CRRC Corporation Limited

601766

CNE100000CP9

Heavy Machinery & Vehicles

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04-29	CRRC Corporation Limited Reports Earnings Results for the First Quarter Ended March 31, 2024	CI
04-26	Zhuzhou CRRC Times Electric's Q1 Profit Jumps 44%	MT

CRRC : Interim Report 2020

September 23, 2020 at 04:55 am

Interim Report 2020

Mobility

for Future Connection

Unless specified otherwise,

Disclaimer for forward-lookingstatements

This report contains forward-lookingstatements that are based on subjective assumptions and judgements on future policies and economic trends and are subject to a variety of uncertainties. The actual results or trends may differ from these forward-lookingstatements.

Investors should be aware that the forward-lookingstatements included in this report in relation to future plans, development strategies, etc. do not constitute any substantive commitment to investors by the Company. Investors are advised to pay attention to the investment risks.

There was no appropriation of funds by the controlling shareholder and its associates for non-operatingpurposes.

There was no provision of guarantee by the Company in favour of any external party in violation of the prescribed decision-makingprocedures. Major risk reminder

The major risk factors faced by the Company include operating environment risks, market risks, product quality risks, exchange rate risks and industrial structure adjustment risks, which have been described in detail in this report. Please refer to the description of "Potential risks" in "Report of Directors".

Liu Hualong, Chairman of the Company, Li Zheng, the Chief Financial Officer and Wang Jian, the head of accounting department (person in charge of accounting affairs), hereby state to guarantee the truthfulness, accuracy and completeness of the financial report in the interim report.

IMPORTANT

The board of directors (the "Board") and the supervisory committee (the "Supervisory Committee") of the Company and its director(s) (the "Director(s)"), supervisor(s) (the "Supervisor(s)") and senior management (the "Senior Management") hereby warrant the truthfulness, accuracy and completeness of the contents of this interim report and that there is no false representation, misleading statement or material omission in this interim report, for which they will assume, severally and jointly, legal responsibility.

The details of the Director absent from the meeting are as follows:

This report has been considered and approved by the twenty-second meeting of the second session of the Board. There were seven Directors eligible for attending the meeting and six Directors attended the meeting, Mr. Lou Qiliang, an executive Director, did not attend the on-site meeting due to other business engagement and appointed Mr. Sun Yongcai, an executive Director and the president, as proxy to vote on his behalf and to execute documents including resolutions and minutes of the meeting in relation to each resolution proposed at the Board meeting.

The interim report is unaudited.

IV.

The Company does not have any proposal on profit distribution or transfer of capital reserve fund during the reporting period considered and approved by the Board.

VI.

VII.

VIII.

IX.

The 2020 interim results of the Company have been prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC and the relevant rules.

XI.

CONTENTS

Company Information	2
Results Highlights	4
Report of Directors	5
Significant Events	32
Change in Shares and Particulars of Shareholders	45
Directors, Supervisors and Senior Management	50
Relevant Information of Corporate Bonds	52
Financial Report	55
Definitions	208

COMPANY INFORMATION

Authorized representative

Sun Yongcai, TANG Tuong Hock

10. Legal adviser

	As to Hong Kong law	Baker & McKenzie
		14th Floor, One Taikoo Place,
		979 King's Road,
	As to the PRC law	Jia Yuan Law Offices
		F408 Ocean Plaza, 158 Fuxingmennei Avenue, Beijing, PRC
11.	Principal place of business in	Unit H, 41st Floor, Office Tower, Convention Plaza,
	Hong Kong	1 Harbour Road, Wanchai, Hong Kong
12.	Domestic registrar and transfer office	China Securities Depository and Clearing Corporation Limited Shanghai
	Correspondence address	Branch 36/F, China Insurance Building, 166 Lujiazui East Avenue, Pudong
		New District, Shanghai
13.	Hong Kong registrar and transfer office	Computershare Hong Kong Investors Services Limited
	Correspondence address	17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong

RESULTS HIGHLIGHTS

Revenue	Net pro•t attributable to shareholders
(RMB'000)	of the Company
	(RMB'000)

From January to June 2020:	From January to June 2020:
89,403,326	3,692,655
From January to June 2019:	From January to June 2019:

Net pro•t attributable to shareholders of the Company after non-recurring gain or loss

(RMB'000)

From January to June 2020:

3,055,866

From January to June 2019:

96,147,021	4,780,641	4,231,283
-7.01%	-22.76%	-27.78%

Net cash ow from operating	Net assets attributable to shareholders
activities	of the Company
(RMB'000)	(RMB'000)
From January to June 2020:	As at 30 June 2020:
-14,785,418	135,355,893

Total assets (RMB'000)

As at 30 June 2020:

421,524,117

From January to June 2019:	As at 31 December 2019:	As at 31 December 2019:
-13,390,166		135,893,631	383,572,485
-	%	-0.40%	9.89 %

Total share capital as at the end of the period (shares)

As at 30 June 2020:

28,698,864,088

Basic earnings per share

(RMB/share)

From January to June 2020:

0.13

Diluted earnings per share

(RMB/share)

From January to June 2020:

0.13

As at 31 December 2019:	From January to June 2019:	From January to June 2019:
28,698,864,088	0.17	0.16

-23.53% -18.75%

Basic earnings per share after non-recurring gain or loss (RMB/share)

From January to June 2020:

0.11

From January to June 2019:

Weighted average return on net assets (%)

From January to June 2020:

2.72

From January to June 2019:

Weighted average return on net assets after non-recurring gain or loss (%)

From January to June 2020:

2.25

From January to June 2019:

0.15	3.65	3.23
-26.67%	Decrease of 0.93 ppt	Decrease of 0.98 ppt

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REPORT OF DIRECTORS

BUSINESS OVERVIEW

Main Business, Operation Model and Industry Situation of the Company During the Reporting Period

CRRC is the world's leading rolling stock supplier with large scale, diverse products and first-class technology. The main scope of business includes: research and development, design, manufacturing, refurbishment, sales, leasing and technical services of railway locomotives, MUs, urban rail transit vehicles, engineering machinery, various electromechanical equipment, electronic equipment and components, as well as electronic devices and environmental protection equipment; information consultation; industry investment and management; asset management; import and export business.

Main business of the Company
1. Railway equipment business
The railway equipment business mainly includes: (1) locomotive business; (2) MUs and passenger carriage business; (3) freight wagon business; (4) track engineering machinery business.
Facing the global market, the Company stayed abreast of changes in the domestic and international railway transport markets and trends in the development of technology with an aim to becoming a world-leading provider of systematic solutions for rail transportation equipment. The Company accelerated innovations in its technology, products and service models, and created a systematic, modular and standardized product platform and technology platform, with a view to continuously meeting the requirements for developing an advanced and widely-applicable railway system and for intelligent, environment-friendly and safe development. The Company continued to further its strategic cooperation with State Railway Group to improve the quality and efficiency of development, accelerate its business integration and structure adjustment, promote the integration of manufacturing and maintenance of locomotives, reorganize its freight wagon business, develop its advanced refurbishment capacity, construct seven regional components centers, and promote its service transformation.

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REPORT OF DIRECTORS

2. Urban rail transit vehicles and urban infrastructure business

The urban rail transit vehicles and urban infrastructure business mainly includes: (1) urban rail transit vehicles; (2) general contracting of urban rail transit vehicles projects; (3) general contracting of other projects.

Facing the global market, the Company expedited innovations in urban rail transportation equipment technology and products to increase its core competitiveness. The Company created a systematic, modular and standardized product platform and technology platform, constantly consolidated and expanded domestic and international markets with high-quality products and services.

The Company actively sought strategic cooperation opportunities, gave full play to its comprehensive advantages in equipment manufacturing, business portfolio and integration of industry and financing, focused on intelligent transportation, connectivity and intelligent city construction, vigorously developed the operation, maintenance and overhaul markets, and continued to expand into the service area, general contracting of electromechanical area, and operation and maintenance area. The Company carried out PPP business according to the industry norm, strengthened project management and control, and drove the development of urban rail transit vehicles and related business. The Company accelerated the integration of resources, promoted the combination of "product and service", and made dedicated efforts in maintenance services. The Company developed steadily in its urban rail transit vehicles and urban infrastructure business.

REPORT OF DIRECTORS

New industry business
The new industry business mainly includes: (1) general mechanical and electrical business; (2) emerging industry business.
In the general mechanical and electrical business, the Company strived to improve technology platform and the construction of industrial chain, promoted upgrade in core business technologies of rail transportation equipment with the focus on mastering core technologies, breaking through key technologies and increasing core competitiveness, and expedited the specialized and scale development of key systems and important spare parts in the industrial, transportation and energy fields. As to the emerging industry, the Company adhered to the principles of "relevance and multi- dimensions, high-end positioning and industry-leading position", and strengthened resource allocation, gave full play to core technological advantages. With emphasis on strategic emerging businesses such as new materials, new energy, environmental-friendly water treatment equipment and digital industry, the Company focused on segmented markets, strengthened exploration of new markets and cultivated new growth points. The Company's emerging industry business has been growing stronger and further.
Modern service business
The modern service business mainly includes: (1) financial business; (2) logistics and trading business; (3) other business.
By adhering to "integration of industry and financing, promoting industry with financing", the Company strengthened risk control, standardized the construction of financial service platform, investment and financing platform as well as financial lease platform, and accelerated the integrated development of the manufacturing and service industries. The Company made continuous efforts in the industry and financing platform. With funds as carriers and innovation in development models, the function of the physical business was increasingly highlighted. The Company developed its modern logistics service by expanding the scope of centralized procurement, continuously promoting the development of the "CRRC Procurement (中車購)" e-commerce platform and the CRRC supply chain management e-procurement platform, accelerating the establishment of the CRRC online bidding platform for recycled materials and promoting the extensive application of intelligent logistics in CRRC's industrial

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5. International business

The Company implemented its international strategy vigorously by seizing the development opportunities arising from the "Belt and Road Initiative" and "going global" strategies. The Company actively expanded overseas markets and promoted the transformation of export products from mid-low end to mid-high end. Through innovation in operating model, the Company continuously promoted a form of "product + technology + service + capital + management" portfolio output and actively carried out third-party market cooperation. The Company continued to promote the localization in manufacturing in overseas bases by increasing the allocation of overseas resources and deepening the implementation of the "five-locals model" of localization in production, purchase, labor, maintenance and management, further contributing to the integration of research and development resources and the enhancement of market development capability.

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REPORT OF DIRECTORS

(II) Major products
	Product structure	Main product functions

	MUs	Mainly include various electric multiple units and diesel multiple units at the
		speed of 200 km/hour and below, 200-250 km/hour, 300-350 km/hour and
		above, which are mainly used to provide main line railway and inter-city railway
		passenger transport services. On the basis of "import, digestion, absorption
		and re-innovation", the MU products represented by "Fuxinghao" have
		independent intellectual property rights.
	Locomotives	Mainly include various DC driving and AC driving electric locomotives and
		diesel locomotives with the largest traction power of 12,000 KW and highest
		speed of 200 km/hour, which are mainly used as traction power to provide
		passenger and goods transport services in main line railway. The Company's
		locomotive products have independent intellectual property rights.
	Passenger carriages	Mainly include seater car, sleeping car, dining car, luggage van, generator car,
		special vehicles, plateau cars and double-deck railway passenger carriages at
		the speed of 120-160 km/hour, which are mainly used to provide passenger
		transport services in main line railway. The Company's passenger carriages
		have independent intellectual property rights.
	Freight wagons	Mainly include various railway gondola trucks, box wagon, flatcar, tank truck,
		hopper car and other special goods transport trucks, which are mainly used
		to transport goods for main line railway and industrial and mining enterprises.
		The Company's freight wagons have independent intellectual property rights.
	Urban rail transit vehicles	Mainly include subway vehicles, light-rail vehicles, urban (commuting) vehicles,
		monorail vehicles, maglev train, tramcar, rubber-tyred vehicles, etc., which
		are mainly used to provide commuter and passenger transport services
		between cities and suburbs. The Company's urban rail transit vehicles have
		independent intellectual property rights.
	General electrical and	Mainly include traction electric driving and network control system, diesel
	mechanical equipment	engine, braking system, cooling and heat transfer system, train operation and
		control system, passenger information system, power supply system, gear
		assembly, etc., which are mainly used to complement with MUs, locomotives,
		urban rail transit vehicles, tracking engineering machinery products in main
		line railway and inter-city railway, and part of them are provided to third party
		customers as spare parts. All of the aforesaid products of the Company have
		independent intellectual property rights.

REPORT OF DIRECTORS

Operation model
Main operation model: the Company independently completes the manufacturing, repair, research and development, and production and delivery of rolling stock equipment relying on our own technology, craftsmanship, production capability and production qualification.
1. Production model: as the value of the product of rolling stock manufacturing industry per unit is comparatively high, its production model is to "limit production to sales", meaning that the arrangement of production is based on purchase contracts obtained from customers. Not only does this model avoid excess inventory of finished products, it also satisfies the needs of customers by arranging for production according to the particular order.
2. Purchasing model: a combination of centralized procurement and decentralized procurement is commonly used. For centralized procurement, it mainly adopts the "unified management, two- level concentration" management model in which purchase applications for bulk materials and key components are collected from all subsidiaries of the Company to form a centralized procurement plan for conduction of centralized supplier management assessment, purchase price management, procurement bidding management as well as centralized ordering and centralized settlement by the Company. For other materials, the subsidiaries shall formulate procurement plans according to production requirements, and select appropriate suppliers and sign supply contracts through centralized organization of bidding and other methods to achieve centralized procurement. Whether it will be done by the Company or its subsidiaries, a centralized procurement shall be completed on the "CRRC Procurement" e-commerce procurement platform to realize open, transparent and traceable management of CRRC's procurement business to ensure timely supply of raw materials for production and reduce procurement costs.
3. Sales model: take advantage of industry technologies to build and improve technology platforms and product platforms for a variety of rail transit equipment in response to user needs, and, for the purpose of providing safe, reliable and affordable products and services, actively participate in open tender or negotiated tender of users at home and abroad, sign supply contracts through bidding and rigorous business negotiations to form orders to guarantee quality and quantity and production on schedule and finally achieve sales.
4. Distribution of the industrial chain: the Company has a number of rolling stock equipment manufacturing bases and research bases at an international advanced level. The Company has formed a complete nationwide industrial chain and production system with the main machinery companies of high-speed MUs, locomotives, urban rail transit vehicles, passenger carriages and freight wagons as its core and supporting companies as its backbone.
5. Distribution of the value chain: the product value of the Company mainly lies in the value chain distribution system of the comprehensive rolling stock equipment with the production of high-speed MUs, high-power locomotives, urban rail transit vehicles, passenger carriages and freight wagons as well as the manufacturing and repairing of related supporting products as core value and supplemented with financial products, financial-related products and financial lease products.
6. Research and development model: the Company adopts a two-level research and development management model of "centralizing research and development of technology, jointly developing products and building and sharing capability".

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REPORT OF DIRECTORS

(IV) Industry status

The Outline for Building China's Strength in Transportation 《( 交通強國建設綱要》) states that by 2035, a modern and comprehensive transportation system will have been basically formed, a "national 123 transportation circle" (one-hour commute in urban areas, two-hour travel between the cities of a conurbation, and three-hour reachability of major cities nationwide) and a "global 123 fast movement of goods circle" (one-day domestic delivery, two-day delivery to neighboring countries, and three-day delivery to global major cities) will have been basically established, the transportation technology innovation system will have been basically built with the installation of advanced and safe transportation key equipment, and the international competitiveness and influence of transportation will have been significantly improved. The Outline proposes that transportation equipment should be advanced and applicable, sound and controllable. The research and development of new types of vehicles should be strengthened, and major breakthroughs in 30,000-tonheavy-duty trains and high-speedwheel-rail freight trains at a speed of 250 km/hour should be achieved. The Outline also promotes new energy, clean energy, intelligent, lightweight, environmentally friendly transportation equipment and full sets of technical equipment, and to widely use emerging equipment and facilities such as intelligent high-speed railways, etc. The State's Medium-toLong-Term Railway Network Plan 《( 中長期鐵路網規劃》) proposes to improve the ordinary-speed railway network, build high-speed railway network, construct integrated transport hubs and build a modern integrated transport system. By 2025, total length of the railway network will reach about 175,000 km, of which about 38,000 km will be covered by high-speed rail, and the planning and construction for major projects such as the Sichuan-Tibet Railway will have been started. On 13 August 2020, State Railway Group released the Outline for the Advanced Railway Planning for a Great Country in Transportation in the New Era 《( 新時代交通強國鐵路先行規劃綱要》), which puts forward the development goals of China's railway in the new era, which will be implemented in two stages from 2021 to the middle of this century. At the first stage, by 2035, the operating mileage of the national railway network will reach about 200,000 km, with approximately 70,000 km of high-speed rail. Cities with a population of more than 200,000 people will achieve railway coverage, and cities with a population of more than 500,000 people will have high-speed rail access. The smart high-speed railway will be completed first, and the realization of smart railway will be accelerated. The national 1, 2, 3 hour high-speed rail travel circle and the national 1, 2, 3 day fast cargo logistics circle will be fully formed. At the second stage, by 2050, a great country with higher-level modern railway will be built completely to fully serve and secure the construction of a great modern socialist country. As at 30 June 2020, there was an aggregate of 41 cities in mainland China (excluding Hong Kong, Macau and Taiwan) commencing the urban rail transit operation lines with a distance of 6,917.62 km, among which, in the first half of 2020, there was a total of newly added highway mileage of

181.42 km and the highway mileage newly approved to be planned, constructed and adjusted of 272.54 km. Proposals for regional development strategies such as the Beijing-Tianjin-Hebei coordinated development, the integrated development of the Yangtze River Delta, and the Guangdong-HongKong-Macao Greater Bay Area development are expected to vigorously promote the construction of rail transit in urban agglomerations and metropolitan areas. As an important part of high-end equipment manufacturing, rolling stock equipment is one of the strategic emerging industries that the country encourages to be the focus of development, and will continue to be in a period of great development opportunities.

As the world's leading rolling stock supplier with large scale, diverse products and first-class technology, CRRC has consecutively ranked first in the world in terms of sales volume of rolling stock equipment for years. CRRC actively implemented the strategy of strong transportation country, actively adapted to the ever- changing market environment, captured market opportunities, and accelerated structural reform, as well as transformation and upgrades. CRRC made well-targeted efforts in market expansion, international operation, technical innovation and synergic development, etc., further consolidating its position in the rolling stock equipment industry.

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Significant Changes of the Company's Major Assets During the Reporting Period

For details, please refer to the section headed "Report of Directors-B. Discussion and Analysis of the Board on the Operation of the Company during the Reporting Period-I. Discussion and Analysis of Operation - (III) Analysis of assets and liabilities".

Analysis of the Core Competitiveness During the Reporting Period

Great concern and importance are attached to the rolling stock equipment industry by the leaders of the CPC and the state, and high- speed train has become a golden business card in the "going global" of high-end equipment of our country. With the strategic objective of "two builds, one develop (雙打造一培育)", CRRC fully grasped opportunities and new challenges, adhered to innovation-driven operation, strengthened its transformation and upgraded and enhanced its operational management. In 2019, CRRC's brand value exceeded RMB100 billion, and it ranked first in the annual top ten model brands at the "2019 Chinese Brand Great China Ceremony".

REPORT OF DIRECTORS

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REPORT OF DIRECTORS

Adhering to innovation-driven development and further improving innovation ability. CRRC regards innovation as the prime motivation for the Company's high-quality development, and adheres to the technological innovation approach of "setting clear ambition to persistently forge ahead, consolidating fundamentals to foster our spirit", and continuously improves its independent innovation capabilities. The Company continued to carry out the reformation of the scientific and technological system, optimized the top-level design, reformed the management of project establishment, organized the key projects and projects of strengthening the weak areas, improved the construction of the "CRRC Q" quality system and quality control, and the innovation ability was steadily improved. The Company improved the construction process of technological innovation system and promoted key work such as strengthening the product research and development system of subsidiaries having research advantages, strengthening the technical research system led by the CRRC Industrial Institute and the National High-Speed Train Technological Innovation Center, improving the evaluation system for technological innovation, gradually establishing a technology evaluation and trading platform, improving the technological supporting service platform and stimulating innovation factors. The technological innovation ability and effectiveness of innovation of the Company have been steadily improved.
Adhering to coordinated development and optimizing the allocation of resources. In accordance with the core business, pillar business, supporting business, platform business and nurturing business, the Group optimized its business layout and resource allocation, accelerated structural adjustment, promoted internal professional reorganization, accelerated the integration of manufacturing and refurbishment for locomotives and the reorganization of freight wagon business, carried out the integration of urban rail transit vehicle business with mechanical and electrical business, established a number of rolling stock equipment technology platforms and production platforms at an international advanced level, developed and improved a complete nationwide industrial chain and production system with the main machinery companies as its core and supporting companies as its backbone. The Group strengthened its overseas resource allocation: 17 overseas research and development centers located in Europe, the Americas and South Africa made great progress with increasing international cooperation. The development plan for the connection with countries of target markets has been moved forward, new breakthroughs have been made in the local manufacturing in overseas production bases. Resources were gathered to nurture and establish pillar business and supporting businesses, and made further room for development. The wind power equipment has mature and complete industrial chain and there has been continuing new breakthroughs in wind turbines, and its wind power blade stably ranked among top three in the country in terms of market share; the polymer composites business has established its leadership in the industry with advanced technology; there were continuing breakthroughs in its core technology for sewage treatment equipment in urban and rural areas with a stable growth in its general contracting of sewage treatment.

REPORT OF DIRECTORS

3. Adhering to sharing development and continually enhancing international competitiveness. Seizing the opportunities arising from the "Belt and Road Initiative" and "going global" strategies, the Company has made efforts to implement its international operation strategy. All kinds of railway transportation equipment have been exported to 107 countries and regions across the world. With the expansion in its export product portfolio of "product + technology + service", overseas business model was changed from single product to a multiple export portfolio of "product, capital, technology, management and service". The Company changed its concept from product "going global" to capacity "going inside" and brand "going high-end". The Company actively carried out its strategic cooperation and developed third-party market cooperation to form synergy effect of brand cooperation. With its "go abroad jointly" initiative, the Company promoted the design, manufacture and after-sales maintenance of high-speed rail vehicles in Jarkata-Bandunghigh-speed rail in Indonesia with high standards, and promoted the golden business card of high-speed train. CRRC's global influence and international recognition have been increased significantly.

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REPORT OF DIRECTORS

DISCUSSION AND ANALYSIS OF THE BOARD ON OPERATION OF THE COMPANY DURING THE REPORTING PERIOD

Discussion and Analysis of Operation

In the first half of 2020, the Company achieved revenue of RMB89,403 million, representing a year-on-year decrease of 7.01%; net profit attributable to shareholders of the Company was RMB3,693 million, representing a year-on-year decrease of 22.76%.

Analysis of main business
1. Analysis table of changes in relevant items of the financial statements

		Unit: '000	Currency: RMB
		Amounts for

		the same
	Amounts for	period of the	Percentage
Item	the period	previous year	change (%)
Revenue	89,403,326	96,147,021	-7.01
Operating costs	70,373,477	74,544,370	-5.60
Selling expenses	2,796,099	3,016,082	-7.29
Administrative expenses	5,380,319	5,990,813	-10.19
Financial expenses	486,350	313,346	55.21
R&D expenses	4,422,787	4,388,411	0.78
Net cash flow used in operating activities	-14,785,418	-13,390,166	-
Net cash flow used in investment activities	-17,099,953	-6,426,932	-
Net cash flow from financing activities	21,942,348	9,641,238	127.59

Analysis of revenue and cost
Revenue decreased by 7.01% as compared to the same period of the previous year, mainly due to the decrease in the revenue from railway equipment.
Operating costs decreased by 5.60% as compared to the same period of the previous year, mainly due to the decrease in revenue. Due to the difference in product structure, the decrease in operating costs was slightly less than the decrease in revenue.

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Main businesses by industry, by products and by regions
Main businesses by industry
						Unit: '000	Currency: RMB
						Increase/
					Increase/	decrease in	Increase/
				decrease in	operating	decrease
				revenue from	costs from	in gross profit
					the same	the same	margin from
			Gross profit		period of	period of	the same
		Operating	margin	the previous	the previous	period of
By industry	Revenue	costs	(%)		year (%)	year (%)	the previous year
Rail transportation products
89,403,326	70,373,477	21.29	-7.01	-5.60	Decreased by 1.18 ppt
and their extended industries
Main businesses by products
						Unit: '000	Currency: RMB
						Increase/
					Increase/	decrease in	Increase/
				decrease in	operating	decrease
				revenue from	costs from	in gross profit
					the same	the same	margin from
					period of	period of	the same
		Operating	Gross profit	the previous	the previous	period of
By products	Revenue	costs	margin (%)		year (%)	year (%)	the previous year

Railway equipment	40,124,785	30,514,187	23.95	-25.53	-25.62	Increased by 0.09 ppt
Urban rail transit vehicles	21,252,247	17,312,635	18.54	19.26	16.69	Increased by 1.79 ppt
and urban infrastructure
New businesses	25,068,891	20,421,818	18.54	20.03	28.79	Decreased by 5.53 ppt
Modern service	2,957,403	2,124,837	28.15	-16.93	-24.82	Increased by 7.54 ppt
Total	89,403,326	70,373,477	21.29	-7.01	-5.60	Decreased by 1.18 ppt
Main businesses by regions
						Unit: '000	Currency: RMB
							Increase/
							decrease in
							revenue as
						compared to the
							same period
							of the previous
By regions						Revenue	year (%)

Mainland China				83,057,500	-4.49
Other countries or regions			6,345,826	-30.88

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REPORT OF DIRECTORS

Explanation of main businesses by industry, by products and by regions

Revenue from the railway equipment business decreased by 25.53% as compared to the same period of the previous year, mainly due to the decrease in sales of major products such as locomotives, passenger carriages, MUs and freight wagons. Operating costs decreased by 25.62% as compared to the same period of the previous year, mainly due to the decrease in revenue.

Revenue from urban rail transit vehicles and urban infrastructure increased by 19.26% as compared to the same period of the previous year, mainly due to the increase in the revenue from urban rail transit vehicles and station equipment and facilities of urban rail transit vehicles projects. Operating costs increased by 16.69% as compared to the same period of the previous year, mainly due to the increase in operating costs being slightly lower than the increase in revenue arising from the relatively significant increase in urban rail transit vehicles.

Revenue from the new industry business increased by 20.03% as compared to the same period of the previous year, mainly due to the increase in revenue from wind power business. Operating costs increased by 28.79% as compared to the same period of the previous year, mainly due to increase in business with lower gross margin.

Revenue from the modern service business decreased by 16.93% as compared to the same period of the previous year, mainly due to the reduction of size of trade business during the current period. Operating costs decreased by 24.82% as compared to the same period of the previous year, mainly due to the decrease in revenue.

Revenue of the Company decreased by 7.01% as compared to the same period of the previous year, and revenue from railway equipment business, urban rail transit vehicles and urban infrastructure business, new industry business and modern service business accounted for 44.88%, 23.77%, 28.04% and 3.31%, respectively, of total revenue. In particular, revenue generated by the locomotive business of the railway equipment business was RMB4.636 billion; revenue generated by the passenger carriage business was RMB2.371 billion; revenue generated by the MUs business was RMB27.819 billion; revenue generated by the freight wagon business was RMB5.299 billion. Revenue generated by the urban rail subways of the urban rail transit vehicles and urban infrastructure business was RMB19.429 billion. During the reporting period, the Company entered into new contracts in the value of RMB102.3 billion, including new overseas contracts in the value of RMB10.4 billion.

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REPORT OF DIRECTORS

(2)	Analysis of cost
						Unit:'000	Currency: RMB
				Cost of main businesses by industry
							Proportion
							of change
							of amount for
							the current
							period as
						Proportion in	compared to
					Amount for	total cost for	amount for
				Proportion in	the same	the same	the same
			Amount for	total cost for	period of	period of the	period of the
			the current	the current	the previous	previous year	previous year
	By industry	period	period (%)	year	(%)	(%)
	Rail transportation products

	and their extended industries	70,373,477	100.00	74,544,370	100.00	-5.60
				Cost of main businesses by item
							Proportion
							of change
							of amount for
							the current
							period as
						Proportion in	compared to
					Amount for	total cost for	amount for
				Proportion in	the same	the same	the same
			Amount for	total cost for	period of	period of the	period of the
			the current	the current	the previous	previous year	previous year
	By item	period	period (%)	year	(%)	(%)

	Direct materials	59,370,185	84.36	62,778,748	84.22	-5.43
	Direct labour costs	3,848,770	5.47	4,292,059	5.76	-10.33
	Manufacturing costs	4,532,704	6.44	4,795,115	6.43	-5.47
	Others	2,621,818	3.73	2,678,448	3.59	-2.11

	Total	70,373,477	100.00	74,544,370	100.00	-5.60

Information on major customers and major suppliers
Sales to five largest customers amounted to RMB46,349 million, representing 51.84% of total sales for the period, of which sales to related parties were RMB0, representing 0% of total sales for the period.
Procurement from five largest suppliers amounted to RMB4,936 million, representing 6.91% of total procurement for the period, of which procurement from related parties was RMB0, representing 0% of total procurement for the period.
The relatively high customers concentration is primarily attributable to State Railway Group (including the railway bureaus and companies subordinate to it) being the largest customer of the Company, which accounted for 41.55% of the total sales of the Company for the period.

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REPORT OF DIRECTORS

1. Expenses
  Selling expenses decreased by approximately 7.29% as compared to the same period of the previous year, mainly due to the decrease in transportation expenses and travel expenses during the period.
  Administrative expenses decreased by approximately 10.19% as compared to the same period of the previous year, mainly due to the significant decrease in employee remuneration of the management during the period.
  Financial expenses increased by 55.21% as compared to the same period of the previous year, mainly due to the fluctuation of exchange rates and increase in exchange losses.
2. Research and development expenses
  Research and development expenses were RMB4,503 million in total for the period, representing an increase of approximately 0.24% as compared to the same period of the previous year, which basically remained at the same level.
3. Cash flows
  Net cash flow from operating activities was a net outflow of RMB14,785 million, representing an increase of RMB1,395 million over the same period of the previous year, mainly due to the year- on-year increase in cash payment for purchase of goods and receipt of services in the reporting period.
  Net cash flow from investing activities was a net outflow of RMB17,100 million, representing an increase of RMB10,673 million over the same period of the previous year, mainly due to the year- on-year increase in cash paid for investment in the reporting period.
  Net cash flow from financing activities was a net inflow of RMB21,942 million, representing an increase of RMB12,301 million over the same period of the previous year, mainly due to the year- on-year decrease in cash paid for repayment of debts in the reporting period.
2. Others
During the reporting period, there was no material change in composition and sources of the Company's profit.
Explanation of significant changes in profit resulting from non-principal business
During the reporting period, the Company had no significant changes in profit resulting from any non-principal business.

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REPORT OF DIRECTORS

(III) Analysis of assets and liabilities
1.	Assets and liabilities
					Unit: '000	Currency: RMB
			Amount at			Amount at
			the end of		Amount at	the end of
			the period		the end of	the period
			as a		last year as a	compared
		Amount	percentage	Amount at	percentage	to amount
		at the end	of total	the end of	of total	at the end of
	Item	of the period	assets (%)	last year	assets (%)	last year (%)

	Lending funds	-	-	139,524	0.04	-100.00
	Bills receivable	9,507,108	2.26	14,245,965	3.71	-33.26
	Accounts receivable	82,778,274	19.64	59,712,424	15.57	38.63
	Receivables financing	6,453,365	1.53	13,085,613	3.41	-50.68
	Contract assets	22,175,924	5.26	16,364,966	4.27	35.51
	Goodwill	313,850	0.07	462,158	0.12	-32.09
	Short-term borrowings	15,205,458	3.61	10,530,416	2.75	44.40
	Borrowings from central bank	-	-	222,317	0.06	-100.00
	Deposits from customers and interbank	2,793,359	0.66	5,577,269	1.45	-49.92
	Taxes payable	1,502,483	0.36	2,554,947	0.67	-41.19
	Other payables	14,670,181	3.48	9,176,397	2.39	59.87
	Non-current liabilities due within one year	6,777,820	1.61	3,778,474	0.99	79.38
	Other current liabilities	19,203,226	4.56	4,015,089	1.05	378.28
	Long-term borrowings	3,427,606	0.81	2,589,644	0.68	32.36
	Bonds payable	3,089,720	0.73	4,534,817	1.18	-31.87

Other explanation

The balance of lending funds was RMB0, mainly due to collection of all such lending funds by the Finance Company owned by the Company during the period.

Bills receivable decreased by 33.26%, mainly due to decrease in bills received by the Company during the period.

Accounts receivable increased by 38.63%, mainly due to concentrated delivery of products by the Company at the end of the period.

Receivables financing decreased by 50.68%, mainly due to the decrease in bills measured at fair value received during the period.

Contract assets increased by 35.51%, mainly due to concentrated delivery of products at the end of the period and payment conditions agreed in the contract not yet met.

Goodwill decreased by 32.09%, mainly due to impairment of goodwill of overseas subsidiaries during the period.

Short-term borrowings increased by 44.40%, mainly due to the increase in bank borrowings by the Company to meet its daily operation and production needs during the period.

Borrowings from central bank was RMB0, mainly due to the repayment of borrowing from central bank was made by the Finance Company owned by the Company during the period.

CRRC CORPORATION LIMITED	23
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REPORT OF DIRECTORS

Deposits from customers and interbank decreased by 49.92%, mainly due to the decrease in deposits taken by the Finance Company owned by the Company during the period.

Taxes payable decreased by 41.19%, mainly due to the payment of various taxes by the Company during the period.

Other payables increased by 59.87%, mainly due to the dividend declared has not been paid during the period.

Non-current liabilities due within one year increased by 79.38%, mainly due to the increase in reclassified bonds payable due within one year during the period.

Other current liabilities increased by 378.28%, mainly due to the increase in super short-term financing bills of the Company during the period.

Long-term borrowings increased by 32.36%, mainly due to the increase in long-term bank borrowings by the Company during the period.

Bonds payable decreased by 31.87%, mainly due to the reclassification of certain bonds into bonds payable due within one year.

2. Material assets subject to restriction as of the end of the reporting period

For details, please refer to "70. Assets with restrictive ownership title or right of use" under "V. Notes of Consolidated Financial Statements" to the financial statements of this report.

(IV) Debt structure, liquidity and cash flow

Capital structure
As at 30 June 2020, the Company's gearing ratio increased from 58.59% at the beginning of the year to 62.34%.
Significant capital expenditure and capital commitments
1. Significant capital expenditure
  From January to June 2020, the Company's significant capital expenditure are set out in the following table:

	January-June
Item	2020
	(RMB'000)
Fixed assets	454,926
Construction in progress	1,885,467
Intangible assets	1,066,215
Development expenses	4,502,573
Total	7,909,181

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REPORT OF DIRECTORS

Capital commitments
As at 30 June 2020, the Company had capital commitments of RMB3,235 million contracted for but not yet incurred, which would be used mainly for property, plant, equipment and land lease prepayment.

	Unit: '000	Currency: RMB
		31 December
	30 June
Item	2020		2019
Construction in progress, fixed assets and land use rights	3,224,666		3,047,826
Other intangible assets	10,032		14,237
Investment commitment	-		64,367
Total	3,234,698		3,126,430

Particulars of contingent liabilities of the Company
Save as the guarantees provided by the Company as stated in the section headed "Significant Events" of this interim report, the Company had no other significant contingent liabilities.
Particulars of pledged assets of the Company
As at the end of the reporting period, the Company had the following assets (with a total book value of RMB804 million) pledged to obtain bank loans and other bank credits: bills receivables of RMB22 million, trade receivables of RMB53 million, long-term receivables of RMB532 million, fixed assets and intangible assets of RMB197 million.
Borrowings, corporate bonds and notes
As at 30 June 2020, the Group had total borrowings, bonds and notes of approximately RMB41,205 million, as compared to the total amount of approximately RMB19,135 million as at 31 December 2019.
As at 30 June 2020, out of the total borrowings, bonds and notes of the Group, RMB33,570 million was denominated in Renminbi, RMB5,558 million was denominated in USD, and RMB1,242 million was denominated in Euro.
The Group's long-terminterest-bearing borrowings, bonds and notes and short-term borrowings, bonds and notes as at 30 June 2020 were RMB6,517 million and RMB34,688 million, respectively.
As at 30 June 2020, the total bank and other borrowings of the Group with floating interest rates amounted to RMB9,030 million, as compared to RMB5,535 million as at 31 December 2019.

CRRC CORPORATION LIMITED	25
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REPORT OF DIRECTORS

The following table sets out the maturity status of borrowings, bonds, and notes payables of the Group as at 31 December 2019 and 30 June 2020:

	30 June	31 December
	2020	2019
	Amount	Amount
	(RMB thousand)	(RMB thousand)
Within one year (starting date and ending date inclusive)	34,687,922	12,010,821
One to two years	1,632,816	5,032,596
Two to five years	3,761,970	1,790,992
Over five years	1,122,540	300,873
Total	41,205,248	19,135,282

As at 30 June 2020, the total borrowings, bonds and notes of the Group amounted to approximately RMB41,205 million, representing an increase of 115% from RMB19,135 million as at 31 December 2019, mainly due to the increase in super short-term financing bills of RMB15,000 million and increase in short-term borrowings of RMB4,675 million.

1. Cash flow
  As at 30 June 2020, the cash and cash equivalents owned by the Group amounted to approximately RMB25,594 million, of which RMB21,673 million was denominated in RMB; RMB1,141 million was denominated in USD; and RMB1,153 million was denominated in Euro.
Analysis of investment
1. General analysis of external equity investment
  As at the end of the reporting period, the Company's long-term equity investment was RMB15,707 million, representing an increase of RMB136 million or 0.87% as compared to the beginning of the period. For details, please refer to Note V.16 Long-term equity investments to the financial statements.
2. 1. Significant equity investment
    The Company had no significant equity investment during the reporting period.
  2. Significant non-equity investment
    The Company had no significant non-equity investment during the reporting period.

26	CRRC CORPORATION LIMITED
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REPORT OF DIRECTORS

Financial assets measured at fair value

					Unit:'000 Currency: RMB
						Other
						changes
			Gains/losses	Aggregate	Provision for	(increase/
			from changes	changes in	impairment	decrease)
			in fair value	fair value	loss during	during the
		Opening	during the	included in	the current	current	Closing
	Item	balance	current period	equity	period	period	balance

	1. Held-for-trading financial assets	9,180,616	53,283	-	-	673,624	9,907,523
	Including: derivative financial assets	2,550	-150	-	-	-	2,400
	Including: bank financial products	8,003,841	8,670	-	-	601,545	8,614,056
	Including: equity instrument investment	1,174,225	44,763	-	-	72,079	1,291,067
	2. Other equity instrument investment	2,654,602	-	54,790	-	-43,895	2,665,497
	Including: listed equity instrument
	investment	1,398,150	-	63,875	-	-189,145	1,272,880
	Including: non-listed equity
	instrument investment	1,256,452	-	-9,085	-	145,250	1,392,617
	3. Receivables financing	13,085,613	-	40,487	-605	-6,672,130	6,453,365
	Including: accounts receivable	1,590,906	-	-6,337	-605	-456,737	1,127,227
	Including: bills receivable	11,494,707	-	46,824	-	-6,215,393	5,326,138

	4. Other non-current financial instruments	616,855	3,569	-	-	8,663	629,087
	Including: preference share
	and perpetual bond	616,855	3,569	-	-	8,663	629,087

	Subtotal of financial assets	25,537,686	56,852	95,277	-605	-6,033,738	19,655,472

(VI)	Material disposal of assets and equity interests

There were no material assets and equity disposals during the reporting period.

CRRC CORPORATION LIMITED	27
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REPORT OF DIRECTORS

(VII) Analysis of major companies controlled or invested in by the Company
							Unit:'000 Currency: RMB
							Net profit
						Net assets at	from
						the end of	January to
						the period	June 2020
						attributable	attributable
						to the	to the		Operating
					Total assets	shareholders	shareholders	Revenue	profit from
	Product and scope	Registered	at the end of	of the	of the	from January	January to
Company name	of main business			capital	the period	Company	Company	to June 2020	June 2020

CRRC Sifang	R&D and manufacturing of railway MUs,	4,071,272	65,573,140	16,237,370	1,252,520	19,492,427	1,454,713
	passenger carriages and urban rail transit
	vehicles; and repair services for railway
	MUs and high-end passenger carriages,
	etc.
CRRC Changchun	Design, manufacturing, repair, sale and	5,807,947	63,945,138	19,731,360	952,080	13,220,979	1,077,266
	lease of railway passenger carriages,
	MUs, urban rail transit vehicles and
	the accessories thereof, as well as
	related technical services and technical
	consultancy, etc.
CRRC Tangshan	Manufacturing of railway transportation	3,990,000	26,986,554	11,731,855	453,475	6,029,014	530,691
	equipment; sale and lease of railway
	vehicles, electric MUs, diesel MUs, maglev
	trains, special vehicles, test vehicles,
	urban rail transit vehicles and accessories
	thereof; and technical consulting services,
	etc.
CRRC ZELRI	Research and manufacturing on electric	8,446,840	65,054,083	18,045,119	174,555	13,424,839	719,155
	drive and control technologies related
	to rail transit and relevant electrical
	equipment; and research and development
	and manufacturing of railway locomotives
	and accessories thereof, etc.
CRRC Zhuzhou	Research and	development and	4,868,336	33,211,315	9,108,426	30,937	7,491,550	103,739
	manufacturing	of railway electric

locomotives, MUs and urban rail transit vehicles, etc.

28	CRRC CORPORATION LIMITED
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REPORT OF DIRECTORS

(VIII) Structured entities controlled by the Company

There were no structured entities under the control of the Company during the reporting period.

(IX) Use of proceeds from issuance of H shares

As approved by the "Reply in relation to the Approval of China CNR Corporation Limited to Issue Overseas Listed Foreign Shares" (CSRC Permit No. [2014] 404) issued by CSRC 《( 關於核准中國北車股份有限公司發行境外上市外資股的批復》（證監許可[2014]404號）), CNR issued through its public offering 1,939,724,000 (including over-allotment) overseas listed foreign shares (H shares) in May 2014 and the proceeds raised totaled HKD10.028 billion. As at 30 June 2020, the proceeds of H shares used by the Company in aggregate were approximately HKD10.060 billion, the actual use is as follows: to increase capital contribution of approximately HKD6.640 billion into subsidiaries, to replenish its working capital and repay bank loans of approximately HKD3.157 billion, to finance the product research and development expense of approximately HKD60 million and to pay issuance costs of approximately HKD203 million, which are in line with the use of proceeds disclosed previously. As at 30 June 2020, interest of bank deposits received for the proceeds from issuance of H shares amounted to HKD115 million in total and the proceeds not yet used by the Company raised through issuance of H shares, plus interests thereon accrued, amounted to HKD83 million. It is expected that the proceeds of HKD83 million will be used to finance the product research and development expense and replenish the working capital by 2021, which is in line with the use of proceeds as disclosed previously.

On 5 February 2016, the Company issued H Share convertible bonds in an aggregate amount of US$600 million. The net proceeds of such issuance were approximately US$595.80 million. On 5 February 2019, the holders of H Share convertible bonds redeemed the convertible bonds with an aggregate principal amount of US$240 million pursuant to the terms and conditions of the convertible bonds. As at 30 June 2020, the net proceeds amounted to US$355.80 million. As at 30 June 2020, the Company used approximately US$355.80 million of such proceeds for the following purposes: (1) approximately US$92.62 million for the repayment of bank loans, (2) approximately US$56.00 million for equity investment, and (3) approximately US$207.18 million for the business operation needs of CRRC Hong Kong Capital Management Co., Ltd., a wholly-owned subsidiary of the Company, which was in line with the use of proceeds disclosed previously. As at 30 June 2020, the Company received a deposit interest of approximately US$12.62 million in respect of the proceeds from the issuance of the H Share convertible bonds, all of which are used for the business operation needs of CRRC Hong Kong Capital Management Co., Ltd., a wholly-owned subsidiary of the Company. All of the proceeds have been used up. Please refer to the section headed "Significant Events - IX. Information on the Convertible Corporate Bonds" in this report for details of the Company's H Share convertible bonds.

CRRC CORPORATION LIMITED	29
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REPORT OF DIRECTORS

Other Events

Potential risks

1. Operating environment risks

Currently, the domestic railway transportation reform continues to deepen. The reform of the corporate system of the State Railway Group and other railway bureaus has been completed. The structural changes in customer demand for railway equipment have been accelerated, and the scope and proportion of autonomous maintenance of railway equipment have continued to expand. With the gradual refinement of the division of labor in society and the continuous improvement of the technical standards of rail transit equipment, user demands are changing from a single rolling stock to the integration of full-cycle services; the bidding method has gradually changed from a single rolling stock procurement to a general contracting and PPP model, and the value structure of the rail transportation industry chain has changed: new materials, new technologies and new processes are used for rail transportation equipment, and there is even more urgent need for development in the direction of systematic, light weight, high-speed reloading and green intelligence. These changes may lead to a lot of uncertainties in the market environment and room for development, which will bring risks to the Company's strategic and operational goals.

Response measures: Timely collect information of industrial policy or industrial planning which is in relation to the Company's operation; conduct proper studies on policy and trend and positively deal with possible changes in policies and industrial planning; strengthen internal management; improve operation and management standards of the Company; reduce operating costs; endeavour to improve operational efficiency and enhance ability to mitigate policy risks.

2. Market risks

At present, the domestic rail transit equipment market, and mainline railway construction and operation rights have been fully liberalized. The willingness for society to invest in the rail transit equipment sector has increased significantly. State-owned, private, and foreign-funded enterprises have entered the rail transportation field one after another, cross-border competition has become the norm, and competition within the industry has become more intense. The rapid development of new technologies and new business forms, railway passenger and freight transportation is constantly optimized in terms of the market awareness, service awareness and innovation awareness, and market demand may undergo structural adjustment. The global railway transportation industry is undergoing deep integration, the industry giants are accelerating their reshuffle and frequently conducting reorganization and integration, the market competition is intensifying. The international trade protectionism is rising and international competition within the industry has intensified, with increasing uncertainties and uncontrollable factors in the international market. Factors such as trade friction between China and the US and long-arm jurisdiction may lead to increasing costs of the Company and make it more difficult to obtain orders, even increasing the risks targeted to the Company, and the Company's "internationalization" strategy will face more challenges. At the same time, the novel coronavirus disease may have certain impact on the Company's production organization, parts and materials supply, and market demand fluctuations may have certain impact on the Company's order acquisition and product delivery cycle.

Response measures: Proactively communicate with major clients; collect information relating to domestic economy, politics and the industry timely; conduct proper studies of market trends; by adhering to innovation-driven, extending the industrial chain, and providing systematic service solutions, optimize the industrial structure of the Company and expand new business models. Make good planning of the top-level design, strengthen the research and practice of worldwide corporate governance structure, multinational management control models and improve management of cross-border operation; establish business platform, continue to implement the "five-locals model", accelerate the five-in-one international operation, rely on core export companies and platform companies, fully increase the breadth and depth of overseas market development, and improve the global industrial network; strengthen organizational mobilization, commission our emergency response plans, invest in resources to fully respond to the pandemic, perform well in communicating with upstream and downstream customers, so as to reduce the adverse impact on the Company's operations.

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3. Product quality risks

In the railway market, a "trinity" safety guarantee mechanism covering related personnel, materials and technologies has been earnestly constructed by major clients to ensure railway safety, thus posing higher standards for the safety and reliability of rail transportation product quality and posed more challenges for the Company's constantly improving product lineage and continuous deepening of technological innovation.

Response measures: Formulate plans and carry out top-level design of technological innovation; adhere to leading technology to ensure the safety of industrial development; persist in quality first, continue to consolidate the management foundation, strengthen source control and after-sales service, and ensure the safety and stable operation of railway equipment.

4 Exchange rate risks

With the accelerated pace of internationalization of the Company, product exports, overseas investments, mergers and acquisitions and other activities will further increase, which may trigger various risks due to exchange rate fluctuations. For example, in light of fluctuating international financial environment, the movement of exchange rate is difficult to predict, and the Company may suffer exchange losses; and since some overseas product items are settled in non-major currencies, and it is difficult to naturally hedge against exchange risks; uncertain foreign exchange collection time makes it more difficult in the adoption of hedging.

Response measures: The Company will closely monitor the exchange rate movement, strengthen the awareness of relevant personnel of risk prevention, establish an exchange rate risk prevention mechanism, make transactions in different currencies, etc., and financial hedging instruments will be used to deal with exchange rate risks.

5. Industrial structure adjustment risks

Due to historical reasons, some segments sectors in the rail transportation business of the Company have overcapacity problems and are facing industrial structure adjustment. A number of factors including connectivity to the industry, industry base, technological conditions and resource sufficiency posed various difficulties and risks for the industrial structure transformation of the Company.

Response measures: The Company has established a special institution to research on the reform plan in the rail transportation sector. According to the principle of adopting different strategies for different sectors and through methods including business restructuring and capacity shrinking, inspire the dynamisms of the Company, gradually build a structure of resource sharing and a win-win mutual development, and continue to optimize the deployment of rail transportation resources, thus achieving the maximization of resource efficiency and serving the best interests of the Company.

CRRC CORPORATION LIMITED	31
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SIGNIFICANT EVENTS

BRIEF INTRODUCTION TO GENERAL MEETINGS

		Query index of the designated
		website where the resolutions	Disclosure date of the
Session of meeting	Convening date	were published	published resolutions

2019 annual general meeting of	18 June 2020	www.sse.com.cn	19 June 2020
CRRC Corporation Limited		www.hkex.com.hk

PROPOSAL FOR PROFIT DISTRIBUTION OR TRANSFER OF CAPITAL RESERVE TO SHARE CAPITAL

The Company does not have any proposal for distribution or transfer of capital reserve to share capital during the reporting period.

III. PERFORMANCE OF UNDERTAKINGS

Undertakings by relevant parties of undertakings, such as actual controller, shareholders, related parties, acquirer and the Company, during or up to the reporting period:

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SIGNIFICANT EVENTS

					Whether	Whethertimely	Ifnotperformed	Ifnotperformed
					duration	andstrictly	timely,describe	timely,describe
Background	Type	Covenantors	Undertakings	Validityperiod	specified	performed	thespecificreasons	plansinnextsteps

Material assets	Resolution of	CRRC	Non-competition undertaking with Times New	Undertakings dated	Yes	Yes	In July 2020, Times New Material and Qingdao Sri	Qingdao Sifang has made a written
reorganization related	same industry		Material: on 5 August 2015, CRRC issued the	5 August 2015,			Technology Co., Ltd. (hereinafter referred to as "Sri	commitment to Times New Material: after
commitment	competitions		Letter of Undertaking of Non-competition with	term is 5 years			Technology"), a wholly-owned subsidiary of Qingdao	the completion of the construction and
			Zhuzhou Times New Material Technology Co., Ltd.	commencing from			Sifang, have been implementing a restructuring plan related	completion inspections of the Intelligent
			《( 關於避免與株洲時代新材料科技股份有限公司	the date of issuance			to competing business. Sri Technology will inject assets,	Manufacturing Project, by 31 December
			同業競爭的承諾函》) in order to resolve the issue	of this letter of			business and staff involved in competition into Times New	2022, it will transfer the Intelligent
			of competition between CRRC and Times New	undertaking			Material.	Manufacturing Project to Qingdao Borui
			Material after the merger between CSR and CNR.					Zhiyuan Damping Technology Co., Ltd.
			The specific undertakings are as follows: the current				The "Application project of intelligent manufacturing new	(青島博銳智遠減振科技有限公司), a
			operations of CRRC in fields such as air springs for				model of high-speed rail oscillating damper products"	subsidiary of Times New Material, in
			rail vehicles and rubber-metal parts for rail vehicles				(hereinafter referred to as the "Intelligent Manufacturing	compliance with the assets evaluation
			compete with the operations of Times New Material,				Project") implemented by Qingdao Sifang falls within the	value confirmed by asset evaluation
			which is indirectly controlled by CRRC. In order to				category of assets of competing business and it is currently	methods approved by the SASAC and
			resolve such competition with Times New Material,				under construction and the construction as well as the	other regulatory authorities by way of
			in accordance with relevant laws and regulations,				completion inspections are expected to be completed	transfer by agreement; at the same time,
			CRRC undertook that it will resolve such issue with				before 31 December 2021. The Intelligent Manufacturing	it will not engage in competing business
			Times New Material within five years from the date of				Project is temporarily not included in the scope of this	through Intelligent Manufacturing Project
			this letter of undertaking in the manner approved by				restructuring plan, mainly due to the fact that the Intelligent	before the transfer.
			the regulatory authorities (including but not limited to				Manufacturing Project is currently under construction.
			asset restructuring, business integration etc.).				A series of equipment procurement and engineering	The Company extended the validity period
							construction contracts were signed for the project by	of the original Letter of Undertaking of
							Qingdao Sifang as the legal entity, and any changes of	Non-competition with Zhuzhou Times
							implementing entities in the process can affect the normality	New Material Technology Co., Ltd. 《( 關
							in the implementation of the project resulting in a delay in	於避免與株洲時代新材料科技股份有限公
							the project construction. In order to ensure the continuity of	司同業競爭的承諾函》) to 31 December
							project construction, to ensure that the project is completed	2022. Except for the change of the term of
							on time with great quality, and achieve the project's	undertakings, other undertakings remain
							expected goals, it is not suitable to change the project	unchanged.
							implementing entities during the project construction period.
							For the above reasons, it is not suitable to inject the assets	The Resolution on Extending Certain Non-
							of the Intelligent Manufacturing Project into Times New	competition Undertakings of the Indirect
							Material before the completion of the construction and the	Controlling Shareholder was also passed
							completion inspections of the Intelligent Manufacturing	at the 2020 first extraordinary general
							Project (i.e. before the aforesaid commitment expiry date of	meeting of Times New Material.
							4 August 2020). In addition, as the Intelligent Manufacturing
							Project will effectively improve production efficiency and
							reduce operating costs after its completion, it will not be
							conducive to the future development of Times New Material
							if the project is terminated or transferred to other parties to
							resolve the same industry competitions.
							In summary, the Company is of the view that under the
							premise of resolving the same industry competitions and
							protecting the interests of Times New Material, the current
							preferred plan is to inject Intelligent Manufacturing Project
							into Times New Material after the completion of construction
							and completion inspections of Intelligent Manufacturing
							Project of Qingdao Sifang.

CRRC CORPORATION LIMITED	33
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SIGNIFICANT EVENTS

					Whether	Whethertimely	Ifnotperformed	Ifnotperformed
					duration	andstrictly	timely,describe	timely,describe
Background	Type	Covenantors	Undertakings	Validityperiod	specified	performed	thespecificreasons	plansinnextsteps

Resolution of	CRRC	Non-competition undertaking with Times Electric:
same industry		on 5 August 2015, CRRC issued the Letter of
competitions		Undertaking of Non-competition with Zhuzhou CSR
		Times Electric Co., Ltd. 《( 關於避免與株洲南車時
		代電氣股份有限公司同業競爭的承諾函》) in order
		to resolve the issue of competition between CRRC
		and Times Electric after the merger between CSR
		and CNR. The specific undertakings are as follows:
		the current operations of CRRC in fields such as
		transmission control systems, network control
		systems, traction power supply system, braking
		system, track construction machinery, electronic
		components and vacuum sanitation system
		compete with the operations of Times Electric,
		which is indirectly controlled by the Company.
		To safeguard the interests of Times Electric in its
		future development, in accordance with relevant
		laws and regulation, CRRC undertook that with
		respect to the operations of CRRC that compete
		with the operations of Times Electric: (1) CRRC
		will grant Times Electric a call option, pursuant to
		which Times Electric will be entitled to elect, at its
		own discretion, when to request CRRC to sell the
		competing businesses of CRRC to Times Electric;
		(2) CRRC will further grant Times Electric a pre-
		emptive right, pursuant to which if CRRC proposes
		to sell the competing business to an independent
		third party, CRRC shall offer to Times Electric the
		competing business first on the same terms and
		conditions, and the sale to an independent third
		party may only be effective after Times Electric
		refuses to purchase the competing business; (3) the
		decision of Times Electric to exercise the aforesaid
		call option and the pre-emptive right shall be made
		by the independent non-executive directors of
		Times Electric; (4) the exercise of the aforesaid
		call option and the pre-emptive right as well as
		other effective methods to resolve this competition
		matter will be subject to the applicable regulatory,
		disclosure requirements and shareholders' approval
		at the general meeting in the places of listing of
		CRRC and Times Electric respectively; and (5) the
		non-competition undertaking will be effective from
		the date of issuance of this letter of undertaking to
		the time when Times Electric is delisted or CRRC
		ceases to be an indirect controlling shareholder of
		Times Electric.

Undertakings dated	No	Yes	－	－
5 August 2015, term
is from the date of
issuance of this letter
of undertaking to
the time when Times
Electric is de-listed or
CRRC ceases to be
an indirect controlling
shareholder of Times
Electric

34	CRRC CORPORATION LIMITED
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SIGNIFICANT EVENTS

							If not
					Whether	Whether	performed timely,	If not performed
					duration	timely and	describe the	timely, describe
Background	Type	Covenantors	Undertakings	Validity period	specified	strictly performed	specific reasons	plans in next steps

Resolution of same	CRRCG	Non-competition undertaking with CRRC: CNRG issued the
industry competitions		Letter of Undertaking of Non-competition with CRRC Corporation
		Limited 《( 關於避免與中國中車股份有限公司同業競爭的承諾
		函》) on 5 August 2015 in order to avoid competition between
		CNRG (has completed restructuring and renamed as CRRCG)
		and CRRC after completion of merger of CNRG with CSRG.
		Pursuant to the Letter of Undertaking: (1) CRRCG undertook that
		CRRCG itself will not engage, and will, through legal procedures,
		procure its wholly-owned and non-wholly owned subsidiaries
		to not engage in any businesses which might directly compete
		with the current operating businesses of CRRC; (2) subject to
		the aforesaid undertaking (1), if CRRCG (including its wholly-
		owned subsidiaries and non-wholly owned subsidiaries or other
		related entities) provide any products or services that might be
		in competition with the principal products or services of CRRC
		in the future, CRRCG will agree to grant CRRC pre-emptive
		right to acquire the assets or its entire equity interests in such
		subsidiaries related to such products or services from CRRCG;
		(3) subject to the aforesaid undertaking (1), CRRCG may develop
		advanced and lucrative projects in the future which fall within the
		business scope of CRRC, but it should preferentially transfer any
		achievement on such projects to CRRC for its own operation
		on equal terms of transfer; and (4) CRRCG should compensate
		CRRC for its actual losses arising from any failure to comply with
		the aforesaid undertakings.

Undertakings dated 5	No	Yes	－	－
August 2015, during the
course of performance

Others	CRRCG	Undertaking to maintain the independence of CRRC: CNRG
		issued the Letter of Undertaking to Maintain the Independence
		of CRRC Corporation Limited 《( 關於保持中國中車股份有限
		公司獨立性的承諾函》) on 5 August 2015 in order to ensure
		that CNRG (has completed restructuring and renamed as
		CRRCG) will not interfere with the independence of CRRC after
		completion of the merger of CNRG with CSRG. Pursuant to the
		Letter of Undertaking: CRRCG undertook to be separate from
		CRRC in respect of areas such as assets, personnel, finance,
		organization and business and will, in strict compliance with the
		relevant requirements on the independence of a listed company
		imposed by the CSRC, not to use its position as the controlling
		shareholder to violate the standardized operation procedures
		of a listed company to intervene in the operating decisions of
		CRRC and to damage the legitimate interests of CRRC and other
		shareholders. CRRCG and other companies under its control
		undertook not to, by any means, use the funds of CRRC and
		companies under its control.

Undertakings dated 5	No	Yes	－	－
August 2015, during the
course of performance

CRRC CORPORATION LIMITED	35
lnterim Report 2020

SIGNIFICANT EVENTS

							If not
					Whether	Whether	performed timely,	If not performed
					duration	timely and	describe the	timely, describe
Background	Type	Covenantors	Undertakings	Validity period	specified	strictly performed specific reasons	plans in next steps

	Resolution of related	CRRCG	Undertaking for regulating related transactions with CRRC: in	Undertakings dated 5	No	Yes	－	－
	transactions		order to regulate related transaction entered into between CNRG	August 2015, during the
			(has completed restructuring and renamed as CRRCG) and	course of performance
			CRRC after the merger between CNRG and CSRG, CNRG issued
			the Letter of Undertaking to Regulate the Related Transactions
			of CRRC Corporation Limited 《( 關於規範與中國中車股份有
			限公司關聯交易的承諾函》) on 5 August 2015, pursuant to
			which CRRCG and other companies controlled by CRRCG will
			endeavor not to enter into or reduce the related transactions
			with CRRC and other companies in which it holds a controlling
			interest. For related transactions that are inevitable or reasonable,
			CRRCG will continue to perform the obligations under the related
			transaction framework agreements entered into between CRRCG
			and CRRC, and will comply with the approval procedures and
			information disclosure obligations in accordance with the relevant
			laws and regulations as well as the provisions under the Articles
			of Association of CRRC. Prices of the related transactions will
			be determined based on prices of the same or comparable
			transactions conducted with other independent third parties.
Undertakings in relation	Others	CRRCG	Undertakings on property ownership issues: CSR (has completed	Undertakings dated 18	No	Yes	－	－
to the initial public			restructuring and renamed as CRRC) disclosed in its prospectus	August 2008, during the
issuance			that CSR has not yet obtained proper property ownership	course of performance
			certificates for 326 properties with a total gross floor area of
			282,019.03 square meters, representing 7.85% of the total gross
			floor area of the property in use of CSR. As for the property
			which CSR has not yet obtained property ownership certificates,

CSRG has made written undertaking which was inherited by CRRCG after the merger. Pursuant to the undertaking: for properties that could not obtain complete property ownership certificates due to reasons such as incomplete procedures in planning and constructions and, which were included in the asset injection to CRRC by CRRCG, CRRCG undertook that such properties satisfy the usage requirements necessary for the production and operations of CRRC. Moreover, if there is any loss incurred to CRRC due to such properties, CRRCG shall assume all compensation liabilities and all economic losses that CRRC incurred.

36	CRRC CORPORATION LIMITED
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SIGNIFICANT EVENTS

								If not
						Whether	Whether	performed timely,	If not performed
						duration	timely and	describe the	timely, describe
Background	Type	Covenantors	Undertakings	Validity period		specified	strictly performed specific reasons	plans in next steps

	Others	CRRCG	Undertakings on the state-owned land use certificate without	Undertakings	dated	No	Yes	－	－
			specifying the land use terms or termination date: CNR (the	10 December	2009,
			relevant matters were inherited by CRRC after the merger)	during the course of
			disclosed in the prospectus that the land use terms or termination	performance
			date were not specified in the state-owned land use certificate
			for part of the authorized lands acquired by CNR. As such,
			CNRG (has completed restructuring and renamed as CRRCG)
			has made a written undertaking. Pursuant to the undertaking:
			CRRCG will compensate the relevant wholly-owned subsidiaries
			of CRRC for the loss caused as a result of the state-owned land
			use certificate not specifying the land use terms or termination
			date for the authorized land.
Undertakings in relation	Others	Directors, Senior	Undertaking to adopt measures of mitigating the potential	Undertakingsdated 27	No	Yes	－	－
to the refinancing		Management of the	dilution of return for the current period: the Directors and	May 2016, during the
		Company	Senior Management of the Company have made the following	course of performance
			undertakings on 27 May 2016: (1) not to transfer interests to
			other entities or individuals without consideration or with unfair
			consideration nor otherwise damage the Company's interests
			in any other ways; (2) to constrain expenses relating to the
			performance of their duties; (3) not to use the Company's assets
			for investments and consumption activities unrelated to the
			performance of their duties; (4) that the remuneration system
			formulated by the Board or the Remuneration and Evaluation
			Committee is in line with implementation of the remedial
			measures for the returns by the Company; (5) that the vesting
			conditions of share incentives to be formulated by the Company
			will be in line with the implementation of the remedial measures
			for returns by the Company if the Company were to make such
			share incentive plans in the future; (6) to perform the remedial
			measures for returns formulated by the Company as well as any
			commitment made by them for such remedial measures. The
			Directors and Senior Management will be liable for indemnifying
			the Company or the investors for their losses in the event of
			failure to perform the commitment.
	Others	CRRCG	Undertaking to adopt measures of mitigating the potential	Undertakingsdated 27	No	Yes	－	－
			dilution of return for the current period: on 27 May 2016, CRRCG	May 2016, during the
			committed not to intervene in the operation and management	course of performance
			activities of the Company or unlawfully infringe upon the
			Company's interests.

CRRC CORPORATION LIMITED	37
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SIGNIFICANT EVENTS

IV. APPOINTMENT AND REMOVAL OF AUDITORS

Pursuant to the relevant requirements issued by the Ministry of Finance and the SASAC, accounting firms that undertake audit of final financial accounts for a central enterprise shall be under consecutive terms of not less than 2 years and not more than 5 years; the audit period for accounting firms that rank among the top 15 of the National Comprehensive Evaluation Ranking of Accounting Firms (全國會計師事務所綜合評價) with excellent audit quality may be extended as appropriate subject to application by relevant enterprises and approval by the SASAC, but the consecutive audit period shall not exceed 8 years. As Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche Tohmatsu have provided audit services for the Company for 6 consecutive years, in order to ensure the independence and objectivity of the audit work of the Company, as well as meet the needs of its business development, the Company proposed to change the accounting firms. Upon approval at the 2019 annual general meeting of the Company convened on 18 June 2020, the Company appointed KPMG Huazhen LLP as the financial report auditors and internal control auditors of the Company for the year 2020.

BANKRUPTCY AND REORGANIZATION

The Company was not involved in any matters related to bankruptcy and reorganization during the reporting period.

VI. MATERIAL LITIGATION AND ARBITRATION

The Company was not involved in any material litigation or arbitration during the reporting period.

VII. SHARE OPTION SCHEME OF THE COMPANY AND ITS IMPACTS

During the reporting period, the Company had no related share option scheme, employee stock ownership scheme and other staff incentives.

VIII. MATERIAL CONTRACTS AND THEIR IMPLEMENTATION

Trusteeship, contracting and leasing matters

During the reporting period, the Company has no related trusteeship, contracting or leasing.

38	CRRC CORPORATION LIMITED
lnterim Report 2020

SIGNIFICANT EVENTS

Guarantees

Unit: '000 Currency: RMB

Guarantees provided by the Company to external parties (excluding guarantees provided by the Company in favour of its subsidiaries)

Relationship

Date of

Whether the

between the

guarantee

Outstanding

guarantee is

guarantor and

(Date of

Whether the

amount of

provided to a

the listed

Guaranteed

signing

Commencement

guarantee has

guarantee is

guarantee

Counter

related party

Guarantor

company

Guaranteed

amount

agreement)

date

Maturity date

Guarantee type

been fulfilled

overdue or no

overdue

guarantee

or not

relationship

CRRC Corporation Limited, Suzhou

CRRC Corporation

Wuhu Yunda

4,613,318

27 April 2017

20 June 2017

20 June 2047

Joint and several

CRRC Construction Engineering

Limited, its wholly-

Rail Transport

liability guarantee

Co., Ltd. (蘇州中車建設工程有限

owned subsidiary

Construction and

公司), a wholly-owned subsidiary

and non-wholly-

Operation Limited

of the Company, and CRRC China

owned subsidiary

(蕪湖市運達軌道交

Merchants (Tianjin) Equity Investment

通建設運營有限公

Fund Management Co., Ltd. (中車招

司)

銀（天津）股權投資基金管理有限公司),

a non-wholly-owned subsidiary of the

Company

Total guarantee amount provided during the reporting period (excluding guarantees provided by the Company in favour of its subsidiaries)

Total guarantee balance at the end of the reporting period (A) (excluding guarantees provided by the Company in favour of its subsidiaries)

4,613,318

Guarantees provided by the Company in favour of its subsidiaries

Total guarantee amount provided to the Company's subsidiaries during the reporting period

7,967,020

Total guarantee balance provided to the Company's subsidiaries at the end of the reporting period (B)

54,077,681

Aggregate guarantee amount provided by the Company (including guarantees provided by the Company in favour of its subsidiaries)

Total guarantee amount (A+B)

58,690,999

Percentage of total guarantee amount to net assets of the Company (%)

43.36

In which:

Provision of guarantee to shareholders, ultimate controller and their respective related parties (C)

Amount of guarantees directly or indirectly provided in favour of parties with gearing ratio over 70% (D)

21,555,741

The total amount of guarantees provided which exceeds 50% of the net asset (E)

Total amount of the three above-stated guarantees (C+D+E)

21,555,741

Explanation on guarantees undue that might be involved in any joint and several liability

Explanation on guarantees

Percentage of total guarantee amount to net assets of the Company=Total guarantee amount/equity attributable to owners of the Company. As at

30 June 2020, total guarantee balance was RMB58.691 billion, representing 43.36% of the Company's net assets. Out of such guarantee balance,

RMB29.760 billion and RMB24.318 billion were provided to the Company's wholly-owned subsidiaries and non-wholly-owned subsidiaries

respectively. Guarantee balance of RMB4.613 billion was provided to Wuhu Yunda Rail Transport Construction and Operation Limited. As far as guarantee type is concerned: RMB2.700 billion was provided for bank acceptance bills, RMB4.481 billion was provided for loans and medium- term notes, and RMB51.510 billion was provided for letters of guarantee, letters of credit and credit facilities, etc. The Company did not provide any guarantees in favour of its controlling shareholders, ultimate controller and their related parties. As at the end of the reporting period, approval procedures have been complied with at the Board meetings and the general meetings as required by the Articles of Associations for all guarantees provided by the Company in favour of its wholly-owned and non-wholly-owned subsidiaries with gearing ratio over 70%.

CRRC CORPORATION LIMITED	39
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SIGNIFICANT EVENTS

(III) Other material contracts

As at the date of this report, the Company signed a number of sales contracts. For details, please refer to announcements dated 16 January 2020, 20 April 2020 and 29 June 2020 published by the Company on the websites of the SSE and the Stock Exchange.

IX. INFORMATION ON THE CONVERTIBLE CORPORATE BONDS

On 5 February 2016, the Company issued H share convertible bonds in an aggregate principal amount of US$600,000,000 (the "Convertible Bonds" or "Bonds"). The Convertible Bonds are due on 5 February 2021 with a par value of US$250,000 each and are issued at 100% of its par value with zero coupon. The initial conversion price of the Convertible Bonds is HK$9.65 per H share, and the current adjusted conversion price as at 30 June 2020 is HK$9.00 per share. Proceeds from the issuance of the Bonds will be used to satisfy the production and international operation needs of the Company, including but not limited to adjusting its debt structure, increasing the capital contribution to its subsidiaries, replenishing working capital and project investments etc., and may be utilized at the sole discretion of the Company both inside and outside of the PRC according to actual circumstances. For details of the actual use of proceeds from the Convertible Bonds, please refer to the section headed "Report of Directors - B. Discussion and Analysis of the Board on the Operation of the Company during the Reporting Period - I. Discussion and Analysis of Operation - (IX) Use of proceeds from issuance of H shares" of this report.

On 5 February 2019, as required by the bondholders, the Company redeemed the Convertible Bonds with an aggregate principal amount of US$240,000,000 pursuant to the terms and conditions of the Convertible Bonds. Upon the completion of abovementioned redemption, the H Share Convertible Bonds of an aggregate principal amount of US$360,000,000 remained outstanding, representing 60% of the total principal amount of the Bonds originally issued. According to the adjusted conversion price of HK$9.00 per H share as at 30 June 2020, the maximum number of H Shares that the Company can issue will be 311,608,000 H Shares if the Bonds are fully converted. The Company distributed a cash dividend of RMB0.15 per share (tax inclusive) to all shareholders pursuant to the 2019 profit distribution plan considered and approved at the general meeting held on 18 June 2020. The conversion price of the Convertible Bonds was adjusted to HK$8.77 per H share from HK$9.00 per H share pursuant to the terms and conditions of the Bonds with effect from 1 July 2020. Based on the adjusted conversion price of HK$8.77 per H share, the maximum number of H shares issuable by the Company upon full conversion of the Convertible Bonds will be 319,780,159 H shares.

For details of the Convertible Bonds, please refer to the announcements dated 26 January 2016, 5 February 2016, 7 March 2016, 27 June 2016, 29 June 2017, 25 August 2017, 12 June 2018, 8 February 2019, 8 July 2019 and 30 June 2020 published by the Company on the websites of SSE and the Stock Exchange.

40	CRRC CORPORATION LIMITED
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SIGNIFICANT EVENTS

Dilution impact of the Convertible Bonds on shares

As at 30 June 2020, the outstanding principal amount of the Convertible Bonds was US$360,000,000. Based on the adjusted conversion price of HK$9.00 per H share, the maximum number of H shares issuable by the Company upon full conversion of the Convertible Bonds will be 311,608,000 H shares. The following table sets out the shareholding structure of the Company upon full conversion of the Convertible Bonds with reference to the shareholding structure of the Company as at 30 June 2020 and assuming no further issuance of shares by the Company:

Name of shareholders

CRRCG and its associates Note Public shareholders: Subscribers of the Bonds Other public shareholders

Issued share capital enlarged by the issuance of conversion shares

		Percentage of issued
		share capital enlarged
		by the issuance of
Number of shares	conversion shares

14,558,389,450	A shares	50.18%
311,608,000	H shares	1.07%
4,371,066,040	H shares	15.07%
9,769,408,598	A shares	33.68%

29,010,472,088 shares	100.00%

Note: CRRCG holds 128,871,427 A shares through CRRC Financial and Securities.

An analysis of the impact on the earnings per share if the Convertible Bonds were fully converted into shares of the Company as at 30 June 2020 is set out in "Note XIII. Other Significant Items - 5. Basic earnings per share and the calculation of diluted earnings per share" to the financial statements of this report.

Principal terms of the Convertible Bonds

The principal terms of the Convertible Bonds are as follows:

1. Conversion right

The holders of the Convertible Bonds may convert the Convertible Bonds to shares of the Company at the applicable conversion price at any time during the conversion period between 17 March 2016 and 26 January 2021. The bondholders may exercise the conversion right attached to the Convertible Bonds at their option at any time (1) during the conversion period; or (2) no later than 10 days prior to the designated redemption date provided that such bonds are required to be redeemed by the Company prior to the maturity date. No conversion right may be exercised in respect of the Bonds where the bondholder shall have exercised its rights under the terms and conditions of the Bonds within the restricted conversion period (both days inclusive) to require the Company to redeem such bonds.

CRRC CORPORATION LIMITED	41
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SIGNIFICANT EVENTS

The initial conversion price of the Convertible Bonds is HK$9.65 per share which is adjusted to HK$9.50 per H share since 28 June 2016 as a result of the distribution of 2015 cash dividend; further adjusted to HK$9.29 per H share since 30 June 2017 as a result of the distribution of 2016 cash dividend; further adjusted to HK$9.15 per H share since 13 June 2018 as a result of the distribution of 2017 cash dividend; and further adjusted to HK$9.00 per H share since 9 July 2019 as a result of the distribution of 2018 cash dividend. The Company distributed a cash dividend of RMB0.15 per share (tax inclusive) to all shareholders pursuant to the 2019 profit distribution plan considered and approved at the general meeting held on 18 June 2020. The conversion price of the Convertible Bonds was adjusted to HK$8.77 per H share from the 2019 adjusted conversion price of HK$9.00 per H share pursuant to the terms and conditions of the Bonds with effect from 1 July 2020. The number of shares that may be converted is determined by the principal amount of the Bonds divided by the conversion price of the Bonds at the time of conversion. The fixed exchange rate of US dollar against HK dollar is HK$7.7902 to US$1.00.

2. Redemption option of the issuer

Redemption at maturity
Unless previously redeemed, converted, repurchased or cancelled, the Company will redeem all the outstanding Convertible Bonds at 100% of the outstanding principal amount on the maturity date.
Conditional redemption
Based on specific conditions, the Company may, having given not less than 30 nor more than 60 days' notice of redemption to the trustee, bondholders and principal agents, redeem all the outstanding Convertible Bonds at 100% of their outstanding principal amount as at the relevant redemption date:
1. at any time after 5 February 2019 and prior to the maturity date, no such redemption may be made unless the closing price of an H share translated into US dollars at the applicable prevailing rate, for any 20 Stock Exchange business days within a period of 30 consecutive business days (the last of such Stock Exchange business day shall occur not more than 10 business days prior to the date upon which notice of such redemption is given), was at least 130% of the then conversion price (translated into US dollars at the fixed exchange rate) for each of such 20 Stock Exchange business days. If there occurs an event giving rise to a change in the conversion price during any of such period of 30 consecutive Stock Exchange business days, appropriate adjustments for the relevant days approved by an independent investment bank shall be made for the purpose of calculating the closing price of the H shares for such days; or
2. if the aggregate principal of the Convertible Bonds that have not been redeemed or converted is less than 10% of the aggregate principal originally issued prior to the date upon which such notice is given.
Redemption at the option of the bondholders
Upon notice given by the holders of the Convertible Bonds of not less than 30 nor more than 60 days before redemption option date (i.e. 5 February 2019), the issuer will, at the option of the holders of the Convertible Bonds, redeem all or part of that holders' Convertible Bonds at 100% of their outstanding principal amount on the redemption option date.

42	CRRC CORPORATION LIMITED
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SIGNIFICANT EVENTS

(III) Accounting for the Convertible Bonds

The Convertible Bonds are comprised of debt component and derivative component with redemption option, conversion option and put-back option. The movements of the debt component and derivative component of the Convertible Bonds for the period are set out below:

		Unit: '000 Currency: RMB
	Debt	Derivative
	component	component	Total

1 January 2020	2,445,097	5,396	2,450,493
Amortization of premiums or discounts	30,746	-	30,746
Exchange gains or losses	36,313	44	36,357
Redemption during the current period	-	-	-
Gains or losses on changes in fair value	-	-5,419	-5,419

30 June 2020	2,512,156	21	2,512,177

(IV) Others

Pursuant to the terms and conditions of the Convertible Bonds, the implied internal rate of return of the Convertible Bonds is nil.

CORPORATE GOVERNANCE

During the reporting period, the Company has implemented its corporate governance in stringent compliance with requirements of the Company Law of the PRC, the Securities Law of the PRC and the Code of Corporate Governance for Listed Companies, as well as the relevant requirements of the SSE and the Stock Exchange. The Company has established a modern corporate governance structure featuring "three meetings and one management". Through the establishment of an effective corporate governance mechanism, corporate governance and operation management were improved in a continuous manner, thus perfecting the corporate governance of the Company.

Compliance with the Corporate Governance Code

The Board has reviewed the documents in relation to corporate governance adopted by the Company, and is of the opinion that, during the reporting period, the Company was in compliance with the principles and code provisions in the Corporate Governance Code, and adopted part of the recommended best practices specified therein. In certain aspects, the corporate governance practices adopted by the Company are more stringent than the code provisions set out in the Corporate Governance Code.

Securities transactions by Directors and Supervisors

The Company has strictly complied with the relevant requirements of the Hong Kong Listing Rules (especially the Model Code) and the Rules Governing the Listing of Stocks on Shanghai Stock Exchange 《( 上海證券交易所股票上市規則》), and published notices on a regular basis to inform important notes for securities transaction by the Directors and Supervisors. The Company also imposed similar requirements on those key personnel who may have knowledge of inside information. The Company has confirmed that, during the reporting period, all the Directors and Supervisors have complied with the requirements for securities transactions mentioned above.

CRRC CORPORATION LIMITED	43
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SIGNIFICANT EVENTS

(III) Review of the interim report by the Audit and Risk Management Committee

The Audit and Risk Management Committee has reviewed the Company's unaudited interim condensed consolidated financial statements and the interim report for the six months ended 30 June 2020, and has agreed on their submission to the Board for consideration and approval.

XI. OTHER SIGNIFICANT EVENTS

Particulars of debt financing instruments
1. On 13 March 2020, the Company issued 2020 First Tranche of 31-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 13 April 2020.
2. On 1 April 2020, the Company issued 2020 First Tranche of three-year Corporate Bonds in a total amount of RMB1 billion, which will be due on 1 April 2023.
3. On 10 April 2020, the Company issued 2020 Second Tranche of 31-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 11 May 2020.
4. On 14 April 2020, the Company issued 2020 Third Tranche of 90-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 13 July 2020.
5. On 7 May 2020, the Company issued 2020 Fourth Tranche of 29-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 5 June 2020.
6. On 7 June 2020, the Company issued 2020 Fifth Tranche of 59-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 6 August 2020.
7. On 19 June 2020, the Company issued 2020 Sixth Tranche of 31-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 20 July 2020.
8. On 19 June 2020, the Company issued 2020 Seventh Tranche of 90-day Super Short-term Financing Bills in a total amount of RMB3 billion, which will be due on 17 September 2020.
9. On 19 June 2020, the Company issued 2020 Eighth Tranche of 90-day Super Short-term Financing Bills in a total amount of RMB3 billion, which will be due on 17 September 2020.
10. On 27 July 2020, the Company issued 2020 Ninth Tranche of 30-day Super Short-term Financing Bills in a total amount of RMB3 billion, which were due and settled on 26 August 2020.
11. On 12 August 2020, the Company issued 2020 Tenth Tranche of 30-day Super Short-term Financing Bills in a total amount of RMB3 billion, which will be due on 11 September 2020.
12. On 14 August 2020, the Company issued 2020 Eleventh Tranche of 30-day Super Short-term Financing Bills in a total amount of RMB3 billion, which will be due on 14 September 2020.

Compared with the previous accounting period, the circumstances, reasons and their impacts of changes in accounting policies, accounting estimates and audit method

Compared with the previous accounting period, there were no changes in accounting policies, accounting estimates and audit method.

Correction on significant accounting errors required to be restated, amended amounts, reasons and impact during the reporting period

During the reporting period, there were no significant accounting errors and corrections that need to be restated.

44	CRRC CORPORATION LIMITED
lnterim Report 2020

CHANGE IN SHARES AND PARTICULARS OF SHAREHOLDERS

CHANGES IN SHARE CAPITAL
1. Changes in shares
2. 1. Changes in shares
    During the reporting period, there were no changes in the total number of shares and share capital structure of the Company.
  2. Public float
    During the reporting period, the public float of the Company satisfied the requirement under Rule 8.08 of the Hong Kong Listing Rules.
  3. Purchase, sale or redemption of securities of the Company
    During the reporting period, neither the Company nor its subsidiaries purchased, sold or redeemed any of the Company's securities under the Hong Kong Listing Rules.
  4. Effect of changes in shares on financial indicators such as earnings per share and net assets per share within the period from the end of the reporting period to the disclosure date of the interim report
    During the reporting period, there was no change in the shares of the Company and its subsidiaries.

CRRC CORPORATION LIMITED	45
lnterim Report 2020

CHANGE IN SHARES AND PARTICULARS OF SHAREHOLDERS

Changes in restricted shares

						Unit: share
		Number of	Increase	Number of
	Number of	restricted	in number	restricted
	restricted	shares	of restricted	shares
	shares at the	expired during	shares during	at the end		Termination date
	beginning	the reporting	the reporting	of reporting	Reasons for	of the lock-up
Name of shareholder	of the period	period	period	period	restrictions	period

CRRCG	705,052,878	705,052,878	-	-	36 months after the	17 January 2020
					completion date of the
					Non-public Issuance
Shanghai Xinghan Asset - Industrial Bank -	235,017,626	235,017,626	-	-	36 months after the	17 January 2020
China Industrial International Trust Limited					completion date of the
(上海興瀚資產－興業銀行					Non-public Issuance
－興業國際信託有限公司)
China Development Bank Capital	176,263,219	176,263,219	-	-	36 months after the	17 January 2020
Corporation Limited					completion date of the
(國開金融有限責任公司)					Non-public Issuance
Shanghai Zhaoyin Equity Investment	117,508,813	117,508,813	-	-	36 months after the	17 January 2020
Fund Management Co., Ltd.					completion date of the
(上海招銀股權投資基金管理有限公司)					Non-public Issuance
China Development Bank Jingcheng (Beijing)	117,508,813	117,508,813	-	-	36 months after the	17 January 2020
Investment Fund Co., Ltd.					completion date of the
(國開精誠（北京）投資基金有限公司)					Non-public Issuance
China Development Bank Siyuan (Beijing)	58,754,406	58,754,406	-	-	36 months after the	17 January 2020
Investment Fund Co., Ltd.					completion date of the
(國開思遠（北京）投資基金有限公司)					Non-public Issuance
Total	1,410,105,755	1,410,105,755	-	-	/	/

The restricted shares held by the above Shareholders have been listed and traded on 17 January 2020. For details, please refer to the "Indicative Announcement on the Listing and Trading of the Restricted Shares from the Non-public Issuance of the A-Shares by CRRC Corporation Limited" of the Company dated 9 January 2020.

PARTICULARS OF SHAREHOLDERS

Total number of shareholders:

Total number of shareholders as at the end of the reporting period (shareholder) Note

780,117

Note: As at the end of the reporting period, the Company had 777,423 holders of A shares and 2,694 registered holders of H shares.

46	CRRC CORPORATION LIMITED
lnterim Report 2020

CHANGE IN SHARES AND PARTICULARS OF SHAREHOLDERS

Shareholdings of the top ten shareholders and the top ten holders of tradeable shares (or holders of shares not subject to trading moratorium) as at the end of the reporting period

							Unit: share
			Shareholdings of the top ten shareholders
					Shares pledged or frozen
		Number of		Number of
		shares held at		shares held
	Change during	the end of		subject
	the reporting	the reporting	Percentage	to trading	Pledged
Name of shareholder (full name)	period	period	(%)	moratorium	or frozen	Number	Nature of shareholder

CRRCG	-	14,429,518,023	50.28	-	Nil	-	State-owned legal person
HKSCC NOMINEES LIMITED note	-165,743	4,359,955,346	15.19	-	Unknown	-	Overseas legal person
China Securities Finance Corporation Limited	-	858,958,326	2.99	-	Unknown	-	State-owned legal person
Hong Kong Securities Clearing Company Limited	-1,426,991	336,937,903	1.17	-	Unknown	-	Overseas legal person
Central Huijin Asset Management Ltd.	-	304,502,100	1.06	-	Unknown	-	State-owned legal person
(中央匯金資產管理有限責任公司)
Shanghai Xinghan Asset - Industrial Bank - China Industrial	-	235,017,626	0.82	-	Unknown	-	State-owned legal person
International Trust Limited
(上海興瀚資產－興業銀行－興業國際信託有限公司)
Bosera Funds - Agricultural Bank of China - Bosera	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(博時基金－農業銀行－博時中證金融資產管理計劃)
E Fund - Agricultural Bank of China - E Fund China	-	234,982,900	0.82	-	Unknown	-	Unknown
Securities and Financial Assets Management Plan
(易方達基金－農業銀行－易方達中證金融資產管理計劃)
Dacheng Fund - Agricultural Bank of China - Dacheng	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(大成基金－農業銀行－大成中證金融資產管理計劃)
Harvest Fund - Agricultural Bank of China - Harvest	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(嘉實基金－農業銀行－嘉實中證金融資產管理計劃)
GF Fund - Agricultural Bank of China - GF	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(廣發基金－農業銀行－廣發中證金融資產管理計劃)
Zhong Ou Asset - Agricultural Bank of China - Zhongou	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(中歐基金－農業銀行－中歐中證金融資產管理計劃)
ChinaAMC - Agricultural Bank of China - ChinaAMC	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(華夏基金－農業銀行－華夏中證金融資產管理計劃)
Yinhua Fund - Agricultural Bank of China - Yinhua	-	234,982,900	0.82	-	Unknown	-	Unknown
China Securities and Financial Assets Management Plan
(銀華基金－農業銀行－銀華中證金融資產管理計劃)
China Southern Asset Management- Agricultural Bank of
China- China Southern Asset Management
China Securities and Financial Assets Management Plan
(南方基金－農業銀行－南方中證金融資產管理計劃)	-	234,982,900	0.82	-	Unknown	-	Unknown
ICBCCS Fund - Agricultural Bank of China - ICBCCS
China Securities and Financial Assets Management Plan
(工銀瑞信基金－農業銀行－工銀瑞信中證金融資產管理計劃)	-	234,982,900	0.82	-	Unknown	-	Unknown

CRRC CORPORATION LIMITED	47
lnterim Report 2020

CHANGE IN SHARES AND PARTICULARS OF SHAREHOLDERS

	Shareholdings of the top ten shareholders not subject to trading moratorium
		Class and number of shares
	Number of tradable
	shares held not subject
Name of shareholder	to trading moratorium	Class	Number

CRRCG	14,429,518,023	Ordinary shares denominated in RMB	14,429,518,023
HKSCC NOMINEES LIMITED note	4,360,121,089	Overseas listed foreign shares	4,360,121,089
China Securities Finance Corporation Limited	858,958,326	Ordinary shares denominated in RMB	858,958,326
Hong Kong Securities Clearing Company Limited	338,364,894	Ordinary shares denominated in RMB	338,364,894
Central Huijin Asset Management Ltd.	304,502,100	Ordinary shares denominated in RMB	304,502,100
(中央匯金資產管理有限責任公司)
Shanghai Xinghan Asset - Industrial Bank	235,017,626	Ordinary shares denominated in RMB	235,017,626

China Industrial International Trust Limited
上海興瀚資產－興業銀行－興業國際信託有限公司

Bosera Funds - Agricultural Bank of China

234,982,900

Ordinary shares denominated in RMB

234,982,900

Bosera China Securities and Financial Assets Management Plan (博時基金－農業銀行－博時中證金融資產管理計劃)

E Fund - Agricultural Bank of China - E Fund	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(易方達基金－農業銀行－易方達中證金融資產管理計劃)
Dacheng Fund - Agricultural Bank of China - Dacheng	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(大成基金－農業銀行－大成中證金融資產管理計劃)
Harvest Fund - Agricultural Bank of China - Harvest	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(嘉實基金－農業銀行－嘉實中證金融資產管理計劃)
GF Fund - Agricultural Bank of China - GF	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(廣發基金－農業銀行－廣發中證金融資產管理計劃)
Zhong Ou Asset - Agricultural Bank of China - Zhongou	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(中歐基金－農業銀行－中歐中證金融資產管理計劃)
ChinaAMC - Agricultural Bank of China - ChinaAMC	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(華夏基金－農業銀行－華夏中證金融資產管理計劃)
Yinhua Fund - Agricultural Bank of China - Yinhua	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(銀華基金－農業銀行－銀華中證金融資產管理計劃)
China Southern Asset Management - Agricultural Bank of China	234,982,900	Ordinary shares denominated in RMB	234,982,900
- China Southern Asset Management
China Securities and Financial Assets Management Plan
(南方基金－農業銀行－南方中證金融資產管理計劃)
ICBCCS Fund - Agricultural Bank of China - ICBCCS	234,982,900	Ordinary shares denominated in RMB	234,982,900
China Securities and Financial Assets Management Plan
(工銀瑞信基金－農業銀行－工銀瑞信中證金融資產管理計劃)

Note: H shares held by HKSCC Nominees Limited are held on behalf of its various clients.

48	CRRC CORPORATION LIMITED
lnterim Report 2020

CHANGE IN SHARES AND PARTICULARS OF SHAREHOLDERS

(III) Substantial shareholders' interests and short positions in the Company

As at 30 June 2020, the persons set out in the table below had an interest or short position in the Company's shares as recorded in the register required to be kept under section 336 of the SFO:

					Percentage of
					H shares or
					A shares held
					in the total
				Number of	issued H shares
		H shares or		H shares or	or total issued
Name of shareholder	Capacity	A share	Nature of interest	A shares held	A shares (%)

CRRCG	Beneficial owner	A Shares	Long position	14,429,518,023	59.31
	Interest of corporation controlled by the	A Shares	Long position	128,871,427	0.53
	substantial shareholder
Citigroup Inc.	Interest of corporation controlled by the	H Shares	Long position	303,261,443	6.94
	substantial shareholder, person having a
	security interest in shares, approved lending
	agent
	Interest of corporation controlled by the	H Shares	Short position	6,981,000	0.16
	substantial shareholder
	Approved lending agent	H Shares	Shares in lending pool	275,742,049	6.31
BlackRock, Inc.	Interest of corporation controlled by the	H Shares	Long position	269,674,634	6.17
	substantial shareholder
	Interest of corporation controlled by the	H Shares	Short position	5,672,000	0.13
	substantial shareholder

Note: As at 30 June 2020, CRRCG held 128,871,427 A shares through CRRC Financial and Securities.

Save as disclosed above, as far as the Directors are aware, as at 30 June 2020, no other person had interests and/ or short positions in the shares or underlying shares (as the case may be) of the Company which were required to be recorded in the register pursuant to section 336 of Part XV of the SFO, or was otherwise a substantial shareholder (as defined in the Hong Kong Listing Rules) of the Company.

(IV) Strategic investors or ordinary legal persons who became top ten shareholders due to placing of shares

During the reporting period, no strategic investor or ordinary legal person has become top ten shareholders due to placing of shares.

III. CHANGES IN THE CONTROLLING SHAREHOLDER OR THE ULTIMATE CONTROLLER

During the reporting period, there was no change in the controlling shareholder or the ultimate controller.

CRRC CORPORATION LIMITED	49
lnterim Report 2020

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

CHANGES IN SHAREHOLDING

Changes in shareholding by current and resigned Directors, Supervisors and Senior Management during the reporting period

During the reporting period, there was no change in the shareholding of current and resigned Directors, Supervisors and Senior Management.

Share options granted to Directors, Supervisors and Senior Management during the reporting period

During the reporting period, no share option was granted to Directors, Supervisors or Senior Management.

(III) Shareholding interests of Directors, Supervisors and chief executive

As at 30 June 2020, the following Directors and Supervisors had interests in the A shares of the Company and relevant details are set out as follows:

			Type of	Number of
Name	Position	Capacity	shares	shares

Liu Hualong	Chairman, Executive Director	Beneficial owner	A shares	50,000
Sun Yongcai	President, Executive Director	Beneficial owner	A shares	111,650

Save as disclosed above, as at 30 June 2020, none of the Directors, Supervisors or chief executives of the Company had interests or short positions in the shares or underlying shares of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be entered in the register maintained by the Company under section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code by the Directors or Supervisors.

50	CRRC CORPORATION LIMITED
lnterim Report 2020

DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

CHANGES IN DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Name	Position	Change

Liu Zhiyong	Non-executive Director	Resignation
Wu Zhuo	Independent non-executive Director	Resignation
Shi Jianzhong	Independent non-executive Director	Election
Zhu Yuanchao	Independent non-executive Director	Election

Notes:

On 19 February 2020, Mr. Liu Zhiyong resigned his position with the Company as a non-executive Director, the vice chairman and member of the Strategy Committee, a member of the Audit and Risk Management Committee and a member of the Remuneration and Evaluation Committee due to his age.

On 18 June 2020, Mr. Wu Zhuo resigned his position with the Company as an independent non-executive Director, the chairman and member of the Remuneration and Evaluation Committee, a member of the Audit and Risk Management Committee and a member of the Nomination Committee due to his age.

At the 2019 annual general meeting of the Company held on 18 June 2020, Mr. Shi Jianzhong and Mr. Zhu Yuanchao were added as independent non- executive Directors for the second session of the Board and their term of office shall end on the date of expiry of the term of office of the second session of the Board.

At the twentieth meeting of the second session of the Board held on 18 June 2020, Mr. Lou Qiliang and Mr. Shi Jianzhong were added as members of the Strategy Committee, Mr. Zhu Yuanchao was added as a member of the Nomination Committee, Mr. Shi Jianzhong and Mr. Zhu Yuanchao were added as members of the Remuneration and Evaluation Committee, and Mr. Shi Jianzhong was elected as the chairman of the Remuneration and Evaluation Committee. Mr. Zhu Yuanchao was added as a member of the Audit and Risk Management Committee.

For details, please refer to the Announcement in relation to Resignation of Directors 《( 中國中車股份有限公司董事辭職公告》) of the Company dated 19 February 2020, the Announcement in relation to Resignation of Directors 《( 中國中車股份有限公司董事辭職公告》), the Announcement in relation to Resolutions Passed at the 2019 Annual General Meeting 《( 中國中車股份有限公司2019年年度股東大會決議公告》), and the Announcement in relation to Resolutions Passed at the Twentieth Meeting of the Second Session of the Board 《( 中國中車股份有限公司第二屆董事會第二十次會議決議公告》) of the Company dated 18 June 2020.

III. OTHER EXPLANATION

Employees of the Company and their remuneration and training

During the reporting period, there were no significant changes in the total number, composition, remuneration and training of the employees of the Group since the disclosure of the 2019 annual report.

CRRC CORPORATION LIMITED	51
lnterim Report 2020

RELEVANT INFORMATION OF CORPORATE BONDS

BASIC INFORMATION OF CORPORATE BONDS

The Company currently holds a 2013 ten-year corporate bond of CSR Corporation Limited (first tranche) (13 CSR 02), a 2016 corporate bond of CRRC Corporation Limited (first tranche) (16 CRRC 01), and a publicly issued 2020 corporate bond of CRRC Corporation Limited (first tranche) (20 CRRC 01).

The 2013 ten-year corporate bond of CSR Corporation Limited (first tranche) was issued by CSR on 22 April 2013 and will expire on 22 April 2023. The outstanding balance of the bonds is RMB1,500 million and bears an interest rate of 5.00%. The interest on the bond will be paid annually and the principal will be repaid in one lump sum. The bond is listed and traded on the SSE.

The 2016 corporate bond of CRRC Corporation Limited (first tranche) was issued by CRRC on 30 August 2016 and will expire on 30 August 2021. The outstanding balance of the bond is RMB589.72 million and bears an interest rate of 3.40%. The interest on the bond will be paid annually and the principal will be repaid in one lump sum. The bond is listed and traded on the SSE.

The publicly issued 2020 corporate bond of CRRC Corporation Limited (first tranche) was issued by CRRC on 1 April 2020 and will expire on 1 April 2023. The outstanding balance of the bond is RMB1,000 million and bears an interest rate of 2.95%. The interest on the bond will be paid annually and the principal will be repaid in one lump sum. The bond is listed and traded on the SSE.

Interest payment for corporate bonds

The Company disclosed in the Announcement in relation to Interest Payment of 13 CSR 02 Corporate Bond of CRRC Corporation Limited 《( 中國中車股份有限公司關於13南車02公司債券的付息公告》) dated 15 April 2020 concerning payment of interest on 13 CSR 02 for the period from 22 April 2019 to 21 April 2020 on 22 April 2020. During the reporting period, no interest payment for 16 CRRC 01 and 20 CRRC 01 was incurred.

Description of other matters in relation to corporate bonds

Provisional Report of China International Capital Corporation Limited in relation to the Entrusted Management of Significant Events of Corporate Bonds of CRRC Corporation Limited 《( 中國國際金融股份有限公司關於中國中車股份有限公司公司債券重大事項受託管理事務臨時報告》) was issued by China International Capital Corporation Limited on 24 June 2020. As Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP, the former auditors of the Company, have provided services for the Company for 6 consecutive years, in order to ensure the independence and objectivity of the audit work of the Company, as well as meet the needs of the Company's business development, the Company proposed to change its auditors. Upon consideration and approval at the 2019 annual general meeting of the Company on 18 June 2020, KPMG Huazhen LLP was engaged by the Company as the financial report auditors and internal control auditors of the Company for the year 2020. The above matters in relation to changes in intermediaries will not have significant impact on the daily operation and solvency of the Company.

52	CRRC CORPORATION LIMITED
lnterim Report 2020

RELEVANT INFORMATION OF CORPORATE BONDS

ACCOUNTING DATA AND FINANCIAL INDICATORS OF THE COMPANY AS AT THE END OF THE REPORTING PERIOD AND THE END OF LAST YEAR (OR THE REPORTING PERIOD AND THE CORRESPONDING PERIOD LAST YEAR)

			Unit: '000 Currency: RMB
			Change between
			the end of the
			reporting period
	End of the		and the same
Key indicator	reporting period	End of last year	period last year (%)

Current ratio (%)	1.20	1.26	-4.76
Quick ratio (%)	0.88	0.80	10.00
Gearing ratio (%)	62.34	58.59	Increased by 3.75 ppt
Loan repayment rate (%)	100	100	-
			Change between
	Reporting		the reporting period
	period (January	Same period	and the same
	to June)	last year	period last year (%)

EBITDA interest coverage multiple	23.51	18.14	29.60
Interest coverage (%)	109.11	128.25	Decreased by 19.14 ppt

III. BANK CREDIT FACILITIES OF THE COMPANY DURING THE REPORTING PERIOD

The table below sets forth details on the amount of bank credit facilities, the utilized amount and the outstanding credit facilities of the Company as at 30 June 2020:

			Unit: '000 Currency: RMB
			Outstanding
			credit facilities	Amount utilized
		Total credit	as at	as at
No.	Name of granting bank	facilities	30 June 2020	30 June 2020

1	China Development Bank	13,500,000	13,500,000	-
2	The Export-Import Bank of China	18,000,000	18,000,000	-
3	Bank of China Limited	20,000,000	18,506,739	1,493,261
4	China Minsheng Bank Co., Ltd.	15,000,000	9,297,825	5,702,175
5	Bank of Communications Co., Ltd.	10,000,000	10,000,000	-
6	China Construction Bank Corporation	10,000,000	2,931,715	7,068,285
7	China Merchants Bank Co., Ltd. Beijing Branch	10,000,000	8,827,359	1,172,641
8	Industrial and Commercial Bank of China Limited	5,170,200	2,170,190	3,000,010
9	China Zheshang Bank Co., Ltd.	6,000,000	6,000,000	-
10	Bank of Beijing Co., Ltd.	6,000,000	6,000,000	-
11	China Everbright Bank Co., Ltd.	6,600,000	6,600,000	-
12	Agricultural Bank of China Limited	4,260,000	3,960,000	300,000
13	China CITIC Bank Corporation Limited	15,000,000	14,446,102	553,898
	Beijing Branch

CRRC CORPORATION LIMITED	53
lnterim Report 2020

RELEVANT INFORMATION OF CORPORATE BONDS

			Outstanding
			credit facilities	Amount utilized
		Total credit	as at	as at
No.	Name of granting bank	facilities	30 June 2020	30 June 2020

14	Postal Savings Bank of China Co., Ltd.	4,000,000	4,000,000	-
15	Huaxia Bank Co., Ltd. Beijing Branch	4,000,000	4,000,000	-
16	Beijing Rural Commercial Bank Co., Ltd.	4,500,000	4,500,000	-
17	Industrial Bank Co., Ltd. Beijing Branch	3,000,000	3,000,000	-
18	Bank of Kunlun Co., Ltd.	1,000,000	1,000,000	-
19	Shanghai Pudong Development Bank Co., Ltd.	7,880,000	7,880,000	-
20	Societe Generale (China) Co., Ltd.	100,000	33,955	66,045

	Total	164,010,200	144,653,885	19,356,315

			Unit: '000 Currency: USD
			Outstanding
			credit facilities	Amount utilized
		Total credit	as at	as at
No.	Name of credit bank	facilities	30 June 2020	30 June 2020

1	Standard Chartered Bank (China) Limited	30,000	21,923	8,077
	Beijing Branch
2	DBS Bank	100,000	97,657	2,343
3	Citibank	124,500	124,500	-

	Total	254,500	244,080	10,420

IV. DESCRIPTION OF THE EXECUTION OF RELEVANT COVENANTS OR UNDERTAKINGS SET OUT IN THE PROSPECTUS OF CORPORATE BONDS OF THE COMPANY DURING THE REPORTING PERIOD

During the reporting period, the Company has paid interest and repaid principal to bondholders in respect of the 2013 ten-year corporate bond of CSR Corporation Limited (first tranche), the 2016 corporate bond of CRRC Corporation Limited (first tranche) and the publicly issued 2020 corporate bond of CRRC Corporation Limited (first tranche) in strict compliance with principal and interest repayment arrangements prescribed in the prospectus, without any breach of the relevant covenants or undertaking thereto.

SIGNIFICANT EVENTS OF THE COMPANY AND THEIR IMPACTS ON THE OPERATION AND SOLVENCY OF THE COMPANY

During the reporting period, there was no significant event which may have impact on the operation and solvency of the Company.

54	CRRC CORPORATION LIMITED
lnterim Report 2020

THE CONSOLIDATED BALANCE SHEET

30 JUNE 2020

			RMB'000
			31 December
		30 June
ITEM	Note V	2020	2019
Current assets:
Cash and bank balances	1	46,290,586	44,904,764
Placements with banks and other financial institutions	2	-	139,524
Held-for-trading financial assets	3	9,907,523	9,180,616
Bills receivable	4	9,507,108	14,245,965
Accounts receivable	5	82,778,274	59,712,424
Receivables at fair value through other comprehensive income	6	6,453,365	13,085,613
Prepayments	7	10,672,339	9,909,219
Other receivables	8	2,666,471	2,599,055
Inventories	9	76,282,599	60,833,768
Contract assets	10	22,175,924	16,364,966
Assets classified as held for sale		-	2,779
Non-current assets due within one year	11	14,113,579	14,416,293
Other current assets	12	5,343,483	5,820,129
Total current assets		286,191,251	251,215,115
Non-current assets:
Loans and advances to customers	13	173,509	180,588
Debt investments	14	1,327,295	1,658,234
Long-term receivables	15	11,053,736	10,518,918
Long-term equity investments	16	15,706,691	15,570,696
Investments in other equity instruments	17	2,665,497	2,654,602
Other non-current financial assets	18	629,087	616,855
Investment properties	19	1,116,929	1,109,477
Fixed assets	20	57,335,004	59,090,886
Construction in progress	21	8,047,387	7,243,849
Right-of-use assets	22	1,204,799	1,261,467
Intangible assets	23	16,357,401	16,014,314
Development expenditure	24	408,959	334,394
Goodwill	25	313,850	462,158
Long-term prepayments		232,753	192,460
Deferred tax assets	26	3,641,835	3,400,751
Other non-current assets	27	15,118,134	12,047,721
Total non-current assets		135,332,866	132,357,370
TOTAL ASSETS		421,524,117	383,572,485

CRRC CORPORATION LIMITED	55
lnterim Report 2020

THE CONSOLIDATED BALANCE SHEET

30 JUNE 2020

			30 June	31 December
ITEM		Note V	2020	2019
Current liabilities:
Short-term borrowings		28	15,205,458	10,530,416
Deposits from banks and other financial institutions	29	2,793,359	5,577,269
Borrowings from the central bank			-	222,317
Bills payable		30	19,407,827	27,339,474
Accounts payable		31	123,384,334	106,602,413
Receipts in advance		32	10,564	5,827
Contract liabilities		33	32,968,149	28,167,471
Employee benefits payable		34	2,255,299	2,194,417
Taxes payable		35	1,502,483	2,554,947
Other payables		36	14,670,181	9,176,397
Non-current liabilities due within one year		37	6,777,820	3,778,474
Other current liabilities		38	19,203,226	4,015,089
Total current liabilities			238,178,700	200,164,511
Non-current liabilities:
Long-term borrowings		39	3,427,606	2,589,644
Bonds payable		40	3,089,720	4,534,817
Lease liabilities		41	940,442	960,501
Long-term payables		42	85,484	85,484
Long-term employee benefits payable		43	3,750,325	3,686,239
Provisions		44	6,278,051	5,854,124
Deferred income		45	6,640,079	6,551,494
Deferred tax liabilities		26	205,395	142,756
Other non-current liabilities		46	167,947	174,433
Total non-current liabilities			24,585,049	24,579,492
TOTAL LIABILITIES			262,763,749	224,744,003
Shareholders' equity:
Share capital		47	28,698,864	28,698,864
Capital reserve		48	40,769,903	40,747,823
Other comprehensive income		49	(1,140,561)	(1,084,770)
Special reserves		50	49,957	49,957
Surplus reserve		51	3,815,330	3,815,330
General risk reserve			551,265	551,265
Retained earnings		52	62,611,135	63,115,162
Total equity attributable to shareholders of the Company		135,355,893	135,893,631
Non-controlling interests			23,404,475	22,934,851
TOTAL SHAREHOLDERS' EQUITY			158,760,368	158,828,482
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		421,524,117	383,572,485
Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
Liu Hualong	Li Zheng		Wang Jian

56	CRRC CORPORATION LIMITED
lnterim Report 2020

THE COMPANY'S BALANCE SHEET

30 JUNE 2020

				RMB'000
				31 December
			30 June
ITEM		Note XIV	2020	2019
Current assets:
Cash and bank balances		1	17,719,791	12,375,161
Accounts receivable			107,203	225,077
Other receivables		2	18,686,159	17,081,153
Non-current assets due within one year			529,924	505,900
Other current assets			6,298	-
Total current assets			37,049,375	30,187,291
Non-current assets:
Long-term receivables			4,205,701	4,481,919
Long-term equity investments		3	104,200,977	103,551,976
Investments in other equity instruments			50,000	25,000
Fixed assets			15,197	18,002
Construction in progress			87,895	75,261
Right-of-use assets			39,673	45,940
Intangible assets			86,086	95,638
Other non-current assets			374,940	374,940
Total non-current assets			109,060,469	108,668,676
TOTAL ASSETS			146,109,844	138,855,967
Current liabilities:
Short-term borrowings			6,967,933	5,550,110
Accounts payable			93,169	226,571
Contract liabilities			11,180	11,180
Employee benefits payable			29,283	61,582
Taxes payable			244	10,850
Other payables			19,930,017	26,963,026
Non-current liabilities due within one year			2,557,612	71,729
Other current liabilities		V.38	15,016,840	-
Total current liabilities			44,606,278	32,895,048
Non-current liabilities:
Bonds payable		V.40	3,089,720	4,534,817
Lease liabilities			37,403	33,534
Long-term payables			240	240
Long-term employee benefits payable			1,025	1,010
Other non-current liabilities			-	5,396
Total non-current liabilities			3,128,388	4,574,997
TOTAL LIABILITIES			47,734,666	37,470,045
Shareholders' equity:
Share capital			28,698,864	28,698,864
Capital reserve			62,808,135	62,803,844
Other comprehensive income			(16,063)	(10,037)
Surplus reserve			3,815,330	3,815,330
Retained earnings			3,068,912	6,077,921
TOTAL SHAREHOLDERS' EQUITY			98,375,178	101,385,922
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		146,109,844	138,855,967
Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
Liu Hualong	Li Zheng		Wang Jian

CRRC CORPORATION LIMITED	57
lnterim Report 2020

THE CONSOLIDATED INCOME STATEMENT

FROM JANUARY TO JUNE 2020

			RMB'000
			January-June
		January-June
ITEM	Note V	2020	2019
I. Total operating income	53	89,403,326	96,147,021
II. Total operating costs		84,095,324	88,983,545
Including: Operating costs	53	70,373,477	74,544,370
Taxes and surcharges	54	636,292	730,523
Selling expenses	55	2,796,099	3,016,082
Administrative expenses	56	5,380,319	5,990,813
Research and development expenses	57	4,422,787	4,388,411
Financial expenses	58	486,350	313,346
Including: Interest expenses		404,137	470,313
Interest income		498,283	286,388
Add: Other income	59	574,181	356,207
Investment income	60	171,330	203,508
Including: Gains from investments in associates and joint
ventures		109,904	149,310
Loss arising from derecognition of financial assets
measured at amortised cost		(74,182)	(67,751)
Gains from changes in fair value	61	62,271	168,370
Impairment losses under expected credit loss model	62	(493,257)	(982,716)
Assets impairment losses	63	(255,863)	(239,896)
Gains/(loss) on disposal of assets	64	19,195	(14,893)
III. Operating profit		5,385,859	6,654,056
Add: Non-operating income	65	520,269	220,627
Less: Non-operating expenses	66	354,568	56,200
IV. Total profit		5,551,560	6,818,483
Less: Income tax expenses	67	1,057,184	1,253,839
V. Net profit		4,494,376	5,564,644
(I) Net profit classified by operating continuity
1. Net profit from continuing operations		4,494,376	5,564,644
(II) Net profit classified by ownership
1. Net profit attributable to shareholders of the Company		3,692,655	4,780,641
2. Net profit attributable to non-controlling interests		801,721	784,003

58	CRRC CORPORATION LIMITED
lnterim Report 2020

THE CONSOLIDATED INCOME STATEMENT

FROM JANUARY TO JUNE 2020

					January-June	January-June
ITEM				Note V	2020	2019
VI. Other comprehensive income, net of income tax	49	71,687	11,611
(I) Other comprehensive income attributable to shareholders
	of the Company, net of income tax			52,357	17,068
1.	Items that will not be reclassified to profit or loss		58,651	(65,022)
	(1)	Remeasurement of the changes in net liabilities or
		net assets of defined benefit plan		(1,939)	-
	(2)	Changes in fair value of investment in other equity
		instruments			60,590	(65,022)
2.	Items that may be reclassified to profit or loss		(6,294)	82,090
	(1)	Other comprehensive income that may be reclassified
		to profit or loss under equity method		3,533	102,195
	(2)	Changes in fair value of other debt investments		91,405	9,162
	(3)	Provision for credit impairments of other debt investments		64	11
	(4)	Translation differences arising from translation of foreign
		currency financial statements		(101,296)	(29,278)
(II) Other comprehensive income attributable to non-controlling
	interests, net of income tax			19,330	(5,457)
VII.Total comprehensive income			4,566,063	5,576,255
(I) Total comprehensive income attributable to shareholders of
	the Company			3,745,012	4,797,709
(II) Total comprehensive income attributable to non-controlling interests		821,051	778,546
VIII. Earnings per share:
(I) Basic earnings per share (RMB/per share)		0.13	0.17
(II) Diluted earnings per share (RMB/per share)		0.13	0.16
Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
	Liu Hualong	Li Zheng		Wang Jian

CRRC CORPORATION LIMITED	59
lnterim Report 2020

THE COMPANY'S INCOME STATEMENT

FROM JANUARY TO JUNE 2020

				RMB'000
				January-June
			January-June
ITEM		Note XIV	2020	2019
I. Operating income			16,714	1,622
Less: Operating costs			7,053	-
Taxes and surcharges			2,013	1,342
Selling expenses			8	1,859
Administrative expenses			92,470	93,850
Research and development expenses		12,708	48,146
Financial expenses			(112,926)	(50,745)
Including: Interest expenses			406,519	384,622
Interest income			513,252	442,575
Add: Other income			-	-
Investment income		4	1,274,753	1,177,165
Including: Income from investment in associates and joint
ventures			73,176	7,377
Losses from derecognition of financial assets
measured at amortised cost		-	-
Gains from changes in fair value			5,419	125,792
Impairment losses under expected credit loss model		(1,805)	-
II. Operating profit			1,293,755	1,210,127
Add: Non-operating income			2,066	4,407
Less: Non-operating expenses			-	-
III. Total profit			1,295,821	1,214,534
Less: Income tax expenses			-	-
IV. Net profit			1,295,821	1,214,534
(I) Net profit from continuing operations			1,295,821	1,214,534
V. Other comprehensive income, net of tax		(6,026)	102,195
(I) Items that may be reclassified to profit or loss		(6,026)	102,195
1. Other comprehensive income that can be reclassified to
profit or loss under equity method		(6,026)	102,195
VI. Total comprehensive income for the year		1,289,795	1,316,729
Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
Liu Hualong	Li Zheng		Wang Jian

60	CRRC CORPORATION LIMITED
lnterim Report 2020

THE CONSOLIDATED CASH FLOW STATEMENT

FROM JANUARY TO JUNE 2020

					RMB'000
					January-June
				January-June
ITEM		Note V	2020	2019
I.	Cash flows from operating activities:
	Cash receipts from the sale of goods and the rendering of services		98,314,340	81,896,877
	Net increase in placements from banks and other financial institutions		-	2,185,045
	Net decrease in placements with banks and other financial institutions		139,524	-
	Receipts of tax refunds			537,603	655,327
	Other cash receipts relating to operating activities	68	2,465,896	4,246,981
	Sub-total of cash inflows from operating activities		101,457,363	88,984,230
	Cash payments for goods purchased and services received		92,667,431	73,613,433
	Net decrease in deposits from banks and other financial institutions		2,783,910	1,002,431
	Net increase in placements with banks and other financial institutions		-	1,194,203
	Cash payments to and on behalf of employees		11,806,931	13,606,216
	Payment of various taxes			3,965,393	6,943,584
	Other cash payments relating to operating activities	68	5,019,116	6,014,529
	Sub-total of cash outflows from operating activities		116,242,781	102,374,396
	Net cash flow used in operating activities		69	(14,785,418)	(13,390,166)
II. Cash flows from investing activities:
	Cash receipts from recovery of investments		23,833,364	18,917,893
	Cash receipts from investment income			262,120	365,327
	Net cash receipts from disposals of fixed assets, intangible
	assets and other long-term assets			251,888	94,550
	Other cash receipts relating to investing activities		-	-
	Sub-total of cash inflows from investing activities		24,347,372	19,377,770
	Cash payments to acquire or construct fixed assets,
	intangible assets and other long-term assets		2,774,360	2,706,890
	Cash payments to acquire investments			38,672,965	22,976,548
	Cash payments for other investing activities		-	121,264
	Sub-total of cash outflows from investing activities		41,447,325	25,804,702
	Net cash flow used in investing activities			(17,099,953)	(6,426,932)
III. Cash flows from financing activities:
	Cash receipts from capital contributions			36,707	796,011
	Including: Cash receipts from capital contributions by non-controlling
	interests of subsidiaries			36,707	796,011
	Cash receipts from borrowings			16,210,235	55,608,495
	Cash receipts from bonds issuing			26,500,000	12,000,000
	Other cash receipts relating to financing activities		-	900
	Sub-total of cash inflows from financing activities		42,746,942	68,405,406
	Cash repayments of borrowings			20,459,991	57,834,540
	Cash payments for distribution of dividends or profits or settlement of
	interest expenses			268,013	636,478
	Including: Payments for distribution of dividends or profits to non-
	controlling interests of subsidiaries			89,464	318,700
	Cash payments for acquisition of non-controlling interests in
	subsidiaries			-	81,584
	Other cash payments relating to financing activities		76,590	211,566
	Sub-total of cash outflows from financing activities		20,804,594	58,764,168
	Net cash flow from financing activities			21,942,348	9,641,238
IV. Effect of foreign exchange rate changes on cash and
	cash equivalents			(282,351)	89,301
V. Net Decrease in Cash and Cash Equivalents	69	(10,225,374)	(10,086,559)
	Add: Opening Balance of Cash and Cash Equivalents	69	35,819,586	30,290,094
VI. Closing Balance of Cash and Cash Equivalents	69	25,594,212	20,203,535
	Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
	Liu Hualong	Li Zheng		Wang Jian

CRRC CORPORATION LIMITED	61
lnterim Report 2020

THE COMPANY'S CASH FLOW STATEMENT

FROM JANUARY TO JUNE 2020

				RMB'000
				January-June
			January-June
ITEM		Note XIV	2020	2019
I. Cash flows from operating activities:
Cash receipts from the sale of goods and the rendering of services		134,699	74,382
Receipts of tax refunds			15,793	22,020
Other cash receipts relating to operating activities		3,062,908	4,003,304
Sub-total of cash inflows from operating activities		3,213,400	4,099,706
Cash payments for goods purchased and services received		146,869	86,027
Cash payments to and on behalf of employees		83,100	92,417
Payment of various taxes			7,530	11,176
Other cash payments relating to operating activities		2,412,875	4,004,155
Sub-total of cash outflows from operating activities		2,650,374	4,193,775
Net cash flow generated from (used in) operating activities	5	563,026	(94,069)
II. Cash flows from investing activities:
Cash receipts from recovery of investments		8,303,400	19,488,753
Cash receipts from investment income			2,544,309	2,497,742
Sub-total of cash inflows from investing activities		10,847,709	21,986,495
Cash payments to acquire or construct fixed assets,
intangible assets and other long-term assets		12,939	5,849
Cash payments to acquire investments			24,284,910	25,503,890
Other cash payments relating to investing activities		-	121,264
Sub-total of cash outflows from investing activities		24,297,849	25,631,003
Net cash flow used in investing activities			(13,450,140)	(3,644,508)
III. Cash flows from financing activities:
Cash receipts from borrowings			32,976,590	45,853,590
Cash receipts from bonds issuing			25,000,000	12,000,000
Other cash receipts relating to financing activities		12,100,000	17,711,585
Sub-total of cash inflows from financing activities		70,076,590	75,565,175
Cash repayments of borrowings			40,559,077	55,291,844
Cash payments for distribution of dividends or profits or
settlement of interest expenses			190,952	415,797
Other cash payments relating to financing activities		23,779,086	22,258,784
Sub-total of cash outflows from financing activities		64,529,115	77,966,425
Net cash flow generated from (used in) financing activities		5,547,475	(2,401,250)
IV. Effect of foreign exchange rate changes on cash
and cash equivalents			980	2,996
V. Net Decrease in Cash and Cash Equivalents	5	(7,338,659)	(6,136,831)
Add: Opening Balance of Cash and Cash Equivalents	5	11,369,799	7,470,296
VI. Closing Balance of Cash and Cash Equivalents	5	4,031,140	1,333,465
Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
Liu Hualong	Li Zheng		Wang Jian

62	CRRC CORPORATION LIMITED
lnterim Report 2020

THE CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY

FROM JANUARY TO JUNE 2020

													RMB'000
								January-June 2020
						Equity attributable to shareholders of the Company

						Other			General			Non-	Total
				Share	Capital	comprehensive	Special	Surplus	risk	Retained		controlling	shareholders'
ITEM			capital	reserve	income	reserves	reserve	reserve	earnings	Sub-total	interests	equity
I.	Balance at the end of the

	previous period	28,698,864	40,747,823	(1,084,770)	49,957	3,815,330	551,265	63,115,162	135,893,631	22,934,851	158,828,482
II.	Balance at the beginning of
	the current period	28,698,864	40,747,823	(1,084,770)	49,957	3,815,330	551,265	63,115,162	135,893,631	22,934,851	158,828,482
III. Changes for the period	-	22,080	(55,791)	-	-	-	(504,027)	(537,738)	469,624	(68,114)
	(I)	Total comprehensive
			income	-	-	52,357	-	-	-	3,692,655	3,745,012	821,051	4,566,063
	(II)	Shareholders' contributions
			and reduction in capital	-	22,080	-	-	-	-	-	22,080	(48,172)	(26,092)
		1.	Capital contribution from
			shareholders	-	-	-	-	-	-	-	-	27,771	27,771
		2.	Others	-	22,080	-	-	-	-	-	22,080	(75,943)	(53,863)
	(III)	Profit distribution	-	-	-	-	-	-	(4,304,830)	(4,304,830)	(303,255)	(4,608,085)
		1.	Distributions to owners
			(or shareholders)	-	-	-	-	-	-	(4,304,830)	(4,304,830)	(303,255)	(4,608,085)
	(IV)	Transfers within
			shareholders' equity	-	-	(108,148)	-	-	-	108,148	-	-	-

1. Other comprehensive income carried forward to retained

	earnings	-	-	(108,148)	-	-	-	108,148	-	-	-
(V) Special reserves	-	-	-	-	-	-	-	-	-	-
1.	Appropriation of special
	reserves	-	-	-	140,252	-	-	-	140,252	36,467	176,719
2.	Amount utilised in the
	period	-	-	-	(140,252)	-	-	-	(140,252)	(36,467)	(176,719)
IV. Balance at the end of
the period	28,698,864	40,769,903	(1,140,561)	49,957	3,815,330	551,265	62,611,135	135,355,893	23,404,475	158,760,368

CRRC CORPORATION LIMITED	63
lnterim Report 2020

THE CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY

FROM JANUARY TO JUNE 2020

January-June 2019

							Equity attributable to shareholders of the Company

							Other			General			Non-	Total
					Share	Capital	comprehensive	Special	Surplus	risk	Retained		controlling	shareholders'
ITEM				capital	reserve	income	reserves	reserve	reserve	earnings	Sub-total	interests	equity
I.	Balance at the end of the

	previous period	28,698,864	40,628,708	(866,748)	49,957	3,279,992	551,265	56,115,657	128,457,695	21,226,932	149,684,627
II.	Balance at the beginning
	of the current period	28,698,864	40,628,708	(866,748)	49,957	3,279,992	551,265	56,115,657	128,457,695	21,226,932	149,684,627
III. Changes for the period		-	(14,249)	26,810	-	-	-	459,944	472,505	1,196,118	1,668,623
	(I)	Total comprehensive
			income		-	-	17,068	-	-	-	4,780,641	4,797,709	778,546	5,576,255
	(II)	Shareholders' contributions
			and reduction in capital		-	(14,249)	-	-	-	-	(6,125)	(20,374)	736,272	715,898
		1.	Capital contribution
			from shareholders		-	-	-	-	-	-	-	-	796,011	796,011
		2.	Others		-	(14,249)	-	-	-	-	(6,125)	(20,374)	(59,739)	(80,113)
	(III)	Profit distribution		-	-	-	-	-	-	(4,304,830)	(4,304,830)	(318,700)	(4,623,530)
		1.	Distributions to owners
			(or shareholders)		-	-	-	-	-	-	(4,304,830)	(4,304,830)	(318,700)	(4,623,530)
	(IV)	Transfers within
			shareholders' equity		-	-	9,742	-	-	-	(9,742)	-	-	-
		1.	Other comprehensive
			income carried
			forward to retained
			earnings		-	-	9,742	-	-	-	(9,742)	-	-	-
	(V)	Special reserve		-	-	-	-	-	-	-	-	-	-
		1.	Appropriation of special
			reserves		-	-	-	162,535	-	-	-	162,535	10,904	173,439
		2. Amount utilised in the
			period		-	-	-	(162,535)	-	-	-	(162,535)	(10,904)	(173,439)
IV. Balance at the end of
	the period		28,698,864	40,614,459	(839,938)	49,957	3,279,992	551,265	56,575,601	128,930,200	22,423,050	151,353,250
			Legal Representative:		Chief Accountant:		Person in Charge of the Accounting Department:
			Liu Hualong		Li Zheng			Wang Jian

64	CRRC CORPORATION LIMITED
lnterim Report 2020

THE COMPANY'S STATEMENT OF CHANGES IN OWNERS' EQUITY

FROM JANUARY TO JUNE 2020

									RMB'000

						January-June 2020
						Other			Total
				Share	Capital	comprehensive	Surplus	Retained	shareholders'
ITEM				capital	reserve	income	reserve	earnings	equity
I. Balance at the end of the previous
period		28,698,864	62,803,844	(10,037)	3,815,330	6,077,921	101,385,922
II. Balance at the beginning of the
current period	28,698,864	62,803,844	(10,037)	3,815,330	6,077,921	101,385,922
III. Changes in equity during the period	-	4,291	(6,026)	-	(3,009,009)	(3,010,744)
(I)	Total comprehensive income	-	-	(6,026)	-	1,295,821	1,289,795
(II)	Shareholders' contributions
		and reduction in capital	-	4,291	-	-	-	4,291
	1.	Other changes in equity
			of associates	-	4,291	-	-	-	4,291
(III)	Profit distribution	-	-	-	-	(4,304,830)	(4,304,830)
	1.		Distributions to shareholders	-	-	-	-	(4,304,830)	(4,304,830)
IV. Balance at the end of the period	28,698,864	62,808,135	(16,063)	3,815,330	3,068,912	98,375,178
						January-June 2019

						Other			Total
				Share	Capital	comprehensive	Surplus	Retained	shareholders'
ITEM				capital	reserve	income	reserve	earnings	equity
I. Balance at the end of the previous

period		28,698,864	62,804,362	(32,989)	3,279,992	5,564,707	100,314,936
II. Balance at the beginning of the period	28,698,864	62,804,362	(32,989)	3,279,992	5,564,707	100,314,936
III. Changes in equity during the period	-	(105)	102,195	-	(3,090,296)	(2,988,206)
(I)	Total comprehensive income	-	-	102,195	-	1,214,534	1,316,729
(II)	Shareholders' contributions
		and reduction in capital	-	(105)	-	-	-	(105)
	1.	Other changes in equity
			of associates	-	(105)	-	-	-	(105)
(III)	Profit distribution	-	-	-	-	(4,304,830)	(4,304,830)
	1.		Distributions to shareholders	-	-	-	-	(4,304,830)	(4,304,830)
IV. Balance at the end of the period	28,698,864	62,804,257	69,206	3,279,992	2,474,411	97,326,730
	Legal Representative:	Chief Accountant:	Person in Charge of the Accounting Department:
			Liu Hualong		Li Zheng		Wang Jian

CRRC CORPORATION LIMITED	65
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

BASIC INFORMATION ABOUT THE COMPANY

1. General information

CSR Corporation Limited ("CSR") was incorporated in the PRC on 28 December 2007 as a joint stock company with limited liability under the Company Law of the PRC. CSR's A shares were listed on the Shanghai Stock Exchange (the "SSE") on 18 August 2008 and CSR's H shares were listed on the main board of The Stock Exchange of Hong Kong Limited on 21 August 2008. CSR non-public issued A-share ordinary shares in 2012, and the ordinary shares increased to 13,803,000,000 shares after the non-public issuing.

China CNR Corporation Limited ("CNR") was incorporated in the PRC on 26 June 2008 as a joint stock company with limited liability under the Company Law of the PRC. CNR made an initial public offering of A shares which were listed on the SSE on 29 December 2009. H shares of CNR were listed on the Main Board of the HKSE on 22 May 2014. As at 31 December 2014, CNR has issued total shares of 12,259,780,303.

CSR and CNR published a joint announcement on 30 December 2014, announcing that the two companies entered into a merger agreement with respect to a merger proposal ("2015 Business Combination"). CSR and CNR would merge by CSR issuing, on the basis of a single exchange ratio, CSR A shares and CSR H shares to holders of CNR A shares and CNR H shares respectively in exchange for all of the issued shares of CNR. The exchange proportion was 1:1.10, meaning that each CNR A share should be exchanged for 1.10 CSR A shares to be issued by CSR and that each CNR H share should be exchanged for 1.10 CSR H shares to be issued by CSR. As all of the conditions of the above agreement as specified in the merger agreement had been satisfied, the merger agreement became effective on 28 May 2015. CSR issued 2,347,066,040 H shares and 11,138,692,293 A shares on 26 May 2015 and 28 May 2015 respectively. CNR A shares were deregistered from the SSE and CNR H shares were deregistered from the Main Board of HKSE. After the completion of the merger, CSR assumed all the assets, liabilities and business of CNR and CNR was deregistered according to law. On 1 June 2015, the name of CSR was changed from "CSR Corporation Limited" to "CRRC Corporation Limited"("CRRC" or the "Company").

On 5 August 2015, the respective holding companies of the Company, namely CSR Group (formerly China South Locomotive and Rolling Stock Industry (Group) Corporation) and China Northern Locomotive & Rolling Stock Industry (Group) Corporation ("CNR Group") concluded the Merger Agreement by which CNR Group merged CSR Group with the latter deregistered and then was renamed to CRRC Group (later renamed to CRRC Group Co., Ltd., "CRRCG"). All assets, liabilities, business, employees, contracts, qualifications and other rights and obligations of CSR Group shall be inherited by CRRCG after the merger.

As proposed and approved in the Company's 2015 annual general meeting of shareholders as well as approved by the China Securities Regulatory Commission ("CSRC") on Reply on the Approval of Non-publicIssuance of Stocks by CRRC Corporation Limited (Zheng Jian Xu Ke [2016] No. 3203), the Company completed the non-public offering 1,410,105,755 A shares with par value RMB1.00 each to specific investors in January 2017. The number of share capital has increased to 28,698,864,088, and CRRC Group remains the controlling shareholder of the Company.

The address of the Company's registered office is No.16 Central West Fourth Ring Road, Haidian District, Beijing, the PRC.

The Company and its subsidiaries (collectively the "Group") are principally engaged in the research and development, design, manufacture, refurbishment and service of locomotives (including multiple units), metro cars, engineering machinery, mechanical and electric equipment, electronic equipment and related components products, electronic appliances and environmental protection equipment, as well as sales, technical services and equipment leasing of related products; information consultation; industrial investment of the above business; assets management; imports and exports.

66	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

BASIC INFORMATION ABOUT THE COMPANY (continued)
2. Scope of consolidated financial statements

								Paid-in	Shareholding	Voting
		Principal place			Legal	Business scope/	Unified social	capital	proportion	proportion
No.	Company name	of business	Registeredoffice	Type of legal entity	representative	Nature of business	credit code	(RMB'000)	(%)	(%)

1	CRRC Changchun Railway Vehicles	China	Changchun	limited liability company	Wang Run	Manufacturing	91220000735902224D	5,807,947	93.54	93.54
	Co. Ltd. ("CRRC Changchun")
2	CRRC Zhuzhou Institute Co., Ltd.	China	Zhuzhou	limited liability company	Li Donglin	Manufacturing	9143020044517525X1	8,446,840	100.00	100.00
	("CRRC Zhuzhou Institute")
3	CRRC Zhuzhou Locomotive Co., Ltd.	China	Zhuzhou	limited liability company	Zhou Qinghe	Manufacturing	914302007790310965	4,868,336	100.00	100.00
	("CRRC Zhuzhou Locomotive")
4	CRRC Qingdao Sifang Co., Ltd	China	Qingdao	limited liability company	Tian Xuehua	Manufacturing	91370200740365750X	4,071,272	97.81	97.81
	("CRRC Qingdao Sifang")
5	CRRC Tangshan Co., Ltd	China	Tangshan	limited liability company	Hou Zhigang	Manufacturing	911302216636887669	3,990,000	100.00	100.00
	("CRRC Tangshan")
6	CRRC Dalian Co., Ltd. ("CRRC Dalian")	China	Dalian	limited liability company	Lin Cunzeng	Manufacturing	91210200241283929E	4,180,000	100.00	100.00
7	CRRC Qiqihar Group Co., Ltd	China	Qiqihar	limited liability company	Gu Chunyang	Manufacturing	91230200057435769W	7,000,000	100.00	100.00
	("CRRC Qiqihar Group")
8	CRRC Yangtze River Transportation	China	Wuhan	limited liability company	Hu Haiping	Manufacturing	91420115MA4KYAEH3B	5,661,409	100.00	100.00
	Equipment Group Co., Ltd.
	("CRRC Yangtze River Group")
9	CRRC Investment & Leasing Co., Ltd	China	Beijing	limited liability company	Yang Ruixin	Trading and financing	911100007109247853	2,909,285	100.00	100.00
	("CRRC Investment & Leasing")					lease
10	CRRC Qishuyan Co., Ltd	China	Changzhou	limited liability company	Yao Guosheng	Manufacturing	913204006638182170	2,255,243	100.00	100.00
	("CRRC Qishuyan")
11	CRRC Qishuyan Institute Co., Ltd	China	Changzhou	limited liability company	Wang Hongnian	Manufacturing	91320400137168058A	2,060,000	100.00	100.00
	("CRRC Qishuyan Institute")
12	CRRC Capital Management Co., Ltd.	China	Beijing	limited liability company	Lu Jianzhou	Finance	91110108MA00314Q4L	2,500,000	100.00	100.00
	("CRRC Capital Management")
13	CRRC Nanjing Puzhen Co., Ltd.	China	Nanjing	limited liability company	Li Dingnan	Manufacturing	91320191663764650N	2,255,630	100.00	100.00
	("CRRC Nanjing Puzhen")
14	CRRC Hong Kong Capital Management	China	Hongkong	limited liability company	Li Jin	Investment and capital	N/A	3,503,568	100.00	100.00
	Co., Ltd. ("CRRC Hong Kong Capital					operation
	Management") (Note 2)
15	CRRC Construction Engineering Co., Ltd.	China	Beijing	limited liability company	Wang Hongwei	Housing industry	91110106590663663T	1,500,000	100.00	100.00
	("CRRC Construction Engineering")
16	CRRC Yongji Moto Co., Ltd.	China	Yongji	limited liability company	Xiao Anhua	Manufacturing	91140881664458751J	1,290,000	100.00	100.00
	("CRRC Yongji Moto") (Note 1)
17	CRRC Sifang Institute Co., Ltd.	China	Qingdao	limited liability company	Kong Jun	Manufacturing	91370200264582788W	1,690,000	100.00	100.00
	("CRRC Sifang Institute")
18	CRRC Finance Co., Ltd. ("CRRC Finance")	China	Beijing	limited liability company	Dong Xuzhang	Finance	911100000573064301	2,200,000	91.36	91.36
19	CRRC Zhuzhou Moto Co., Ltd.	China	Zhuzhou	limited liability company	Zhou Junjun	Manufacturing	9143020076071871X7	1,342,200	100.00	100.00
	("CRRC Zhuzhou Moto")

CRRC CORPORATION LIMITED	67
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

BASIC INFORMATION ABOUT THE COMPANY (continued)
2. Scope of consolidated financial statements (continued)

								Paid-in	Shareholding	Voting
		Principal place			Legal	Business scope/	Unified social	capital	proportion	proportion
No.	Company name	of business	Registeredoffice	Type of legal entity	representative	Nature of business	credit code	(RMB'000)	(%)	(%)

20	CRRC Ziyang Co., Ltd. ("CRRC Ziyang")	China	Ziyang	limited liability company	Chen Zhixin	Manufacturing	91512000786693055N	2,026,533	99.73	99.73
21	CRRC Beijing Nankou Co., Ltd.	China	Beijing	limited liability company	Sun Kai	Manufacturing	91110000664625580F	805,000	100.00	100.00
	("CRRC Beijing Nankou")
22	CRRC Datong Electric Locomotive	China	Datong	limited liability company	Huang Qichao	Manufacturing	91140200602161186E	656,000	100.00	100.00
	Co., Ltd. (CRRC Datong")
23	CRRC Dalian Institute Co., Ltd.	China	Dalian	limited liability company	Jiang Dong	Manufacturing	91210200243024402A	350,000	100.00	100.00
	("CRRC Dalian Institute")
24	CRRC Sifang Co., Ltd ("CRRC Sifang")	China	Qingdao	limited liability company	Lan Yuzhen	Manufacturing	9137020016357624X1	343,095	100.00	100.00
25	CRRC Logistics Co., Ltd.	China	Beijing	limited liability company	Du Pengyuan	Logistics and trade	91110108737682982M	760,000	100.00	100.00
	("CRRC Logistics")
26	CRRC Industrial Institute Co., Ltd.	China	Beijing	limited liability company	Gong Ming	Manufacturing	911101063066897448	200,000	100.00	100.00
	("CRRC Industrial Institute")
27	CRRC International Co., Ltd.	China	Beijing	limited liability company	Luo Chongfu	Trading	911101067109217367	700,000	100.00	100.00
	("CRRC International")
28	Beijing CNR CR Transportation	China	Beijing	limited liability company	Zhang Yan	Manufacturing	91110106684367734P	20,000	51.00	51.00
	Equipment Co., Ltd ("Beijing CNR
	CR Transportation Equipment")
29	CRRC Information Technology Co., Ltd.	China	Beijing	limited liability company	Tang Xiankang	Software development	91110108700035941C	50,000	100.00	100.00
	("CRRC Information Technology")
30	CRRC SA (PTY) LTD	South Africa	South Africa	limited liability company	Han Xiaobo	Manufacturing	N/A	ZAR 1,000	66.00	66.00
31	CRRC Financial Leasing CO., LTD.	China	Tianjin	limited liability company	Xu Weifeng	Financial Services	91120118MA06J91H6K	3,000,000	81.00	81.00
	("CRRC Financial Leasing")
32	Zhuzhou CRRC Times Electric CO., LTD.	China	Zhuzhou	Company limited by shares	Li Donglin	Manufacturing	914300007808508659	1,175,477	53.19	53.19
	("CRRC Times Electric") (Note 3)
33	Zhuzhou Times New Material	China	Zhuzhou	Company limited by shares	Yang Jun	Manufacturing	91430200712106524U	802,798	39.55	51.02
	Technology CO., LTD.
	("Zhu Zhou Times New Material")
	(Nnote 4)

Note 1: During the period, CRRC Yongji Moto Co., Ltd, a subsidiary of the company, is entrusted by the Company to conduct overall management of CRRC Dalian R&D Co., Ltd., on the basis of holding 50% equity of CRRC Dalian R&D.

Note 2: During the period, the Company injected its 69.62% equity in CRRC Hong Kong Co., Ltd. in the form of non-monetary assets to CRRC Hong Kong Capital Management Co., Ltd., a wholly-owned subsidiary of the Company. Upon the completion of capital injection, CRRC Hong Kong became a wholly-owned subsidiary of CRRC Hong Kong Capital Management, with its financial statements consolidated accordingly.

Note 3: ZTE is a subsidiary of Zhuzhou Institute. In 2018, CRRC Hong Kong Capital Management, a subsidiary of the Company, purchased 4,066,800 shares of ZTE on the open market. As at 31 December 2018, the Group's shareholding in ZTE was 52.38%. In 2019, CRRC Hong Kong Capital Management purchased 9,526,400 shares of ZTE in the open market. As at 30 June 2020, the Group's shareholding ratio in ZTE is 53.19%.

Note 4: ZTNM is a subsidiary of Zhuzhou Institute. The equity interests of ZTNM held by the Company was 39.55%. Since CRRCG held 11.47% equity interest of ZTNM and has authorized the Company to exercise its voting rights, the voting rights of ZTNM held by the Company became 51.02%.

68	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

1. Basis of preparation

The Group has adopted the Accounting Standards for Business Enterprises and relative regulations ("ASBE") issued by the Ministry of Finance (the "MOF").

According to Acceptance of Mainland Accounting and Auditing Standards and Mainland Audit Firms for Mainland Incorporated Companies Listed in Hong Kong and other relevant Security Listing Rules Amendments issued by the Hong Kong Stock Exchange (Hong Kong Listing Rules) in December 2010, also referring to the relevant provisions issued by the MoF and the China Securities Regulatory Commission ("CSRC"), and approved by the 10th meeting of the second board of directors of the Company and the General Meeting of the Company, from 2019 fiscal year, the Company no longer provides the financial statements prepared in accordance with the ASBE and the International Financial Reporting Standards (the "IFRS") separately to stockholders of A shares and H shares. Instead, the Company provides the financial statements prepared in accordance with the ASBE to all stockholders, taking the relevant disclosure standards of Hong Kong Companies Ordinance and Hong Kong Listing Rules into consideration.

The financial data in this report are prepared based on ASBE.

In addition, the Company also discloses relevant financial information in accordance with Information Disclosure and Preparation Rules for Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reporting (revised by CSRC in 2014).

2. Going concern

The Group evaluated the going concern capability for the next twelve months from 30 June 2020 and found no matters or circumstances that could raise serious doubts about the going concern capability. These financial statements have been prepared on a going concern basis.

CRRC CORPORATION LIMITED	69
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

SPECIFIC ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

1. Statement of compliance with the ASBE

These financial statements are in compliance with the ASBE to truly and completely reflect consolidated and the Company's financial position as at 30 June 2020, and consolidated and the Company's operating results and cash flows for the period ended 30 June 2020.

2. Accounting period

The Company has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.

3. Business cycle

Business cycle refers to the period since purchasing assets for production till the realisation of cash or cash equivalents. The Group's business cycle is 12 months in general.

4. Reporting currency

The functional currency of the Company is RMB and is adopted to prepare the financial statements. Except for particular explanations, all items are presented in RMB'000. The functional currency of the Company's subsidiaries, joint ventures and associates is selected based on economic environment where they operate.

5. Basis of accounting and principle of measurement

The Group has adopted the accrual basis of accounting. Except for certain financial instruments which are measured at fair value, the Group adopts the historical cost as the principle of measurement. When assets are impaired, impairment provisions for assets are recognised in accordance with relevant requirements.

The historical cost of an asset when it is acquired or created is the value of the costs incurred in acquiring or creating the asset, comprising the fair value of consideration paid to acquire or create the asset. The historical cost of a liability when it is incurred or taken on is the value of the consideration received to incur or take on the liability, or the contractual amount for taken current obligations, or the amount of cash and cash equivalents expected to be paid to settle the liabilities in normal course of business.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurements date, regardless of whether that price is directly observable or estimated using valuation technique. Fair value measurement and disclosure in the financial statements are determined according to the above basis.

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than inputs within Level 1, that are observable for the asset or liability;
Level 3 inputs are unobservable inputs for the asset or liability.

70	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

6. The accounting treatment of business combinations involving enterprises under common control and business combinations not involving enterprises under common control

A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations includes business combinations involving enterprises under common control and business combinations not involving enterprises under common control.

Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For a business combination involving entities under common control, on the combination date, the party that, obtains control of another entity in the combination is the acquirer, while the other entity is the acquiree. The combination date is the date on which the acquirer obtains control of the acquiree.
Assets and liabilities obtained shall be measured at their respective carrying amounts as recorded by the combining entities at the date of the combination. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination (or the aggregate par value of the shares issued as consideration) is adjusted to share premium under capital reserve. If the capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
Costs that are directly attributable to the combination are charged to profit or loss in the period in which they are incurred.
Business combinations not involving enterprises under common control and goodwill
A business combination not involving enterprises under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties before and after the combination.
The cost of combination is the fair values of the assets paid, liabilities incurred or bore, and equity instruments issued by the acquirer for the purpose of achieving the control of the acquiree. The intermediary cost such as audit, legal services, valuation and consulting services and other related administrative expenses that are directely attributable to the business combination by the acquirer are charged to profit or loss in the period in which they are incurred.
The acquiree's identifiable assets, liabilities and contingent liabilities acquired by the acquirer in a business combination not involving enterprises under common control shall be measured at fair value at the date of acquisition.
Where the cost of combination exceeds the acquirer's interest in the fair value of the acquiree's identifiable net assets, the difference is treated as an asset and recognised as goodwill, which is measured at cost on initial recognition. Where the cost of combination is less than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer firstly reassesses the measurement of the fair values of the acquiree's identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination. If after that reassessment, the cost of combination is still less than the acquirer's interest in the fair value of the acquiree's identifiable net assets, the acquirer recognises the remaining difference immediately in profit or loss for the current period.
The goodwill arising on a business combination should be separately disclosed in the consolidated financial statement and measured by the amount of costs deducted by the accumulative provision for impairment.

CRRC CORPORATION LIMITED	71
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

7. Basis for preparation of consolidated financial statements

The scope of consolidation in the consolidated financial statements is determined on the basis of control. Control is achieved when the company has power over the investee; is exposed or has rights to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns. A subsidiary is an enterprise that is controlled by the Company. The financial positions, operating results, and cash flow of subsidiaries are included in consolidated financial statement from acquisition date to termination date of control.

For subsidiaries acquired through a business combination involving enterprises under common control, they will be fully consolidated into consolidated financial statements from the date on which subsidiary was ultimately under common control by the same party or parties. Their operating results and cash flows from the beginning of the earliest reporting period are included in the consolidated income statement and consolidated statement of cash flows appropriately.

For a subsidiary acquired through a business combination not involving enterprises under common control, the acquired subsidiaries are consolidated in consolidated financial statement on the basis of fair value of identifiable assets and liabilities recognised on the date of acquisition.

The significant accounting policies and accounting periods adopted by the subsidiaries are determined based on the uniform accounting policies and accounting periods set out by the Company.

All significant intra-group balances and transactions are eliminated on consolidation.

The portion of subsidiaries' equity, profits or losses and comprehensive income that is attribute to their non- controlling shareholders is separately presented under "shareholders' equity" in the consolidated balance sheet, and "net profit" and "total comprehensive income" in the consolidated income statement.

When the amount of loss for the period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders' portion of the opening balance of shareholders' equity of the subsidiary, the excess amount is still allocated against non-controlling interests.

Acquisition of non-controlling interests or disposal of interest in a subsidiary that does not result in the loss of control over the subsidiary is accounted for as equity transactions. The carrying amounts of the Company's interests and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. The difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is adjusted to capital reserve under shareholders' equity. If the capital reserve is not sufficient to absorb the difference, the excess is adjusted against retained earnings.

When the Group loses control over a subsidiary due to disposal of certain equity interest or other reasons, any retained interest is re-measured at its fair value at the date when control is lost. The difference between (i) the aggregate of the consideration received on disposal and the fair value of any retained interest and (ii) the share of the former subsidiary's net assets cumulatively calculated from the acquisition date according to the original proportion of ownership interest is recognised as investment income in the period in which control is lost, and offset goodwill simultaneously. Other comprehensive income associated with investment in the former subsidiary is reclassified to investment income in the period in which control is lost.

72	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

8. Classification of joint arrangements and accounting methods for joint management

The joint arrangement includes joint operations and joint ventures. The classification is determined by considering the structure, legal form and contract terms of the arrangement according to the rights and obligations of the joint party in the joint arrangement. Joint operation refers to whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint venture arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.

The Group's joint arrangements are joint ventures, which are accounted for using the equity method, and are set out in Note III, 14.

9. Recognition criteria of cash and cash equivalent

Cash equivalents are the Company's short-term (it generally expires within three months from the date of purchase), highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

10. Translation of transactions and financial statements denominated in foreign currencies

For foreign currency transactions, the Group translate the amount of foreign currency into RMB.

Foreign currency transactions are initially recorded using the functional currency spot exchange rate at the date of the transactions. At the balance sheet date, foreign currency monetary items are translated into RMB using the spot exchange rate at the balance sheet date. Exchange differences arising from the differences between the spot exchange rates prevailing at the balance sheet date and those on initial recognition or at the previous balance sheet date are recognised in profit or loss for the period, except that (1) exchange differences related to a specific- purpose borrowing denominated in foreign currency that qualify for capitalization are capitalised as part of the cost of the qualifying asset during the capitalization period; (2) exchange differences arising from changes in the carrying amounts (other than the amortised cost) of monetary items measured at fair value through other comprehensive income are recognised as other comprehensive income.

Foreign currency non-monetary items measured at historical cost are translated into the amounts in functional currencies at the spot exchange rates at the transaction dates. Foreign currency non-monetary items measured at fair value are re-translated at the spot exchange rate on the date the fair value is determined. Difference between the re-translated functional currency amount and the original functional currency amount is treated as changes in fair value (including changes of exchange rate) and is recognised in profit and loss or as other comprehensive income.

For the purpose of preparing the consolidated financial statements, financial statements of a foreign operation are translated from the foreign currency into RMB using the following method: all the assets and liability items in the balance sheet are translated using the spot exchange rates at the balance sheet date, shareholders' equity items except of "retained earnings" are translated at the spot exchange rates at the date on which such items arose; income and expense items in the income statement are translated at the average exchange rates during the period in which the transaction occurs. Translation differences of financial statements denominated in foreign currencies arising hereby are recognized as other comprehensive income. When a foreign operation is disposed of, other comprehensive income associated with such foreign operation is transferred to profit or loss for the period in which it is disposed of. In case of a disposal or other reason that leads to the reduction of the proportion of foreign operation interests held but does not result in the Group losing control of a foreign operation, the proportionate share of accumulated exchange differences arising on translation of financial statements are re-attributed to non- controlling interests and are not recognized in profit and loss. For partial disposals of equity interests in foreign operations which are associates or joint ventures, the proportionate share of the accumulated exchange differences arising on translation of financial statements of foreign operations is reclassified to profit or loss.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

10. Translation of transactions and financial statements denominated in foreign currencies (continued)

Foreign currency cash flows and the cash flows of foreign subsidiaries are translated using the average exchange rate for the year during which the cash flows occur. The effect of exchange rate changes on cash and cash equivalents is regarded as a reconciling item and presented separately in the cash flow statement as effect of foreign exchange rate changes on cash and cash equivalents.

11. Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are immediately recognised in profit or loss. For other financial assets and financial liabilities, transaction costs are included in their initial recognised amounts. When the Group recognises the accounts receivable excluding significant financing components or does not consider the financing components in the contracts within one year in accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue ("Revenue Standards"), the initial recognition is measured at transaction price defined in Revenue Standards.

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over each accounting period.

The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or financial liability, or where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates future cash flows considering all contractual terms of the financial asset or financial liability (i.e. pre-repayment, extension, call option or other similar options, etc.) without considering future impairment losses under expected credit loss model.

The amortised cost of a financial asset or a financial liability is an accumulatively amortised amount arising from the initially recognised amount of the financial asset or the financial liability deducting repaid principals plus or less amortisation of balances between the initially recognised amount on initial recognition and the amount on maturity date using the effective interest method, and then deducting accumulated provisions for losses (only applicable to financial assets).

Classification and measurement of financial assets
Subsequent to initial recognition, the Group's various financial assets are subsequently measured at amortised cost, fair value through other comprehensive income and fair value through profit or loss.
If contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, and the financial asset is held within a business model whose objective is achieved by collecting contractual cash flows, the Group classify the financial asset into financial asset measured at amortised cost. Such financial assets include cash and bank balances, bills and accounts receivable, other receivables, placements with banks and other financial institutions, some non-current assets due within one year, loans and advances to customers, debt investments and long-term receivables.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Classification and measurement of financial assets (continued)
  If the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, and the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets, the Group classify the financial asset into the financial assets at fair value through other comprehensive income ("FVTOCI"). Accounts receivable and bills receivable that are classified at fair value through other comprehensive income at the time of acquisition are presented in the receivables at fair value through other comprehensive income; the remaining items are presented in other current assets if they are within one year (inclusive) at the time of acquisition.
  Financial assets at fair value through profit and loss ("FVTPL") include financial assets classified at fair value through profit and loss and those designated as at fair value through profit or loss.
2. - Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are recognised into FVTPL.
  - Upon initial recognition, to eliminate or significantly reduce accounting mismatches, the Group may irrevocably designate financial assets as measured at FVTPL.

Financial assets at fair value through profit and loss are presented under held-for-trading financial assets. Financial assets due over one year since the balance sheet date or without a fixed expiring date are presented under other non-current financial assets.

Upon initial recognition, the Group may irrevocably designate non-tradable equity instrument investment as financial assets measured at FVTOCI, except for contingent considerations recognised in the business combination not under the common control. Such type of financial assets shall be presented as investment in other equity instruments.

Financial assets meeting one of the following requirements indicate that the financial assets held by the Group are for trading:

The purpose of obtaining relevant financial assets is mainly for sale or buy-back in the near future;
Relevant financial assets are part of the identifiable financial instrument combination under centralized management upon initial recognition and there is objective evidence indicating that exists recently a short-term profit model;
Relevant financial assets are derivatives, except for derivatives meet the definition of financial guarantee contracts as well as derivatives designated as effective hedging instruments.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Classification and measurement of financial assets (continued)
2. 1. Financial assets measured at amortised cost
    Financial assets are subsequently measured at amortised cost using the effective interest method. Gain or loss arising from impairment or derecognition is recognised in profit or loss.
    For financial assets measured at amortised cost the Group recognises interest income using the effective interest method. The Group calculates and recognises interest income through book value of financial assets multiplying effective interest, except for the following circumstances:
  2. - For the purchased or originated credit loss occurred financial assets, the Group calculates and recognises their interest income based on amortised cost and credit-adjusted effective interest rate of such financial assets since initial recognition.
    - For the purchased or originated financial assets without credit-impairment but subsequently incurred credit-impairment, the Group calculates and recognises their interest income based on amortised costs and effective interest rate of such financial assets. If the credit impairment risk is reduced during the subsequent periods and credit impairment does not exist and the improvement is relevant to an event incurred subsequent to the application of above provisions, the Group recognises interest income based on book value of financial assets multiplying effective interest rate.
  3. Categorized into FVTOCI
    Impairment losses or gains related to financial assets categorized into FVTOCI, interest income measured using effective interest method and exchange gains or losses are recognised into profit or loss for the current period. Except for the above circumstances, changes in fair value of the financial assets are included in other comprehensive income. The amount includes in profit or loss of certain financial assets is equal to the amount that the financial assets is recognised at amortised cost over each period. When the financial asset is derecognized, the cumulative gains or losses previously recognised in other comprehensive income shall be removed from other comprehensive income and recognised in profit or loss.
  4. Designated as FVTOCI
    The Group designated non-tradable equity investments as FVTOCI, changes in fair value of certain financial assets should be recognised in other comprehensive income, when the financial assets are derecognized, the accumulative gains or losses previously recognised in other comprehensive income shall be removed from other comprehensive income and recognised in retained earnings. During the period that the Group holds these non-tradable equity instrument, the Group has established the right of collecting dividends, whose economic benefit is probably flow into the Group, and the amount of the dividends can be reliably measured, then the Group will recognise dividends in profit or loss.
  5. FVTPL
    The Group subsequently measured financial assets at FVTPL at fair value, gains or losses arising from changes in the fair value and dividend and interest income related to these financial assets shall be recognised into profit or loss for the period.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Impairment of financial assets and other items
  The Group recognises impairment losses for expected credit losses on financial instruments measured at amortised cost, categorized into FVTOCI, lease receivables, contract assets, loan commitments and financial guarantee contracts.
  The Group makes a loss allowance against amount of expected credit losses during the whole life of the contract assets, accounts receivables and lease receivable arising from the transactions under Accounting Standards for Business Enterprises No. 21 - Lease.
  For other financial instruments, except for those impaired when purchased or originated, the Group re- evaluate changes in credit risk of relevant financial instruments since initial recognition at each balance sheet date. If the credit risk of the above financial instruments has increased significantly since initial recognition, the Group measures loss allowance based on the amount of full lifetime; if credit risk of the financial instrument does not increase significantly since initial recognition, the Group recognises loss allowance based on 12-month expected credit loss of the financial instrument. Increase or reversal of credit loss allowance is included in profit or loss as loss/gain on impairment. Except for the financial assets classified as FVTOCI, financial guarantee contract and loan commitment, credit loss allowance offsets the carrying amount of financial assets. For the financial assets classified as FVTOCI, the Group recognises credit loss allowance in other comprehensive income, which does not decrease the carrying amount of such financial assets in the balance sheet.
  The Group has made a loss allowance against amount of expected credit losses during the whole life in the prior accounting period. However, at the balance sheet date, the credit risk on a financial instrument has not increased significantly since initial recognition; the Group will measure the loss allowance for that financial instrument at an amount in the future 12-month expected credit losses. Reversed amount of loss allowance arising from such circumstances shall be included in profit or loss as impairment gains.
2. 1. Significant increases in credit risk
    The Group will make use of reasonable and supportable forward-looking information that is available to determine whether credit risk has increased significantly since initial recognition through comparing the risk of a default occurring on the financial instruments as at the reporting date with the risk of a default occurring on the financial instruments as at the date of initial recognition. For financial guarantee contracts, when applying the provision of impairment of financial instruments, the Group shall take the date when it becomes the party making an irrevocable undertaking as the initial recognition date.
    The Group will take the following factors into consideration when assessing whether credit risk has increased significantly:
  2. - Significant changes in internal price indicators as a result of a change in credit risk;
    - Other changes in the rates or terms of an existing financial instrument that would be significantly different if the instrument was newly originated or issued at the balance sheet date (such as more stringent covenants, increased amounts of collateral or guarantees, or higher income coverage);
    - Significant changes in external market indicators of credit risk for a particular financial instrument or similar financial instruments with the same expected life;
    - An actual or expected significant change in the financial instrument's external credit rating.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Impairment of financial assets and other items (continued)
2. 1. Significant increases in credit risk (continued)
  2. - Existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant change in the debtor's ability to meet its debt obligations.
    - An actual or expected significant change in the operating results of the debtor.
    - Significant increases in credit risk on other financial instruments of the same debtor.
    - An actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor.
    - Significant changes in the value of the collateral supporting the obligation or in the quality of third- party guarantees or credit enhancements.
    - Significant changes in the expected performance and behaviour of the debtor.
    - Changes in the Group's credit management approach related to the financial instrument;

At the balance sheet date, if the Group judges that the financial instruments solely are exposed to lower credit risk, the Group will assume that the credit risk of the financial instruments has not been significantly increased since initial recognition. If the risk of default on financial instruments is low, the borrower's ability to meet its contractual cash flow obligations in the short term is strong, and even if the economic situation and operating environment are adversely changed over a long period of time, it may not necessarily reduce the borrower's ability to fulfill its contractual cash flow obligations, the financial instrument is considered to have a lower credit risk.

Credit-impairedfinancial assets
When the Group expected occurrence of one or more events which may cause adverse impact on future cash flows of a financial asset, the financial asset will become a credit-impaired financial asset. Objective evidence that a financial asset is impaired includes the following observable events:
- Significant financial difficulty of the issuer or the borrower;
- A breach of contract by the debtor, such as a default or delinquency in interest or principal payments;
- The creditor, for economic or legal reasons relating to the debtor's financial difficulty, granting a concession to the debtor;
- It is becoming probable that the debtor will enter bankruptcy or other financial reorganization;
- The disappearance of an active market for that financial asset because of financial difficulties; or
- The purchase or origination of a financial asset with a large scale of discount, which reflects the facts of credit losses incurred.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Impairment of financial assets and other items (continued)
2. 1. Determination of expected credit losses
    Except that the Group recognises credit loss for financial assets, contract assets, lease receivables, loan commitment and financial guarantee contracts that are individually significant or credit impaired on an individual asset/contract basis, the Group recognises credit loss of relevant financial instruments on a collectively basis using a provision matrix. The Group classifies financial instruments into different groups based on common risk characteristics. Shared credit risk characteristics include type of financial instruments, credit risk rating, type of collateral, remaining contractual maturity, industry of debtors, geographical location of debtors and the value of collateral relative to financial assets, etc.
    The Group determines expected credit losses of relevant financial instruments using the following methods:
  2. - For a financial asset, credit loss is the present value of difference between the contractual cash flows that are due to the Group under the contract and the cash flows that the Group expects to receive.
    - For a lease receivable, credit loss is the present value of difference between the contractual cash flows that are due to the Group under the contract and the cash flows that the Group expects to receive.
    - For undrawn loan commitments, the credit loss is the present value of the difference between the contract cash flow to be received by the Group and the expected cash flow, under the condition that the loan commitment holder withdraws the corresponding loans. The Group's estimate of the expected credit loss on the loan commitment is consistent with the expected withdrawal of the loan commitment.
    - For a financial guarantee contract, credit loss is the present value of difference between the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the Group expects to receive from the holder, the debtor or any other party.
    - For credit-impaired financial assets other than the purchased or originated credit-impaired financial assets at the balance sheet date, credit loss is difference between the carrying amount of financial assets and the present value of expected future cash flows discounted at original effective interest rate.

The factors reflected in methods of measurement of expected credit losses include an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes; time value of money; reasonable and supportable information about past events, current conditions and forecasts on future economic status at the balance sheet date without unnecessary additional costs or efforts.

Write-offof financial assets
The Group shall directly write down the carrying amount of a financial asset when the Group has no longer reasonably expect that the contractual cash flows of financial assets can be collected in aggregate or in part, which constitutes derecognition of relevant financial assets.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Transfer of financial assets
  The Group derecognizes a financial asset if one of the following conditions is satisfied: (i) the contractual rights to the cash flows from the financial asset expire; or (ii) the financial asset has been transferred and substantially all the risks and rewards of ownership of the financial asset is transferred to the transferee; or (iii) although the financial asset has been transferred, the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset but has not retained control of the financial asset.
  If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and it retains control of the financial asset, the Group will recognise the financial asset to the extent of its continuing involvement in the transferred financial asset and recognises an associated liability. Relevant liabilities are measured using the following methods:
2. - For transferred financial assets recognised at amortised cost, the carrying amount of relevant liabilities is the carrying amount of financial assets transferred with continuing involvement deducted amortised cost of the Group's retained rights (if the Group retains relevant rights due to transfer of financial assets) with addition of amortised cost of obligations undertaken by the Group (if the Group undertakes relevant obligations upon transfer of financial assets). Relevant liabilities shall not be designated as financial liabilities at fair value through profit or loss.
  - For transferred financial assets recognised at fair value, the carrying amount of relevant financial liabilities is the carrying amount of financial assets transferred with continuing involvement deducted fair value of the Group's retained rights (if the Group retains relevant rights upon transfer of financial assets) with addition of fair value of obligations undertaken by the Group (if the Group undertakes relevant obligations upon transfer of financial assets). Accordingly, the fair value of relevant rights and obligations shall be measured on an individual basis.

For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, for financial asset categorized into those measured at amortised cost and FVTOCI, the difference between the carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and any cumulative gain or loss that has been recognised in other comprehensive income, is recognised in profit or loss. For non-trading equity instruments designated as financial assets at FVTOCI, cumulative gains or losses previously recognised in other comprehensive income should be removed from other comprehensive income and be recognised in retained earnings.

For a part of transfer of a financial asset that satisfies the derecognition criteria, the carrying amount of the transferred financial asset is allocated between the part that is derecognized and the part that is continuously involved, based on the respective fair values of those parts on transfer date. The difference between (1) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognised in other comprehensive income; and (2) the carrying amount allocated to the part derecognized on derecognition date; is recognised in profit or loss or retained earnings.

For a transfer of a financial asset in its entirety that does not satisfy the derecognition criteria, the Group continues to recognise the transferred financial asset in its entirety. The consideration received should be recognised as a financial liability.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Classification of liabilities and equity
  Financial instruments issued by the Group are classified into financial liabilities or equity instruments on the basis of the substance of the contractual arrangements and the economic nature not only its legal form, together with the definition of financial liability and equity instruments on initial recognition.
2. 1. Classification and measurement of financial liabilities
    On initial recognition, financial liabilities are classified into financial liabilities at fair value through profit or loss and other financial liabilities.
  2. 1. Financial liabilities at fair value through profit or loss
      Financial liabilities at FVTPL consist of financial liabilities held for trading (including derivative instruments classified as financial liabilities) and those designated as at FVTPL. Financial liabilities at FVTPL are presented as held-for-trading financial liabilities/other non-current liabilities based on its liquidity.
      It is indicated that the Group's purpose of undertaking the financial liabilities is for trading if the financial liabilities meet one of the following conditions:
    2. - The purpose for undertaking relevant financial liabilities is mainly for recent repurchase;
      - The relevant financial liabilities are part of the centrally managed identifiable financial instrument portfolio at initial recognition, and there is objective evidence that there is a short-term profits presence in the near future;
      - Related financial liabilities are derivatives, except for derivatives that meet the definition of a financial guarantee contract and that are designated as effective hedging instruments.

Financial liabilities at FVTPL are subsequently measured at fair value. Any gains or losses arising from changes in the fair value or any dividend or interest expenses paid related to the financial liabilities are recognised in profit or loss.

Other financial liabilities
Other financial liabilities, except for financial guarantee contracts, are classified as financial liabilities measured at amortised cost, which is subsequently measured at amortised cost, any gains or losses arising from derecognition or amortisation are recognised in profit or loss for the period.
If the Group amends or renegotiates a contract with the counterparty which does not result in derecognition of financial liabilities subsequently measured at amortised cost but results in changes in the contractual cash flow, the Group shall recalculate the carrying amount of the financial liabilities and account for the relevant profit or loss as current profit or loss. The Group determines the recalculated carrying amount of the financial liabilities based on the present value of the contractual cash flow to be renegotiated or modified according to the discounted original effective interest rate of financial liabilities. For all the costs or expenses arising from an amended or renegotiated contract, the Group shall adjust the book value of the financial liabilities and amortise them for the remaining life of the financial liabilities.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Classification of liabilities and equity (continued)
2. 1. Classification and measurement of financial liabilities (continued)
  2. 1. Other financial liabilities (continued)
      A financial guarantee contract is a contract by which the issuer is required to compensate specific amount to the contract holder who suffers from losses when the specific debtor cannot repay the debts in accordance with the initial or revised debt instrument terms upon maturity of debts. Financial guarantee contracts that are not designated as financial liabilities at FVTPL are measured at the higher of: (i) the loss provision after initial recognition, and (ii) balance of amount recognised initially deducting the accumulated amortisation amount determined on the basis of relevant revenue standards.
  3. Derecognition of Financial Liabilities
    The Group derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Group (an existing debtor) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
    When the Group derecognizes a financial liability or a part of it, it recognises the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
  4. Equity instruments
    An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued (including refinanced), repurchased, sold and cancelled by the Group are recognised as changes in equity. Change of fair value of equity instruments is not recognised by the Group. The related transaction costs are deducted from equity.
    The Group recognises the distribution to holders of the equity instruments as distribution of profits, and dividends paid do not affect total amount of shareholders' equity.
3. Derivatives and embedded derivatives
  Derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are subsequently re-measured at fair value.
  For hybrid contract constituted by embedded derivatives and host contract, if the host contract is a financial asset, the embedded derivative shall not be separated from the hybrid contract, and the hybrid contract shall be taken as a whole to apply to the accounting standards for the classification of financial assets.

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SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
11. Financial instruments (continued)
1. Derivatives and embedded derivatives (continued)
  If the host contract included in the hybrid contract is not a financial asset and satisfies all the following criteria, the embedded derivative shall be separated from the hybrid contract and treated as an individual derivative.
2. - The economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract.
  - The individual instrument has the same terms as the embedded derivative conforms to the definition of a derivative.
  - The hybrid instrument is not designated as a financial asset or financial liability at FVTPL.

If the embedded derivative is separated from the hybrid contract, the host contract shall be accounted for in accordance with the appropriate accounting standards.

Changes in fair value of derivative financial instruments are included in profit or loss for the period.

Convertible Bonds
Convertible bonds issued by the Group that contain both debt and multiple embedded derivatives (including conversion option that will be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Group's own equity instruments, redemption options and repurchase options) are classified separately into respective items on initial recognition. Multiple embedded derivatives are generally treated as a single compound embedded derivative unless those derivatives relate to different risk exposures and are readily separable and independent of each other. At the date of issue, both the debt and the derivative components are recognised at fair value.
In subsequent periods, the debt component of the convertible bonds is carried at amortised cost using the effective interest method. The derivative component is measured at fair value with changes in fair value recognised in profit or loss.
Transaction costs that relate to the issue of the convertible bonds are allocated to the debt and derivative components in proportion to their relative fair values. Transaction costs relating to the derivative component is charged to profit or loss immediately. Transaction costs relating to the debt component are included in the carrying amount of the debt portion and amortised over the period of the convertible bonds using the effective interest method.
Offsetting financial assets and financial liabilities
Where the Group has a legal right that is currently enforceable to set off the recognised financial assets and financial liabilities, and intends either to settle on a net basis, or to realise the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.

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III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

12. Inventories

Inventories include raw materials, work in progress, finished goods, commissioned processing materials and turnover materials, etc.

Inventories are initially measured at cost. Cost of inventories include purchase costs, processing cost and other costs. The actual costs of inventories are determined on specific identification, first-in,first-out, or weighted average methods depending on business types. Turnover materials include low cost and short-lived consumables, packaging materials, etc., which are armortised using either one-off amortisation method or multiple-stage amortisation method.

The perpetual inventory system is maintained for stock system.

At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the cost of inventories is higher than the net realisable value, a provision for decline in value of inventories is recognised in profit or loss. If factors that previously resulted in the provision for decline in value of inventories no longer exist, the amount of the write-down is reversed. The reversal is limited to the amount originally provided for the provision for the decline in value of inventories, and is recognised in profit or loss of the current period.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realisable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events.

For inventories that relate to a product series that is produced and marketed in the same geographical area, have the same or similar uses or purposes, and cannot be practicably evaluated separately from other items, provision for decline in value of inventories can be determined on an aggregate basis. Provision for decline in value of other inventories is made based on the excess of cost of inventory over its net realisable value on an item-by-item basis.

13. Assets held for sale

Non-current assets and disposal groups are classified as held for sale category when the Group recovers the carrying amount through a sale (including an exchange of nonmonetary assets that has commercial substance) rather than continuing use.

Non-current assets or disposal groups classified as held for sale are required to satisfy both of the following conditions: (1) the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset or disposal group; (2) the sale is highly probable, i.e. the Group has made a resolution about selling plan and obtained a confirmed purchase commitment and the sale is expected to be completed within one year.

The Group measures the non-current assets or disposal groups classified as held for sale at the lower of their carrying amount and fair value less costs to sell. Where the carrying amount is higher than the net amount of fair value less costs to sell, carrying amount should be reduced to the net amount of fair value less costs to sell, and such reduction is recognised in impairment loss of assets and included in profit or loss for the period. Meanwhile, provision for impairment of held-for-sale assets are made. When there is increase in the net amount of fair value of assets classified as held for sale less costs to sell at the balance sheet date, the original deduction should be reversed in impairment loss of assets recognised after the classification of held-for-sale category, and the reverse amount is included in profit or loss for the period.

Non-current assets classified as held-for-sale or disposal groups are not depreciated or amortised, interest and other costs of liabilities of disposal group classified as held for sale continue to be recognised.

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FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
14. Long-term equity investments
1. Judgment criteria for joint control and significant influence
  Control is achieved when the investor has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating policy decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee (for example, warrants and convertible debts) held by the investing enterprises or other parties that are currently exercisable or convertible shall be considered.
2. Determination of investment cost
  For a long-term equity investment acquired through a business combination involving enterprises under common control, the investment cost of the long-term equity investment is the share of the carrying amount of the shareholders' equity of the acquiree attributable to the ultimate controlling party at the date of combination. For a long-term equity investment acquired through business combination not involving enterprises under common control, the investment cost of the long-term equity investment is the cost of acquisition. For a business combination not involving enterprises under common control achieved in stages that involves multiple exchange transactions, the initial investment cost is carried at the aggregate of the carrying amount of the acquirer's previously held equity interest in the acquiree and the new investment cost incurred on the acquisition date. Except for long-term equity investment acquired through a business combination, other equity investment is initially measured at cost.
  The expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services and other related administrative expenses attributable to the business combination are charged in profit or loss in the period in which they are incurred.
3. Subsequent measurement and recognition of profit or loss
4. 1. Long-termequity investment measured under the cost method
    The Company's financial statements measured the long-term equity investments of subsidiaries under the cost method. A subsidiary is the investee controlled by the Group.
    Under the cost method, a long-term equity investment initial recognised at cost. Except for cash dividends or profits already declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognised in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.

CRRC CORPORATION LIMITED	85
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
14. Long-term equity investments (continued)
1. Subsequent measurement and recognition of profit or loss (continued)
2. 1. Long-termequity investment measured under the equity method
    The Group measured investments in associates and joint ventures under the equity method. An associate is an entity over which the Group has significant influence, and a joint venture is an entity over which the Group has joint control along with other investors.
    Under the equity method, where the initial investment cost of a long-term equity investment exceeds the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is less than the Group's share of the fair value of the investee's identifiable net assets at the time of acquisition, the difference is recognised in profit or loss for the period, and the cost of the long-term equity investment is adjusted accordingly.
    Under the equity method, the Group recognises its share of the net profit or loss and other comprehensive income of the investee for the period as investment income or loss and other comprehensive income for the period. The Group recognises its share of the investee's net profit or loss based on the fair value of the investee's individual separately identifiable assets, etc. at the acquisition date after making appropriate adjustments to be confirmed with the Group's accounting policies and accounting period. Unrealised profits or losses resulting from the Group's transactions with its associates and joint ventures shall be eliminated when recognised investment income or loss to the extent that those attributable to the Group's equity interest. However, unrealised profits or losses resulting from the Group's transactions with its associates and joint ventures are recognised as investment income or loss to the extent that those attributable to the Group's equity interest are eliminated if the trading assets do not form a business. Unrealised losses are resulted from the Group's transactions with its associates and joint ventures, the impairment losses on the transferred assets are not eliminated. Changes in other equity of the investee other than net profit or loss, other comprehensive income and profit distribution shall be included in capital reserve, with the carrying amount of long-term equity investment correspondingly adjusted.
    The Group discontinues recognizing its share of net losses of the investee after the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of its net investment in the investee is reduced to zero. If the Group has incurred obligations to assume additional losses of the investee, a provision is recognised according to the expected obligation, and recorded as investment loss for the period. Where net profits are subsequently realised by the investee, the Group resumes recognizing its share of those profits only after its share of the profits exceeds the share of losses previously not recognised.
  2. Disposal of long-term equity investments
    On disposal of a long-term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognised in profit or loss for the period. For long-term equity investment measured under the equity method, the portion of other comprehensive income recognised before the Group had controlled over the investee under equity method or the financial assets recognition and measurement standard should be treated referring to the same fundamental of disposing related assets and liabilities.
  3. Methods of impairment assessment approach and provision for impairment are set out in Note III, 20.

86	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

15. Investment properties

The properties held by the Group for the purpose of earning rentals or for capital appreciation or for both purposes are categorised to investment property. The Group measures investment property under cost model, namely, investment properties are presented in balance sheet by cost deducting accumulated depreciation, amortisation and impairment loss. The investment properties are depreciated over its useful life by straight-line method after deducting estimated net residual value. The useful life, residual value rate and annual depreciation rate for various investment properties are as follows:

				Annual
	Estimated useful	Residual	depreciation
Item		life (years)	value rate (%)	rate (%)

Buildings	20-50	3-5	1.90-4.85
Land use rights	50	-	2.00

If the Group has conclusive evidence that the purpose for holding properties has changed and if one of the following conditions is met, the investment properties shall be converted into other assets, or other assets shall be converted into investment properties:

The purpose for holding the property is changed to self-use;
The self-use buildings or land use rights are stopped self-using, and changed to held for earning rentals or capital appreciation;
Self-usestructures stopped self-using, and changed to for renting.

Under the cost model, the carrying amounts of the buildings remain unchanged before and after the purpose change.

Methods of impairment assessment and provision for impairment are set out in Note III, 20.

16. Fixed assets

Recognition criteria
Fixed assets are tangible assets that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and have useful lives of more than one accounting year.
The initial cost of purchased fixed assets includes purchase cost, relevant taxes and expenses attributable to the asset incurred before it reaches ready-to-use condition. The initial cost of self-constructed fixed assets is recognised in accordance with Note III, 17. The components of fixed assets, which have various useful life or contribute economic benefits to the Group in different ways, or at different depreciation rate or via different depreciation methods, will be recognised as individual fixed assets by the Group. The subsequent expenditure of fixed assets (including amount paid for replace certain component of fixed assets), is recognised into cost of fixed assets if it qualifies recognition criteria. Meanwhile, the carrying amount of replaced component is deducted. The expense relating to routine maintenance of fixed assets is included in profit or loss when it is incurred. Fixed assets are presented on the balance sheet at cost less accumulated depreciation and impairment losses.

CRRC CORPORATION LIMITED	87
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
16. Fixed assets (continued)
1. Depreciation method
  Except for land use right owned by the Group, fixed asset is depreciated using the straight-line method. The useful life, estimated net residual value rate and annual depreciation rate of each category of fixed assets are as follows:

				Annual
	Depreciation	Depreciation	Residual	depreciation
Category	method	period (year)	value rate (%)	rate (%)

Buildings	Straight-line method	10-50	3-5	1.90-9.70
Machinery and equipment	Straight-line method	6-28	3-5	3.39-16.17
Office equipment and other	Straight-line method	5-12	3-5	7.92-19.40
equipment
Transportation vehicles	Straight-line method	5-15	3-5	6.33-19.40

If a fixed asset is upon disposal or no future economic benefits are expected to be generated from its use or disposal, the fixed asset is derecognized. When a fixed asset is sold, transferred, retired or damaged, the amount of any proceeds on disposal of the asset net of the carrying amount and related taxes is recognised in profit or loss for the period. The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least once at the end of each fiscal year, and makes adjustments when necessary. The Group does not make depreciation for overseas land ownership, which has no residual value.

Methods of impairment assessment and provision for impairment are set out in Note III, 20.

17. Construction in progress

Construction in progress is measured at its actual costs. The actual costs include various construction expenditures during the construction period, borrowing costs capitalised before it is ready for intended use and other relevant costs.

Construction in progress is transferred to a fixed asset when it is ready for intended use.

Methods of impairment assessment and provision for impairment are set out in Note III, 20.

18. Borrowing Costs

Borrowing costs are interests and other costs incurred by the Group in connection with the borrowing of funds. Borrowing costs include interests, amortisation of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings.

The borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised. The amounts of other borrowing costs incurred are recognised as an expense in the period in which they are incurred. Qualifying assets are assets that necessarily take a substantial period of time for construction or production to get ready for their intended use or sale.

88	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

18. Borrowing Costs (continued)

The capitalization of borrowing costs commences only when all of the following conditions are satisfied:

Expenditures for the asset have incurred; and
Borrowing costs are being incurred; and
Activities relating to the construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced.

During the capitalization period, the amount of interest to be capitalised for each accounting period shall be determined as follows:

Where funds are borrowed under a specific-purpose borrowing, the amount of interest to be capitalised is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds.
Where funds are borrowed under general-purpose borrowings, the amount of interest to be capitalised on such borrowings by applying a capitalization rate to the weighted average of the excess of cumulative expenditures on the asset over the amounts of specific-purpose borrowings. The capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings.

Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods are recognised as an expense of the current period until the acquisition, construction or production is resumed.

Capitalization of borrowing costs ceases when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Any borrowing costs incurred subsequently are recognised as an expense in the period in which they are incurred.

19. Intangible assets

Valuation method, useful life and impairment test
A purchased intangible asset is measured initially at cost. An intangible asset acquired in the combination not involving enterprises under common control, it shall be separately recognised as an intangible asset at its fair value on the acquisition date.
The useful life of an intangible asset is determined according to the period over which it is expected to generate economic benefits for the Group. An intangible asset is regarded as having an indefinite useful life when there is no foreseeable limit period over which the asset is expected to generate economic benefits for the Group.

CRRC CORPORATION LIMITED	89
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
19. Intangible assets (continued)
1. Valuation method, useful life and impairment test (continued)

The useful lives of the intangible assets are as follows:

Item	Useful life

Land use rights

Proprietary technology and technical know-how Software use rights

Customer relationship

Backlogs and technical service preferential orders

50-70 years

3-10 years

2-10 years

7-15 years

The period in which the services are rendered agreed in the contract

Land use rights acquired by the Group are accounted for as intangible assets. For buildings such as plants that are developed and constructed by the Group, the relevant land use rights and buildings are accounted for as intangible assets and fixed assets respectively. Payments for the land and buildings purchased are allocated between the land use rights and the buildings; if the payments cannot be reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.

An intangible asset with a finite useful life is amortised using the straight-line method over its useful life. For an intangible asset with a finite useful life, the Group reviews the useful life and the amortisation method at least at the end of each fiscal year and makes adjustment if necessary.

An intangible asset with an indefinite useful life is not amortised and its useful life is reviewed in each accounting period. If there is an evidence indicating that the useful life of the intangible asset is finite, it is accounted for using the above accounting policies applicable to intangible assets with finite useful lives.

Accounting policies for internal research and development expenditure
The Group classifies the expenditure on an internal research and development project into research expenditures and development expenditures.
Research expenditure is recognised as an expense in the period in which it is incurred.
Development expenditures which meet the criteria set out below shall capitalised, that is, it is technically feasible to complete the intangible asset so that it will be available for use or sale; the Group has the intention to complete the intangible asset and use or sell it; the Group can demonstrate the ways in which the intangible asset will generate economic benefits, including the evidence of the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset need to be proved; the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and the expenditure attributable to the intangible asset during its development phase can be reliably measured. Expenditure on the development phase that does not meet the above criteria is recognised in profit or loss for the period in which it is incurred.
If the expenditures cannot be distinguished between the research phase and development phase, the Group recognises all of them in profit or loss for the period.
Methods of impairment assessment and provision for impairment are set out in Note III, 20.

90	CRRC CORPORATION LIMITED
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

20. Impairment of long-term assets

The Group assesses at each balance sheet date whether there is any indication that long-term equity investment, fixed assets and construction in progress, investment properties, development expenditure, long-term prepayments and some other non-current assets under cost method, right-of-use assets and intangible assets with a finite useful life may be impaired. If there is any indication that such assets may be impaired, recoverable amounts are estimated for such assets. Intangible assets with indefinite useful life and intangible assets not yet available for use are tested for impairment annually, irrespective of whether there is any indication that the assets may be impaired.

Recoverable amount is estimated on the basis of individual asset. If it is not practical to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs will be estimated. The recoverable amount of an asset is the higher of its fair value less disposal costs and the present value of the future cash flows expected to be derived from the asset.

If the recoverable amount of an asset or an asset group is less than its carrying amount, the deficit is accounted for as an impairment loss and is recognised in profit or loss for the period.

Goodwill is tested for impairment at least at each year end. When conduct impairment test for goodwill, it should be considered together with the related assets group(s), i.e., goodwill is reasonably allocated to the related assets group(s) or each of assets group(s) expected to benefit from the synergies of the combination. An impairment loss is recognised if the recoverable amount of the assets group or sets of assets groups (including goodwill) is less than its carrying amount. The impairment loss is firstly allocated to reduce the carrying amount of any goodwill allocated to such assets group or sets of assets groups, and then to the other assets of the group pro-rata on the basis of the carrying amount of each asset (other than goodwill) in the group.

Once the above impairment loss is recognised, it cannot be reversed in any subsequent accounting periods.

21. Long-term deferred expenses

Long-term prepayments are expenses incurred that should be amortised over the current and subsequent periods (amortisation period of more than one year). Long-term prepayments are amortised using the straight-line method over the expected periods in which benefits are derived.

22. Employee benefits

Employee benefits are all forms of remuneration and compensation given by an entity in exchange for services rendered by employees or for the termination of employment and other remunerations. Employee benefits include short-term benefit, retirement benefits, termination benefits and other long-term employee benefits. The benefits the Group provided to employees' spouse, children, dependent, and families of deceased employees also belong to employee benefits.

Accounting for short-term employee benefits
During the accounting period in which the employees provide services, the Group's actual short-term remuneration is recognised as liabilities and included in the profits or losses of the current year or recognised as respective assets costs.
Regarding to the health insurance, industrial injury insurance, maternity insurance and other social insurances, housing fund and labour union expenditure and personnel education that the Group paid for employees, the Group should recognise corresponding employees benefits payable and include these expenses in the profits or losses of the current year or recognised as respective assets costs.

CRRC CORPORATION LIMITED	91
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
22. Employee benefits (continued)
1. Accounting for retirement benefits
  Retirement benefits are classified into defined contribution plans and defined benefit plans.
  In an accounting period in which an employee has rendered service to the Group, the amount payable calculated in accordance with the defined contribution plan is recognised as a liability and charged to profit or loss in the period, or included in cost of related assets.
  For defined benefit plans, the independent actuary makes actuarial estimation to determine cost of benefits offered and attributable period by using projected unit credit method. Defined benefit costs are categorized as follows:
2. 1. Service costs include current service cost, past service cost, as well as gains and losses on and settlements. Current service cost refers to the increase amount of present value of defined benefit obligation arising from service rendered in current year; past service cost refers to the change of present value of defined benefit obligation arising from modification of defined benefit plans;
  2. Net interest expense or income net of liabilities or assets (including interest income of planned assets, interest expenses of defined benefit plan liabilities and effect of asset ceiling;
  3. Changes arising from remeasurement of net liabilities or net assets of defined benefit plans (including actuarial gains and losses).

Unless benefits costs recognised in the cost of assets are required or permitted by other standards, the Group presents the above (i) and (ii) in profit or loss while (iii) in other comprehensive income, which will not be reversed to the profit or loss during the subsequent accounting period.

The defined benefit plans provided by the Group are set out in Note V, 43.

Accounting for termination benefits
When the Group terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision shall be recognised for the compensation arising from termination of employment relationship with employees, with a corresponding charge to the profit or loss for the current year, at the earlier of when:
1. The Group cannot unilaterally withdraw from the termination plan or the redundancy offer; or
2. The Group recognises costs relating to termination benefits payment in respect of restructuring.

92	CRRC CORPORATION LIMITED
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

23. Provisions

Except for contingent consideration arised and contingent liabilities undertaken in business combinations, the Group recognises an obligation related to a contingency as a provision when all of the following conditions are satisfied: (i) the obligation is a present obligation of the Group; (ii) it is probable that an outflow of economic benefits will be required to settle the obligation; and; (iii) the amount of the obligation can be measured reliably. A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation, with comprehensive consideration of factors such as the risks, uncertainty and time value of money relating to a contingency. The carrying amount of a provision is reviewed at each balance sheet date. If there is clear evidence that the carrying amount does not reflect the current best estimate, the carrying amount is adjusted to the best estimate.

Provisions are recognised when the Group has a present obligation related to a contingency such as warranty provisions/onerous contract/outstanding litigations, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into consideration of the factors pertaining to a contingency such as the risks, uncertainties and time value of money. Where the effect of the time value of money is material, the amount of the provision is determined by discounting the related future cash outflows.

24. Revenue

Accounting policy for recognition and measurement of revenue from contracts with customers The revenue of the Group is mainly generated from business types as follows:
1. Revenue from selling of goods;
2. Revenue from rendering of services.

The Group shall recognise revenue when the Group satisfies a performance obligation in the Contract, namely, when the customer obtains control over relevant goods or services, which is based on the transaction price allocated to the performance obligation. A performance obligation represents the commitment that a good and service that is distinct shall be transferred by the Group to the customer. Transaction price refers to the consideration that the Group is expected to receive due to the transfer of goods or services to the customer, but it does not include payments received on behalf of third parties and amounts that the Group expects to return to the customer.

Revenue is recognised over time by reference to the progress towards complete satisfaction of the relevant performance obligation if one of the following conditions is met: (i) the customer simultaneously receives and consumes the benefits provided by the Group's performance as the Group performs; (ii) the customer is able to control goods in the progress during the Group's performance; (iii) the Group's performance does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. Otherwise, revenue is recognised at a point of time when the customer obtains control over the relevant goods or services.

For performance obligations performed over time, the Group adopts input method to determine the appropriate progress of performance, that is, the progress of the performance is determined according to the Group's input for fulfilling its performance obligations. Where the progress cannot be determined reasonably, the revenue is recognised based on the amount of cost that is expected to be compensated based on the cost already incurred, until the progress of performance is reasonably determined.

CRRC CORPORATION LIMITED	93
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
24. Revenue (continued)
1. Accounting policy for recognition and measurement of revenue from contracts with customers (continued)
  If the contract includes two or more performance obligations, at contract inception, the Group allocates the transaction price to single performance obligation according to relative proportion of the stand-alone selling prices of the goods or services promised by single performance obligation. However, where there is conclusive evidence that the contract discount or variable consideration is only related to one or more (not all) performance obligations in the contract, the Group shall allocate the contract discount or variable consideration to relevant one or more performance obligations. The stand-alone selling price is the price at which the Group would sell a promised good or service separately to a customer. If a stand-alone selling price is not directly observable, the Group shall consider all information that is reasonably available to the Group and maximize the use of observable inputs and apply estimation methods consistently in similar circumstances.
  If the contract includes consideration payable to a customer (for example, supplier nomination fee, etc.), the Group shall account for consideration payable to a customer as a reduction of the transaction price unless the payment to the customer is in exchange for a distinct good or service, and recognised the reduction of revenue when (or as) the later of either of the following events occurs: 1) the Group recognises revenue for the transfer of the related goods or services to the customer; and 2) the Group pays or promises to pay the consideration.
  For sales with quality assurance terms, if the quality assurance provides a separate service to the customer other than ensuring that the goods or services sold meet the established standards, the quality assurance constitutes a single performance obligation. Otherwise, the Group will account for the quality assurance responsibility in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.
  If the contract contains a significant financing component, the Group determines the transaction price based on the amount payable under the assumption that the customer pays that amount payable in cash when "control" of the goods or services is obtained by the customer. The difference between the transaction price and the contract consideration shall be amortised within the contract period using effective interest rate. If the Group expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less, the Group needs not to consider the significant financing component.
  The Group determines whether it is a principal or an agent at the time of the transaction based on whether it owns the "control" of the goods or services before the transfer of such goods or services to the customer. The Group is a principal if it controls the specified good or service before that good or service is transferred to a customer, and the revenue shall be recognised based on the total consideration received or receivable; otherwise, the Group is an agent, and the revenue shall be recognised based on the amount of commission or handling fee that is expected to be charged, and such amount is determined based on the net amount of the total consideration received or receivable after deducting the prices payable to other related parties or according to the established commission amount or proportion.
  When the Group collects amounts of sold goods or services in advance from the customer, the Group will firstly recognise the amounts as a liability and then transfer to revenue until satisfying relevant performance obligations.
  Contract asset refers to the Group's right to consideration in exchange for goods or services that the Group has transferred to a customer when that right is conditioned on something other than the passage of time. Accounting policies relating to contract asset are specified in Note III, 11. The Group's unconditional (i.e., depending on the passage of time only) right to receive consideration from the customer is separately presented as receivables.

94	CRRC CORPORATION LIMITED
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
1. Revenue (continued)
2. 1. Accounting policy for recognition and measurement of revenue from contracts with customers (continued)
    Contract liabilities refer to the Group's obligation to transfer goods or services to a customer for which the Group has received consideration from the customer.
    Contract assets and contract liabilities under the same contract are presented at net amount.
    Except for the income arising from contracts with customers, income of the Group includes interest income and lease income from daily operating activities. Relevant accounting policies are detailed in Note III, 11 and 27.
3. Government grants

Government grants are transfer of monetary assets and non-monetary assets from the government to the Group at no consideration. A government grant is recognised only when the Group can comply with the conditions attaching to the grant and the Group will receive the grant.

If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a nominal amount is recognised immediately in profit or loss for the period.

Judgment basis and accounting treatments for government grants related to assets
If the government grant is a compensation for constructing or forming long-term assets, the government grant is recognised as government grants related to assets.
A government grant related to an asset is recognised as deferred income and included in profit or loss over the useful life of the related asset. Where the relevant asset is sold, transferred, scrapped or damaged prior to the end of its useful life, the related undistributed deferred income is transferred to the profit or loss of the disposal period.
Judgment basis and accounting treatments for government grants related to income
Government grants other than government grants related to assets are government grants related to income.
For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent periods, the grant is recognised as deferred income and recognised in profit or loss over the periods in which the related costs or losses are recognised; If the grant is a compensation for related expenses or losses already incurred, the grant is recognised immediately in profit or loss for the period. The Group classifies government grants that are difficult to be distinguished as government grants related to income aggregately.
A government grant related to the Group's daily activities is recognised in other income based on the substance of economic activities; a government grant not related to the Group's daily activities is recognised in non-operating income and expenses.
Discount interest on preferential loans obtained by the Group is directly allocated to the Group, with the corresponding interest discounts offsetting related borrowing costs.

CRRC CORPORATION LIMITED	95
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FOR THE SIX MONTHS ENDED 30 JUNE 2020

III. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)

26. Deferred tax assets/deferred tax liabilities

The income tax expenses include current income tax and deferred tax. Except for that (1) goodwill arising from the business combination or (2) the current income tax and deferred income tax related to transactions or events recognised in other comprehensive income or shareholders' equity are included in other comprehensive income or shareholders' equity, other current income tax and deferred income tax expenses or gains are included in profit or loss for the period.

Current income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered or paid according to the taxation laws and regulations.
Deferred tax assets/deferred tax liabilities
For temporary differences between the carrying amounts of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognised as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognised using the balance sheet liability method.
A deferred tax liability is recognised for all taxable temporary differences, except:
- Where taxable temporary differences arise from the initial recognition of goodwill; or the initial recognition of an asset or liability in a transaction that is not a business combination, and at the time of the transaction, it affects neither accounting profit nor taxable profit or loss.
- For taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, where the timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future.

A deferred tax asset is recognised for deductible temporary differences, carry forward of unused deductible tax losses and tax credits, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of deductible tax losses and tax credits can be utilised, except:

Where the deferred tax asset arises from a transaction that is not a business combination and, at the time of the transaction, neither affects the accounting profit nor taxable profit or loss.
Deductible temporary differences associated with investments in subsidiaries, joint ventures and associates, a deferred tax asset is only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised in the future.

At the balance sheet date, deferred income tax assets and liabilities are measured, subject the tax laws, at the applicable rate in the period in which deferred tax assets or liabilities are expected to be realized or settled, and the tax effects arising from the expected reversal of assets or liabilities are reflected at the balance sheet date.

96	CRRC CORPORATION LIMITED
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
1. Deferred tax assets/deferred tax liabilities (continued)
2. 1. Deferred tax assets/deferred tax liabilities (continued)
    The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assets to be utilised. Unrecognized deferred tax assets are reassessed at the balance sheet date and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.
    When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
    Deferred tax assets and deferred tax liabilities are offset and presented on a net basis if the Group has a legal right to set off the current tax assets against current tax liabilities on a net basis and the deferred taxes relate to the same taxable entity and the same taxation authority.
3. Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

For contracts entered into on the date of initial application, the Group assesses whether a contract is or contains a lease at commencement date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.

As a lessee
1. Allocation
  For a contract that contains one or more lease component and non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand- alone price of the lease component and the aggregate stand-alone price of the non-lease components.
2. Right-of-useassets
  Except for short-term leases and leases of low value assets, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). The right-of-use asset is initially measured at cost. This cost includes:
3. - The initial measurement amount of the lease liabilities;
  - Any lease payments made at or before the commencement date, less any lease incentives received;
  - Any initial direct costs incurred by the Group; and
  - An estimate of costs to be incurred by the Group in dismantling and removing the underlying assets, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, excluding the costs that are incurred to produce inventories.

CRRC CORPORATION LIMITED	97
lnterim Report 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES (continued)
27. Leases (continued)
1. As a lessee (continued)
2. 1. Right-of-useassets (continued)
    After the commencement date of the lease, the carrying amount of right-of-use assets shall be adjusted when lease liability is remeasured.
    The Group makes depreciation for the right-of-use assets in accordance with the relevant depreciation regulations under the Accounting Standards for Business Enterprises No. 4-FixedAssets . Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term is depreciated from commencement date to the end of the useful life. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.
    For the method of testing the impairment of the right-of-use asset and the method of determining impairment provision, please refer to Note III.20 for details.
  2. Lease liabilities
    At the commencement date of a lease, the Group recognises and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
    Lease payment refers to the amount paid by the Group to the lessor relating to the right to use an underlying asset during the lease term, including:
  3. - Fixed payments (including in-substance fixed payments) less any lease incentives receivable;
    - Variable lease payments that depend on an index or a rate;
    - The exercise price of a purchase option reasonably certain to be exercised by the Group;
    - Payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate; and
    - Amounts expected to be paid under residual value guarantees.

The variable lease payments, depending on the index or ratio, are determined at the initial measurement based on the index or proportion at the beginning of the lease term. The variable lease payments that are not included in the measurement of the lease liability are recognised in profit or loss or related asset costs when incurred.

After the commencement date of the lease term, the Group calculates the interest expense of the lease liabilities for each period of the lease term based on a fixed periodic interest rate, and includes it in profit and loss or related asset costs.

98	CRRC CORPORATION LIMITED
lnterim Report 2020

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Company Profile

Crrc Corp Ltd is a China-based company principally engaged in the manufacture and sale of rail transit equipment. The Company's main businesses include railway equipment business, urban rail and urban infrastructure business, new industry business and modern service business. The railway equipment business mainly includes locomotive business, motor train unit and passenger car business, freight car business and rail construction machinery business. The urban rail and urban infrastructure business mainly includes urban rail vehicles, general contracting of urban rail projects and general contracting of other projects. The new industry business mainly includes electromechanical business and emerging industry business. The modern service business mainly includes financial business, logistics, trade business and other businesses.

Sector

Heavy Machinery & Vehicles

Calendar

2024-08-22 - Q2 2024 Earnings Release (Projected)

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Ratings for CRRC Corporation Limited

Trading Rating

Investor Rating

ESG Refinitiv

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Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

7.17 CNY

Average target price

7.691 CNY

Spread / Average Target

+7.27%

Consensus

EPS Revisions

Estimates Revisions

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Company calendar

Sector Locomotive Engines & Rolling Stock

	1st Jan change	Capi.
CRRC CORPORATION LIMITED	+36.31%	26.75B
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION	+32.66%	29.69B
STADLER RAIL AG	-3.40%	3.23B
HYUNDAI ROTEM COMPANY	+41.35%	3B
TRINITY INDUSTRIES, INC.	+17.49%	2.56B
THE GREENBRIER COMPANIES, INC.	+20.46%	1.66B
CONSTRUCCIONES Y AUXILIAR DE FERROCARRILES, S.A.	+3.83%	1.25B
NANJING KANGNI MECHANICAL & ELECTRICAL CO.,LTD	+9.34%	759M
TALGO, S.A.	+0.46%	585M
CHENGDU XINZHU ROAD&BRIDGE MACHINERY CO.,LTD	-26.28%	397M

Locomotive Engines & Rolling Stock

1.	Name of the Company in Chinese	中國中車股份有限公司
	Short name of the Company in Chinese	中國中車
	Name of the Company in English	CRRC Corporation Limited
	Short name of the Company in English	CRRC
	Legal representative of the Company	Liu Hualong
2.			Secretary to the Board	Securities Affairs Representative

	Name	Xie Jilong		Jin Yonggang
		Contact address	No. 16, Central West Fourth Ring Road,	No. 16, Central West Fourth Ring Road,
			Haidian District, Beijing		Haidian District, Beijing
		Telephone	010-51862188		010-51862188
		Facsimile	010-63984785		010-63984785
		E-mail	crrc@crrcgc.cc		crrc@crrcgc.cc
3.		Registered address of the Company	No. 16, Central West Fourth Ring Road, Haidian District, Beijing
		Postal code of registered address	100036
		of the Company
		Business address of the Company	No. 16, Central West Fourth Ring Road, Haidian District, Beijing
		Postal code of business address	100036
		of the Company
		Company website		www.crrcgc.cc
		E-mail		crrc@crrcgc.cc
4.		Newspapers designated for A-share	China Securities Journal, Shanghai Securities News, Securities Times
		information disclosure by the Company	and Securities Daily
		Website designated by the CSRC for	www.sse.com.cn
		publication of A-share interim report
		Website designated by the Stock	www.hkex.com.hk
		Exchange for publication of
		H-share interim report
		Place where interim report of the	the Board Office at No. 16, Central West Fourth Ring
		Company is available for inspection	Haidian District, Beijing
			Place of listing			Stock
5.		Type of shares	of the shares	Stock abbreviation	Stock code	before

	A shares	SSE	中國中車	601766	中國南
		H shares	HKSE	CRRC	1766	CSR

7.	Independent auditor	KPMG Huazhen LLP
		Certified Public Accountants
		8th Floor, KPMG Building, Oriental Plaza,
		1 East Chang'an Avenue, Beijing, PRC
8.	Joint company secretary	Xie Jilong, TANG Tuong Hock

CRRC Corporation Limited

Equities

601766

CNE100000CP9

Heavy Machinery & Vehicles

CRRC : Interim Report 2020

EPS Revisions