththeAccountingStandardsforBusinessEnterprisesThefinancialstatementspreparedbytheGroupareincompliancewithincompliancewiththeAccountingStandardsforBusinessEnterprises,whichfactuallyandcompletelypresenttheCompany’sandtheGroup’sfinancialpositions,businessresultsandcashflowsandotherrelevantinformation.

2.FiscalPeriodThefiscalperiodsaredividedintofiscalyearandmetaphase,thefiscalyearisfromJanuary1toDecember31andasthemetaphaseincludedmonthly,quarterlyandsemi-yearlyperiods.

3.OperatingCycleAnormaloperatingcyclereferstoaperiodfromtheGrouppurchasingassetsforprocessingtorealizingcashorcashequivalents.AnoperatingcyclefortheGroupis12months,whichisalsotheclassificationcriterionfortheliquidityofitsassetsandliabilities.

4.CurrencyUsedinBookkeepingRenminbiisfunctionalcurrencyoftheCompany.

5.AccountingMethodsforBusinessCombinationsundertheSameControlandBusinessCombinationsnotundertheSameControl

(1)Businesscombinationsunderthesamecontrol:

Abusinesscombinationunderthesamecontrolisabusinesscombinationinwhichallofthecombiningenterprisesareultimatelycontrolledbythesamepartyorthesamepartiesbothbeforeandafterthebusinesscombinationandonwhichthecontrolisnottemporary.Forthemergerofenterprisesunderthesamecontrol,iftheconsiderationofthemergingenterpriseisthatitmakespaymentincash,transfersnon-cashassetsorbearitsdebts,itshall,onthedateofmerger,regardtheshareofthebookvalueoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thedifferencebetweentheinitialcostofthelong-termequityinvestmentandthepaymentincash,non-cashassetstransferredaswellasthebookvalueofthedebtsbornebythemergingpartyshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Iftheconsiderationofthemergingenterpriseisthatitissuesequitysecurities,itshall,onthedateofmerger,regardtheshareofthebookvalueoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thetotalfacevalueofthestocksissuedshallberegardedasthecapitalstock,whilethedifferencebetweentheinitialcostofthelong-termequityinvestmentandtotalfacevalueofthesharesissuedshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Alldirectcostsforthebusinesscombination,includingexpensesforaudit,evaluatingandlegalservicesshallberecordedintotheprofitsandlossesatthecurrentperiod.Theexpensessuchasthehandlingchargesandcommissionetc,premiumincomeofdeductingtheequitysecurities,andasforthepremiumincomewasinsufficienttodilute,theretainedearningsshallbewrittendown.Owningtothereasonssuchastheadditionalinvestment,fortheequityinvestmentheldbeforeacquiringthe

controlrightofthecombinedparties,theconfirmedrelevantgainsandlosses,othercomprehensiveincomeandthechangesofothernetassetssincethedateoftheearlieronebetweenthedatewhenacquiringtheoriginalequityrightandthedatewhenthecombinepartiesandcombinedoneswereunderthesamecontroltothecombinationdate,shouldberespectivelywrittendownandcomparedwiththebeginningbalanceofretainedearningsorthecurrentgainsandlossesduringthestatementperiod.

(2)BusinesscombinationsnotunderthesamecontrolAbusinesscombinationnotunderthesamecontrolisabusinesscombinationinwhichthecombiningenterprisesarenotultimatelycontrolledbythesamepartyorthesamepartiesbothbeforeandafterthebusinesscombination.Thecombinationcostsoftheacquirerandtheidentifiablenetassetsobtainedbytheacquirerinabusinesscombinationshallbemeasuredatthefairvalues.Theacquirershallrecognizethepositivebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsformstheacquireeasbusinessreputation.Thedirectrelevantexpensesoccurredfromtheenterprisecombinationshouldbeincludedinthecurrentgainsandlosseswhenoccurred.Thecombinationcostsoftheacquirerandtheidentifiablenetassetsobtainedbyitinthecombinationshallbemeasuredaccordingtotheirfairvaluesattheacquiringdate.ThedifferencebetweenthefairvalueoftheassetspaidoutbytheCompanyanditsbookvalueshouldbeincludedinthecurrentgainsandlosses.Thepurchasedatereferstothedatethatthepurchaseracquiresthecontrolrightoftheacquiree.Forthebusinesscombinationsnotunderthesamecontrolrealizedthroughstepbystepmultipletransaction,asfortheequityintereststhattheGroupholdsintheacquireebeforetheacquiringdate,theyshallbere-measuredaccordingtotheirfairvaluesattheacquiringdate;thepositivedifferencebetweentheirfairvaluesandcarryingamountsshallberecordedintotheinvestmentgainsfortheperiodincludingtheacquiringdate.Theequityholedbytheacquireewhichinvolvedwiththeothercomprehensiveincomeandtheotherowners’equitieschangesexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionandotherrelatedcomprehensivegainsandotherowners’equitieswhichinrelationtotheequityintereststhattheGroupholdsintheacquireebeforetheacquiringdateshouldbetransferredintothecurrentinvestmentincomeontheacquiringdate,exceptfortheothercomprehensiveincomeoccurredfromthere-measurementofthenetprofitsofthedefinedbenefitplansorthechangesofthenetassetsoftheinvestees.

6.MethodsforPreparingConsolidatedFinancialStatementsTheCompanyconfirmstheconsolidatedscopebasedonthecontrolandincludesthesubsidiarieswithactualcontrolrightintotheconsolidatedfinancialstatement.TheconsolidatedfinancialstatementoftheCompanyiscompiledaccordingtotheregulationsofNo.33ofASBE-ConsolidatedFinancialStatementandtherelevantregulationsandasforthewholesignificantcome-and-gobalance,investment,transactionandtheunrealizedprofitsshouldbewrittenoffwhencompilingtheconsolidatedfinancialstatement.Theportionofasubsidiary’sshareholders’equityandtheportionofasubsidiary’snetprofitsandlossesfortheperiodnotheldbytheGrouparerecognizedasminorityinterestsandminorityshareholderprofitsandlossesrespectivelyandpresentedseparatelyundershareholders’equityandnetprofitsintheconsolidationfinancialstatements.Theportionofasubsidiary’snetprofitsandlossesfortheperiodthatbelongtominorityinterestsispresentedastheitemof“minorityshareholderprofitsandlosses”underthebiggeritemofnetprofitsintheconsolidatedfinancialstatements.Wherethelossofasubsidiarysharedbyminorityshareholdersexceedstheportionenjoyedbyminorityshareholdersinthesubsidiary’sopeningowners’equity,minorityinterestsareoffset.TheaccountingpolicyoraccountingperiodofeachsubsidiaryisdifferentfromwhichoftheCompany,which

shallbeadjustedastheCompany;orsubsidiariesshallpreparefinancialstatementagainrequiredbytheCompanywhenpreparingtheconsolidatedfinancialstatements.Asfortheaddedsubsidiarycompanynotcontrolledbythesameenterprisepreparingtheconsolidatedfinancialstatement,shalladjustindividualfinancialstatementbasedonthefairvalueoftheidentifiablenetassetsontheacquisitiondate;asfortheaddedsubsidiarycompaniescontrolledbythesameenterprisepreparingthefinancialstatement,shallnotadjustthefinancialstatementofthesubsidiaries,namelysurvivedbyintegrationasparticipatingintheconsolidationwhenthefinalcontrolpartystartsimplementingcontrolandshouldadjusttheperiod-beginamountoftheconsolidatedbalancesheetandatthesametimeadjusttherelevantitemsofthecomparedstatement.Asforthedisposedsubsidiaries,theoperationresultandthecashflowshouldbeincludedintheconsolidatedincomestatementandtheconsolidatedcashflowbeforethedisposingdate;thedisposedsubsidiariesofthecurrentperiod,shouldnotbeadjustedtheperiod-beginamountoftheconsolidatedbalancesheet.WheretheGrouplossescontrolonitsoriginalsubsidiariesduetodisposalofsomeequityinvestmentsorotherreasons,theresidualequityinterestsarere-measuredaccordingtothefairvalueonthedatewhensuchcontrolceases.Thesummationoftheconsiderationobtainedfromthedisposalofequityinterestsandthefairvalueoftheresidualequityinterests,minustheportionintheoriginalsubsidiary’snetassetsmeasuredonacontinuousbasisfromtheacquisitiondatethatisenjoyablebytheGroupaccordingtotheoriginalshareholdingpercentageinthesubsidiary,isrecordedininvestmentgainsfortheperiodwhentheGroup’scontrolonthesubsidiaryceases.Othercomprehensiveincomesinrelationtotheequityinvestmentandtheotherowners’equitieschangesexceptforthenetgainsandlosses,othercomprehensiveincomeandprofitsdistributionintheoriginalsubsidiaryaretreatedonthesameaccountingbasisastheacquireedirectlydisposestherelevantassetsorliabilities(thatis,exceptforthechangesinthenetliabilitiesorassetswithadefinedbenefitplanresultedfromre-measurementoftheoriginalsubsidiary,therestshallallbetransferredintocurrentinvestmentgains)whensuchcontrolceases.AndsubsequentmeasurementisconductedontheresidualequityinterestsaccordingtotheNo.2AccountingStandardforBusinessEnterprises-Long-termEquityInvestmentsortheNo.22AccountingStandardforBusinessEnterprises-RecognitionandMeasurementofFinancialInstruments.Forthedisposalofequityinvestmentbelongstoapackagedeal,shouldbeconsideredasatransactionandconductaccountingtreatment.However,Beforelosingcontrol,everydisposalcostandcorrespondingnetassetsbalanceofsubsidiaryofdisposalinvestmentareconfirmedasothercomprehensiveincomeinconsolidatedfinancialstatements,whichtogethertransferredintothecurrentprofitsandlossesinthelossofcontrol,whentheGrouplosingcontrolonitssubsidiary.Forthedisposaloftheequityinvestmentnotbelongstoapackagedeal,shouldbeexecutedaccountingtreatmentaccordingtotherelevantpoliciesofpartlydisposingtheequityinvestmentofthesubsidiariesunderthesituationnotlosethecontrolrightbeforelosingthecontrolright;whenlosingthecontrolright,theformershouldbeexecutedaccountingtreatmentaccordingtothegeneraldisposingmethodofthedisposalofthesubsidiaries.

7.ClassificationofJointArrangementsandAccountingTreatmentofJointOperationsTheGroupclassifiesjointarrangementsintojointoperationsandjointventures.AjointoperationreferstoajointarrangementwheretheGroupisthejointoperationspartyofthejointarrangementandenjoysassetsandhastobearliabilitiesrelatedtothearrangement.TheCompanyconfirmsthefollowingitemsrelatedtotheinterestsshareamongthejointoperationsandexecutesaccountingtreatmentaccordingtotheregulationsoftherelevantASBE:

(1)Recognizestheassetsthatitholdsandbearsinthejointoperationandrecognizesthejointly-heldassets

accordingtotheGroup’sstakeinthejointoperation;

(2)Recognizestheliabilitiesthatitholdsandbearsinthejointoperationandrecognizesthejointly-heldliabilitiesaccordingtotheGroup’sstakeinthejointoperation;

(3)RecognizestheincomefromsaleoftheGroup’sshareintheoutputofthejointoperation

(4)Recognizestheincomefromsaleofthejointoperation’soutputsaccordingtotheGroup’sstakeinit

(5)RecognizestheexpensesolelyincurredtotheGroupandtheexpenseincurredtothejointoperationaccordingtotheGroup’sstakeinit.

8.RecognitionStandardforCashandCashEquivalentsIntheGroup’sunderstanding,cashandcashequivalentsincludecashonhand,anydepositthatcanbeusedforcover,andshort-term(usuallyduewithin3monthssincethedayofpurchase)andhighcirculatinginvestments,whichareeasilyconvertibleintoknownamountofcashandwhoserisksinchangeofvalueareminimal.

9.ForeignCurrencyBusinessesandTranslationofForeignCurrencyFinancialStatements

(1)ForeigncurrencybusinessConcerningtheforeign-currencytransactionsthatoccurred,theforeigncurrencyshallbeconvertedintotherecordingcurrencyaccordingtothemiddlepriceofthemarketexchangeratedisclosedbythePeople’sBankofChinaonthedateofthetransaction.Amongthesaidtransactionsthatoccurred,thoseinvolvingforeignexchangesshallbeconvertedaccordingtotheexchangeratesadoptedintheactualtransactions.Onthebalancesheetdate,theforeign-currencymonetaryassetsandthebalanceoftheliabilityaccountshallbeconvertedintotherecodingcurrencyaccordingtothemiddlepriceofthemarketexchangeratesdisclosedbythePeople’sBankofChinaontheBalanceSheetDate.Thedifferencebetweentherecording-currencyamountconvertedaccordingtotheexchangerateontheBalanceSheetDateandtheoriginalbookrecording-currencyamountshallberecognizedasgains/lossesfromforeignexchange.Andtheexchangegain/losscausedbytheforeign-currencyborrowingsrelatedtopurchasingfixedassetsshallbehandledaccordingtotheprincipleofcapitalizingborrowingexpenses;theexchangegain/lossincurredintheestablishmentperiodshallberecordedintotheestablishmentexpense;othersshallberecordedintothefinancialexpensesforthecurrentperiod.Onthebalancesheetdate,theforeign-currencynon-monetaryitemsmeasuredbyhistoricalcostshallbeconvertedaccordingtothemiddlepriceofthemarketexchangedisclosedbythePeople’sBankofChinaonthedateofthetransaction,withnochangesintheoriginalrecording-currencyamount;whiletheforeign-currencynon-monetaryitemsmeasuredbyfairvalueshallbeconvertedaccordingtothemiddlepriceofthemarketexchangedisclosedbythePeople’sBankofChinaonthedatewhenthefairvalueisrecognized,andtheexchangegain/losscausedthereofshallberecognizedasthegain/lossfromfairvaluechangesandrecordedintothegain/lossofthecurrentperiod.

(2)TranslationofforeigncurrencyTheassetsandliabilitiesitemsamongthebalancesheetoftheforeignoperationshallbetranslatedataspotexchangerateonthebalancesheetdate.Amongtheowner’sequityitems,exceptfortheitemsas“undistributedprofits”,otheritemsshallbetranslatedatthespotexchangerateatthetimewhentheyareincurred.Andtherevenuesandexpensesitemsamongthebalancesheetoftheforeignoperationshallbetranslatedattheapproximateexchangerateofthetransactiondate.Thedifferencecausedfromtheabovetransactionoftheforeigncurrencystatementshouldbelistedintheothercomprehensiveincomeamongtheowners’equities.

10.FinancialInstruments

(1)ClassificationofFinancialInstrumentsTheCompanyclassifiesthefinancialassetswheninitiallyrecognizedintothefollowingthreecategoriesbasedonthebusinessmodelforfinancialassetsmanagementandcharacteristicsofcontractualcashflowoffinancialassets:

financialassetsmeasuredatamortizedcost,financialassetsatfairvaluethroughothercomprehensiveincome(debtinstruments)andfinancialassetsatfairvaluethroughprofitorlossFinancialliabilitieswereclassifieswheninitiallyrecognizedintofinancialliabilitiesatfairvaluethroughprofitorlossandfinancialliabilitiesmeasuredatamortizedcost.

(2)RecognitionBasisandMeasurementMethodforFinancialInstruments

①FinancialassetsmeasuredatamortizedcostFinancialassetsatamortizedcostincludenotesreceivable,accountsreceivable,otherreceivables,long-termreceivables,andinvestmentindebtobligationswhichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.ForaccountsreceivableexcludingsignificantfinancingandaccountsreceivablethattheCompanydecidesnottoconsiderfinancingcomponentslessthanoneyear,theinitialmeasurementshallbemadeatthecontracttransactionprice.Theinterestcalculatedwithactualratesfortheholdingperiodshallberecordedintothecurrentprofitorloss.Whenrecoveredordisposed,thedifferencebetweenthepriceobtainedandthecarryingvalueofthefinancialassetsshallberecordedintothecurrentprofitorloss.

②Financialassetsatfairvaluethroughothercomprehensiveincome(debtinstruments)Financialassetsatfairvaluethroughothercomprehensiveincome(debtinstruments)includeaccountsreceivablefinancingandinvestmentinotherdebtobligationswhichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandchangesoffairvalueexceptforinterestcalculatedwithactualrates,impairmentlossesorgainsandexchangegainsorlossesshallberecordedintoothercomprehensiveincome.Whenderecognized,theaccumulatedgainsorlossesoriginallyrecordedintoothercomprehensiveincomeshallbetransferredintothecurrentprofitorloss.

③Financialassetsatfairvaluethroughothercomprehensiveincome(equityinstruments)Financialassetsatfairvaluethroughothercomprehensiveincome(equityinstruments)includeinvestmentinotherequityinstruments,etc.whichareinitiallymeasuredatfairvalueandrelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandchangesoffairvalueshallberecordedintoothercomprehensiveincome.Thedividendsobtainedshallberecordedintothecurrentprofitorloss.Whenderecognized,theaccumulatedgainsorlossesoriginallyrecordedintoothercomprehensiveincomeshallbetransferredintoretainedearnings.

④FinancialassetsatfairvaluethroughprofitorlossFinancialassetsatfairvaluethroughprofitorlossincludeheld-for-tradingfinancialassets,derivativefinancialassetsandothernon-currentfinancialassetswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintothecurrentprofitorloss.Thesubsequentmeasurementofthefinancialassetsshallbeatfairvalueandthechangesoffairvalueshallberecordedintothecurrentprofitorloss.

⑤FinancialliabilitiesatfairvaluethroughprofitorlossFinancialliabilitiesatfairvaluethroughprofitorlossincludeheld-for-tradingfinancialliabilitiesandderivativefinancialliabilitieswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintothecurrentprofitorloss.Thesubsequentmeasurementofthefinancialliabilitiesshallbeatfairvalueandthechangesoffairvalueshallberecordedintothecurrentprofitorloss.Whenderecognized,thedifferencebetween

thecarryingvalueandthepaidconsiderationshallberecordedintothecurrentprofitorloss.

⑥FinancialliabilitiesatamortizedcostFinancialliabilitiesatamortizedcostincludeshort-termborrowings,notespayable,accountspayable,otherpayables,long-termborrowings,bondspayableandlong-termpayableswhichareinitiallymeasuredatfairvalueandtherelatedtransactioncostshallberecordedintotheinitialrecognizedamount.Theinterestcalculatedwithactualratesfortheholdingperiodshallberecordedintothecurrentprofitorloss.Whenderecognized,thedifferencebetweenthepaidconsiderationandthecarryingvalueofthefinancialliabilitiesshallberecordedintothecurrentprofitorloss.

(3)RecognitionBasisandMeasurementofTransferofFinancialAssetsWheretheCompanyhastransferrednearlyalloftherisksandrewardsrelatedtotheownershipofthefinancialassettothetransferee,itshallstoprecognizingthefinancialassetandseparatelyrecognizetherightsandobligationsgeneratedretainedfromthetransferasassetsorliabilities.Ifitretainednearlyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itshallcontinuetorecognizethetransferredfinancialasset.WheretheCompanydoesnottransferorretainnearlyalloftherisksandrewardsrelatedtotheownershipofafinancialasset,itshalldealwithitaccordingtothecircumstancesasfollows,respectively:(1)Ifitgivesupitscontroloverthefinancialasset,itshallstoprecognizingthefinancialassetandseparatelyrecognizetherightsandobligationsgeneratedretainedfromthetransferasassetsorliabilities;(2)Ifitdoesnotgiveupitscontroloverthefinancialasset,itshall,accordingtotheextentofitscontinuousinvolvementinthetransferredfinancialasset,recognizetherelatedfinancialassetandrecognizetherelevantliabilityaccordingly.Ifthetransferofanentirefinancialassetsatisfiestheconditionsforstoppingrecognition,thedifferencebetweentheamountsofthefollowing2itemsshallberecordedintheprofitsandlossesofthecurrentperiod:(1)Thecarryingvalueofthetransferredfinancialassetonthederecognitiondate;(2)Thesumofconsiderationreceivedfromthetransferoffinancialassets,andderecognitionamountamongtheaccumulativeamountofthechangesofthefairvalueoriginallyrecordedintheothercomprehensiveincome(thefinancialassetsinvolvetransferareinvestmentsindebtinstrumentsatfairvaluethroughothercomprehensiveincome.Ifthetransferofpartialfinancialassetsatisfiestheconditionstostoptherecognition,theentirecarryingvalueofthetransferredfinancialassetshall,betweentheportionwhoserecognitionhasbeenstoppedandtheportionwhoserecognitionhasnotbeenstopped,beapportionedaccordingtotheirrespectiverelativefairvalueonthetransferdate,andthedifferencebetweentheamountsofthefollowingtwoitemsshallbeincludedintotheprofitsandlossesofthecurrentperiod:(1)Thecarryingvalueoftheportionwhoserecognitionhasbeenstopped;(2)Thesumofconsiderationoftheportionwhoserecognitionhasbeenstopped,andderecognitionamountamongtheaccumulativeamountofthechangesofthefairvalueoriginallyrecordedintheothercomprehensiveincome(thefinancialassetsinvolvetransferareinvestmentsindebtinstrumentsatfairvaluethroughothercomprehensiveincome.

(4)DerecognitionBasisofFinancialLiabilitiesAfinancialliabilityorpartofitcanbederecognizedafteritscurrentobligationhasbeenrelievedinfullorinpart.

(5)RecognitionofFairValueofFinancialAssetsandFinancialLiabilitiesThefairvalueoffinancialinstrumentswithanactivemarketisdeterminedbythequotedpriceintheactivemarket.Forfinancialinstrumentswithoutactivemarket,thefairvalueisdeterminedbyvaluationtechniques.TheCompanyadoptsthevaluationtechniquesapplicabletothecurrentconditionswhicharesupportedbysufficientdataandotherinformationforvaluation,andselectstheinputvaluesconsistentwiththecharacteristicsofassetsorliabilitiesconsideredbymarketparticipantsinassetorliabilitytransactions,withprioritytoobservableinputvalues.Unobservableinputvaluesareusedonlywhenrelevantobservableinputvaluesarenotavailableorpractical.

(6)Impairmentoffinancialinstrument

①ImpairmentmeasurementandaccountinghandlingoffinancialinstrumentBasedonexpectedcreditloss,theCompanyconductsimpairmenthandlingandconfirmscreditimpairmentlossforfinancialassetswhichismeasuredbyamortizedcost,debtinstrumentinvestmentwhichismeasuredbyfairvalueandwhosechangeiscalculatedintoothercomprehensiveprofits,financialguaranteecontract.Expectedcreditlossreferstoweightedaverageofcreditlossoffinancialinstrumentwhichtakestheriskofcontractbreachoccurrenceastheweight.Creditlossreferstothedifferencebetweenallcontractcashflowwhichisconvertedintocashaccordingtoactualinterestrateandreceivableaccordingtocontractandallcashflowwhichtobechargedasexpected,i.e.currentvalueofallcashshortage.Amongit,asforfinancialassetpurchasedororiginalwhichhashadcreditimpairment,itshouldbeconvertedintocashaccordingactualinterestrateofthisfinancialassetaftercreditadjustment.Lifetimeexpectedcreditlossesrefertothosecausedbypossibledefaultsduringtheentireexpecteddurationofafinancialinstrument.Theexpectedcreditlossesinthenext12monthsreferstothosecausedbythedefaulteventsofthefinancialinstrumentthatmayoccurwithin12months(ortheexpecteddurationiftheexpecteddurationofthefinancialinstrumentislessthan12months)afterthebalancesheetdate,andispartoftheexpectedcreditlossesintheentireduration.Oneachbalancesheetdate,theCompanyrespectivelymeasuredtheexpectedcreditlossesoffinancialinstrumentsindifferentstages.Ifthecreditriskofafinancialinstrumenthashadnosignificantincreasesinceitsinitialrecognition,theinstrumentshallfallinthefirststage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesinthefuture12months.Ifthecreditriskofafinancialinstrumenthashadasignificantincreasesinceitsinitialrecognitionbutnocreditimpairmenthasoccurred,theinstrumentshallfallinthesecondstage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesintheentiredurationoftheinstrument.Ifthecreditimpairmenthasoccurredsinceitsinitialrecognition,thefinancialinstrumentshallfallinthethirdstage,forwhichtheCompanywouldmeasurethelossreservesaccordingtotheexpectedcreditlossesintheentiredurationoftheinstrument.Asforafinancialinstrumentwithlowcreditrisksonthebalancesheetdate,theCompanymeasuredthelossreservesaccordingtotheexpectedcreditlossesinthefuture12months,assumingthatitscreditriskhashadnosignificantincreasesinceitsinitialrecognition.Forfinancialinstrumentswithlowcreditrisksinstages1and2,theCompanycalculatedtheinterestincomeattheeffectiveinterestrateandonthecarryingamountoftheinstrumentswithoutdeductionsforprovisionsforassetimpairment.Forfinancialinstrumentsinstage3,interestincomewascalculatedattheeffectiveinterestratesandontheamortizedcostbyreducingtheprovisionsforassetimpairmentfromthecarryingamount.Fornotesreceivables,accountsreceivables,andfinancingreceivables,whethertherewasasignificantfinancialcomponentornot,theCompanymeasuredthelossreservesbasedontheexpectedcreditlossesfortheentireduration.A.AccountsreceivableFornotesreceivable,accountsreceivable,otherreceivablesandaccountsreceivablefinancingwithobjectiveevidenceindicatingimpairmentandthosesuitableforindividualevaluation,theCompanycarriesoutimpairmenttestseparatelytoconfirmexpectedcreditlossandprepareprovisionforimpairmentofsingleitems.Fornotesreceivable,accountsreceivable,otherreceivables,accountsreceivablefinancing,contractassetsandlong-termreceivableswithoutobjectiveevidenceofimpairment,orasinglefinancialassetwithexpectedcreditlossimpossibletobeassessedatareasonablecost,theCompanydividesthenotesreceivable,accountsreceivable,otherreceivablesandaccountsreceivablefinancingintogroupsaccordingtothecharacteristicsofcreditrisk,andcalculatestheexpectedcreditlossbasedonreceivablegroups.Thebasisforrecognizinggroupsisasfollows:

ItemRecognitionbasisMethodofmeasuringexpectedcreditlosses
Group1ofnotesreceivableAllcommercialbillsConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossrateovertheentirelife
Group2ofnotesreceivableBank’sacceptancebillswithlowcreditrating
AccountsreceivablefinancingBank’sacceptancebillswithhighcreditratingConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossrateovertheentirelife
Accountsreceivable-creditriskcharacteristicsgroupAccountsreceivableportfoliowithcreditperiodPreparethecomparativelistbetweenagingofaccountsreceivableandexpectedcreditlossrateovertheentirelifeandcalculatetheexpectedcreditlossbyconsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation.TheCompanytakesagingascreditriskcharacteristicsgroupsandcalculatestheexpectedcreditlossforaccountsreceivable.
Accountsreceivable-intercoursefundsamongrelatedpartygroupwithintheconsolidationscopeRelatedpartywithintheconsolidationscopeConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossrateovertheentirelife

Basisforrecognizinggroupsofotherreceivablesisasfollows:

ItemRecognitionbasisMethodofmeasuringexpectedcreditlosses
Group1ofotherreceivablesOtherreceivablesexcludingthosefromrelatedparties-aginggroupConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossratewithinthenext12monthsorovertheentirelife
Group2ofotherreceivablesRelatedpartywithintheconsolidationscopeConsultinghistoricalexperienceincreditlosses,combiningcurrentsituationandpredictionforfutureeconomicsituation,theexpectedcreditlossshallbeaccountedthroughexposureatdefaultandtheexpectedcreditlossratewithinthenext12monthsorovertheentirelife

11.AccountsReceivableSee“10.FinancialInstruments”.

12.AccountsReceivableFinancingSee“10.FinancialInstruments”.

13.OtherReceivablesSee“10.FinancialInstruments”.

14.Inventory

(1)CategoryofInventoryInventoryreferstotheheld-for-salefinishedproductsorcommodities,goodsinprocess,materialsconsumedintheproductionprocessortheprocessprovidingthelaborserviceetc.Inventoryismainlyincludingtherawmaterials,lowpricedandeasilywornarticles,unfinishedproducts,inventoriesandworkinprocess–outsourcedetc.

(2)PricingmethodPurchasingandstorageofthevariousinventoriesshouldbevaluedaccordingtotheplanedcostandthedispatchbecalculatedaccordingtotheweightedaveragemethod;carriedforwardthecostofthefinishedproductsaccordingtotheactualcostofthecurrentperiodandthesalescostaccordingtotheweightedaveragemethod.

(3)DeterminationbasisofthenetrealizablevalueofinventoryandwithdrawalmethodoftheprovisionforfallingpriceofinventoryAtthebalancesheetdate,inventoriesaremeasuredatthelowerofthecostsandnetrealizablevalue.Whenalltheinventoriesarecheckedroundly,forthosewhichweredestroyed,outdatedinallorinpart,soldataloss,etc,theCompanyshallestimatetheirrecoverablepartofitscostandwithdrawaltheinventoryfallingpricereserveattheyear-end.Wherethecostofthesingleinventoryitemishigherthanthenetrealizablevalue,theinventoryfallingpricereserveshallbewithdrawnandrecordedintoprofitsandlossesofthecurrentperiod.Ofwhich:inthenormalproductionandoperatingprocess,asforthecommoditiesinventorydirectlyforsalessuchasthefinishedproducts,commoditiesandthematerialsforsales,shouldrecognizethenetrealizablevalueaccordingtotheamountoftheestimatedsellingpriceoftheinventoryminusestheestimatedsellingexpensesandtherelevanttaxes;asforthematerialsinventoryneedstobeprocessedinthenormalproductionandoperatingprocess,shouldrecognizeitsnetrealizablevalueaccordingtotheamountoftheestimatedsellingpriceofthefinishedproductsminusesthecostpredictstobeoccurwhentheproductioncompletesandtheestimatedsellingexpensesaswellastherelevanttaxes;onthebalancesheetdate,forthesameinventorywithonepartagreedbythecontractpriceandotherpartsnotbythecontractprice,shouldberespectivelyrecognizedthenetrealizablevalue.Foritemsofinventoriesrelatingtoaproductlinethatareproducedandmarketedinthesamegeographicalarea,havethesameorsimilarendusersorpurposes,andcannotbepracticablyevaluatedseparatelyfromotheritemsinthatproductlineprovisionfordeclineinvalueisdeterminedonanaggregatebasis;forlargequantityandlowvalueitemsofinventories,provisionfordeclineinvalueismadebasedoncategoriesofinventories.

(4)Theperpetualinventorysystemismaintainedforstocksystem.

(5)Amortizationmethodoflow-valueconsumablesandpackagesOnetimeamortizationmethodisadoptedforlow-valueconsumablesandpackages.

15.ContractAssetsContractAssetsmeansthattheCompanyisendowedwiththerighttochargetheconsiderationthroughtransferringanycommodityorservicetotheclient,andsuchrightdependsonotherfactorsexceptthepassingoftime.TheCompany’sunconditionalright(onlydependingonthepassingoftime)ofchargingtheconsiderationfromtheclientshallbeseparatelypresentedasreceivables.TherecognitionmethodandaccountingtreatmentmethodoftheestimatedcreditlossofcontractassetsareconsistentwiththatspecifiedinNotesV.11.

16.ContractCosts

(1)CostsfromAcquiringContractIftheincrementalcostresultingfromtheCompany’sacquiringofcontract(namelycostsmerelyresultingfromtheacquiringofcontract)ispredictedtoberetrieved,itshallberecognizedasanassets,amortizedbyadoptingthesamebasiswiththerecognitionofcommoditiesorservicerevenuesrelatedtotheassetsandincludedintothecurrentprofitandloss.Iftheassets’amortizationperioddoesnotexceedoneyear,itshallbeimmediatelyincludedintothecurrentprofitandloss.OtherexpensesresultingfromtheCompany’sacquiringofcontractshallalsobeincludedintothecurrentprofitandlossunlessitisexplicitlybornebytheclient.

(2)CostsfromExecutingContractTheCompany’scostsfromexecutingcontractisnotcoveredbyotherASBEexceptforRevenueStandards,andwhenthefollowingsituationsaremet,suchcostscanberecognizedasanassets:①thecostsaredirectlyrelatedtoacurrentorpredictedcontract;②thecostsincreasetheCompany’sresourcesappliedtofulfillperformanceobligationsinthefuture;③thecostsarepredictedtoberetrieved.Therecognizedassetsshallbeamortizedbyadoptingthesamebasiswiththerecognitionofcommoditiesorservicerevenuesrelatedtotheassetsandincludedintothecurrentprofitandloss.Ifthebookvalueofcontractcostsishigherthanthedifferenceofthefollowingtwoitems,correspondingdepreciationreservesshallbecountedandwithdrawnanditshallberecognizedastheassetsdepreciationloss:①theresidualconsiderationpredictedtobeacquiredbytransferringcommoditiesrelatedtotheassets;②thecostspredictedtooccurduetothetransferofrelatedcommodities.Ifthedifferencebetween①and②ishigherthanthebookvalueofcontractcostsduetoanychangeinvariousfactorscausingdepreciationinpreviousperiods,itshallberestitutedtothewithdrawnassetsdepreciationreservesandincludedinthecurrentprofitandloss.However,thebookvalueofrestitutedcontractcostsshallnotexceedthebookvalueoftheassetsonthedayofrestitutionbasedonthehypothesisthatdepreciationreservesarenotcountedandwithdrawn.

17.AssetsHeldforSaleTheCompanyrecognizesthecomponents(orthenon-currentassets)whichmeetwiththefollowingconditionsasassetsheldforsale:

(1)Thecomponentsmustbeimmediatelysoldonlyaccordingtotheusualtermsofsellingthiskindofcomponentsunderthecurrentconditions;

(2)TheCompanyhadmadesolutionsondisposingthecomponents(orthenon-currentassets),forexample,theCompanyshouldgaintheapprovalfromtheshareholdersaccordingtotheregulationsandhadacquiredtheapprovedfromtheAnnualGeneralMeetingortherelevantauthorityinstitutions;

(3)TheCompanyhadsignedtheirrevocabletransformationagreementwiththetransferee;

(4)Thetransformationshouldbecompletedwithin1year.

18.Long-termEquityInvestments

(1)JudgmentstandardofjointcontrolandsignificantinfluencesJointcontrol,referstothecontroljointlyownedaccordingtotherelevantagreementonanarrangementbytheCompanyandtherelevantactivitiesofthearrangementshouldbedecidedonlyaftertheparticipantswhichsharethecontrolrightmakeconsensus.SignificantinfluencereferstothepoweroftheCompanywhichcouldanticipateinthefinanceandtheoperationpolicesoftheinvestees,butcouldnotcontrolorjointlycontroltheformulationofthepolicieswiththeotherparties.

(2)RecognitionforinitialinvestmentcostTheinitialinvestmentcostofthelong-termequityinvestmentshallberecognizedbyadoptingthefollowingwaysinaccordancewithdifferentmethodsofacquisition:

1)Asforthoseformsunderthesamecontroloftheenterprisecombine,ifthecombinepartytakesthecashpayment,non-cashassetstransformation,liabilitiesassumptionorequitysecuritiesissuanceasthecombinationconsideration,shouldtakethesharesofthebookvaluebytheultimatecontrolpartyintheconsolidatefinancialstatementoftheowners’equitiesofthecombinersacquiredonthemergerdateastheinitialinvestmentcost.Thedifferencebetweentheinitialinvestmentcostandthebookvalueofthepaidcombinationconsiderationorthetotalamountoftheissuedsharesofthelong-termequityinvestmentshouldbeadjustedthecapitalreserve;Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Toincludeeachdirectrelevantexpenseoccurredwhenexecutingtheenterprisemergerintothecurrentgainsandlosses;whilethehandlingchargesandcommissionoccursfromtheissuingtheequitysecuritiesorthebondsfortheenterprisemergershouldbeincludedintheinitialmeasurementamountoftheshareholders’equitiesortheliabilities.

2)Asforlong-termequityinvestmentacquiredthroughthemergerofenterprisesnotunderthesamecontrol,itsinitialinvestmentcostshallregardasthecombinationcostcalculatedbythefairvalueoftheassets,equityinstrumentissuedandliabilitiesincurredorundertakenonthepurchasedateaddingthedirectcostrelatedwiththeacquisition.Theidentifiableassetsofthecombinedpartyandtheliabilities(includingcontingentliability)undertakenonthecombiningdateshallbemeasuredatthefairvaluewithoutconsideringtheamountofminorityinterest.Theacquirershallrecognizethepositivebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsfromtheacquireeasbusinessreputation.Theacquirershallrecordthenegativebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsfromtheacquireeintotheconsolidatedincomestatementdirectly.Theagentexpenseandotherrelevantmanagementexpensessuchastheaudit,legalserviceandevaluationconsultationoccursfromtheenterprisemerger,shouldbeincludedinthecurrentgainsandlosseswhenoccur;whilethehandlingchargesandcommissionoccursfromtheissuingtheequitysecuritiesorthebondsfortheenterprisemergershouldbeincludedintheinitialmeasurementamountoftheshareholders’equitiesortheliabilities.

3)Long-termequityinvestmentobtainedbyothermeansTheinitialcostofalong-termequityinvestmentobtainedbymakingpaymentincashshallbethepurchasecostwhichisactuallypaid.Theinitialcostofalong-termequityinvestmentobtainedonthebasisofissuingequitysecuritiesshallbethefairvalueoftheequitysecuritiesissued.Theinitialcostofalong-termequityinvestmentofaninvestorshallbethevaluestipulatedintheinvestmentcontractoragreement,theunfairvaluestipulatedinthecontractoragreementshallbemeasuredatfairvalue.Asforlong-terminvestmentobtainedbytheexchangeofnon-monetaryassets,whereitiscommercialinnature,

thefairvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived;whereitisnotcommercialinnature,thebookvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived.Theinitialcostofalong-termequityinvestmentobtainedbyrecombinationofliabilitiesshallberecognizedatfairvalueoflong-termequityinvestment.

(3)Subsequentmeasurementandrecognitionofprofitsandlosses

1)AninvestmentinthesubsidiarycompanyshallbemeasuredbyemployingthecostmethodWheretheCompanyhold,andisabletodoequityinvestmentwithcontroloveraninvestedentity,theinvestedentityshallbeitssubsidiarycompany.WheretheCompanyholdsthesharesofanentityover50%,or,whiletheCompanyholdsthesharesofanentitybelow50%,buthasarealcontroltothesaidentity,thenthesaidentityshallbeitssubsidiarycompany.

2)AninvestmentinthejointenterpriseorassociatedenterpriseshallbemeasuredbyemployingtheequitymethodWheretheCompanyhold,andisabletodoequityinvestmentwithjointcontrolwithotherpartiesoveraninvestedentity,theinvestedentityshallbeitsjointenterprise.WheretheCompanyhold,andisabletohaveequityinvestmentwithsignificantinfluencesonaninvestedentity,theinvestedentityshallbeitsassociatedentity.AftertheCompanyacquiredthelong-termequityinvestment,shouldrespectivelyrecognizeinvestmentincomeandothercomprehensiveincomeaccordingtothenetgainsandlossesaswellastheportionofothercomprehensiveincomewhichshouldbeenjoyedorbeshared,andatthesametimeadjustthebookvalueofthelong-termequityinvestment;correspondingreducethebookvalueofthelong-termequityinvestmentaccordingtoprofitswhichbedeclaredtodistributebytheinvesteesortheportionofthecalculationofcashdividendswhichshouldbeenjoyed;fortheotherchangesexceptforthenetgainsandlosses,othercomprehensiveincomeandtheowners’equityexceptfortheprofitsdistributionoftheinvestees,shouldadjustthebookvalueofthelong-termequityinvestmentaswellasincludeintheowners’equity.Theinvestingenterpriseshall,onthegroundofthefairvalueofallidentifiableassetsoftheinvestedentitywhenitobtainstheinvestment,recognizetheattributableshareofthenetprofitsandlossesoftheinvestedentityafteritadjuststhenetprofitsoftheinvestedentity.IftheaccountingpolicyadoptedbytheinvesteesisnotaccordwiththatoftheCompany,shouldbeadjustedaccordingtotheaccountingpoliciesoftheCompanyandthefinancialstatementoftheinvesteesduringtheaccountingperiodandaccordingwhichtorecognizetheinvestmentincomeaswellasothercomprehensiveincome.ForthetransactionhappenedbetweentheCompanyandassociatedenterprisesaswellasjointventures,iftheassetslaunchedorsoldnotformintobusiness,theportionoftheunrealizedgainsandlossesoftheinternaltransaction,whichbelongstotheCompanyaccordingtothecalculationoftheenjoyedproportion,shouldrecognizetheinvestmentgainsandlossesonthebasis.ButthelossesoftheunrealizedinternaltransactionhappenedbetweentheCompanyandtheinvesteeswhichbelongstotheimpairmentlossesofthetransferredassets,shouldnotbeneutralized.TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseaccordingtothefollowingsequence:firstofall,towritedownthebookvalueofthelong-termequityinvestment.Secondly,ifthebookvalueofthelong-termequityinvestmentisinsufficientforwrittendown,shouldbecontinuedtorecognizedtheinvestmentlosseslimitedtothebookvalueofotherlong-termequitywhichformsofthenetinvestmentoftheinvesteesandtowrittendownthebookvalueofthelong-termaccountsreceivableetc.Lastly,throughtheabovehandling,forthoseshouldstillundertaketheadditionalobligationsaccordingtotheinvestmentcontractsortheagreements,itshall

berecognizedastheestimatedliabilitiesinaccordancewiththeestimateddutiesandthenrecordedintoinvestmentlossesatcurrentperiod.Iftheinvestedentityrealizesanynetprofitslater,theCompanyshall,aftertheamountofitsattributableshareofprofitsoffsetsagainstitsattributableshareoftheun-recognizedlosses,resumerecognizingitsattributableshareofprofits.Inthepreparationforthefinancialstatements,thebalanceexistedbetweenthelong-termequityinvestmentincreasedbyacquiringsharesofminorityinterestandtheattributablenetassetsonthesubsidiarycalculatedbytheincreasedsharesheldsincethepurchasedate(orcombinationdate),thecapitalreservesshallbeadjusted,ifthecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted;theCompanydisposedpartofthelong-termequityinvestmentonsubsidiarieswithoutlosingitscontrollingrightonthem,thebalancebetweenthedisposedpriceandattributablenetassetsofsubsidiariesbydisposingthelong-termequityinvestmentshallberecordedintoowners’equity.Forotherwaysondisposaloflong-termequityinvestment,thebalancebetweenthebookvalueofthedisposedequityanditsactualpaymentgainedshallberecordedintocurrentprofitsandlosses.Forthelong-termequityinvestmentmeasuredbyadoptingequitymethod,iftheremainedequityafterdisposalstilladoptstheequitymethodformeasurement,theothercomprehensiveincomeoriginallyrecordedintoowners’equityshouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteesaccordingtothecorrespondingproportion.Theowners’equityrecognizedowningtothechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionoftheinvestees,shouldbetransferredintothecurrentgainsandlossesaccordingtotheproportion.Forthelong-termequityinvestmentwhichadoptsthecostmethodofmeasurement,iftheremainedequitystilladoptthecostmethod,theothercomprehensiveincomerecognizedowningtoadoptingtheequitymethodformeasurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforeacquiringthecontroloftheinvestees,shouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteesandshouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion;thechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequitymethodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestmentaswellastheremainedequityafterdisposalcouldexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchangetomeasurebyequitymethodwhencompilingtheindividualfinancialstatementandshouldadjustthemeasurementoftheremainedequitytoequitymethodasadoptedsincethetimeacquired;iftheremainedequityafterdisposalcouldnotexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchangetheaccountingdisposalaccordingtotherelevantregulationsoftherecognitionandmeasurementstandardsoffinancialinstrument,anditsdifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthecurrentgainsandlosses.FortheothercomprehensiveincomerecognizedbyadoptingequitymethodformeasurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforetheCompanyacquiredthecontroloftheinvestees,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenlosethecontrolofthem,whilethechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequitymethodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.Ofwhich,forthedisposedremainedequitywhichadoptedtheequitymethodformeasurement,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardaccordingtotheproportion;forthedisposedremainedequitywhichchangedtoexecutetheaccountingdisposalaccordingto

therecognitionandmeasurementstandardsoffinancialinstrument,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardinfullamount.ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestment,thedisposedremainedequityshouldchangetocalculateaccordingtotherecognitionandmeasurementstandardsoffinancialinstrument,anddifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthecurrentgainsandlosses.Fortheothercomprehensiveincomerecognizedfromtheoriginalequityinvestmentbyadoptingtheequitymethod,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenterminatetheequitymethodformeasurement,whilefortheowners’equityrecognizedowningtothechangesoftheotherowner’sequityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionoftheinvestees,shouldbetransferredintothecurrentinvestmentincomewithfullamountwhenterminateadoptingtheequitymethod.

19.InvestmentRealEstateMeasurementmodeofinvestmentrealestate:

MeasurementofcostmethodDepreciationoramortizationmethodTheinvestmentrealestateshallbemeasuredatitscost.Ofwhich,thecostofaninvestmentrealestatebyacquisitionconsistsoftheacquisitionprice,relevanttaxes,andotherexpensedirectlyrelegatedtotheasset;thecostofaself-builtinvestmentrealestatecomposesofthenecessaryexpensesforbuildingtheassettothehopedconditionforuse.Theinvestmentrealestateinvestedbyinvestorsshallberecordedatthevaluestipulatedintheinvestmentcontractsoragreements,buttheunfairvalueappointedinthecontractoragreementshallbeenteredintotheaccountbookatthefairvalue.Asforwithdrawalbasisofprovisionforimpairmentofinvestmentrealestates,pleaserefertowithdrawalmethodforprovisionforimpairmentoffixedassets.

20.FixedAssets

(1)RecognitionConditionsFixedassetsreferstothetangibleassetsthatsimultaneouslypossessthefeaturesasfollows:(a)theyareheldforthesakeofproducingcommodities,renderinglaborservice,rentingorbusinessmanagement;and(b)theirusefullifeisinexcessofonefiscalyear.ThefixedassetsareonlyrecognizedwhentherelevanteconomicbenefitsprobablyflowintheCompanyanditscostcouldbereliablemeasured.

(2)DepreciationMethod

CategoryoffixedassetsMethodUsefullifeAnnualdeprecation
HousingandbuildingAveragemethodofusefullife20-40years2.50%-5%
MachineryequipmentAveragemethodofusefullife6-15years6.67%-16.67%
TransportationequipmentAveragemethodofusefullife5-10years10%-20%
OtherequipmentAveragemethodofusefullife5-10years10%-20%

(3)RecognitionBasis,PricingandDepreciationMethodofFixedAssetsbyFinanceLease

TheCompanyrecognizesthosemeetwiththefollowingoneorcertainstandardsasthefixedassetsbyfinancelease:

1)Theleasingcontracthadagreedthat(ormadethereasonablejudgmentaccordingtotherelevantconditionsontheleasestartingdate)whentheleasetermexpires,theownershipofleasingthefixedassetscouldbetransferredtotheCompany;

2)TheCompanyownsthechoosingrightforpurchasingandleasingthefixedassets,withthesetpurchasepricewhichisestimatedfarlowerthanthefairvalueofthefixedassetsbyfinanceleasewhenexecutingthechoosingright,sotheCompanycouldexecutethechoosingrightreasonablyontheleasestartingdate;

3)Eveniftheownershipofthefixedassetsnotbetransferred,theleaseperiodisof75%oraboveoftheusefullifeoftheleasefixedassets;

4)ThecurrentvalueoftheminimumleasepaymentontheleasestartingdateoftheCompanyisequalto90%oraboveofthefairvalueoftheleasefixedassetsontheleasestartingdate;thecurrentvalueoftheminimumleasereceiptsontheleasestartingdateoftheleaserisequalto90%oraboveofthefairvalueoftheleasefixedassetsontheleasestartingdate;

5)ThenatureoftheleaseassetsisspecialthatonlytheCompanycoulduseitifnotexecutelargetransformation.Thefixedassetsbyfinanceleaseshouldtaketheloweronebetweenthefairvalueoftheleasingassetsandthecurrentvalueoftheminimumleasepaymentontheleasestartingdateastheentryvalue.Asfortheminimumleasepaymentwhichberegardedastheentryvalueofthelong-termaccountspayable,itsdifferenceshouldberegardedastheunrecognizedfinancingexpense.Fortheinitialdirectexpensesoccurintheleasenegotiationsandthesigningprocessoftheleasecontractsthatattributetothehandlingexpenses,counselfees,travelexpensesandstamptaxesoftheleaseitems,shouldbeincludedinthecharter-inassetsvalue.Theunrecognizedfinancingexpensesshouldbeamortizedbyadoptingtheactualinterestrateduringtheperiodoftheleaseterm.Thefixedassetsbyfinanceleaseshalladoptthesamedepreciationpolicyforself-ownedfixedassets.Ifitisreasonabletobecertainthatthelesseewillobtaintheownershipoftheleasedassetwhentheleasetermexpires,theleasedassetshallbefullydepreciatedoveritsusefullife.Ifitisnotreasonabletobecertainthatthelesseewillobtaintheownershipoftheleasedassetattheexpiryoftheleaseterm,theleasedassetshallbefullydepreciatedovertheshorteroneoftheleasetermoritsusefullife

21.ConstructioninProgress

(1)ValuationoftheprogressinconstructionConstructioninprogressshallbemeasuredatactualcost.Self-operatingprojectsshallbemeasuredatdirectmaterials,directwagesanddirectconstructionfees;constructioncontractshallbemeasuredatprojectpricepayable;projectcostforplantengineeringshallberecognizedatvalueofequipmentsinstalled,costofinstallation,trailrunofprojects.Costsofconstructioninprocessalsoincludeborrowingcostsandexchangegainsandlosses,whichshouldbecapitalized.

(2)StandardizationonconstructioninprocesstransferredintofixedassetsandtimepointTheconstructioninprocess,ofwhichthefixedassetsreachtothepredictedconditionforuse,shallcarryforwardfixedassetsonschedule.Theonethathasnotauditedthefinalaccountingshallrecognizethecostandmakedepreciationinlinewithvaluationvalue.Theconstructioninprocessshalladjusttheoriginalvaluationvalueatitshistoricalcostbutnotadjustthedepreciationthathasbeenmadeafterauditingthefinalaccounting.

22.BorrowingCosts

(1)RecognitionprincipleofcapitalizationofborrowingcostsTheborrowingcostsshallincludetheinterestonborrowings,amortizationofdiscountsorpremiumson

borrowings,ancillaryexpenses,andexchangebalanceonforeigncurrencyborrowings.Wheretheborrowingcostsoccurredbelongtospecificallyborrowedloanorgeneralborrowingusedfortheacquisitionandconstructionofinvestmentrealestatesandinventoriesoveroneyear(includingoneyear)shallbecapitalized,andrecordintorelevantassetscost.Otherborrowingcostsshallberecognizedasexpensesonthebasisoftheactualamountincurred,andshallberecordedintothecurrentprofitsandlosses.Theborrowingcostsshallnotbecapitalizedunlesstheysimultaneouslymeetthefollowingthreerequirements:(1)Theassetdisbursementshavealreadyincurred;(2)Theborrowingcostshavealreadyincurred;and(3)Theacquisitionandconstructionorproductionactivitieswhicharenecessarytopreparetheassetforitsintendeduseorsalehavealreadystarted.

(2)TheperiodofcapitalizationofborrowingcostsTheborrowingcostsarisingfromacquisitionandconstructionoffixedassets,investmentrealestatesandinventories,iftheymeettheabove-mentionedcapitalizationconditions,thecapitalizationoftheborrowingcostsshallbemeasuredintoassetcostbeforesuchassetsreachtotheintendeduseorsale,Whereacquisitionandconstructionoffixedassets,investmentrealestatesandinventoriesisinterruptedabnormallyandtheinterruptionperiodlastsformorethan3months,thecapitalizationoftheborrowingcostsshallbesuspended,andrecordedintothecurrentexpense,tilltheacquisitionandconstructionoftheassetsrestarts.Whenthequalifiedassetisreadyfortheintendeduseorsale,thecapitalizationoftheborrowingcostsshallbeceased,theborrowingcostsoccurredlatershallbeincludedintothefinancialexpensedirectlyatthecurrentperiod.

(3)MeasurementmethodofcapitalizationamountofborrowingcostsAsforspecificallyborrowedloansfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theto-be-capitalizedamountofinterestsshallbedeterminedinlightoftheactualcostincurredofthespeciallyborrowedloanatthepresentperiodminustheincomeofinterestsearnedontheunusedborrowingloansasadepositinthebankorasatemporaryinvestment.Whereageneralborrowingisusedfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theenterpriseshallcalculateanddeterminetheto-be-capitalizedamountofinterestsonthegeneralborrowingbymultiplyingtheweightedaverageassetdisbursementofthepartoftheaccumulativeassetdisbursementsminusthegeneralborrowingbythecapitalizationrateofthegeneralborrowingused.Thecapitalizationrateshallbecalculatedanddeterminedinlightoftheweightedaverageinterestrateofthegeneralborrowing.

23.IntangibleAssets

(1)PricingMethod,ServiceLife,andImpairmentTest

(1)PricingmethodofintangibleassetsIntangibleassetspurchasedshouldtaketheactualpaymentandtherelevantotherexpensesastheactualcost.Fortheintangibleassetsinvestedbytheinvestorsshouldberecognizedtheactualcostaccordingtothevalueoftheinvestmentcontractsoragreements,however,forthevalueofthecontractsoragreementsisnotfair,theactualcostshouldberecognizedaccordingtothefairvalue.Fortheintangibleassetsacquiresfromtheexchangeofthenon-currencyassets,ifownthecommercialnature,shouldberecordedaccordingtothefairvalueoftheswap-outassets;forthosenotownthecommercialnature,shouldberecordedaccordingtothebookvalueoftheswap-outassets.Fortheintangibleassetsacquiresfromthedebtsreorganizationshouldberecognizedbythefairvalue.

(2)AmortizationmethodandtermofintangibleassetsAsfortheintangibleassetswithlimitedservicelife,whichareamortizedbystraight-linemethodwhenitisavailableforusewithintheserviceperiod,shallberecordedintothecurrentprofitsandlosses.TheCompanyshall,atleastattheendofeachyear,checktheservicelifeandtheamortizationmethodofintangibleassetswith

limitedservicelife.Whentheservicelifeandtheamortizationmethodofintangibleassetsaredifferentfromthosebefore,theyearsandmethodoftheamortizationshallbechanged.Intangibleassetswithuncertainservicelifemaynotbeamortized.However,theCompanyshallchecktheservicelifeofintangibleassetswithuncertainservicelifeduringeachaccountingperiod.Wherethereareevidencestoprovetheintangibleassetshavelimitedservicelife,itshallbeestimatedofitsservicelife,andbeamortizedaccordingtotheabovemethodmentioned.TherightstouselandoftheCompanyshallbeamortizedaccordingtotherestservicelife.

(2)AccountingPolicesofInternalR&DCostsTheinternalresearchanddevelopmentprojectsofanenterpriseshallbeclassifiedintoresearchphaseanddevelopmentphase:theterm“research”referstothecreativeandplannedinvestigationtoacquireandunderstandnewscientificortechnologicalknowledge;theterm“development”referstotheapplicationofresearchachievementsandotherknowledgetoacertainplanordesign,priortothecommercialproductionoruse,soastoproduceanynewmaterial,deviceorproduct,orsubstantiallyimprovedmaterial,deviceandproduct.TheCompanycollectsthecostsofthecorrespondingphasesaccordingtotheabovestandardofclassifyingtheresearchphaseandthedevelopmentphase.Theresearchexpendituresforitsinternalresearchanddevelopmentprojectsofanenterpriseshallberecordedintotheprofitorlossforthecurrentperiod.Thedevelopmentcostsforitsinternalresearchanddevelopmentprojectsofanenterprisemaybecapitalizedwhentheysatisfythefollowingconditionssimultaneously:itisfeasibletechnicallytofinishintangibleassetsforuseorsale;itisintendedtofinishanduseorselltheintangibleassets;theusefulnessofmethodsforintangibleassetstogenerateeconomicbenefitsshallbeproved,includingbeingabletoprovethatthereisapotentialmarketfortheproductsmanufacturedbyapplyingtheintangibleassetsorthereisapotentialmarketfortheintangibleassetsitselfortheintangibleassetswillbeusedinternally;itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthesupportofsufficienttechnologies,financialresourcesandotherresources;thedevelopmentcostsoftheintangibleassetscanbereliablymeasured.

24.ImpairmentofLong-termAssetsFornon-currentfinancialAssetsoffixedAssets,projectsunderconstruction,intangibleAssetswithlimitedservicelife,investingrealestatewithcostmodel,long-termequityinvestmentofsubsidiaries,cooperativeenterprisesandjointventures,theCompanyshouldjudgewhetherdecreaseinvalueexistsonthedateofbalancesheet.Recoverableamountsshouldbetestedfordecreaseinvalueifitexists.OtherintangibleAssetsofreputationanduncertainservicelifeandothernon-accessibleintangibleassetsshouldbetestedfordecreaseinvaluenomatterwhetheritexists.Iftherecoverableamountislessthanbookvalueinimpairmenttestresults,theprovisionforimpairmentofdifferencesshouldincludeinimpairmentloss.Recoverableamountswouldbethehigherofnetvalueofassetfairvaluedeductingdisposalchargesorpresentvalueofpredictedcashflow.Assetfairvalueshouldbedeterminedaccordingtonegotiatedsalespriceoffairtrade.Ifnosalesagreementexistsbutwithassetactivemarket,fairvalueshouldbedeterminedaccordingtotheBuyer’spriceoftheasset.Ifnosalesagreementorassetactivemarketexists,assetfairvaluecouldbeacquiredonthebasisofbestinformationavailable.Disposalexpensesincludelegalfees,taxes,cartageorotherdirectexpensesofmerchantableAssetsrelatedtoassetdisposal.PresentvalueofpredictedassetcashflowshouldbedeterminedbytheproperdiscountrateaccordingtoAssetsinserviceandpredictedcashflowoffinaldisposal.AssetdepreciationreservesshouldbecalculatedonthebasisofsingleAssets.IfitisdifficulttopredicttherecoverableamountsforsingleAssets,recoverableamountsshouldbedeterminedaccordingtothebelongingassetgroup.Assetgroupistheminimumassetcombinationproducingcash

flowindependently.Inimpairmenttest,bookvalueofthebusinessreputationinfinancialreportshouldbesharedtobeneficialassetgroupandassetgroupcombinationincollaborationofbusinessmerger.Itisshowninthetestthatifrecoverableamountsofsharedbusinessreputationassetgrouporassetgroupcombinationarelowerthanbookvalue,itshoulddeterminetheimpairmentloss.Impairmentlossamountshouldfirstlybedeductedandsharedtothebookvalueofbusinessreputationofassetgrouporassetgroupcombination,thendeductbookvalueofallassetsaccordingtoproportionsofotherbookvalueofaboveassetsinassetgrouporassetgroupcombinationexceptbusinessreputation.Aftertheassetimpairmentlossisdetermined,recoverablevalueamountswouldnotbereturnedinfuture.

25.Long-termDeferredExpensesLong-termdeferredexpansesoftheCompanyshallberecordedinlightoftheactualexpenditure,andamortizedaveragelywithinbenefitperiod.Incaseofnobenefitinthefutureaccountingperiod,theamortizedvalueofsuchprojectthatfailstobeamortizedshallbetransferredintotheprofitsandlossesofthecurrentperiod.

26.ContractLiabilitiesContractliabilitiesrefertotheCompany’sobligationsintransferringcommoditiesorservicestotheclientforthereceivedorpredictedconsideration.Contractassetsandcontractliabilitiesunderthesamecontractshallbepresentedbasedonthenetamount.

27.EmployeeBenefits

(1)AccountingTreatmentofShort-termCompensationShort-termcompensationmainlyincludingsalary,bonus,allowancesandsubsidies,employeeservicesandbenefits,medicalinsurancepremiums,birthinsurancepremium,industrialinjuryinsurancepremium,housingfund,laborunionexpenditureandpersonneleducationfund,non-monetarybenefitsetc.Theshort-termcompensationactuallyhappenedduringtheaccountingperiodwhentheactivestaffofferingtheservicefortheCompanyshouldberecognizedasliabilitiesandisincludedinthecurrentgainsandlossesorrelevantassetscost.Ofwhichthenon-monetarybenefitsshouldbemeasuredaccordingtothefairvalue.

(2)AccountingTreatmentoftheWelfareafterDemissionTheCompanyclassifiesthewelfareplansafterdemissionintodefinedcontributionplansanddefinedbenefitplans.WelfareplansafterdemissionreferstotheagreementonthewelfareafterdemissionreachesbetweentheCompanyandtheemployees,ortheregulationsormethodsformulatedbytheCompanyforprovidingthewelfareafterdemissionfortheemployees.Ofwhich,definedcontributionplansreferstothewelfareplansafterdemissionthattheCompanynomoreundertakethefurtherpaymentobligationsafterthepaymentofthefixedexpensesfortheindependentfunds;definedbenefitplans,referstothewelfareplansafterdemissionexceptforthedefinedcontributionplans.DefinedcontributionplansDuringtheaccountingperiodthattheCompanyprovidingtheservicefortheemployees,theCompanyshouldrecognizetheliabilitiesaccordingtothedepositedamountcalculatedbydefinedcontributionplans,andshouldbeincludedinthecurrentgainsandlossesortherelevantassetscost.

(3)AccountingTreatmentoftheDemissionWelfareTheCompanyshouldrecognizethepayrollpaymentliabilitiesoccurfromthedemissionwelfareaccordingtotheearlierdatebetweenthefollowingtwoconditionsandincludewhichinthecurrentgainsandlosseswhenprovidingthedemissionwelfarefortheemployees:theCompanycouldnotunilaterallywithdrawthedemissionwelfareowningtotherelieveplansofthelaborrelationshiporreduction;whentheCompanyrecognizingthecostsorexpensesrelatedtothereorganizationinvolveswiththedemissionwelfarepayments.

28.LeaseLiabilitiesOnthecommencementdateoftheleaseterm,theCompanyrecognizesthepresentvalueofunpaidleasepaymentsasleaseliabilities.Leasepaymentsinclude:fixedpaymentandsubstantialfixedpayment,andtherelevantamountaftertheleaseincentive(ifany)isdeducted;variableleasepaymentsthatdependonindexationorratio,whicharedeterminedaccordingtotheindexationorratioonthecommencementdateoftheleasetermintheinitialmeasurement;exercisepriceofthepurchasedoption,providedthatthelesseereasonablydeterminesthattheoptionwillbeexercised;theamounttobepaidfortheexerciseoftheleaseterminationoptions,providedthattheleasetermreflectsthatthelesseewillexercisetheoptionstoterminatethelease;andestimatedpaymentsduetotheguaranteedresidualvalueprovidedbythelessee.TheCompanyusestheinterestrateimplicitinleaseastherateofdiscountwhencalculatingthepresentvalueoftheleasepayments.Theincrementallendingrateofthelesseewillbeusedastherateofdiscount,iftheinterestrateimplicitinleasecannotbedetermined.TheCompanycalculatestheinterestchargeoftheleaseliabilitiesineachperiodoftheleasetermatafixedperiodicinterestrateandincludesitintheprofitorlossofthecurrentperiod,unlesssuchinterestchargeisstipulatedtobeincludedintheunderlyingassetcosts.Variableleasepaymentsthatarenotincludedinthemeasurementoftheleaseliabilitiesshouldbeincludedintheprofitorlossofthecurrentperiodwhentheyareactuallyincurred,unlesssuchpaymentsarestipulatedtobeincludedintheunderlyingassetcosts.TheCompanywillre-calculatetheleaseliabilitiesusingthepresentvalueofthechangedleasepayments,ifthesubstantialfixedpayment,theestimatedpaymentsduetotheguaranteedresidualvalue,theindexorrateusedtodeterminetheleasepayments,ortheassessmentresultofthecalloption,therenewaloption,ortheterminationoption,ortheactualexercisechanges,afterthecommencementdateoftheleaseterm.

29.Provisions

(1)CriteriaofprovisionsOnlyiftheobligationpertinenttoacontingenciesshallberecognizedasanestimateddebtswhenthefollowingconditionsaresatisfiedsimultaneously:

1)ThatobligationisacurrentobligationoftheCompany;

2)ItislikelytocauseanyeconomicbenefittoflowoutoftheCompanyasaresultofperformanceoftheobligation;

3)Theamountoftheobligationcanbemeasuredinareliableway.

(2)MeasurementofprovisionsTheCompanyshallmeasuretheprovisionsinaccordancewiththebestestimateofthenecessaryexpensesfortheperformanceofthecurrentobligation.

TheCompanyshallcheckthebookvalueoftheprovisionsontheBalanceSheetDate.Ifthereisanyconclusiveevidenceprovingthatthesaidbookvaluecan’ttrulyreflectthecurrentbestestimate,theCompanyshall,subjecttochange,makeadjustmenttocarryingvaluetoreflectthecurrentbestestimate.

30.RevenueAccountingpoliciesforrecognitionandmeasurementofrevenue:

WhentheCompanyfulfillsitsdueperformanceobligations(namelywhentheclientobtainsthecontroloverrelatedcommoditiesorservices),revenuesshallberecognizedbasedontheobligation’samortizedtransactionprice.PerformanceObligationreferstotheCompany’spromiseoftransferringcommoditiesorservicesthatcanbeclearlydefinedtotheclient.TransactionPricereferstotheconsiderationamountdulychargedbytheCompanyfortransferringcommoditiesorservicestotheclient,excludinganyamountchargedbythethirdpartyandanyamountpredictedtobereturnedtotheclient.ControlOverRelevantCommoditiesmeansthattheuseofcommoditiescanbecontrolledandalmostalleconomicinterestscanbeobtained.Onthecontractcommencementday,theCompanyshallevaluatethecontract,recognizeindividualperformanceobligationandconfirmthatindividualperformanceobligationisfulfilledinacertainperiod.Whenoneofthefollowingconditionsismet,suchperformanceobligationshallbedeemedasfulfilledinacertainperiod,andtheCompanyshallrecognizeitasrevenuewithinacertainperiodaccordingtotheperformanceschedule:(1)theclientobtainsandconsumestheeconomicinterestsresultingfromtheCompany’sperformanceofcontractwhileperformingthecontract;(2)theclientisabletocontrolthecommoditiesunderconstructionduringtheperformance;(3)commoditiesproducedbytheCompanyduringtheperformancepossesstheirreplaceablepurpose,andtheCompanyhastherighttochargeallfinishedpartsduringthecontractperiod;otherwise,theCompanyshallrecognizetherevenuewhentheclientobtainsthecontroloverrelevantcommoditiesorservices.TheCompanyshalladopttheInputMethodtodeterminethePerformanceSchedule.Namely,thePerformanceScheduleshallbedeterminedaccordingtotheCompany’sinputforfulfillingperformanceobligations.WhenthePerformanceSchedulecannotbereasonablydeterminedandallresultingcostsarepredictedtobecompensated,theCompanyshallrecognizetherevenuebasedontheresultingcostamounttillthePerformanceSchedulecanbereasonablydetermined.Whenthecontractinvolvestwoormorethantwoperformanceobligations,thetransactionpriceshallbeamortizedtoeachsingleperformanceobligationonthecontractcommencementdayaccordingtotherelativeproportionoftheindependentsellingpriceofcommoditiesorservicesundereachsingleperformanceobligation.Ifanysolidevidenceprovesthatthecontractdiscountorvariableconsiderationonlyrelatestooneormorethanone(notall)performanceobligationunderthecontract,theCompanyshallamortizethecontractdiscountorvariableconsiderationtooneormorethanonerelatedperformanceobligations.IndependentsellingpricereferstothepriceadoptedbytheCompanytoindependentlysellcommoditiesorservicestotheclient.However,independentsellingpricecannotbedirectlyobserved.TheCompanyshallestimatetheindependentsellingpricebycomprehensivelyconsideringallrelatedinformationthatcanbereasonablyobtainedandmaximallyadoptingtheobservableinputvalue.VariableConsiderationIfanyvariableconsiderationexistsinthecontract,theCompanyshalldeterminetheoptimalestimationofthevariableconsiderationbasedontheexpectedvaluesorthemostpossibleamount.Thevariableconsideration’stransactionpriceshallbeincludedwithoutexceedingthetotalrevenueamountrecognizedwithouttheriskofsignificantrestitutionwhenalluncertaintiesareeliminated.Oneachbalancesheetday,theCompanyshallre-estimatethevariableconsiderationamounttobeincludedinthetransactionprice.

ConsiderationPayabletotheClientIfanyconsiderationpayabletotheclientexistsinthecontract,theCompanyshallusesuchconsiderationtooffsetthetransactionpriceunlesssuchconsiderationispaidforacquiringotherclearly-definedcommoditiesorservicesfromtheclient,andwritedownthecurrentrevenueatthelatertimebetweenthetimeofrecognizingrelevantrevenuesandthetimeofpaying(orpromisingthepayment)theconsiderationtotheclient.SaleswiththeQualityAssuranceForsaleswiththeQualityAssurance,iftheQualityAssuranceinvolvesanotherseparateserviceexceptfortheguaranteeofallsoldcommoditiesorservicesmeetingallestablishedstandards,theQualityAssuranceshallconstituteasinglePerformanceObligation;otherwise,theCompanyshallmakecorrespondingaccountingtreatmenttotheQualityAssuranceaccordingtoASBENo.13--Contingency.MainResponsibilityPerson/AgentAccordingtowhetherthecontrolovercommoditiesorservicesisobtainedbeforetheyaretransferredtotheclient,theCompanycanjudgewhetheritisMainResponsibilityPersonorAgentbasedonitsstatusduringthetransaction.IftheCompanycancontrolcommoditiesorservicesbeforetheyaretransferredtotheclient,theCompanyshallbeMainResponsibilityPerson,andrevenuesshallberecognizedaccordingtothetotalconsiderationamountreceivedortobereceived;otherwise,theCompanyshallbeAgent,andrevenuesshallberecognizedaccordingtothecommissionorservicefeespredictedtobedulycharged.However,suchamountshallbedeterminedbasedonthenetamountafterdeductingotheramountspayabletootherrelatedpartiesfromthetotalconsiderationreceivedortobedulyreceivedorthefixedcommissionamountorproportion.SpecificmethodsThespecificmethodsoftheCompany'srevenuerecognitionareasfollows:

ThesalecontractbetweentheCompanyanditscustomersusuallycontainsonlytheperformanceobligationforthetransferofgoods,whichissatisfiedatapointintime.Thefollowingrequirementsmustbemettoconfirmtherevenueofdomesticproducts:TheCompanyhasdeliveredthegoodstothecustomerinaccordancewiththecontractandthecustomerhasacceptedthegoods.Thepaymenthasbeenrecoveredorthereceiptvoucherhasbeenobtained,andtherelevanteconomicbenefitsarelikelytoflowin.Thecustomerhasobtainedcontroloftherelevantgoods.Themainrisksandrewardsofproductownershiphavebeentransferred.Thelegalownershipofthegoodshasbeentransferred.Thefollowingrequirementsmustbemettoconfirmtherevenueofexportproducts:TheCompanyhasdeclaredtheproductsinaccordancewiththecontract,obtainedthebillsoflading,andreceivedthepaymentorobtainedthereceiptvoucherandtherelatedeconomicbenefitsarelikelytoflowin.Themainrisksandrewardsofproductownershiphavebeentransferred.Thelegalownershipofthegoodshasbeentransferred.InterestRevenueInterestRevenueshallbedeterminedaccordingtothetimeoftheCompany’suseofmonetarycapitalandtheactualinterestrate.

31.GovernmentGrants

(1)TypeAgovernmentgrantmeansthemonetaryornon-monetaryassetsobtainedfreebyanenterprisefromthegovernment.Governmentgrantsconsistofthegovernmentgrantspertinenttoassetsandgovernmentgrantspertinenttoincomeaccordingtotherelevantgovernmentdocuments.Forthosethegovernmentdocumentsnotdefinitestipulatetheassistanceobject,thejudgmentbasisofthe

Companyclassifiesthegovernmentgrantspertinenttoassetsandgovernmentsubsidiespertinenttoincomeis:

whetherareusedforpurchasingorconstructingorforformingthelong-termassetsbyothermethods.

(2)RecognitionofGovernmentSubsidiesThegovernmentsubsidiesshouldberecognizedonlywhenmeetwiththeattachedconditionsofthegovernmentgrantsaswellascouldbeacquired.Ifthegovernmentgrantsarethemonetaryassets,shouldbemeasuredaccordingtothereceivedorreceivableamount;andforthegovernmentgrantsarethenon-monetaryassets,shouldbemeasuredbyfairvalue.

(3)AccountingTreatmentThegovernmentgrantspertinenttoassetsshallberecognizedasdeferredincome,andincludedinthecurrentgainsandlossesoroffsetthebookvalueofrelatedassetswithintheusefullivesoftherelevantassetswithareasonableandsystematicmethod.Governmentgrantspertinenttoincomeusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyinthesubsequentperiodshallberecognizedasdeferredincome,andshallbeincludedinthecurrentprofitandlossduringtheperiodofconfirmingtherelevantcosts,expensesorlosses;thoseusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyalreadyhappenedshallbeincludedinthecurrentgainsandlossesorusedtooffsetrelevantcostsdirectly.Forgovernmentgrantsthatincludebothassets-relatedandincome-relatedparts,theyshouldbedistinguishedseparatelyforaccountingtreatment;forgovernmentsubsidiesthataredifficulttobedistinguished,theyshouldbeclassifiedasincome-related.GovernmentgrantsrelatedtothedailyactivitiesoftheCompanyshallbeincludedintootherincomeorusedtooffsetrelevantcostsbythenatureofeconomicbusiness;thoseunrelatedshallbeincludedintonon-operatingincome.Thegovernmentgrantsrecognizedwithrelevantdeferredincomebalancebutneedtoreturnshallbeusedtooffsetthebookbalanceofrelevantdeferredincome,theexcessivepartshallbeincludedinthecurrentgainsandlossesoradjustingthebookvalueofassetsforthegovernmentgrantsassets-relatedthatoffsetthebookvalueofrelevantassetswhentheyareinitiallyrecognized;thosebelongtoothercasesshallbedirectlyincludedinthecurrentgainsandlosses.

32.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)BasisofrecognizingthedeferredincometaxassetsAccordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,adeferredtaxassetshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.TherecognitionofthedeferredincometaxassetsislimitedbytheincometaxpayablethattheCompanyprobablygainsfordeductingthedeductibletemporarydifferences.Atthebalancesheetdate,wherethereisstrongevidenceshowingthatsufficienttaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,thedeferredtaxassetunrecognizedinpriorperiodshallberecognized.TheCompanyassessesthecarryingamountofdeferredtaxassetatthebalancesheetdate.Ifit’sprobablethatsufficienttaxableprofitwillnotbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,theCompanyshallwritedownthecarryingamountofdeferredtaxasset,orreversetheamountwrittendownlaterwhenit’sprobablethatsufficienttaxableprofitwillbeavailable.

(2)Basisofrecognizingthedeferredincometaxliabilities

Accordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,Adeferredtaxliabilityshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.

33.LeaseTheterm"lease"referstoacontractwherebythelessortransferstherightofuseregardingtheleasedasset(s)tothelesseewithinaspecifiedtimeinexchangeforconsideration.Fromtheeffectivedateofacontract,theCompanyassesseswhetherthecontractisaleaseorincludesanylease.Ifapartytothecontracttransferredtherightallowingthecontrolovertheuseofoneormoreassetsthathavebeenidentifiedwithinacertainperiod,inexchangeforaconsideration,suchcontractisaleaseorincludesalease.Ifacontractcontainsmultiplesingleleasesatthesametime,theCompanywillsplitthecontract,andconductaccountingtreatmentofeachsingleleaserespectively.Ifacontractcontainsbothleaseandnon-leasepartsatthesametime,thelesseeandlessorwillsplittheleaseandnon-leaseparts.

(1)TheCompanyasthelesseeSeeNote28(leaseliabilities)forthegeneralaccountingtreatmentoftheCompanyasthelessee.Forshort-termleaseswithaleasetermnotexceeding12monthsandleasesoflow-valueassetswhensingleleasedassetsarebrandnewassets,theCompanychoosesnottorecognizeright-of-useassetsandleaseliabilities,andrecordsrelevantrentalexpensesintotheprofitorlossofthecurrentperiodortheunderlyingassetcostsonastraight-linebasisineachperiodwithintheleaseterm.Ifaleasechangesandmeetsthefollowingconditionsatthesametime,theCompanywillaccountfortheleasechangeasaseparatelease:theleasechangeexpandstheleasescopebyincreasingtherighttouseoneormoreleasedassets;theincreasedconsiderationisequivalenttotheseparatepriceoftheexpandedleasescopeadjustedaccordingtothecontract.Wheretheleasechangeisnotaccountedforasaseparatelease,ontheeffectivedateoftheleasechange,theCompanywillallocatetheconsiderationofthechangedcontractandre-determinethechangedleaseterm.Thepresentvaluedeterminedbasedonthechangedleasepaymentsandtherevisedrateofdiscountareusedtoremeasuretheleaseliabilities.

(2)TheCompanyasthelessorOnthecommencementdateoftheleaseterm,theCompanyclassifiestheleasesthatsubstantiallytransferalmostallrisksandrewardsrelatedtotheownershipoftheleasedassetsasfinanceleases,andleasesotherthanfinanceleasesasoperatingleases.

1)OperatingleaseTheCompanyrecognizestheleasepaymentsreceivableasrentalsineachperiodwithintheleasetermonastraight-linebasis.TheCompanycapitalizestheinitialdirectcostsrelatedtooperatingleasesuponincurrencethereofandapportionsandincludessuchcostsintheprofitorlossofthecurrentperiodonthebasissameastherecognitionofrentals.Thereceivedvariableleasepaymentsrelatedtooperatingleasesthatarenotincludedintheleasepaymentsreceivableareincludedinprofitorlossofthecurrentperiodwhentheyareactuallyincurred.

2)FinancialleaseOnthecommencementdateoftheleaseterm,theCompanyrecognizesthefinanceleasereceivablesonthebasisofnetinvestmentinthelease(thesumoftheunguaranteedresidualvalueandthepresentvalueoftheleasepaymentsreceivablenotyetreceivedonthecommencementdateoftheleasetermdiscountedattheinterestrateimplicitinlease)andderecognizestheleasedassetofthefinancelease.TheCompanycalculatesandrecognizesinterestincomebasedontheinterestrateimplicitinleaseineachperiodwithintheleaseterm.Thereceived

variableleasepaymentsthatarenotcoveredinthemeasurementofthenetinvestmentintheleaseareincludedintheprofitorlossofthecurrentperiodwhenactuallyincurred.

(3)SaleandleasebackTheCompanyassesseswhethertheassettransferinasaleandleasebacktransactionisasaleinaccordancewithrelevantprovisionsoftheAccountingStandardsforBusinessEnterprisesNo.14-Income.

1)TheCompanyasthelesseeIftheassettransferinasaleandleasebacktransactionisasale,theCompanymeasurestheright-of-useassetsformedbythesaleandleasebackbasedontheportionoftheoriginalasset'scarryingvaluethatisrelatedtotheuserightacquiredbytheleaseback,andrecognizesrelatedgainsorlossesonlyfortherighttransferredtothelessor.Iftheassettransferinasaleandleasebacktransactionisnotasale,theCompanycontinuestorecognizethetransferredassetandatthesametimerecognizesafinancialliabilityequivalenttothetransferincome,andconductscorrespondingaccountingtreatmentforthefinancialliabilityinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments.

2)TheCompanyasthelessorIftheassettransferinasaleandleasebacktransactionisasale,theCompanyappliesotheraccountingstandardsforbusinessenterprisestotheaccountingtreatmentforassetpurchase,andconductscorrespondingaccountingtreatmentforassetleaseinaccordancewiththeAccountingStandardforBusinessEnterprisesNo.21-Leases.Iftheassettransferinasaleandleasebacktransactionisnotasale,theCompanydoesnotrecognizethetransferredasset,butrecognizesafinancialassetequivalenttothetransferincome,andconductscorrespondingaccountingtreatmentforthefinancialassetinaccordancewiththeAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments.

34.OtherSignificantAccountingPoliciesandAccountingEstimatesTheCompanyevaluatestheimportantaccountingestimatesandkeyassumptionsadoptedonanongoingbasis,basedonhistoricalexperienceandotherfactors,includingreasonableexpectationsoffutureevents.Importantaccountingestimatesandcriticalassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfiscalyeararelistedasfollows:

(1)ClassificationoffinancialassetsThesignificantjudgmentsinvolvedwhentheCompanydeterminestheclassificationoffinancialassetsincludeanalysisofbusinessmodelsandcontractualcashflowcharacteristics.TheCompanydeterminesthebusinessmodelformanagingfinancialassetsatthelevelofthefinancialassetportfolio,takingintoaccountfactorssuchastheapproachofevaluatingandreportingtheperformanceoffinancialassetstokeymanagementpersonnel,therisksaffectingtheperformanceoffinancialassetsandthemannerinwhichtheyaremanaged,andwayinwhichtherelevantbusinessmanagementpersonnelarecompensated.Thefollowingmainjudgmentsexistinassessingwhetherthecontractualcashflowsoffinancialassetsareconsistentwiththebasiclendingarrangements:

Whetherthetimedistributionoramountoftheprincipalamountduringthedurationmaychangeduetoearlyrepaymentorforotherreasons;whethertheinterestincludesonlythetimevalueofmoney,creditrisk,otherbasiclendingrisksandconsiderationagainstcostsandprofits.Forexample,whethertheamountofearlyrepaymentreflectsonlytheoutstandingprincipalandinterestbasedontheoutstandingprincipal,aswellasreasonablecompensationpaidforearlyterminationofthecontract.

(2)MeasurementofexpectedcreditlossesofaccountsreceivableTheCompanycalculatestheexpectedcreditlossofaccountsreceivableusingtheexposuretodefaultriskofaccountsreceivableandtheexpectedcreditlossratio,anddeterminestheexpectedcreditlossratiobasedontheprobabilityofdefaultandthedefaultlossratio.Whendeterminingtheexpectedcreditlossratio,theCompanyusesdatasuchasinternalhistoricalcreditlossexperienceandadjustshistoricaldatatotakeintoaccountcurrentconditionsandforward-lookinginformation.Whenconsideringforward-lookinginformation,theCompanyusesindicatorssuchastheriskofeconomicdownturnandchangesintheexternalmarketenvironment,technologicalenvironmentandcustomerprofile.TheCompanyregularlymonitorsandreviewstheassumptionsrelatedtothecalculationofexpectedcreditlosses.

(3)InventoryfallingpricereservesTheCompanyfollowstheinventoryaccountingpolicyandcarriesoutmeasurementbasedonwhichissmallerbetweenthecostandthenetrealizablevalue.Ifthecostofinventoriesishigherthanitsnetrealizablevalue,thentheinventoryfallingpricesreserveswereimplemented.Theimpairmentofinventoriestonetrealizablevalueisbasedonanassessmentofthemarketabilityoftheinventoriesandtheirnetrealizablevalue.Themanagementshalldeterminetheimpairmentofinventoriesafterobtainingreliableevidencewhiletakingintoaccountthepurposeofholdinginventories,theeffectofitemsafterthebalancesheetdate,andotherfactors.Differencesbetweenactualresultsandoriginalestimateswillaffectthecarryingvalueofinventoriesandtheprovisionorreversalofreversesforfallingpricesofinventoriesintheperiodinwhichtheestimatesarechanged.

(4)DeterminationoffairvalueofunlistedequityinvestmentThefairvalueofunlistedequityinvestmentistheexpectedfuturecashflowsdiscountedatthecurrentdiscountrateforitemswithsimilartermsandriskcharacteristics.SuchvaluationrequirestheCompanytoestimateexpectedfuturecashflowsanddiscountratesandisthereforesubjecttouncertainty.Underlimitedcircumstances,iftheinformationusedtodeterminefairvalueisinsufficient,oriftherangeofpossibleestimatesoffairvalueiswideandthecostrepresentsthebestestimateoffairvaluewithinthatrange,thecostmayrepresentitsappropriateestimateoffairvaluewithinthatrangeofdistribution.

(5)Reservesforlong-termassetsimpairmentTheCompanydeterminesatthebalancesheetdatewhetherthereisanyindicationthatanon-currentasset,otherthanafinancialasset,maybeimpaired.Forintangibleassetswithanuncertainusefullife,impairmenttestsshallbeconductedwhenthereisanindicationofimpairmentbesidestheannualimpairmenttest.Othernon-currentassetsotherthanfinancialassetsshallbetestedforimpairmentwhenthereisanindicationthatthecarryingamountisirrecoverable.Animpairmentisindicatedwhenthecarryingamountofanassetorassetgroupisgreaterthantherecoverableamount,whichisthehigherofthefairvalueminusdisposalexpensesandthepresentvalueofestimatedfuturecashflows.Thenetvalueofthefairvalueminusdisposalexpensesisdeterminedbyreferringtothenegotiablesalepriceorobservablemarketpriceofsimilarassetsinafairtransactionanddeductingincrementalcostsdirectlyattributabletothedisposaloftheasset.Estimatingthepresentvalueoffuturecashflowsrequiressignificantjudgmentswithrespecttotheproductionvolumeoftheasset(orassetgroup),thesellingprice,therelatedoperatingcostsandthediscountrateusedincalculatingthepresentvalue.TheCompanyusesallavailablerelevantinformationinestimatingrecoverableamounts,includingprojectionsofvolumes,sellingpricesandrelatedoperatingcostsbasedonreasonableandsupportableassumptions.

(6)Depreciationandamortization

TheCompanydepreciatesandamortizesinvestmentproperties,fixedassetsandintangibleassetsonastraight-linebasiswithintheirservicelivesaftertakingintoaccounttheirresidualvalues.TheCompanyregularlyreviewsservicelivestodeterminetheamountofdepreciationandamortizationexpensestobeincludedineachreportingperiod.TheservicelifeisdeterminedbytheCompanybasedonpastexperiencewithsimilarassetsandexpectedtechnologicalupdates.Depreciationandamortizationexpenseswillbeadjustedinthefutureperiodifthereisasignificantchangeinpreviousestimates.

(7)DeferredincometaxassetsTotheextentthatitisprobablethatsufficienttaxableprofitwillbeavailabletooffsetthelosses,theCompanyrecognizesdeferredincometaxassetsforallunusedtaxlosses.ThisrequirestheCompany'smanagementtousemanyjudgmentstoestimatethetimingandamountoffuturetaxableprofits,takingintoaccounttaxplanningstrategies,soastodeterminetheamountofdeferredincometaxassetstoberecognized.

(8)IncometaxInthenormaloperatingactivitiesoftheCompany,theultimatetaxtreatmentandcalculationofcertaintransactionsaresubjecttocertainuncertainties.Whethersomeitemscanbedisbursedbeforetaxrequirestheapprovalofthetaxauthorities.Ifthefinaldeterminationofthesetaxmattersdiffersfromtheamountsinitiallyestimated,thedifferencewillhaveanimpactoncurrentanddeferredincometaxesintheperiodinwhichtheyarefinallydetermined.

35.ChangesinMainAccountingPoliciesandEstimates

(1)ChangeofAccountingPolicies

√Applicable□Notapplicable

ChangestotheaccountingpoliciesandwhyApprovalprocessRemark
TheCompanystartstoimplementthe“Accountingtreatmentforsalesofproductsorby-productsbyenterprisesgeneratedfromfixedassetsbeforereachingtheintendedstateofavailabilityorfromtheperiodofR&D”and“Judgmentononerouscontracts”and“Presentationofcentralizedcapitalmanagement”stipulatedintheAccountingStandardsforBusinessEnterprisesInterpretationNo.15issuedbytheMinistryofFinancein2021since1January2022.On22August2022,the13thMeetingofthe9thBoardofDirectorsandthe12thMeetingofthe9thSupervisoryCommitteewereheldbytheCompanyonwhichtheProposalonChangesofAccountingPolicieswasapproved.Notesofchangestoaccountingpolicies-(1)
TheCompanystartstoimplementthe“accountingtreatmentoftheincometaxeffectoffinancialinstrumentrelateddividendwhoseissuerisclassifiedasequityinstrument”and“accountingtreatmentofshare-basedpaymentincashsettlementmodifiedintoshare-basedpaymentinequitysettlementbytheenterprise”stipulatedintheAccountingStandardsforBusinessEnterprisesInterpretationNo.16issuedbytheMinistryofFinancein2022since13December2022./Notesofchangestoaccountingpolicies-(2)

Descriptionofchangesinaccountingpolicies:

(1)TheimpactofimplementingtheInterpretationNo.15ofAccountingStandardsforBusinessEnterprisesontheCompanyOn31December2021,theMinistryofFinanceissuedtheInterpretationNo.15ofAccountingStandardsforBusinessEnterprises(C.K.[2021]No.35)(hereinafterreferredtoas“InterpretationNo.15”).Contentsof“accountingtreatmentofexternalsalesofproductsorby-productproducedbytheenterprisebeforethefixedassetsreachtheintendedusablestateorduringtheresearchanddevelopmentprocess(hereinafterreferredtoas‘TrialSales’)”and“judgmentonloss-makingcontracts”cameintoforceon1January2022.TheCompanyimplementedInterpretationNo.15sincethedateofissuance,andtheimplementationhasnomaterialimpactonthefinancialstatementsduringthereportingperiod.

(2)TheimpactofimplementingtheInterpretationNo.16ofAccountingStandardsforBusinessEnterprisesontheCompanyOn13December2022,theMinistryofFinanceissuedtheInterpretationNo.16ofAccountingStandardsforBusinessEnterprises(C.K.[2022]No.31)(hereinafterreferredtoas“InterpretationNo.16”).Theregulationsof“accountingtreatmentfordeferredincometaxrelatingtoassetsandliabilitiesarisingfromasingletransactionthatisnotsubjecttotheinitialrecognitionexemption”cameintoforceon1January2023,allowingcompaniestoimplementtheexemptionpriortotheyearofissuance,whichhasnotbeenimplementedbytheCompanyinadvancethisyear.Inaddition,thecontentsof“accountingtreatmentoftheincometaxeffectoffinancialinstrumentrelateddividendwhoseissuerisclassifiedasequityinstrument”and“accountingtreatmentofshare-basedpaymentincashsettlementmodifiedintoshare-basedpaymentinequitysettlementbytheenterprise”cameintoforceontheissuancedate.TheCompanyimplementedInterpretationNo.16sincethedateofissuance,andtheimplementationhasnomaterialimpactonthefinancialstatementsduringthereportingperiod.

(2)ChangesinAccountingEstimates

□Applicable√NotapplicableVI.Taxation

1.MainTaxesandTaxRate

CategoryoftaxesTaxbasisTaxrate
VATPayabletosalesrevenue13%,9%,6%,5%
UrbanmaintenanceandconstructiontaxTaxableturnoveramountTaxpaidinaccordancewiththetaxregulationsoftaxunitslocation
EnterpriseincometaxTaxableincome25%,15%,2.5%
EducationsurchargeTaxableturnoveramount5%

Notesofthedisclosuresituationofthetaxpayingbodieswithdifferententerprisesincometaxrate

NameIncometaxrate
ChangchaiCompany,Limited15%
ChangchaiWanzhouDieselEngineCo.,Ltd.15%
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.25%
ChangzhouHorizonInvestmentCo.,Ltd.25%
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,25%
Ltd.
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.15%
JiangsuChangchaiMachineryCo.,Ltd.25%
ChangzhouXingshengRealEstateManagementCo.,Ltd.2.5%
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.15%

2.TaxPreferenceOn30November2021,theCompanyobtainedtheCertificatesforHigh-techEnterprisesagain,anditstillenjoys15-percentpreferentialrateforcorporateincometaxduringtheReportingPeriod;theCompany’scontrollingsubsidiary-ChangchaiWanzhouDieselEngineCo.,Ltd.,thecontrollingsubsidiarycompany,shallpaythecorporateincometaxattaxrate15%from1January2011to31December2030inaccordancewiththeNoticeoftheMinistryofFinance,theGeneralAdministrationofCustomsofPRCandtheNationalAdministrationofTaxationaboutthePreferentialTaxPoliciesfortheWesternDevelopmentandMinistryofFinanceAnnouncementNo.23[2020]AnnouncementoftheMinistryofFinance,theStateAdministrationofTaxationandtheNationalDevelopmentandReformCommissiononContinuingtheEnterpriseIncomeTaxPolicyfortheGreatWesternDevelopment.On2December2020,thewholly-ownedsubsidiaryChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.obtainedthe"High-techEnterpriseCertificate"andenjoyeda15%preferentialcorporateincometaxrateduringtheReportingPeriod;Thewholly-ownedsubsidiaryChangzhouXingshengRealEstateManagementCo.,Ltd.iseligiblesmallenterprisewithlowprofitsandshallpaythecorporateincometaxattaxrate2.5%forsmallenterpriseswithlowprofitsduringtheReportingPeriod;ThesubsidiaryZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.acquiredintheyearhasobtainedthe"High-techEnterpriseCertificate"andenjoyeda15%preferentialcorporateincometaxrateduringtheReportingPeriod.

VII.NotestoMajorItemsintheConsolidatedFinancialStatementsoftheCompany

1.MonetaryAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Cashonhand251,965.06145,594.98
Bankdeposits830,914,999.19561,746,767.12
Othermonetaryassets98,846,386.72146,074,316.64
Total930,013,350.97707,966,678.74
Ofwhich:Totalamountdepositedoverseas
Totalamountofrestrictioninusebymortgage,pledgeorfreeze95,662,384.92145,564,457.15

Attheperiod-end,therestrictedmonetaryassetsoftheCompanywasRMB95,662,384.92,ofwhichRMB91,084,933.63wasthecashdepositforbankacceptancebills,RMB2,993,220.00wascashdepositforL/G,RMB871,348.35wascashdepositforenvironmentandRMB712,882.94wascashdepositforcredit.

2.TradingFinancialAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Financialassetsatfairvaluethroughprofitorloss370,103,602.57404,053,261.57
Ofwhich:Stocks78,739,311.00121,940,343.76
Financialproducts291,364,291.57282,112,917.81
Total370,103,602.57404,053,261.57

3.NotesReceivable

(1)NotesReceivableListedbyCategory

Unit:RMB

ItemEndingbalanceBeginningbalance
Bankacceptancebill297,125,872.54334,311,236.78
Total297,125,872.54334,311,236.78

Ifthebaddebtprovisionfornotesreceivablewaswithdrawninaccordancewiththegeneralmodelofexpectedcreditlosses,informationrelatedtobaddebtprovisionshallbedisclosedbyreferencetothedisclosuremethodofotherreceivables:

□Applicable√Notapplicable

(2)NotesReceivablePledgedbytheCompanyatthePeriod-end:None

(3)NotesReceivablewhichHadEndorsedbytheCompanyorhadDiscountedbuthadnotDueontheBalanceSheetDateatthePeriod-end

Unit:RMB

ItemAmountofrecognitionterminationattheperiod-endAmountofnotterminatedrecognitionattheperiod-end
Bankacceptancebill176,395,231.83
Total176,395,231.83

(4)ThereWereNoNotesTransferredtoAccountsReceivablebecauseDraweroftheNotesFailedtoExecutetheContractorAgreementatthePeriod-end

4.AccountsReceivable

(1)AccountsReceivableClassifiedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued51,757,257.999.91%34,367,361.8366.40%17,389,896.1650,437,453.639.10%44,054,367.1587.34%6,383,086.48
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbygroup470,411,042.1590.09%117,478,758.5424.97%352,932,283.61504,092,720.0890.90%135,266,680.0826.83%368,826,040.00
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup470,411,042.1590.09%117,478,758.5424.97%352,932,283.61504,092,720.0890.90%135,266,680.0826.83%368,826,040.00
Total522,168,300.14100.00%151,846,120.3729.08%370,322,179.77554,530,173.71100.00%179,321,047.2332.34%375,209,126.48

Accountreceivableswithdrawnbaddebtprovisionseparatelywithsignificantamountattheperiodend:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionReasonofwithdrawal
Customer11,470,110.641,470,110.64100.00%Difficulttorecover
Customer21,902,326.581,902,326.58100.00%Difficulttorecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,797,123.262,194,980.2878.47%Expectedtodifficultlyrecover
Customer53,633,081.232,122,165.7358.41%Expectedtodifficultlyrecover
Customer62,584,805.832,584,805.83100.00%Difficulttorecover
Customer71,731,493.711,731,493.71100.00%Difficulttorecover
Customer81,511,937.64604,775.0640.00%Expectedtodifficultlyrecover
Customer93,329,074.84720,031.7121.63%Expectedtodifficultlyrecover
Customer102,025,880.182,025,880.18100.00%Difficulttorecover
Customer115,972,101.905,972,101.90100.00%Difficulttorecover
Customer124,592,679.054,592,679.05100.00%Difficulttorecover
Total37,766,277.5032,137,013.31----

Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup:

Unit:RMB

AgingEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Within1year327,927,427.986,558,548.572.00%
1to2years25,360,867.631,268,043.395.00%
2to3years6,764,456.551,014,668.4815.00%
3to4years1,377,872.15413,361.6430.00%
4to5years1,890,703.461,134,422.0860.00%
Over5years107,089,714.38107,089,714.38100.00%
Total470,411,042.15117,478,758.54--

Notesofthebasisofdeterminingthegroup:

Theaccountsreceivablewasadoptedtheaginganalysisbasedonthemonthswhentheaccountsincurredactually,amongwhichtheaccountsincurredearlierwillbeprioritytobesettledintermsofthecapitalturnover.ExplanationoftheinputvalueandassumptionadoptedtodeterminethewithdrawalamountofbaddebtprovisionontheCurrentPeriod:Withreferencetotheexperienceofthehistoricalcreditloss,combiningwiththepredictionofthepresentstatusandfuturefinancialsituation,thecomparisontablewaspreparedbetweentheagingoftheaccountsreceivableandestimatedcreditlossrateinthedurationandtocalculatetheestimatedcreditloss.Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)343,017,134.79
1to2years25,903,580.29
2to3years6,917,677.75
Over3years146,329,907.31
3to4years3,465,761.24
4to5years3,840,453.02
Over5years139,023,693.05
Total522,168,300.14

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofbaddebtprovisionwithdrawn:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offTransferofconsolidatedsubsidiary
Baddebtprovisionwithdrawnseparately44,054,367.15493,726.4510,180,731.7734,367,361.83
Baddebtprovisionwithdrawnbygroup135,266,680.082,632,425.8020,769,169.67348,822.33117,478,758.54
Total179,321,047.233,126,152.2530,949,901.44348,822.33151,846,120.37

OfwhichbaddebtprovisionreversedorrecoveredwithsignificantamountintheReportingPeriod:No.

(3)AccountsReceivablewithActualVerificationduringtheReportingPeriod

Unit:RMB

ItemVerifiedamount
Accountsreceivablewithactualverification30,949,901.44

Ofwhichtheverificationofsignificantaccountsreceivable:

Unit:RMB

NameoftheentityNatureoftheaccountsreceivableVerifiedamountReasonforverificationVerificationproceduresperformedArisingfromrelated-partytransactionsornot
Customer1Accountsreceivableforgoods2,837,045.23Withaccountsreceivableagingover5years,thedebtorshavenoassetsfordebtextinguishmentduetothecounterpartcompanybeingrevokedorcancelled,ordebtreorganisation,bankruptcyclearing,orjudiciallitigationandotherreasons.ChangchaiWanzhouDieselEngineCo.,Ltd.heldthe1stExtraordinaryGeneralMeetingon20December2022andapprovedtheProposalonVerificationofSomeAccountsReceivable.Not
Customer22,790,920.00
Customer32,589,892.74
Customer42,173,984.00
Customer51,962,873.80
Customer61,635,047.54
Customer71,444,186.14
Customer81,266,654.55
Customer91,209,883.25
Customer101,128,969.12
Customer111,068,019.00
Customer121,062,062.94
Customer131,043,064.00
Total22,212,602.31

(4)Top5oftheEndingBalanceoftheAccountsReceivableCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityEndingbalanceofaccountsreceivableProportiontototalendingbalanceofaccountsreceivableEndingbalanceofbaddebtprovision
Customer1182,469,247.0534.94%3,649,384.94
Customer240,330,698.627.72%806,613.97
Customer320,619,430.633.95%412,388.61
Customer418,538,588.593.55%913,245.46
Customer515,564,496.002.98%311,289.92
Total277,522,460.8953.14%

5.AccountsReceivableFinancing

Unit:RMB

ItemEndingbalanceBeginningbalance
Bankacceptancebills242,813,392.79497,388,826.02
Total242,813,392.79497,388,826.02

ChangesofaccountsreceivablefinancingandfairvaluethereofintheReportingPeriod

√Applicable□NotapplicablePleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivablefinancing.

□Applicable√NotapplicableOthernotes:

TheCompanydiscountsandendorsesaportionofitsbankacceptancesbasedonitsroutinefundmanagementneeds,andtheconditionsforderecognitionaremet,sothebankacceptancesareclassifiedasfinancialassetsmeasuredatfairvaluewhosechangeisincludedinothercomprehensiveincome.On31December2022,therewasnobankacceptanceforwhichbaddebtprovisionaccruedseparatelyintheCompany.TheCompanymeasurestheprovisionofbaddebtprovisiononthebasisofexpectedcreditlossesthroughouttheduration.TheCompanybelievesthatthecreditriskcharacteristicsofthebankacceptancesitholdsaresimilar,andtherewasnobankacceptanceforwhichbaddebtprovisionaccruedseparately.Inaddition,therewasnosignificantcreditriskinthebankacceptance,andnosignificantlosswouldbecausedbybankdefaults.

(1)AccountsreceivablefinancingwhichhadendorsedbytheCompanyorhaddiscountedbuthadnotdueattheperiod-end

Unit:RMB

ItemAmountofrecognitionterminationattheperiod-endAmountofnotterminatedrecognitionattheperiod-end
Bankacceptancebill511,689,991.87
Total511,689,991.87

6.Prepayments

(1)ListbyAgingAnalysis

Unit:RMB

AgingEndingbalanceBeginningbalance
AmountProportionAmountProportion
Within1year5,941,708.2193.86%6,706,970.5581.82%
1to2years289,373.604.57%94,583.551.15%
2to3years71,654.181.13%362,397.674.42%
Over3years27,466.700.44%1,033,466.6212.61%
Total6,330,202.69--8,197,418.39--

Therewasnoprepaymentwithsignificantamountagingoveroneyearasoftheperiod-end.

(2)Top5oftheEndingBalanceofthePrepaymentsCollectedaccordingtothePrepaymentTargetAttheperiod-end,thetotaltop5oftheendingbalanceoftheprepaymentscollectedaccordingtotheprepaymenttargetwasRMB4,798,600accountingfor75.80%ofthetotalendingbalanceofprepayments.

7.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestreceivable
Dividendreceivable
Otherreceivables32,938,305.1619,515,350.52
Total32,938,305.1619,515,350.52

(1)OtherReceivables

1)OtherReceivablesClassifiedbyAccountsNature

Unit:RMB

NatureEndingcarryingvalueBeginningcarryingvalue
Marginandcashpledge2,028,096.871,299,600.00
Intercoursefunds48,701,034.9035,889,738.80
Pettycashandborrowingsbyemployees742,075.761,184,204.41
Other13,635,867.6013,630,284.64
Total65,107,075.1352,003,827.85

2)WithdrawalofBadDebtProvision

Unit:RMB

BaddebtprovisionFirststageSecondstageThirdstageTotal
Expectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)
Balanceof1January2022287,609.4526,486,676.975,714,190.9132,488,477.33
Balanceof1January2022intheCurrentPeriod
--TransfertoSecondstage-871.48871.48
--TransfertoThirdstage-4,266.68-23,342,513.3823,346,780.06
--ReversetoSecondstage
--ReversetoFirststage
Transferofconsolidatedsubsidiary3,810.003,810.00
WithdrawaloftheCurrentPeriod150,404.27150,404.27
ReversaloftheCurrentPeriod148,176.99174,638.80322,815.79
Write-offsoftheCurrentPeriod
VerificationoftheCurrentPeriod63,002.9188,102.93151,105.84
Otherchanges
Balanceof31December2022373,682.652,908,755.1528,886,332.1732,168,769.97

Changesofcarryingamountwithsignificantamountchangedoflossprovisioninthecurrentperiod

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingEndingbalance
Within1year(including1year)16,050,004.29
1to2years15,783,825.92
2to3years1,164,476.00
Over3years32,108,768.92
3to4years420,716.17
4to5years338,457.65
Over5years31,349,595.10
Total65,107,075.13

3)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offTransferofconsolidatedsubsidiary
Baddebtprovisionforwhichaccruedseparately5,714,190.91177,905.475,536,285.44
Baddebtprovisionforwhichaccruedbygroup26,774,286.425,493.95151,105.843,810.0026,632,484.53
Total32,488,477.335,493.95177,905.47151,105.843,810.0032,168,769.97

4)ThereWereNoParticularsoftheActualVerificationofOtherReceivablesduringtheReportingPeriod

Unit:RMB

ItemWritten-offamount
Otherreceivableswithactualverification151,105.84

Ofwhichtheverificationofsignificantotherreceivables:

Unit:RMB

NameoftheentityNatureWritten-offamountReasonforverificationVerificationproceduresperformedWhetheroccurredbecauseofrelated-partytransactions
Customer1Otherintercoursefunds21,472.28Withaccountsreceivableagingover5years,thecounterpartcompanybeingrevokedorcancelled,ordebtreorganisation,bankruptcyclearingorthedebtorshavenoassetsfordebtextinguishmentApprovedbytheadministrativeofficemeetingofChangzhouChangchaiBenniuDieselEnginePartsCo.,Ltd.,asubsidiary.Not
Customer241,530.63
Customer39,020.00TheProposalontheWrite-offofCertainOtherReceivableswasapprovedatthePartyCommitteeandOfficeMeeting.
Customer48,357.60
Customer57,933.63
Customer67,800.00
Customer76,700.00
Customer86,000.00
Customer96,000.00
Customer105,525.00
Total120,339.14------

5)Top5oftheEndingBalanceofOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontototalendingbalanceofotherreceivables%Endingbalanceofbaddebtprovision
ChangzhouCompressorFactoryIntercoursefunds2,940,000.00Over5years4.52%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years4.38%2,853,188.02
ChangzhouNewDistrictAccountingCenterIntercoursefunds1,626,483.25Over5years2.50%1,626,483.25
ChangchaiGroupSettlementCenterIntercoursefunds1,140,722.16Over5years1.75%1,140,722.16
ChangzhouHuadiEngineeringGuaranteeCo.,Ltd.Engineeringdeposit1,065,400.002-3years1.64%159,810.00
Total9,625,793.4314.78%8,720,203.43

8.InventoryWhethertheCompanyneedstocomplywiththerequirementsofrealestateindustryNo

(1)CategoryofInventory

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountFallingpricereservesCarryingvalueCarryingamountFallingpricereservesCarryingvalue
Rawmaterials163,954,131.275,982,286.51157,971,844.76148,617,321.857,260,564.47141,356,757.38
Materialsprocessedoncommission12,299,968.9812,299,968.9813,877,280.6013,877,280.60
Goodsinprocess110,883,778.5810,725,860.43100,157,918.15119,354,374.1415,534,236.35103,820,137.79
Finishedgoods322,959,181.0822,755,460.80300,203,720.28403,855,588.9413,029,104.26390,826,484.68
Lowpricedandeasilywornarticles1,363,429.571,363,429.571,203,097.731,203,097.73
Total611,460,489.4839,463,607.74571,996,881.74686,907,663.2635,823,905.08651,083,758.18

(2)FallingPriceReservesofInventoryandImpairmentReservesforContractPerformanceCosts

Unit:RMB

ItemBeginningIncreaseDecreaseEndingbalance
balanceWithdrawalTransferofconsolidatedsubsidiaryReversalorwrite-offOther
Rawmaterials7,260,564.471,473,329.89491,707.023,243,314.875,982,286.51
Goodsinprocess15,534,236.354,808,375.9210,725,860.43
Finishedgoods13,029,104.2613,441,573.493,715,216.9522,755,460.80
Total35,823,905.0814,914,903.38491,707.0211,766,907.7439,463,607.74

(3)ThereWasNoCapitalizedBorrowingExpenseintheEndingBalanceofInventories.

9.OtherCurrentAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
TheVATtaxcredits47,682,930.2337,806,274.29
Prepaidcorporateincometax1,505,424.806,143,886.15
Prepaidexpense90,667.46110,662.13
Total49,279,022.4944,060,822.57

10.InvestmentsinDebtObligations

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountFallingpricereservesCarryingvalueCarryingamountFallingpricereservesCarryingvalue
Three-yearfixedtermdeposit39,309,587.9339,309,587.9337,898,226.3937,898,226.39
Total39,309,587.9339,309,587.9337,898,226.3937,898,226.39

Significantinvestmentsindebtobligations

Unit:RMB

ItemEndingbalanceBeginningbalance
ParvalueCouponrateActualinterestrateMaturitydateParvalueCouponrateActualinterestrateMaturitydate
Three-yearfixedtermdeposit37,000,000.003.80%3.72%26April202437,000,000.003.80%26April2024
Total37,000,000.00——————37,000,000.00——————

Changesofcarryingamountwithsignificantamountchangedoflossprovisioninthereportingperiod

□Applicable√Notapplicable

11.Long-termEquityInvestment

Unit:RMB

InvesteesBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserves
AdditionalinvestmentReducedinvestmentGainorlossrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesinotherequityCashbonusorprofitannouncedtoissueWithdrawalofdepreciationreservesOther
II.Associatedenterprises
BeijingTsinghuaIndustrialInvestmentManagementCo.,Ltd.0.000.0044,182.50
Subtotal0.000.0044,182.50
Total0.000.0044,182.50

12.OtherEquityInstrumentInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)378,929,240.08146,375,646.53
Otherequityinstrumentinvestmentmeasuredbyfairvalue576,631,000.00633,502,000.00
Total955,560,240.08779,877,646.53

Non-tradingequityinstrumentinvestmentdisclosedbycategory

Unit:RMB

ItemDividendincomerecognizedAccumulativegainsAccumulativelossesAmountofothercomprehensivetransferredtoretainedearningsReasonforassigningtomeasurebyfairvalueofwhichchangesbeincludedtoothercomprehensiveincomeReasonforothercomprehensiveincometransferredtoretainedearnings
FotonMotorCo.,Ltd.364,261,000.00Non-tradingequityinvestment
BankofJiangsu9,360,000.00127,800,000.00Non-tradingequityinvestment
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)278,929,240.08Non-tradingequityinvestment

Othernotes:

Thecorporatesecuritiesofaccommodationbusinessstillonlendingattheperiod-end:350,000sharesofFotonMotorCo.,Ltd.

13.OtherNon-currentFinancialAssets

Unit:RMB

14.InvestmentProperty

(1)InvestmentPropertyAdoptingtheCostMeasurementMode

√Applicable□Notapplicable

Unit:RMB

ItemHousesandbuildingsTotal
I.Originalcarryingvalue
1.Beginningbalance93,077,479.5293,077,479.52

Item

ItemEndingbalanceBeginningbalance
JiangsuHorizonNewEnergyTechnologyCo.,Ltd.373,500,000.00112,500,000.00
Total373,500,000.00112,500,000.00
2.Increasedamountoftheperiod
(1)Outsourcing
(2)Transferfrominventories/fixedassets/constructioninprogress
(3)Enterprisecombinationincrease
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance93,077,479.5293,077,479.52
II.Accumulativedepreciationandaccumulativeamortization
1.Beginningbalance48,480,224.3148,480,224.31
2.Increasedamountoftheperiod2,436,475.562,436,475.56
(1)Withdrawaloramortization2,436,475.562,436,475.56
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance50,916,699.8750,916,699.87
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue42,160,779.6542,160,779.65
2.Beginningcarryingvalue44,597,255.2144,597,255.21

15.FixedAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Fixedassets720,061,387.76402,915,521.65
Disposaloffixedassets
Total720,061,387.76402,915,521.65

(1)ListofFixedAssets

Unit:RMB

ItemHousesandbuildingsMachineryequipmentTransportationequipmentOtherequipmentTotal
I.Originalcarryingvalue
1.Beginningbalance457,375,409.951,012,550,535.1215,509,653.3841,354,837.041,526,790,435.49
2.Increasedamountoftheperiod253,254,929.43125,801,337.314,237,121.4318,442,087.47401,735,475.64
(1)Purchase39,329.441,242,576.10603,856.902,296,172.764,181,935.20
(2)Transferfromconstructioninprogress232,659,718.43117,139,454.393,010,897.3215,794,897.09368,604,967.23
(3)Enterprisecombinationincrease20,555,881.567,419,306.82622,367.21351,017.6228,948,573.21
3.Decreasedamountoftheperiod26,299.5019,654,185.78614,584.342,771,002.5223,066,072.14
(1)Disposalorscrap26,299.5019,654,185.78614,584.342,771,002.5223,066,072.14
4.Endingbalance710,604,039.881,118,697,686.6519,132,190.4757,025,921.991,905,459,838.99
II.Accumulativedepreciation
1.Beginningbalance309,538,003.02765,592,089.0612,399,386.8235,864,760.691,123,394,239.59
2.Increasedamountoftheperiod21,330,936.6158,002,318.901,645,043.303,596,006.8484,574,305.65
(1)Withdrawal18,617,538.6554,407,073.341,103,512.473,362,056.9577,490,181.41
(2)Transferfromcombination2,713,397.963,595,245.56541,530.83233,949.897,084,124.24
3.Decreasedamountoftheperiod23,799.5019,648,705.40598,206.352,722,626.7922,993,338.04
(1)Disposalorscrap23,799.5019,648,705.40598,206.352,722,626.7922,993,338.04
4.Endingbalance330,845,140.13803,945,702.5613,446,223.7736,738,140.741,184,975,207.20
III.Depreciationreserves

(2)ListofTemporarilyIdleFixedAssets

Unit:RMB

ItemOriginalcarryingvalueAccumulativedepreciationDepreciationreservesCarryingvalueNote
Machineryequipment476,507.5053,263.47423,244.03

16.ConstructioninProgress

Unit:RMB

ItemEndingbalanceBeginningbalance
Constructioninprogress30,259,647.16268,417,880.66
Engineeringmaterials21,900.401,887,810.25
Total30,281,547.56270,305,690.91

(1)ListofConstructioninProgress

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue

1.Beginningbalance

1.Beginningbalance480,674.25480,674.25
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod57,430.2257,430.22
(1)Disposalorscrap57,430.2257,430.22
4.Endingbalance423,244.03423,244.03
IV.Carryingvalue
1.Endingcarryingvalue379,758,899.75314,328,740.065,685,966.7020,287,781.25720,061,387.76
2.Beginningcarryingvalue147,837,406.93246,477,771.813,110,266.565,490,076.35402,915,521.65
Expansioncapacityofmulti-cylinder(The2ndPeriod)1,097,435.901,097,435.90
Innovationcapacityconstructionoftechnologycenter5,443,764.335,443,764.333,714,601.763,714,601.76
Relocationprojectoflightengineandcasting11,155,119.7011,155,119.70254,748,122.49254,748,122.49
Equipmenttobeinstalledandpaymentforprojects13,660,763.1313,660,763.138,857,720.518,857,720.51
Total30,259,647.1630,259,647.16268,417,880.66268,417,880.66

(2)ChangesinSignificantConstructioninProgressduringtheReportingPeriod

Unit:RMB

ItemBudgetBeginningbalanceIncreasedamountTransferredinfixedassetsOtherdecreasedamountEndingbalanceProportionofaccumulatedinvestmentinconstructionstobudgetJobscheduleAccumulatedamountofinterestcapitalizationOfwhich:AmountofcapitalizedinterestsfortheReportingPeriodCapitalizationrateofinterestsfortheReportingPeriodCapitalresources
Expansioncapacityofmulti-cylinder(The2ndPeriod)1,097,435.901,097,435.90CompletedSelf-raised
Innovationcapacityconstructionoftechnologycenter96,066,200.003,714,601.761,950,929.23221,766.665,443,764.335.90%UncompletedSelf-raisedandraisedfunds
Relocationprojectoflightengineandcasting474,706,000.00254,748,272.15120,775,065.42361,128,217.873,240,000.0011,155,119.7079.11%UncompletedSelf-raisedandraisedfunds
Total570,772,200.00259,560,309.81122,725,994.65362,447,420.433,240,000.0016,598,884.03------

(3)EngineeringMaterials

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Engineeringmaterials21,900.4021,900.401,887,810.251,887,810.25
Total21,900.4021,900.401,887,810.251,887,810.25

17.IntangibleAssets

(1)ListofIntangibleAssets

Unit:RMB

ItemLanduserightSoftwareLicensefeeTrademarkuserightTotal
I.Originalcarryingvalue
1.Beginningbalance206,783,546.6815,736,719.665,488,000.001,650,973.47229,659,239.81
2.Increasedamountoftheperiod7,404,229.032,110,482.4850,000.009,564,711.51
(1)Purchase1,933,758.501,933,758.50
(2)InternalR&D
(3)Businesscombinationincrease7,404,229.03176,723.9850,000.007,630,953.01
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance214,187,775.7117,847,202.145,538,000.001,650,973.47239,223,951.32
II.Accumulatedamortization
1.Beginningbalance58,805,643.9612,856,960.122,652,533.14189,356.6874,504,493.90
2.Increasedamountoftheperiod5,026,881.781,539,099.16594,217.03167,041.927,327,239.89
(1)Withdrawal4,298,126.151,426,192.17551,717.03167,041.926,443,077.27
(2)Combinationincrease728,755.63112,906.9942,500.00884,162.62
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance63,832,525.7414,396,059.283,246,750.17356,398.6081,831,733.79
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue150,355,249.973,451,142.872,291,249.831,294,574.87157,392,217.54
2.Beginningcarryingvalue147,977,902.722,879,759.542,835,466.861,461,616.79155,154,745.91

18.Long-termPrepaidExpenses

ItemBeginningbalanceIncreaseAmortizedamountDecreaseEndingbalance
Trademarkrenewalfee110,345.30105,518.0313,893.01201,970.32
Externalpowerlineaccessproject3,240,000.00162,000.003,078,000.00
Total110,345.303,345,518.03175,893.013,279,970.32

19.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)DeferredIncomeTaxAssetsthatHadnotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
DeductibletemporarydifferenceDeferredincometaxassetsDeductibletemporarydifferenceDeferredincometaxassets
Baddebtprovision6,853,948.191,048,165.047,196,880.381,087,755.38
Deductibleloss149,230,051.5524,713,867.0059,064,221.029,085,419.14
Inventoryfallingpricereserves2,633,715.26395,057.292,990,223.81448,533.57
Impairmentoffixedassets423,244.0363,486.60480,674.2572,101.14
Total159,140,959.0326,220,575.9369,731,999.4610,693,809.23

(2)DeferredIncomeTaxLiabilitiesHadNotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
TaxabletemporarydifferenceDeferredincometaxliabilitiesTaxabletemporarydifferenceDeferredincometaxliabilities
Assetsevaluationappreciationforbusinesscombinationnotunderthesamecontrol5,677,718.36851,657.753,643,147.16546,472.07
Changesoffairvalue1,039,472,114.80160,508,593.58720,658,981.89116,797,689.04
Total1,045,149,833.16161,360,251.33724,302,129.05117,344,161.11

(3)ListofUnrecognizedDeferredIncomeTaxAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Baddebtprovision177,160,942.15204,612,644.18
Fallingpricereservesofinventories36,829,892.4832,833,681.27
Deductibleloss22,257,409.9614,716,019.78
Total236,248,244.59252,162,345.23

(4)DeductibleLossesofUnrecognizedDeferredIncomeTaxAssetswillDueintheFollowingYears

YearsEndingamountBeginningamountNote
2022434,000.66
20231,146,746.13940,673.56
20243,605,384.256,538,363.99
20255,250,820.812,279,179.37
20267,372,277.944,523,802.20
20274,882,180.83
Total22,257,409.9614,716,019.78--

20.OtherNon-currentAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Advancespaymentofequipments670,735.93670,735.934,543,240.884,543,240.88
Total670,735.93670,735.934,543,240.884,543,240.88

21.Short-termBorrowings

(1)CategoryofShort-termBorrowings

Unit:RMB

ItemEndingbalanceBeginningbalance
Mortgageloans7,000,000.007,000,000.00
Guaranteedloans5,000,000.00
Obligationtopaybillsdiscountedbeforematurity108,437,700.6561,971,466.65
Total115,437,700.6573,971,466.65

(2)ThereWasNoShort-termBorrowingsOverduebutUnpaid.

22.NotesPayable

Unit:RMB

CategoryEndingbalanceBeginningbalance
Bankacceptancebill471,876,397.72550,774,400.00
Total471,876,397.72550,774,400.00

Attheendofthecurrentperiod,therewerenonotespayabledueandnotpaid.

23.AccountsPayable

(1)ListofAccountsPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
Paymentforgoods747,010,098.88666,186,668.82
Total747,010,098.88666,186,668.82

(2)SignificantAccountsPayableAgingoverOneYear

ItemEndingbalanceUnpaid/Un-carry-overreason
Paymentforgoods53,297,351.52Supplierterminatescooperation,pendingpayment
Paymentforequipment40,637,976.87Equipmentwarranty
Total93,935,328.39

24.AdvancesfromCustomers

Unit:RMB

ItemEndingbalanceBeginningbalance
Advancepaymentofhouserent837,425.55660,965.62
Total837,425.55660,965.62

Therewerenosignificantadvancesfromcustomersagingoveroneyearattheendoftheperiod.

25.ContractLiabilities

Unit:RMB

ItemEndingbalanceBeginningbalance
Contractliabilities32,843,692.8326,864,081.97
Total32,843,692.8326,864,081.97

Therewerenosignificantcontractliabilitiesagingoveroneyearattheendoftheperiod.

26.PayrollPayable

(1)ListofPayrollPayable

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
I.Short-termsalary45,385,667.48279,381,408.55275,616,053.5649,151,022.47
II.Post-employmentbenefit-definedcontributionplans37,243,881.8237,243,881.82
III.Terminationbenefits459,903.90259,903.90200,000.00
IV.Currentportionofotherbenefits
Total45,385,667.48317,085,194.27313,119,839.2849,351,022.47

(2)ListofShort-termSalary

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Salary,bonus,allowance,subsidy37,375,772.77229,118,091.49225,610,345.4940,883,518.77
2.Employeewelfare1,592.743,138,764.513,138,764.511,592.74
3.Socialinsurance21,460,410.4021,460,410.40
Ofwhich:Medicalinsurancepremiums17,834,836.4417,834,836.44
Work-relatedinjuryinsurance2,049,942.682,049,942.68
Maternityinsurance1,575,631.281,575,631.28
4.Housingfund21,244,377.5421,244,377.54
5.Laborunionbudgetandemployeeeducationbudget8,008,301.974,419,764.614,162,155.628,265,910.96
6.Short-termabsencewithsalary
7.Short-termprofitsharingscheme
Total45,385,667.48279,381,408.55275,616,053.5649,151,022.47

(3)ListofDefinedContributionPlans

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Basicpensionbenefits36,127,234.7036,127,234.70
2.Unemploymentinsurance1,116,647.121,116,647.12
3.Enterpriseannuities
Total37,243,881.8237,243,881.82

27.TaxesPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
VAT2,240,512.82372,401.11
Corporateincometax1,272,876.86470,363.07
Personalincometax68,629.7376,559.47
Urbanmaintenanceandconstructiontax1,151,395.75957,520.42
Propertytax1,172,973.711,160,865.33
Landusetax1,041,594.391,026,217.69
Stampduty286,018.6144,759.84
EducationSurcharge229,345.1490,862.46
Comprehensivefees1,075,134.761,075,134.76
Environmentalprotectiontax31,693.6231,694.67
Total8,570,175.395,306,378.82

28.OtherPayables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestpayable
Dividendspayable3,891,433.833,891,433.83
Otherpayables156,155,449.10144,469,939.46
Total160,046,882.93148,361,373.29

(1)DividendsPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
Ordinarysharedividends3,243,179.973,243,179.97
Interestofpreferredshares/perpetualbondclassifiedasequityinstrument
Dividendsfornon-controllingshareholders648,253.86648,253.86

Thereasonfornon-paymentforoveroneyear:Notgottenbyshareholdersyet.

(2)OtherPayables

1)OtherPayablesListedbyNatureofAccount

Unit:RMB

ItemEndingbalanceBeginningbalance
Margin&cashpledged4,293,474.885,045,246.58
Intercoursefundsamongunits7,831,477.018,364,769.41
Intercoursefundsamongindividuals397,761.04402,661.04
Salesdiscountandthreeguarantees126,787,544.75114,581,855.32
Other16,845,191.4216,075,407.11
Total156,155,449.10144,469,939.46

2)SignificantOtherPayablesAgingoverOneYearThesignificantotherpayablesagingoveroneyearattheperiod-endmainlyreferredtotheunsettledtemporarycreditsandchargesowned.

29.OtherCurrentLiabilities

Unit:RMB

ItemEndingbalanceBeginningbalance
Saleservicefee806,555.29460,437.94
Transportationstoragefee597,090.12870,397.06
Electriccharge1,467,332.183,131,920.88
Taxtobetransferred2,821,340.542,250,515.65
Estimatedsharevalueaddedtax1,909,715.093,989,913.45
Obligationtopaybillstransferredbeforematurity66,395,231.8372,391,302.15
Otherwithholdingexpenses4,648,476.115,843,705.66
Total78,645,741.1688,938,192.79

30.DeferredIncome

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalanceReasonforformation
Governmentgrants39,615,355.403,409,729.4636,205,625.94Governmentappropriation
Total39,615,355.403,409,729.4636,205,625.94--

Iteminvolvinggovernmentgrants:

Unit:RMB

Other
Total3,891,433.833,891,433.83
ItemBeginningbalanceAmountofnewsubsidyAmountrecordedintonon-operatingincomeintheReportingPeriodAmountrecordedintootherincomeintheReportingPeriodAmountoffsetcostintheReportingPeriodOtherchangesEndingbalanceRelatedtoassets/relatedincome
Nationalmajorprojectspecialallocations-Flexibleprocessingproductionlineforcylindersofdieselengines13,040,367.001,519,266.0011,521,101.00Relatedtoassets
Removecompensation18,513,763.98665,973.6217,847,790.36Relatedtoassets
ResearchanddevelopmentandindustrializationallocationsofnationalIII/IVstandardhigh-poweredefficientdieselengineforagriculturaluse8,061,224.421,224,489.846,836,734.58Relatedtoassets

31.ShareCapital

Unit:RMB

BeginningbalanceIncrease/decrease(+/-)Endingbalance
NewsharesissuedBonussharesBonusissuefromprofitOtherSubtotal
Thesumofshares705,692,507.00705,692,507.00

32.CapitalReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Capitalpremium(premiumonstock)620,338,243.21620,338,243.21
Othercapitalreserves20,337,975.19-542,255.3919,795,719.80
Total640,676,218.40-542,255.39640,133,963.01

Othernotes,includingchangesandreasonsthereof:

Increaseforthecurrentperiod:TheoriginalshareholdingratiooftheparentcompanytothesubsidiarycompanyChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.(hereinafterreferredtoas“HorizonAgriculturalEquipment”)is95%.TheoriginalminorityshareholdersofHorizonAgriculturalEquipmenttransferredtheir5%sharestotheparentcompanyforfreethisyear,andwasincludedinlong-termequityinvestmentandcapitalsurplusas5%oftheopeningnetassetsofHorizonAgriculturalEquipment.

33.OtherComprehensiveIncome

Unit:RMB

ItemBeginningbalanceReportingPeriodEndingbalance
IncomebeforetaxationintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinretainedearningsintheCurrentPeriodLess:IncometaxexpenseAttributabletoownersoftheCompanyastheparentaftertaxAttributabletonon-controllinginterestsaftertax
I.Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss506,011,499.55175,682,593.5526,352,389.03149,330,204.52655,341,704.07
Ofwhich:Changescausedbyre-measurementsondefinedbenefitpensionschemes
Shareofothercomprehensiveincomeofinvesteesthatwillnotbereclassifiedtoprofitorlossunderequitymethod
Changesinfairvalueofotherequityinstrumentinvestment506,011,499.55175,682,593.5526,352,389.03149,330,204.52655,341,704.07
Changesinfairvalueofcorporatecreditrisk
II.Othercomprehensiveincomethatmaysubsequentlybereclassifiedtoprofitorloss
Ofwhich:Shareofothercomprehensiveincomeofinvesteesthatwillbereclassifiedtoprofitorlossunderequitymethod
Changesinfairvalueofinvestmentinotherdebtobligations
Amountoffinancialassetsreclassifiedtoothercomprehensiveincome
Creditdepreciationreservesofinvestmentinotherdebtobligations
Reservesforcashflowhedges
Differencesarisingfromtranslationofforeigncurrency-denominatedfinancialstatements
Totalofothercomprehensiveincome506,011,499.55175,682,593.5526,352,389.03149,330,204.52655,341,704.07

34.SpecificReserve

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Safetyproductioncost18,812,950.044,877,232.124,841,325.4118,848,856.75
Total18,812,950.044,877,232.124,841,325.4118,848,856.75

35.SurplusReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Statutorysurplusreserves320,987,630.5615,053,237.26336,040,867.82
Discretionalsurplusreserves13,156,857.9013,156,857.90
Total334,144,488.4615,053,237.26349,197,725.72

36.RetainedEarnings

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Beginningbalanceofretainedearningsbeforeadjustments872,212,354.88777,899,079.66
Totalretainedearningsatthebeginningoftheadjustmentperiod(“+”meansup,“-”meansdown)
Beginningbalanceofretainedearningsafteradjustments872,212,354.88777,899,079.66
Add:NetprofitattributabletoownersoftheCompanyastheparent76,684,796.91103,006,232.54
Less:Withdrawalofstatutorysurplusreserves15,053,237.268,692,957.32
Withdrawalofdiscretionalsurplusreserves
Withdrawalofgeneralreserve
Dividendofordinarysharespayable18,348,005.18
Dividendsofordinarysharestransferredassharecapital
Endingretainedearnings915,495,909.35872,212,354.88

Listofadjustmentofbeginningretainedearnings:

(1)RMB0.00beginningretainedearningswasaffectedbyretrospectiveadjustmentconductedaccordingtotheAccountingStandardsforBusinessEnterprisesandrelevantnewregulations.

(2)RMB0.00beginningretainedearningswasaffectedbychangesinaccountingpolicies.

(3)RMB0.00beginningretainedearningswasaffectedbycorrectionofsignificantaccountingerrors.

(4)RMB0.00beginningretainedearningswasaffectedbychangesincombinationscopearisingfromsamecontrol.

(5)RMB0.00beginningretainedearningswasaffectedtotallybyotheradjustments.

37.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations2,145,567,983.951,924,209,350.482,404,119,747.062,051,932,677.42
Otheroperations36,475,111.6624,467,686.0448,310,768.5432,739,084.66
Total2,182,043,095.611,948,677,036.522,452,430,515.602,084,671,762.08

Whethertheloweroftheauditednetprofitbeforeandafterdeductionofnon-recurringgainsandlossesisnegative

√Yes□No

Unit:RMB

Item2022Specificdeduction2021Specificdeduction
Operatingrevenue2,182,043,095.61ThemainbusinessoftheCompanyistheproductionandsalesofdieselenginesandgasolineengines2,452,430,515.60ThemainbusinessoftheCompanyistheproductionandsalesofdieselenginesandgasolineengines
Totaloperatingincomewithdeduction36,475,111.66Otherbusinessincomeotherthanmainoperations48,310,768.54Otherbusinessincomeotherthanmainoperations
Theproportionoftotaloperatingincomewithdeductioninoperatingrevenue1.67%1.97%
I.Businessincomenotrelatedtothemainbusiness
1.Otherbusinessincomeoutsidenormalbusiness.E.g.,incomefromtheleaseoffixedassets,intangibleassets,packagingmaterials,salesmaterials,non-monetaryassetexchangewithmaterialsandoperationofentrustedmanagementbusiness,andincomethatisincludedintheincomefromprimarybusinessbutisoutsidethenormalbusinessofthelistedcompany.36,475,111.66Incomefromsalesofmaterials,housingrentalfees,propertyandutilitycharges48,310,768.54Incomefromsalesofmaterials,housingrentalfees,propertyandutilitycharges
Subtotalofbusinessincomenotrelatedtothemainbusiness36,475,111.66Incomefromsalesofmaterials,housingrentalfees,propertyandutilitycharges48,310,768.54Incomefromsalesofmaterials,housingrentalfees,propertyandutilitycharges
II.Incomewithoutcommercialsubstance
Subtotalofincome0.00None0.00None
withoutcommercialsubstance
III.Otherincomenotrelatedtothemainbusinessorwithoutcommercialsubstance0.00None0.00None
Operatingrevenueafterdeduction2,145,567,983.95Dieselengines,gasolineenginesandfittingsbusiness2,404,119,747.06Dieselengines,gasolineenginesandfittingsbusiness

Relevantinformationofrevenue:

Unit:RMB

CategoryofcontractsTotal
ProductTypes
Ofwhich:
Single-cylinderdieselengines814,545,044.55
Multi-cylinderdieselengines1,055,889,184.19
Otherproducts212,223,234.20
Fittings62,910,521.01
Classifiedbybusinessarea
Ofwhich:
Salesindomesticmarket1,821,370,757.82
Exportsales324,197,226.13
Total2,145,567,983.95

Informationrelatedtoperformanceobligations:none

38.TaxesandSurtaxes

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Urbanmaintenanceandconstructiontax2,905,289.191,472,605.59
Educationsurcharge2,073,990.111,051,826.51
Propertytax6,312,819.286,157,554.67
Landusetax4,474,736.135,226,882.22
Vehicleandvesselusetax3,092.642,875.00
Stampduty898,751.20969,210.59
Environmenttax293,572.90204,133.44
Other10,944.8140,860.94
Total16,973,196.2615,125,948.96

39.SellingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Employeebenefits41,414,480.3642,968,060.55
Officeexpenses9,191,582.9911,247,378.94
Salespromotionalexpense1,435,536.25
Threeguarantees50,709,187.0260,722,393.46
Transportcharge320,853.84
Other1,314,973.34548,067.28
Total102,630,223.71117,242,290.32

40.AdministrativeExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Employeebenefits62,242,258.0351,646,790.82
Officeexpenses9,510,389.699,359,397.93
Depreciationandamortization16,116,539.749,925,872.31
Safetyexpenses4,877,232.124,023,200.24
Repaircharge1,736,442.581,985,784.26
Inventoryscrapandinventoryloss(profit)-333,858.145,218,542.74
Other25,362,185.7016,730,695.92
Total119,511,189.7298,890,284.22

41.DevelopmentCosts

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Directinputexpense43,996,939.3749,871,973.96
Employeebenefits24,608,063.9521,059,641.45
Depreciationandamortization4,570,577.954,240,194.24
Designcosts250,000.00
Entrusteddevelopmentcharges6,509,898.895,521,861.13
Other1,554,116.901,446,613.36
Total81,239,597.0682,390,284.14

42.FinanceCosts

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Interestexpense1,993,453.715,907,625.42
Less:Interestincome12,804,077.197,921,535.62
Netforeignexchangegainsorlosses-10,929,750.573,969,634.63
Other150,669.42-752,108.63
Total-21,589,704.631,203,615.80

43.OtherIncome

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Governmentgrantsdirectlyrecordedintothecurrentprofitorloss3,749,273.004,234,711.29
Governmentgrantsrelatedtodeferredincome3,409,729.462,364,382.20
Others25,025.5934,238.89

44.InvestmentIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Long-termequityinvestmentincomeaccountedbyequitymethod
Investmentincomefromdisposaloflong-termequityinvestment
Investmentincomefromholdingoftradingfinancialassets
Investmentincomefromdisposaloftradingfinancialassets12,262.47450,637.63
Dividendincomefromholdingofotherequityinstrumentinvestment9,360,000.007,394,400.00
Incomefromre-measurementofresidualstockrightsatfairvalueafterlosingcontrolpower
Interestincomefromholdingofinvestmentindebtobligations1,411,361.54
Interestincomefromholdingofinvestmentinotherdebtobligations
Investmentincomefromdisposalofinvestmentinotherdebtobligations
Incomefromdebtreorganization
Investmentincomefromdisposalofothernon-currentfinancialassets-221,711.92
Dividendincomefromholdingofheld-for-tradingfinancialassets296,740.00189,085.80
Incomefromrefinancingoperations136,003.961,028,964.68
Investmentincomefromfinancialproducts5,995,552.352,292,008.67
Forwardincomefromforeignexchangesettlement63,235.00
Accountsreceivablefinancing-discountinterestofbankacceptancebills-9,242,453.13-1,869,322.91
Total7,969,467.199,327,296.95

45.GainonChangesinFairValue

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Held-for-tradingfinancialassets-40,756,542.8370,820,498.36
Othernon-currentfinancialassets186,000,000.0033,750,000.00
Total145,243,457.17104,570,498.36

46.CreditImpairmentLoss

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Baddebtlossofotherreceivables172,411.52-562,856.87
Baddebtlossofaccountsreceivable-3,126,152.25-51,454,294.95
Total-2,953,740.73-52,017,151.82

47.AssetImpairmentLoss

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
I.Baddebtloss
II.Lossoninventoryvaluationandcontractperformancecost-14,367,197.27-8,676,024.20
III.Impairmentlossonlong-termequityinvestment
IV.Impairmentlossoninvestmentproperty
V.Impairmentlossonfixedassets
VI.Impairmentlossonengineeringmaterials
VII.Impairmentlossonconstructioninprogress
VIII.Impairmentlossonproductivelivingassets
IX.Impairmentlossonoilandgasassets
X.Impairmentlossonintangibleassets
XI.Impairmentlossongoodwill
XII.Other
Total-14,367,197.27-8,676,024.20

48.AssetDisposalIncome

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Disposalincomeoffixedassets393,161.73155,515.49

49.Non-operatingIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurringprofitorloss
Incomefromscrapoffixedassets236,284.295,825.24236,284.29
Incomefromscrapofconstructioninprogress2,089,369.81
Incomefrompenalty93,140.00398,143.0093,140.00
Accountsnotrequiredtobepaid1,714,502.081,429,558.711,714,502.08
Negativegoodwillgeneratedfromcombinationnotunderthesamecontrol1,904,132.581,904,132.58
Other309,883.70115,000.00309,883.70
Total4,257,942.654,037,896.764,257,942.65

50.Non-operatingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurringprofitorloss
Retirementlossofnon-currentassets148,926.1122,405.72148,926.11
Compensationforquality208,884.78507,265.91208,884.78
Donation168,300.00168,300.00
Other92,352.671,107,361.4292,352.67
Total618,463.561,637,033.05618,463.56

51.IncomeTaxExpense

(1)ListofIncomeTaxExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Currentincometaxexpense1,267,934.70443,034.91
Deferredincometaxexpense1,930,017.9715,999,671.86
Adjustmentofincometaxofprioryears-733,872.93-4,073,920.19
Total2,464,079.7412,368,786.58

(2)AdjustmentProcessofAccountingProfitandIncomeTaxExpense

Unit:RMB

ItemReportingPeriod
Profitbeforetaxation81,710,212.20
Currentincometaxexpenseaccountedatstatutory/applicabletaxrate12,256,531.82
Influenceofapplyingdifferenttaxratesbysubsidiaries-7,278,933.33
Influenceofincometaxbeforeadjustment-733,872.93
Influenceofnon-taxableincome-1,430,654.07
Influenceofnon-deductablecosts,expensesandlosses3,725,995.40
InfluenceofdeductablelossesofunrecognizeddeferredincometaxatthebeginningoftheReportingPeriod172,794.49
InfluenceofdeductabletemporarydifferenceordeductablelossesofunrecognizeddeferredincometaxassetsintheReportingPeriod4,019,365.61
Taxpreferencefromeligibleexpenditures-8,267,147.25
Incometaxexpense2,464,079.74

52.OtherComprehensiveIncomeSeeNote33fordetails.

53.CashFlowStatement

(1)CashGeneratedfromOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Subsidyandappropriation3,751,451.594,240,292.03
Otherintercoursesincash4,962,530.666,603,764.28
Interestincome12,804,077.197,921,535.62
Other1,472,234.003,871,134.26
Total22,990,293.4422,636,726.19

(2)CashUsedinOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Sellingandadministrativeexpensepaidincash89,311,871.19101,602,750.69
Handlingcharges1,212,912.331,220,112.47
Other16,260,652.6715,807,386.22
Othertransactions1,405,188.0523,381,748.58
Total108,190,624.24142,011,997.96

(3)CashGeneratedfromOtherInvestingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Cashandcashequivalentsfromcombinationofsubsidiary11,400,123.61
Total11,400,123.61

(4)CashUsedinOtherInvestingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Accountsreceivablefinancing-discountinterestfrombankacceptancebills1,869,322.91
Total1,869,322.91

(5)CashGeneratedfromOtherFinancialActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Discountofbankacceptancebillswithlowcreditrating128,437,700.6558,971,466.65
Total128,437,700.6558,971,466.65

(6)CashUsedinOtherFinancialActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Intermediaryagencyfeesforprivateplacement10,849,056.61
Discountofbankacceptancebillswithlowcreditrating83,623,545.073,772,107.02
Total83,623,545.0714,621,163.63

54.SupplementalInformationforCashFlowStatement

(1)SupplementalInformationforCashFlowStatement

Unit:RMB

SupplementalinformationReportingPeriodSameperiodoflastyear
1.Reconciliationofnetprofittonetcashflowsgeneratedfromoperatingactivities----
Netprofit79,246,132.46102,931,874.37
Add:Provisionforimpairmentofassets17,320,938.0060,693,176.02
Depreciationoffixedassets,ofoilandgasassets,ofproductivelivingassets79,926,656.9776,128,177.44
Depreciationofright-of-useassets
Amortizationofintangibleassets5,824,591.444,711,649.34
Amortizationoflong-termdeferredexpenses175,893.0117,605.33
Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets(gainsby“-”)-393,161.73-155,515.49
Lossesonthescrappingoffixedassets(gainsby“-”)-87,358.18-2,072,789.33
Lossesonthechangesinfairvalue(gainsby“-”)-145,243,457.17-104,570,498.36
Financialexpenses(gainsby“-”)2,146,237.778,122,828.51
Investmentlosses(gainsby“-”)-17,211,920.32-9,327,296.95
Decreaseindeferredincometaxassets(increaseby“-”)-15,400,115.80-6,461,936.08
Increaseindeferredincometaxliabilities(decreaseby“-”)17,330,133.7722,461,607.94
Decreaseininventory(increaseby“-”)89,813,152.96-53,079,441.83
Decreaseinaccountsreceivablefromoperatingactivities(increaseby“-”)-33,140,187.50-286,670,314.47
Increaseinpayablesfromoperatingactivities(decreaseby“-”)286,526,874.74-79,052,905.74
Other-1,904,132.58
Netcashflowsgeneratedfromoperatingactivities364,930,277.84-266,323,779.30
2.Investingandfinancingactivitiesthatdonotinvolvingcashreceiptsandpayment:
Debttransferredascapital
Convertiblecorporatebondduewithinoneyear
Fixedassetsfromfinancinglease
3.Netincreaseincashandcashequivalents
Endingbalanceofcash810,350,966.05562,402,221.59
Less:Beginningbalanceofcash562,402,221.59629,939,540.50
Add:Endingbalanceofcashequivalents
Less:Beginningbalanceofcashequivalents
Netincreaseincashandcashequivalents247,948,744.46-67,537,318.91

(2)CashandCashEquivalents

Unit:RMB

ItemEndingbalanceBeginningbalance
I.Cash810,350,966.05562,402,221.59
Including:Cashonhand251,965.06145,594.98
Bankdepositondemand806,914,999.19561,746,767.12
Othermonetaryassetsondemand3,184,001.80509,859.49
Accountsdepositedinthecentralbankavailableforpayment
Depositsinotherbanks
Accountsofinterbank
II.Cashequivalents
Ofwhich:Bondinvestmentexpiredwithinthreemonths
III.Endingbalanceofcashandcashequivalents810,350,966.05562,402,221.59
Ofwhich:CashandcashequivalentswithrestrictioninusefortheCompanyastheparentorsubsidiariesoftheGroup

55.AssetswithRestrictedOwnershiporRighttoUse

Unit:RMB

ItemEndingcarryingvalueReasonforrestriction
Monetaryassets95,662,384.92Ascashdepositforbankacceptancebillandforenvironment
Housesandbuildings1,530,890.90Mortgagedforborrowingsfrombanks
Landuseright879,275.35Mortgagedforborrowingsfrombanks
Machineryequipment31,222,420.22Mortgagedforborrowingsfrombanks
Obligationtopaybillsdiscountedbeforematurity110,000,000.00
Obligationtopaybillstransferredbeforematurity66,395,231.83
Total305,690,203.22

56.ForeignCurrencyMonetaryItems

(1)ForeignCurrencyMonetaryItems

Unit:RMB

ItemEndingforeigncurrencybalanceExchangerateEndingbalanceconvertedtoRMB
Monetaryassets----
Ofwhich:USD13,543,608.996.964694,325,820.43
HKD320,344.500.8933286,163.74
Accountsreceivable
Ofwhich:USD8,596,374.276.964659,870,308.38
GBP-67,212.278.3941-564,186.52
Accountspayable
Ofwhich:USD302.606.96462,107.49
Contractliabilities
Ofwhich:USD635,740.166.96464,427,675.94
EUR117,145.847.4229869,561.86

(2)NotestoOverseasEntitiesIncluding:forSignificantOverseaEntities,MainOperatingPlace,RecordingCurrencyandSelectionBasisShallBeDisclosed;ifthereAreChangesinRecordingCurrency,RelevantReasonsShallBeDisclosed.

□Applicable√Notapplicable

57.GovernmentGrants

(1)BasicInformationonGovernmentGrants

Unit:RMB

CategoryAmountListeditemsAmountrecordedinthecurrentprofitorloss
Subsidiesforstabilizingandincreasingjobpositionsandretainingworkers2,396,713.00Otherincome2,396,713.00
Specialfundsforbusinessdevelopment102,800.00Otherincome102,800.00
Membershipduesreturn4,760.00Otherincome4,760.00
Municipalspecialfundsforenvironmentalprotection10,000.00Otherincome10,000.00
2021EnterpriseTechnicalInnovationAward50,000.00Otherincome50,000.00
FinancialAssistancetothe19thBatchofTechnologyPlansinChangzhouin2021200,000.00Otherincome200,000.00
The9thBatchofSpecialFundsforTalentsin202250,000.00Otherincome50,000.00
SupportFundsforAgriculturalMachineryGuildinZhonglouDistrcitofChangzhouin2022250,000.00Otherincome250,000.00
Incentivesandsubsidiesforearlierphase-outandscrappingofhigh-emissionoldcarsinChangzhou59,800.00Otherincome59,800.00
FinancialAssistancetothe2rdBatchofTechnologyPlansinChanzhou110,000.00Otherincome110,000.00
The25thBatchofSpecialFundsforTalentsin2022120,000.00Otherincome120,000.00
Industrialdevelopmentfunds1,500.00Otherincome1,500.00
IncentivesforR&DspendingonNo.20847,000.00Otherincome47,000.00
Incentivesforprovincialtechnologytransferacceptor27,700.00Otherincome27,700.00
Employmentandapprenticeshipsubsidies11,000.00Otherincome11,000.00
Subsidiesforhigh-qualityinvention2,000.00Otherincome2,000.00
TaxContributionAward30,000.00Otherincome30,000.00
Subsidiesforwork-basedtraining45,000.00Otherincome45,000.00
Innovation-drivenincentives31,000.00Otherincome31,000.00
Re-affirmanddeclareincentivesforhighandnewtechenterprises200,000.00Otherincome200,000.00
Demolitioncompensation(replacingZouVillagewithHehaiRoad)13,344,397.90Deferredincome267,333.48
Demolitioncompensation-mainworkshopsinthebaseinHehaiRoad11,864,289.02Deferredincome398,640.14
Thenationalmajorspecialproject-theflexibleprocessingproductionlinefordieselenginecylinderblocks13,800,000.00Deferredincome1,519,266.00
NationalIII/IVAppropriationfortheresearchanddevelopmentandindustrializationofstandardhigh-horsepowerhigh-efficiencyagriculturaldieselengine10,000,000.00Deferredincome1,224,489.84

ReturnofGovernmentGrants

□Applicable√NotapplicableVIII.ChangesofConsolidationScope

1.BusinessCombinationNotundertheSameControl

(1)BusinessCombinationNotundertheSameControlintheReportingPeriod

Unit:RMB

NameofacquireeTimeandplaceofgainingtheequityCostofgainingtheequityProportionofequityWaytogaintheequityPurchasedateRecognitionbasisofpurchasedateIncomeofacquireefromthepurchasedatetoperiod-endNetprofitsofacquireefromthepurchasedatetoperiod-end
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.23February202233,520,800.0041.50%Acquisitionincash31May2022On16May2022,theBoardofDirectorsofZhenjiangSiyangwasreorganizedanditsArticlesofAssociationwereamended,afterwhichdirectorsappointedbyChangchaiCompanyareinthemajority.InMay2022,ChangchaiappointedmanagerstoparticipateintheproductionandoperationmanagementofZhenjiangSiyang.35,440,983.374,824,237.05

(2)CombinationCostandGoodwill

Unit:RMB

Combinationcost
--Cash33,520,800.00
--Fairvalueofnon-cashassets
--Fairvalueofdebtsissuedorundertaken
--Fairvalueofequitysecuritiesissued
--Fairvalueofcontingentconsideration
--Fairvalueofequitiesheldbeforethepurchasedateonthepurchasedate
--Other
Totalcombinationcost33,520,800.00
Less:fairvalueofidentifiablenetassetsacquired35,424,932.58
Theamountofgoodwill/combinedcostlessthanthefairvalueshareofidentifiablenetassetsobtained-1,904,132.58

Notetodeterminationmethodofthefairvalueofthecombinationcost,considerationandchanges:

Combinationcost:AccordingtotheConfirmationofTransactionontheTransferof41.5%EquityInterest(CorrespondingtoCapitalContributionofRMB830,000)inZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.issuedbyJiangsuPropertyRightsExchangeCo.,Ltd.on12January2022,thetransactionpriceisRMB33,520,800.00,andChangchaiCompany,Limitedpaidaone-timepaymentofRMB33,520,800.00on23February2022.Determinationmethodoffairvalue:ZhenjiangSiyang'sbasedateofassetsevaluationis31March2021.TheevaluatedvalueofassetsofZhenjiangSiyangon31March2021isusedasthefairvalue.ThefairvalueofZhenjiangSiyangcontinuouslymeasuredfrom31May2022iscalculated,whichismultipliedbytheshareholdingratioofChangchaiCompany,LimitedtoobtainthefairvalueshareoftheidentifiablenetassetsobtainedbyChangchaiCompany,Limited.Themainreasonsfortheformationoflarge-valuegoodwill:Notapplicable

(3)TheIdentifiableAssetsandLiabilitiesofAcquireeonPurchaseDate

Unit:RMB

ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.
FairvalueonpurchasedateCarryingvalueonpurchasedate
Assets:99,167,047.9696,946,440.05
Monetaryassets19,400,123.6119,400,123.61
Accountsreceivable24,790,090.3424,790,090.34
Inventories25,093,473.7925,096,648.68
Fixedassets21,864,448.9721,427,812.03
Intangibleassets6,746,790.394,959,644.53
Othercurrentassets697,629.25697,629.25
Constructioninprogress447,840.71447,840.71
Deferredincometaxassets126,650.90126,650.90
Liabilities:13,805,764.6313,472,197.21
Borrowings
Accountspayable13,472,197.2113,472,197.21
Deferredincometaxliabilities333,567.42
Netassets85,361,283.3383,474,242.84
Less:Non-controllinginterests49,936,350.7548,832,432.06
Netassetsacquired35,424,932.5834,641,810.78

(4)GainsorlossesfromRe-measurementofEquityHeldbeforethePurchaseDateatFairValueWhetherthereisatransactionthatthroughmultipletransactionstepbysteptorealizebusinesscombinationandgainingthecontrolduringtheReportingPeriod

□Yes√No

(5)NotestoReasonableConsiderationorFairValueofIdentifiableAssetsandLiabilitiesoftheAcquireethatCannotBeDeterminedontheAcquisitionDateorduringthePeriod-endoftheMergerNotapplicable

IX.EquityinOtherEntities

1.EquityinSubsidiary

(1)Subsidiaries

NameMainoperatingplaceRegistrationplaceNatureofbusinessHoldingpercentage(%)Wayofgaining
DirectlyIndirectly
ChangchaiWanzhouDieselEngineCo.,Ltd.ChongqingChongqingIndustry60.00%Set-up
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.ChangzhouChangzhouIndustry99.00%1.00%Set-up
ChangzhouHorizonInvestmentCo.,Ltd.ChangzhouChangzhouService100.00%Set-up
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.ChangzhouChangzhouIndustry75.00%25.00%Set-up
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.ChangzhouChangzhouIndustry100.00%Combinationnotunderthesamecontrol
JiangsuChangchaiMachineryCo.,Ltd.ChangzhouChangzhouIndustry100.00%Set-up
ChangzhouXingshengPropertyManagementCo.,Ltd.ChangzhouChangzhouService100.00%Set-up
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.ZhenjiangZhenjiangIndustry41.50%Combinationnotunderthesamecontrol

Explanation:thecompanyholds41.5%ofthesharesinZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.Ourcompanyisthelargestshareholder,andtheothershareholdersareemployeeandnonemployeeshares,whicharerelativelyscattered.Therearenoothershareholderswithahighshareholdingratiothatisclosetotheactualcontroller'sshareholdingratio;Amongthe7membersoftheboardofdirectorsofZhenjiangSiyang,5aredispatchedbyourcompany.ThechairmanofZhenjiangSiyangisdispatchedbyourcompany,andourcompanyisthesubstantivecontrollerofZhenjiangSiyang,whichconstitutestheconditionsformerger.

(2)SignificantNon-wholly-ownedSubsidiary

Unit:RMB

NameShareholdingproportionofnon-controllinginterestsTheprofitorlossattributabletothenon-controllinginterestsDeclaringdividendsdistributedtonon-controllinginterestsBalanceofnon-controllinginterestsattheperiod-end
ChangchaiWanzhouDieselEngineCo.,Ltd.40.00%-260,843.1219,705,643.25
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.58.50%2,822,178.6752,758,529.42

Holdingproportionofnon-controllinginterestsinsubsidiarydifferentfromvotingproportion:Notapplicable

(3)TheMainFinancialInformationofSignificantNotWholly-ownedSubsidiary

Unit:RMB

NameEndingbalanceBeginningbalance
CurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilitiesCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilities
ChangchaiWanzhouDieselEngineCo.,Ltd.47,133,617.1623,228,110.0970,361,727.2521,097,619.1321,097,619.1348,200,342.7724,141,889.9072,342,232.6722,426,016.7522,426,016.75
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.82,697,983.5828,045,494.39110,743,477.9720,235,256.17322,701.4220,557,957.59————————————
ChangzhouChangchaiHorizonAgriculturalEquipment————————————14,505,888.53324,302.8414,830,191.3725,675,299.1725,675,299.17

Unit:RMB

Co.,Ltd.

Name

NameReportingPeriodSameperiodoflastyear
OperatingrevenueNetprofitTotalcomprehensiveincomeCashflowsfromoperatingactivitiesOperatingrevenueNetprofitTotalcomprehensiveincomeCashflowsfromoperatingactivities
ChangchaiWanzhouDieselEngineCo.,Ltd.34,281,252.72-652,107.80-652,107.80650,437.0342,629,379.24386,567.27386,567.272,563,679.17
ZhenjiangSiyangDieselEngineManufacturingCo.,Ltd.35,440,983.374,824,237.054,824,237.05-9,291,537.82————————
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.————————14,362,872.77-4,579,701.60-4,579,701.606,216,842.70

2.EquityintheStructuredEntityExcludedintheScopeofConsolidatedFinancialStatementsNotestothestructuredentityexcludedinthescopeofconsolidatedfinancialstatements:

In2017,theCompanysetupChangzhouXietongPrivateEquityFund(LimitedPartnership)togetherwithSynergeticInnovationFundManagementCo.,Ltd.throughjointinvestment.On18October2018and3December2020,newpartnerswererespectivelyadded.PartnershipSharestransferwasmadeon29December2022.InlinewiththerevisedPartnershipAgreement,thegeneralpartnerisSynergeticInnovationFundManagementCo.,Ltd.,andthelimitedpartnersareChangchaiCompany,Limited,ChangzhouZhongyouPetroleumSalesCo.,Ltd.,ChangzhouFuelCo.,Ltd.,TongYinzhu,TongYinxin,AnhuiHaiyunzhouEquityInvestmentPartnershipEnterprise(Limited),ShenzhenJiaxinOneVentureCapitalPartnership(limitedpartnership)andZhongWende.InaccordancewiththePartnershipAgreement,thelimitedpartnerdoesnotexecutethepartnershipaffairs.Thus,theCompanydoesnotcontrolChangzhouXietongPrivateEquityFund(LimitedPartnership)anddidnotincludeitintothescopeofconsolidatedfinancialstatements.

X.TheRiskRelatedtoFinancialInstruments

ThegoaloftheCompany’sriskmanagementwasgainingthebalancebetweentheriskandincome,andreducedthenegativeimpacttotheoperationperformanceoftheCompanyinthelowestlevelandmaximizedtheinterestsofshareholdersandotherequityinvestors.Baseontheriskmanagementgoal,thebasisstrategyoftheCompany’sriskmanagementwastorecognizedandanalyzeallkindsofriskthattheCompanyfaced,setupsuitableriskbottomlineandconductriskmanagement,andsupervisedtheriskstimelyandreliablyandcontroltheriskwithinthelimitedscope.ThemainrisksoftheCompanyduetofinancialinstrumentswerecreditrisk,liquidityriskandmarketrisk.Themanagementlevelhadreviewedandapprovedthepoliciestomanagetherisks,whichsummarizedasfollows:

(I)CreditRiskCreditriskwasonepartyofthecontractfailedtofulfilltheobligationsandcauseslossoffinancialassetsoftheotherparty.ThecreditofriskoftheCompanymainlywasrelatedtoaccountreceivable,inordertocontroltherisk,theCompanyconductthefollowingmethods.TheCompanyonlyconductsrelatedtransactionwithapprovedandreputablethirdparty,inlinewiththepolicyoftheCompany,theCompanyneedtoconductcredit-checkfortheclientsadoptingwayofcredittoconducttransaction.Inaddition,theCompanycontinuouslymonitorsthebalanceofaccountreceivabletoensuretheCompanywouldnotfacethesignificantbaddebtrisk.(II)LiquidityRiskLiquidityriskisreferredtotheriskofincurringcapitalshortagewhenperformingsettlementobligationinthewayofcashpaymentorotherfinancialassets.ThepoliciesoftheCompanyaretoensurethattherewassufficientcashtopaythedueliabilities.TheliquidityriskwascentralizedcontrolledbythefinancialdepartmentoftheCompany.Thefinancialdepartmentsthroughsupervisingthebalanceofthecashandsecuritiescanbeconverttocashatanytimeandtherollingpredictionofcashflowinfuture12monthstoensuretheCompanyhassufficientcashtopaytheliabilitiesunderthecaseofallreasonableprediction.(III)MarketRiskMarketriskisrefertoriskofthefairvalueorfuturecashflowoffinancialinstrumentchangedduetothechangeofmarketprice,includingforeignexchangeraterisk,interestraterisk.

1.InterestRateRiskInterestrateriskisreferstofluctuationriskofthefairvalueorfuturecashflowoffinancialinstrumentchangeduetothechangeofmarketprice.

2.ForeignExchangeRiskForeignexchangerateriskisreferredtotheriskincurredformthechangeofexchangerate.AsfortheCompany’sexportbusiness,customerswillbegivenacertaincreditterm,iftheRMBappreciatesagainstthedollar,thecompany'saccountsreceivablewillincurforeigncurrencyexchangeloss.XI.TheDisclosureofFairValue

1.EndingFairValueofAssetsandLiabilitiesatFairValue

Unit:RMB

ItemEndingfairvalue
Fairvaluemeasurementitemsatlevel1Fairvaluemeasurementitemsatlevel2Fairvaluemeasurementitemsatlevel3Total
I.Consistentfairvaluemeasurement--------
(I)Tradingfinancialassets78,739,311.00291,364,291.57370,103,602.57
1.Financialassetsatfairvaluethroughprofitorloss78,739,311.00291,364,291.57370,103,602.57
(1)Debtinstrumentinvestment
(2)Equityinstrumentinvestment78,739,311.0078,739,311.00
(3)Derivativefinancialassets
Wealthmanagementinvestments291,364,291.57291,364,291.57
2.Financialassetsdesignatedtobemeasuredatfairvalueandthechangesincludedintothecurrentprofitorloss
(1)Debtinstrumentinvestment
(2)Equityinstrumentinvestment
(II)Otherinvestmentsindebtobligations
(III)Otherequityinstrumentinvestment576,631,000.00378,929,240.08955,560,240.08
(IV)Investmentproperty
1.Landuserightforlease
2.Buildingsleasedout
3.Landuseright
heldandplannedtobetransferredonceappreciating
(V)Livingassets
1.Consumptivelivingassets
2.Productivelivingassets
Accountsreceivablefinancing242,813,392.79242,813,392.79
Othernon-currentfinancialassets373,500,000.00373,500,000.00
Totalassetsconsistentlymeasuredbyfairvalue655,370,311.00291,364,291.57995,242,632.871,941,977,235.44
(VI)Tradingfinancialliabilities
Ofwhich:Issuedtradingbonds
Derivativefinancialliabilities
Other
(VII)Financialliabilitiesdesignatedtobemeasuredatfairvalueandthechangesrecordedintothecurrentprofitorloss
Totalliabilitiesconsistentlymeasuredbyfairvalue
II.Inconsistentfairvaluemeasurement--------
(1)Assetsheldforsale
Totalassetsinconsistentlymeasuredbyfairvalue
Totalliabilities

2.MarketPriceRecognitionBasisforConsistentandInconsistentFairValueMeasurementItemsatLevel

Forthelistedcompanystocksheldbythecompanyintheheld-for-tradingfinancialassetsmeasuredatfairvalue,theclosingmarketpriceonthebalancesheetdatewasthebasisforthemeasurementoffairvalue.

3.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel2Wealthmanagementandinvestment:Theunderlyingassetsofinvestmentinwealthmanagementproductsincludebondassets,depositassets,fundassets,etc.Theportfolioofinvestmentassetsshouldbedynamicallymanaged.Thefairvalueofwealthmanagementproductsshouldbeadjustedaccordingtotheyieldofsimilarproductsprovidedbythecounterparty.

4.ValuationTechniqueAdoptedandNatureandAmountDeterminationofImportantParametersforConsistentandInconsistentFairValueMeasurementItemsatLevel3

(1)Accountsreceivablefinancing:Accountsreceivablefinancingisabankacceptancewithhighcreditrating,shortmaturityandlowrisk.Theparamountisclosetothefairvalueandisusedasthefairvalue.

(2)Amongtheothernon-currentfinancialassets:fortheinvestmentsinequityinstrumentofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,JiangsuHorizonNewEnergyTechnologyCo.,Ltd.entrustedanappraisalagencytoevaluatethevalueofallitsshareholders’equityduetotheneedforcapitalincreaseandshareexpansionin2022,andconfirmedthepremiumrateofcapitalincreasebasedontheappreciationrateoftheequityvalue.Thecompany’snewinvestorssignedtheinvestmentagreementson29August2022.Therefore,thefairvalueoftheequityinvestmenthadbeenadjustedandconfirmedaccordinglybasedonthepremiumrateofthenewroundoffinancing.

(3)Amongotherequityinvestmentinstruments,thetotalinvestmentinChengduChangwanDieselEngineDistributionCo.,Ltd.,ChongqingWanzhouChangwanDieselEnginePartsCo.,Ltd.,ChangzhouEconomicandTechnologicalDevelopmentCompany,ChangzhouTractorCompany,ChangzhouEconomicCommissionIndustrialCapitalMutualAidAssociation,BeijingEngineeringMachineryAgriculturalMachineryCompanywasRMB1.21million,andthefairvaluewasRMB0.00duetothedifficultyinrecoveringtheinvestment.SinceitsestablishmentinOctober2017,ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)hadincreasedtheequityofpartnersattheendoftheyearduetothechangeinfairvalueoftheequityheldbyit.Inaddition,thecompany'sbusinessenvironment,operatingconditions,andfinancialstatushadnotundergonemajorchanges.Therefore,thecompanydetermineditsfairvalueonthebasisofthenetbookassetsofthepartnershipattheendoftheperiod.

5.SensitivenessAnalysisonUnobservableParametersandAdjustmentInformationbetweenBeginningandEndingCarryingValueofConsistentFairValueMeasurementItemsatLevel3

Notapplicable

6.ExplaintheReasonforConversionandtheGoverningPolicywhentheConversionHappensifConversionHappensamongConsistentFairValueMeasurementItemsatDifferentLevelsNotapplicable

7.ChangesintheValuationTechniqueintheCurrentPeriodandtheReasonforSuchChangesNotapplicable

8.FairValueofFinancialAssetsandLiabilitiesNotMeasuredatFairValueThefinancialassetsandliabilitiesmeasuredatamortizationcostmainlyincludenotesreceivable,accountsreceivable,otherreceivables,short-termborrowings,accountspayable,otherpayables,etc.Thedifferencebetweenthecarryingvalueandfairvalueforfinancialassetsandliabilitiesnotmeasuredatfairvalueissmall.

9.OtherDuringtheyear,therewasnoconversionbetweenLevel1andLevel2,norwasthereanytransfertoorfromLevel3forthefairvaluemeasurementoftheCompany'sfinancialassetsandfinancialliabilities.XII.RelatedPartyandRelated-partyTransactions

1.InformationRelatedtotheCompanyastheParentoftheCompany

NameRegistrationplaceNatureofbusinessRegisteredcapitalProportionofshareheldbytheCompanyastheparentagainsttheCompanyProportionofvotingrightsownedbytheCompanyastheparentagainsttheCompany
ChangzhouInvestmentGroupCo.,Ltd.ChangzhouInvestmentandoperationsofstate-ownedassets,assetsmanagement(excludingfinancialbusiness),investmentconsulting(excludingRMB1.2billion32.26%32.26%

Notes:InformationontheCompanyastheparentTheparentcompanyoftheCompanyisChangzhouInvestmentGroupCo.,Ltd.AccordingtotheguidingprincipleoftheNoticeofProvincialGovernmentonIssuingtheImplementationPlanforTransferringPartofState-ownedCapitaltoBoostSocialSecurityFundinJiangsuProvince(SZF[2020]No.27),theNoticeonTransferringPartofState-ownedCapitaltoCitiesandCountiestoBoostSocialSecurityFund(SCGM[2020]No.

139)fromtheDepartmentofFinanceofJiangsuProvinceandotherfivedepartmentsandtheNoticeonTransferringPartofState-ownedCapitalatUrban(District)LeveltoBoostSocialSecurityFund(CCGM[2020]No.4)fromChangzhouFinanceBureauandotherfourdepartments,the10%state-ownedequityoftheInvestmentGroupheldbyChangzhouMunicipalPeople'sGovernmentistransferredtotheDepartmentofFinanceofJiangsuProvincefreeofcharge.Afterthesharetransfer,ChangzhouPeople’sGovernmentholds90%state-ownedequityoftheInvestmentGroupandtheDepartmentofFinanceofJiangsuProvinceholds10%state-ownedequityoftheInvestmentGroup.InaccordancewithChangzhouPeople’sGovernmentDocument(CZF[2006]No.62),ChangzhouInvestmentGroupCo.,Ltd.isanenterprisewhichChangzhouPeople’sGovernmentauthorizesChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissiontoperformdutiesofinvestors.Thus,ChangzhouInvestmentGroupCo.,Ltd.isthecontrollingshareholderoftheCompanyandChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissionisstilltheactualcontrolleroftheCompany.ThefinalcontrolleroftheCompanyisChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommission.

2.SubsidiariesoftheCompanyRefertoNoteIXfordetails.

3、SituationofjointventuresandassociatedenterprisesofthecompanyNone

4.InformationonOtherRelatedParties

consultingoninvestmentinsecuritiesandoptions),etc.Name

NameRelationshipwiththeCompany
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)Participatedinestablishingtheindustrialinvestmentfund
JiangsuHorizonNewEnergyTechnologyCo.,Ltd.ShareholdingenterpriseoftheCompany
DonghaiSecuritiesCo.,Ltd.ControlledbythesameCompanyastheparent

5.RelatedPartyTransactions

(1)Compensationforkeymanagementpersonnel

Unit:RMB

ItemCurrentamountincurredAmountincurredinthepreviousperiod
Compensationforkeymanagementpersonnel7,110,100.007,667,300.00

(2)OtherRelated-partyTransaction

1)On25August2022,theCompanyheldtheFourthInterimMeetingoftheBoardofDirectorsandtheFourthInterimMeetingoftheSupervisoryCommitteein2022anddeliberatedandapprovedtheProposalonPlanningtoParticipateinCapitalIncreaseandShareExpansionandRelatedTransactionsofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,agreeingtoincreaseRMB75millioncapitaltoHorizonNewEnergyforthesubscriptionofitsnewlyregisteredcapitalofRMB18,844,200andauthorizingShiXinkun,theCompany’sChairman,tosigncapitalincreaseagreementswithrelatedparties.InAugust2022,HorizonNewEnergyanditsshareholderssignedtheCapitalIncreaseAgreementofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.,agreeingthattheregisteredcapitalofHorizonNewEnergywasincreasedfromRMB1,405,622,491toRMB1.75billion.InOctober2022,HorizonNewEnergycompletedtheindustrialandcommercialchangeregistrationproceduresaccordingtotheaforesaidcapitalincreaseagreementandobtainedthenewbusinesslicense.

2)TheProposalonUsingIdleFundstoPurchaseWealthManagementProductswasdeliberatedandapprovedattheFourthInterimMeetingoftheBoardofDirectorsin2021andtheSecondInterimMeetingoftheBoardofSupervisorsin2021heldbytheCompanyon13July2021,allowingtheCompanyanditswholly-ownedsubsidiariestousenomorethanRMB350millionofidleraisedfundstopurchasewealthmanagementproductsforcashmanagementonthepremisethattheinvestmentprojectswithraisedfundsarecarriedoutnormallyandtheuseofraisedfundsisnotaffected.On27July2021,theCompanyenteredintoasubscriptionagreementwithDonghaiSecuritiesCo.,Ltd.fortheproduct"DonghaiSecuritiesLongGainReturnCertificateJuneTypeCustomizedIssueNo.13".ThesubscriptionamountisRMB50million,andthesourceoffundsisidleraisedfunds.Thereturncertificatematuredon25January2022,withatotalofRMB50,949,315.07inprincipalandreturnactuallyreceived,whichisrecognizedasgainsonchangesoffairvalueofRMB817,465.75in2021andasinvestmentincomeofRMB131,849.32in2022.

XIII.CommitmentsandContingency

1.SignificantCommitmentsSignificantcommitmentsonbalancesheetdateAsof31December2022,therewasnosignificantcommitmentfortheCompanytodisclose.

2.Contingency

(1)SignificantContingencyonBalanceSheetDateNone

(2)InDespiteofnoSignificantContingencytoDisclose,theCompanyShallAlsoMakeRelevantStatementsTherewasnosignificantcontingencyintheCompany.

XIV.EventsafterBalanceSheetDate

1.ProfitDistribution

Unit:RMB

Profitsordividendstobedistributed7,056,925.07

2.SalesReturnNone

3.NotestoOtherEventsafterBalanceSheetDateTherewasnoothereventafterbalancesheetdate.

XV.OtherSignificantEvents

1.TheAccountingErrorsCorrectioninPreviousPeriod

(1)RetrospectiveRestatementNone

(2)ProspectiveApplicationNone

2.DebtRestructuringNotapplicable

3.AssetsReplacementNotapplicable

4.PensionPlansNotapplicable

5.DiscontinuedOperationsNotapplicable

6.SegmentInformation

(1)DeterminationBasisandAccountingPoliciesofReportableSegmentDuetotheoperationscopeoftheCompanyandsubsidiariesweresimilar,theCompanyconductscommon

management,anddidnotdividebusinessunit,sotheCompanyonlymadesinglebranchreport.

7.OtherSignificantTransactionsandEventswithInfluenceonInvestors’Decision-makingNone

XVI.NotesofMainItemsintheFinancialStatementsoftheCompanyastheParent

1.AccountsReceivable

(1)AccountsReceivableClassifiedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued27,364,067.346.22%21,607,429.5078.96%5,756,637.8427,509,745.336.00%21,126,658.8576.80%6,383,086.48
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbygroup412,769,158.3993.78%89,464,855.7321.67%323,304,302.66430,771,912.0394.00%88,019,743.0920.43%342,752,168.94
Ofwhich:
Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup412,769,158.3993.78%89,464,855.7321.67%323,304,302.66430,771,912.0394.00%88,019,743.0920.43%342,752,168.94
Total440,133,225.73100.00%111,072,285.2325.24%329,060,940.50458,281,657.36100.00%109,146,401.9423.82%349,135,255.42

Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccruedattheendoftheperiod:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionWithdrawalreason
Customer11,470,110.641,470,110.64100.00%Difficulttorecover
Customer21,902,326.581,902,326.58100.00%Difficulttorecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,797,123.262,194,980.2878.47%Expectedtodifficultlyrecover
Customer53,633,081.232,122,165.7358.41%Expectedtodifficultlyrecover
Customer62,584,805.832,584,805.83100.00%Difficulttorecover
Customer71,731,493.711,731,493.71100.00%Difficulttorecover
Customer81,511,937.64604,775.0640.00%Expectedtodifficultlyrecover
Customer93,329,074.84720,031.7121.63%Expectedtodifficultlyrecover
Total25,175,616.3719,546,352.18----

Accountsreceivableforwhichbaddebtprovisionaccruedbycreditriskfeaturesgroup

Unit:RMB

Endingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Within1year300,792,980.526,015,859.612.00%
1to2years25,189,130.521,259,456.535.00%
2to3years4,391,594.73658,739.2115.00%
3to4years829,958.37248,987.5130.00%
4to5years709,203.46425,522.0860.00%
Over5years80,856,290.7980,856,290.79100.00%
Total412,769,158.3989,464,855.73

Notestothebasisforthedeterminationofthegroups:

Theaccountsreceivablewasadoptedtheaginganalysisbasedonthemonthswhentheaccountsoccurredactually,amongwhichtheaccountsoccurredearlierwillbeprioritytobesettledintermsofthecapitalturnover.ExplanationoftheinputvalueandassumptionadoptedtodeterminethewithdrawalamountofbaddebtprovisionontheCurrentPeriod:Withreferencetotheexperienceofthehistoricalcreditloss,combiningwiththepredictionofthepresentstatusandfuturefinancialsituation,thecomparisontablewaspreparedbetweentheagingoftheaccountsreceivableandestimatedcreditlossrateinthedurationandtocalculatetheestimatedcreditloss.Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)304,249,429.01
1to2years25,731,843.18
2to3years4,391,594.73
Over3years105,760,358.81
3to4years2,917,847.46
4to5years2,658,953.02
Over5years100,183,558.33
Total440,133,225.73

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriod

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offOther
Baddebtprovisionwithdrawnseparately21,126,658.85480,770.6521,607,429.50
Baddebtprovisionwithdrawnbygroup88,019,743.092,150,511.77705,399.1389,464,855.73
Total109,146,401.942,631,282.42705,399.13111,072,285.23

OfwhichbaddebtprovisionreversedorrecoveredwithsignificantamountintheReportingPeriod:No.

(3)AccountsReceivablewithActualVerificationduringtheReportingPeriod

Unit:RMB

ItemAmountverified
Accountsreceivablewithactualverification705,399.13

Ofwhichtheverificationofsignificantaccountsreceivable:

Unit:RMB

NameoftheentityNatureAmountverifiedReasonPerformanceofverificationproceduresWhethergeneratedfromrelated-partytransaction
Customer1Accountsreceivableofgoods256,244.04Withaccountsreceivableagingover5years,thecounterpartcompanybeingrevokedorcancelled,ordebtreorganisation,bankruptcyclearingorthedebtorshavenoassetsfordebtThePartyCommitteeandtheofficemeetingreviewedandapprovedtheProposalontheVerificationofAccountsReceivableoftheOverseasBusinessDepartmentDuetoPendingPrototypesandPendingQualityIssuesNot
Customer269,529.81
Customer372,967.54
Customer459,625.69
Customer544,647.49
Customer671,769.00
Customer740,120.00
extinguishment
Total614,903.57------

(4)Top5oftheEndingBalanceofAccountsReceivableCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityEndingbalanceofaccountsreceivableProportiontototalendingbalanceofaccountsreceivableEndingbalanceofbaddebtprovision
Customer1182,469,247.0541.46%3,649,384.94
Customer240,330,698.629.16%806,613.97
Customer320,619,430.634.68%412,388.61
Customer418,538,588.594.21%913,245.46
Customer515,564,496.003.54%311,289.92
Total277,522,460.8963.05%

2.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Otherreceivables179,596,495.5726,497,081.34
Total179,596,495.5726,497,081.34

(1)OtherReceivable

1)OtherReceivablesClassifiedbyAccountNature

Unit:RMB

NatureEndingcarryingamountBeginningcarryingamount
CashdepositandMargin1,300.004,200.00
Intercoursefundsamongunits214,624,107.5355,450,919.93
Pettycashandborrowingsbyemployees671,817.84613,410.65
Other13,635,256.6413,629,784.64
Total228,932,482.0169,698,315.22

2)WithdrawalofBadDebtProvision

Unit:RMB

BaddebtprovisionFirststageSecondstageThirdstageTotal
Expectedcreditlossofthenext12monthsExpectedlossintheduration(creditimpairmentnotoccurred)Expectedlossintheduration(creditimpairmentoccurred)
Balanceof1January2022209,613.5323,809,010.5819,182,609.7743,201,233.88
Balanceof1January2022intheCurrentPeriod————————
--TransfertoSecondstage
--TransfertoThirdstage-23,342,513.3823,342,513.38
--ReversetoSecondstage
--ReversetoFirststage
WithdrawaloftheCurrentPeriod6,574,799.606,574,799.60
ReversaloftheCurrentPeriod183,426.54168,517.57351,944.11
Write-offsoftheCurrentPeriod
VerificationoftheCurrentPeriod88,102.9388,102.93
Otherchanges
Balanceof31December202226,186.99209,876.7049,099,922.7549,335,986.44

ChangesofcarryingamountwithsignificantamountchangedoflossprovisionintheCurrentPeriod

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingCarryingamount
Within1year(including1year)182,815,353.08
1to2years16,778,473.11
2to3years99,076.00
Over3years29,239,579.82
3to4years420,716.17
4to5years333,939.40
Over5years28,484,924.25
Total228,932,482.01

3)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofbaddebtprovisionwithdrawn:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-offOther
Baddebtprovisionwithdrawnseparately19,182,609.776,574,799.6025,757,409.37
Baddebtprovisionwithdrawnbygroup24,018,624.11351,944.1188,102.9323,578,577.07
Total43,201,233.886,574,799.60351,944.1188,102.9349,335,986.44

4)ParticularsoftheActualVerificationofOtherReceivablesduringtheReportingPeriod

Unit:RMB

ItemWritten-offamount
Otherreceivableswithactualverification88,102.93

Ofwhichtheverificationofsignificantotherreceivables:

Unit:RMB

NameoftheentityNatureWritten-offamountReasonforverificationVerificationproceduresperformedWhetheroccurredbecauseofrelated-partytransactions
Customer1Otherintercoursefunds9,020.00Withaccountsreceivableagingover5years,thecounterpartcompanybeingrevokedorcancelled,ordebtreorganisation,bankruptcyclearingorthedebtorshavenoassetsfordebtextinguishmentTheProposalontheWrite-offofCertainOtherReceivableswasapprovedatthePartyCommitteeandOfficeMeeting.Not
Customer28,357.60
Customer37,933.63
Customer47,800.00
Customer56,700.00
Customer66,000.00
Customer76,000.00
Total51,811.23------

5)Top5oftheEndingBalanceofOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontototalendingbalanceofotherreceivablesEndingbalanceofbaddebtprovision
JiangsuChangchaiMachineryManufacturingCo.,Ltd.Intercoursefunds135,735,255.26Within1year59.29%
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.Intercoursefunds20,221,123.93Within1yearwithRMB18,996,476.74,1-2yearswithRMB1,224,647.198.83%20,221,123.93
ChangzhouChangniuMachineryCo.,Ltd.Intercoursefunds9,000,000.001-2years3.93%
ChangzhouCompressorsFactoryIntercoursefunds2,940,000.00Over5years1.28%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years1.25%2,853,188.02
Total--170,749,567.2174.58%26,014,311.95

6)DerecognitionofOtherReceivablesduetotheTransferofFinancialAssets:none

7)TheAmountoftheAssetsandLiabilitiesFormedduetotheTransferandtheContinuedInvolvementofOtherReceivables:none

3.Long-termEquityInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Investmenttosubsidiaries576,273,530.037,000,000.00569,273,530.03542,752,730.037,000,000.00535,752,730.03
Investmenttojointventuresandassociatedenterprises44,182.5044,182.5044,182.5044,182.50
Total576,317,712.537,044,182.50569,273,530.03542,796,912.537,044,182.50535,752,730.03

(1)InvestmenttoSubsidiaries

Unit:RMB

InvesteeBeginningbalance(carryingIncrease/decreaseEndingbalance(carryingEndingbalanceofdepreciatio
AdditionalReducedWithdrawaOther
value)investmentinvestmentlofdepreciationreservevalue)nreserve
ChangchaiWanzhouDieselEngineCo.,Ltd.51,000,000.0051,000,000.00
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.96,466,500.0096,466,500.00
ChangzhouHorizonInvestmentCo.,Ltd.40,000,000.0040,000,000.00
ChangzhouChangchaiHorizonAgriculturalEquipmentCo.,Ltd.0.000.007,000,000.00
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.47,286,230.0347,286,230.03
JiangsuChangchaiMachineryCo.,Ltd.300,000,000.00300,000,000.00
ChangzhouXingshengPropertyManagementCo.,Ltd.1,000,000.001,000,000.00
ZhenjiangSiyangDiesel33,520,800.0033,520,800.00
EngineManufacturingCo.,Ltd.
Total535,752,730.0333,520,800.00569,273,530.037,000,000.00

(2)InvestmenttoJointVenturesandAssociatedEnterprises

Unit:RMB

InvesteeBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserve
AdditionalinvestmentReducedinvestmentGainsandlossesrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesofotherequityCashbonusorprofitsannouncedtoissueWithdrawalofimpairmentprovisionOther
II.Associatedenterprises
BeijingTsinghuaXingyeIndustrialInvestmentManagementCo.,Ltd.0.000.0044,182.50
Subtotal0.000.0044,182.50
Total0.000.0044,182.50

4.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations1,937,402,949.981,743,767,173.552,221,914,222.251,913,817,106.36
Otheroperations51,070,094.5740,578,530.5545,317,897.5331,003,356.23
Total1,988,473,044.551,784,345,704.102,267,232,119.781,944,820,462.59

Informationonrevenue:

Unit:RMB

CategoryofcontractsTotal
ProductTypes
Ofwhich:
Single-cylinderdieselengines810,033,457.43
Multi-cylinderdieselengines1,068,550,094.42
Otherproducts31,841,402.73
Fittings26,977,995.40
Classifiedbybusinessarea
Ofwhich:
Salesindomesticmarket1,717,395,940.92
Exportsales220,007,009.06
Total1,937,402,949.98

Informationrelatedtoperformanceobligations:none

5.InvestmentIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Dividendincomefromholdingofotherequityinstrumentinvestment9,360,000.007,394,400.00
Incomefromrefinancingoperations136,003.961,028,964.68
Dividendsundercostaccounting28,800,000.00
Interestincomefromholdingofdebtobligationinvestments1,411,361.54
Investmentincomefromdisposalofheld-for-tradingfinancialassets5,408,606.171,798,672.49
Accountsreceivablefinancing-discountinterestofbankacceptancebills-8,511,313.05-1,869,322.91
Total36,604,658.628,352,714.26

XVII.SupplementaryMaterials

1.ItemsandAmountsofNon-recurringProfitorLoss

√Applicable□Notapplicable

Unit:RMB

ItemAmountNote
Gainorlossondisposalofnon-currentassets393,161.73
Governmentsubsidieschargedtocurrentprofitorloss(exclusiveofgovernmentsubsidiesgivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsasperthegovernment’suniformstandards)3,774,298.59
Gain/lossfromchangeoffairvalueoftradingfinancialassetsandliabilities,andinvestmentgainsfromdisposaloftradingfinancialassetsandliabilities,andderivativefinancialassetsandliabilities,andavailable-for-salefinancialassets,otherthanvalidhedgingrelatedtotheCompany’scommonbusinesses162,319,373.53IncreaseinthefairvalueoftheequityofJiangsuHorizonNewEnergyTechnologyCo.,Ltd.heldbytheCompanyandpricefallingofstocksofJiangsuLianceElectromechanicalTechnologyCo.,Ltd.andKailongHighTechnologyCo.,Ltd.heldbythewholly-ownedsubsidiaryHorizonInvestmentduringtheReportingPeriod.
Reverseofprovisionforimpairmentofaccountsreceivableindividuallyconductingimpairmenttest30,000.00
Othernon-operatingincomeandexpensesotherthantheabove1,735,346.51
Negativegoodwillduetobusinesscombinationnotundercommoncontrol1,904,132.58
Less:Incometaxeffects19,859,063.58
Non-controllinginterestseffects(aftertax)-24,058.57
Total150,321,307.93--

ExplainthereasonsiftheCompanyclassifiesanitemasannon-recurringgain/lossaccordingtothedefinitionintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-recurringGainsandLosses,orclassifiesanyextraordinarygain/lossitemmentionedinthesaidexplanatoryannouncementasarecurrentgain/lossitem.

□Applicable√Notapplicable

2.ReturnonEquityandEarningsPerShare

ProfitasofReportingPeriodWeightedaverageROE(%)EPS(Yuan/share)
EPS-basicEPS-diluted
NetprofitattributabletoordinaryshareholdersoftheCompany2.51%0.10870.1087
NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductionofnon-recurringprofitorloss-2.41%-0.1043-0.1043

TheBoardofDirectorsChangchaiCompany,Limited

10April2023


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