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长安B:2019年年度报告(英文版) 下载公告
公告日期:2020-04-30

Chongqing Changan Automobile

Company Limited

2019 Annual Report

April, 2020

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 1 Important Notice, Contents, and DefinitionsThe Board of Directors, the Board of Supervisors, Directors, Supervisors and SeniorExecutives of our company hereby guarantee that no false or misleading statement or majoromission was made to the materials in this report and that they will assume all the responsibilities,individually and jointly, for the trueness, accuracy and completeness of the contents of this report.The Chairman of the Board Zhang Baolin, the Chief Financial Officer Zhang Deyong and theresponsible person of the accounting institution (Accountant in charge) Chen Jianfeng herebydeclare that the Financial Statements enclosed in this annual report are true, accurate and complete.Except the following directors, all the directors attended the board meeting for reviewing theannual report.

The name of the directors absentPositionsReasons for the absenceName of the consignee
Zhu HuarongDirectorsBusiness tripZhang Deyong

Chongqing Changan Automobile Company Limited 2019 Annual Report

CONTENTS

Chapter 1 Important Notice, Contents, and Definitions ...... 1

Chapter 2 Company Profile & Main Financial Indexes ...... 4

Chapter 3 Analysis of Main Business ...... 9

Chapter 4 Business Discussion and Analysis ...... 11

Chapter 5 Important Matters ...... 34

Chapter 6 Changes in the shareholding of the company and shareholders ...... 46Chapter 7 Information about Directors, Supervisors, Senior Management andEmployees ...... 52

Chapter 8 Corporate Governance ...... 65

Chapter 9 Corporate Bonds ...... 71

Chapter 10 Auditor’s Report ...... 72

Chapter 11 Documents for Future Reference ...... 239

Chongqing Changan Automobile Company Limited 2019 Annual Report

Definitions

ItemsDefinitions
Changan Auto., the CompanyRefers toChongqing Changan Automobile Company Limited
South IndustriesRefers toChina South Industries Group Co., Ltd., the Company’s actual controller
China ChanganRefers toChina Changan Automobile Group Co., Ltd., old name: China South Industries automobile Co., Ltd., a subsidiary company of South Industries
Changan IndustryRefers toChongqing Changan Industry (Group) Co., Ltd., old name: Changan Automobile (Group) Co., Ltd., a subsidiary company of South Industries
Nanjing ChanganRefers toNanjing Changan Automobile Co., Ltd., a subsidiary company of the Company
Hebei ChanganRefers toHebei Changan Automobile Co., Ltd., a subsidiary company of the Company
Hefei ChanganRefers toHefei Changan Automobile Co., Ltd., a subsidiary company of the Company
Changan BusRefers toBaoding Changan Bus Co., Ltd., a subsidiary company of the Company
International CompanyRefers toChongqing Changan Automobile International Sale Service Co., Ltd., a subsidiary company of the Company
Changan SuzukiRefers toChongqing Changan Suzuki Automobile Co., Ltd., a subsidiary company of the Company
Changan FordRefers toChangan Ford Automobile Co., Ltd., a JV of the Company
Changan MazdaRefers toChangan Mazda Automobile Co., Ltd., a JV of the Company
CMERefers toChangan Mazda Engine Co., Ltd., a JV of the Company
Changan PSARefers toChangan PSA Automobiles Co., Ltd., a JV of the Company
Jiangling HoldingRefers toJiangling Holding Co., Ltd., an associate of the Company
Changan FinanceRefers toChangan Automobile Finacing Co., Ltd., an associate of the Company
South Industries FinanceRefers toChina South Industries Group Finance Co., Ltd., a subsidiary company of South Industries
UPIRefers toUnited Prosperity (Hong Kong)Investment Co., Ltd., a subsidiary company of China Changan
Hafei GroupRefers toHarbin Hafei Automobile Industry Group Co., Ltd., a subsidiary company of China Changan
CMALRefers toChongqing Changan Minsheng APLL Logistics Co., Ltd., an associate of China Changan

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 2 Company Profile & Main Financial IndexesI. Basic Information

Stock abbreviationChangan Automobile 、Changan BStock Code000625、200625
Listed onShenzhen Stock Exchange
Company in Chinese name重庆长安汽车股份有限公司
Company abbreviation in Chinese name长安汽车
Company name in EnglishChongqing Changan Automobile Company Limited
Legal representativeZhang Baolin
Registered addressNo. 260, East Jianxin Road Jiangbei District, Chongqing
Post code of the registered address400023
Office addressNo. 260, East Jianxin Road, Jiangbei District, Chongqing
Post code of the office address400023
Websitehttp://www.changan.com.cn
E-mail addresscazqc@changan.com.cn
Secretary of the Board of DirectorsSecurities affairs representative
NameLi Jun
Contact addressNo. 260, East Jianxin Road, Jiangbei District, Chongqing
TEL:023-67594008
FAX:023-67866055
E-mail addresscazqc@changan.com.cn

Chongqing Changan Automobile Company Limited 2019 Annual Report

Newspaper selected by the Company for information disclosureChina Securities Journal, Securities Times, Securities Daily, Shanghai Securities News, Hong Kong Commercial Daily
Website selected by CSRC for publishing this annual reportwww.cninfo.com.cn
The place where this annual report is prepared and keptSecretary's Office of Board of Directors
Organization Code9150000020286320X6
Changes in the main business since the company's listingNot applicable
All previous changes of dominant stockholdersIn Dec. 2005, according to the restructuring program on automobile business, the Company’s actual controller, China South Industries Group Corporation made transferring of all state-owned shares of the Company as part of funding for China South Industries Automobile Company Limited. In March 2006, all shares held by Changan Group have been transferred to China South Industries Automobile Company Limited. China South Industries Automobile Company Limited became the majority shareholder of the Company, and Changan Group holds zero share since then. In July 2009, with the approval of State Administration for Industry and Commerce, “China South Industries Automobile Company Limited”, changed its name to “China Changan Automobile Group Co., Ltd.”. With the change of its name, no change occurred in its property, ownership and control relation of the Company.
Name of the accounting firmErnst & Young Hua Ming LLP (Special Ordinary Partner)
Address of the accounting firmLevel 16, Ernst & Young Tower, Oriental Plaza, No. 1 East Chang An Avenue, Dong Cheng District, Beijing, China
Name of the certified public accountant for signatureQiao Chun, Hu Yan
Financial ConsultantAddress of financial consultantName of financial consultantSupervision duration

Chongqing Changan Automobile Company Limited 2019 Annual Report

Shanghai Realize Investment Consulting Co., Ltd.No.639,Xinhua Road, ShanghaiYe SuqinSeptember 2016 - September 2020
20192018Increase/decrease on a y-o-y basis (%)2017
Operating revenue (Yuan)70,595,245,133.2866,298,270,389.776.48%80,012,205,182.37
Net profit belonging to shareholders of the listed company (Yuan)-2,646,719,356.53680,728,392.03-488.81%7,137,234,723.47
Net profit belonging to shareholders of the listed company after deduction of non-recurring profit and loss (Yuan)-4,762,446,597.61-3,165,070,272.21-50.47%5,716,114,648.34
Net cash flow arising from operating activities (Yuan)3,881,748,238.39-3,887,475,302.44199.85%-1,123,470,776.83
Basic earnings per share (Yuan/Share)-0.550.14-492.86%1.49
Diluted earnings per share (Yuan/Share)Not applicableNot applicableNot applicableNot applicable
Return on equity (ROE) (%)-5.86%1.45%Down 7.31 Points15.65%
End of 2019End of 2018Increase/decrease of the end of current year compared with that of the previous year (%)End of 2017
Total assets (Yuan)97,617,053,590.3893,488,854,098.954.42%106,125,114,622.69
Net assets belonging to shareholders of the listed company (Yuan)44,028,312,743.6646,244,958,676.52-4.79%47,598,690,942.28

Chongqing Changan Automobile Company Limited 2019 Annual Report

No difference.

(2). Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards.

□ Applicable √ Not applicable

No difference.VIII. Key financial indicators for the quarter

Unit: Yuan

First QuarterSecond QuarterThird QuarterForth Quarter
Business income16,007,950,602.5013,867,829,494.3415,239,641,870.9725,479,823,165.47
Net profit attributable to shareholders of listing Corporation-2,096,352,326.12-143,687,434.99-421,470,641.2114,791,045.79
Net profit attributable to shareholders of the listing Corporation after deducting non-recurring gains and losses-2,161,147,810.27-750,619,786.17-621,493,786.91-1,229,185,214.26
Net cash flows from operating activities3,258,788,381.35961,475,249.60-462,439,727.59123,924,335.03
Item201920182017
Non-recurring items and amounts(including accrued reversal assets impairment part)56,658,864.178,561,074.7341,774,452.23
Government subsidies included in the profit and loss of the current period (Except closely related to business operations, in accordance with the national unified standard quota or quantitative enjoyment of government subsidies)1,537,625,620.932,873,192,102.561,613,343,216.59
The investment cost of the enterprise to obtain subsidiaries and joint ventures which is less than the fair value of the identifiable net assets of the investee when the investment is obtained-1,020,821,274.01-
In addition to the effective hedging business related to the company's normal business operations, the fair value of gains and losses from changes in fair value889,154,888.69--
Gains and losses on entrusted loans6,771,226.43--
Except the above other operating income and expenses-135,258,766.1448,285,737.4629,262,070.84
Interest on deferred payment of funds received by non financial28,553,488.6529,303,167.7333,408,866.16

Chongqing Changan Automobile Company Limited 2019 Annual Report

enterprises
Reduction: the impact of income tax250,459,302.0482,007,701.31188,136,520.19
Impact of minority shareholders' equity (after tax)17,318,779.6152,356,990.94108,532,010.50
Total2,115,727,241.083,845,798,664.241,421,120,075.13

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 3 Analysis of Main BusinessI.The main business of the Company in the reporting periodDoes the Company need to comply with the disclosure requirements of special industry

□ Yes √ No

During the reporting period, the company's main business is the R&D, manufacturing and sale of cars, the R&D and productionof automobile engine products. Besides, the company integrates advantageous resources to actively develop travel services, newretail and carry out multi-dimensional industrial layout.Changan automobile always adheres to the mission of "leading the car civilization for the benefit of human life", and theconcept of "energy conservation, environmental protection, scientific and technological intelligence", vigorously develops newenergy and smart cars, guides the automobile civilization by the use of scientific and technological innovation, and providescustomers with high quality products and services. After years of development, the company owns many famous brands such asChangan passenger car, Oushang automobile, Kaicheng automobile, Changan Ford, Changan Mazda and so on. Up to now, thecompany has successfully launched a series of classic brands such as CS series, Eado series, Raeton series, Oushang and Honorseries; a series of famous JV products such as all new Focus, new Mondeo, Kuga, Escape, CX-5, CX-8, Axela and so on. At the sametime, we have launched new energy vehicles such as Eado EV, new Benben EV and CS15EV, which are admired by the market andloved by the consumers.II. Major changes in assets

1、 Major changes in assets

No significant changes in major assets during the reporting period

2、 Main Overseas Assets

□ Applicable √ Not applicable

III. Core Competence Analysis

In 2019, Chang'an Automobile continued to iterate its innovation and entrepreneurship program, took solid steps to advance itsnew energy "shangri-la" and its intelligent "Beidou Tianshu" programs, and steadfastly moved toward intelligent travel technologycompanies. In 2019, the Company spent 4.478 billion yuan on product and technology projects development to build the industry'sleading R & D strength.

Constantly build classic products. CS75PLUS, CS55PLUS, CS85 COUPE, new CS95, Oushang X7, KaichengF70, NE1.4T,NE1.5T engines and other new products were launched on schedule. 72,000 units of the CS75 plus were sold in its first four monthson the market, the fastest ever, and the Oushang X7 is among the top 10 selling autonomous compact SUV in the country.

Innovatively enhance R & D capability. The Company focused on breakthroughs in intelligent technology and new energytechnologies, continued to strengthen the "fashion, intelligence, Green, pleasure" four major technology labels and N basictechnologies, made breakthroughs in 40 key technologies, such as the three-level autopilot technology, the development of ICARplatform, fuel cells, and applied terminal software platform and cockpit hardware platform and other advanced technologies. On theintelligent side, the remote-controlled valet parking system APA5.0 (Multi-storey car park) was launched in mass production withCS75 plus for the first time, and the Company mastered more than 30 key technologies on the L3 level limited automatic drivingtechnology, and rapidly advanced the engineering development; Level L4 autopilot in Xiantao Data Valley in Chongqing

Chongqing Changan Automobile Company Limited 2019 Annual Report

implemented a demonstration operation under the open road scenario. On the New Energy side, independent innovation seven-in-oneSystem Assembly, performance improvement of the third generation of intelligent vehicle domain controller "Chang'an smart core"was raised by 70% to the industry-leading level.The image of technological innovation deeply rooted in people's minds. The official opening of Chang'an AutomobileGlobal R & D Center marked the R&D 4.0 Era of "Open sharing, Global Synergy". There were 904 patents applied for in the wholeyear, of which 402 were applied for invention patents. As of 2019, there were 1,415 valid invention patents. The joint innovationcenters with Huawei, Tencent, Bosch, Qingshan were set up to create new heights of innovations. CS75 plus won the 2019international CMF design gold award, and won the 2019 China Smart car index evaluation and China Automobile Health Index VOC/ VOI Plate evaluation double titles. Blue Whale NE platform products with the highest thermal efficiency of 40% and severalindicators leading the industry won the title of "Top 10 China Engines".The brand potential is steadily improving. The implementation of multi brand strategy, Changan passenger vehicles, mediumand high-end passenger vehicles, Oushang automobile and Kaicheng automobile adhere to the differentiated positioning, clear theseparation of landing path, and accelerate the collaborative development; carry out the systematic construction of brand planning andmanagement, and focus on building brand value system, brand indicators, brand management principles and visual identity system;Changan passenger vehicle products exhibit the brand new momentum, the brand positioning of "technology Chang'an, smartpartners" is clear with signed brand spokesperson, take advantage of the opportunity of product marketing, promote the new productlisting with big IP, steadily improve the brand potential; optimize the public opinion monitoring and maintenance system, continue tocreate a positive image of smart, dynamic, service and other labels of public opinion, and steadily improve the brand preference.

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 4 Business Discussion and AnalysisI. OverviewIn 2019, it is the 70th anniversary of the founding of new China. Since 2018, China's automobile industry has declined for thefirst time in 28 years. Under the background of downward pressure on China's economy, in the face of complex and changeableinternational trade situation and huge adjustment of industrial policies, the downward trend of China's automobile market in 2019 hasnot been reversed, and China's automobile industry is undergoing profound changes. Influenced by factors such as the slowdown ofmacro-economic growth, trade friction and adjustment of industrial policies, automobile sales in 2019 totaled 25.769 million, down

8.2% year on year, down 5.4% more from the previous year. Under the background of the overall transformation of the automobilemarket, the passenger vehicle market is gradually changing from increment era to stock competition era. The annual sale ofpassenger vehicle market is 21.444 million, down 9.6% year on year. Among them, the SUV sales fell by 6.3% year-on-year, and thedecline was further expanded (-2.5% in 2018); the MPV sales fell by 20.2% year-on-year. Under the influence of joint ventureproduct exploration and other factors, the market share of Chinese brands fell year on year. Affected by the sharp decline of subsidies,among the new energy passenger vehicles, the sales of pure electric passenger vehicles was 834,000, up by 5.9% year-on-year, andthe growth rate slowed down significantly, experiencing a painful period after the decline of subsidies. (The above data is from Chinaautomobile industry production and marketing news “China Automobile Industry Association” and its industry information release.)

Production and sales of China's auto industry in 2019

2019 Accumulative production (ten thousand)y-o-y increase (%)2019 Accumulative production (ten thousand)y-o-y increase (%)
Automobile2572.1-7.52576.9-8.2
Passenger cars2136.0-9.22144.4-9.6

Chongqing Changan Automobile Company Limited 2019 Annual Report

Sedan1023.3-10.91030.8-10.7
MPV138.1-18.1138.4-20.2
SUV934.4-6.0935.3-6.3
Cross-passenger car40.2-4.340.0-11.7
New energy cars124.2-2.3120.6-4.0
New energy Passenger cars109.12.0106.00.7
EV87.710.883.45.9

Chongqing Changan Automobile Company Limited 2019 Annual Report

continuously improved, the technical label of "fashion, green, intelligence and pleasure" has continuously strengthened, and 40 keytechnologies such as the three-level technology of automatic driving, the development of ICAR platform and fuel cell have achievedbreakthroughs. The third generation power, blue whale power, was put into production on time, leading the industry in manyindicators, and won the title of "top 10 China engines". The thirteen models completed the switch with the minimum investment,launching the first shot of blue sky defense of independent brands.

List of products listed in 2019

Date of listingModel nameModel features
March, 2019CS85 COUPEChang'an CS85 COUPE, inherited the family "Royal Yue" front face features with aggression; family-style double waist line design, full face, rich muscle feeling; domed streamer back design, full style, high-level sports; all-LED Matrix Star drill headlamps, 3D stereo lamp belt, personal and technological with rich "vitality" ; surrounding star cabin with elegant and easy ride experience; blue whale 2.0T+AIXIN8AT golden power combination with advanced performance and the driving passion; TENCENT TAI car intelligence system on board, enjoy the pleasure of intelligent interactive experience. Chang'an CS85 COUPE, smart and masculine coexistence, sports and technology, leading the new trend of the times, and highlighting the style of new life.
March, 2019Novel CS15Novel CS15 from the second generation of family design language, bring into the design concept of "Sun Born", build a stylish and flexible appearance, and create a very forward-looking SUV aesthetics for the love of life of young mentality, Sun born! The new CS15 features an enhanced lower body design, a striking trapezoidal vision, a radical and dynamic body posture, a NAPPA leather upholstery, a connected HD dual screen, and a 120 degree wide angle camera integrated into the right rear view mirror, flat back seat, the area with soft bag texture, a stylish and delicate cockpit. The new CS15 has been carefully trained by top experts with 20 years of chassis training experience, and has a precise, lightweight, soft and flexible suspension, equipped with ESP electronic stability control system, ABS Anti-lock braking system, EBD electronic brake force distribution function, TCS traction control system, HHC ramp start assist system, BA brake assist, TPMS tire pressure detection system, which brings you a fully upgraded driving experience.
April, 2019Novel CS95The brand new design language, super cabin experience, super luxury interior materials: soft touching and first class seat comfort with luxury experience. LED multi-color atmosphere lamp: 16777216 kinds of colors infinitely regulated, perfectly matching every scene in the journey; PM2.5 monitoring + air purifier: Escape from the dirty air in the city and enjoy the forest breath. 12.3 inch central control touch screen: high definition large screen, wide viewing angle, convenient and smooth interactive touch. 4G T-box (free traffic for the first car owner): intelligent voice interaction, abundant traffic guarantee, double power for intelligent travel. The industry's first Gaud map 3.0: support ADAS, incremental update, new UI, real-time view of road traffic, reasonable route planning, avoid congestion, travel more leisurely. Integrated adaptive cruise iACC: leading intelligent driving assistance system of the same level, alleviating driving fatigue, providing all-round safety guarantee and making the journey easy. Full 360° HD panoramic image: insight into the details around, low-speed driving safety.
April, 2019CS75 Million VersionIn order to give back the support and trust of millions of customers over the past five years since CS75 went public, CS75 million versions have been launched to inherit the advantages of CS75, and give back to consumers with exclusive appearance, interior decoration and power system.

Chongqing Changan Automobile Company Limited 2019 Annual Report

Equipped with DCT270 7-speed wet dual clutch automatic transmission, the power transmission is more efficient and the driving experience is better; equipped with blue whale 280T direct injection supercharged engine, it won the title of " top ten China engines" in 2018; equipped with ACC, AEB, LDW, BSD, APS and other systems, it won the first good result in 2018 China intelligent automobile index evaluation.
July,2019CS35PLUS Blue Whale versionPositioning new power Internet social SUV. On the basis of popular CS35plus, the brand-new version upgrades the sports beauty value and 1.4T blue whale power. It has five advantages: core, model, talent, product and spectrum. Equipped with the first engine of Chang'an "blue whale NE" platform engine and the first product of Chang'an power in the 3.0 era, it integrates more than 10 advanced technologies of the world's first mass production, significantly improving the fuel efficiency and fuel economy, and even reaching the international first-class performance level.
July,2019Eado Blue WhaleEado blue whale redefines the new standard of compact car and establishes a new value proposition. 1. Extreme driving experience: the new power system perfectly balances power and fuel consumption; 2. High value: use cost, maintenance, purchase cost, etc.; 3. Safety and reliability: five star safety standard design in Europe. Power: equipped with the strongest 1.4T turbocharged direct injection engine of the same level, direct injection in the turbocharged cylinder, it starts to overtake faster, so the power comes; it has strong climbing, full load and energy saving. High value: low cost of car purchase, low cost of car use, only 5.9L fuel consumption per 100 km; maintenance every 7500 km, saving money and trouble. Safety: car designed according to European five star safety standards. The main structure of the vehicle is laser welded, with the strength of 3.6 times that of the competitive body with spot welding; equipped with PAB warning auxiliary brake system, the earliest alarm can be sent out 1.4s in advance ; the runaway braking distance is 5 meters shorter than that of the same level car; 51.6% of the car body is made of high-strength steel, and the roof can bear 3 times the weight of the car body; large range of soft interior decoration and package; cage body frame structure is adopted to ensure the safety of users in all aspects.
September, 2019CS75 PLUSCS75 plus is built based on the family concept of Chang'an performance. By upgrading the platform architecture and power system, and comprehensively considering the balance of various performances in the car use scenario, CS75 plus pursues the integration of people and cars, overall coordination, harmony and nature, which can bring users a confident, advanced and passionate driving experience. Design: CS75 plus is a European design team composed of more than 200 foreign designers from 25 countries. It adopts Yuyue's design concept, with a tension front face, a dynamic posture and coordinated colors, making the whole car full of future design style Wisdom: the high performance car carries the intelligent functions of APA5.0, mobile phone Bluetooth key and so on. It is the AT model of the entire vehicle equipped with the Indus car intelligent system and integrates Tencent's ecological resources. It becomes a truly intelligent Internet vehicle. Power: it is equipped with classic power combination 1.5TGDI + Aisin 6AT and golden power combination blue whale 2.0 TGDI + Aisin 8AT. Both engines have won the title of "China's top ten engines", and the transmission adopts the latest generation of Aisin transmission

Chongqing Changan Automobile Company Limited 2019 Annual Report

Safety: CS75 plus is designed according to the safety standards of C-NCAP five-star and CBR two five-star, 6 airbags are equipped with 38.3% high-strength steel of the whole vehicle, leading the same level.
October, 2019Raeton CCRaeton CC's extraordinary space is quite different. With 4800mm super long car body and 2770mm super long wheelbase, it brings excellent atmosphere and spacious interior space, which enables every passenger to stretch to their full capacity and feel comfortable, which makes the experience stand the test. With professional adjustment of suspension frame and ultra fiber leather multi-functional seat, from fresh and natural healthy air purification system to glass full screen, panoramic skylight shows sincere texture technology, which makes driving and riding become a kind of enjoyment. The idle noise of the whole vehicle is as low as 36.5 decibels, and the mute performance reaches the joint venture level, creating a "deep sea level" quiet cockpit; Raeton CC adopts a high-strength rigid body, rich and perfect active and passive safety configuration, and brings 360 degrees of all-round protection with strict safety standards; intelligent Internet system, which combines human thinking and advanced technology, creates interesting and considerate convenient travel, and helps you to deal with it calmly. The road ahead is boundless.
November, 2019CS55PLUSPositioning the mainstream compact SUV, equipped with the classic power combination of bluecore 1.5T turbocharged engine and Aisin's third generation 6AT. Fashion and dynamic elements are integrated into the model to highlight the youth. Compared with CS55, the product strength is comprehensively improved in life dynamic design, intelligent luxury driving cabin and ultimate quality driving control. Equipped with skyline neon tail lamp, 10.25 inch polar dual screen, IACC integrated adaptive cruise system, 360 degree recording HD panoramic image, AEB automatic emergency brake, LAS Lane auxiliary system, LCDA auxiliary line system and other intelligent driving aids system, and Tencent intelligent system such as Wutong car Union and AI Xiao An. Create a high-quality car with more experience of high standard and rigorous test.

Chongqing Changan Automobile Company Limited 2019 Annual Report

with many 3.0 image stores of Chang'an passenger brand, the fifth and sixth line channel coverage and core business circle productscoverage continues to improve, and realizes the transformation from the channel quantity to channel quality. Chang'an Oushangoptimized the marketing organization, steadily switched the store logo, and continued to promote the transformation of channels topassenger use. The Company builds a direct communication and interaction platform between senior and professional personnel andcustomers, and vigorously improve customer experience. The Company implements "2 times project", increase time and resourceinvestment of key personnel and senior management, and ensure more than 2 times of customer operation investment. The Companybuilds customer service system, optimizes the process of complaint upgrading, and the number of complaints of 10000 vehicles hasimproved significantly year on year. The Company releases "intimate partner plan" and makes "five promises of honest service" tousers. The Company innovates the customer online service mode, and more than 1000 technicians and engineers solve customerproblems online and promote customer experience.

6. The joint venture cooperation deepening and bravely facing the challenges

The two sides strengthen high-level communication, release "Chang'an Ford acceleration plan", and complete theimplementation of Lincoln brand cooperation. Changan Ford Research Institute was established to continuously cultivate localizationdevelopment capability, and 18 products will be launched to the Chinese market in the next three years. The new Focus active, NewTaurus and new Edge St/St-line were launched in August with good performance; the first strategic new product of Changan Fordacceleration plan, and new Ford Edge Escape made full efforts to target the high-end market of twenty-thousand yuan levelmedium-sized four-wheel drive SUV, and opened the prelude of Changan Ford's comprehensive counter attack with the promise of"more Ford, more China" in the Ford 2.0 era. The Company further consolidates the cooperative relationship between Chang'an andMazda, integrates Mazda's resources in China, and speeds up the adjustment of product structure; in 2019, The Company launchesthe next generation Mazda3 Axela, 2020 CX-5 and other 2 products to effectively support the company's business quality.

7. Promote the construction of ecosphere and explore the future layout opportunities steadily

The Company works with Huawei, Lenovo, NXP and other members of Shangrila alliance to establish the joint technologyinnovation centers and deepens strategic and cross-border cooperation with more than 30 strategic partners such as Tencent, Huawei,Gree and Xiaomi. The Company constantly studies brand strategy and firmly builds high-end brand confidence. The Companyactively explores one belt, one road overseas market, and the first overseas joint venture company has been put into operation inPakistan. The Company adjusts the travel business strategies of Chang'an and T3, integrates innovative marketing models such as Carfor better, Oushang style and smart stores, and constantly optimizes the development direction of emerging businesses.II. Analysis of Main Business

1、Overview

Whether it is the same as the summary in the business discussion and analysis.

√ Yes □ No

2、Income and cost

(1)Composition of the operating revenue

Unit :Yuan

20192018Increase/decrease on a y-o-y basis (%)
SumShare of operatingSumShare of operating

Chongqing Changan Automobile Company Limited 2019 Annual Report

income(%)income (%)
Operating revenue70,595,245,133.28100.00%66,298,270,389.77100.00%6.48%
Industry
Automobile70,595,245,133.28100.00%66,298,270,389.77100.00%6.95%
Products
Vehicles70,528,420,564.0799.91%66,276,054,153.0999.97%6.42%
Provision of labor services and others66,824,569.210.09%22,216,236.680.03%200.79%
Area
China67,531,869,212.5995.66%63,892,840,365.3896.37%5.70%
Overseas3,063,375,920.694.34%2,405,430,024.393.63%27.35%
Operating RevenueOperating CostGross marginIncrease/decrease on a year-on-year basis Operating Revenue (%)Increase/decrease on a year-on-year basis Operating Cost (%)Increase/decrease on a year-on-year basis gross margin
Industry
Automobile70,595,245,133.2860,232,585,428.0814.68%6.48%6.45%Up 0.03 points
Products
Sales of products70,528,420,564.0760,214,857,917.8014.62%6.42%6.45%Down 0.03 points
IndustryItem20192018Increase/decrease on a year-on-year basis (%)
Automobile IndustrySales volume1,759,9712,074,575-15.16%
Production volume1,797,4291,998,865-10.08%

Chongqing Changan Automobile Company Limited 2019 Annual Report

Stock volume58,37946,25526.21%
Market share(%)6.83%7.39%Down 0.56 points
Industry classificationItem20192018Increase/decrease on a year-on-year basis (%)
AmountRatio in operation cost (%)AmountRatio in operation cost (%)
Automobile ProductionProduct Sale6,021,48699.97%5,656,44199.97%6.45%
Provision of labor services and others1,7730.03%1,9060.03%-6.99%
Total6,023,259100.00%5,658,347100.00%6.45%
Total sales amount to top 5 customers (RMB)5,297,834,284.21

Chongqing Changan Automobile Company Limited 2019 Annual Report

Proportion of sales to top 5 customers in the annual sales (%)7.50%
Proportion of sales amount of the related party in the top 5 customers(%)4.56%
Serial No.companySales valueproportion in total sales(%)
1First1,294,526,146.641.83%
2Second1,114,790,679.431.58%
3Third1,020,942,159.561.45%
4Fourth964,578,663.521.37%
5Fifth902,996,635.061.28%
total5,297,834,284.217.50%
Total purchase amount to top 5 suppliers (RMB)5,328,307,085.27
Proportion of purchase to top 5 suppliers in the annual purchase (%)8.85%
Proportion of purchase amount of the related party in the top 5 suppliers(%)5.25%
Serial No.Company namePurchase valueProportion in the total purchase(%)
1First1,445,693,679.112.40%
2Second1,287,348,187.932.14%
3Third876,106,469.951.45%
4Fourth863,253,483.291.43%
5Fifth855,905,264.991.42%
Total5,328,307,085.278.85%
Item20192018increase/decrease(%)Description of major changes
Selling expense4,591,170,885.945,283,255,346.48-13.10%

Chongqing Changan Automobile Company Limited 2019 Annual Report

Management expense2,265,231,518.652,141,231,988.915.79%
Financial expense-190,849,511.73-427,062,035.0655.31%In 2019, the average monthly deposit balance decreased significantly year-on-year, and interest income decreased
R&D expense3,169,063,761.133,184,788,921.68-0.49%
20192018Changes in ratio
Labor Number7,8297,7221.39%
Proportion of labor in the Company21.30%21.43%Down 0.13 pionts
Investment value (yuan)4,478,435,313.284,464,733,629.100.31%
Proportion of investment in the revenue6.34%6.73%Down 0.39 pionts
Capitalization (yuan)1,309,371,552.151,279,944,707.422.30%
Proportion of capitalization in R&D investment29.24%28.67%Up 0.57 pionts
Item20192018Increase/decrease(%)
Subtotal of cash inflows from operating activities75,201,286,289.3781,996,970,246.85-8.29%
Subtotal of cash outflows from operating activities71,319,538,050.9885,884,445,549.29-16.96%
Net cash flows from operating activities3,881,748,238.39-3,887,475,302.44199.85%
Subtotal of cash inflows from investing activities2,291,173,505.542,488,521,707.35-7.93%

Chongqing Changan Automobile Company Limited 2019 Annual Report

Subtotal of cash outflows from investing activities6,085,786,845.199,057,241,752.33-32.81%
Net cash flows from investing activities-3,794,613,339.65-6,568,720,044.9842.23%
Subtotal of cash inflows from financing activities337,719,805.561,195,280,377.20-71.75%
Subtotal of cash outflows from financing activities738,294,133.172,547,968,288.91-71.02%
Net cash flows from financing activities-400,574,327.61-1,352,687,911.7170.39%
Net increase in cash and cash equivalents-287,678,939.91-11,803,151,475.7397.56%
ItemDec.31,2019Dec.31,2018Increase/ decrease (%)instructions
AmountRatio in total assets(%)AmountRatio in total assets(%)
Cash10,066,171,353.4810.31%9,980,544,526.1410.68%-0.37%
Notes receivable838,314,076.820.86%1,409,419,600.501.51%-0.65%Subsidiaries Changan International and Baoding Changke have stepped up their collection efforts and made timely payments
Inventory3,375,441,488.373.46%4,917,420,457.195.26%-1.80%Imported transmission resource reserves are gradually consumed, and the amount of raw materials and

Chongqing Changan Automobile Company Limited 2019 Annual Report

materials in transit is reduced
Investment property7,102,849.720.01%7,329,561.280.01%0.00%
Long-term equity investments11,008,336,989.0911.28%13,275,170,118.8314.20%-2.92%
Fixed assets26,939,490,554.1927.60%22,161,054,058.3123.70%3.90%
Construction in progress1,729,803,028.431.77%5,383,844,030.755.76%-3.99%The first phase of global R & D projects and the adjustment of automobile product structure have been gradually solidified
Short-term loans229,580,000.000.24%190,000,000.000.20%0.04%
Long-term loans55,300,000.000.06%-0.00%0.06%
ItemAmount at year beginningProfit and loss from changes in fair value in the current periodAccumulated fair value changes included in equityImpairment provisions in the reporting periodAmount purchased in the current periodAmount sold in the current periodAmount at year end
Financial assets
Transactional financial assets-2,419,476,200.002,419,476,200.00
Equity instrument investment-734,506,100.00734,506,100.00
Subtotal of financial assets-3,153,982,300.003,153,982,300.00
Others
Total-3,153,982,300.003,153,982,300.00
Financial liabilities------

Chongqing Changan Automobile Company Limited 2019 Annual Report

3、Property rights limits by the end of report period

ItemBook value at the end of this yearLimited Reason
Cash705,696,678.59Used to open the acceptance deposit
Notes receivable and accounts receivable3,125,099,350.00Notes receivable pledge to issue notes payable
Intangible assets18,080,415.84Obtain liquidity borrowings and obtain commercial acceptance bills
Fixed assets24,200,714.44Obtain liquidity borrowings and obtain commercial acceptance bills
Total3,873,077,158.87
External investment
Investment Amount in the report period(RMB)Investment Amount in 2017(RMB)Variance rate
1,800,000,0002,933,941,217.67-38.65%
Particulars of investees
Company NamePrincipal businessProportion in the investees’ equity (%
Nanjing Leading Equity Investment Partnership (Limited Partnership)Equity investment, venture capital investment; investment in non-publicly traded equity of non-listed companies, non-publicly issued equity of listed companies, and related services. (Projects subject to approval according to law may be operated after approval by relevant departments)16.39%
Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership)Equity investment (operating in accordance with the approved items and deadlines of the license documents).50.25%
Company namePrincipal businessInvestment modeInvestment amountShare-holding ratioCapital sourcePartnerInvestment periodProgress on book closing dateAny litigationsDisclosure date(in case)Disclosure index(in case)

Chongqing Changan Automobile Company Limited 2019 Annual Report

Nanjing Leading Equity Investment Partnership (Limited Partnership)Equity investment, venture capital investment; investment in non-publicly traded equity of non-listed companies, non-publicly issued equity of listed companies, and related services. (Projects subject to approval according to law may be operated after approval by relevant departments)Newly established1,600,000,00016.39%Its own capitalSuning Investment Co., Ltd., China First Automobile Group Co., Ltd., Dongfeng Motor Group Co., Ltd., Shenzhen Tencent New Travel Limited Partnership (Limited Partnership), Shenzhen Segali Asset Management Co., Ltd., Hangzhou Alibaba Venture Capital Management Co., Ltd. Wuxi Feiye Investment Co., Ltd., Xianning Rongyi Smart Travel Industry Investment Fund (Limited Partnership), Nanjing Hengchuang Yunzhi Network Technology Co., Ltd., Nanjing Leading Equity Investment Management Co., Ltd.Indefinite durationEstablishment completed, industrial and commercial registration procedures completedNo2019-03-22Announcement of the Establishment of Nanjing Leading Equity Investment Partnership (Limited Partnership) (Bulletin No: 2019-16)
Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership)Equity investment (operating in accordance with the approved items and deadlines of the license documents).Newly established200,000,00050.25%Its own capitalJiantou Huake Investment Co., Ltd., Beijing Huake Lianzhi Technology Co., Ltd., China Construction Investment Management (Tianjin) Co., Ltd.Indefinite durationEstablishment completed, industrial and commercial registration procedures completedNo2019-04-30Announcement of the Establishment of Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership) (Bulletin No: 2019-30)
Total----1,800,000,000----------------

Chongqing Changan Automobile Company Limited 2019 Annual Report

√ Applicable □ Not applicable

Securities varietySecurities codeSecurities short nameInitial investment cost(Yuan)Number of shares held at the beginning of the period(Share)Percentage of shares held at the beginning of the periodNumber of shares held at the end of the period(Share)Percentage of shares held at the end of the periodBook value at the end of the period (Yuan)Reporting period profit and loss (Yuan)Accounting accountSource of shares
Stock600369Southwest Securities50,000,00035,500,0000.63%35,500,0000.63%184,245,00060,705,000.00Transactional financial assetsInitial investment
Stock300750CATL1,000,000,82122,999,5751.06%22,999,5751.04%2,235,231,200828,449,888.69Transactional financial assetsInitial investment
Total1,050,000,82158,499,575--58,499,575--2,419,476,200889,154,888.69----

Chongqing Changan Automobile Company Limited 2019 Annual Report

On December 30, 2019, Changan Automobile and Shenzhen Qianhai Ruizhi Investment Co., Ltd. (hereinafter referred to as"Qianhai Ruizhi") signed the "Equity Transfer Agreement" to transfer all the 50% equity of Changan PSA held to Qianhai Ruizhi.The transaction meets the company's actual business and future development needs, optimizes the company's asset structure, and is inline with the company's strategic transformation direction. The transfer price of the transaction is 1.63 billion yuan, and the expectedimpact on the consolidated statement is to increase the pre-tax profit of 1.352 billion yuan. The generated profit will be included inthe accounting period of the transaction completion (expected to be 2020). The specific impact is subject to the audit results of thecompany's annual auditor. For details, please refer to the "Announcement on the Sale of Equity Interests in Joint Ventures"(Announcement No. 2020-02). On January 13, 2020, the matter was reviewed and approved by the first extraordinary generalmeeting of shareholders in 2020 (Announcement No. 2020-04).VII. Analysis of main holding companies and equity companies

√ Applicable □Not applicable

Basic information of main subsidiary companies and shareholding companies which have an impact on over 10% of net profits

Unit: ten thousand yuan

NameRegistered capitalEquity heldMain businessesTotal assetsMain operating incomeNet profit
Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership)150,001100%Engaged in non-securities equity investment activities and related consulting business223,524070,744
Chongqing Changan Automobile Customer Service Co., Ltd.3,000100%Produce and sell auto and parts113,622178,52136,855
Hefei Changan Automobile Co., Ltd.77,500100%Produce and sell auto and parts777,1261,035,07333,548
Chongqing Changan Suzuki Motor Co., Ltd.133,764100%Produce and sell auto and parts257,566143,734-40,315
Chongqing Changan New Energy Automobile Technology Co., Ltd.9,900100%Produce and sell auto and parts239,000381,830-48,115
Changan Mazda Automobile Co. Ltd11,097USD50%Produce and sell auto and parts1,262,5011,621,262187,025
Changan Peugeot Citroen Automobile Co., Ltd.760,00050%Produce and sell auto and parts639,22978,265-222,096
Changan Ford Automobile Co., Ltd24,100USD50%Produce and sell auto and parts4,772,1272,809,603-385,720
NameAcquisition and disposal of subsidiaries during the reporting periodOn the overall production and operation and performance impact

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chongqing Chehe Mei Technology Co., Ltd.Newly establishedNo major influence

Chongqing Changan Automobile Company Limited 2019 Annual Report

to integrate resources to develop electric and intelligent; new forces of vehicle manufacturing enter the stage of mass production andlanding.

2. The Company Development Strategy

In the face of the new normal of "low growth, micro profit" in the automobile market, the Company will comprehensivelyimplement the "365" action of group company quality improvement, focus on "customer-oriented, firm reform, innovative marketing,and ultimate efficiency", and make every effort to promote the third entrepreneurship innovation plan, work hard unswervingly topromote high-quality development, and transform to intelligent travel technology company.We should attach equal importance to independence and joint venture, coordinate traditional business with emerging business,transform from serving customers to operating customers, from operating products to brands, from traditional products to intelligent+ new energy products, from providing traditional products to providing ecological products, we will build into an intelligent traveltechnology company and move forward to a world-class automobile enterprise.

3. Business plan

The operation goal of BOD in 2020: strive to produce and sell more than 1.91 million cars. In order to achieve the above goals,the Company takes "customer-oriented, firm reform, innovative marketing, and ultimate efficiency" as the main line, vigorouslypromotes "efficiency 1/2 project" and "customer 2 times project", deepens the marketing system, accelerates the implementation ofreform projects, and comprehensively improves the operation quality. The Company will focus on the following work: firstly,strengthen the strategic direction, and accelerate the transformation and development; secondly, implement the "2 times project" withfine customer experience; thirdly, promote 1/2 project, and improve the efficiency in an all-round way; fourthly, deepen the reformand innovation, and stimulate the endogenous power; fifthly, strengthen the sense of operation, and improve the quality of operation;sixthly, conduct the technological innovation, and create classic products; seventhly, accelerate the brand renewal, and improve thebrand potential energy; eighthly, deepen marketing reform and improve system capacity; ninthly, deepen joint venture cooperationand boost joint venture; tenthly, improve the base construction and speed up overseas layout; Eleventhly, innovate business modeland promote steady transformation; twelfthly, pay close attention to production and ensure production safety; thirteenthly,comprehensively and strictly govern the party and improve the quality of Party construction; fourteenthly, practice leading cultureand inspire the vitality of all staff.

4. The company's capital expenditure plan for 2019

In order to achieve the company's strategic objectives, it is estimated that the investment plan of the company and its holdingsubsidiaries in 2020 will be 3627.78 million yuan, including 2427.78 million yuan of fixed assets investment and 120 million yuan ofequity investment. Fixed asset investment focuses on the construction of new products and R&D capabilities, which could maintainthe competitiveness of independent passenger vehicle products and increase the investment in new energy and light vehicle products,and continuously improve the core R&D capabilities such as intelligence, modeling, collision test, etc. Equity investment is mainly tooptimize the capital layout structure, including investing in T3 travel, T3 technology, and strengthen the forward-looking layout inthe intelligent field. According to the progress of the project, combined with the operation and financing environment, the companywill study and formulate the fund-raising plan and fund use plan of various channels to improve the efficiency of fund use and reducethe cost of capital.

5. Possible risks

Firstly, novel coronavirus epidemic risk.

First, the delay in resumption of work results in the failure of timely supply of parts and components from some suppliers,which makes the production organization more difficult. Some products fail to meet the market sales demand in time; second, thepassenger flow of customers into the 4S stores to purchase cars during the epidemic period is greatly reduced and the customercollection of the sales terminal is affected; third, some small and micro enterprises are in a dilemma, resulting in the decrease ofincome, the frustration of consumption consumer confidence, and the reduction of the car consumption.

Countermeasures: the company has launched a comprehensive epidemic emergency plan. First, ensure the production and

Chongqing Changan Automobile Company Limited 2019 Annual Report

supply through flexible production organization; second, increase online promotion and service, and strengthen users’ contacts; third,strive to minimize market impact by strengthening auto financial services, improving product selling points, and enhancing userexperience and so on.Secondly, macroeconomic downside risks.China's economic development is still in an important stage of structural adjustment, transformation and upgrading. Coupledwith the impact of this epidemic, the recent economic growth is facing a greater downside risk. Due to the strong correlation betweenautomobile consumption and national economic growth, it is expected that the automobile market will continue to decline in 2020,and the decline may be higher than that in the same period of last year.Countermeasures: the company has formed a research and judgment mechanism of daily, weekly, monthly and quarterlyinformation tracking and strategic trend observation, strengthened the research of macroeconomic situation, actively adjusted on thebasis of full research and judgment, turned crisis into opportunity, strengthened product research and development and marketpromotion, strengthened the cooperation, sharing and symbiosis between enterprises in the industrial chain, and found newopportunities.Thirdly, the risk of increasing competition between enterprises.First, foreign brands continue to increase investment and competition in the Chinese market, the price of joint venture brandproducts continues to decline, the market as a whole shows the pace of more new products, rapid price reduction, and the industry'sproduct profit space has accelerated to shrink. Second, the new force of domestic car building products has accelerated their listing,while weak brands have accelerated their elimination in the competition, enterprises and brands have accelerated the replacement ofold and new ones, and in the process of great waves, the vicious competition has increased the disturbance to the market.Countermeasures: on the one hand, the Company will further focus on products and accelerate product replacement and newproduct introduction; on the other hand, the Company will vigorously promote organizational mechanism and system reform, fullystimulate personnel vitality, organizational efficiency and process efficiency, improve operation efficiency, reduce management costand product cost, accelerate the pace of reform, and accelerate the implementation of the company's third innovation andentrepreneurship strategy.X. Registration form for reception, research, communication, interview,etc. during thereporting period

DateMannerType of Reception ObjectIndex
2019.01.02On-Site SurveyInstitutionFor details, see the January 4, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 2, 2019 investor relations activities record sheet
2019.01.10On-Site SurveyInstitutionFor details, see the January 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10, 2019 investor relations activities record sheet(1)
2019.01.10On-Site SurveyInstitutionFor details, see the January 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10, 2019 investor relations activities record sheet(2)
2019.01.10On-Site SurveyInstitutionFor details, see the January 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10, 2019 investor relations activities record sheet(3)

Chongqing Changan Automobile Company Limited 2019 Annual Report

2019.01.11On-Site SurveyInstitutionFor details, see the January 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 11, 2019 investor relations activities record sheet(1)
2019.01.11On-Site SurveyInstitutionFor details, see the January 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 11, 2019 investor relations activities record sheet(2)
2019.01.15On-Site SurveyInstitutionFor details, see the January 17, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 15, 2019 investor relations activities record sheet
2019.01.15On-Site SurveyInstitutionFor details, see the January 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 15, 2019 investor relations activities record sheet(2)
2019.01.16On-Site SurveyInstitutionFor details, see the January 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 16, 2019 investor relations activities record sheet
2019.01.18On-Site SurveyInstitutionFor details, see the January 22, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 18, 2019 investor relations activities record sheet
2019.01.22On-Site SurveyInstitutionFor details, see the January 24, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 22, 2019 investor relations activities record sheet(1)
2019.01.22On-Site SurveyInstitutionFor details, see the January 24, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 22, 2019 investor relations activities record sheet(2)
2019.02.26On-Site SurveyInstitutionFor details, see the February 27, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: February 26, 2019 investor relations activities record sheet
2019.02.28On-Site SurveyInstitutionFor details, see the March 1, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: February 28, 2019 investor relations activities record sheet
2019.03.05On-Site SurveyInstitutionFor details, see the March 7, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 5, 2019 investor relations activities record sheet
2019.03.14On-Site SurveyInstitutionFor details, see the March 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 14, 2019 investor relations activities record sheet(1)
2019.03.14On-Site SurveyInstitutionFor details, see the March 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 14, 2019 investor relations activities record sheet
2019.03.19On-Site SurveyInstitutionFor details, see the March 20, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 19, 2019 investor relations activities record sheet
2019.03.22On-Site SurveyInstitutionFor details, see the March 25, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 22, 2019 investor

Chongqing Changan Automobile Company Limited 2019 Annual Report

relations activities record sheet
2019.04.30On-Site SurveyInstitutionFor details, see the May 7, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: April 30, 2019 investor relations activities record sheet
2019.05.06On-Site SurveyInstitutionFor details, see the May 7, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 6, 2019 investor relations activities record sheet
2019.05.10On-Site SurveyInstitutionFor details, see the May 13, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 10, 2019 investor relations activities record sheet
2019.05.14On-Site SurveyInstitutionFor details, see the May 16, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 14, 2019 investor relations activities record sheet
2019.06.12On-Site SurveyInstitutionFor details, see the May 7, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 6, 2019 investor relations activities record sheet
2019.06.12On-Site SurveyInstitutionFor details, see the June 14, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 12, 2019 investor relations activities record sheet
2019.06.21On-Site SurveyInstitutionFor details, see the June 25, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 21, 2019 investor relations activities record sheet
2019.06.28On-Site SurveyInstitutionFor details, see the July 2, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 28, 2019 investor relations activities record sheet
2019.07.03On-Site SurveyInstitutionFor details, see the July 5, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 3, 2019 investor relations activities record sheet
2019.07.05On-Site SurveyInstitutionFor details, see the July 10, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 5, 2019 investor relations activities record sheet
2019.07.19On-Site SurveyInstitutionFor details, see the July 23, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 19, 2019 investor relations activities record sheet
2019.07.23On-Site SurveyInstitutionFor details, see the July 24, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 23, 2019 investor relations activities record sheet
2019.07.24On-Site SurveyInstitutionFor details, see the July 26, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 24, 2019 investor relations activities record sheet (1)
2019.07.24On-Site SurveyInstitutionFor details, see the July 26, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 24, 2019 investor relations activities record sheet (2)
2019.09.09On-Site SurveyInstitutionFor details, see the September 11, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 9, 2019 investor relations activities record sheet
2019.09.10On-Site SurveyInstitutionFor details, see the September 11, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 10, 2019

Chongqing Changan Automobile Company Limited 2019 Annual Report

investor relations activities record sheet
2019.09.11On-Site SurveyInstitutionFor details, see the September 12, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 11, 2019 investor relations activities record sheet (1)
2019.09.11On-Site SurveyInstitutionFor details, see the September 12, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 11, 2019 investor relations activities record sheet (2)
2019.09.18On-Site SurveyInstitutionFor details, see the September 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 18, 2019 investor relations activities record sheet
2019.09.26On-Site SurveyInstitutionFor details, see the September 29, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 26, 2019 investor relations activities record sheet
2019.10.09On-Site SurveyInstitutionFor details, see the October 11, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: October 9, 2019 investor relations activities record sheet
2019.11.01On-Site SurveyInstitutionFor details, see the November 5, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November r 1, 2019 investor relations activities record sheet
2019.11.08On-Site SurveyInstitutionFor details, see the November 12, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 8, 2019 investor relations activities record sheet
2019.11.14On-Site SurveyInstitutionFor details, see the November 18, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 14, 2019 investor relations activities record sheet
2019.11.19On-Site SurveyInstitutionFor details, see the November 21, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 19, 2019 investor relations activities record sheet
2019.12.06On-Site SurveyInstitutionFor details, see the December 10, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 6, 2019 investor relations activities record sheet
2019.12.13On-Site SurveyInstitutionFor details, see the December 13, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 13, 2019 investor relations activities record sheet
2019.12.17On-Site SurveyInstitutionFor details, see the December 17, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 17, 2019 investor relations activities record sheet
2019.12.19On-Site SurveyInstitutionFor details, see the December 20, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 19, 2019 investor relations activities record sheet
2019.12.20On-Site SurveyInstitutionFor details, see the December 20, 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 20, 2019 investor relations activities record sheet
Reception Times49
Number of Agencies152

Chongqing Changan Automobile Company Limited 2019 Annual Report

Number of Individuals0
Number of other entities0
Whether to disclose undisclosed important informationNo

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 5 Important Matters

Ⅰ. Company common stock profit distribution and capital reserves converting into sharecapitalDuring the reporting period, the common stock profit distribution policy, especially the formulation, implementation orthe adjustment situation of cash dividend policy.

√ applicable □ not applicable

According to the China Securities Regulatory Commission requirements, in combination with the practical situation of thecompany, the Company has rectified the “Articles of Association” and clarified about the distributable profit caliber, dividenddistribution way, principle, form, cash dividend conditions and proportion, stock dividend condition, plans to set up and reviewprocedures, the implementation, the conditions of distribution policy adjustment, and decision-making procedures, etc, to strengthenthe supervision function of independent directors in the profit distribution plan, policy adjustment, and strengthen the guaranteesystem of the dividend return for investors. For details of the company’s specific distribution policy, please refer to the Articles ofAssociation. Since the net profit attributable to shareholders of the listed company is negative in 2019, no profit distribution will bemade, and no capital reserve will be converted into share capital.

Special Statement for Cash Dividend Policy
Whether comply with the company's articles of association or requirements of resolutions of the shareholders' general meeting:Yes
Whether the standard of distribution and the proportion is clear:Yes
Whether the related decision-making process and mechanism is complete:Yes
Whether the independent directors play a proper role:Yes
Whether the small and medium-sized shareholders have the chance to fully express their views and demands, whether the legitimate rights and interests get fully protected:Yes
Whether cash dividend policy is adjusted or changed, whether the conditions and procedures are compliant and transparent:Not Applicable
YearCash dividend amount (tax included)Net profit attributable to shareholders of listedThe net profit ratio (%) attributable to shareholders of

Chongqing Changan Automobile Company Limited 2019 Annual Report

companies in dividends annual consolidated statementslisted companies in consolidated statements
2019--2,646,719,356.53-
201886,447,673.20680,728,392.0312.70%
20172,141,981,235.917,137,234,723.4730.01%
For every 10 shares to send bonus shares-
For every 10 shares dividend number (RMB) (tax included)-
The equity base of distribution plan(shares)4,802,648,511
Total cash dividends (yuan) (tax included)-
Distributable profits (yuan)31,852,751,052.34
Proportion (%) of cash dividends to total profit distribution-
Cash dividend policy:
Others
Detailed statement of profit allocation or plan that capital accumulation fund turn to be added
Audited by Ernst &Young Huaming certified public accountants (special ordinary partnership), the parent company annual net profit of 2019 is -2,828,617,627.35 yuan, added with early undistributed profit of 34,767,840,143.32 yuan, minus the allocated cash dividend of 86,471,463.63yuan during the reporting period, so at the end of 2019 the undistributed profits can be used for distribution is 31,852,751,052.34 yuan. At the end of 2019, monetary fund balance of the parent company is 6,563,020,335.56 yuan. In 2019, the preplan profit distribution of the Company deliberated and approved by the Board is: no profit distribution and no conversion of capital reserve into share capital.
CommitmentsCommitment entityCommitment contentCommitment timeperiod for commitmentPerformance
Share limited commitmentChina ChanganWhen the company non-publicly subscribes for new shares of listed companies in 2017, the newly acquired shares of listed company can not be transferred within 36Oct., 201736 monthsChina Changan has fulfilled its commitment that the subscription of restricted shares has not been transferred within 36 months from October 14, 2016, and the conditions

Chongqing Changan Automobile Company Limited 2019 Annual Report

months since the listing, but can be transferred after 36 months according to relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange.for lifting the restricted shares have been met. The shares were listed and circulated on October 16, 2019.
Other small shareholders commitmentChina ChanganIn order to avoid and eventually solve the possible competition or potential competitors, better maintain the interests of investors, the company controlling shareholder China Changan made the commitment: In two consecutive years profit of Harbin Hf Automobile Industry Group Co, With the continuous development ability and management level is improved significantly. Under such condition, the enterprise will be affiliated into the company.September, 2010The Harbin Hefei Automobile Industry Group Co at present is still running at a loss, The conditions have not yet reached the profitable for two consecutive years.

Chongqing Changan Automobile Company Limited 2019 Annual Report

Policies and Accounting Estimates” in Note 3 to the Financial Statements in the “2018 Annual Report of the Company”.

VII. During the reporting period, big accounting errors correction and the need for tracerestatement

□Applicable √Not-applicable

During the reporting period, no significant accounting errors correction and no need for trace restatement.

VIII. Compared with financial report for last year, the explanation to the scope change ofconsolidated statements

√ Applicable □ Not applicable

During the reporting period, Changan Automobile newly established one wholly owned subsidiaries, Chongqing Chehe MeiTechnology Co., Ltd., which was included in the consolidated statements.IX. The appointment, dismissal of the accounting firm

The appointment of the accounting firm

The name of the domestic accounting firmErnst & Young Hua Ming LLP
Domestic accounting firms payment (ten thousand Yuan)386
A continuous years of domestic accounting firms audit service13
Domestic accounting firm of Certified Public Accountants nameQiao Chun, Hu Yan

Chongqing Changan Automobile Company Limited 2019 Annual Report

During the report period no bankruptcy restructure related matters occur.XII. Crucial litigation and arbitration events

□Applicable √Not-applicable

During the reporting period the company has no crucial litigation and arbitration events.XIII.Punishment and rectification

□Applicable √Not-applicable

During the reporting period there’s no punishment and rectification.XIV. The integrity of company and its controlling shareholder, actual controller

□Applicable √Not-applicable

XV. Company equity incentive plan, the implementation of the employee stock ownershipplan or other staff incentives.

√Applicable □Not-applicable

At the 50th meeting of the 7th board of directors, A bill to cancel some stock options of the Company was deliberated and passedon Apr 19th, 2019, and 9,503,400 stock options would be cancelled. For details, please refer to The announcement of cancellationabout some stock options of the company (Announcement Number: 2019-24) on Apr 23rd, 2019. On May 15th, 2019, the companydisclosed Notice on the completion of cancellation about some stock options (Announcement Number: 2019-33), according torelevant regulations, the company applied to the shenzhen branch of China securities registration and settlement co., LTD for thecancellation of stock options and completed the cancellation procedures.

XVI. Significant related party transactions

1、Related transactions related to day-to-day operation

For details, please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements.

2、Assets or equity acquisition, sales related transactions

√Applicable □Not-applicable

For details, please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements.

3、Related transactions of common investment

√Applicable □Not-applicable

For details, please refer to Chapter four " Major equity investment in the reporting period " in the Financial Statements.

Chongqing Changan Automobile Company Limited 2019 Annual Report

4、Related rights and debt relations

√Applicable □Not-applicable

For details, please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements.Whether there is any non-business related credits and debts

□Yes √ No

There is no non-operating associated credits and debts during the reporting period.

5、Other significant related transactions

√applicable □ not applicable

Related queries in disclosure website of interim report of related transactions

Name of temporary announcementTemporary announcement dateTemporary announcement site name
Related transaction announcement thet Chongqing Automobile Finance Co., Ltd. provides financial services (Note 1)Feb, 1st, 2019http://www.cninfo.com.cn
Related Transactions Announcement that China South Industries Group Co., Ltd. provides financial service for the company (Note 2)Feb, 1st, 2019http://www.cninfo.com.cn
Announcement about increasing estimated amount of 2019 daily related transactionFeb, 1st, 2019http://www.cninfo.com.cn
Supplementary announcement about increasing estimated amount of 2019 daily related transactionFeb, 21st, 2019http://www.cninfo.com.cn
Announcement of Related Transactions for Providing Entrusted Loans to Jiangling Holdings LimitedApr, 23rd, 2019http://www.cninfo.com.cn

Chongqing Changan Automobile Company Limited 2019 Annual Report

assessment report.(For details, please refer to " A report on risk assessment of Changan Automobile Finance" disclosed onhttp://www.cninfo.com.cn on Feb., 28th 2020)In 2019, Changan auto Finance provided the following services for the company:

①Provide the maximum deposit balance of not more than 3.5 billion, and the deposit interest rates should not be lower than that ofother domestic financial institutions over the same period;

②Provide the maximum of 2 billion yuan in auto finance personal consumer credit discount service , and set the prices for financialservices in accordance with the standards not higher than market fair prices or national standards;

③Provide the maximum credit total of 6 billion auto financial services and other financial services, and set the prices for financialservices in accordance with the standards not higher than market fair prices or national standards.XVII. Major contract and its performance

1、Trusteeship, contracting, leasing matters

(1)Trusteeship

□Applicable √ Not-applicable

Information about TrusteeshipThere is no Trusteeship during the reporting period.

(2)contracting

□Applicable √ Not-applicable

Information about contractingThere is no contracting during the reporting period.

(3)Leasing

√Applicable □Not-applicable

Information about leasingRelated party rental situation can be found in the note nine of financial statements 5 (2) related party relationships and transactions.Projects whose profit and loss to the company during the reporting period is more than 10% of total profits

□Applicable √ Not-applicable

Projects whose profit and loss to the company during the reporting period can’t be more than 10% of total profits

2、Major guarantee

□Applicable √ Not-applicable

There’s no major guarantee during the report period.

Chongqing Changan Automobile Company Limited 2019 Annual Report

3、 Entrust others for cash assets management

(1) Entrust financial situation

□Applicable √ Not-applicable

There’s no entrusting situation during the reporting period.

(2) Entrusted loans situation

√ Applicable □ Not applicable

On April 19th, 2019, the 51st meeting of the 7th board of directors reviewed and approved the "Proposal on Providing EntrustedLoans to Jiangling Holdings Co., Ltd.", agreeing that Changan Automobile provide entrusted loans of 300 million to its joint ventureJiangling Holdings Co., Ltd. For details, please refer to the "Announcement of Related Transactions for Providing Entrusted Loans toJiangling Holdings Limited " (Announcement Number: 2019-27).

4、Other major contract

□Applicable √ Not-applicable

There’s no other major contract during the reporting period.XVIII. Social responsibility

1、Performance of social responsibilities

The full text of the company's social responsibility report has been published on the website of www.cninfo.com.cn on the sameday as the company's annual report.

2、Fulfillment of social responsibility for targeted poverty alleviation

√ Applicable □ Not applicable

In 2019, Changan Automobile actively responded to the Guiding Opinions of the Central Committee of the Communist Party ofChina and the State Council on the Three-Year Action to Win the Strong Fight against Poverty, comprehensively implemented thespirit of the Nineteenth National Congress of the CPC and the Central Conference on Poverty Alleviation and Development. Inaccordance with the decision-making and deployment of the Party Central Committee and the State Council, and in accordance withthe actual situation of the enterprise, the company have effectively promoted targeted poverty alleviation work, and completed theassistance to Yunnan Luxi, Yanshan, Jiangxi Jishui, Hebei Fuping, Chongqing Pengshui and Youyang.

(1)Fixed Poverty Alleviation Programs in Yunnan “Two Counties” in 2019

The company donated RMB 9 million to Luxi County.

On education poverty alleviation projects: invest 1.5 million yuan on the renovation project of dangerous buildings in AlouPrimary School of Yongning Village Committee to improve the school infrastructure and provide a safe learning environment for theschool students.

On poverty alleviation projects for people's livelihood: invest 4.7 million yuan to improve the living environment through thesupport of rural domestic waste collection and transportation facilities project for the disposal of garbage trucks and stainless steel

Chongqing Changan Automobile Company Limited 2019 Annual Report

trash cans (hanging barrels) on demand in Luxi County,On the industrial poverty alleviation project: invest 2.8 million yuan to support the construction project of factory nurserybase in JinmaThe company donated RMB 9 million to Yanshan County.On education poverty alleviation projects: invest 0.3 million yuan on the 980 square metre student complex building ofDageda hope primary school to solve the problem of teaching rooms for school students in grades 1-3 and kindergartens; invest 2million yuan on the 960 square metre new comprehensive building and 120 square metre latrines and ancillary engineering projectsof the Biyun hope primary school.On poverty alleviation projects for people's livelihood: donate 2.89 million yuan to 9 townships for the purchase of thegarbage collection vehicles; donate 3.81 million yuan on the project of garbage collection bins (boxes) to purchase domestic garbagecollection boxes in 11 townships.

(2)Fixed Poverty Alleviation Program in Jishui County, Jiangxi Province in 2019

The company donated RMB 2 million to to Jishui County.On the health poverty alleviation project: support the health express project and invest 2 million yuan to purchase medicalambulances for Jishui County.

(3)Fixed Poverty Alleviation Programs in Pengshui and Youyang Counties of Chongqing in 2019According to the "Notice of the Chongqing Municipal Development and Reform Commission's Leading Group for PovertyAlleviation on Carrying out Donation Assistance and Reporting Poverty Alleviation Materials"( Yu Development and ReformCommission of the Poverty Alleviation Group issued [2019] Document No. 1), Changan Automobile donated 300,000 yuan toPengshui County for poverty alleviation.In accordance with the spirit of the Notice of the Office of the People's Government of Jiangbei District of Chongqing on theWork Plan of Aiding Youyang County in 2019 (No. 5 of Jiangbei Prefecture Office), Changan Automobile donated 200,000 yuan toYouyang County for the"Golden Plum" planting project in Changsha Village of Lixi Town.

(4)Fixed Poverty Alleviation Program inn Fuping, Hebei Province in 2019

According to the letter of the poverty alleviation Working Group Office of the State Administration of organ affairs on FurtherStrengthening the assistance to mengxiang automobile training base of Fuping Vocational Education Center, the poverty alleviationwork was carried out in Fuping County, Hebei Province, and materials such as complete vehicles, parts, machinery and equipmentwere donated to mengxiang automobile training base of Fuping vocational and technical education center, including 38 vehicles, 77parts and components (2 categories and 8 kinds of materials), 30 sets of machinery and equipment, equivalent to 9.15 million yuan intotal.

Changan Automobile Statistics on Poverty Alleviation in 2019

IndicatorUnitQuantity / Details
Ⅰ. Total————
1.funds10 thousand RMB2050
2. Material10 thousand RMB915
Ⅱ. Subdivision————
1. Industrial poverty alleviation——300
1.1 Industrial poverty alleviation project type——1) Construction Project of Factory Seedling Raising Base in Jinma Town, Luxi; 280 2) "Golden Plum" Planting Project in Changsha

Chongqing Changan Automobile Company Limited 2019 Annual Report

(5)Follow-up precision poverty alleviation plan

In 2020, Changan Automobile will adhere to targeted poverty alleviation, focus on the combination of poverty alleviation withsupporting the will and wisdom, complete the task of poverty alleviation in Luxi County, Yanshan County, Pengshui County,Youyang County, etc., spread the concept of "love the world", and establish the image of excellent corporate citizens of Changanautomobile.

3、Fulfill the social responsibility of the environmental protection

Whether the listed companies and their subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection department

√Yes □No

Basic status

Changan Automobile mainly produces engines and automobiles. The main pollutants are chemical oxygen demand, ammonianitrogen, total nickel, toluene, xylene and non-methane hydrocarbon,etc. Waste water mainly comes from the treatment of surfacetreatment wastewater, spray painting wastewater and oil containing wastewater before the coating workshop, which is dischargedafter physicochemical and biochemical treatment. The exhaust gas is mainly painted waste gas and flue gas. The exhaust gas of thespray paint is absorbed, concentrated and burned, and the exhaust gas of the oven is discharged after burning. Two sulfur oxide andnitrogen oxide are mainly from the waste gas from the clean energy of natural gas. All of the exhaust gases from energy and naturalgas combustion are organized emissions. The company's headquarters and subsidiaries have a sound environmental managementsystem, which has passed the environmental management system certification.Pollution discharge information

Village, Lixi Town, Youyang; 20
2. Education poverty alleviation——1295
2.1 Funding for poor students10 thousand RMB1) Renovation project of dangerous buildings in Alou Primary School of Yongning Village Committee, in Luxi County; 150 2) Dageda Hope Primary School Project in Yanshan county; 30 3) Biyun Hope Primary School Project in Yanshan county; 200 4) Mengxiang automobile training base project of Fuping vocational and Technical Education Center; 915
3. Medical and health poverty alleviation——200
3.1 Medical and health resources invested in poverty areas10 thousand RMBJishui County Health Express (Medical Ambulance) Project; 200
4. Other projects - people's livelihood poverty alleviation——1170
4.1 Amount of investment10 thousand RMB1) Luxi Waste Collection and Transportation Facility Project; 470 2) Yanshan Garbage Collection Vehicle Purchase and Construction Project; 289 3) Inkshan Garbage Collection Tank Purchase Construction Project; 381 4) Pengshui County; 30

Chongqing Changan Automobile Company Limited 2019 Annual Report

During the reporting period, there were 412 pollutant outlets and 17 water pollutant outlets. The emission standards were strictlyimplemented according to the national sewage comprehensive discharge standard, the water pollutant discharge standard in Beijing,the national standard for the comprehensive emission of air pollutants, the standard for the emission of air pollutants on the surface ofautomobile manufacturing in Chongqing, the standard for the comprehensive emission of air pollutants, and the vehicleManufacturing industry (painting process) air pollutant emission standard in Beijing, national industrial enterprise boundaryenvironmental noise emission standard and so on. The total emission of major pollutants: 641.11 tons of chemical oxygen, 58.33 tonsof ammonia nitrogen, 26.98 tons of sulfur dioxide, 163.45 tons of nitrogen oxides and quantitative volatile organic compounds2245.02 tons. All the pollutants in the company are discharged, and there is no excess total emission.Solid wastes are separately collected and stored. Main dangerous wastes are wastewater and sludge treatment, paint slag,phosphated residue and waste solvent, etc. The units with hazardous waste business qualification are entrusted to dispose hazardouswastes. The general industrial solid wastes and household garbage are disposed by the units with qualification according to therequirement of the local government. The waste electrical and electronic products are disassembled by the units with qualificationand are safely disposed by the units with hazardous waste business qualification. During the reporting period, 70,000 tons ofhazardous waste and 86,400 tons of general industrial solid waste were disposed.Construction and operation of pollution prevention facilitiesDuring the reporting period, the main waste gas prevention and control facilities include foundry dust removal anddeodorization facilities in engine factories, welding dust removal facilities in vehicle factories and treatment facilities for coatingvolatile organic waste gas; together with wastewater treatment facilities, they are included in preventive maintenance management ofequipment, with account books, operation instructions, preventive maintenance rules, preventive maintenance plans andimplementation records, and equipment spot inspection records, operating records and so on. The facilities are running normally. Thekey pollutant discharge units are all equipped with automatic wastewater monitoring facilities and entrusted the tripartite company tooperate and maintain the facilities.Administrative licensing of environmental impact assessment and other environmental protection for construction projectsIn accordance with the regulations of the State Council on environmental protection and management of construction projects,the People's Republic of China Environmental Impact Assessment Law, the regulations on environmental protection in Chongqing,and the Interim Measures for the construction project completion of environmental protection and acceptance by the Ministry ofenvironmental protection of the state, the environmental impact assessment and completion ring of the new, modified and expandedprojects are required and strictly enforce the environmental impact assessment system and the "Three Simultaneity" system.During the reporting period, the environmental impact assessment approvals for the second phase of the crash laboratory and theCS85 project have been obtained, and the completion of the environmental protection acceptance of the new energy first phaseproject, electric drive project, and automobile product structure adjustment project has been completed.Emergency preparedness and exercise of emergency environmental eventsContinue to carry out environmental protection emergency drills to improve the emergency response capabilities ofenvironmental emergencies. During the reporting period, all bases had environmental risk assessment reports and emergencyresponse plans for environmental emergencies. Jiangbei Engine Factory of Chongqing Headquarters Changan completed the revisionand filing of emergency response plans for environmental emergencies. Each base station prepared emergency drill plans and carriedout emergency response in accordance with regulatory requirements Drills to continuously improve the practicality of emergencyplans and employees' emergency response capabilities. No sudden environmental incident occurred.Programming and implementation of self-monitoring of the environmentIn 2019, Key sewage units of Changan Automobile: OuShang Automotive Division, Jiangbei Engine Factory, Yubei Factory,Beijing Changan, Hefei Changan. All the key sewage made self-monitoring schemes, and self-monitoring has been carried out, andinformation disclosure has been carried out according to the requirements of the local ecological environment department.Others

Chongqing Changan Automobile Company Limited 2019 Annual Report

During the reporting period, all bases carried out the declaration of national sewage permits in accordance with regulations andobtained national sewage permits. OuShang Automotive Division, Jiangbei Engine Factory, Yubei Factory, and Mould BusinessDepartment have carried out environmental credit evaluation work, all of which have been awarded the title of EnvironmentalIntegrity Enterprise.XIX. Other important events

√Applicable □Not-applicable

For details, please refer to "2、Selling of major equity" in Section IV "VI. Selling of major assets and major equity" of the annualreport.XX. Important matters of the Company's subsidiary

√Applicable □Not-applicable

For details, please refer to "2、Selling of major equity" in Section IV "VI. Selling of major assets and major equity" of the annualreport.

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 6 Changes in the shareholding of the company and

shareholdersI. Change in shareholdings

1、Change in shareholdings

Unit: One share

Balance before current changeAddition and deduction(+,-) during changeBalance after current change
QuantityRatio (%)Additional issuedStock dividendProvident fund transferotherQuantityRatio (%)
Non-circulated shares139,781,3032.91%-139,762,40318,9000.00%
1、State-owned legal person shares139,762,4032.91%-139,762,40300.00%
2、Senior management personnel shares18,9000.00%18,9000.00%
Circulated shares4,662,867,20897.09%+139,762,4034,802,629,611100.00%
1、Domestic listed RMB shares3,760,881,06678.31%+139,762,4033,900,643,46981.22%
2、Domestic listed foreign shares901,986,14218.78%901,986,14218.78%
Total shares4,802,648,511100.00%04,802,648,511100.00%

Chongqing Changan Automobile Company Limited 2019 Annual Report

□ applicable √ not applicable

Progress in the implementation of the reduction of stock by means of centralized bidding

□ applicable √ not applicable

The influence of share changes on financial indicators, such as the latest year and the latest basic earnings per share anddiluted earnings per share, the net assets per share belonging to the common shareholder of the company

□ applicable √ not applicable

Other contents which the company regards necessary and securities supervising institution requires the Company to disclose.

□ applicable √ not applicable

2、Change in Non-circulated shares

√ Available □Not-available

Unit:one share

Name of shareholdersNon-circulated shares held at the year-beginningDecrease during the reporting periodIncrease during the reporting periodNon-circulated shares held at the year-endReason for non-circulated sharesDate for the circulated shares
China Changan Automobile Co., Ltd.139,762,403139,762,403--Non - public offering shares of 139,762,403 in 20162019-10-16
Zhu Huarong18,900--18,900Executive lock stocks6 months after the retirement
Total139,781,303139,762,403-18,900----

Chongqing Changan Automobile Company Limited 2019 Annual Report

III. Shareholders and actual controllers situation

1、The number of shareholders of the company and the stock

Unit: one share

Number of ordinary shareholders at the period-end154,222Number of ordinary shareholders at the month-end prior to the disclosure of this Report142,292Number of preferred shareholders with resumed voting rights at the period-end0Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report0
Holding more than 5% of the shareholders, or top 10 shareholders situation
Name of shareholdersNature of ShareholdersPercentage of total shares (%)Shares held at the year-endincreases and decreases during the report periodNon-circulated shares held at the year-endCirculated shares held at the year-endPledged/ Frozen cases
Share statusamount
China South Industries Group Co., Ltd.State-owned legal person shares21.56%1,035,312,673--1,035,312,673No pledge or freeze
China Changan Automobile Co., Ltd.State-owned legal person shares19.32%928,044,946--928,044,946No pledge or freeze
China securities finance Co, Ltddomestic general legal person shares4.88%234,265,333--234,265,333No pledge or freeze
United Prosperity (Hongkong) Investment Co., Limitedforeign legal person shares3.21%154,120,237--154,120,237No pledge or freeze
Hong Kong Central Clearing Company Limitedforeign legal person shares2.45%117,696,72894,048,681-117,696,728No pledge or freeze
Central Huijin Investment Ltd.domestic general legal person shares1.15%55,393,100--55,393,100No pledge or freeze
DRAGON BILLION SELECT MASTER FUNDforeign legal person shares0.79%38,006,736-2,590,378-38,006,736No pledge or freeze
GIC PRIVATEforeign legal0.73%35,283,393-9,519,830-35,283,393No pledge or

Chongqing Changan Automobile Company Limited 2019 Annual Report

LIMITEDperson sharesfreeze
CAPE ANN GLOBAL DEVELOPING MARKETS FUNDforeign legal person shares0.45%21,851,1258,551,149-21,851,125No pledge or freeze
Industrial and Commercial Bank of China-E Fund Value Growth Hybrid Securities Investment Fundfund, finance products, etc.0.43%20,672,90520,672,905-20,672,905No pledge or freeze
Explanation on the relationship and the action alike of above shareholdersAmong the top 10 shareholders, China South Industries Group Co., Ltd., the actual controller; China Changan Automobile Group Co., Ltd., the controlling shareholder, and its wholly owned subsidiary United Prosperity (Hong Kong) Investment Co., Limited. belong to the concerted actor regulated by “Disclosure Administration of Shares Change Information of The Listed Company”.
The ten largest circulated shareholders
Name of shareholdersShares at the year endShares type
TypeAmount
China South Industries Group Co., Ltd.1,035,312,673RMB ordinary shares1,035,312,673
China Changan Automobile Co., Ltd.928,044,946RMB ordinary shares928,044,946
China securities finance Co, Ltd234,265,333RMB ordinary shares234,265,333
United Prosperity (Hongkong) Investment Co., Limited154,120,237Domestic listed foreign shares154,120,237
Hong Kong Central Clearing Company Limited117,696,728RMB ordinary shares117,696,728
Central Huijin Investment Ltd.55,393,100RMB ordinary shares55,393,100
DRAGON BILLION SELECT MASTER FUND38,006,736Domestic listed foreign shares38,006,736
GIC PRIVATE LIMITED35,283,393Domestic listed foreign shares35,283,393
CAPE ANN GLOBAL DEVELOPING MARKETS FUND21,851,125Domestic listed foreign shares21,851,125
Industrial and Commercial Bank of China-E Fund Value Growth Hybrid Securities Investment Fund20,672,905RMB ordinary shares20,672,905
The top 10 shareholders to sell circulated shares, and the infinite tradable relationship between shareholders and top 10 shareholders or concerted actionAmong the top 10 shareholders, China South Industries Group Co., Ltd., the actual controller; China Changan Automobile Group Co., Ltd., the controlling shareholder, and its wholly owned subsidiary United Prosperity (Hong Kong) Investment Co., Limited. belong to the concerted actor regulated by “Disclosure Administration of Shares Change Information of The Listed Company”.

Chongqing Changan Automobile Company Limited 2019 Annual Report

transactions during the reporting period。

2、The controlling shareholder of the company.

Nature of the controlling shareholder: the central state-ownedType of the controlling shareholder: legal person

NameLegal /RepresentativeDate of establishmentOrganization codeBusiness scope and major products:
CHINA CHANGAN AUTOMOBILE GROUP CO., LTDLiu WeidongDec 26th, 2005911100007109339484Design, development, manufacture and sales of automobile &motorcycle, automobile &motorcycle engine, automotive and motor cycle components& parts; sales of optical products, electronic and photoelectron products, night-time vision device, information and communication equipment; technical development, technical transfer, technical consultation, technical training, and other technical service relative with the operation mentioned above; imports and exports; merge and acquisition and consultation of assets restructuring.
The controlling equity and equity during the reporting period, the controlling shareholder of listed companies in other domestic and foreign marketsTo the reporting period, the holding companies: Harbin Dongan Auto Engine Co., Ltd. (stock code 600178); Hunan Tianyan Machinery Co., Ltd. (stock code 600698), Chongqing Changan Minsheng APLL Logistics Co., Ltd(stock code 01292.HK)
NameLegal /RepresentativeDate of establishmentOrganization codeBusiness scope and major products:
China South Industries Group Corp.Xu Ping29 Jun.,199991110000710926043Finvestment and management of state-owned assets; manufacturing of guns and firearms; engineering prospecting, designing, construction, contracting, construction supervision; equipment installation, etc.
The controlling equityTo the reporting period, direct or indirect holding companies: Harbin Dongan Auto Engine Co., Ltd. (stock

Chongqing Changan Automobile Company Limited 2019 Annual Report

and equity during the reporting period, the controlling shareholder of listed companies in other domestic and foreign marketscode 600178); Baoding Tianwei Electric Co., Ltd. (stock code 600550); Jiangling Motors Co., Ltd. (stock code 000550); Hunan Tianyan Machinery Co., Ltd. (stock code 600698); Chongqing Jianshe Automotive Systems Co., Ltd. (stock code 200054); China Optical Group Co., Ltd. (stock code 002189); Yunnan West Instrument industrial Co., Ltd. (stock code 002265); Chongqing Changan Minsheng logistics Limited (stock code 01292.HK).

Chongqing Changan Automobile Company Limited 2019 Annual Report

Chapter 7 Information about Directors, Supervisors, Senior

Management and Employees

Ⅰ. Share ownership changes of directors, supervisors and senior management

NamePositionAs stateGenderAgeTerm start dateTerm Termination dateShares held at beginning(stock)increased share number in this issue(stock)decreased share number in this issue(stock)share number at the end(stock)
Zhang BaolinChairmanpresentM572017-09-22Up to now
Zhu HuarongDirector, PresidentpresentM542016-03-23Up to now25,200--25,200
Zhou ZhipingDirectorpresentM492016-03-23Up to now
Tan XiaogangDirectorpresentM562016-03-23Up to now
Zhang DongjunDirectorpresentM532018-05-18Up to now
Zhang DeyongDirector, The chief accountantpresentM452018-05-18Up to now
Liu Jipengindependent directorpresentM632016-03-23Up to now
Li Qingwenindependent directorpresentM632016-03-23Up to now
Chen Quanshiindependent directorpresentM742016-03-23Up to now
Ren Xiaochangindependent directorpresentM632017-09-20Up to now
Pang Yongindependent directorpresentM502016-03-23Up to now
Tan Xiaoshengindependent directorpresentM492016-03-23Up to now
Wei Xinjiangindependent directorpresentM502017-09-20Up to now

Chongqing Changan Automobile Company Limited 2019 Annual Report

Cao Xingquanindependent directorpresentM482018-05-18Up to now
Yan MingChairman of the supervisorypresentM542019-01-03Up to now
Sun DahongSupervisorpresentM532016-03-23Up to now
Zhao HuixiaSupervisorpresentM592016-03-23Up to now
Wang YanhuiEmployee SupervisorpresentF532020-04-18Up to now
Luo YanEmployee SupervisorpresentF452016-03-23Up to now
Yuan MingxueExecutive Vice PresidentpresentM512016-03-23Up to now
Liu BoDeputy Vice DirectorpresentM532016-03-23Up to now
He ChaobingDeputy Vice DirectorpresentM522016-03-23Up to now
Zhang JingjingDeputy Vice DirectorpresentF532016-03-23Up to now
Li WeiDeputy Vice DirectorpresentM532016-03-23Up to now
Tan BenhongDeputy Vice DirectorpresentM442017-08-31Up to now
Liu ZhengjunDeputy Vice DirectorpresentM542017-11-24Up to now
Ye PeiVice PresidentpresentM442018-09-21Up to now
Zhao FeiVice PresidentpresentM452018-09-21Up to now
Chen WeiVice PresidentpresentM472018-09-21Up to now
Li MingcaiVice PresidentpresentM382018-09-21Up to now
Li JunBoard SectarypresentF502016-03-23Up to now
Zhang AnguoEmployee SupervisordepartureM602016-03-232019-06-12
Total25,200--25,200
NamePositionTypeTermReason
Yan MingChairman of the supervisoryelected2019-01-03recruitment for work needs

Chongqing Changan Automobile Company Limited 2019 Annual Report

Wang YanhuiEmployee Supervisorelected2020-04-18recruitment for work needs
Zhang AnguoEmployee Supervisordeparture2019-06-12reached the statutory retirement age

Chongqing Changan Automobile Company Limited 2019 Annual Report

and Equipment Group, Deputy Director of the Finance Department of China Weaponry and Equipment Group Corporation Member,deputy director of the financial department of China Weapon Equipment Group Corporation (on duty), director, chief accountant andmember of the party committee of Chongqing Changan Industry Group Co., Ltd.Mr. Liu Jipeng, independent director. He was born in 1956, master degree. He has the certificates of Phase II Professor, SeniorFellow, Senior Economist and Certified Public Accountant and currently serves as Dean and Phase II Professor of Business School ofChina University of Political Science and Law. Currently, he is the dean, professor, and PhD supervisor of Capital Finance Institute inChina University of Political Science and Law; Legal adviser to the State-owned Assets Supervision and Administration Commissionof the State Council; the vice Chairman of China Enterprise Reform and Development Research Association; Deputy director of theindependent board of directors of the China listed companies Association. He is a famous expert on joint-stock systems and corporateissues, specializing in the combination of joint-stock systems, collectivization, and internationalization theory and practice. He haspublished more than 400 articles on newspapers and magazines domestic and abroad, such as People’s Daily and Economic ResearchJournal and received more than 800 interviews by domestic and overseas newspaper and magazines. In the last 20 years, he hasmanaged the shareholding system reform, corporate strategy, acquisition and reorganization, financing scheme design for over 300companies, such as National Electricity Company, Aviation Industry Corporation of China, Chinalco, Haier Group, Hainan Airlines,Wanxiang Group, Li-ning Sproting Goods Co, Tianjin Development Zone Head Office. These enterprises cover more than 20provinces and cities, including various industries. He is called “the first person in stock reform” by media.

Mr. Li Qingwen, independent director. He was born in 1956, master degree. He is currently the dean of the AutomobileEvaluation Institute, dean o of Beijing invisible unicorn information technology institute and vice chairman of the China AutomobileTalent Research Association. He once served as chairman of China Energy Automobile Communications Group, president of ChinaAutomobile Newspaper, president of China Energy Newspaper, director and deputy director of the General Office of HeilongjiangProvincial People's Government, and secretary of Hailin Municipal Committee of Heilongjiang Province. Since 1998, his works witha total of over one million words in automotive research, monographs, reviews, and interviews have been published.Mr. Tan Xiaosheng, independent director, born in 1970, bachelor’s degree. Currently, he is Beijing Saiboyingjie Technology Co.,Ltd founder, senior engineer, deputy secretary-general of the CCF, outstanding cyber security talents in 2018, high-end leader ofZhongguancun in 2012, technical expert of the Network Security Bureau of the Ministry of Public Security, and chairman of the CCFYOCSEF 2015-2016 headquarters, and successively worked at Xi'an Jiaotong University, Peking University Founder Group,Shenzhen Modern, Shenzhen Haoxin, 3721, Yahoo! China, MySpace China. From 2009 to 2019, he worked at 360 Company andserved as vice president of technology, chief privacy officer, chief security officer, and technical president. He is also an adjunctprofessor and manager of the School of Computer Science at Chongqing University of Posts and Telecommunications, an adjunctprofessor at Xidian University, and an enterprise tutor at Beijing University of Posts and Telecommunications. Technical areas:

network security technology, cloud computing platform technology, operational automation technology, search engine technology.

Mr. Pang Yong, independent director, born in 1969, master’s degree. Currently, he is the chairman and CEO of IDEO, andadjunct professor of Jilin University, the vice president of the China Federation of Industry and Commerce Automobile Dealers, thevice president of the China-Europe Alumni Automobile Industry Association, a member of the Jiusan Society, and a member of AlxaSEE. As a senior expert in the Chinese automobile industry, an advocate of the lean operation model of China's automobile marketing,focusing on the automotive industry + consulting + marketing solutions and digital transformation services, he led the team to build adata and technology-driven channel dealer competitiveness database and The evaluation system "AD-CAS" utilizes the SaaSplatform to realize the digital upgrade of China's automotive omni-channel and builds a cloud service for all new retail scenes ofvehicles-Yimai Car. Enthusiastic for public welfare, there are special scholarship programs for young students in Tsinghua University,Jilin University, Beijing University of Aeronautics and Astronautics, and Tongji University.

Mr. Chen Quanshi, independent director, born in 1945, bachelor's degree. Currently, He is currently a professor and director ofthe Department of Automotive Engineering of Tsinghua University, director of the Electric Vehicle Research Office, and honorarydirector of the Electric Vehicle Branch of the China Automobile Engineering Society. He once served as vice president of the School

Chongqing Changan Automobile Company Limited 2019 Annual Report

of Mechanical Engineering of Tsinghua University, head of the Department of Automotive Engineering, and director of theAutomobile Research Institute. To undertake the topic of "Fuel Cell City Passenger Vehicle Technology Research" in the majornational "863" electric vehicle projects, national energy conservation and new energy vehicle 863 major projects; He won the firstprize for scientific and technological progress in Beijing in 2009 and the second prize for national invention(ranked second). Hepublished a monograph "Fuel Cell Electric Vehicle"(first author) 2004, Tsinghua University Press; Editor-in-Chief of AdvancedElectric Vehicle Technology (First Author) the first edition of 2007 (won the second prize of the National Machinery IndustryScience and Technology Progress Award).Mr. Ren Xiaochang, independent director, was born in 1956, bachelor's degree. He served as the chairman and general managerof China Automobile Engineering Research Institute, the group expert of the 12th Five-Year plan national key science andtechnology special (EV) projects, and the committee member of the second national strategic emerging industry development expertadvisory committee. He is the expert of the Chinese machinery industry science and technology, the special subsidy expert of theState Council and the evaluation expert of the national science and technology award,the member of the academic committee ofChina Academy of international engineering. Its main research and scientific research projects have won the awards such asprovincial and ministerial level and scientific and technological progress awards, including 3 second-level awards and 3 third-levelawards.Mr. Wei Xinjiang, independent director, was born in 1969, PHD. He is currently assistant general manager of China LifeInsurance (Group) company strategic planning department and senior researcher of China life financial research institute. He wasengaged in teaching and scientific research for 13 years at the International Investment Department of the Chinese Academy ofFinance and the Institute of Finance and economics of foreign trade and Economy University. He studied at Holland business school,the University of Birmingham, the European Commission and the United Nations Hague International Court of justice for 3 years.He is the expert in international business, overseas M & A, operation of capital market and so on. It has rich research on finance,insurance, overseas investment, and comprehensive finance and so on. He also served as a part-time professor and postgraduateinstructor of the International College of Renmin University of China, Xi’an Jiaotong-Liverpool University and the Holland businessschool. He has published nearly 150 papers in international and domestic journals, and 8 books, such as the fraud and anti-fraud ofautomobile insurance, the comparative study of the anti-monopoly policies between the United States and the EU, and the analysis ofthe accounting statements and investment value of the enterprises.

Mr. Cao Xingquan, independent director, born in 1971, doctor of law. He is currently a professor at the School of Civil andCommercial Law of Southwest University of Political Science and Law, and a doctoral tutor in the direction of civil and commerciallaw. He has 17 years of civil and commercial law teaching and research experience, including 14 years of teaching at SouthwestUniversity of Political Science and Law. He is a lecturer in the National fine course "Business Law" and the National Resourcesharing course "Business Law". He focuses on the study of commercial law, company law, securities law, and insurance law. He haspresided over or participated in more than 20 various scientific research topics, published more than 60 academic papers, publishedmore than 10 academic works and participated in teaching materials; He is the executive director and director of the China LawConference Law, Insurance Law, and Securities Law Research Association; He once served as vice president of the Fourth Divisionof the Chongqing First Intermediate People's Court Civil Trial; Member of Chongqing People's Procuratorate Expert Committee onCivil Administration Supervision; He has participated in many national and local legislative consultations, engaged in a large numberof professional consultations, special lectures, and legal services in enterprise restructuring, capital operations, and corporategovernance, and concurrently served as an arbitrator in arbitration committees in Shenzhen, Chongqing, and Zunyi.

2、Supervisors

Mr. Yan Ming, Chairman of the Supervisory Board, born in 1965, Master of Law, Senior Political Engineer. He is currently thesenior professional of the Audit and Risk Department of China South Industries Co., Ltd., Chairman of the Weaponry EquipmentGroup Finance Co., Ltd. Baoding Tianwei Group Co., Ltd. He served as Deputy Minister and Minister of Organization Departmentof Jialing Industrial Co., Ltd.; United Front Department Minister, Party School Executive Vice President, Director of Human

Chongqing Changan Automobile Company Limited 2019 Annual Report

Resources Development Management Office of Jialing Industrial Co., Ltd.; Deputy Party Secretary and Disciplinary CommitteeSecretary of Jialing Industry Co., Ltd..; Deputy Director of Human Resources Department of China South Industries (Exchange);Deputy Director and Director of the Party Group Work Department(Supervision Department) of China South Industries Co., Ltd.,Deputy Chairman of the Party Group Discipline Inspection Unit, Member, Deputy Secretary, Member and Secretary of the CPCOrdnance Group directly under the Committee; Director of the Supervision Department of China South Industries and deputy leaderof the Party Group Discipline Inspection Unit; Audit and Risk Department Inspector of China South Industries; Chairman of theSupervisory Board of Baoding Tianwei Group Co., Ltd., Zhonghui Fortis(Shenzhen) Co., Ltd., Southern Industrial AssetsManagement Co., Ltd.,Weaponry Equipment Group Finance Co., Ltd.Mr. Sun Dahong, Supervisor. He was born in 1966, master degree, senior economist. Currently, he is the vice director of thelegal department. He used to be the vice director of legal division under the general office in China South Industries Group, vicedirector and director of Legal Advisor Division in China South Industries Group, and director of Legal Affairs Division of generaloffice,deputy director of general office and the chief of Secrets Agency in South Industries Group.Mr. Zhao Huixia, Supervisor. He was born in 1960, bachelor degree, senior account. Currently, he is the professional senior staff.He used to be the deputy general accountant and director of Hafei Automobile Co, vice general manager of Harbin Hafei AutomobileIndustry Group, vice general manager of Hafei Automobile Co, the Secretary of the Party Committee and Vice President of HafeiAutomobile Industry Group, vice general manager of AVIC Automobile Industry Co., Ltd, Assistant President and general managerof Operations Management Department of China Changan Automobile Group Co, Ltd.Ms. Wang Yanhui, employee supervisor. She was born in 1966, bachelor's degree, senior engineer. She is currently the projectdirector of the commissioned development business of Changan Automobile. She used to be the deputy director of science andtechnology management division, director of science and technology management division, deputy director of science andtechnology and project management department, director of science and technology and project management department, Secretaryof Party branch, executive vice chairman of science and Technology Association, director of comprehensive planning department,press spokesman of the company, and project director of strategic planning department.Ms. Luo Yan, staff supervisor. She was born in 1974, bachelor degree, assistant economist. Currently, she is the chief of salary& performance section of HR department. She used to be the maintenance electricians, engineering measurer person, labortechnology fixed member, schemer in workshop No.232 of No.3 plant, chief of welfare section of Salary Division of HR Department,and chief of welfare office III.

3、Senior Management other than Directors and Supervisors

Mr.Yuan Mingxue, the major executive vice president, born in 1968, master’s degree, senior engineer, he used to be the ViceDirector and Director of the General Manager’s Office, Director of the Quality Control Department, Assistant to President, and VicePresident of Changan Automobile (Group) CO., LTD, the Deputy Executive President and the Secretary of CPC of ChognqingChangan Suzuki Auto. Co., Ltd, vice president of the Company.

Mr. Liu Bo, Executive Vice President and Head of Automobile Engineering General Institute, born in 1966, Master's degree,Senior Researcher-level Engineer. He used to serve as the Vice Director of Workshop No.71 of Jiangling Machinery Plant, the ViceDirector of Engine Research Division under Company Technology Department, the Vice Director of the Technical Center, the ViceDirector, Executive vice Director of Automobile Engineering Institute, Assistant to the President and the Director of ProjectSupervision Office of the Company, the Director of the Project Administration Department, President of Changan AutomobileEngineering Research Institute.

Mr. He Chaobing, Secretary of the party committee of auchan automotive division,Executive Vice President and Director ofOperations Management Committee, born in 1967, master's degree, Senior engineer. A former director of fourth development centerand Vice President of Automobile Engineering Research Institute, Deputy director of commercial vehicle business management

department, President assistant and general manager of the Beijing Changan Automobile Co., Ltd, President assistant and director ofpurchase department, President assistant and vice general manager of the commercial vehicle division, Executive vice president and

Chongqing Changan Automobile Company Limited 2019 Annual Report

party secretary of changan Ford Motor Co., Ltd.

Ms Zhang Jingjing, Executive Vice President (Deputy director of development planning department of China north equipmentgroup corporation (Temporary post)). Born in 1966, bachelor's degree, professor-level and senior engineer. She used to serve asformer deputy chief engineer of the 2nd factory of the Company, vice director of development and planning department of theCompany, deputy director of Science and Technology Committee of the Company, deputy director of the administration office, thedirector of the project department, the minister of the Company's human resources department , the company CEO assistant and thedirector of Quality Department, and General Counsel.Mr. Li Wei, executive vice president, born in 1966. Master graduate student, senior engineer. The former president of institute ofautomobile body design director,the Beijing Institute, executive vice president, assistant president of Changan automobile and deputyvice president and the Secretary of the Party Committee of Changan Automotive Engineering Research Institute, General manager ofchongqing changan new energy automobile technology co. LTD.Mr. Tan Benhong, the executive vice president and the director of the Institute of styling design. Born in 1975, master’s degree,engineer. He was the deputy director of the Changan company Automobile Technology Department, the product technology managerof the Nanjing factory of Changan Ford Automobile Co., Ltd., the deputy director of the reception office and the secretarial receptiondepartment of the Changan Company office, the director of the technical Planning Institute of the Automobile Engineering ResearchInstitute, the deputy chief engineer of the Automobile Engineering Research Institute and the director of the Institute of technicalplanning and research, the Vice president of the General Academy of automobile engineering research, Dean of Beijing ResearchInstitute, the department head of market department, brand public relations, product planning department, and vice deputy Presidentand Secretary of the Party committee of the Research Institute, and the spokesman of company news.Mr. Liu Zhengjun, executive vice president, general manager of Chongqing changan Co., Ltd., general manager of newmarketing business department, director of Chelizi joint venture project, director of light vehicle operation management committee.He was born in 1965, bachelor's degree and senior engineer. He is currently the chief economist of China Changan. He used to be thedeputy director and director of the inspection department of the quality department in the company, the vice department head anddepartment head of the quality department of the Company, the director of the office of the quality division, the general manager andparty secretary of the Hebei Changan Automobile Co., Ltd., the vice chairman, general manager, chairman of Hafei automobile.Mr. Ye Pei, vice president and general manager and the secretary of the party committee of the passenger car marketingdepartment, Secretary of the party committee, deputy director of the passenger car operation management committee, born in 1975,master's degree, engineer. He once served as the deputy chief of the Jiangling Engine Branch General Administration Division,deputy chief of the quality division, deputy director of the quality management department, assistant general manager of NanjingChangan Automobile Co., Ltd., deputy minister of quality and director of the quality evaluation and improvement department.Director of Market Quality Office, deputy director of the company's office, general manager of Nanjing Changan Automobile Co.,Ltd., Secretary of the party committee, Deputy general manager of commercial vehicle business department and manufacturinglogistics Department of commercial vehicle business department, Secretary of the party branch, assistant to the general manager ofthe company, Secretary of the strategic planning department, Secretary of the party branch, general manager and party secretary ofthe car sales department.Mr. Chen Wei, Vice President and Director of Safety Production of the company, Deputy Director of the European BusinessManagement Committee, born in 1972, undergraduate, engineer. He once served as secretary of the Youth League Committee ofChang 'an Automobile Manufacturing Plant, director of the factory office, deputy director, director, and party committee secretary;Vice President of Personnel and Secretary of Discipline Committee of Changan Ford Co., Ltd.; Chang 'an Automobile Manufacturingand Logistics Department Minister, Party Branch Secretary, Director of the OTD Project of the company, General Manager ofBeijing Chang' an Automobile Company, Secretary of the Party Committee, and Director of the Beijing Research InstituteConstruction Project.Mr. Li Mingcai, vice president and general manager of overseas business department, general counsel of the company, 1981,

Chongqing Changan Automobile Company Limited 2019 Annual Report

master's degree. He used to be the acting manager and manager of the sales department of Chongqing Changan AutomobileInternational Sales Service Co., Ltd.. Changan Automobile Overseas Business Development Department Assistant General Managerand Sales Regional Manager, Deputy General Manager of Overseas Business Development Department, General Manager ofInternational Sales Company, Deputy General Manager of Changan Automobile Overseas Business Development Department,Director of Russian JV Project, Brazilian Project Manager.Mr. Zhao Fei, vice president and executive vice president of Changan Ford, Secretary of the party committee, born in 1974,master's degree, senior engineer. He used to be the technical director and technical quality manager of the engine Department ofChangan Ford Mazda Automobile Co., Ltd.; Engine Director of Changan Ford Mazda Automobile Co., Ltd..; Institute Director ofChang 'an Automobile Research Institute Engine Technology; Deputy director of Chang 'an Engine 4 Factory; China Chang'anGroup's deputy general manager of science and technology development department; Director and General Manager of HarbinDongan Automobile Engine Manufacturing Co. Ltd.. Party secretary and chairman of Harbin Dongan automobile enginemanufacturing Co., Ltd., assistant to President and minister of strategic planning, party branch secretary.Ms. Li Jun, the Secretary of BOD and the Vice Director of Capital Operation Department, was born in 1969, MBA, senioraccountant. She used to be the Vice Director of Security Investment Office, Director of Capital Operation Office of the FinancialDepartment, Director of the BOD Office, Vice director of the finance department of the Company.Employment in shareholders’ work unit

√Applicable □ Not applicable

NameName of shareholders’ work unitPosition in shareholders’ work unitTerm start dateTerm end dateWhether get allowance in shareholders’ work unit
ZhangbaolinChina South Industries Group Corp.secretary of the party committee, vice presidentY
Zhu HuarongChina South Industries Group Corp、China Changanthe Assistant President of China South Industries Group Corp, the director of China ChanganN
Zhou ZhipingChina South Industries Group Corp、China Changanthe employee director of China South Industries Group Corp, the general manager and the secretary of party committee of China ChanganY, Receiving the Payment allowance in China Changan
Tan XiaogangChina South Industries Group CorpDirector of the Strategic DevelopmentY
Zhang DongjunChina Changanvice president, general accountantY
Yan MingChina South Industries Group CorpAudit and Risk Department Senior SpecialistY
Sun DahongChina South Industries Group CorpDeputy Director of Legal DepartmentY
Zhao HuixiaChina Changanthe professional senior staffY

Chongqing Changan Automobile Company Limited 2019 Annual Report

Liu ZhengjunChina Changanthe chief economist of China ChanganN
NameName of other work unitsPosition in other work unitsTerm start dateTerm end dateWhether get allowance in other work unit
Liu JipengChina University of Political Science and Lawthe dean, professor, and PhD supervisor of Capital Finance Institute in China University of Political Science and Law; Legal adviser to the State-owned Assets Supervision and Administration Commission of the State Council; the vice Chairman of China Enterprise Reform and Development Research Association; Deputy director of the independent board of directors of the China listed companies Association.Y
Li QingwenChina Energy& Automobile Media Groupthe dean of the Automobile Evaluation Institute, dean o of Beijing invisible unicorn information technology institute and vice chairman of the China Automobile Talent Research AssociationY
Tan XiaoshengBeijing Saiboyingjie Technology Co., LtdThe founder of Beijing Saiboyingjie Technology Co., Ltd、senior engineeringY
Pang YongIDEOChairman and CEO of IDEO , adjunct professor of Jilin University, the vice president of the China Federation of Industry and Commerce Automobile Dealers, the vice president of the China-Europe Alumni Automobile Industry Association, a member of the Jiusan Society, and a member of Alxa SEE.Y
Wei XinjiangChina Life Insurance (Group)assistant general manager of China Life Insurance (Group) company strategic planning department and senior researcher of China life financial research instituteY
Chen QuanshiTsinghua Universitya professor and director of the Department of Automotive Engineering of Tsinghua University, director of the Electric Vehicle Research Office, and honorary director of the Electric Vehicle Branch of the China Automobile Engineering Society.Y
Cao XingquanSouthwest Universitya professor at the School of Civil and Commercial Law of Southwest University of Political Science and Law, and a doctoral tutor in the direction of civil and commercial lawY
Position in otherThis table only shows the main office performance and position of independent directors.

Chongqing Changan Automobile Company Limited 2019 Annual Report

work unit

Securities regulatory agency’s punishment to the current and former directors, supervisors and seniormanagement during the reporting period in recent three years.

□Applicable √Not applicable

Ⅳ. Remuneration of directors, supervisors and senior management

Payment decision-making process, determination basis, the actual payment of directors, supervisors and senior managers

Decision-making process: except the independent directors, the annual remuneration of directors, supervisors and seniormanagement is referring to the wage management regulations and rating standard of South Industries Group. Payment of companyindependent directors is prescribed by the board of directors and submitted to the board of directors of the company, and approved bythe shareholders' general meeting.The basis: the senior management evaluation is divided into annual appraisal, mid-term assessment, term-change assessmentand "look back" examination. Annual appraisal is to evaluate the business performance which senior management is in charge of, andthe employee representatives and part of the units give to democratic appraisal or special evaluation on senior management, theassessment results will feedback to themselves in time on the problems existing in their work and relevant suggestions forimprovement, which will be rectified in the coming new year. At the same time the assessment results will be linked with the annualperformance award. Mid-term assessment is mainly to evaluate the business performance which senior management is in charge of,assessment results are related to the targeted training, position promotion, post communication, etc; term-change assessment is thatthe employee representative gives democratic evaluation on all the senior management and does special visit to part of unit, and theassessment results are related to the targeted training, position promotion, post communication training and post appointment of thesenior management; new office head "look back" examination is mainly to look back the adjusted team, understand the workingstatus of the new team in time, check the configuration effect of the new group, promote the new group into role as soon as possible,and reduce the risk of personnel employment.Actual payments: senior managers pay basic salary monthly, annual performance prize combines annual appraisal status, therest delays payment according to the company's business situation. In 2019, the remuneration the directors, supervisors and seniormanagers receiving from the company is 10.4609 million yuan in total.Payment of directors, supervisors and senior managers got from the company during the reporting period

NamePositionGenderagestatusTotal earning from the company(yuan)
Zhang BaolinChairman of the boardM57Present-
Zhu HuarongDirector and President, Secretary of Party CommitteeM54Present836,325.00
Zhou ZhipingDirectorM49Present-
Tan XiaogangDirectorM56Present-
Zhang DongjunDirectorM53Present-
Zhang DeyongDirector, Chief accountantM45Present597,414.75

Chongqing Changan Automobile Company Limited 2019 Annual Report

Liu JipengIndependent DirectorM63Present120,000.00
Li QingwenIndependent DirectorM63Present120,000.00
Chen QuanshiIndependent DirectorM74Present120,000.00
Ren XiaochangIndependent DirectorM63Present120,000.00
Pang YongIndependent DirectorM50Present120,000.00
Tan XiaoshengIndependent DirectorM49Present120,000.00
Wei XinjiangIndependent DirectorM50Present120,000.00
Cao XingquanIndependent DirectorM48Present120,000.00
Yan MingChairman of the supervisoryM54Present-
Sun DahongSupervisorM53Present-
Zhao HuixiaSupervisorM59Present-
Wang YanhuiEmployee SupervisorF53Present-
Luo YanEmployee SupervisorF45Present290,771.00
Yuan MingxueMajor Executive vice presidentM51Present674,373.00
Liu BoExecutive vice presidentM53Present697,145.00
He ChaobingExecutive vice presidentM52Present695,079.00
Zhang JingjingExecutive vice presidentF53Present673,654.00
Li WeiExecutive vice presidentM53Present675,168.00
Tan BenhongExecutive vice presidentM44Present665,022.00
Liu ZhengjunExecutive vice presidentM54Present608,757.00
Ye Peivice presidentM44Present635,344.00
Zhao Feivice presidentM45Present627,821.00
Chen Weivice presidentM47Present599,204.00
Li Mingcaivice presidentM38Present578,937.00
Li Junthe Secretary of BODF50Present537,018.66
Zhang AnguoEmployee SupervisorM60Retirement age108,873.00
Total--------10,460,906.41

Chongqing Changan Automobile Company Limited 2019 Annual Report

Ⅴ. Core technology team or key technical personnel changes during the reporting period (notthe directors, supervisors and senior management)During the reporting period, the company's core technical team and key technical personnel remained stable.Ⅵ. The Employees of the Company

1. The number of employees, professional composition and education level

Number of employees in the parent company(persons)23,455
Number of employees in major subsidiaries(persons)13,309
Total number of active employees(persons)36,764
Total number of current salaried employees(persons)36,764
Number of retired employees whose parent company and major subsidiary bear the costs(persons)6,385
Professional composition
Professional component categoriesProfessional Composition(persons)
Production personnel21,006
Sales staff1,726
Technicians9,180
Finance staff408
Administrators416
Managers4,028
Total36,764
Educational Background
Type of educationNumber(persons)
PHD116
Postgraduate2,269
Bachelor degree11,892
University specialty7,879
Secondary school, high school and corresponding education12,324
Secondary and below2,284
Total36,764

Chongqing Changan Automobile Company Limited 2019 Annual Report

distribution efficiency, strengthens the double benchmarking of performance compensation, and guides the unit to continuouslyimprove the labor productivity and human resource value creativity. Based on the sorting and evaluation of positions, combined withthe market benchmarking, the company establishes the broadband salary standard and reasonably sets the salary gap. Meanwhile, thecompany adheres to the salary strategy of following and leading, implements the differential distribution, and focuses on key andcore positions to support the company's strategy.

3. Training plan

The company's training will be guided by Xi Jinping's new socialist ideology with China's characteristics and the nineteenthspirits of the party. With the strategic deployment of "365" climbing action of the quality improvement and the "third pioneeringundertaking innovation and entrepreneurship plan", the Company will focus on six key abilities, "customer orientation, firm reform,innovative marketing and extreme efficiency". The Company will make good use of the pilot project of annual education objectivesfor higher vocational personnel, make full use of social resources, solidly promote training programs at all levels, build a new talentteam to support the strategy, and promote the transformation of the company into an intelligent travel technology company.

4. Outsourcing of services

□ Applicable √ Not applicable

Chapter 8 Corporate Governance

I. The basic situation of corporate governanceIn strict accordance with the requirements of the Company Law, the Securities Law and the relevant laws andregulations of the CSRC, the Company continuously improved the corporate governance structure and promotedthe standard operation of the Company. The actual situation of the corporate governance of the Company is in linewith the relevant requirements of the CSRC normative documents on corporate governance.The company has established an effective internal control system over the financial report. According tocompany’s operation and management characteristics, the company strictly implemented the "EnterpriseAccounting Standards", improved the basic accounting management, established a sound financial system,optimized accounting and statements preparation process, strengthened the financial supervision, conducted thein-depth implementation of financial management, established the management foundation work, accounting andfinance management authorization, the monetary fund management, financing, purchasing and payment, fixedassets, projects under construction, accounting policy, accounting estimate, consolidated financial statements, costmanagement, inventory management, financial analysis and other financial management system to ensure thequality of accounting information and the safety of the Company property. According to internal controldeficiencies identified standards of the financial report, there is no internal control defects over financial reportingin the report period. The full text of the internal control self-evaluation report is published onhttp://www.cninfo.com.cn on April 30, 2020.Whether there are differences between corporate governance and the related requirements of "companylaw" and China CSRC.

□yes √no

There is no difference between corporate governance and the related requirements of "company law" and ChinaCSRC.Ⅱ. Independent completion situation in terms of business, personnel, assets,organization and finance which is relative to the controlling shareholdersThe company and the controlling shareholders are fully independent in terms of business, assets, personnel,organization and finance.Ⅲ. Competition situationIn December 2009, according to the national “Automobile Industry Adjustment and Revitalization Plan”regarding promoting auto enterprise merger restructuring and further optimization of state-owned economystrategy layout requirements, the actual controller of the company China South Industries Group Corporation andChina Aviation Industry Group Company proceeded industry restructuring, China Aviation Industry GroupCompany transferred 100% equity of Jiangxi Changhe Automobile Co., LTD free. (hereinafter referred to as"Changhe Automobile") and 100% stake of Harbin Hafei Automobile Industry Group co., LTD. (hereinafterreferred to as "Haqi group") into the company's controlling shareholder China Changan Automobile Group Co.,

LTD. (hereinafter referred to as "China Changan").This above-mentioned behavior led to competition between thecompany and subordinate enterprise of China Changan, the controlling shareholder. To finally solve the possiblecompetition and better maintain the interests of company’s investors, the company’s controlling shareholder ChinaChangan commitment:⒈When Jiangxi Changhe Automobile Co., Ltd. and Harbin Hafei Automobile IndustryGroup Co., LTD. can make profits for two successive years with sustainable development ability and improvedmanagement level, it’s proposed to affiliate the two companies into Changan automobile. In October 28, 2013, thecontrolling shareholder of China Changan transferred Jiangxi Changhe Automobile Co. Ltd. to Jiangxi provincialstate owned enterprise assets (Holdings) Limited, China Changan proposed Jiangxi Changhe Automobile Co. Ltd.injected commitment matter was removed. In order to solve the possible horizontal competition between HafeiAutomobile Co., Ltd. and the company, on January 25, 2019, Haqi Group, a subsidiary of the company'scontrolling shareholder China Changan, transferred 38% of the shares of Hafei Automobile Co., Ltd. to HarbinYungu Automobile. Industrial Development Co., Ltd., Haqi Group has lost control of Hafei Automobile Co., Ltd.IV. Annual shareholders meeting and interim shareholders meeting during thereporting period

1、Shareholders meeting during the reporting period

Meeting SessionTypeInvestors' participation ratioOpening TimeDisclosure TimeDisclosure Index
2019 First Interim Shareholders MeetingInterim43.615%Jan. 3, 2019Jan. 4, 2019http//www.cninfo.com.cn 2019 First Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2019-02)
2018 Annual Shareholders MeetingAnnual58.387%June. 27th, 2019June. 28th, 2019http//www.cninfo.com.cn 2018 Annual Shareholders Meeting Resolution Announcement(Announcement Number: 2019-45)
Independent directors attend board of directors and the shareholders meeting
Names of independent directorsTimes of attending the board of directors during the report periodTimes of presenceTimes of attendance by communication modeTimes of entrust attendanceTimes of absenceWhether absent from the meeting for two consecutive times
Liu Jipeng141121N
Li Qingwen14122N
Chen Quanshi14212N
Ren Xiaochang14212N
Pang Yong14212N
Tan Xiaosheng14212N
Wei Xinjiang14212N
Cao Xingquan14212N
Times for independent directors attending the shareholders meeting1

2、Compensation and Review Committee

The compensation and review committee under the board of directors consists of 3 independent directors. Thechairman of the committee is Mr. Chen Quanshi. During the reporting period, the committee held 2 meetings andperformed the following duties:

1) Review and agree to the "Bill on the Cancellation of Some Stock Options of the Company".

2) Review and agree to the motion on the annual salary distribution plan for deputy management performancein 2018.

3、Compensation and Review Committee

The strategy and investment committee under the board of directors consists of four non-independentdirectors and one independent director. The chairman is Mr. Zhangbaolin. During the reporting period, the strategyand investment committee held 8 meetings and performed the following duties:

1) Review and agree to the "Proposal on Investment Plan in 2019, Proposal on Financing Plan in 2019,Proposal on Developing Bill Pool Business, Proposal on Signing <Financial Service Agreement> with WeaponEquipment Group Finance Co., Ltd., "Proposal on Signing of" Financial Service Agreement "with ChanganAutomobile Finance Co., Ltd., and" Proposal on Carrying Forward Foreign Exchange Settlement Transactions bySubsidiaries of the Company ";

2) Review and agree to the "Proposal on Participating in the Establishment of Nanjing Lingxing EquityInvestment Partnership (Limited Partnership) ";

3) Examine and agree to the "Explanation of financial statements for 2018 and financial budget for 2019 ";

4) Review and agree to the "Proposal on Participating in the Establishment of Chongqing Lianzhi'anInvestment Equity Investment Partnership (Limited Partnership) ";

5) Review and agree to the "Proposal on Subsidiary Joint Ventures to Increase Capital and Shares by PublicListing ".

6) Review and agree to the "Proposal on the wholly-owned subsidiary's capital increase and share expansionthrough public listing ".

7) Review and agree to the "Proposal on the Company's Subsidiaries to Carry Forward Foreign ExchangeSettlement Transactions ".

8) Review and agree to the "Proposal on the sale of equity in joint ventures ".

Ⅶ. The work of the board of supervisors

The board of supervisors found whether the company was at risk or not in the supervision during the reportperiod

□ Yes √ No

The Board of Supervisors supervised and inspected the legal compliance of the company's financial situation,"three important and one big" decisions, business management activities, and implementation of major strategies.The Supervisory Board has no objection to the supervision matters during the reporting period.

Ⅷ. The evaluation and incentive of senior managementFor details, please refer to Section 7 of this year's report. "IV. Remuneration of directors, supervisors, and seniormanagement."Ⅸ. Internal Control

1、Significant Deficiency of Internal Control found during the report period

□ Yes √ No

2、Self-assessment report of internal control

Disclosure date of self-assessment report of internal controlApr. 30, 2020
Disclosure index of self-assessment report of internal controlhttp://www.cninfo.com.cn
proportion of total asset in the assessment accounting for the total asset in the financial statement92.28%
proportion of revenue in the assessment accounting for the revenue in the financial statement98.97%
Deficiency Definition Standard
TypeFinancial ReportNon Financial Report
qualitative standard1. Fraud behavior of the directors, supervisors and senior management. 2. The company has corrected the published financial report, the significant wrong report due to fraud and mistakes, the significant mistakes in the financial report found by certified public accountants, but not found by the company’s internal control. 3. The supervision of audit committee on the company’s external financial report and internal control of financial report is not effective.1.Lack democratic decision-making procedure or violation of democratic decision-making procedure 2.Violate national laws and regulations and get punished 3.Great loss of middle and senior management and senior technical personnel 4.Frequent media negative news with a large range 5.Signifant business lacks regulation control or regulation system becomes ineffective 6.The significant deficiencies of internal control is not corrected
quantitative standardThe amount of misstatement of the financial statements falls within the following ranges: Wrong report ≥ 1% of total assetDetermine the internal control deficiencies in financial reporting by reference to the quantitative criteria.
Financial Report Major Defects0
Non-financial reporting significant number of defects0
Financial Reporting Key Number of defects0
Non-financial reporting Number of important defects0

Ⅹ. Internal control audit report

√Applicable □Not applicable

deliberations in the internal control audit report
The audit opinion of the internal control audit report compiled by Ernst & Young Hua Ming Accounting Firm: Chongqing Changan Automobile Co., Ltd keeps the effective financial report internal control on significant aspects from Dec.31st, 2019, according to “Basic Norms of Enterprise Internal Control” and other related regulations.
Disclosure date of audit report of internal controlApr.30, 2020
Disclosure index of audit report of internal controlInternal control audit report will be published on http://www.cninfo.com.cn on Apr.30, 2020
type of opinion on internal control audit reportstandard and unqualified opinion
Whether there is huge deficiency in the non-financial reportNo

Chapter 9 Corporate Bonds

Is there a corporate bond that is publicly issued and listed on the stock exchangeand fails to be fully paid up or not due on maturity until the approval of theannual report ?

□ Yes √ NO

Chapter 10 Auditor’s Report

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

To the shareholders ofChongqing Changan Automobile Company Limited

Auditor’s Report

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

To the shareholders ofChongqing Changan Automobile Company Limited

Opinion

We have audited the accompanying financial statements of Chongqing ChanganAutomobile Company Limited, which comprise the consolidated and the company balancesheet as at 31 December 2019, and the consolidated and the company income statements,the statements of changes in equity and the cash flow statements for the year then endedand notes to the financial statements.

In our opinion, the accompanying financial statements of Chongqing Changan AutomobileCompany Limited present fairly, in all material respects, the consolidated and theCompany’s financial position as at 31 December 2019, and the consolidated and theCompany’s financial performance and cash flows for the year then ended in accordancewith Accounting Standards for Business Enterprises (“ASBEs”).

Basis for opinion

We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Ourresponsibilities under those standards are further described in the Auditor’s responsibilitiesfor the audit of the financial statements section of our report. We are independent of theCompany in accordance with China Code of Ethics for Certified Public Accountants (the“Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.For each matter below, our description of how our audit addressed the matter is provided inthat context.

Auditor’s Report (continued)

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

Key audit matters (continued)

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the auditof the financial statements section of our report, including in relation to these matters.Accordingly, our audit included the performance of procedures designed to respond to ourassessment of the risks of material misstatement of the financial statements. The results ofour audit procedures, including the procedures performed to address the matters below,provide the basis for our audit opinion on the accompanying financial statements.

Key audit matterHow our audit addressed the key audit matter
Provision for warranties
According to after-sales maintenance contracts or related national laws and regulations, Chongqing Changan Automobile Company Limited provides warranties on automobile and undertakes to repair or replace items that fail to perform satisfactorily based on certain pre-determined conditions. In addition, in order to improve customer satisfaction and to maintain the quality and safety of the sold vehicle, Chongqing Changan Automobile Company Limited also provides extra free repairing service or promotes a recall based on needs. Chongqing Changan Automobile Company Limited should estimate and recognize the warranty costs and the corresponding liabilities. Provisions for warranties granted by Chongqing Changan Automobile Company Limited for the vehicles sold are recognized based on sales volume and past experience of the cost of repair and replacement, and labor cost, which involves a number of assumptions and judgments. Provision for extra free repairing service program or recalls are recognized based on the vehicles involved and the estimated average cost of repair and replacement, and labor cost, which involves a number of assumptions and judgments. Any increase or decrease in the provision would have a significant impact on the financial statements. Refer to Note III 21, 30 and Note V 28 of the consolidated financial statements for the disclosures of the provision for warranties.With regard to the warranty provisions audited by us: ? We understood and evaluated the process of the warranty provisions. In addition, we tested the key controls and application controls over the process of the warranty provisions. ? We assessed the reasonableness and evaluated the major assumptions of management’s warranty provision models. We tested the samples of payment of the warranty provisions and tested the mathematical accuracy of calculations therein by re-performing the calculations regarding the balance of the provisions. ? We reviewed the adequacy of disclosures in the financial statements.

Auditor’s Report (continued)

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

Key audit matters (continued)

Key audit matterHow our audit addressed the key audit matter
Capitalization of internal development costs
The research and development activities launched by Chongqing Changan Automobile Company Limited mainly include technology development, product process design and product manufacturing process design. Management capitalized the costs on development projects met the criteria set out in the accounting standard for capitalization. The expenditures in development stage are capitalized that should meet all the conditions including technically feasible, use or sale intention, market, finance, resources, and etc. The judgment should be made according to every project and agreed by all related departments. In addition, for projects that have been capitalized in the past, the judgment whether the expenditures in development can be continuing capitalized should be made according the latest progress and future expectations of the project. The judgment made by the management would have a significant impact on the financial statements. Refer to Note III 17, 30 and Note V 16 of the consolidated financial statements for the disclosures of capitalization of internal development costs.With regard to the capitalization of internal development costs audited by us: ? We understood, evaluated and validated the key controls over the capitalization of internal development costs. ? We assessed the criterias set by the management related to the capitalization of the costs under development stage. We assessed the accuracy of the start point and the stop point for capitalization of internal development costs. We also tested samples of projects to review the feasibility reports and other reports for important stages. ? We reviewed the adequacy of disclosures in the financial statements.

Auditor’s Report (continued)

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

Other informantion

The management of the Chongqing Changan Automobile Company Limited (the“Management”) is responsible for the other information. The other information comprisesthe information included in the annual report, other than the financial statements and ourauditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a materialmisstatement of this other information, we are required to report that fact. We havenothing to report in this regard.

Management’s and governance’ responsibility for the financial statements

The Management is responsible for the preparation and fair presentation of these financialstatements in accordance with ASBEs, and for designing, implementing and maintainingsuch internal control as the management determines is necessary to enable the preparationof financial statements that are free from material misstatement, whether due to fraud orerror.

In preparing the financial statements, the Management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting, unless the managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financialreporting process.

Auditor’s Report (continued)

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatement, whether due to fraud or error, and to issuean auditor’s report that includes our opinion. Reasonable assurance is a high level ofassurance but is not a guarantee that an audit conducted in accordance with CSAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are generally considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.

As part of an audit in accordance with CSAs, we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

(4) Conclude on the appropriateness of the management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company’sability to continue as a going concern. If we conclude that a material uncertainty exists,we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Company to cease tocontinue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements,including the disclosures, and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Auditor’s Report (continued)

Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01

Chongqing Changan Automobile Company Limited

Auditor’s responsibilities for the audit of the financial statements (continued)

(6) Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Company to express an opinion on the financialstatements. We are responsible for the direction, supervision and performance of thegroup audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not becommunicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Qiao Chun

Ernst & Young Hua Ming (LLP) Chinese Certified Public Accountant(Engagement partner)

Hu Yan

Chinese Certified Public Accountant

Beijing, the People’s Republic of China 28 April 2020

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
Current assets
Cash110,066,171,353.489,980,544,526.14
Financial assets held for trading22,419,476,200.00-
Notes receivable326,805,635,587.1920,561,625,805.24
Accounts receivable4838,314,076.821,409,419,600.50
Prepayments5623,801,896.07866,249,749.51
Other receivables63,731,755,992.463,233,020,118.16
Inventories73,375,441,488.374,917,420,457.19
Other current assets81,746,120,128.042,244,998,158.77
Total current assets49,606,716,722.4343,213,278,415.51
Non-current assets
Available-for-sale financial assets9-1,957,873,311.31
Long-term equity investments1011,008,336,989.0913,275,170,118.83
Other equity instrument investment11734,506,100.00-
Investment property127,102,849.727,329,561.28
Fixed assets1326,939,490,554.1922,161,054,058.31
Construction in progress141,729,803,028.435,383,844,030.75
Intangible assets155,209,619,313.495,018,243,552.80
Development expenditure16814,745,464.20789,597,615.60
Goodwill179,804,394.009,804,394.00
Long-term deferred expenses1814,327,639.9017,104,601.67
Deferred tax assets191,542,600,534.931,655,554,438.89
Total non-current assets48,010,336,867.9550,275,575,683.44
TOTAL ASSETS97,617,053,590.3893,488,854,098.95

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET (continued)31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
Current liabilities
Short-term loans21229,580,000.00190,000,000.00
Notes payable2213,430,543,294.2314,807,862,262.39
Accounts payable2318,905,725,271.5013,916,201,276.95
Advances from customers242,315,641,685.781,556,482,278.92
Payroll payable251,046,335,781.911,362,995,277.56
Taxes payable26889,092,442.80669,316,487.25
Other payables274,809,918,141.453,079,749,015.81
Contingent liabilities283,352,580,839.283,245,322,744.12
Other current liabilities294,253,942,761.774,325,441,152.61
Current portion of30
non-current liabilities-6,594,120.00
Total current liabilities49,233,360,218.7243,159,964,615.61
Non-current liabilities
Long-term loans3155,300,000.00-
Special payable32857,356,423.71303,590,824.69
Long term payroll payable3345,932,000.0053,837,000.00
Deferred income343,194,291,079.213,683,308,534.73
Deferred tax liabilities19296,742,890.29135,231,170.59
Total non-current liabilities4,449,622,393.214,175,967,530.01
Total liabilities53,682,982,611.9347,335,932,145.62

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET (continued)31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
Owners’ equity
Share capital354,802,648,511.004,802,648,511.00
Capital reserves365,366,097,594.665,057,242,440.17
Other Comprehensive Income37139,994,580.19235,509,930.44
Special reserves3847,076,242.7141,222,369.10
Surplus reserves392,401,324,255.502,401,324,255.50
Retained earnings4031,271,171,559.6033,707,011,170.31
Equity attributable to owners44,028,312,743.6646,244,958,676.52
Minority interests(94,241,765.21)(92,036,723.19)
Total equity43,934,070,978.4546,152,921,953.33
TOTAL LIABILITIES
AND OWNERS’ EQUITY97,617,053,590.3893,488,854,098.95

Chongqing Changan Automobile Company LimitedCONSOLIDATED INCOME STATEMENTYear ended 31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
Operating revenue4170,595,245,133.2866,298,270,389.77
Less:Operating cost4160,232,585,428.0856,583,468,369.14
Tax and surcharges422,488,057,067.832,305,917,984.34
Operating expenses434,591,170,885.945,283,255,346.48
General and administrative442,265,231,518.652,141,231,988.91
expenses
Research and development453,169,063,761.133,184,788,921.68
expenses
Financial income46(190,849,511.73)(427,062,035.06)
Interest expense40,109,729.9311,700,010.25
Interest income245,520,358.56476,922,766.94
Add: Other incomes471,537,625,620.932,873,192,102.56
Investment income or loss48(2,109,369,113.31)(71,306,776.79)
Including: Investment
income from associates and joint venture(2,158,815,891.20)(331,883,560.67)
Earnings from fair value changes49889,154,888.69--
Credit impairment loss50(125,657,732.02)--)
Impairment loss51(395,506,650.22)(238,554,564.69)
Gain on disposal of assets5256,658,864.178,561,074.73
Operating profit/ (loss)(2,107,108,138.38)(201,438,349.91)
Add:Non-operating income5349,703,849.18916,219,224.68
Less:Non-operating expenses54184,962,615.3256,555,550.94
Total profit/ (loss)(2,242,366,904.52)658,225,323.83
Less:Income tax expense55406,764,986.36(65,134,058.04)
Net profit(2,649,131,890.88)723,359,381.87
Classification by going concern
Net profit from continuing
operations(2,649,131,890.88)723,359,381.87
Classification by ownership attribution
Net profit attributable to owners(2,646,719,356.53)680,728,392.03
Minority interests(2,412,534.35)42,630,989.84

Chongqing Changan Automobile Company LimitedCONSOLIDATED INCOME STATEMENT (continued)Year ended 31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
Other comprehensive income,
net of tax
Total comprehensive income
attributable to owners,
net of tax3769,977,399.20152,550,506.60
Other comprehensive income
not to be reclassified to
profit or loss in
subsequent periods:
Change in net liability or
assets from defined
benefit plan254,000.00(13,214,000.00)
Changes in fair value of
other equity investment63,584,845.00-
Other comprehensive income
not to be reclassified
to profit or loss
under equity method-(706,228.88)
63,838,845.00(13,920,228.88)
Other comprehensive income
to be reclassified to profit
or loss in subsequent periods:
Changes in fair value from
available-for-sale financial
assets-177,088,959.46
Foreign currency reserve6,138,554.20(10,618,223.98)
6,138,554.20166,470,735.48
Total comprehensive income
attributable to minority
interests, net of tax--
Total comprehensive income(2,579,154,491.68)875,909,888.47
Total comprehensive income

The notes form an integral part of the financial statements.

attributable to owners(2,576,741,957.33)833,278,898.63
Total comprehensive income
attributable to minority
interest(2,412,534.35)42,630,989.84
Earnings per share56
Basic earnings per share(0.55)0.14
Diluted earnings per shareNot ApplicableNot Applicable

Chongqing Changan Automobile Company LimitedCONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITYYear ended 31 December 2019(Expressed in Renminbi Yuan)

Equity attributable to owners
Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsSubtotalMinority interestTotal equity
At 31 December 20184,802,648,511.005,057,242,440.17235,509,930.4441,222,369.102,401,324,255.5033,707,011,170.3146,244,958,676.52(92,036,723.1946,152,921,953.33
Changes in accounting standard--(165,492,749.45--297,351,209.45131,858,460.00-131,858,460.00
At 1 January 20194,802,648,511.005,057,242,440.1770,017,180.9941,222,369.102,401,324,255.5034,004,362,379.7646,376,817,136.52(92,036,723.1946,284,780,413.33
Changes during the year:
Total comprehensive income--69,977,399.20--(2,646,719,356.53)(2,576,741,957.33(2,412,534.35(2,579,154,491.68)
Capital contributed by owners and capital decreases
1.The amount of share- based payments recorded in owners’ equity-(23,961,900.00)----(23,961,900.00)-(23,961,900.00)
2.Others-332,817,054.49----332,817,054.49-332,817,054.49
Distribution of profit
1.Distribution to owners-----(86,471,463.63)(86,471,463.63)-(86,471,463.63)
Special reserves
1.Provided---79,135,417.54--79,135,417.541,097,065.3780,232,482.91
2.Ultilized---(73,281,543.93--(73,281,543.93(889,573.04(74,171,116.97)
At 31 December 20194,802,648,511.005,366,097,594.66139,994,580.1947,076,242.712,401,324,255.5031,271,171,559.6044,028,312,743.66(94,241,765.2143,934,070,978.45

Chongqing Changan Automobile Company LimitedCONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)Year ended 31 December 2018(Expressed in Renminbi Yuan)

Equity attributable to owners
Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsSubtotalMinority interestTotal equity
At 31 December 20174,802,648,511.005,099,405,956.9482,959,423.8428,279,733.062,401,324,255.5035,184,073,061.9447,598,690,942.28(135,511,683.8247,463,179,258.46
Changes during the year
Total comprehensive income--152,550,506.60--680,728,392.03833,278,898.6342,630,989.84875,909,888.47
Capital contributed by owners and capital decreases
1.The amount of share- based payments recorded in owners’ equity-(8,735,100.00)----(8,735,100.00-(8,735,100.00)
2.Others-(33,428,416.77)----(33,428,416.77544,858.43(32,883,558.34)
Distribution of profit
1.Distribution to owners-----(2,157,790,283.66)(2,157,790,283.66-(2,157,790,283.66)
Special reserves
1.Provided---83,826,318.58--83,826,318.581,218,813.9385,045,132.51
2.Ultilized---(69,587,419.73)--(69,587,419.73(919,701.57(70,507,121.30)
3.Effective portion of changes in special reserves from joint venture---(1,296,262.81)--(1,296,262.81-(1,296,262.81)
At 31 December 20184,802,648,511.005,057,242,440.17235,509,930.4441,222,369.102,401,324,255.5033,707,011,170.3146,244,958,676.52(92,036,723.1946,152,921,953.33

Chongqing Changan Automobile Company LimitedCONSOLIDATED CASH FLOW STATEMENTYear ended 31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
CASH FLOWS FROM
OPERATING ACTIVITIES
Cash received from sale of goods
or rendering of services70,578,207,834.2976,764,633,238.29
Refunds of taxes603,916,897.39464,242,119.33
Cash received relating to other
operating activities574,019,161,557.694,768,094,889.23
Subtotal of cash inflows75,201,286,289.3781,996,970,246.85
Cash paid for goods and services55,704,810,280.0870,504,737,377.42
Cash paid to and on behalf of
employees5,633,184,648.816,114,219,565.04
Cash paid for all types of taxes2,955,141,047.762,496,007,225.13
Cash paid relating to other
operating activities577,026,402,074.336,769,481,381.70
Subtotal of cash outflows71,319,538,050.9885,884,445,549.29
Net cash flows from operating
activities583,881,748,238.39(3,887,475,302.44)
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash received from recovery
of investment831,429,574.25-
Cash received from return
on investment1,386,844,687.601,409,353,446.15
Net cash received from disposal
of fixed assets, intangible assets
and other long-term assets72,899,243.6942,904,511.29
Cash received relating to other
investing activities57-1,036,263,749.91
Subtotal of cash inflows2,291,173,505.542,488,521,707.35
Cash paid for acquisition of
fixed assets, intangible assets
and other long-term assets4,783,722,428.466,488,329,782.76
Cash paid for acquisition of
investments1,002,064,416.732,034,743,750.00
Acquisition of net cash payments
from subsidiaries and other
business units-534,168,219.57
Other cash disbursed in connection with investment activities57300,000,000.00-
Subtotal of cash outflows6,085,786,845.199,057,241,752.33
Net cash flows from investing activities(3,794,613,339.65)(6,568,720,044.98)

Chongqing Changan Automobile Company LimitedCONSOLIDATED CASH FLOW STATEMENT (continued)Year ended 31 December 2019(Expressed in Renminbi Yuan)

Notes V20192018
CASH FLOWS FROM
FINANCING ACTIVITIES:
Cash received from borrowings304,880,000.00340,000,000.00
Cash received relating to
other financing activities5732,839,805.56855,280,377.20
Sub-total of cash inflows337,719,805.561,195,280,377.20
Cash repayments of borrowings216,594,120.00348,133,800.00
Cash paid for distribution of dividends
or profits and interest expenses126,540,808.632,169,490,293.91
Cash paid relating to
other financing activities57395,159,204.5430,344,195.00
Sub-total of cash outflows738,294,133.172,547,968,288.91
Net cash flows from financing activities(400,574,327.61)(1,352,687,911.71)
EFFECT OF CHANGES IN
EXCHANGE RATE ON CASH25,760,488.965,731,783.40
NET INCREASE IN CASH
AND CASH EQUIVALENTS(287,678,939.91)(11,803,151,475.73)
Add: Opening balance of
cash and cash equivalents9,648,153,614.8021,451,305,090.53
CLOSING BALANCE OF
CASH AND CASH EQUIVLANT589,360,474,674.899,648,153,614.80

Chongqing Changan Automobile Company LimitedBALANCE SHEET31 December 2019(Expressed in Renminbi Yuan)

Notes XIV20192018
Current assets
Cash6,563,020,335.567,310,973,018.99
Financial assets held for trading184,245,000.00-
Notes receivable25,837,326,483.0919,391,160,283.70
Accounts receivable15,094,270,365.725,679,160,679.69
Prepayments403,105,316.24671,849,711.04
Other receivables22,597,314,344.402,326,885,353.29
Inventories1,735,570,691.283,851,783,233.12
Other current assets798,430,035.621,372,588,554.75
Total current assets43,213,282,571.9140,604,400,834.58
Non-current assets
Available-for-sale financial assets-541,182,000.00
Long-term equity investments316,052,319,271.8218,017,137,600.72
Other equity instrument investment724,309,400.00-
Fixed assets20,301,231,002.4116,795,537,563.35
Construction in progress1,545,211,000.224,114,409,774.13
Intangible assets4,030,438,649.574,054,893,372.88
Development expenditure431,774,377.27559,309,970.45
Long-term deferred expenses9,719,259.8412,555,353.69
Deferred tax assets1,318,884,054.481,533,057,523.95
Other non-current assets-250,000,000.00
Total non-current assets44,413,887,015.6145,878,083,159.17
TOTAL ASSETS87,627,169,587.5286,482,483,993.75

Chongqing Changan Automobile Company LimitedBALANCE SHEET (continued)31 December 2019(Expressed in Renminbi Yuan)

20192018
Current liabilities
Short term loans29,580,000.00-
Notes payable11,983,445,725.0613,572,757,870.72
Accounts payable15,601,432,751.7410,690,985,635.15
Advances from customers1,870,992,349.081,208,631,011.05
Payroll payable641,340,149.301,001,765,362.99
Taxes payable453,619,905.66604,525,457.30
Other payables4,301,257,819.043,219,909,047.22
Contingent liabilities2,413,434,397.362,372,512,543.49
Other current liabilities3,400,065,879.023,923,419,042.37
Total current liabilities40,695,168,976.2636,594,505,970.29
Non-current liabilities
Long term loans55,300,000.00-
Long term payable285,768,478.89248,240,115.29
Long term payroll payable22,747,000.0024,315,000.00
Deferred income2,135,615,106.852,827,208,446.74
Deferred tax liabilities81,775,341.6026,683,742.04
Total non-current liabilities2,581,205,927.343,126,447,304.07
Total liabilities43,276,374,903.6039,720,953,274.36
Owner’s equity
Share capital4,802,648,511.004,802,648,511.00
Capital reserves5,014,772,792.874,705,917,638.38
Other comprehensive income259,380,413.58149,525,803.58
Special reserves19,917,658.6319,835,367.61
Surplus reserves2,401,324,255.502,401,324,255.50
Retained earnings31,852,751,052.3434,682,279,143.32
Total owner’s equity44,350,794,683.9246,761,530,719.39
TOTAL LIABILITIES
AND OWNERS’ EQUITY87,627,169,587.5286,482,483,993.75

Chongqing Changan Automobile Company LimitedINCOME STATEMENTYear ended 31 December 2019(Expressed in Renminbi Yuan)

Notes XIV20192018
Operating revenue464,952,750,206.6363,379,464,762.20
Less: Operating cost456,966,369,777.8354,508,948,244.13
Tax and surcharges1,763,695,806.321,897,849,791.26
Operating expenses3,173,277,654.384,763,764,952.42
General and administrative
expenses1,433,878,532.921,601,985,466.76
Research and development2,659,328,815.493,021,080,255.27
expenses
Financial income(159,213,197.04)(449,471,788.18)
Interest income22,298,902.58-
Interest expense194,548,964.11464,373,610.97
Add: Other income765,866,705.171,799,031,976.58
Investment income5(2,023,549,132.39)383,123,214.36
Including:Investment income
from associates and from
joint venture(2,081,317,451.25)(320,199,939.11)
Earnings from fair value changes60,705,000.00-
Impairment of credit(121,430,481.42)-
Impairment loss(303,604,164.62)(166,593,138.09)
Gain on disposal of assets45,709,560.3415,582,497.02
Operating profit(2,460,889,696.19)66,452,390.41
Add: Non-operating income32,324,558.4064,148,620.50
Less: Non-operating expenses165,234,410.5343,385,534.76
Total profit(2,593,799,548.32)87,215,476.15
Less: Income tax expense234,818,079.03(111,891,616.78)
Net profit(2,828,617,627.35)199,107,092.93
Classification by going concern
Net profit from continuing
operations(2,828,617,627.35)199,107,092.93

Chongqing Changan Automobile Company LimitedINCOME STATEMENTYear ended 31 December 2019(Expressed in Renminbi Yuan)

Notes XIV20192018
Other comprehensive income,
net of tax
Other comprehensive income
not to be reclassified to
profit or loss in
subsequent periods:
Change in net liability or
assets from defined
benefit plan216,000.00(13,234,000.00)
Changes in fair value
of other equity investment63,321,260.00-
Other Comprehensive income
not to be reclassified
to profit or loss
under equity method-(706,228.88)
63,537,260.00(13,940,228.88)
Other comprehensive income
to be reclassified to profit
or loss in subsequent periods:
Changes in fair value from
available-for-sale financial
assets-30,945,621.58
Total comprehensive income(2,765,080,367.35)216,112,485.63

Chongqing Changan Automobile Company LimitedSTATMENT OF CHANGES IN SHAREHOLDERS’ EQUITYYear ended 31 December 2019(Expressed in Renminbi Yuan)

Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsTotal owner’s equity
At 31 December 20184,802,648,511.004,705,917,638.38149,525,803.5819,835,367.612,401,324,255.5034,682,279,143.3246,761,530,719.39
Changes in accounting standard--46,317,350.00--85,561,000.00131,878,350.00
At 1 January 20194,802,648,511.004,705,917,638.38195,843,153.5819,835,367.612,401,324,255.5034,767,840,143.3246,893,409,069.39
Changes during the year:
Total comprehensive income--63,537,260.00--(2,828,617,627.35(2,765,080,367.35
Capital contributed by owners and capital decreases
1.The amount of share-based payments recorded in owners’ equity-(23,961,900.00----(23,961,900.00
2.Others-332,817,054.49----332,817,054.49
Distribution of profit
1.Distribution to owners-----(86,471,463.63(86,471,463.63
Special reserves
1.Provided---49,268,965.50--49,268,965.50
2.Ultilized---(49,186,674.48--(49,186,674.48)
At 31 December 20194,802,648,511.005,014,772,792.87259,380,413.5819,917,658.632,401,324,255.5031,852,751,052.3444,350,794,683.92

Chongqing Changan Automobile Company LimitedSTATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)Year ended 31 December 2018(Expressed in Renminbi Yuan)

Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsTotal onwer’s equity
At 31 December 20174,802,648,511.004,717,192,101.72132,520,410.8812,013,706.732,401,324,255.5036,640,962,334.0548,706,661,319.88
Changes during the year
Total comprehensive income--17,005,392.70--199,107,092.93216,112,485.63
Capital contributed by owners and capital decreases
1.The amount of share- based payments recorded in owners’ equity-(8,735,100.00----(8,735,100.00)
2.Others-(2,539,363.34----(2,539,363.34)
Distribution of profit
1.Distribution to owners-----(2,157,790,283.66)(2,157,790,283.66)
Special reserves
1.Provided---58,994,940.74--58,994,940.74
2.Ultilized---(49,877,017.05)--(49,877,017.05)
3.Effective portion of changes in special reserves from joint venture---(1,296,262.81)--(1,296,262.81)
At 31 December 20184,802,648,511.004,705,917,638.38149,525,803.5819,835,367.612,401,324,255.5034,682,279,143.3246,761,530,719.39

Chongqing Changan Automobile Company LimitedCASH FLOW STATEMENTYear ended 31 December 2019(Expressed in Renminbi Yuan)

20192018
CASH FLOWS FROM
OPERATING ACTIVITIES
Cash received from sale of goods
or rendering of services63,365,386,343.8773,237,084,046.94
Cash received relating to other
operating activities2,494,240,256.213,836,274,126.52
Subtotal of cash inflows65,859,626,600.0877,073,358,173.46
Cash paid for goods and services50,430,826,053.2267,590,149,087.20
Cash paid to and on behalf of
employees3,965,479,429.674,715,386,170.77
Cash paid for all types of taxes1,889,492,304.511,723,167,770.46
Cash paid relating to other
operating activities6,407,581,336.306,515,146,136.99
Subtotal of cash outflows62,693,379,123.7080,543,849,165.42
Net cash flows from operating
activities3,166,247,476.38(3,470,490,991.96)
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash received from recovery
of investment831,300,000.002,937,256.01
Cash received from return
on investment1,395,166,228.501,422,371,071.18
Net cash received from disposal
of fixed assets, intangible assets
and other long-term assets60,445,420.2060,014,623.13
Cash received relating to other
investing activities-124,782,800.00
Subtotal of cash inflows2,286,911,648.701,610,105,750.32
Cash paid for acquisition of
fixed assets, intangible assets
and other long-term assets4,021,334,954.675,973,170,360.48
Cash paid for acquisition of
investments1,855,926,872.553,132,195,583.18
Cash paid relating to other
investing activities300,000,000.00200,000,000.00
Subtotal of cash outflows6,177,261,827.229,305,365,943.66
Net cash flows from investing activities(3,890,350,178.52)(7,695,260,193.34)

Chongqing Changan Automobile Company LimitedCASH FLOW STATEMENT (continued)Year ended 31 December 2019(Expressed in Renminbi Yuan)

20192018
CASH FLOWS FROM
FINANCING ACTIVITIES
Cash received on loan84,880,000.00-
Cash receipts relating to other
financing activities-461,856,503.42
Sub-total of cash inflows84,880,000.00461,856,503.42
Cash paid for distribution of dividends
or profits and for interest expenses108,729,981.282,157,790,283.66
Cash paid relating to other financing activities--
Sub-total of cash outflows108,729,981.282,157,790,283.66
Net cash flows from financing activities(23,849,981.28)(1,695,933,780.24)
EFFECT OF CHANGES IN
EXCHANGE RATE ON CASH--
NET INCREASE IN CASH
AND CASH EQUIVALENTS(747,952,683.42)(12,861,684,965.54)
Add: Cash and cash equivalents at
beginning of year7,310,973,018.9920,172,657,984.53
CASH AND CASH EQUIVLANT
AT END OF YEAR6,563,020,335.577,310,973,018.99

I CORPORATE INFORMATION

Chongqing Changan Automobile Company Limited (hereafter referred to as the “Company”) is a companylimited by shares registered in Chongqing, People’s Republic of China. It was establish on 31 October 1996 withan indefinite business period. The ordinary A shares of Renminbi issued by the company and the B shares ofdomestically listed foreign shares have been listed on the Shenzhen Stock Exchange. Changan Group isheadquartered at 260 Jianxin East Road, Jiangbei District, Chongqing, China.

After the establishment of the company, the share capital and shareholding structure have undergone severalchanges. As of December 31, 2019, the company’s controlling shareholder China Changan Automobile GroupCompany Limited (hereinafter referred to as “China Changan”) and its wholly-owned subsidiary ZhonghuiFutong (Hong Kong) Investment Company Limited held a total of ordinary shares of the company 1,082,165,183shares with an equity ratio of 22.53%. China South Industries Group Co., Ltd. (hereinafter referred to as “ChinaSouth Group”), the parent company of China Changan, and its wholly-owned subsidiary, South IndustriesInternational Holdings (Hong Kong) Company Limited, hold 1,037,857,987 ordinary shares of the company, witha 21.61% shareholding ratio. China Changan and W China South Group holds ordinary shares 2,120,023,170 intotal with a shareholding ratio of 44.14%.

The Company and its subsidiaries collectively refer to as the Group, and its main business activities are: themanufacturing and sales of automobiles (including cars), automobile engine products, and supporting parts.

The holding company and ultimate holding company of the Company are China Changan and China SouthGroup respectively.

According to the Articles of Association, the financial statements, which has been approved by the board ofdirectors on 28 April 2020, was submitted to general meeting of shareholders for approval.

The scope of consolidation in the consolidated financial statement is determined based on control. For theconsolidation scope of this year, please refer to Note VI.

II BASIS OF PREPERATION

1. Basis of preparation

The financial statements have been prepared in accordance with Accounting Standards for BusinessEnterprises-Basic Standard and the specific standards issued and modified subsequently, and theimplementation guidance, interpretations and other relevant provisions issued subsequently by the MOF(correctly referred to as “Accounting Standards for Business Enterprises”).

The financial statements are presented on a going concern basis.

The financial statements have been prepared under the historical cost convention, except for certain financialinstruments. If the assets are impaired, the corresponding provisions should be made accordingly.

III SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

According to the actual production and operation characteristics, the group formulated the specific accountingpolicies and accounting estimates, mainly reflected in provision of accounts receivables, inventory valuation,depreciation of fixed assets, intangible assets amortization, condition of capitalization of research anddevelopment expense and revenue recognition and measurement.

1. Statement of compliance with Accounting Standards for Business Enterprises

The financial statements present fairly and fully, the financial position of the Company as at 31 December 2019and the financial results and the cash flows for the year then ended in accordance with Accounting Standardsfor Business Enterprises.

2. Accounting year

The accounting year of the Group is from 1 January to 31 December of each calendar year.

3. Functional currency

The Group’s functional and reporting currency is the Renminbi (“RMB”). Unless otherwise stated, the unit of thecurrency is Yuan. Each entity in the Group determines its own functional currency in accordance with theoperating circumstances. At the end of the reporting period, the foreign currency financial statements aretranslated into the reporting currency of the Company of RMB.

4. Business combination

Business combinations are classified into business combinations involving entities under common control andbusiness combinations involving entities not under common control.

Business combination involving entities under common controlA business combination involving entities under common control is a business combination in which all of thecombining entities are ultimately controlled by the same party or parties both before and after thecombination, and that control is not transitory. For a business combination involving entities under commoncontrol, the party which, on the combination date, obtains control of another entity participating in thecombination is the acquiring party, while that other entity participating in the combination is a party beingacquired. Combination date is the date on which the acquiring party effectively obtains control of the partybeing acquired.

Assets and liabilities that are obtained by the acquiring party in a business combination involving entities undercommon control shall be measured at their carrying amounts at the combination date as recorded by the partybeing acquired. The difference between the carrying amount of the net assets obtained and the carryingamount of the consideration paid for the combination (or the aggregate face value of shares issued asconsideration) shall be adjusted to capital reserve. If the capital reserve is not sufficient to absorb thedifference, any excess shall be adjusted against retained earnings.

Business combination involving entities not under common controlA business combination involving entities not under common control is a business combination in which all ofthe combining entities are not ultimately controlled by the same party or parties both before and after thecombination. For a business combination involving entities not under common control, the party that, on theacquisition date, obtains control of another entity participating in the combination is the acquirer, while thatother entity participating in the combination is the acquiree. Acquisition date is the date on which the acquirereffectively obtains control of the acquiree.

The acquirer shall measure the acquiree’s identifiable assets, liabilities and contingent liabilities acquired in thebusiness combination at their fair values on the acquisition date.

Goodwill is initially recognised and measured at cost, being the excess of the aggregate of the fair value of theconsideration transferred (or the fair value of the equity securities issued) and any fair value of the Group’spreviously held equity interest in the acquiree over the Group’s interest in the fair value of the acquiree’s netidentifiable assets. After initial recognition, goodwill is measured at cost less any accumulated impairment

losses. Where the aggregate of the fair value of the consideration transferred (or the fair value of the equitysecurities issued) and any fair value of the Group’s previously held equity interest in the acquiree is lower thanthe Group’s interest in the fair value of the acquiree’s net identifiable assets, the Group reassesses themeasurement of the fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities and thefair value of the consideration transferred (or the fair value of the equity securities issued), together with thefair value of the Group’s previously held equity interest in the acquiree. If after that reassessment, theaggregate of the fair value of the consideration transferred (or the fair value of the equity securities issued) andthe Group’s previously held equity interest in the acquiree is still lower than the Group’s interest in the fair valueof the acquiree’s net identifiable assets, the Group recognise the remaining difference in profit or loss.

5. Consolidated financial statements

The scope of the consolidated financial statements, which include the financial statements of the Company andall of its subsidiaries, is determined on the basis of control. A subsidiary is an entity that is controlled by theCompany (such as an enterprise, a deemed separate entity, or a structured entity controlled by the Company).

In the preparation of the consolidated financial statements, the financial statements of the subsidiaries areprepared for the same reporting period as the Company, using consistent accounting policies. All intra-groupassets and liabilities, equity, income, expenses and cash flows relating to transactions between members of theGroup are eliminated in full on consolidation.

When the current loss belong to minorities of the subsidiary exceeds the beginning equity of the subsidiarybelong to minorities, the exceeded part will still deduct the equity belong to minorities.

With respect to subsidiaries acquired through business combinations involving entities not under commoncontrol, the operating results and cash flows of the acquiree should be included in the consolidated financialstatements, from the day that the Group gains control, till the Group ceases the control of it. While preparingthe consolidated financial statements, the acquirer should adjust the subsidiary’s financial statements, on thebasis of the fair values of the identifiable assets, liabilities and contingent liabilities recognized on theacquisition date.

With respect to subsidiaries acquired through business combinations involving entities under common control,the operating results and cash flows of the acquiree should be included in the consolidated financial statementsfrom the beginning of the period in which the combination occurs.

If the changes of relevant facts and circumstances will result in the changes of one or more control elements,then the Group should reassess whether it has taken control of the investee.

6 Joint venture arrangement classification and joint operation

Joint venture arrangements are classified into joint operation and joint venture. Joint operation refers to thosejoint venture arrangements, relevant assets and liabilities of which are enjoyed and assumed by the jointventures. Joint ventures refer to those joint venture arrangements, only the right to net assets of which isenjoyed by the joint ventures.

Any joint venture shall recognize the following items related to its share of benefits in the joint operation andconduct accounting treatment in accordance with relevant accounting standards for business enterprises:

assets it solely holds and its share of jointly-held assets based on its percentage; liabilities it solely assumes andits share of jointly-assumed liabilities based on its percentage; incomes from sale of output enjoyed by it fromthe joint operation; incomes from sale of output from the joint operation based on its percentage; and separatecosts and costs for the joint operation based on its percentage.

7. Cash and cash equivalents

Cash comprises cash on hand and bank deposits which can be used for payment at any time; Cash equivalentsare short-term, highly liquid investments held by the Group, that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value.

8. Foreign currency translation

The Group translates the amount of foreign currency transactions occurred into functional currency.

The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying tothe foreign currency amount at the spot exchange rate on the transaction dates. Foreign currency monetaryitems are translated using the spot exchange rate quoted by the People’s Bank of China at the balance sheetdate. The exchange gains or losses arising from occurrence of transactions and exchange of currencies, exceptfor those relating to foreign currency borrowings specifically for construction and acquisition of fixed assetscapitalized, are dealt with in the profit and loss accounts. Non-monetary foreign currency items measured athistorical cost remain to be translated at the spot exchange rate prevailing on the transaction date, and theamount denominated in the functional currency should not be changed. Non-monetary foreign currency itemsmeasured at fair value should be translated at the spot exchange rate prevailing on the date when the fairvalues are determined. The exchange difference thus resulted should be charged to the current income or othercomprehensive income account of the current period.

When preparing consolidated financial statements, the financial statements of the subsidiaries presented inforeign currencies are translated into Renminbi as follows: asset and liability accounts are translated intoRenminbi at exchange rates ruling at the balance sheet date; shareholders’ equity accounts other than retainedprofits are translated into Renminbi at the applicable exchange rates ruling at the transaction dates; incomeand expense in income statement are translated into Renminbi at spot exchange rates on transactionoccurrence; total difference between translated assets and translated liabilities and shareholders’ equity isseparately listed as “foreign currency exchange differences” below retained profits. The translation differencearising from the settlement of oversea subsidiaries is charged to the current liquidation profit and loss inproportion to the settlement ratio of the assets concerned.

Foreign currency cash flows and the cash flows of foreign subsidiaries should be translated using the averageexchange rate prevailing on the transaction month during which the cash flows occur. The amount of the effecton the cash arising from the change in the exchange rate should be separately presented as an adjustment itemin the cash flow statement.

9. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability orequity instrument of another entity.

Recognition and derecognition

The Group recognizes a financial asset or a financial liability, when the Group becomes a party to thecontractual provision of the instrument.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) isprimarily derecognized (i.e., removed from the Group’s consolidated balance sheet) when:

1) the rights to receive cash flows from the financial asset have expired;

2) the Group has transferred its rights to receive cash flows from the financial asset, or has assumed an

obligation to pay the received cash flows in full without material delay to a third party under a “pass-through”arrangement; and either (a) has transferred substantially all the risks and rewards of the financial asset, or (b)has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferredcontrol of the financial asset.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires.When an existing financial liability is replaced by another from the same lender on substantially different terms,or the terms of an existing liability are substantially modified, such an exchange or modification is treated as aderecognition of the original liability and a recognition of a new liability, and the difference between therespective carrying amounts is recognized in profit or loss.

Regular way purchases and sales of financial assets are recognized and derecognized using trade dateaccounting. Regular way purchases or sales are purchases or sales of financial assets that require delivery withinthe period generally established by regulation or convention in the marketplace. The trade date is the date thatthe Group committed to purchase or sell a financial asset.

Classification and measurement of financial assets

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flowcharacteristics and the Group’s business model for managing them: financial assets at fair value through profitor loss, financial assets at amortized cost and financial assets at fair value through other comprehensive income.All affected related financial assets will be reclassified only if the Group changes its business model formanaging financial assets.

Classification and measurement of financial assets (Continued)

Financial assets are measured at fair value on initial recognition, but accounts receivable or notes receivablearising from the sale of goods or rendering of services that do not contain significant financing components orfor which the Group has applied the practical expedient of not adjusting the effect of a significant financingcomponent due within one year, are initially measured at the transaction price.

For financial assets at fair value through profit or loss, relevant transaction costs are directly recognized inprofit or loss, and transaction costs relating to other financial assets are included in the initial recognitionamounts.

The subsequent measurement of financial assets depends on their classification as follows:

Debt investments measured at amortized costThe Group measures financial assets at amortized cost if both of the following conditions are met: the financialasset is held within a business model with the objective to hold financial assets in order to collect contractualcash flows; the contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding. Financial assets at amortized cost aresubsequently measured using the effective interest method. Gains and losses are recognized in profit or losswhen the asset is derecognized, modified or impaired.

Debt investments at fair value through other comprehensive incomeThe Group measures debt investments at fair value through other comprehensive income if both of thefollowing conditions are met: the financial asset is held within a business model with the objective of bothholding to collect contractual cash flows and selling; the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principal amountoutstanding. Interest income is recognized using the effective interest method. The interest income,impairment losses and foreign exchange revaluation are recognized in profit or loss. The remaining fair valuechanges are recognized in other comprehensive income. Upon derecognition, the cumulative fair value change

recognized in other comprehensive income is recycled to profit or loss.

Equity investments at fair value through other comprehensive incomeThe Group can elect to classify irrevocably its equity investments which are not held for trading as equityinvestments designated at fair value through other comprehensive income. Only the relevant dividend income(excluding the dividend income explicitly recovered as part of the investment cost) is recognized in profit or loss.Subsequent changes in the fair value are included in other comprehensive income, and no provision forimpairment is made. When the financial asset is derecognized, the accumulated gains or losses previouslyincluded in other comprehensive income are transferred from other comprehensive income to retainedearnings.

Classification and measurement of financial assets (Continued)

Financial assets at fair value through profit or lossThe financial assets other than the above financial assets measured at amortized cost and financial assets atfair value through other comprehensive income are classified as financial assets at fair value through profit orloss. Such financial assets are subsequently measured at fair value with net changes in fair value recognized inprofit or loss.

Classification and measurement of financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,other financial liabilities, or as derivatives designated as hedging instruments in an effective hedge, asappropriate. For financial liabilities at fair value through profit or loss, relevant transaction costs are directlyrecognized in profit or loss, and transaction costs relating to other financial assets are included in the initialrecognition amounts.

The subsequent measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include financial liabilities held for trading and financialliabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities held fortrading are subsequently measured at fair value with net changes in fair value recognized in profit or loss. Gainsor losses on liabilities designated at fair value through profit or loss are recognised in profit or loss, except forthe gains or losses arising from the Group’s own credit risk which are presented in other comprehensive incomewith no subsequent reclassification to profit or loss.

Other financial liabilitiesOther financial liabilities are subsequently measured at amortized cost using the effective interest method.

Impairment of financial assets

On the basis of expected credit losses, the Group performs impairment treatment on financial assets measuredat amortized cost and equity instrument investments measured at fair value and whose changes are included inother comprehensive income, and reserves for loss are recognized.

For receivables and contract assets that do not contain significant financing components, the Group uses asimplified measurement method to measure the loss provision vased on the expected credit loss amount forthe entire duration.

For financial assets other than the simplified measurement method mentioned above, the Group assesses oneach balance sheet date whether its credit risk has not increased significantly since initial recognition, it is inthe first stage. The Group measures the loss provision based on the amount equivalent to the expected credit

loss in the next 12 months, and calculates the interest income based on the book balance and the actual interestrate; if the credit risk has increased significantly since initial recognition but has not yet suffered creditimpairment, it is in the second at this stage, the Group measures the loss provision based on the amountequivalent to the expected credit loss for the entire duration, and calculates the interest income based on thebook balance and the actual interest rate; If credit impairment occurs after initial recognition, it is in the thirdstage. The amount of expected credit losses is measured over the entire duration of the loss allowance, andinterest income is calculated based on amortized cost and effective interest rate. For financial instruments withlow credit risk on the balance sheet date, the Group assumes that their credit risk has not increased significantlysince initial recognition.

The Group assesses the expected credit losses of financial instruments based on individual items and portfolios.The Group has considered the credit risk characteristics of different customers and evaluated the expectedcredit losses of accounts receivable and other receivables based on the ageing combination.

Please refer to Note VII.3 for the disclosure of the Group’s judgment criteria for significant increase in credit risk,the definition of credit impairment assets that have occurred, and assumptions about the expected credit lossmeasurement.

When the Group no longer reasonably expects to be able to fully or partially recover the contractual cash flowsof financial assets, the Group directly writes down the book balance of the financial asset.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there isa currently enforceable legal right to offset the recognized amounts; and there is an intention to settle on a netbasis, or to realise the assets and settle the liabilities simultaneously.

Transfer of financial assets

If the Group transfers substantially all the risks and rewards of ownership of the financial asset, the Groupderecognizes the financial asset; and if the Group retains substantially all the risks and rewards of the financialasset, the Group does not derecognize the financial asset.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financialasset, the Group determines whether it has retained control of the financial asset. In this case: (i) if the Grouphas not retained control, it derecognizes the financial asset and recognize separately as assets or liabilities anyrights and obligations created not retained in the transfer; (ii) if the Group has retained control, it continues torecognize the financial asset to the extent of its continuing involvement in the transferred financial asset andrecognizes an associated liability.

10. Inventories

Inventory includes raw materials, goods in transit, work in progress, finished goods, consigned processingmaterials, low-value consumables and spare parts.

Inventory is initially carried at the actual cost. Inventory costs comprise all costs of purchase, costs ofconversion and other costs incurred in bringing the inventory to its present location and condition. Weightedaverage method is assigned to the determination of actual costs of inventories. One-off writing off method isadopted in amortization of low-value consumables.

The Group applies a perpetual counting method of inventory.

At the balance sheet date, the inventory is stated at the lower of cost and net realizable value. If the cost ishigher than the net realizable value, provision for the inventory should be made through profit or loss. If factors

that resulted in the provision for the inventory have disappeared and made the net realizable value higher thantheir book value, the amount of the write-down should be reversed, to the extent of the amount of theprovision for the inventory, and the reversed amount should be recognized in the income statement for thecurrent period.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make the sale. The impairment provision should be made on abasis of each item of inventories according to the difference between cost and net realizable value. For largenumbers of inventories at relatively low unit prices, the provision for loss on decline in value of inventoriesshould be made by category.

11. Long-term equity investments

Long-term equity investments include investments in subsidiaries, joint ventures and associates.

The long-term investments are initially recorded at costs on acquisition. Long-term investments acquired frombusiness combination under common control shall be initially measured at the carrying value of the heldinterest of the party being acquired; The difference between the initial measured amounts and the book valueof consideration, adjust the capital reserves (if the capital reserve is insufficient to be offset, retained earningsshould be adjusted); Long-term investments acquired from business combination not under common controlshall be initially measured at the cost (or, the sum of the cost and the carrying value of the previously heldequity interest in the acquire for the business combination achieved by stages), which include the fair value ofthe consideration paid, the liabilities beard and the fair value of issued equity instrument; the othercomprehensive income produced from the investment before the acquisition should be transferred into thecurrent year investment income on disposal.Long-term investments acquired not from business combinationare initially measured at 1)the consideration together with the cost necessary incurred; 2) the fair value of theequity instruments; and 3) the consideration agreed in the investment agreement by the investors, otherwisethe agreed consideration were not fair.

The Company adopted cost method to account for long-term investments in the subsidiaries in the separatefinancial statements of the Company. Control is the power to govern the financial and operating policies of anentity so as to obtain benefits from its activities.

Under cost method, the long-term equity investment is valued at the cost of the initial investment. The cost oflong-term equity investment should be adjusted in case of additional investment or disinvestments. Whencash dividends or profits are declared by the invested enterprise is recognized as investment income in currentperiod.

The equity method is applied to account for long-term equity investments, when the Group has jointly control,or significant influence on the investee enterprise. Joint control is the contractually agreed sharing of controlover an economic activity, and exists only when the strategic financial and operating decisions relating to theactivity require the unanimous consent of the parties sharing control (the venturers). Significant influence is thepower to participate in the financial and operating policy decisions of an economic activity but is not control orjoint control over those policies.

Under equity method, when the initial investment cost of a long-term equity investment exceeds the investingenterprise’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, thedifference is accounted for as an initial cost. As to the initial investment cost is less than the investingenterprise’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, thedifference shall be charged to the income statement for the current period, and the cost of the long-term equityinvestment shall be adjusted accordingly.

Under equity method, the Group recognizes its share of post-acquisition equity in the investee enterprise forthe current period as a gain or loss on investment, and also increases or decreases the carrying amount of theinvestment. When recognizing its share in the net profit or loss of the investee entities, the Group should, based

on the fair values of the identifiable assets of the investee entity when the investment is acquired, inaccordance with the Group’s accounting policies and periods, after eliminating the portion of the profits orlosses, arising from internal transactions with joint ventures and associates, attributable to the investing entityaccording to the share ratio (but losses arising from internal transactions that belong to losses on theimpairment of assets, should be recognized in full), recognize the net profit of the investee entity after makingappropriate adjustments. The book value of the investment is reduced to the extent that the Group’s share ofthe profit or cash dividend declared to be distributed by the investee enterprise. However, the share of net lossis only recognized to the extent that the book value of the investment is reduced to zero, except to the extentthat the Group has incurred obligations to assume additional losses. The Group shall adjust the carryingamount of the long-term equity investment for other changes in owners’ equity of the investee enterprise(other than net profits or losses), and include the corresponding adjustments in equity, which should be realizedthrough profit or loss in subsequent settlement of the respective long-term investment.

On settlement of a long-term equity investment, the difference between the proceeds actually received and thecarrying amount shall be recognized in the income statement for the current period. As to other comprehensiveincome recognized based on measurement of the original equity investment by employing the equity method,accounting treatment shall be made on the same basis as would be required if the invested entity had directlydisposed of the assets or liabilities related thereto when measurement by employing the equity method isterminated. As to any change in owners' equity of the invested entity other than net profit or loss, othercomprehensive income and profit distribution, the investing party shall be transferred to the income statementfor the current period. If the remaining equities still be measured under the equity method, accumulativechange previously recorded in other comprehensive income shall be transferred to current profit or loss, inmeasurement on the same basis as the invested entity had directly disposed of the assets or liabilities relatedthereto. The income or loss recorded in the equity directly should been transferred to the current incomestatement on settlement of the equity investment on the disposal proportion.

12. Investment property

Investment property are properties held to earn rentals or for capital appreciation, or both, including rentedland use right, land use right which is held and prepared for transfer after appreciation, and rented building.

The initial measurement of the investment property shall be measured at its actual cost. The follow-upexpenses pertinent to an investment property shall be included in the cost of the investment property, if theeconomic benefits pertinent to this real estate are likely to flow into the enterprise, and, the cost of theinvestment property can be reliably measured. Otherwise, they should be included in the current profits andlosses upon occurrence.

The group adopts the cost method to make follow-up measurement to the investment property. The buildingsare depreciated under straight-line method.

13. Fixed assets

A fixed asset probably shall be recognized only when the economic benefits associated with the asset will flowto the Group and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixedasset that meet the recognition criteria shall be included in the cost of the fixed asset, and the book value of thecomponent of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall berecognized in the income statement in the period during which they are incurred.

Fixed assets are initially measured at actual cost on acquisition. The cost of a purchased fixed asset comprisesthe purchase price, relevant taxes and any directly attributable expenditure for bringing the asset to workingcondition for its intended use, such as delivery and handling costs, installation costs and other surcharges.

Fixed assets are depreciated on straight-line basis. The estimated useful lives estimated residual values andannual depreciation rates for each category of fixed assets are as follows:

CategoryDeprecation periodResidual rate (%)Yearly deprecation rate (%)
Buildings20 to 35 years3%2.77%-4.85%
Machinery (Note)5 to 20 years3%4.85%-19.40%
Vehicles4 to 10 years3%9.70%-24.25%
Others3 to 21 years3%4.62%-32.33%
Note: the molds in machinery should be depreciated in units-of-production method.

borrowings is determined by applying a weighted average interest rate to the weighted average of the excessamounts of cumulative expenditure on the asset over and above the amounts of specific-purpose borrowings.

During the construction or manufacture of assets that are qualified for capitalization, if abnormaldiscontinuance, other than procedures necessary for their reaching the expected useful conditions, happens,and the duration of the discontinuance is over three months, the capitalization of the borrowing costs issuspended. Borrowing costs incurred during the discontinuance are recognized as expense and charged to theincome statement of the current period, till the construction or manufacture of the assets resumes.

16. Intangible assets

An intangible asset probably shall be recognized only when the economic benefits associated with the asset willflow to the Group and the cost of the asset can be measured reliably. Intangible assets are initially measured atcost. The cost of intangible assets acquired in a business combination is the fair value as at the date ofacquisition, if the fair value can be reliably measured.

The useful life of the intangible assets shall be assessed according to the estimated beneficial period expectedto generate economic benefits. An intangible asset shall be regarded as having an indefinite useful life whenthere is no foreseeable limit to the period over which the asset is expected to generate economic benefits forthe Group.

The useful lives of the intangible assets are as follow:

Useful life

Land use right 43 to 50 yearsSoftware 2 yearsTrademark 10 yearsNon-patent technology 5 years

Land use rights that are purchased or acquired through the payment of land use fees are accounted for asintangible assets. With respect to self-developed properties, the corresponding land use right and buildingsshould be recorded as intangible and fixed assets separately. As to the purchased properties, if the reasonableallocation of outlays cannot be made between land and buildings, all assets purchased will be recorded as fixedassets. The cost of a finite useful life intangible asset is amortized using the straight-line method during theestimated useful life. For an intangible asset with a finite useful life, the Group reviews the estimated useful lifeand amortization method at least at the end of each year and adjusts if necessary.

The Group should test an intangible asset with an indefinite useful life for impairment by comparing itsrecoverable amount with its carrying amount annually, whenever there is an indication that the intangible assetmay be impaired. An intangible asset with an indefinite useful life shall not be amortized.

The useful life of an intangible asset that is not being amortised shall be reviewed each period to determinewhether events and circumstances continue to support an indefinite useful life assessment for that asset. Ifthere are indicators that the intangible asset has finite useful life, the accounting treatment would be inaccordance with the intangible asset with finite useful life.

17. Research and development expenditures

The Group classified the internal research and development expenditures as follows: research expenditures anddevelopment cost.

The expenditures in research stage are charged to the current income on occurrence.

The expenditures in development stage are capitalized that should meet all the conditions of (a) it is technicallyfeasible to finish intangible assets for use or sale; (b) it is intended to finish and use or sell the intangible assets;(c) the usefulness of methods for intangible assets to generate economic benefits shall be proved, includingbeing able to prove that there is a potential market for the products manufactured by applying the intangibleassets or there is a potential market for the intangible assets itself or the intangible assets will be used internally;(d) it is able to finish the development of the intangible assets, and able to use or sell the intangible assets, withthe support of sufficient technologies, financial resources and other resources; and (e) the developmentexpenditures of the intangible assets can be reliably measured. Expenses incurred that don’t meet the aboverequirements unanimously should be expensed in the income statement of the reporting period.

The Group discriminates between research and development stage with the condition that the project researchhas been determined, in which the relevant research complete all the fractionalization of productsmeasurements and final product scheme under final approval of management. The expenditures incurredbefore project-determination stage is charged to the current income, otherwise it is recorded as developmentcost.

18. Impairment of assets

The Group determines the impairment of assets, other than the impairment of inventory, deferred income taxes,and financial assets, using the following methods:

The Group assesses at the balance sheet date whether there is any indication that an asset may be impaired. Ifany indication exists that an asset may be impaired, the Group estimates the recoverable amount of the assetand performs impairment tests. Goodwill arising from a business combination and an intangible asset with anindefinite useful life are tested for impairment at least at the end of every year, irrespective of whether there isany indication that the asset may be impaired. An intangible asset which is not ready for its intended use istested for impairment at least at the end of every year.

The recoverable amount of an asset is the higher of its fair value less costs to sell and the present value of thefuture cash flow expected to be derived from the asset. The Group estimates the recoverable amount on anindividual basis. If it is not possible to estimate the recoverable amount of the individual asset, the Groupdetermines the recoverable amount of the asset group to which the asset belongs. Identification of an assetgroup is based on whether major cash flows generated by the asset group are independent of the cash flowsfrom other assets or asset groups.

When the recoverable amount of an asset or asset group is less than its carrying amount, the carrying amount isreduced to the recoverable amount. The impairment of asset is provided for and the impairment loss isrecognized in the income statement for the current period.

For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination isallocated, on a reasonable basis, to related asset groups; if it is impossible to allocate to the related asset groups,it is allocated to each of the related sets of asset groups. Each of the related asset groups or related sets of assetgroups is a group or set of asset group that is able to benefit from the synergies of the business combinationand shall not be larger than a reportable segment determined by the Group.

When an impairment test is conducted on an asset group or a set of asset groups that contains goodwill, if thereis any indication of impairment, the Group firstly tests the asset group or the set of asset groups excluding theamount of goodwill allocated for impairment, i.e., it determines and compares the recoverable amount with therelated carrying amount and then recognize impairment loss if any. Thereafter, the Group tests the asset groupor set of asset groups including goodwill for impairment, the carrying amount (including the portion of thecarrying amount of goodwill allocated) of the related asset group or set of asset groups is compared to itsrecoverable amount. If the carrying amount of the asset group or set of asset groups is higher than itsrecoverable amount, the amount of the impairment loss is firstly eliminated by and amortized to the bookvalue of the goodwill included in the asset group or set of asset groups, and then eliminated by the book value

of other assets according to the proportion of the book values of assets other than the goodwill in the assetgroup or set of asset groups.

Once the above impairment loss is recognized, it cannot be reversed in subsequent periods.

19. Long-term deferred expenses

The long-term deferred expenses represent the payment for the improvement on buildings and other expenses,which have been paid and should be deferred in the following years. Long-term deferred expenses areamortized on the straight-line basis over the expected beneficial period and are presented at actualexpenditure net of accumulated amortization.

20. Employee benefits

Employee benefits refer to all kinds of remunerations or compensation made by enterprises to their employeesin exchange for services provided by the employees or termination of labor relation. Employee compensationincludes short-term compensation and post-employment benefits. The benefits offered by enterprises to thespouse, children, the dependents of the employee, the family member of deceased employee and otherbeneficiaries are also employee compensation.

Short-term employee salaries

During the accounting period of employee rendering service, the actural employees salaries and are charged tothe statement of profit or loss as they become payable in balance sheet.

Post-employment benefits (Defined contribution plans)

The employees of the Group participate in pension insurance, which is managed by local government and therelevant expenditure, is recognized, when incurred, in the costs of relevant assets or the profit and loss for thecurrent period.

Post-employment benefits (Defined benefit plan)

The Group operates a defined benefit pension plan which requires contributions to be made to a separatelyadministered fund. The benefits are unfunded. The cost of providing benefits under the defined benefit planis determined using the projected unit credit actuarial valuation method.

Remeasurements arising from defined benefit pension plans are recognised immediately in the consolidatedstatement of financial position with a corresponding debit or credit to retained profits through othercomprehensive income in the period in which they occur. Remeasurements are not reclassified to profit orloss in subsequent periods.

Past service costs are recognised in profit or loss at the earlier of: the date of the plan amendment orcurtailment; and the date that the Group recognises restructuring-related costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Grouprecognises the following changes in the net defined benefit obligation under administrative expenses in theconsolidated statement of profit or loss by function: ?service costs comprising current service costs,past-service costs, gains and losses on curtailments and non-routine settlements;net interest expense orincome.

Termination benefits

Termination benefits are recognized at the earlier of when the Group can no longer withdraw the offer of thosebenefits and when the Group recognises restructuring costs involving the payment of termination benefits.

21. Provisions

An obligation related to a contingency shall be recognised by the Group as a provision when all of the followingconditions are satisfied, except for contingent considerations and contingent liabilities assumed in a businesscombination not involving entities under common control:

1) the obligation is a present obligation of the Group;

2) it is probable that an outflow of economic benefits from the Group will be required to settle the

obligation;

3) a reliable estimate can be made of the amount of the obligation.

Contingent liabilities are initially measured according to the current best estimate for the expenditurenecessary for the performance of relevant present obligations, with comprehensive consideration given tofactors such as the risks, uncertainty and time value of money relating to contingencies. The book value of thecontingent liabilities should be reviewed at each balance sheet date. If there is objective evidence showing thatthe book value cannot reflect the present best estimate, the book value should be adjusted according to thebest estimate.

The contingent liabilities of the acquiree acquired in the business combination involving entities not undercommon control are measured at fair value upon initial recognition. After initial recognition, the balance of theamount recognized according to the estimated liabilities and the amount initially recognized after deductingthe accumulated amortization determined by the revenue recognition principle is subsequently measured atthe higher of the two.

22. Share-based payments

The share-based payments shall consist of equity-settled share-based payments and cash-settled share-basedpayments. The term "equity-settled share-based payment" refers to a transaction in which an enterprise grantsshares or other equity instruments as a consideration in return for services.

The equity-settled share-based payment in return for employee services shall be measured at the fair value ofthe equity instruments granted to the employees. As to an equity-settled share-based payment in return forservices of employees, if the right may be exercised immediately after the grant, the fair value of the equityinstruments shall, on the date of the grant, be included in the relevant cost or expense and the capital reservesshall be increased accordingly. As to a equity-settled share-based payment in return for employee services, ifthe right cannot be exercised until the vesting period comes to an end or until the prescribed performanceconditions are met, then on each balance sheet date within the vesting period, the services obtained in thecurrent period shall, based on the best estimate of the number of vested equity instruments, be included in therelevant costs or expenses and the capital reserves at the fair value of the equities instruments on the date ofthe grant. The fair value is determined using Black-Scholes model (Note XI).

Within the vesting period or before the prescribed performance conditons are met, the relevant costs orexpenses and capital reserves shall be determined and increased based on the best estimate of the number ofvested equity instruments on each balance sheet date.

For awards that do not ultimately vest because non-market performance and/or service conditions have notbeen met, no expense is recognised. Where awards include a market or non-vesting condition, the transactionsare treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided thatall other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if theterms had not been modified, if the original terms of the award are met. In addition, an expense is recognisedfor any modification that increases the total fair value of the share-based payments, or is otherwise beneficialto the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and anyexpense not yet recognised for the award is recognised immediately. This includes any award wherenon-vesting conditions within the control of either the Group or the employee are not met. However, if a newaward is substituted for the cancelled award, and is designated as a replacement award on the date that it isgranted, the cancelled and new awards are treated as if they were a modification of the original award, asdescribed in the previous paragraph.

23. Revenue

Revenue is recognized only when an inflow of economic benefits is probable, the amount of which can bereliably measured, and all of the following conditions are qualified.

Revenue from the sale of goods

The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the Groupretains neither continuing management involvement to the degree usually associated with ownership noreffective control over the goods sold; and the amount of revenue can be measured reliably. The proceedsearned from sales of goods are determined based on the amount received or receivable as stipulated in thecontract or agreement, otherwise the amount is not fair; If the amount received or receivable as stipulated inthe contract or agreement is collected in a defer method, it includes the financing elements and should bedetermined according to the fair value of the amount received or receivable as stipulated in the contract oragreement.

Revenue from the rendering of services

When the outcome of a transaction involving the rendering of services can be estimated reliably at the balancesheet date, revenue associated with the transaction is recognized using the percentage of completion method,or otherwise, the revenue is recognized to the extent of costs incurred that are expected to be recoverable. Theoutcome of a transaction involving rendering of services can be estimated reliably when all of the followingconditions are satisfied: the amount of revenue can be measured reliably; it is probable that the associatedeconomic benefits will flow into the Group; the stage of completion of the transaction can be measured reliably;and the costs incurred and to be incurred for the transaction can be measured reliably. The Group determinesthe stage of completion of a transaction involving the rendering of services by using the proportion of servicesperformed to date to the total services to be performed. The total amount of revenue earned from renderingservice are determined based on the amount received or receivable as stipulated in the contract or agreement,otherwise the amount is not fair.

Interest income

It should be measured based on the length of time for which the Group’s cash is used by others and theapplicable effective interest rate.

Royalty income

Royalty income is recognized according to the agreed time and method by both parties in related contracts.

Rental income

Rental income from operating leases is recognized by the lesser in the income statement on a straight-line basisover the lease term. The contingent rents shall be recorded in the profits and losses of the period in which theyactually arise.

24. Government grants

A government grant is recognized only when there is reasonable assurance that the entity will comply with anyconditions attached to the grant and the grant will be received. Monetary grants are accounted for at receivedor receivable amount. Non-monetary grants are accounted for at fair value. If there is no reliable fair valueavailable, the grants are accounted for a nominal amount.

A government grant which is specified by the government documents to be used to purchase and construct thelong-term assets shall be recognized as the government grant related to assets. A government grant which isnot specified by the government documents shall be judged based on the basic conditions to obtain thegovernment grant. The one whose basic condition was to purchase and construct the long-term assets shall berecognized as the government grant related to assets.

The Group uses the gross method to account for government grants.

Government grants related to income to be used as compensation for future expenses or losses shall berecognized as deferred income and shall be charged to the current profit or loss or be used to write down therelevant loss, during the recognition of the relevant cost expenses or losses; or used as compensation forrelevant expenses or losses already incurred by enterprises shall be directly charged to the profit and lossaccount in the current period or used to write down the relevant cost.

The government grants related to assets shall be used to write down the book value of the relevant assets or berecognized as deferred income. The government grants related to assets, recognized as deferred income, shallbe charged to the profit and loss reasonably and systematically in stages over the useful lives of the relevantassets. The government grants measured at nominal amount shall be directly charged to the current profit andloss. The remaining book value of the government grants related to assets should be charged to the profit andloss account in the current period when the relative assets sold, transferred, disposed or damaged.

25. Income taxes

Income tax comprises current and deferred tax. Income tax is recognized as an income or an expense andinclude in the income statement for the current period, except to the extent that the tax arises from a businesscombination or if it relates to a transaction or event which is recognized directly in equity.

Current income tax liabilities or assets for the current and prior periods, are measured at the amount expectedto be paid (or recovered) according to the requirements of tax laws.

For temporary differences at the balance sheet date between the tax bases of assets and liabilities and theircarrying amounts, and temporary differences between the carrying amounts and the tax bases of items, the taxbases of which can be determined for tax purposes, but which have not been recognized as assets and liabilities,deferred taxes are provided using the liability method.

A deferred tax liability is recognized for all taxable temporary differences, except:

(1) to the extent that the deferred tax liability arises from the initial recognition of goodwill or the initial

recognition of an asset or liability in a transaction which contains both of the following characteristics:

the transaction is not a business combination and at the time of the transaction, it affects neither theaccounting profit nor taxable profit or loss.

(2) in respect of taxable temporary differences associated with investments in subsidiaries, associates andinterests in jointly-controlled enterprises, where the timing of the reversal of the temporary differences can becontrolled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

(1) where the deferred tax asset relating to the deductible temporary differences arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the time ofthe transaction, affects neither the accounting profit nor taxable profit or loss; and

(2) in respect of deductible temporary differences associated with investments in subsidiaries, associates

and interests in joint ventures, deferred tax assets are only recognized to the extent that it is probablethat the temporary differences will reverse in the foreseeable future and taxable profit will be availableagainst which the temporary differences can be utilized.

At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected toapply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws.The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that wouldfollow from the manner in which the Group expects at the balance sheet date, to recover the assets or settle theliabilities.

At the balance sheet date, the Group reviews the book value of deferred tax assets. If it is probable thatsufficient taxable income cannot be generated to use the tax benefits of deferred tax assets, the book value ofdeferred tax assets should be reduced. When it is probable that sufficient taxable income can be generated, theamount of such reduction should be reversed. When it is probable that sufficient taxable income can begenerated, the amount of such reduction should be reversed.

When the following conditions are met at the same time, the deferred tax assets and deferred tax liabilities arelisted at the net amount after offset: the legal right to settle the current income tax assets and current incometax liabilities at the net amount; the deferred tax assets and deferred tax liabilities are related to the income taxlevied by the same tax collection and management department on the same taxable subject or differenttaxpaying subjects However, in the future, during each period when the significant deferred tax assets anddeferred tax liabilities are reversed, the tax payer involved intends to settle the current income tax assets andcurrent income tax liabilities with net amount or obtain assets and pay off debts at the same time.

26. Leases

A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.An operating lease is a lease other than a finance lease.

The Group recording the operating lease as a lessee

Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term,and either included in the cost of another related asset or charged to the income statement for the currentperiod. The contingent rents shall be recorded in the profits and losses of the period in which they actuallyarise.

The Group recording the operating lease as a lessor

Rental income from operating leases is recognized by the lesser in the income statement on a straight-line basisover the lease term. The contingent rents shall be recorded in the profits and losses of the period in which they

actually arise.

27. Profit distribution

The cash dividend of the Group is recognized as liabilities after the approval of general meeting ofstockholders.

28. Safety fund

The safety fund extracted by the Group shall be recognized as the cost of the related products or incomestatement, while be recognized as special reserve. When using safety fund, it shall be distinguished whether itwill form fixed assets or not. The expenditure shall write down the special reserve; the capital expenditure shallbe recognized as fixed assets when meet the expected conditions for use, and write down the special reservewhile recognizing accumulated depreciation with the same amount.

29. Fair value measurement

The Group measures its equity investments at fair value at the end of each reporting period. Fair value is theprice that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. The fair value measurement is based on the presumption thatthe transaction to sell the asset or transfer the liability takes place either in the principal market for the asset orliability, or in the absence of a principal market, in the most advantageous market for the asset or liability. Theprincipal or the most advantageous market must be accessible by the Group. The fair value of an asset or aliability is measured using the assumptions that market participants would use when pricing the asset orliability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participantthat would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data areavailable to measure fair value, maximising the use of relevant observable inputs and minimising the use ofunobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fairvalue measurement as a whole: Level 1 – based on quoted prices (unadjusted) in active markets for identicalassets or liabilities; Level 2 – based on valuation techniques for which the lowest level input that is significant tothe fair value measurement is observable, either directly or indirectly; Level 3 – based on valuation techniquesfor which the lowest level input that is significant to the fair value measurement is unobservable。

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Groupdetermines whether transfers have occurred between levels in the hierarchy by reassessing categorisation(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of eachreporting period.

30. Significant accounting judgments and estimates

The preparation of financial statements requires management to make judgments, estimates and assumptionsthat affect the amounts and disclosures of revenues, expenses, assets and liabilities, and the disclosure ofcontingent liabilities, at the balance sheet date. However, uncertainty about these assumptions and estimatescould result in outcomes that could require a material adjustment to the carrying amounts of the assets or

liabilities affected in the future.

Judgments

In the process of applying the Group’s accounting policies, management has made the following judgmentswhich have significant effect on the financial statements:

Operating leases - as lessorThe Group has entered into commercial property leases on its investment property portfolio. The Group hasdetermined, based on an evaluation of the terms and conditions of the arrangements, that it retains all thesignificant risks and rewards of ownership of these properties which are leased out on operating leases.

Business modelThe classification of financial assets at initial recognition depends on the business model of the Group’smanagement of financial assets. When judging the business model, the Group considers the methods includingenterprise evaluation and reporting of financial asset performance to key management personnel, risksaffecting financial asset performance and its anagement method and the way in which related businessmanagers get paid. When evaluating whether to take contract cash flow as the goal, the Group needs to analyzeand judge the reasons, time, frequency and value of the sale of financial assets before the due date.

Contract cash flow characteristicsThe classification of financial assets at initial recognitions depends on the contractual cash flow characteristicsof the financial assets. Ite is necessary to determine whether the contractual cash flow is only for the paymentof principal and interest based on outstanding principal, including correction of the time value of money duringthe evaluation, it is necessary to determine whether there is a significant difference compared to thebenchmark cash flow. For financial assets that include prepayment characteristics, it is necessary to determinewhether the fair value of the prepayment characteristics is very small, etc.

Uncertainty of accounting estimates

The crucial assumptions of significant accounting estimates in future and other crucial sources of estimateduncertainty, which may result in the significant adjustments to the book value of the subsequent accountingperiod, are as the following:

Impairment of financial instrumentsThe Group uses the expected credit loss model to assess the impairment of financial instruments. Theapplication of the expected credit loss model requires significant judgments and estimates. All reasonable andvalid information must be considered, including forward-looking information. In making these judgments andestimates, the Group infers the expected changes in the credit risk of the debtor based on historical repaymentdata combined with economic policies, macroeconomic indicators, industry risks and other factors. Differentestimates may affect the provision for impairment losses. The provision for impairment losses may not be equalto the actual amount of future impairment losses.

Impairment of non-current assets other than financial assets (goodwill excluded)The Group assesses at each reporting date whether there is an indication that non-current assets other thanfinancial assets may be impaired. If there is any sign of possible assets impairment, the assets concerned shouldbe subject to impairment test. When the carrying amount of an asset or the relevant assets group exceeds itsrecoverable amount which is the higher one of the net amount of the fair value of the asset minus the disposalexpenses and the present value of the expected future cash flow of the asset, the asset is considered impaired.The fair value minus the disposal expenses is determined by reference to the recent market transactions priceor observed market price less any directly attributable expenditure for disposing. When making an estimate ofthe present value of the future cash flow of an asset, the Group should estimate the future cash flows of theasset or the relevant assets group, with the appropriate discount rate selected to reflect the present value of thefuture cash flows.

Fair value of unlisted equity investmentsFor unlisted equity instrument investments, several valuation models are used to estimate the fair value. Thisrequires the Group to make estimates of unobservable market parameters such as price-to-book ration,discount rate, sustainable growth rate, asset price index, etc., and is therefore uncertain.

Development expendituresWhen determining the capitalization amount, management should make assumptions such as the expectedcash flows of the assets related, the applicable discount rate and expected benefit period.

Deferred tax assetsThe Group should recognize the deferred income tax assets arising from all the existing unutilized tax deficitsand deductible temporary differences to the extent of the amount of the taxable income which it is most likelyto obtain and which can be deducted from the deductible temporary differences. Enormous accountingjudgments, as well as the tax planning are compulsory for management to estimate the time and amount ofprospective taxable profits and thus determine the appropriate amount of the deferred tax assets concerned.

WarrantyThe Group provides warranties on automobile and undertakes to repair or replace items that fail to performsatisfactorily based on certain pre-determined conditions. Factors that influence estimation of relatedwarranty claim include: 1) renewal of laws and regulations; 2) quality promotion of Group products; 3) changeof parts and labour cost. In general, the Group records warranty based on selling volume and estimatedcompensatory unit warranty cost, deduction multi-agreed compensation from suppliers. As at balance sheetday, the Group launches retrospective analysis on warranty carrying amount in consideration of accrualwarranty payment during relative warranty period, and recent trends of product renovation and replacement,and further adjustment if necessary. Any increase or decrease in the provision would affect profit or loss infuture years.

Depreciation and amortizationThe Group’s management determines the estimated useful lives and residual value of fixed assets andintangible assets. This estimate is based on the historical experience of actual useful lives of fixed assets andintangible assets of similar nature and functions. Management will increase the depreciation and amortizationcharges where useful lives are less than previously estimated.

31. Changes in accounting policies and estimates

Changes in accounting policies

The New Guidelines for Financial InstrumentsIn 2017, the Ministry of Finance issued the revised “Accounting Standard for enterprise No.22 –- Recognitionand Measurement of Financial Instruments”; “Accounting Standard for enterprise No.23 – the Transfer ofFinancial Assets”; “Accounting Standard for enterprise No.24 – Hedging” and “Accounting Standard forenterprise No.37 – the List of Financial Instrument” (generally referred to as “the New Financial InstrumentGuidelines”). The Group will conduct accounting treatment in accordance with the new financial instrumentstandards from January 1, 2019. According to the convergence provisions, no adjustment will be made to theinformation of the comparable period. The difference between the new standards and the current standardsimplemented on the first day will be retroactively adjusted to adjust the undistributed profit or othercomprehensive income at the beginning of 2019.

The New Guidelines for Financial Instruments have changed the classification and measurement methods offinancial assets, which identified three main categories of measurement: amortized cost; other comprehensiveincome measured to fair value and whose changes; the current profit and loss measured to fair value and whosechanges. Enterprises are supposed to consider their own business models and the contractual cash flow

characteristics of financial assets to carry out the above classification. Equity instrument investment needs tobe measured at fair value and its changes are included in the current profit and loss, but at initial recognition,non-trading equity instrument investments can be irrevocably designated as financial assets measured at fairvalue and their changes are included in other comprehensive income.

The New Standard for Financial Instruments requires that the impairment measurement of financial assetsshould be changed to “expected credit loss model” from “incurred loss model”. It is appropriate for the financialassets measured at amortized cost and those measured at fair value with changes included in othercomprehensive income.

The Group designated part of the equity investment held as a financial asset measured at fair value and itschanges included in other comprehensive income on January 1, 2019 and reported as an investment in otherequity instruments.

The New Guidelines for Financial Instruments (continued)On the date of initial implementation, the classification and measurement results of financial assets inaccordance with the financial instrument recognition and measurement standards before and after revision areas follows:

The Group

Recognition and measurement standards for financial instruments before amendmentRecognition and measurement standards for financial instruments after amendment
Measurement categoryCarrying amountMeasurement categoryCarrying amount
CashAmortized cost (The loan and Account receivable)9,980,544,526.14Amortized cost9,980,544,526.14
Account receivableAmortized cost (The loan and Account receivable)1,409,419,600.50Amortized cost1,409,419,600.50
Notes receivableAmortized cost (The loan and Account receivable)20,561,625,805.24Amortized cost20,561,625,805.24
Other account receivableAmortized cost (The loan and Account receivable)3,233,020,118.16Amortized cost3,233,020,118.16
Equity investmentMeasure at fair value and its changes are included in the other comprehensive income (Assets available for sale)1,530,321,311.31Measure at fair value and its changes are included in the current profit and loss (the Requirement of the Guidelines)1,530,321,311.31
Equity investmentAmortized cost (Assets available for sale)427,552,000.00Measure at fair value and its changes are included in the other comprehensive income (Specified)582,679,600.00
Recognition and measurement standards for financial instruments before amendmentRecognition and measurement standards for financial instruments after amendment
Measurement categoryCarrying amountMeasurement categoryCarrying amount
CashAmortized cost (The loan and Account7,310,973,018.99Amortized cost7,310,973,018.99
receivable)
Account receivableAmortized cost (The loan and Account receivable)5,679,160,679.69Amortized cost5,679,160,679.69
Notes receivableAmortized cost (The loan and Account receivable)19,391,160,283.70Amortized cost19,391,160,283.70
Other account receivableAmortized cost (The loan and Account receivable)2,326,885,353.29Amortized cost2,326,885,353.29
Equity investmentMeasure at fair value and its changes are included in the other comprehensive income (Assets available for sale)123,540,000.00Measure at fair value and its changes are included in the current profit and loss (the Requirement of the Guidelines)123,540,000.00
Equity investmentAmortized cost (Assets available for sale)417,642,000.00Measure at fair value and its changes are included in the other comprehensive income (Specified)572,793,000.00
Face value as listed in the original financial instrument standard 31 December 2018RearrangeRemeasurementFace value as listed in the original financial instrument standard 1 January 2019
Financial assets measured at amortized cost
Cash9,980,544,526.14--9,980,544,526.14
Account receivable1,409,419,600.50--1,409,419,600.50
Note receivable20,561,625,805.24--20,561,625,805.24
Other account receivable3,233,020,118.16--3,233,020,118.16
Equity investment-financial asset available for sale----
Balance as listed in the original financial instrument standard427,552,000.00---
Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard)-(427,552,000.00)--
Balances listed under the new financial instrument standard----
Total financial assets measured at amortized cost35,612,162,050.04(427,552,000.00)-35,184,610,050.04
Measure at fair value and its changes are included in the other comprehensive income
Equity investment-financial asset available for sale----
Balance as listed in the original financial instrument standard1,530,321,311.31---
Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard)-427,552,000.00--
Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard)-(1,530,321,311.31)--
Remeasurement: first execution date fair value change--155,127,600.00-
Balances listed under the new financial instrument standard---582,679,600.00
Face value as listed in the original financial instrument standard 31 December 2018RearrangeRemeasurementFace value as listed in the original financial instrument standard 1 January 2019
Total financial assets measured at fair value and whose changes are recorded in other comprehensive income1,530,321,311.31(1,102,769,311.31)155,127,600.00582,679,600.00
Financial assets measured at fair value and whose changes are recorded in other comprehensive income
Balances listed under the new financial instrument standard----
Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard)-1,530,321,311.31--
Balance list under the new financial instrument standard---1,530,321,311.31
Total financial assets measured at fair value and whose changes are recorded into the current profit and loss-1,530,321,311.31-1,530,321,311.31
Total37,142,483,361.35-155,127,600.0037,297,610,961.35

The New Guidelines for Financial Instruments (continued)

On the date of initial implementation, the origin face value adjustment of financial assets is the adjustmenttable for the new financial asset face value classified and measured in accordance with the revised financialinstrument recognition and measurement standards:

The Company (continued)

Face value as listed in the original financial instrument standard 31 December 2018RearrangeRemeasurementFace value as listed in the original financial instrument standard 1 January 2019
Financial assets measured at amortized cost
Cash7,310,973,018.99--7,310,973,018.99
Account receivable5,679,160,679.69--5,679,160,679.69
Note receivable19,391,160,283.70--19,391,160,283.70
Other account receivable2,326,885,353.29--2,326,885,353.29
Equity investment-financial asset available for sale----
Balance as listed in the original financial instrument standard417,642,000.00---
Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard)-(417,642,000.00)--
Balances listed under the new financial instrument standard----
Total financial assets measured at amortized cost35,125,821,335.67(417,642,000.00)-34,708,179,335.67
Measure at fair value and its changes are included in the other comprehensive income
Equity investment-financial asset available for sale----
Balance as listed in the original financial instrument standard123,540,000.00---
Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard)-417,642,000.00--
Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard)-(123,540,000.00)--
Remeasurement: first execution date--155,151,000.00-

fair value change

The New Guidelines for Financial Instruments (continued)

The Company (continued)

Face value as listed in the original financial instrument standard 31 December 2018RearrangeRemeasurementFace value as listed in the original financial instrument standard 1 January 2019
Total financial assets measured at fair value and whose changes are recorded in other comprehensive income123,540,000.00294,102,000.00155,151,000.00572,793,000.00
Financial assets measured at fair value and whose changes are recorded in other comprehensive income
Balances listed under the new financial instrument standard----
Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard)-123,540,000.00--
Balance list under the new financial instrument standard---123,540,000.00
Total financial assets measured at fair value and whose changes are recorded into the current prot and loss-123,540,000.00-123,540,000.00
Total35,249,361,335.67-155,151,000.0035,404,512,335.67
Face value before the changes in accounting policiesChanges in accounting policiesFace value after the changes in accounting policies
31 December 2018The effects of the new financial instrument standardOther financial statement presentation method change impact1 January 2019
The Group
Notes receivable--20,561,625,805.2420,561,625,805.24
Account receivable--1,409,419,600.501,409,419,600.50
Notes and account receivable21,971,045,405.74-(21,971,045,405.74)-
Other account receivable3,250,452,923.70-(17,432,805.54)3,233,020,118.16
Other current assets2,227,565,353.23-17,432,805.542,244,998,158.77
Financial assets available for sale1,957,873,311.31(1,957,873,311.31)--
Financial assets for trading-1,530,321,311.31-1,530,321,311.31
Investment in other equity instruments-582,679,600.00-582,679,600.00
Notes payable--14,807,862,262.3914,807,862,262.39
Account payable--13,916,201,276.9513,916,201,276.95
Notes and account payable28,724,063,539.34-(28,724,063,539.34)-
Research and development costs2,543,265,379.12-641,523,542.563,184,788,921.68
Management costs2,782,755,531.47-(641,523,542.56)2,141,231,988.91
The Company
Notes receivable--19,391,160,283.7019,391,160,283.70
Account receivable--5,679,160,679.695,679,160,679.69
Notes and account receivable25,070,320,963.39-(25,070,320,963.39)-
Other account receivable2,344,318,158.83-(17,432,805.54)2,326,885,353.29
Other current assets1,355,155,749.21-17,432,805.541,372,588,554.75
Financial assets available for sale541,182,000.00(541,182,000.00)--
Financial assets for trading-123,540,000.00-123,540,000.00
Investment in other equity instruments-572,793,000.00-572,793,000.00
Notes payable--13,572,757,870.7213,572,757,870.72
Account payable--10,690,985,635.1510,690,985,635.15
Notes and account payable24,263,743,505.87-(24,263,743,505.87)-
Research and development costs2,468,444,658.83-552,635,596.443,021,080,255.27
Management costs2,154,621,063.20-(552,635,596.44)1,601,985,466.76

IV TAXES

1. Main taxes and tax rates

Value added tax (“VAT”)-VAT payable is the difference between VAT output and less deductible VAT input for the current year. VAT output of sales of products has been calculated by applying a rate of 13% to the taxable value since 1 April 2019 (16% before 1 April 2019). And VAT output of income from providing labor services has been calculated by applying a rate of 6% to the taxable value during this year.
Consumption tax-Consumption tax is calculated at 1%, 3% or 5% of taxable income.
City maintenance and construction tax-5% or 7% of the turnover tax paid is calculated and paid.
Educational surcharge-3% of the actual turnover tax paid is calculated and paid.
Local educational surcharge-2% of the turnover tax actually paid is calculated and paid.
Corporate income tax-Corporate income tax is paid at 15% or 25% of taxable income.

V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Cash

Item20192018
Cash18,280.0814,374.84
Cash at bank9,360,456,394.819,648,139,239.96
Other cash705,696,678.59332,390,911.34
Total10,066,171,353.489,980,544,526.14
2019
Financial assets measured at fair value and whose changes are recorded into the current profit and loss
- Investment in equity instrument2,419,476,200.00
Type20192018
Commercial acceptance bill7,475,629,607.726,687,321,419.20
Bank acceptance bill19,330,005,979.4713,874,304,386.04
Total26,805,635,587.1920,561,625,805.24

3. Notes receivable and accounts receivable(continued)

(2) Pledged notes receivable

Type20192018
Commercial acceptance bill365,040,070.00384,462,570.00
Bank acceptance bill2,760,059,280.0085,160,000.00
Total3,125,099,350.00469,622,570.00
20192018
DerecognitionUn-derecognitionDerecognitionUn-derecognition
Commercial acceptance bill662,937,930.00-147,853,740.00-
Bank acceptance bill1,937,078,894.54-1,498,687,956.97-
Total2,600,016,824.54-1,646,541,696.97-
Aging20192018
Within 1 year678,737,828.901,147,795,158.16
1 to 2 years141,612,978.2596,258,167.82
2 to 3 years33,700,863.10112,117,946.39
Over 3 years68,414,880.58143,862,648.03
Total922,466,550.831,500,033,920.40
Less: Provision(84,152,474.01)(90,614,319.90)
838,314,076.821,409,419,600.50
Beginning balanceAdditionDeductionEnding balance
ProvisionOtherReversalWrite-off
201990,614,319.9013,362,617.00-6,450,000.0013,374,462.8984,152,474.01
201836,030,522.3113,490,022.8142,008,512.00832,031.7382,705.4990,614,319.90

4. Notes receivable (continued)

(3) Analysis of accounts receivable by category as at 31 December 2019 is as follows:

Item2019
BalanceProvision
Amount(%)Amount(%)
Individually analyzed for provision216,876,810.5023.5149,267,460.6822.72
Accounts receivable analyzed as groups for provision705,589,740.3376.4934,885,013.334.94
Total922,466,550.83100.0084,152,474.019.12
Item2018
BalanceProvision
Amount(%)Amount(%)
Individually significant items and analyzed individually for provision858,892,602.3657.2644,226,423.355.15
Accounts receivable analyzed as groups for provision
Group 1. Accounts receivable analyzed for provision according to aging analysis427,323,980.2328.4929,225,702.476.84
Group 2. Accounts receivable from related parties185,492,616.7012.37--
Group subtotal612,816,596.9340.8529,225,702.474.77
Individually insignificant items but analyzed individually for provision28,324,721.111.8917,162,194.0860.59
合计1,500,033,920.40100.0090,614,319.906.04
20192018
Estimated face value for defaultExpected credit loss rate (%)Expected credit loss for the entire durationFace balanceProvision ratio (%)Provision for bad debt
Within 1 year601,963,326.690.804,799,025.50356,681,581.720.0268,746.54
1 to 2 years56,368,999.037.544,250,219.2434,680,938.0310.003,468,093.80
2 to 3 years20,043,284.2531.236,258,614.7111,214,542.6630.003,364,362.80
3 to 4 years10,355,210.7042.664,417,566.601,106,688.0350.00553,344.02
4 to 5 years2,411,538.0345.521,097,691.199,345,372.3880.007,476,297.90
Over 5 years14,447,381.6397.3314,061,896.0914,294,857.41100.0014,294,857.41
Total705,589,740.334.9434,885,013.33427,323,980.236.8429,225,702.47

4. Notes receivable (continued)

(5) In 2019, provision for accounts receivable amounted to RMB13,362,617.00 (2018: RMB13,490,022.81).

Provision for accounts receivable amounted to RMB6,450,000.00 has been reversed (2018:

RMB832,031.73).

(6) As at 31 December 2019, Provision for accounts receivable amounted to RMB13,374,462.89 has been

written off (2018: RMB82,705.49).

(7) As at 31 December 2019, accounts receivable from Top 5 clients amounted to RMB191,520,443.31,

accounted for 20.76% of the total accounts receivable (2018:RMB564,688,036.12,accounted for37.65%of the total amount).

(8) There were no accounts receivable derecognized due to transfer of financial assets during 2019 (2018:

Nil).

5. Prepayments

(1) Aging analysis of the prepayments is as follows:

Aging20192018
AmountPercentage (%)AmountPercentage (%)
Within 1 year427,508,750.4268.53781,698,728.2490.24
1 to 2 years190,277,683.9230.5077,209,604.948.91
2 to 3 years4,480,529.560.725,320,836.560.61
Over 3 years1,534,932.170.252,020,579.770.23
Total623,801,896.07100.00866,249,749.51100

6. Other receivables

(1) Aging analysis of other receivables as at 31 December 2019 is as follows:

20192018
Within 1 year1,627,799,420.781,959,280,906.55
1 to 2 years1,667,806,094.071,185,294,003.76
2 to 3 years503,954,545.0173,740,285.90
Over 3 years57,790,016.7122,553,085.53
Total3,857,350,076.573,240,868,281.74
Provision(125,594,084.11)(7,848,163.58)
3,731,755,992.463,233,020,118.16
Nature20192018
New energy subsidy3,462,221,902.092,847,788,412.50
Reserve41,810,604.1885,243,135.73
Margin13,965,172.5616,370,802.38
Other213,758,313.63283,617,767.55
Total3,731,755,992.463,233,020,118.16

6. Other receivables (continued)

(3) In 2019, the changes in the provision for bad debts for other receivables based on the 12-month

expected credit losses and the expected credit losses for the entire duration are as follows:

Stage 1 12-month ECLsStage 2 Lifetime ECLsStage 3 Credit-impaired financial assets (Lifetime ECLs)Total
Opening balance688,784.69473,328.516,686,050.387,848,163.58
Changes due to the opening balance
- Transfer to Stage 2----
- Transfer to Stage 3(150,000.00)(348,425.91)498,425.91-
- Turn back Stage 2----
- Turn back Stage 1----
Provision135,958.46111,637,659.127,431,094.18119,204,711.76
Reversal(383,561.14)(76,035.60)-(459,596.74)
Transfer----
Write-off--(999,194.49)(999,194.49)
Closing balance291,182.01111,686,526.1213,616,375.98125,594,084.11

6. Other receivables (continued)

Movement of other account receivable balance as follow:

Stage 1 12-month ECLsStage 2 Lifetime ECLsStage 3 Credit-impaired financial assets (Lifetime ECLs)Total
Opening balance3,228,443,949.915,738,281.456,686,050.383,240,868,281.74
Changes due to the opening balance
- Transfer to Stage 2(2,203,754,203.78)2,203,754,203.78--
- Transfer to Stage 3(5,079,519.22)(2,850,000.87)7,929,520.09-
- Turn back Stage 2----
- Turn back Stage 1----
Addition1,603,831,056.07667,724.40-1,604,498,780.47
Derecognition(417,662,893.72)(569,354,897.43)-(987,017,791.15)
Write-off--(999,194.49)(999,194.49)
Closing balance2,205,778,389.261,637,955,311.3313,616,375.983,857,350,076.57
Beginning balanceAdditionDeductionEnding balance
ProvisionOther additionReversalWrite-off
20184,156,595.68576,587.364,348,209.001,176,673.6656,554.807,848,163.58

6. Other receivables (continued)

Analysis of other receivables by category as at 31 December 2018 is as follows:

Item2018
BalanceProvision
Amount%Amount%
Individually significant items and analyzed individually for provision2,780,889,774.6285.80--
Group 1. Other receivables analyzed for provision according to aging analysis323,279,832.199.981,212,982.160.38
Group 2. Other receivables from related parties126,128,653.393.89--
Group subtotal449,408,485.5813.871,212,982.160.27
individually insignificant items but analyzed individually for provision10,570,021.540.336,635,181.4262.77
Total3,240,868,281.741007,848,163.580.24
Aging2018
BalanceProvision
Amount%
Within 1-year subtotal317,541,550.7498.22290,391.47
1 to 2 years5,113,633.101.58511,363.31
2 to 3 years253,452.000.0876,035.60
3 to 4 years34,672.340.0117,336.17
4 to 5 years93,342.000.0374,673.60
Over 5 years243,182.010.08243,182.01
Total323,279,832.191001,212,982.16

6. Other receivables (continued)

(7) As at 31 December 2019, top five debtors of other receivables are as follows:

DebtorsAmountNatureAgingProportion of total other receivables (%)Provision
First1,770,677,411.60New energy subsidy0-4 years45.90111,066,213.00
Second1,071,115,340.00New energy subsidyWithin 1year27.77-
Third430,588,852.51New energy subsidy0-5years11.161,572,800.00
Fourth131,582,160.00New energy subsidyWithin 1year3.41-
Fifth124,312,677.94Commission processing1-2years3.22-
Total3,528,276,442.0591.47112,639,013.00
DebtorsAmountNatureAgingProportion of total other receivables (%)Provision
First1,667,483,759.60New energy subsidyWithin four years51.45-
Second538,567,705.00New energy subsidyWithin four years16.62-
Third414,492,285.00New energy subsidyWithin three years12.79-
Fourth124,312,677.94Commission processingWithin one year3.84-
Fifth107,479,260.00New energy subsidyWithin one year3.32-
Total2,852,335,687.5488.02-

7. Inventories

(1) Classification of inventories

Item20192018
BalanceProvisionNet valueBalanceProvisionNet value
Raw materials843,669,443.37350,525,510.02493,143,933.352,029,706,541.33181,897,353.271,847,809,188.06
Material in transit293,575,861.15-293,575,861.15318,420,244.84-318,420,244.84
Work in progress657,730,109.0728,324,925.14629,405,183.931,413,892,484.3835,473,526.731,378,418,957.65
Finish goods1,958,389,227.8783,956,153.451,874,433,074.421,292,509,122.5176,519,657.331,215,989,465.18
Consigned processing material51,101,639.03-51,101,639.03110,310,364.86-110,310,364.86
Consumables33,781,796.49-33,781,796.4946,472,236.60-46,472,236.60
Total3,838,248,076.98462,806,588.613,375,441,488.375,211,310,994.52293,890,537.334,917,420,457.19
TypeBeginning balanceAdditionsDeductionEnding balance
ProvisionOtherReversal or Written off
Raw materials181,897,353.27176,755,422.47-8,127,265.72350,525,510.02
Work in progress35,473,526.732,744,458.87-9,893,060.4628,324,925.14
Finish goods76,519,657.3345,220,725.83-37,784,229.7183,956,153.45
Total293,890,537.33224,720,607.17-55,804,555.89462,806,588.61
TypeBeginning balanceAdditionsDeductionEnding balance
ProvisionOtherReversal or Written off
Raw materials33,713,007.05163,124,568.33161,591,998.30176,532,220.41181,897,353.27
Work in progress32,329,369.556,303,861.081,985,609.605,145,313.5035,473,526.73
Finish goods103,902,330.0668,184,792.8717,456,727.63113,024,193.2376,519,657.33
Total169,944,706.66237,613,222.28181,034,335.53294,701,727.14293,890,537.33

7. Inventories(continued)

(3) Note for inventory provision

The Group assesses whether the cost of inventory is higher than the net realizable value and makes provision ofthe difference. Net realizable value is the estimated by selling price in the ordinary course of business deductestimated costs in further production to sell and estimated necessary distribution expense and tax expense.The reversal of inventory provisions is due to price rebound of previous impaired inventories by net realizablevalue test, while written off inventory provisions are due to selling off of previous impaired inventories incurrent year.

8. Other current assets

Item20192018
Input VAT to be deducted1,428,518,317.992,227,386,063.11
Entrusted loan300,000,000.00-
Others17,601,810.0517,612,095.66
Total1,746,120,128.042,244,998,158.77
Item2018
Book valueProvisionNet value
Available-for-sale equity instrument
Measured at fair value1,557,441,311.3127,120,000.001,530,321,311.31
Measured at historical cost429,361,274.001,809,274.00427,552,000.00
Total1,986,802,585.3128,929,274.001,957,873,311.31
Item2018
Cost of equity instrument1,050,000,821.00
Fair value1,530,321,311.31
Accumulated amount of change in fair value recorded in other comprehensive income349,824,952.31
Provision27,120,000.00

9. Available-for-sale financial assets (only available for 2018) (continued)

Available-for-sale financial assets measured at historical cost:

2018

ItemBook valueProvisionShareholding Ratio (%)Cash dividend in current year
Beginning balanceAdditionDisposalEnding balanceBeginning balanceAdditionDisposalEnding balance
China South Industry Group Finance Co., Ltd.80,000,000.00--80,000,000.00----3.8348,909,006.75
Chongqing Ante trading Co., Ltd3,000,000.00--3,000,000.00----10.00-
Sichuan Glass Co., Ltd.1,809,274.00--1,809,274.001,809,274.00--1,809,274.000.64-
Zhong Fa Lian Investment Co., Ltd.21,000,000.00--21,000,000.00----10.00-
CAERI(Beijing) automobile Lightweight Technology Research Institution Co., Ltd.3,000,000.00--3,000,000.00----6.89-
Guoqi Automobile Power Cell Research Co., Ltd.40,000,000.00--40,000,000.00----7.41449,438.20
United Prosperity Investment (ShenZhen) Co., Ltd30,552,000.00--30,552,000.00----5.00-
Corun Hybrid Power Technology Co. Ltd200,000,000.00--200,000,000.00----9.24-
Guoqi (Beijing) Intelligent Network Association Automotive Research Institute Co., Ltd.-50,000,000.00-50,000,000.00----5.56-
Total379,361,274.0050,000,000.00-429,361,274.001,809,274.00--1,809,274.0049,358,444.95
Provision for available-for-sale financial assetsBeginning balanceAdditionDisposalEnding balance
Available-for-sale financial assets measured at fair value27,120,000.00--27,120,000.00
Available-for-sale financial assets measured at historical cost1,809,274.00--1,809,274.00
Total28,929,274.00--28,929,274.00

10. Long-term equity investments

2019

InvesteeBeginning balanceAdditionInvestment income under equity methodOther equity variationCash dividends declaredOther DeductionProvisionBook value ending balanceProvision ending balance
Joint Venture
Jiangling Holding Co., Ltd. (note 2)2,493,754,915.53-(221,583,996.94)--(2,272,170,918.59)---
Changan Ford Automobile Co., Ltd.3,709,784,507.11-(1,926,961,179.20)----1,782,823,327.91-
Changan Mazda Automobile Co., Ltd.2,472,626,663.41-929,384,241.61-(1,225,000,000.00)--2,177,010,905.02-
Changan Ford Mazda Engine Co., Ltd.827,803,757.96-39,968,582.73-(37,500,000.00)--830,272,340.69-
Changan PSA Automobiles Co., Ltd.1,456,519,068.74-(1,110,480,084.87)----346,038,983.87-
Changan Weilai New Energy Automobile Technology Co., Ltd.44,065,513.91-(56,937,233.33)----(12,871,719.42)-
Nanchang Jiangling Holding Co., Ltd.-2,063,742,852.9118,072,312.40----2,081,815,165.31-
Subtotal11,004,554,426.662,063,742,852.91(2,328,537,357.60)-(1,262,500,000.00)(2,272,170,918.59)-7,205,089,003.38-
Associates
Chongqing Changan Kuayue Automobile Co., Ltd.116,588,234.97-75,417,039.13----192,005,274.10-
Chongqing Changan Kuayue Automobile Sales Co., Ltd. (note1)--------
Beijing Fang’an cresent taxi Co., Ltd. (note1)---------
Changan Automobile Financing Co.,Ltd2,030,617,157.41-239,321,406.72-(74,897,909.69)--2,195,040,654.44-
Hainan Anxinxing Information Technology Co., Ltd.5,536,555.21-(1,976,171.11)----3,560,384.10-
Nanjing Chelai Travel Technology Co., Ltd.1,813,616.14-(338,671.05)----1,474,945.09-
Hunan Guoxin Semiconductor Technology Co., Ltd.25,000,000.00-152,447.20----25,152,447.20-
Beijing Wutong Chelian Technology Co., Ltd.85,856,852.57-(81,762,342.17)----4,094,510.40-
Anhe (Chongqing) Equity Investment Fund Management Co., Ltd.2,500,000.00-(560,394.14)----1,939,605.86-
Hangzhou Chelizi Intelligent Technology Co., Ltd.2,703,275.87-4,824,296.36----7,527,572.23-
Nanjing Leading Equity Investment Partnership-858,267,717.0076,950,606.32----935,218,323.32-
Nanjing Leading Equity Investment Management Co., Ltd.-1,500,000.00(54,584.31)----1,445,415.69-
Pakistan Master Automobile Co., Ltd.-36,795,899.66-----36,795,899.66-
Jiangling Holding Co., Ltd. (Note 2)-208,428,065.68(142,252,166.55)332,817,054.49---398,992,953.62-
Subtotal2,270,615,692.171,104,991,682.34169,721,466.40332,817,054.49(74,897,909.69)--3,803,247,985.71-
Total13,275,170,118.833,168,734,535.25(2,158,815,891.20)332,817,054.49(1,337,397,909.69)(2,272,170,918.59)-11,008,336,989.09-

10. Long-term equity investments(continued)

Note1: As at 31 December 2019, the Group is not responsible for extra loss from Chongqing Changan Kuayue Automobile Sales Co., Ltd. and Beijing Fang’an cresent taxi Co., Ltd.

Therefore, when excess losses of these two associates occurred, the Group just reduced its correspondent long-term equity investment to zero, and did not recognizecontingent liabilities accordingly.

Note2: In 2019, the joint venture of the group, Jiangling Holding Co., Ltd., was separated into Jiangling Holding Co., Ltd., and the newly established Nanchang Jiangling Investment

Co., Ltd . Jiangling Holdings Co., Ltd introduced new investors after the split. Upon completion of the capital increase, the group held 25% of the equity of JianglingHolding Co., Ltd , which converted to an associate of the group.

2018

InvesteeBeginning balanceAdditionInvestment income under equity methodOther comprehensive incomeOther equity variationCash dividends declaredOther DeductionProvisionBook value ending balanceProvision ending balance
Joint Venture
Chongqing Changan Suzuki Automobile Co., Ltd.1,190,705,710.43-(595,756,652.13)---(594,949,058.30)---
Jiangling Holding Co., Ltd.2,907,749,943.37-(409,453,173.08)(706,228.88)(3,835,625.88)---2,493,754,915.53-
Changan Ford Automobile Co., Ltd.4,125,426,104.20-(415,641,597.09)-----3,709,784,507.11-
Changan Mazda Automobile Co., Ltd.2,439,429,811.02-1,263,196,852.39--(1,230,000,000.00)--2,472,626,663.41-
Changan Ford Mazda Engine Co., Ltd.903,838,395.08-38,465,362.88--(114,500,000.00)--827,803,757.96-
Changan PSA Automobiles Co., Ltd.93,561,126.761,800,000,000.00(437,042,058.02)-----1,456,519,068.74-
Changan Weilai New Energy Automobile Technology Co., Ltd.-49,000,000.00(4,934,486.09)---44,065,513.91
Subtotal11,660,711,090.861,849,000,000.00(561,165,751.14)(706,228.88)(3,835,625.88)(1,344,500,000.00)(594,949,058.30)-11,004,554,426.66-
Associates
Chongqing Changan Kuayue Automobile Co., Ltd.101,399,892.43-28,908,342.54--(13,720,000.00)--116,588,234.97-
Chongqing Changan Kuayue Automobile Sales Co., Ltd. (note1)----------
Beijing Fang’an cresent taxi Co., Ltd.----------
Changan Automobile Financing Co.,Ltd1,817,669,991.73-212,947,165.68-----2,030,617,157.41-
Zhenjiang Demao Hairun equity investment fund partnership (limited partnership)(note2)518,742,921.95-(239,867.54)77,231,613.62--(595,734,668.03)---
Hainan Anxinxing Information Technology Co., Ltd.-6,000,000.00(463,444.79)-----5,536,555.21-
Nanjing Chelai Travel Technology Co., Ltd.-2,000,000.00(186,383.86)----1,813,616.14-
Hunan Guoxin Semiconductor Technology Co., Ltd.-25,000,000.00-----25,000,000.00-
Beijing Wutong Chelian Technology Co., Ltd.-98,000,000.00(12,143,147.43)----85,856,852.57-
Anhe (Chongqing) Equity Investment Fund Management Co., Ltd.-2,500,000.00-----2,500,000.00-
Hangzhou Chelizi Intelligent Technology Co., Ltd.-2,243,750.00459,525.87--2,703,275.87-
Subtotal2,437,812,806.11135,743,750.00229,282,190.4777,231,613.62-(13,720,000.00)(595,734,668.03)-2,270,615,692.17-
Total14,098,523,896.971,984,743,750.00(331,883,560.67)76,525,384.74(3,835,625.88)(1,358,220,000.00)(1,190,683,726.33)-13,275,170,118.83-
Accumulative changes in fair value included in other comprehensive incomeFair valueDividends IncomeReason for being designated as fair value through other comprehensive income
Corun Hybrid Power Technology Co. Ltd4,097,255.00204,820,300.00-Unlisted equity instruments
China South Industry Group Finance Co., Ltd.135,103,250.00315,965,800.0038,343,163.30Unlisted equity instruments
Guoqi (Beijing) Intelligent Network Association Automotive Research Institute Co., Ltd.42,500,000.00100,000,000.00-Unlisted equity instruments
Guoqi Automobile Power Cell Research Co., Ltd.10,657,725.0052,538,500.00-Unlisted equity instruments
United Prosperity Investment (ShenZhen) Co., Ltd3,085,075.0034,181,500.00-Unlisted equity instruments
Zhong Fa Lian Investment Co., Ltd.-21,000,000.00-Unlisted equity instruments
Chongqing Ante trading Co., Ltd-3,000,000.00-Unlisted equity instruments
CAERI(Beijing) automobile Lightweight Technology Research Institution Co., Ltd.-3,000,000.00-Unlisted equity instruments
Sichuan Glass Co., Ltd.---Unlisted equity instruments
合计195,443,305.00734,506,100.0038,343,163.30

12. Investment property

Cost Model

ItemBuilidings
20192018
Original cost
Beginning and Ending10,050,100.0010,050,100.00
Accumulated depreciation and amortization
Beginning2,720,538.722,493,827.16
Accrual226,711.56226,711.56
Ending2,947,250.282,720,538.72
Impairment Provision
Beginning and Ending--
Carrying amount
Ending7,102,849.727,329,561.28
Beginning7,329,561.287,556,272.84

13. Fixed assets

(1) Details of fixed assets

2019

ItemBuildingsMachineryVehiclesOther EquipmentTotal
Original cost
Beginning9,889,579,515.3421,927,380,270.821,213,223,699.567,644,065,328.4640,674,248,814.18
Purchase10,051,085.3610,383,228.89923,091.0017,745,714.2839,103,119.53
Transfer from Construction in progress1,255,128,220.825,381,232,681.61155,920,892.721,165,455,499.857,957,737,295.00
Other addition10,598,771.511,695,411,683.7914,198,727.44540,601,707.842,260,810,890.58
Disposal11,144,160,050.0125,623,584,497.531,355,868,955.848,286,664,834.7546,410,278,338.13
Ending
Accumulated depreciation
Beginning2,147,206,657.3211,026,127,942.23405,520,581.393,773,744,928.5517,352,600,109.49
Accrual372,877,646.571,796,628,985.33236,791,742.00609,619,331.303,015,917,705.20
Other addition4,681,943.621,326,233,165.2713,079,362.87414,130,901.341,758,125,373.10
Disposal2,515,402,360.2711,496,523,762.29629,232,960.523,969,233,358.5118,610,392,441.59
Ending
Impairment provision
Beginning82,452,249.51895,917,567.9636,271,972.06145,952,856.851,160,594,646.38
Accrual3,249,811.6183,337,033.15919,442.0135,466,815.08122,973,101.85
Other addition109,876.41348,207,151.12429,524.8874,425,853.47423,172,405.88
Disposal85,592,184.71631,047,449.9936,761,889.19106,993,818.46860,395,342.35
Ending
Carrying amount
Ending8,543,165,505.0313,496,013,285.25689,874,106.134,210,437,657.7826,939,490,554.19
Beginning7,659,920,608.5110,005,334,760.63771,431,146.113,724,367,543.0622,161,054,058.31

13. Fixed assets (continued)

(1) Details of fixed assets (continued)

2018

ItemBuildingsMachineryVehiclesOther EquipmentTotal
Original cost
Beginning7,588,350,429.4317,780,317,915.84758,168,041.394,965,243,303.0531,092,079,689.71
Purchase23,926,779.5723,571,882.603,099,101.1726,846,795.5677,444,558.90
Transfer from Construction in progress1,327,900,008.98756,278,671.99432,279,275.461,379,046,064.133,895,504,020.56
Other addition954,716,283.233,602,516,085.7724,428,654.751,329,694,549.685,911,355,573.43
Disposal5,313,985.87235,304,285.384,751,373.2156,765,383.96302,135,028.42
Ending9,889,579,515.3421,927,380,270.821,213,223,699.567,644,065,328.4640,674,248,814.18
Accumulated depreciation
Beginning1,585,639,930.247,183,157,682.85207,356,765.942,190,616,451.0011,166,770,830.03
Accrual293,956,868.751,410,740,403.02181,011,982.63448,572,044.962,334,281,299.36
Other addition269,696,084.632,650,379,521.2520,023,995.951,165,493,091.834,105,592,693.66
Disposal2,086,226.30218,149,664.892,872,163.1330,936,659.24254,044,713.56
Ending2,147,206,657.3211,026,127,942.23405,520,581.393,773,744,928.5517,352,600,109.49
Impairment provision
Beginning83,371,676.72673,609,726.30223,852.23123,574,653.73880,779,908.98
Accrual400,000.0087,862,065.2836,048,119.8317,301,545.17141,611,730.28
Other addition708,576.48149,779,328.80-6,351,188.48156,839,093.76
Disposal2,028,003.6915,333,552.42-1,274,530.5318,636,086.64
Ending82,452,249.51895,917,567.9636,271,972.06145,952,856.851,160,594,646.38
Carrying amount
Ending7,659,920,608.5110,005,334,760.63771,431,146.113,724,367,543.0622,161,054,058.31
Beginning5,919,338,822.479,923,550,506.69550,587,423.222,651,052,198.3219,044,528,950.70
ItemOriginal costAccumulated depreciationImpairment provisionCarrying amount
Buildings129,796,057.2365,393,233.8544,613,642.1619,789,181.22
Machinery573,645,176.56391,306,715.37168,519,406.4313,819,054.76
Vehicles3,245,203.103,146,307.4346,835.2052,060.47
Other Equipment297,958,260.66206,412,768.7186,401,828.635,143,663.32
Total1,004,644,697.55666,259,025.36299,581,712.4238,803,959.77

13. Fixed assets (continued)

(2) Fixed assets that are temporarily unused (continued)

2018

ItemOriginal costAccumulated depreciationImpairment provisionCarrying amount
Buildings224,485,202.11125,177,360.1077,423,503.0021,884,339.01
Machinery1,976,159,790.511,347,119,942.38615,716,084.4413,323,763.69
Vehicles1,879,595.781,578,167.36275,067.0826,361.34
Other Equipment434,967,988.89312,070,125.63119,315,817.563,582,045.70
Total2,637,492,577.291,785,945,595.47812,730,472.0838,816,509.74
Item20192018
Buildings74,985,870.8856,946,778.73
Machinery9,443,408.1211,813,715.84
ItemCarrying amountReason for incomplete certificate of title
Painting plant584,289,477.40Under processing
Assemble plant568,400,161.73Under processing
Welding workshop307,497,805.57Under processing
Yu Zui Auto City243,927,566.71Under processing
Welding Workshop216,339,074.69Under processing
Stamping Workshop215,919,166.74Under processing
H plant Phase IV147,826,329.97Under processing
Other plant91,709,015.23Under processing
Other facilities73,456,456.32Under processing
S Engine plant61,499,636.18Under processing
Engine Plant58,386,780.80Under processing
New Energy Battery Workshop52,632,785.72Under processing
Second plant and public building34,660,294.32Under processing
EA Casting workshop Phase I34,065,399.30Under processing
Staff cafeteria28,100,103.33Under processing
Office building17,081,906.23Under processing
Vehicle capability Lab7,031,193.45Under processing
Buildings in testing projects of Dianjiang4,644,244.02Under processing
Technology center workshop4,504,408.80Under processing

14. Construction in progress

(1) Details of construction in progress

Item20192018
BalanceProvisionCarrying amountBalanceProvisionCarrying amount
Mini-bus production equipment59,110,263.16-59,110,263.16815,889,070.57-815,889,070.57
Yuzui motor city project39,547,629.19-39,547,629.1951,962,876.25-51,962,876.25
Car production equipment104,070,401.86-104,070,401.86181,137,313.03-181,137,313.03
Engine plant880,128,770.64-880,128,770.641,458,726,257.58-1,458,726,257.58
Vehicle research institution40,087,119.45-40,087,119.45854,570,879.08-854,570,879.08
Vehicle moulds284,573,714.88-284,573,714.88420,284,566.37-420,284,566.37
Light vehicle technical transformation project of Baoding Changan bus65,394,282.59-65,394,282.5983,207,252.58-83,207,252.58
Beijing vehicle construction project60,307,306.09-60,307,306.0998,585,664.59-98,585,664.59
Car production Project of Hefei Changan6,491,703.97-6,491,703.97872,832,482.14-872,832,482.14
Others239,490,564.6049,398,728.00190,091,836.60595,963,063.4449,315,394.88546,647,668.56
Total1,779,201,756.4349,398,728.001,729,803,028.435,433,159,425.6349,315,394.885,383,844,030.75

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

14. Construction in progress (continued)

(2) Movements of significant construction in progress in 2019

ProjectBudget (RMB0,000)Beginning balanceAdditionTransfer to fixed assetsThe project investments’ proportion of budgetProgress of constructionSource of fundsEnding balance
Mini-bus production equipment539,977.00815,889,070.57669,970,155.041,426,748,962.4577%77%Self-raised59,110,263.16
Yuzui motor city project564,027.0051,962,876.25127,147,462.86139,562,709.9280%80%Self-raised39,547,629.19
Car production equipment735,202.00181,137,313.03280,561,074.87357,627,986.0431%31%Self-raised104,070,401.86
Engine plant942,516.001,458,726,257.581,375,360,914.301,953,958,401.2495%95%Self-raised880,128,770.64
Vehicle research institution251,830.00854,570,879.08315,087,543.901,129,571,303.5390%90%Self-raised40,087,119.45
Vehicle moulds242,050.00420,284,566.37165,308,918.23301,019,769.7293%93%Self-raised284,573,714.88
Light vehicle technical transformation project of Baoding Changan Bus143,776.0083,207,252.58109,955,391.66127,768,361.6546%46%Self-raised65,394,282.59
Beijing vehicle construction project513,262.5398,585,664.5954,616,917.3592,895,275.8573%73%Self-raised60,307,306.09
Car production project of Hefei Changan389,601.00872,832,482.14996,304,527.391,862,645,305.5676%76%Self-raised6,491,703.97
Others546,647,668.56209,383,387.08565,939,219.04Self-raised190,091,836.60
Total5,383,844,030.754,303,696,292.687,957,737,295.00Self-raised1,729,803,028.43

14. Construction in progress (continued)

(2) Movements of significant construction in progress in 2018:

ProjectBudget (RMB0,000)Beginning balanceAdditionTransfer to fixed assetsThe project investments’ proportion of budgetProgress of constructionSource of fundsEnding balance
Mini-bus production equipment523,977.00997,340,616.73822,003,529.661,003,455,075.8267%67%Raised815,889,070.57
Yuzui motor city project564,027.00247,220,662.88284,256,842.83479,514,629.4678%78%Raised51,962,876.25
Car production equipment735,202.00165,767,240.81525,824,999.59510,454,927.3728%28%Raised181,137,313.03
Engine plant827,789.00341,191,269.611,350,482,008.58232,947,020.6192%92%Raised1,458,726,257.58
Vehicle research institution226,830.00401,869,572.35637,783,509.21185,082,202.4886%86%Raised854,570,879.08
Vehicle moulds225,550.00365,419,879.40365,375,476.56310,510,789.5992%92%Raised420,284,566.37
Light vehicle technical transformation project of Baoding Changan Bus92,867.0028,393,497.7499,638,888.1844,825,133.3457%57%Raised83,207,252.58
Beijing vehicle construction project513,262.53163,600,842.58177,445,536.24242,460,714.2372%72%Raised98,585,664.59
Car production project of Hefei Changan412,108.00156,409,567.96920,575,058.27204,152,144.0948%48%Raised872,832,482.14
Others366,960,005.46828,626,292.45659,967,092.92--Raised495,484,251.65
Total3,234,173,155.526,045,174,895.793,895,504,020.565,383,844,030.75

15. Intangible assets

2019

ItemLand use rightsSoftware use rightsTrademark use rightsNon-patent technologyTotal
Original cost
Beginning2,753,082,390.28632,418,610.26211,784,400.005,628,937,137.879,226,222,538.41
Purchase-72,741,193.22--72,741,193.22
Internal research and development---1,191,538,130.671,191,538,130.67
Other additions---110,678.40110,678.40
Ending2,753,082,390.28705,159,803.48211,784,400.006,820,364,590.1410,490,391,183.90
Accumulated amortization
Beginning403,454,284.03510,503,061.87170,953,466.622,893,723,166.603,978,633,979.12
Accrual58,527,222.3054,162,005.4817,500,000.00894,872,734.701,025,061,962.48
Other additions---9,007.939,007.93
Ending461,981,506.33564,665,067.35188,453,466.623,788,586,893.375,003,686,933.67
Impairment provision
Beginning-23,617,923.17-205,727,083.32229,345,006.49
Accrual---47,739,930.2547,739,930.25
Other additions-----
Ending-23,617,923.17-253,467,013.57277,084,936.74
Carrying amount
Ending2,291,100,883.95116,876,812.9623,330,933.382,778,310,683.205,209,619,313.49
Beginning2,349,628,106.2598,297,625.2240,830,933.382,529,486,887.955,018,243,552.80
ItemLand use rightsSoftware use rightsTrademark use rightsNon-patent technologyTotal
Original cost
Beginning2,384,260,724.00440,803,454.31211,784,400.004,120,145,819.007,156,994,397.31
Purchase-123,109,392.52--123,109,392.52
Internal research and development---1,297,212,770.581,297,212,770.58
Other additions368,821,666.2868,505,763.43-211,578,548.29648,905,978.00
Ending2,753,082,390.28632,418,610.26211,784,400.005,628,937,137.879,226,222,538.41
Accumulated amortization
Beginning280,991,802.54396,959,100.18153,453,466.622,054,012,177.292,885,416,546.63
Accrual49,968,327.2956,772,368.1417,500,000.00641,523,542.56765,764,237.99
Other additions72,494,154.2056,771,593.55-198,187,446.75327,453,194.50
Ending403,454,284.03510,503,061.87170,953,466.622,893,723,166.603,978,633,979.12
Impairment provision
Beginning-21,319,804.81-202,312,916.20223,632,721.01
Accrual---3,414,167.123,414,167.12
Other additions-2,298,118.36--2,298,118.36
Ending-23,617,923.17-205,727,083.32229,345,006.49
Carrying amount
Ending2,349,628,106.2598,297,625.2240,830,933.382,529,486,887.955,018,243,552.80
Beginning2,103,268,921.4622,524,549.3258,330,933.381,863,820,725.514,047,945,129.67
ItemBeginning balanceAdditionDeductionEnding balance
Internal research and developmentRecognized as intangible assetsCharged to income Statement of the current year
Automobile Development789,597,615.601,309,371,552.151,191,538,130.6792,685,572.88814,745,464.20
ItemBeginning balanceAdditionDeductionEnding balance
Internal research and developmentRecognized as intangible assetsCharged to income Statement of the current year
Automobile Development836,638,328.101,279,944,707.421,297,212,770.5829,772,649.34789,597,615.60
InvesteeBeginning balanceAdditionDeductionEnding balance
Business combination under common controlDisposal
Hebei Changan Automobile Co., Ltd.9,804,394.00--9,804,394.00

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

Nanjing Changan Automobile Co., Ltd.----
Total9,804,394.00--9,804,394.00
InvesteeBeginning balanceAdditionDeductionEnding balance
AccrualDisposal
Nanjing Changan Automobile Co., Ltd.73,465,335.00--73,465,335.00
ItemBeginning balanceAdditionAmortizationEnding balance
201917,104,601.673,991,609.296,768,571.0614,327,639.90
201813,545,589.397,475,597.773,916,585.4917,104,601.67
Item20192018
Deferred tax assets:Deductible temporary differencesDeferred tax assetsDeductible temporary differencesDeferred tax assets
Assets provision1,096,277,037.39164,441,555.611,192,875,928.31178,931,389.28
Accrued expenses and contingent liabilities5,787,629,284.18868,144,392.635,755,288,762.17863,293,314.33
Unpaid tech development expense and advertisement expense356,768,621.3753,515,293.21477,578,425.8671,636,763.88
Deferred income2,737,366,931.07410,605,039.663,116,680,509.64467,502,076.45
Unpaid salary and bonus and others305,961,692.4445,894,253.82494,605,966.6974,190,894.95
Total10,284,003,566.451,542,600,534.9311,037,029,592.671,655,554,438.89

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

19. Deferred tax assets and liabilities (continued)

Item20192018
Deferred tax liabilities:Taxable temporary differencesDeferred tax liabilitiesTaxable temporary differencesDeferred tax liabilities
Available-for-sale financial assets on the changes in fair value recorded in capital reserve1,626,528,679.00243,979,301.85507,440,490.3176,116,073.54
Fair value adjustment of business combination not under common control274,831,525.8741,224,728.88394,100,647.0359,115,097.05
Other76,925,730.4011,538,859.56--
Total1,978,285,935.27296,742,890.29901,541,137.34135,231,170.59
Item20192018
The deductible temporary difference2,819,674,898.012,438,545,953.61
The deductible tax loss8,045,254,649.134,871,204,656.42
Total10,864,929,547.147,309,750,610.03
Year20192018
2019-659,281,850.63
2020114,124,498.57348,563,349.93
202135,368,427.70103,219,695.88
2022200,696,545.78898,588,459.22
2023962,591,126.512,861,551,300.76
2024 and onwards6,732,474,050.57-
Total8,045,254,649.134,871,204,656.42

20. Provision for the impairment of assets

2019

ItemBeginningDeductionEnding
ReversalWrite-off
I. Bad debt provision98,462,483.48132,567,328.766,909,596.7414,373,657.38209,746,558.12
II. Provision for inventory293,890,537.33224,720,607.1710,322.1755,794,233.72462,806,588.61
III. Provision for fixed assets1,160,594,646.38122,973,101.85-423,172,405.88860,395,342.35
IV. Provision for construction in progress49,315,394.8883,333.12--49,398,728.00
V. Provision for intangible assets229,345,006.4947,739,930.25--277,084,936.74
Ⅵ. Provision for goodwill73,465,335.00---73,465,335.00
Total1,905,073,403.56528,084,301.156,919,918.91493,340,296.981,932,897,488.82
ItemBeginningAdditionDeductionEnding
provisionOther additionReversalWrite-off
I. Bad debt provision40,187,117.9914,066,610.1746,356,721.002,008,705.39139,260.2998,462,483.48
II. Provision for inventory169,944,706.66237,613,222.28181,034,335.53156,142,459.77138,559,267.37293,890,537.33
III. Provision for fixed assets880,779,908.98141,611,730.28156,839,093.76-18,636,086.641,160,594,646.38
IV. Provision for construction in progress--49,315,394.88--49,315,394.88
V. Provision for intangible assets223,632,721.013,414,167.122,298,118.36--229,345,006.49
Ⅵ. Provision for goodwill73,465,335.00----73,465,335.00
Ⅶ. Provision for available-for-sale financial assets28,929,274.00----28,929,274.00
Total1,416,939,063.64396,705,729.85435,843,663.53158,151,165.16157,334,614.301,934,002,677.56

21. Short-term loans

Classification of short-term loans:

Item20192018
Mortgage loans50,000,000.0040,000,000.00
guaranteed loan179,580,000.00150,000,000.00
Total229,580,000.00190,000,000.00
Item20192018
Commercial acceptance bill2,551,863,471.512,946,482,019.96
Bank acceptance bill10,878,679,822.7211,861,380,242.43
Total13,430,543,294.2314,807,862,262.39
2019年2018年
accounts payable18,905,725,271.5013,916,201,276.95

24. Advances from customers

Item20192018
Advances from customers2,315,641,685.781,556,482,278.92
ItemBeginningAdditionDeductionEnding
Short term salary benefits1,271,461,842.354,902,928,307.235,201,783,794.98972,606,354.60
Defined contribution plans84,410,435.21493,073,936.79508,999,944.6968,484,427.31
Early retirement benefits7,123,000.008,925,762.8310,803,762.835,245,000.00
Total1,362,995,277.565,404,928,006.855,721,587,502.501,046,335,781.91
ItemBeginningAdditionDeductionEnding
Short term salary benefits1,567,656,287.035,281,251,280.325,577,445,725.001,271,461,842.35
Defined contribution plans68,156,035.30566,571,969.66550,317,569.7584,410,435.21
Early retirement benefits5,073,000.0010,387,769.638,337,769.637,123,000.00
Total1,640,885,322.335,858,211,019.616,136,101,064.381,362,995,277.56

25. Payroll payable (continued)

Short term salary benefits:

2019

ItemBeginningAdditionDeductionEnding
Salary, bonus, allowance and subsidy1,077,447,577.693,939,344,440.244,238,980,908.85777,811,109.08
Employee benefit45,611,590.61230,351,764.50264,306,315.5711,657,039.54
Social insurance3,379,369.66325,520,272.55317,519,224.7811,380,417.43
Medical insurance532,854.88284,975,364.87283,988,065.451,520,154.30
Industrial injury insurance1,437,746.0536,669,991.3729,487,616.288,620,121.14
Maternity insurance1,408,768.733,874,916.314,043,543.051,240,141.99
Housing accumulation fund9,422,677.58290,581,751.15297,207,126.282,797,302.45
Labor fund and employee education fund135,600,626.81117,130,078.7983,770,219.50168,960,486.10
Total1,271,461,842.354,902,928,307.235,201,783,794.98972,606,354.60
ItemBeginningAdditionDeductionEnding
Salary, bonus, allowance and subsidy1,207,501,206.864,488,234,330.214,618,287,959.381,077,447,577.69
Employee benefit207,402,348.9588,951,550.95250,742,309.2945,611,590.61
Social insurance(174,158.92)307,202,837.90303,649,309.323,379,369.66
Medical insurance559,230.30272,234,008.27272,260,383.69532,854.88
Industrial injury insurance(3,096,589.29)32,563,345.5428,029,010.201,437,746.05
Maternity insurance2,363,200.072,405,484.093,359,915.431,408,768.73
Housing accumulation fund59,222,161.27258,334,142.47308,133,626.169,422,677.58
Labor fund and employee education fund93,704,728.87138,528,418.7996,632,520.85135,600,626.81
Total1,567,656,287.035,281,251,280.325,577,445,725.001,271,461,842.35

25. Payroll payable (continued)

Defined contribution plans:

2019

ItemBeginningAdditionDeductionEnding
Basic retirement security76,517,169.90477,667,218.04493,147,391.0661,036,996.88
Unemployment insurance7,893,265.3115,406,718.7515,852,553.637,447,430.43
Total84,410,435.21493,073,936.79508,999,944.6968,484,427.31
ItemBeginningAdditionDeductionEnding
Basic retirement security60,088,662.53551,646,640.84535,218,133.4776,517,169.90
Unemployment insurance8,067,372.7714,925,328.8215,099,436.287,893,265.31
Total68,156,035.30566,571,969.66550,317,569.7584,410,435.21
Item20192018
Value-added tax84,852,296.039,641,450.47
Consumption tax629,406,972.37658,869,177.63
Corporate income tax120,351,092.86(19,968,952.37)
City maintenance and construction tax and education surcharge34,455,756.669,333,772.54
Others20,026,324.8811,441,038.98
Total889,092,442.80669,316,487.25

27. Other payables

20192018
Dividend payable-79,742.80
Other payables4,809,918,141.453,079,669,273.01
Total4,809,918,141.453,079,749,015.81
Item20192018
Project funds2,091,437,803.041,271,262,272.32
Deposits of dealer and supplier284,705,119.28133,434,563.54
Maintenance fees158,503,895.70205,714,188.51
Advertisement fees405,752,873.43750,771,372.18
Warehousing and transport fees247,969,064.86123,222,758.15
Advances of equity transfer831,300,000.00-
Others790,249,385.14595,264,118.31
Total4,809,918,141.453,079,669,273.01
ItemBeginningAdditionDeductionEnding
Warranty2,610,780,818.12781,546,593.88629,561,064.502,762,766,347.50
Supplier compensation634,541,926.00-44,727,434.22589,814,491.78
Total3,245,322,744.12781,546,593.88674,288,498.723,352,580,839.28
ItemBeginningAdditionDeductionEnding
Warranty2,423,958,274.70712,598,648.92525,776,105.502,610,780,818.12
Supplier compensation-634,541,926.00-634,541,926.00
Total2,423,958,274.701,347,140,574.92525,776,105.503,245,322,744.12

29. Other current liabilities

Item20192018
Accrued commercial discount payable3,028,296,317.932,883,344,577.38
Accrued transportation fee501,351,278.96537,462,389.91
Accrued market development expense355,903,653.68443,397,362.38
Accrued utilities25,777,106.1136,910,207.22
Accrued labor service fee39,493,497.4837,723,105.48
Accrued technology royalty101,005,700.82128,055,835.93
Accrued lease fee83,111,810.6698,306,892.29
Others119,003,396.13160,240,782.02
Total4,253,942,761.774,325,441,152.61
Item20192018
Long-term loan within 1 year-6,594,120.00
Item20192018
Credit loan55,300,000.006,594,120.00
Deduction: Loan within 1 year-(6,594,120.00)
Total55,300,000.00-

32. Long-term payables

20192018
Special payables857,356,423.71303,590,824.69
ItemBeginningAdditionDeductionEnding
New vehicle product20,684,920.293,026,900.0010,314,074.8113,397,745.48
Changan automobile E class Gasoline engine cylinder block, cylinder head production line project22,984,695.64-22,984,695.64-
Land relocation compensation55,350,709.40500,000,000.00-555,350,709.40
Development and industrialization of C206 pure electric cars3,446,280.58-3,415,113.0331,167.55
Intelligent manufacturing project104,783,625.9867,802,899.554,828,994.45167,757,531.08
Lightweight design of automobile structure52,890,838.7121,360,000.0025,290,720.7148,960,118.00
Others43,449,754.0974,955,560.3246,546,162.2171,859,152.20
Total303,590,824.69667,145,359.87113,379,760.85857,356,423.71
ItemBeginningAdditionDeductionEnding
New vehicle product7,808,326.5822,360,900.009,484,306.2920,684,920.29
Changan automobile E class Gasoline engine cylinder block, cylinder head production line project67,480,246.95-44,495,551.3122,984,695.64
Land relocation compensation55,350,709.40--55,350,709.40
Development and industrialization of C206 pure electric cars14,582,280.58-11,136,000.003,446,280.58
Intelligent manufacturing project45,455,157.4079,908,937.7420,580,469.16104,783,625.98
Lightweight design of automobile structure63,564,705.201,300,829.0011,974,695.4952,890,838.71
Others36,365,724.9128,760,473.8421,676,444.6643,449,754.09
Total290,607,151.02132,331,140.58119,347,466.91303,590,824.69

33. Long-term payroll payable

Item20192018
Net obligation of defined benefit plan31,965,000.0033,534,000.00
Early retirement13,967,000.0020,303,000.00
Total45,932,000.0053,837,000.00
20192018
Discount rate
Retired employees3.25%3.25%
Early retired employees2.75%3.00%
Retirement age
Male6060
Female50 /5550/55
Increase rate of key benefits
Retired employees0.0%-4.0%0.0%-6.0%
Early retired employees0.0%-4.0%0.0%-4.0%
Increase %Increase/(Decrease) in the obligation of defined benefits planDecrease %Increase/(Decrease) in the obligation of defined benefits plan
Discount rate0.5%(1,670,000.00)0.5%1,805,000.00
Increase rate of key benefits0.5%1,806,000.000.5%(1,682,000.00)
Mortality rate5%(465,000.00)5%489,000.00

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

2018

Increase %Increase/(Decrease) in the obligation of defined benefits planDecrease %Increase/(Decrease) in the obligation of defined benefits plan
Discount rate0.5%(1,907,000.00)0.5%2,061,000.00
Increase rate of key benefits0.5%2,101,000.000.5%(1,922,000.00)
Mortality rate5%(476,000.00)5%501,000.00
20192018
Service costs- current period43,000.00(79,656,000.00)
Net interest1,050,000.004,110,000.00
Post employment benefits, net1,093,000.00(75,546,000.00)
Recorded in general administrative expenses1,093,000.00(75,546,000.00)
Defined Benefit Plan Obligation
20192018
Beginning balance33,534,000.00100,782,000.00
Charged to income Statement of the current period
Service costs- current period43,000.00(79,656,000.00)
Interest expense, net1,050,000.004,110,000.00
Actuarial losses charged to other comprehensive income(254,000.00)13,214,000.00
Benefits Payment(2,408,000.00)(4,916,000.00)
Ending balance31,965,000.0033,534,000.00

34. Deferred income

2019

ItemBeginningAdditionDeductionEnding
Government grants related to assets2,871,932,225.37224,667,080.00237,726,222.292,858,873,083.08
Government grants related to gains673,754,999.84703,273,000.001,167,197,918.74209,830,081.10
Others137,621,309.5225,771,589.4237,804,983.91125,587,915.03
Total3,683,308,534.73953,711,669.421,442,729,124.943,194,291,079.21
ItemBeginningAdditionDeductionEnding
Government grants related to assets2,825,085,486.08258,126,338.83211,279,599.542,871,932,225.37
Government grants related to gains754,048,245.36302,298,761.19382,592,006.71673,754,999.84
Others48,683,687.61142,238,902.0053,301,280.09137,621,309.52
Total3,627,817,419.05702,664,002.02647,172,886.343,683,308,534.73

34. Deferred income(continued)

As at 31 December 2019, details of liabilities related to government grants are as follows:

ItemBeginningAdditionRecorded to non-operating incomeDeductionEndingRelates to asset/gain
Funds for Beijing Changan project1,166,388,574.21-36,308,168.78-1,130,080,405.43Related to assets
Subsidies for the automobile comprehensive testing ground project459,704,416.60-28,199,166.67-431,505,249.93Related to assets
Subsidies for the construction of Hefei new plants326,888,250.56120,682,000.0055,643,599.74-391,926,650.82Related to assets
Funds for Yuzui motor city project233,030,612.08-5,683,673.47-227,346,938.61Related to assets
New energy subsidy132,908,316.5370,375,080.0058,144,047.49-145,139,349.04Related to assets
Light vehicle technical transformation project of Baoding Changan Bus128,340,591.54-6,820,018.44-121,520,573.10Related to assets
Engine production restructure program90,977,443.51-9,022,556.39-81,954,887.12Related to assets
Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line76,688,194.59-15,965,833.33-60,722,361.26Related to assets
Changan automobile E class Gasoline engine cylinder block, cylinder head production line project45,344,600.00---45,344,600.00Related to assets
Expansion of production capacity project37,446,511.51-4,686,606.83-32,759,904.68Related to assets
Funds for H series engine32,000,000.08-5,333,333.33-26,666,666.75Related to assets
Others142,214,714.1633,610,000.0011,919,217.82-163,905,496.34Related to assets
Subtotal2,871,932,225.37224,667,080.00237,726,222.29-2,858,873,083.08
Subsidy of Nanjing new energy research and development600,000,000.00100,000,000.00-700,000,000.00-Related to income
Research and development fund subsidy of Hefei Changan71,456,238.65600,000,000.00466,896,031.92-204,560,206.73Related to income
New energy power system research and development subsidy2,298,761.19-37,876.11-2,260,885.08Related to income
Other-3,273,000.00264,010.71-3,008,989.29Related to income
Subtotal673,754,999.84703,273,000.00467,197,918.74700,000,000.00209,830,081.10
Total3,545,687,225.21927,940,080.00704,924,141.03700,000,000.003,068,703,164.18

34. Deferred income (continued)

As at 31 December 2018, details of liability related to government grants are as follows:

ItemBeginningAdditionRecorded to non-operating incomeEndingRelates to asset/gain
Funds for Beijing Changan project1,202,042,715.17-35,654,140.961,166,388,574.21Relates to asset
Subsidies for the automobile comprehensive testing ground project487,903,583.27-28,199,166.67459,704,416.60Relates to asset
Subsidies for the construction of Hefei new plants328,769,680.0644,876,000.0046,757,429.50326,888,250.56Relates to asset
Funds for Yuzui motor city project238,714,285.60-5,683,673.52233,030,612.08Relates to asset
New energy subsidy27,738,250.00134,157,000.0028,986,933.47132,908,316.53Relates to asset
Light vehicle technical transformation project of Baoding Changan Bus135,160,610.02-6,820,018.48128,340,591.54Relates to asset
Engine production restructure program100,000,000.00-9,022,556.4990,977,443.51Relates to asset
Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line92,654,027.88-15,965,833.2976,688,194.59Relates to asset
Changan automobile E class Gasoline engine cylinder block, cylinder head production line project-45,344,600.00-45,344,600.00Relates to asset
Expansion of production capacity project42,133,118.34-4,686,606.8337,446,511.51Relates to asset
Funds for H series engine37,333,333.40-5,333,333.3232,000,000.08Relates to asset
Others132,635,882.3433,748,738.8324,169,907.01142,214,714.16Relates to asset
Subtotal2,825,085,486.08258,126,338.83211,279,599.542,871,932,225.37
Subsidy of Nanjing new energy research and development600,000,000.00--600,000,000.00Relates to income
Research and development fund subsidy of Hefei Changan154,048,245.36300,000,000.00382,592,006.7171,456,238.65Relates to income
New energy power system research and development subsidy-2,298,761.19-2,298,761.19Relates to income
Subtotal754,048,245.36302,298,761.19382,592,006.71673,754,999.84
Total3,579,133,731.44560,425,100.02593,871,606.253,545,687,225.21

35. Share capital

2019

movement
31 December 2018Issuance of sharesStock dividendTransfer of reserve to common sharesOthersSub-total31 December 2019
I.Restricted shares
1Shares held by state-owned legal persons139,762,403---(139,762,403)(139,762,403)-
2Shares held by domestic natural person18,900-----18,900
Total of restricted shares139,781,303----18,900
II.Unrestricted shares
1RMB ordinary shares3,760,881,066---139,762,403139,762,4033,900,643,469
2Foreign-funded shares listed domestically901,986,142-----901,986,142
Total of unrestricted shares4,662,867,208----4,802,629,611
III.Total shares4,802,648,511-----4,802,648,511

35. Share capital (continued)

2018

movement
31 December 2017Issuance of sharesStock dividendTransfer of reserve to common sharesOthersSub-total31 December 2018
I.Restricted shares
1Shares held by state-owned legal persons139,762,403-----139,762,403
2Shares held by domestic natural person18,900-----18,900
Total of restricted shares139,781,303-----139,781,303
II.Unrestricted shares
1RMB ordinary shares3,760,881,066-----3,760,881,066
2Foreign-funded shares listed domestically901,986,142-----901,986,142
Total of unrestricted shares4,662,867,208-----4,662,867,208
III.Total shares4,802,648,511-----4,802,648,511

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

36. Capital reserves

2019

ItemBeginningAdditionDeductionEnding
Share premium4,938,329,830.94--4,938,329,830.94
Share-based payment23,961,900.00-23,961,900.00-
Capital reserve transferred arising from the old standards44,496,899.00--44,496,899.00
Restricted capital reserve of equity investments17,015,985.20--17,015,985.20
Others (Note 1)33,437,825.03332,817,054.49-366,254,879.52
Total5,057,242,440.17332,817,054.4923,961,900.005,366,097,594.66
ItemBeginningAdditionDeductionEnding
Share premium4,969,218,884.37-30,889,053.434,938,329,830.94
Share-based payment32,697,000.0011,014,600.0019,749,700.0023,961,900.00
Capital reserve transferred arising from the old standards44,496,899.00--44,496,899.00
Restricted capital reserve of equity investments17,015,985.20--17,015,985.20
Others35,977,188.37-2,539,363.3433,437,825.03
Total5,099,405,956.9411,014,600.0053,178,116.775,057,242,440.17

37. Other comprehensive income

Accumulated other comprehensive income in balance sheet attributable to parent company is as follows:

31 December2018Movement1 January 2019Movement31 December 2019
Change in net liability or assets from defined benefit plan1,175,000.00-1,175,000.00254,000.001,429,000.00
Comprehensive income which cannot be reclassified into profit and loss under equity method(2,088,068.00)-(2,088,068.00)-(2,088,068.00)
Fair value change generated from available for sale financial assets297,351,209.45(165,492,749.45)131,858,460.0063,584,845.00195,443,305.00
Foreign currency translation difference(60,928,211.01)-(60,928,211.01)6,138,554.20(54,789,656.81)
Total235,509,930.44(165,492,749.45)70,017,180.9969,977,399.20139,994,580.19
1 January 2018Movement31 December 2018
Change in net liability or assets from defined benefit plan14,389,000.00(13,214,000.00)1,175,000.00
Comprehensive income which cannot be reclassified into profit and loss under equity method(1,381,839.12)(706,228.88)(2,088,068.00)
Fair value change generated from available for sale financial assets120,262,249.99177,088,959.46297,351,209.45
Foreign currency translation difference(50,309,987.03)(10,618,223.98)(60,928,211.01)
Total82,959,423.84152,550,506.60235,509,930.44
Amount before taxDeduct: amounts transferred to income statement which were recognized in other comprehensive income in prior periodDeduct: Income taxAmount attributable to ownersAmount attributable to minority interests
Other comprehensive income not to be reclassified to profit or loss in subsequent period
Change in net liability or assets from defined benefit plan254,000.00--254,000.00-
Fair value change of Investment in other equity instruments74,805,700.00-11,220,855.0063,584,845.00-
Subtotal75,059,700.00-11,220,855.0063,838,845.00-
Other comprehensive income will be reclassified to profit or loss in subsequent period
Foreign currency translation difference6,138,554.20--6,138,554.20-
Subtotal6,138,554.20--6,138,554.20-
Total81,198,254.20-11,220,855.0069,977,399.20

37. Other comprehensive income (continued)

2018

Amount before taxDeduct: amounts transferred to income statement which were recognized in other comprehensive income in prior periodDeduct: Income taxAmount attributable to ownersAmount attributable to minority interests
Other comprehensive income not to be reclassified to profit or loss in subsequent period
Change in net liability or assets from defined benefit plan(13,214,000.00)--(13,214,000.00)-
Comprehensive income which can not be reclassified into profit and loss under equity method(706,228.88)--(706,228.88)-
Subtotal(13,920,228.88)--(13,920,228.88)-
Other comprehensive income will be reclassified to profit or loss in subsequent period
Fair value change of available for sale financial assets208,339,952.31-31,250,992.85177,088,959.46-
Foreign currency translation difference(10,618,223.98)--(10,618,223.98)-
Subtotal197,721,728.33-31,250,992.85166,470,735.48-
Total183,801,499.45-31,250,992.85152,550,506.60-
ItemBeginningAdditionDeductionEnding
Safety fund41,222,369.1079,135,417.5473,281,543.9347,076,242.71
ItemBeginningAdditionDeductionEnding
Safety fund28,279,733.0683,826,318.5870,883,682.5441,222,369.10

39. Surplus reserves

2019 and 2018

ItemBeginningAdditionDeductionEnding
Statutory surplus2,401,324,255.50--2,401,324,255.50
Item20192018
Retained earnings at beginning of the year33,707,011,170.3135,184,073,061.94
Adjustment297,351,209.45-
Retained earnings after adjustment34,004,362,379.7635,184,073,061.94
Add: Profits attributable to parent company for the current year(2,646,719,356.53)680,728,392.03
Less: Appropriation to statutory surplus reserves--
Less: Ordinary share dividend of cash86,471,463.632,157,790,283.66
Retained earnings at the end of year31,271,171,559.6033,707,011,170.31
Item20192018
RevenueCostRevenueCost
Main business69,315,716,509.2959,445,831,613.0164,490,487,252.7155,116,734,739.05
Other business1,279,528,623.99786,753,815.071,807,783,137.061,466,733,630.09
Total70,595,245,133.2860,232,585,428.0866,298,270,389.7756,583,468,369.14
Item20192018
Sale of goods70,528,420,564.0766,276,054,153.09
Provide labor and other services66,824,569.2122,216,236.68
Total70,595,245,133.2866,298,270,389.77

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

42. Tax and surcharges

Item20192018
Consumption tax1,998,619,440.931,887,596,418.76
City maintenance and construction tax160,739,584.91121,084,067.02
Educational surcharge118,587,412.13107,471,391.03
Others210,110,629.86189,766,107.53
Total2,488,057,067.832,305,917,984.34
Item20192018
Payroll and welfare420,884,406.19326,700,194.59
Promotion, advertising fee and Sales service fee2,224,959,385.192,981,253,072.70
Transportation expenses1,796,397,367.831,728,743,073.33
Travelling expenses89,905,543.7082,924,351.46
Package expenses8,979,853.4618,172,933.96
Consulting fee9,278,821.9120,414,125.10
Training fee28,185,324.6458,950,405.11
Others12,580,183.0266,097,190.23
Total4,591,170,885.945,283,255,346.48
Item20192018
Payroll and welfare1,360,795,649.371,230,385,974.33
Administrative expenses314,648,478.13378,467,226.08
Depreciation and amortization276,550,788.64244,302,232.68
Miscellaneous service charges60,861,235.5953,961,042.11
Traffic expenses39,399,677.2365,664,475.92
Travelling expenses24,604,006.4354,238,378.61
Others188,371,683.26114,212,659.18
Total2,265,231,518.652,141,231,988.91
Item20192018
Payroll and welfare1,079,128,106.161,432,753,634.55
Material fee223,007,996.05241,258,297.80
Subcontract fee321,189,407.67201,398,428.01
Survey and traffic expenses81,309,580.38128,375,837.23
Test fee187,139,269.95146,093,293.23
Depreciation and amortization1,129,018,488.23820,906,255.98
Others148,270,912.69214,003,174.88
Total3,169,063,761.133,184,788,921.68
Item20192018
Interest income245,520,358.56476,922,766.94
Less: Foreign exchange gain or loss(8,130,682.63)14,802,579.62
Interest expense40,109,729.9311,700,010.25
Others22,691,799.5323,358,142.01
Total190,849,511.73427,062,035.06
Item20192018Amount recognized in 2019 as non-recurring profit and loss
Other income1,537,625,620.932,873,192,102.561,537,625,620.93
Item20192018Relates to asset/gain
New energy subsidy58,144,047.4928,986,933.47Assets
Subsidies for the construction of Hefei new plants55,643,599.7446,757,429.50Assets
Funds for Beijing Changan project36,308,168.7835,654,140.96Assets
Comprehensive testing field program28,199,166.6728,199,166.67Assets
Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line15,965,833.3315,965,833.29Assets
Engine capacity structure adjustment project9,022,556.399,022,556.49Assets
Light vehicle technical transformation project of Baoding Changan Bus6,820,018.446,820,018.48Assets
Funds for Yuzui motor city project5,683,673.475,683,673.52Assets
Funds for H series engine5,333,333.335,333,333.32Assets
Expansion of production capacity project4,686,606.834,686,606.83Assets
Other11,919,217.8224,169,907.01Assets
Subtotal237,726,222.29211,279,599.54
Hefei Changan R & D funding subsidies466,896,031.92382,592,006.71Income
Enterprise development fund397,250,000.001,426,333,900.00Income
Post stability subsidy257,216,017.31-Income
Nanjing Changan R & D funding subsidies61,370,000.00151,000,000.00Income
Government grants for development expenses39,306,000.00478,596,700.00Income
Others77,861,349.41223,389,896.31Income
Subtotal1,299,899,398.642,661,912,503.02
Total1,537,625,620.932,873,192,102.56
Item20192018
Long-term equity investment income under equity method(2,158,815,891.20)(331,883,560.67)
Gains generated by business combinations not under common control(note)-209,443,337.73
The investment income of financial asset held for trading during its holding period4,332,388.16-
Dividend income from remaining investments in other equity instruments38,343,163.30-
Investment income during holding period from available-for-sale financial assets-51,133,446.15
Entrusted loan interest income6,771,226.43-
Total(2,109,369,113.31)(71,306,776.79)
20192018
Financial assets held for trading889,154,888.69-
2019
Bad debt for account receivable6,912,617.00
Bad debt for other receivables118,745,115.02
合计125,657,732.02
Item20192018
I. Bad debt loss-12,057,904.78
II. Impairment of inventory224,710,285.0081,470,762.51

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

III. Impairment of fixed assets122,973,101.85141,611,730.28
IV. Impairment of intangible assets47,739,930.253,414,167.12
V.Impairment of available-for-sale financial assets83,333.12-
Total395,506,650.22238,554,564.69
Item20192018Amount recognized in 2018 as non-recurring profit and loss
Gain on disposal of fixed-assets56,658,864.178,561,074.7356,658,864.17
Item20192018Amount recognized in 2019 as non-recurring profit and loss
Gains generated by business combinations not under common control-811,377,936.28-
Fines, penalties and others49,703,849.18104,841,288.4049,703,849.18
Total49,703,849.18916,219,224.6849,703,849.18
Item20192018Amount recognized in 2019 as non-recurring profit and loss
Donation30,198,295.9227,582,524.1230,198,295.92
Vehicle premium6,029,776.005,098,810.006,029,776.00
Fines and penalties81,475,589.373,860,473.3281,475,589.37
Others67,258,954.0320,013,743.5067,258,954.03
Total184,962,615.3256,555,550.94184,962,615.32
Item20192018
Current income tax expense166,789,357.7059,356,673.11
Deferred income tax expense239,975,628.66(124,490,731.15)
Total406,764,986.36(65,134,058.04)
Item20192018
Profit/(loss) before tax(2,242,366,904.52)658,225,323.83
Tax at the applicable tax rate(336,355,035.69)98,733,798.57
Impact of different tax rates of subsidiaries(46,985,923.84)(21,467,247.81)
Adjustments to current income tax of previous period14,818,867.16(4,629,283.01)
Profit or loss attributable to joint ventures and associates343,313,319.8066,960,893.21
Non-taxable income(6,645,717.84)(163,680,879.95)
Non-deductible tax expense9,061,952.293,836,286.40
Usage previous deductible losses(66,761,248.99)(19,645,340.05)
Unrecognized deductible temporary differences and deductible losses722,485,517.59317,046,456.24
Additional deduction arising from research and development expense(226,166,744.12)(342,288,741.64)
Tax expense under actual tax rate of the Group406,764,986.36(65,134,058.04)

56. Earnings per share (“EPS”)

The basic EPS is calculated by dividing the net profit of the current period attributable to the ordinaryshareholders of the Company by the weighted average number of outstanding ordinary shares.

The Company has no dilutive potential ordinary shares.

20192018
Earnings
Net profit attributable to ordinary shareholders(2,646,719,356.53)680,728,392.03
Shares
Weighted average ordinary shares4,802,648,511.004,802,648,511.00
Item20192018
Interest income245,520,358.56476,922,766.94
Government grants related to operating activities2,427,786,919.772,972,076,736.91
Others1,345,854,279.361,319,095,385.38
Total4,019,161,557.694,768,094,889.23
Item20192018
Selling expense4,243,108,756.854,309,012,845.31
Administrative expense701,218,540.63666,543,781.90
Research and development expenses737,909,170.70689,870,733.35
Refund of government subsidies700,000,000.00-
Others644,165,606.151,104,054,021.14
Total7,026,402,074.336,769,481,381.70

57. Notes to cash flow statement (continued)

(3) Items of cash received relating to other investing activities are as follows:

Item20192018
Net cash received from business combinations-1,036,263,749.91
20192018
Entrusted loan300,000,000.00-
Item20192018
Withdraw for deposit of bill32,839,805.56855,280,377.20
Item20192018
Payment for deposit of bill395,159,204.54-
Acquisition of minority shareholders' equity-30,344,195.00
Total395,159,204.5430,344,195.00

58. Supplementary information of cash flow statement

(1) Supplementary information of cash flow statement

Supplementary information20192018
1.Cash flows from operating activities calculated by adjusting the net profit
Net profit(2,649,131,890.88)723,359,381.87
Add: impairment provision for assets521,164,382.24238,554,564.69
Depreciation of fixed assets3,015,917,705.202,334,281,299.36
Depreciation and amortization of investment property226,711.56226,711.56
Amortization of intangible assets1,025,061,962.48765,764,237.99
Amortization of long-term deferred expense6,768,571.063,916,585.49
Increase in deferred income(489,017,455.52)52,824,676.85
Disposal loss on fixed assets, intangible assets and others long-term assets(56,658,864.17)(8,561,074.73)
Loss of abandonment of fixed assets61,599,450.00-
Income of fair value movement(889,154,888.69)-
Financial expense40,109,729.9311,700,010.25
Investment income2,109,369,113.3171,306,776.79
Increase in deferred tax assets112,953,903.96(121,696,627.62)
Decrease in inventory1,317,268,683.80162,147,313.89
Deferred income tax liabilities increased127,021,724.70(2,794,103.52)
Decrease in operating receivables(6,933,919,137.79)7,012,744,770.54
Increase in operating payables6,610,407,218.35(14,321,540,062.30)
Others(48,238,681.15)(809,709,763.55)
Net cash flows from operating activities3,881,748,238.39(3,887,475,302.44)
2.Movement of cash and cash equivalents
Ending balance of cash9,360,474,674.899,648,153,614.80
Less: beginning balance of cash9,648,153,614.8021,451,305,090.53
Decrease in cash and cash equivalents(287,678,939.91)(11,803,151,475.73)

58. Supplementary information of cash flow statement (continued)

(2) The major non-cash investing and financing activities:

Item20192018
Endorsed bank acceptance received by sales and providing service3,292,638,946.703,032,518,773.00
Item20192018
I. Cash
Including: Cash on hand18,280.0814,374.84
Bank deposits that can be readily used9,360,456,394.819,648,139,239.96
II. Cash equivalents--
III. Ending balance of cash and cash equivalents9,360,474,674.899,648,153,614.80
Item20192018Notes
Cash and cash equivalents705,696,678.59332,390,911.34Note 1
Notes receivable and Accounts receivable3,125,099,350.00469,622,570.00Note 2
Intangible assets18,080,415.8418,499,267.20Note 3
Fixed assets24,200,714.4426,729,742.04Note 3

60. Foreign Monetary Item

Item20192018
Original CurrencyExchange RateTranslated to RMBOriginal CurrencyExchange RateTranslated to RMB
Cash
USD12,051,146.326.976284,071,206.968,751,966.066.863260,066,493.46
GBP2,705,025.179.150124,751,250.812,373,542.008.676220,593,325.10
EUR3,335,742.037.815526,070,491.844,048,438.857.802331,587,134.44
JPY128,999,237.000.06418,267,045.1064,912,028.430.06194,018,054.56
SUR746,523,266.530.112984,257,705.03239,651,676.870.099023,725,516.01
BRL571,845.631.7378993,754.73553,990.201.82871,013,081.88
Accounts receivable
USD20,851,192.186.9762145,462,086.8914,372,769.496.863298,643,191.56
Other receivables
USD2,102,288.896.976214,665,987.752,876,923.866.863219,744,903.84
JPY17,101,991.070.06411,095,998.2016,387,327.630.06191,014,375.58
EUR1,710,130.007.815513,365,521.023,514,473.567.802327,420,977.06
SUR1,312,803.709.150112,012,285.141,243,071.008.676210,785,132.61
BRL-1.7378-14,146.871.828725,870.38
Accounts Payable
USD528,062.066.97623,683,866.54868,583.126.86325,961,259.67
JPY10,747,095.930.0641688,738.3920,635,052.400.06191,277,309.74
EUR960,196.007.81557,504,411.842,451,927.127.802319,130,670.97
GBP462,384.839.15014,230,867.43965,218.008.67628,374,424.41
Other Payables
USD5,502,387.246.976238,385,753.86777,462.076.86325,335,877.68
GBP178,041.969.15011,629,101.741,760,110.008.676215,271,066.38

VI Shares in other entities

1. Shares in subsidaries

The subsidiaries of the Company are as follows:

Company nameMain operating placeRegistered placeNature of businessRegistered capital (0,000)Total proportion of shareholders (%)
directindirect
I. The subsidiary formed by establish or investment
Hebei Changan Automobile Co., Ltd. (note 1)DingzhouDingzhouManufacturing46,46994.22
Chongqing Changan International Automobile Sales Co., Ltd.ChongqingChongqingsales1,376100.00
Chongqing Changan Connected Car Technology Co., Ltd.ChongqingChongqingLease8,850100.001.00
Chongqing Changan Special Automobile Co., Ltd (note 2)ChongqingChongqingSales2,00050.00
Chongqing Changan Automobile Supporting Service Co., Ltd.ChongqingChongqingsales3,00099.00
Chongqing Changan New Energy Automobile Co. Ltd.ChongqingChongqingR&D2,900100.00
Chongqing Changan Europe Design Academy Co., Ltd.Turin, ItalyTurin, ItalyR&DEUR1,738.36100.00
Changan United Kingdom R&D Center Co., Ltd.Nottingham, United KingdomNottingham, United KingdomR&DGBP2,482100.00-
Beijing Changan R&D Center Co., Ltd.BeijingBeijingR&D100100.00-
Changan Japan Designing Center Co.,Ltd.Yokohama, JapanYokohama, JapanR&DJPY2,000100.00-
Changan United States R&D Center Co., Ltd.Troy, United statesDetriot, United statesR&DUSD154100.00-
Changan Automobile Russia Co., Ltd.Moscow, RussiaMoscow, RussiaSalesRUB220,382100.00-
Changan Brazil Holdings LimitedSt. Paul, BrazilSt. Paul, BrazilSalesBRL100100.00-
Changan automobile investment (Shenzhen) Co., Ltd.ShenzhenShenzhenSales14,800100.00
Hangzhou Changan Yixing Technology Co., Ltd.HangzhouHangzhouLease500100.00-
Hefei Changan Yixing Technology Co., Ltd.HefeiHefeiLease500100.00-
Nanjing Changan Connected Car Technology Co., Ltd.NanjingNanjingLease500100.00-
Nanjing Changan New Energy Automobile Sales & Service Co., Ltd.NanjingNanjingSales5,000100.00
Fuqing Changan New Energy Automobile Co. Ltd.NanjingNanjingSales200100.00-
Xiamen Changan New Energy Automobile Co. Ltd.XiamenXiamenSales200100.00-

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

Note 1: The Company's voting rights for Nanjing Changan Automobile Co., Ltd. and Hebei Changan AutomobileCo., Ltd. are 93.79% and 95.62% respectively. The reason for the inconsistent ratio of shareholding ratio tovoting rights is that some minority shareholders entrust the company to exercise voting rights.

Note 2: The remaining shareholders of Chongqing Changan Special Purpose Vehicle Co., Ltd. signed the

“Consensus Action People Agreement” with the company, and they all agreed to vote according tothe voting intention of the company. Therefore, the company can control it, so it will be included inthe consolidated financial the scope of the report.

As at 31 December 2019, the Group has no subsidiaries with important minority interests.

2. Shares in joint ventures and associates

Guangzhou Changan New Energy Automobile Co. Ltd.GuangzhouGuangzhouSales400100.00-
Chongqing Chehemei Technology Co., Ltd.ChongqingChongqingSales1,000100-
Chongqing Changan New Energy Automobile Technology Co., Ltd.ChongqingChongqingSales9,900100.00-
II. subsidiaries acquired through business combinations not under common control
Nanjing Changan Automobile Co., Ltd.(note1)NanjingNanjingManufacturing60,18184.73-
Chongqing Changan Suzuki Automobile Co., Ltd.ChongqingChongqingManufacturing133,764100.00-
Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership)ZhenjiangZhenjiangfinance150,001100.00-
III. The subsidiary formed by business combination under common control
Hebei Baoding Changan Bus Co., Ltd.DingzhouDingzhouManufacturing3,000100.00-
Hefei Changan Automobile Co.,Ltd.HefeiHefeiManufacturing77,500100.00-
Company nameMain operating placeRegistered placeNature of businessRegistered capital (0,000)Total proportion of shareholders (%)Accounting treatment
directindirect
I. Joint ventures
Changan Ford Automobile Co., Ltd.ChongqingChongqingManufacture and sale of automobiles, and componentsUSD24,10050.00-The equity method
Changan Mazda Automobile Co., Ltd.NanjingNanjingManufacture and sale of automobiles, and componentsUSD11,09750.00-The equity method
Changan Mazda Engine Co., Ltd.(Note)NanjingNanjingManufacture and sale of automobiles, and componentsUSD20,96650.00-The equity method
Changan PSA Automobiles Co., Ltd.ShenzhenShenzhenManufacture and sale of automobiles, and components760,00050.00-The equity method
Changan Weilai New Energy Automobile Technology Co., Ltd.NanjingNanjingManufacture and sale of automobiles, and components9,80050.00-The equity method
Nanchang Jiangling Investment Co., Ltd.NanchangNanchangManagement of investment, industry and assets100,00050.00-The equity method
II. Associates
Chongqing Changan Kuayue Automobile Co., Ltd.ChongqingChongqingDevelop, product and sale of automobile and components; import and6,53334.30-The equity method

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

2. Shares in joint ventures and associates (continued)

export goods.
Chongqing Changan Kuayue Automobile Sales Co., Ltd.ChongqingChongqingSale of Changan Kuayue’ s automobile and agricultural cars and components. Technical advisory services for automobile30034.30-The equity method
Beijing Fang’an cresent taxi Co., Ltd.BeijingBeijingRegional taxi operation2,897.9620.70-The equity method
Changan Automobile Finacing Co., Ltd.ChongqingChongqingProvide car loan; provide vehicle loans and operating equipment loans to car dealers, including the construction loans of exhibition hall,spare parts loans and maintenance equipment loans, etc.476,843.1028.66-The equity method
Hainan Anxinxing Information Technology Co., Ltd.ChengmaiChengmaiSoftware and hardware technology development, technical consulting, auto parts sales3,00030.00-The equity method
Nanjing Chelai Travel Technology Co., Ltd.NanjingNanjingCar sales, leasing, software technology development, technical services10,00010.00-The equity method
Hunan Guoxin Semiconductor Technology Co., Ltd.ZhuzhouZhuzhouTechnology development consulting, technical services, technology transfer in the field of power semiconductors50,00025.00-The equity method
Beijing Wutong Chelian Technology Co., Ltd.BeijingBeijingTechnology development, technical consulting, technical services, technology transfer20,000-49.00The equity method
Anhe (Chongqing) Equity Investment Fund Management Co., Ltd.ChongqingChongqingEquity investment management1,000-25.00The equity method
Hangzhou Chelizi Intelligent Technology Co., Ltd.HangzhouHangzhouCar travel service630-20.00The equity method
Company nameMain operating placeRegistered placeNature of businessRegistered capital (0,000)Total proportion of shareholders (%)Accounting treatment
directindirect
II. Associatess
Pakistan Master Automobile Co., Ltd.PakistanPakistanCar travel serviceBRL75,000-30.00The equity method
Jiangling Holding Co., Ltd.NanchangNanchangProduction and sales of automobiles and auto parts200,00025.00-The equity method
Nanjing Leading Equity Investment Partnership (Limited Partnership)NanjingNanjingEquity investment, venture capital; investment in non-publicly traded equity such as non-listed companies 'equity, listed companies' non-publicly issued equity, and related services.876,00016.39-The equity method
Nanjing Leading Equity Investment Management Co., Ltd. )NanjingNanjingEntrusted with the management of private equity investment funds, engaged in equity investment management and related services1,00015.00-The equity method

2. Shares in joint ventures and associates (continued)

Changan Ford Automobile Co., Ltd. is the important joint venture to the Group and makes great influence in theshare of profit and loss in joint venture and associates, the Group adopts equity method to deal with theinvestment to it.

The table below shows the financial status of Changan Ford Automobile Co., Ltd., and all the information hasbeen adjusted to eliminate the difference of the accounting policies.

20192018
Current assets15,855,818,973.0013,008,234,449.00
Of which: cash and cash equivalent6,147,195,270.002,276,585,106.00
Non-current assets31,865,453,438.0029,167,707,557.00
Total assets47,721,272,411.0042,175,942,006.00
Current liabilities33,821,313,974.0029,971,079,402.00
Non-current liabilities10,133,779,777.004,587,988,735.00
Total liabilities43,955,093,751.0034,559,068,137.00
Minority interests84,802,769.0078,302,490.00
Equity attributable to owners3,681,375,891.007,538,571,379.00
Net asset owned according to share proportion1,840,687,945.503,769,285,689.50
Adjustment(57,864,617.59)(59,501,182.39)
Book value of investment1,782,823,327.913,709,784,507.11
Operating revenue28,096,027,801.0049,754,282,303.00
Financial expenses- interest income64,059,181.0065,983,748.00
Financial expenses- interest expense713,200,770.00243,439,266.00
Income tax expense954,312,779.00(185,229,789.00)
Net profit(3,850,695,209.00)(792,490,479.00)
Dividend--

2. Shares in joint ventures and associates (continued)

The table below shows the financial status of the less important joint ventures and associates:

20192018
Joint venture
Total book value of the investment5,422,265,675.477,294,769,919.55
Total amount calculated by shareholding proportion
Net profit(401,576,178.40)(145,524,154.05)
Other comprehensive income-(706,228.88)
Total comprehensive income(401,576,178.40)(146,230,382.93)
Total book value of the investment3,803,247,985.712,270,615,692.17
Total amount calculated by shareholding proportion
Net profit169,721,466.40229,282,190.47
Other comprehensive income-77,231,613.62
Total comprehensive income169,721,466.40306,513,804.09

Chongqing Changan Automobile Company LimitedNotes to Financial StatementYear ended 31 December 2019

(Expressed in Renminbi Yuan)

VII Risks associated with financial instruments

1. Classification of financial instruments

As at balance sheet day, the book values of financial instruments are as follows:

Financial assets

2019Financial assets measured at fair value and whose changes are recorded in the current profit and loss (standard required)Financial assets measured at amortized costFinancial assets measured at fair value and whose changes are recorded in the current profit and loss (specified)Total
Cash-10,066,171,353.48-10,066,171,353.48
Financial assets for trading2,419,476,200.00--2,419,476,200.00
Notes receivable-26,805,635,587.19-26,805,635,587.19
Accounts receivable-838,314,076.82-838,314,076.82
Other receivables-3,731,755,992.46-3,731,755,992.46
Other current assets-317,546,789.66-317,546,789.66
Investment in other equity instrument--734,506,100.00734,506,100.00
Total2,419,476,200.0041,759,423,799.61734,506,100.0044,913,406,099.61
2018Loans and accounts receivableAvailable-for-sale financial assetsTotal
Cash9,980,544,526.14-9,980,544,526.14
Notes receivable20,561,625,805.24-20,561,625,805.24
Accounts receivable1,409,419,600.50-1,409,419,600.50
Other receivables3,233,020,118.16-3,233,020,118.16
Other current assets17,432,805.54-17,432,805.54
Financial asset available for sales-1,957,873,311.311,957,873,311.31
Total35,202,042,855.581,957,873,311.3137,159,916,166.89
Other financial liabilities
20192018
Short-term loans229,580,000.00190,000,000.00
Notes payable13,430,543,294.2314,807,862,262.39
Accounts payable18,905,725,271.5013,916,201,276.95
Other payables4,809,918,141.453,079,749,015.81
Long-term loan55,300,000.006,594,120.00
Total37,431,066,707.1832,000,406,675.15

2. Transfer of financial assets

The transferred financial assets that entirely derecognized but continuing involved

As at 31 December 2019, the Group has endorsed bank acceptance bill with a carrying amount ofRMB1,894,125,685.18 (2018: RMB1,473,189,956.97) to suppliers to settle the accounts payable. The maturities ofthe notes are between 1 to 6 months. According to the relevant provisions of the "law of negotiableinstruments", if the banks refuse the payment, the holder has the right of recourse to the Group (the "continuinginvolvement"). The Group holds the view that almost all the risks and rewards concerned have been transferred;therefore, the book value of the accounts payable should be derecognized. The maximum loss and theundiscounted cash flow of the continuing involvement and repurchase is equal to its book value, the Groupregards the fair value of the continuing involvement is not significant.

In 2019, the Group didn’t recognize profit or loss on the transferring date. No revenue or expense should berecognized in accordance with the continuing involvement in the current period. The indorsement occurredflatly in this period.

3. Risks of financial instruments

The Group faces risks of various financial instruments in its daily activities, mainly including credit risk, liquidityrisk and market risk (including exchange rate risk, interest rate risk and price risk). The main financialinstruments of the Group include monetary funds, equity investments, loans, bills receivable, accountsreceivable, bills payable, accounts payable, etc. The risks associated with these financial instruments and the riskmanagement strategies adopted by the Group to reduce these risks are described below.

The Group has formulated risk management policies to identify and analyze the risks faced by the Group, setappropriate risk acceptance levels and design corresponding internal control procedures to monitor the Group'srisk levels. The Group will periodically re-examine these risk management policies and related internal controlsystems to adapt to changes in market conditions or the Group ’s operating activities. The internal auditdepartment also regularly and irregularly checks whether the implementation of the internal control systemcomplies with the risk management policy.

Credit risk

The Group only deals with recognized and reputable third parties. In accordance with the Group's policy, a creditreview is required for all customers who require credit transactions. In addition, the Group continuouslymonitors the balance of accounts receivable to ensure that the Group does not face significant bad debt risk. Fortransactions that are not settled with the relevant business unit's bookkeeping standard currency, the Groupdoes not provide credit transaction conditions unless specifically approved by the Group's credit controldepartment.

Since the counterparties of monetary funds and bank acceptance receivables are reputable banks with highercredit ratings, these financial instruments have lower credit risk.

3. Risks of financial instruments (continued)

Credit risk (continued)

With respect to credit risk arising from the other financial assets of the Group, which comprise cash andavailable-for-sale financial assets, other receivables, dividend receivables and certain derivatives financialinstruments, the Group’s exposure to credit risk arising from default of the counterparty, with a maximumexposure equal to the carrying amount of these instruments, listed as book value of financial assets inconsolidated financial statements. In 2019, there was no credit risk arising from financial guarantee.

No gage is required since the Group trades only with recognized, creditworthy third parties. Credit risks aremanaged by clients and industries collectively. As at 31 December 2019, among the Group’s collections withspecific credit risk, 20.76% (2018: 37.65%) of accounts receivables of the Group are due from top five clients. TheGroup does not hold any gage from or enhance credit limit to these clients.

2019

Judgment criteria for significant increase in credit risk

The group evaluates on each balance sheet date whether the credit risk of the relevant financial instruments hasincreased significantly since the initial recognition. In determining whether credit risk has increasedsignificantly since the initial recognition, the group considers that reasonable and evidence-based informationcan be obtained without unnecessary additional cost or effort, including qualitative and quantitative analysisbased on the group's historical data, external credit risk ratings and forward-looking information. Based on asingle financial instrument or a portfolio of financial instruments with similar credit risk characteristics, thegroup compares the default risk of financial instruments on the balance sheet date with the default risk on theinitial confirmation date to determine the change of default risk of financial instruments during their expectedduration.

When one or more of the following quantitative or qualitative criteria are triggered, the group believes that thecredit risk of financial instruments has significantly increased:

?the quantitative criterion is that the default probability of the remaining duration on the report date increasesby more than a certain percentage compared with the initial confirmation;?qualitative criteria mainly include material adverse changes in the operating or financial situation of thedebtor, early warning customer list, etc.;

Definition of assets that have incurred credit impairmentIn order to determine whether credit impairment occurs, the group adopts a definition standard consistent withthe internal credit risk management objectives for relevant financial instruments, and considers bothquantitative and qualitative indicators. The group mainly takes the following factors into consideration whenevaluating whether the debtor has credit impairment:

?significant financial difficulties of the issuer or debtor;?debtor breaches the contract, such as default or overdue payment of interest or principal;

3. Risks of financial instruments (continued)

Credit risk (continued)

?the creditor gives the debtor concessions that the debtor would not have made under any othercircumstances for economic or contractual reasons related to the debtor's financial difficulties;?the debtor is likely to go bankrupt or undergo other financial restructuring;?the financial difficulties of the issuer or debtor result in the disappearance of an active market for thefinancial asset;?purchase or source a financial asset at a substantial discount that reflects the fact that a credit loss hasoccurred.

The credit impairment of financial assets may be caused by the joint action of multiple events, but not by eventsthat can be identified separately.

A parameter for measuring expected credit losses

According to whether the credit risk has significantly increased and whether the credit impairment has occurred,the group measures the impairment provision for different assets with the expected credit loss of 12 months orthe whole duration respectively. The key parameters of expected credit loss measurement include defaultprobability, default loss rate and default risk exposure. The group takes into account the quantitative analysisand forward-looking information of historical statistical data (such as counterparty rating, guarantee methodand types of collateral, repayment method, etc.) to establish default probability, default loss rate and defaultrisk exposure models.

The relevant definition is as follows:

?probability of default is the probability that the debtor will not be able to meet its repayment obligations inthe next 12 months or throughout the remaining period. The default probability of the group is adjusted basedon the results of the historical credit loss model and forward-looking information is added to reflect the defaultprobability of the debtor in the current macroeconomic environment.?the default loss rate refers to the group's expectation of the extent of losses from default risk exposure.Default loss rates also vary depending on the type of counterparty, the type and priority of recourse, and thecollateral. The default loss rate is the percentage of the risk exposure loss at the time of default, calculated onthe basis of the next 12 months or the whole duration;?default exposure is the amount that should be paid to the group at the time of default over the next 12months or throughout the remaining duration.

The assessment of a significant increase in credit risk and the calculation of expected credit losses involveforward-looking information. Through the analysis of historical data, the group identifies the key economicindicators that affect the credit risks and expected credit losses of each business type.

3. Risks of financial instruments (continued)

Credit risk (continued)

2019 (continued)

As at the end of the year, the maturity analysis for the Group’s financial assets not impaired is as follows:

Book balance
Expected credit loss in 12 monthsExpected credit loss for the entire duration
Stage IStage 2Stage 3Simplified measurement
Cash10,066,171,353.48---
Financial assets for trading2,419,476,200.00---
Notes receivable26,805,635,587.19---
Accounts Receivable---922,466,550.83
Other receivables2,205,778,389.261,637,955,311.3313,616,375.98-
Other current assets317,546,789.66---
Investment in other equity instrument734,506,100.00---
TotalNeither overdue nor impairedOverdue but not impaired
Within 3 months3 months to 1 yearOver 1 year
Cash9,980,544,526.149,980,544,526.14---
Notes receivable20,561,625,805.2420,518,834,178.40389,425.2624,957,342.8217,444,858.76
Account receivable1,409,419,600.501,409,419,600.50---
Other receivables3,233,020,118.163,222,686,989.47336,474.296,170,515.963,826,138.44
Other current assets17,432,805.5417,432,805.54---
Available for sale financial assets1,957,873,311.311,957,873,311.31---

3. Risks of financial instruments (continued)

Liquidity risk

The Group adopts cycle liquidity planning instrument to manage capital shortage risks. The instrument takesinto consideration the maturity date of financial instruments plus estimated cash flow from the Group’soperations.

The Group’s objective is to maintain a balance between continuity of funding and flexibility and sufficient cashto support operating capital through financing functions by the use of bank loans, debentures, etc.

The table below summarizes the maturity profile of the Group’s financial liabilities based on the non-discountedcash flow of the contracts:

2019

Within 1 month1 to 3 months3 months to 1 year1 to 5 yearsTotal
Short-term loans10,873,355.5411,662,192.77225,320,407.33-247,855,955.64
Notes payable2,199,933,553.004,009,043,006.467,221,566,734.77-13,430,543,294.23
Accounts payable5,035,073,542.162,771,766,385.9711,098,885,343.37-18,905,725,271.50
Other payable2,617,278,106.27863,614,813.371,329,025,221.81-4,809,918,141.45
Long-term loan46,967.1290,904.11415,128.7756,915,063.0157,468,063.01
Total9,863,205,524.097,656,177,302.6819,875,212,836.0556,915,063.0137,451,510,725.83
Within 1 month1 to 3 months3 months to 1 year1 to 5 yearsTotal
Short-term loans730,835.621,367,369.86195,641,035.62-197,739,241.10
Notes payable2,345,913,865.205,169,707,846.867,292,240,550.33-14,807,862,262.39
Accounts payable5,994,446,844.736,488,809,039.971,432,945,392.25-13,916,201,276.95
Other payable1,835,725,519.621,003,480,426.18240,543,070.01-3,079,749,015.81
Long-term loan25,605.436,601,553.83--6,627,159.26
Total10,176,842,670.6012,669,966,236.709,161,370,048.21-32,008,178,955.51

3. Risks of financial instruments (continued)

Equity instruments investment price riskEquity price risk is the risk that the fair values of equity securities decrease as a result of changes in the levels ofequity indices and the value of individual securities. The Group’s listed investments (note V. 21) are listed on theShenzhen and Shanghai stock exchanges and are valued at quoted market prices at the end of the reportingperiod. The following table demonstrates the sensitivity to every 5% change (based on the carrying amount asat the end of reporting period) in the Group’s net profit and fair value of the equity investments, with all othervariables held constant.

Carrying amount of equity investmentsChange in fair valueIncrease/ (decrease) in net profitIncrease/(decrease) in equity
2019
Shanghai- Equity investment included in financial assets at fair value through profit or loss184,245,000.005%7,830,412.507,830,412.50
Shanghai- Equity investment included in financial assets at fair value through profit or loss184,245,000.00(5%)(7,830,412.50)(7,830,412.50)
Shenzhen- Equity investment included in financial assets at fair value through profit or loss2,235,231,200.005%94,997,326.0094,997,326.00
Shenzhen- Equity investment included in financial assets at fair value through profit or loss2,235,231,200.00(5%)(94,997,326.00)(94,997,326.00)
2018
Shanghai- Available for sale123,540,000.005%5,250,450.005,250,450.00
Shanghai- Available for sale123,540,000.00(5%)(5,250,450.00)(5,250,450.00)
Shenzhen- Available for sale1,406,781,311.315%59,788,205.7359,788,205.73
Shenzhen- Available for sale1,406,781,311.31(5%)(59,788,205.73)(59,788,205.73)

4. Capital management

The main goal of the Group’s capital management is to ensure that the ability of continuous operation andmaintain a healthy capital ratios in order to support business development, and to maximize shareholder value.

The Group manages the capital structure and adjusts it with the change of economy trend and the risk feature ofthe assets. To maintain or adjust the capital structure, the Group can rectify dividend distribution, return capitalto shareholders or issue new shares. The Group is not subject to external mandatory capital requirementsconstraints. The goal, principle and procedure of capital management stay the same in 2018 and 2019.

The Group’s leverage ratio on the balance sheet date is as follows:

31 December 201931 December 2018
Leverage ratio54.99%50.63%

IX Disclosure of fair value

1. Assets and liabilities measured at fair value

2019

Input measured at fair value
Quoted price in active market (The first level)Important and observable input(The second level)Important but unobservable input (The third level)Total
Financial asset held for trading184,245,000.002,235,231,200.00-2,419,476,200.00
Investment in other equity instrument--734,506,100.00734,506,100.00
Total184,245,000.002,235,231,200.00734,506,100.003,153,982,300.00
Input measured at fair value
Quoted price in active market (The first level)Important and observable input(The second level)Important but unobservable input (The third level)Total
Available-for-sale financial assets- equity instruments123,540,000.001,406,781,311.31-1,530,321,311.31

2. Fair value estimation (continued)

The equity instruments listed by the Company include unrestricted ordinary shares and restricted shares. Theunrestricted ordinary shares investment determines the fair value by market quotation, and the restricted stockinvestment uses the discounted valuation model to estimate the fair value. The Group's unlisted equityinstrument USES the listed company comparison method to estimate the fair value. The assumptions adoptedare not supported by observable market prices or interest rates. The group believes that the fair value and itsvariation, as estimated by valuation techniques, are reasonable and the most appropriate value at the balancesheet date.

3. Unobservable input

The following is an overview of the important unobservable input value of the third level fair valuemeasurement:

Fair valueValuation techniquesNon-observable input value
Investment in other equity instrumentDec 31, 2019734,506,100.00Market approach/ Income approachComparable transaction value multiplier / Post-tax discount rate
Fair valueValuation techniquesNon-observable input value
Investment in other equity instrumentDec 31, 2019734,506,100.00Comparison of listed companyLiquidity discount

X Related party relationships and transactions

1. The holding company

Holding companyPlace of registrationRegistered capitalNature of the businessProportion of shares in the CompanyProportion of voting rights in the company
Changan Automobile Company LimitedBeijing6,092,273,400.00Automobile and its engines, spare parts manufacturing, marketing22.53%22.53%

4. Other related parties

Related partiesRelationship
China Changan Automobile Group. – Chongqing Tsingshan Transmission Branch (hereafter referred to as “CSIA-Chongqing Tsingshan Transmission Branch”)Controlled by the same ultimate holding company
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.Controlled by the same ultimate holding company
Harbin Dongan Auto Engine Co., Ltd.Controlled by the same ultimate holding company
Sichuan Jian'an Industrial Co.,Ltd.Controlled by the same ultimate holding company
Chongqing Wanyou Economic Development Co., LtdControlled by the same ultimate holding company
Hubei Huazhong Marelli Automobile Lighting Co.,Controlled by the same ultimate holding company
Chengdu Huachuan Electric Equipment Co., Ltd.Controlled by the same ultimate holding company
Chongqing Dajiang Yuqiang Plastic Co., Ltd.Controlled by the same ultimate holding company
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.Controlled by the same ultimate holding company
Chengdu Wanyou Filter Co., Ltd.Controlled by the same ultimate holding company
Hubei Xiaogan Huazhong Automobile Light Co., Ltd.Controlled by the same ultimate holding company
Yunnan Xiyi Industries Co., Ltd.Controlled by the same ultimate holding company
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.Controlled by the same ultimate holding company
Chongqing Changrong Machinery Co., Ltd.Controlled by the same ultimate holding company
Chengdu Lingchuan Special Industry Co., Ltd.Controlled by the same ultimate holding company
Chongqing Shangfang Automobile Fittings Co., Ltd.Controlled by the same ultimate holding company
Sichuan Ningjiang Shanchuan Machinery Co., Ltd Longchang shock absorber branchControlled by the same ultimate holding company
Chongqing Construction Tongda Industrial Co., Ltd.Controlled by the same ultimate holding company
Chengdu Lingchuan Vehicle Oil Tank Co., Ltd.Controlled by the same ultimate holding company
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.Controlled by the same ultimate holding company
Chengdu Jialing Huaxi Optical & Precision Machinery Co., Ltd.Controlled by the same ultimate holding company
Chongqing Qingshan Transmission Sales Co., Ltd.Controlled by the same ultimate holding company
Related partiesRelationship
Chongqing Yihong Engineering Plastic Products Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changan Property Management Co., Ltd.Controlled by the same ultimate holding company
Chongqing Dajiang Jiexin Forging Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changan Industries Group Co. Ltd.Controlled by the same ultimate holding company
Yunnan Wanyou Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Guizhou Wanyou Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changfeng Jiquan Machinery Co., Ltd.Controlled by the same ultimate holding company
Chengdu Wanyou Auto Trade Service Co., LtdControlled by the same ultimate holding company
Beijing Beiji Mechanical and Electrical Industry Co., Ltd.Controlled by the same ultimate holding company
Chongqing Wanyou Ducheng Auto Sales Service Co., Ltd.Controlled by the same ultimate holding company
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Chongqing Wanyou Xingjian Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
Ya'an Wanyou Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Yunnan Xiangyu Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Harbin Botong Auto Parts Co.,Ltd.Controlled by the same ultimate holding company
Liangshan Wanyou Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
Panzhihua Wanyou Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
Nanning Wanyou Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Luzhou Wanyou Automobile Service Co., Ltd.Controlled by the same ultimate holding company
Guangxi Wanyou Auto Sales and Service Co., Ltd.Controlled by the same ultimate holding company
Chengdu Wanyou Trading Co., Ltd.Controlled by the same ultimate holding company
China Changan Automobile Group Tianjin Sales Co., Ltd.Controlled by the same ultimate holding company
Bazhong Wanyou Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changan Construction Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changan Real Estate Development Co., Ltd.Controlled by the same ultimate holding company
Wanyou Automobile Investment Co., Ltd.Controlled by the same ultimate holding company
Related partiesRelationship
Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd.Controlled by the same ultimate holding company
China Changan Automobile Group Hefei Investment Co., Ltd.Controlled by the same ultimate holding company
Chongqing Anfu Automobile Co., Ltd.Controlled by the same ultimate holding company
China South Industry Group Finance Co., Ltd;Controlled by the same ultimate holding company
Chengdu wanyou auto Sales and service co.,LtdControlled by the same ultimate holding company
Kunming Wanling Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
China South Industry Assets Management Co.' Ltd.Controlled by the same ultimate holding company
Harbin Hafei Automobile Industry Group Co.,Ltd.Controlled by the same ultimate holding company
Chongqing Automobile Air-conditioner Co., Ltd.Controlled by the same ultimate holding company
Chongqing Jialing Yimin Special Equipment Co., Ltd.Controlled by the same ultimate holding company
Chengdu Guangming Tianzhong Environmental Protection Technology Co., LtdControlled by the same ultimate holding company
Chongqing Xiyi Automobile Connecting Rod Co., Ltd.Controlled by the same ultimate holding company
Dali Wanling Auto Sales & Service Co., Ltd.Controlled by the same ultimate holding company
Chongqing Changan Minsheng Logistics Co. LtdParticipated by the Ultimate holding company
Chongqing Nexteer Steering System Co.,Ltd.Participated by the Ultimate holding company
South Tianhe Chassis System Co., Ltd.Participated by the Ultimate holding company
Southern Fojiya Auto Parts Co., Ltd.Participated by the Ultimate holding company
South Inter Air-conditioner Co.,Ltd.Participated by the Ultimate holding company
Chengdu Ningjiang Zhaohe Automobile Components Co., Ltd.Participated by the Ultimate holding company
Chongqing Lingxing Yuexiang Auto Service Co.,Ltd.Companies in which the company participates
Nanjing Lingxing Yuexiang Auto Service Co.,Ltd.Companies in which the company participates
Hangzhou Lingxing Yuexiang Auto Service Co.,Ltd.Companies in which the company participates

5. Major transactions between the Group and its related parties

(1) Transactions of goods and services

Purchases of goods and services from related parties

Related partiesNature of the transaction20192018
Chongqing Changan Min Sheng Logistics Co., Ltd.Purchase of spare parts and transportation fee1,842,826,345.721,389,088,291.94
CSIA-Chongqing Tsingshan Transmission BranchPurchase of spare parts1,445,693,679.111,284,085,746.55
Harbin Dongan Auto Engine Co., Ltd.Purchase of spare parts863,253,483.29729,821,616.79
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.Purchase of spare parts and accept service855,905,264.99382,752,767.69
Sichuan Jian'an Industrial Co., LtdPurchase of spare parts669,897,166.50747,672,263.03
Chongqing Nexteer Steering System Co.,Ltd.Purchase of spare parts645,365,956.45579,242,368.51
Chongqing Wanyou Economic Development Co., Ltd.Purchase of spare parts449,900,979.95329,624,797.32
South Tianhe Chassis System Co., Ltd.Purchase of spare parts423,553,043.17601,959,455.32
Southern Fojiya Auto Parts Co., Ltd.Accept service362,451,567.62251,772,521.47
South Inter Air-conditioner Co, .Ltd.Purchase of spare parts343,160,145.30490,615,574.48
Hubei Huazhong Marelli Automobile Lighting Co., LtdPurchase of spare parts342,062,024.70-
Chengdu Huachuan Electric Equipment Co., Ltd.Purchase of spare parts285,653,390.76279,083,119.39
Chongqing Dajiang Yuqiang Plastic Co., Ltd.Purchase of spare parts151,818,323.38276,123,847.99
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.Purchase of spare parts104,933,521.74110,293,645.11
Chengdu Ningjiang Zhaohe Automobile Components Co., Ltd.Purchase of spare parts104,848,894.3675,867,551.80
Chengdu Wanyou Filter Co., Ltd.Purchase of spare parts102,999,118.76142,276,990.69
Hubei Xiaogan Huazhong Automobile Light Co., Ltd.Purchase of spare parts88,918,096.0987,329,310.10
Changan PSA Automobiles Co., Ltd.Accept service79,147,833.936,309,145.00
Yunnan Xiyi Industries Co., Ltd.Purchase of spare parts74,537,241.9488,997,586.25
Related partiesNature of the transaction20192018
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.Purchase of spare parts73,268,453.17105,758,408.84
Chongqing Changrong Machinery Co., Ltd.Purchase of spare parts52,501,322.7518,795,175.93
Chengdu Lingchuan Special Industry Co., Ltd.Purchase of spare parts37,573,006.1824,507,845.13
Chongqing Shangfang Automobile Fittings Co., Ltd.Purchase of spare parts31,151,137.1047,857,427.57
Sichuan Ningjiang Shanchuan Machinery Co., Ltd Longchang shock absorber branchPurchase of spare parts30,386,872.7437,353,791.80
Chongqing Construction Tongda Industrial Co., Ltd.Purchase of spare parts25,843,605.06-
Chengdu Lingchuan Vehicle Oil Tank Co., Ltd.Purchase of spare parts23,453,388.4974,135,330.06
Chengdu Jialing Huaxi Optical & Precision Machinery Co., Ltd.Purchase of spare parts11,994,195.1214,592,213.03
Chongqing Qingshan Transmission Sales Co., Ltd.Purchase of spare parts8,394,479.565,943,733.67
Chongqing Yihong Engineering Plastic Products Co., Ltd.Purchase of spare parts6,403,252.1920,730,680.31
Chongqing Changan Property Management Co., Ltd.Accept service3,768,639.915,410,948.67
Chongqing Dajiang Jiexin Forging Co., Ltd.Accept service2,962,328.842,392,326.57
Changan Ford Automobile Co., Ltd.Purchase of spare parts and accept processing services2,590,337.2657,461,801.63
Chongqing Changan Industries Group Co. Ltd.Purchase of spare parts and accept service1,684,045.4846,447,919.42
Yunnan Wanyou Auto Sales and Service Co., Ltd.Accept service1,333,771.441,610,572.58
Guizhou Wanyou Auto Sales and Service Co., Ltd.Accept service1,152,962.381,158,331.89
Chongqing Changfeng Jiquan Machinery Co., Ltd.Purchase of spare parts784,396.1322,462,283.98
Chengdu Wanyou Auto Trade Service Co., Ltd.Accept service758,199.25675,086.70
Beijing Beiji Mechanical and Electrical Industry Co., Ltd.Accept service708,967.981,496,100.00
Chongqing Wanyou Ducheng Auto Sales Service Co., Ltd.Accept service465,125.25472,699.15
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.Accept service406,108.89406,387.74
Chongqing Wanyou Xingjian Auto Sales & Service Co., Ltd.Accept service291,142.59729,801.70
Ya'an Wanyou Auto Sales & Service Co., Ltd.Accept service169,973.58211,018.21
Yunnan Xiangyu Auto Sales and Service Co., Ltd.Accept service162,564.53205,055.66
Related partiesNature of the transaction20192018
Harbin Botong Auto Parts Co.,Ltd.Accept service110,662.344,908,486.65
Liangshan Wanyou Auto Sales & Servi