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长安B:2020年年度报告(英文版) 下载公告
公告日期:2021-04-20

Chongqing Changan Automobile

Company Limited

2020 Annual Report

April, 2021

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chapter 1 Important Notice, Contents, and Definitions

The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Executivesof our company hereby guarantee that no false or misleading statement or major omission was madeto 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 Zhu Huarong, the Chief Financial Officer Zhang Deyong and theresponsible person of the accounting institution (Accountant in charge) Chen Jianfeng hereby declarethat 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
Tan XiaogangDirectorBusiness tripZhou Zhiping
Liu JipengIndependent directorBusiness tripPang Yong
Tan XiaoshengIndependent directorBusiness tripLi Qingwen

Chongqing Changan Automobile Company Limited 2020 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 ...... 13

Chapter 5 Important Matters ...... 40

Chapter 6 Changes in the shareholding of the company and shareholders ...... 55Chapter 7 Information about Directors, Supervisors, Senior Management andEmployees ...... 63

Chapter 8 Corporate Governance ...... 78

Chapter 9 Corporate Bonds ...... 84

Chapter 10 Auditor’s Report ...... 85

Chapter 11 Documents for Future Reference ...... 255

Chongqing Changan Automobile Company Limited 2020 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 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
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 2020 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 representativeZhu Huarong
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
Newspaper selected by the Company forChina Securities Journal, Securities Times, Securities Daily, Shanghai

Chongqing Changan Automobile Company Limited 2020 Annual Report

information disclosureSecurities 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
Sponsor nameSponsor's office addressName of sponsor representativeContinuous supervision period
CITIC Securities Co., Ltd.21st Floor, CITIC Securities Building, No. 48 Liangmaqiao Road, Chaoyang District, BeijingHe Yang, Chen ShumianOctober 26, 2020-December 31, 2021

Chongqing Changan Automobile Company Limited 2020 Annual Report

□ Applicable √ Not applicable

VI. Summary of Accounting Data and Financial IndexesDoes the company conduct the retrospective adjustment or restatement of previous years accounting data due to changes in accountingpolicies or accounting errors?

□Yes √ No

20202019Increase/decrease on a y-o-y basis (%)2018
Operating revenue (Yuan)84,565,544,146.5870,595,245,133.2819.79%66,298,270,389.77
Net profit belonging to shareholders of the listed company (Yuan)3,324,251,164.16-2,646,719,356.53225.60%680,728,392.03
Net profit belonging to shareholders of the listed company after deduction of non-recurring profit and loss (Yuan)-3,249,984,527.77-4,762,446,597.6131.76%-3,165,070,272.21
Net cash flow arising from operating activities (Yuan)10,675,953,479.243,881,748,238.39175.03%-3,887,475,302.44
Basic earnings per share (Yuan/Share)0.68-0.55223.64%0.14
Diluted earnings per share (Yuan/Share)Not applicableNot applicableNot applicableNot applicable
Return on equity (ROE) (%)7.13%-5.86%Up 12.99 Points1.45%
End of 2020End of 2019Increase/decrease of the end of current year compared with that of the previous year (%)End of 2018
Total assets (Yuan)120,915,805,349.5297,617,053,590.3823.87%93,488,854,098.95
Net assets belonging to shareholders of the listed company (Yuan)53,410,193,236.0944,028,312,743.6621.31%46,244,958,676.52
Item20202019Notes

Chongqing Changan Automobile Company Limited 2020 Annual Report

Operating revenue (Yuan)84,565,544,146.5870,595,245,133.28Company's operating income (before deduction)
Operating revenue deduction amount (yuan)113,349,438.0455,177,961.32Business income not related to the main business
Amount after deduction of operating revenue (yuan)84,452,194,708.5470,540,067,171.96Company's operating income (after deduction)
First QuarterSecond QuarterThird QuarterForth Quarter
Business income11,564,077,463.3421,217,580,015.7623,059,924,854.4428,723,961,813.04
Net profit attributable to shareholders of listing Corporation631,077,888.631,971,088,514.05883,806,569.75-161,721,808.27
Net profit attributable to shareholders of the listing Corporation after deducting non-recurring gains and losses-1,793,324,817.62-823,563,483.85519,048,534.49-1,152,144,760.79
Net cash flows from operating activities4,155,344,266.522,757,242,427.08106,853,186.713,656,513,598.93
Item202020192018
Non-recurring items and amounts(including accrued reversal assets impairment part)29,465,046.0756,658,864.178,561,074.73

Chongqing Changan Automobile Company Limited 2020 Annual Report

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)797,901,407.241,537,625,620.932,873,192,102.56
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 value2,035,390,665.86889,154,888.69-
Gains and losses on entrusted loans13,768,160.426,771,226.43-
Losses arising from business combinations not under common control-6,937,641.07--
Investment income from disposal of long-term equity investments1,398,196,002.13--
Gains from the remeasurement of the remaining equity at fair value after the loss of control2,246,681,836.54
Except the above other operating income and expenses-27,519,486.75-135,258,766.1448,285,737.46
Interest on deferred payment of funds received by non financial enterprises17,795,918.3728,553,488.6529,303,167.73
Reduction: the impact of income tax-91,514,483.25250,459,302.0482,007,701.31
Impact of minority shareholders' equity (after tax)22,020,700.1317,318,779.6152,356,990.94
Total6,574,235,691.932,115,727,241.083,845,798,664.24

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chapter 3 Analysis of Main Business

I.The main business of the Company in the reporting period

Does 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, new retailand 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 the conceptof "energy conservation, environmental protection, scientific and technological intelligence", vigorously develops new energy andsmart cars, guides the automobile civilization by the use of scientific and technological innovation, and provides customers with highquality products and services. After years of development, the company owns many famous brands such as Changan passenger car,Oushang automobile, Kaicheng automobile, Changan Ford, Changan Mazda and so on. Up to now, the company has successfullylaunched a series of classic brands such as CS series, Eado series, UNI,Oushang series, and Shenqi series; a series of famous JVproducts such as all new Focus, Escort, Escape, Edge,Explorer,Adventurer,Axela, CX-5, CX-8, CX-30 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.

During the reporting period, major changes have taken place in industrial policies and major regulations. The specificcircumstances of the changes and their impact on the company are as follows:

1. industrial policy (new energy)

(1) Policy on financial subsidies

On December 31,2020, the Ministry of Finance and other four ministries and departments issued the notice on further improvingthe financial subsidy policy for the promotion and application of new energy vehicles, which clarifies the financial subsidy policy fornew energy vehicles in 2021 and will be implemented since January 1

st

, 2021. Firstly, as for the subsidy standards, the implementationof the 2020 subsidy policy (financial construction [2020] No. 86) is clear-cut: New Energy vehicle subsidy standards in non-publicTransport Sector decreased by 20% on the basis of the 2020 standard; New Energy vehicle subsidy standards in public Transport Sectordecreased by 10% on the basis of the 2020 standard. New Energy subsidy income of Chang'an automobile in 2020 amounted to 67million yuan. Secondly, in terms of technical indicators, the policy maintained the same threshold of technical indicators such as energydensity, driving range and energy consumption of the power battery system while the technical threshold requirements such as drivingrange and energy consumption of plug-in hybrid electric vehicle (including add-program) are adjusted. The technical difficulty afteradjustment is consistent with the technical difficulty under NEDC working condition. In addition, special emphasis has been placed onthe safety responsibility of new energy vehicles and the prevention of disorderly expansion of production capacity.

Technical indicators of financial subsidies for new energy vehicle remain stable, the amount of subsidies reduced to some extent,and it is conducive to the continuity of the company's products and improve the profitability of vehicles.

(2) New Energy Vehicle Points

On June 15, 2020, the Ministry of Industry and Information Technology published the decision on revising the regulations on theconcurrent management of the average fuel consumption of passenger vehicle enterprises and the new energy vehicle points, whichspecifies that the new energy vehicle points of the 2021、2022、2023 are 14% , 16% and 18% respectively with the increasing proportion.At the same time, the new energy points for single unit will be reduced by 20% to 40%.

New Energy points policy requires the vehicle companies to produce more new energy vehicles. Otherwise, they need to purchasethe points to meet the point requirements, both of which will create greater financial pressure on the company, and affect the company's

Chongqing Changan Automobile Company Limited 2020 Annual Report

current profit level.

2. Major Regulatory Requirements (fuel standards, emission requirements, electric vehicles, etc.)

(1) Fuel Standards and emission requirements

China's motor vehicle emission standards system has drawn on the practices of the European Union, taking into account thespecific development of relevant industries in China as well as environmental and management requirements, and is implemented stepby step. Since 2000, China began to implement the first national standard, until now the sixth national emission standards (GB 18352.6-2016) have been fully implemented in light vehicles.As shown in the table below:

All the company's products have already met the sixth national emission standards.

(2) The standards for electric vehicles

In 2020, two mandatory standards in the field of new energy vehicles, GB 18384-2020 safety requirements for electric vehiclesand GB 38031-2020 safety requirements for power storage batteries for electric vehicles, were issued in 2020 and imposed on January1, 2021. The GB 18384-2020 safety requirements for electric vehicles (EVS), replacing the original GB/T 18384-2015, safetyrequirements series standards for use, specify the requirements, functional safety requirements and test methods for personal electricshock protection in normal use. Several relevant safety requirements are added or deleted in the GB 18384-2020 safety requirementsand the corresponding test methods are clarified. Some of the mandatory standards have been implemented, and the new thermalrunaway alarm requirements have been added. GB 38031-2020 safety requirements for power storage batteries of new energy vehiclesspecifies the safety requirements and test methods for power storage batteries, battery packs or systems.

The above change enables enterprises to increase R&D investment in Battery Safety Application Research, big data monitoring,on-board alarm, thermal runaway suppression and so on. At the same time, due to the increase of safety control components and strengthrequirements, the vehicle cost will also increase correspondingly, but the safety and reliability of the vehicle has been greatly improved.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 2020, Chang'an automobile firmly set the direction of its third innovation and entrepreneurship program, issued its innovationand entrepreneurship plan 3.0, accelerated the landing of the "Beidou Tianshu" plan and the "Shangri-la" plan, and initiated a newchapter of development in all respects. In 2020, the Company spent 4.142 billion yuan on product and technology projects development

Chongqing Changan Automobile Company Limited 2020 Annual Report

to build the industry's leading R & D strength.

Constantly build classic products. UNI-T, Eado PLUS, CS55PLUS blue whale version, Reaton CC blue whale version,CS75PLUS 2020 version , CS75PLUS 2021 version , Oushang X5, Keshang EV, Benben E-Star, CS55 pure electric version, NE15TG-AA and other products were launched on time. The CS75 series, the Eado series, CS55 PLUS, CS35 PLUS were sold 267 thousandunits, 175 thousand units, 110 thousand units, and 95 thousand units respectively. The sales number of UNI-T and Oushang X5amounted to 69,000 and 40,000 cars in 2020.

Constant improvement of key capabilities. The Company completes the first domestic L3 mass production technology release,and continues to enhance the core technical capacity of autopilot. The first launch of sight bright screen, lip recognition and otherfunctions evolves into "Voice+Video" intelligent interactive iteration. The new electronic and electrical architecture completes theintegration of the body area controller and the cockpit area controller. The first carbon fiber-aluminum alloy hybrid body has beensuccessfully trial-produced and rolled off the line. The first high-performance pure electric four-wheel drive SUV has been successfullytrial-produced and rolled off the line, and the self-designed control software of fuel cell system breaks through the key technology andlays a foundation for the following industrial application. The gene technology of pleasant driving quality is applied in UNI-T vehiclebody posture control, dynamic torque control and so on. Chang'an new energy seven-in-one electric drive system (XTDM16) won thefirst high efficiency ratio a-class product certification of electric vehicle drive motor system issued by China Automotive Research andDevelopment Corporation and will be the first launch of the next generation digital vehicle. Chang'an automobile "PM0.1" compositeanti-bacterial and anti-toxic high-efficiency filter acquires the "CATARC CN95" certification issued by the China Automobiletechnology Research Center Certification Center, and becomes the highest level of certification of automobile air conditioning filterproducts, which sets a new benchmark for healthy cars. Chang'an blue whale 2.0T prototype longitudinal engine has successfullyignited at the Company’s global R & D Centre, marking the smooth starting of the Chang'an blue whale 2.0 era.

Adhere to the guidance of scientific and technological innovation. The first Chinese automobile multimedia internationalstandard ITU-T f.749.3 Automobile multimedia network use cases and requirements participated and led by Changan Automobile wasofficially released after global publicity. The core of the standard adopts the network deep integration technology of "5g+satellite,integration of heaven and earth" which is independently innovated by China, breaking the long-term monopoly of Europe, America,Japan and South Korea in the field of automobile electronics, marking the beginning of China's multimedia integration technology tothe world. Among them, the project of research and industrial application of advanced technology and manufacturing technology oftypical lightweight automobile parts won the first prize of Chongqing Science and technology progress award, and the project ofresearch and development and application of key technologies of Changan intelligent automobile platform won the second prize ofautomobile industry science and technology Progress Award. In 2020, 1091 patents have been applied, including 400 invention patents.As of 2020, 1474 valid invention patents have been obtained. In depth cooperation with Huawei and CATL, the Company jointly build"intelligent networked electric vehicle platform". Chang'an vehicle software platform is constructed guided by the intelligent strategyof "Beidou Tianshu" of Chang'an Automobile and the research and development of vehicle software platform is highly focused.Chang'an software center is settled in Xiantao data valley. Changan blue whale NE1.5T high pressure direct injection engine has carriedout the limit operation test of no less than 200+ hours, successfully challenged the Guinness world record, and won the honorary titleof "China heart" 2020 top ten engines in 2020.

The brand potential is steadily improving. Firstly, define the brand structure of the four major businesses, and release version

3.0 of the company's brand management principles. Clarify the brand positioning of Chang'an Automobile, promote the landing of corevalues, refresh the brand visual image in Beijing auto show, promote the "1361" brand upward operation system, accelerate the landingof digital system; initially build brand value and visual system of Oushang and Kaicheng brands. Secondly, create brand labels such asChang'an design and power, realize the coordinated development of double sequence division; actively respond to the epidemicsituation, carry out communication transformation, and build a new brand experience platform with live broadcast as the origin andpublic relations as the traction. Thirdly, return to the central media, launch the plan brand day activities with CCTV-2, release fashionblockbusters with new image of senior executives, realize all-round image rejuvenation, create a breakthrough new mode of cooperationbetween media and enterprises, and empower the brand of Changan Automobile. Fourthly, build enterprise content matrix and

Chongqing Changan Automobile Company Limited 2020 Annual Report

specialization, achieve continuous improvement of communication form and content quality, and realize the brand upward.

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chapter 4 Business Discussion and Analysis

I. Overview2020 is a very unusual year in the history of new China. The international situation is grim and complicated. The task of reformand development and stability in China is arduous and heavy. The COVID-19 epidemic has brought serious impact to the developmentof the economy and society. However, under the strong leadership of the Party Central Committee, China became the only majoreconomy to achieve economic growth in the world this year. The three major battles have made decisive achievements, scientific andtechnological innovation has made significant progress, and important breakthroughs have been achieved in reform and opening up,and people's livelihood has been effectively guaranteed.Affected by the epidemic situation, China's automobile market suffered a setback in early 2020. However, with the continuousimprovement of the national epidemic prevention and control situation, the orderly promotion of resumption of work and production,the continuous recovery of consumer confidence, the continuous recovery of domestic automobile market from April, the automobileenterprises’ production and operation improved and the V-shaped reversal trend went throughout the year. In 2020, the cumulativeproduction and sales of China's automobile market reached 25.525 million and 25.311 million respectively, with a year-on-year decreaseof 2.0% and 1.9% respectively. The sales of passenger cars decreased by 6.0% year-on-year to 20.178 million; the sales of commercialvehicles were 5.133 million driven by the upgrading of emission standards and new infrastructure, up 18.7% year-on-year. The newenergy vehicle market has entered a new stage of development after experiencing the pain of subsidization. The sales of pure electricpassenger cars are 1.246 million, a year-on-year growth of 14.6% with the proportion of personal consumption and the proportion ofnon-restricted cities increasing significantly. At the same time, the epidemic also accelerated the reshuffle of the industry. The salesvolume of the top ten enterprise groups in the narrow sense of passenger car sales in the whole year totaled 18.81 million, accountingfor 94.5% of the total automobile sales, up 0.3% over the same period of last year.In 2020, the sales volume of passenger car market still showed a year-on-year decline, but the second half of the year recoveredbetter than expected under the promotion of consumer stimulus policies and the rise of automobile demand after the epidemic. Themarket share of China's brand passenger cars continued to decline under the pressure of joint venture brand prices, but the decline ratenarrowed by 1.1% compared with the previous year. Among the joint venture brands, the share of Japanese and American brandsincreased by 1.8% and 0.8% respectively, while that of Korean brands decreased by 1.3%. The performance of various segments ofpassenger car market is different. In 2020, the sale number of sedans is 9.275 million, a year-on-year decrease of 9.9%. The top tenbrands in sales volume are mainly Japanese and European brands, accounting for 34.0% of the total sales volume of car. The overallperformance of SUV market is better than that of passenger car industry by 6.6% on a year-on-year basis, and the sales volume exceedsthat of sedans for the first time. The top ten SUVs in sales volume are mainly Chinese brands, European brands and Japanese brands,among which CS75 has a higher growth rate, with a year-on-year growth rate of nearly 40%. Japanese brands are outstanding with fourbrands in the top ten.With the gradual maturity of the new energy vehicle industry chain, the improvement of consumers' understanding andacceptance of new energy vehicles, the rich and diversified new energy vehicle products provided by backbone enterprises and thegradual improvement of new energy use environment, the new energy vehicle market in 2020 will go out of the downturn after thedecline of subsidies in 2019 and enter a new growth stage. New energy vehicles are recognized by more and more consumers. Theproportion of individual consumption of new energy has increased to nearly 70%, and the proportion of non-restricted cities has reached60%. From the perspective of vehicle type structure, the new energy market will be polarized in 2020, that is, the share of high-endand micro power will increase rapidly, and the total share of the two will reach 46.2%. The top 10 in terms of sales volume are the newforces of car making and the micro electric products of Chinese brands. [the above data / information comes from China automobileindustry production and marketing Express (China Automobile Industry Association) and its industry information release]

Chongqing Changan Automobile Company Limited 2020 Annual Report

In 2020, Chang'an Automobile will not forget its original intention and stick to its strategic transformation. It sold 2.04 millionvehicles in 2020 with a year-on-year growth of 14.0%. Changan Automobile adheres to technology leading, strives to break throughthe core technology, and is committed to creating classic products that satisfy users. Since its launch in June, UNI-T as the first high-end product of UNI was sold more than 10,000 cars a month, which is in short supply; CS75plus has sold more than 15000 cars amonth for nine consecutive months, boosting the annual sales of CS75 series to exceed 267 thousand cars; Eado plus has sold morethan 10,000 cars a month since its launch at the end of March, which ranked the first compact car of Chinese brands; CS55plus hasstable monthly sales driven by blue whale in 10,000 units; CS35 series cumulative sales reached one million, ranking in the forefrontof small SUV. Oushang X7 entered the mainstream passenger car competition circle, with annual sales exceeding 80,000 units; OushangX5, built on MPA's exclusive SUV platform, sold more than 10000 units in the first month of its launch; Lincoln adventurer continuedto sell well after its launch, and ranked fifth in the segment market in 2020, strongly supporting Lincoln brand to become the fastestgrowing luxury SUV brand in 2020.

Production and sales of China's auto industry in 2020

2020 Accumulative production (ten thousand)y-o-y increase (%)2020 Accumulative production (ten thousand)y-o-y increase (%)
Automobile2522.5-2.02531.1-1.9
Passenger cars1999.4-6.52017.8-6.0
Sedan918.9-10.0927.5-9.9
MPV101.1-26.8105.4-23.8
SUV939.80.1946.10.7
Cross-passenger car39.5-1.738.8-2.9
Commercial car523.120.0513.318.7
New energy cars136.67.5136.710.9
New energy Passenger cars124.711.3124.614.6

Chongqing Changan Automobile Company Limited 2020 Annual Report

EV99.19.4100.016.1

Chongqing Changan Automobile Company Limited 2020 Annual Report

and set up product CEO to improve product development efficiency and profitability. The Company strengthened the construction oftalent team, built a talent supply system of market-oriented employment and contract management, and introduced mature talents insoftware, new energy, intelligence and other aspects through multiple channels. Strengthen the incentive constraints, fully implementthe project follow-up investment mechanism, establish the incentive mechanism for incubating innovative business, and help thedevelopment of new business. The company should comprehensively carry out the "digital business project", promote the company'sdigital transformation, release the four major operation process architecture and working mechanism, and build a decision-makingsystem with products as the main line; promote the construction of CADDM platform, transparent research, production, supply andmarketing management; carry out the "data analysis competition", and create a digital cultural atmosphere for all staff.

3. Adhere to the bottom line thinking, business quality continuing to improve

While effectively doing a good job in epidemic prevention and control, Changan Automobile fully implemented the "16 character"policy, and made overall efforts to improve the operation quality. The Company continued to deepen the work of "increasing revenue,reducing cost, saving expenditure, controlling investment, reducing inventory, financing, cashing in and reforming". In the past threeyears, the Company shut down 1.09 million backward vehicle capacity and 0.5 million engine capacity, and further optimized theproduct and capacity structure. The average price of the independent brand continued to rise with significant results in cost reductionand cost saving, and the overall business quality continued to improve. In the face of the adverse impact of the epidemic on the wholeindustry and the complex and changeable international relations on the supply guarantee of enterprises, Chang'an Automobile deeplystudied and judged the current and future domestic and international situation and enterprise operation status, and made the overallplans to formulate the overall response strategy of "fast contraction, save expenditure; grab resources , be sustainable; change direction,build ecology; stabilize team, and ensure safety" so as to ensure the normal production and operation order to the maximum extent, aworking group was set up to sort out and screen the materials that may have supply guarantee risks one by one, formulate targetedsolutions, reserve key parts materials in advance, formulate alternative schemes and other means, and formulate medium and long-termsupply guarantee schemes to ensure the safety of the industrial chain supply chain full and stable.

4. Product innovation achieving the initial results, the brand achieving new results

The Company strengthened the creation of classic products and the Eado plus was well recognized by the market with the pre-sale orders exceeding ten thousand for 16 days, and the occupation of the forefront of the market segment. Uni-T, as the first high-endproduct of UNI series, is officially launched, and shaped an interesting future mass producer of science and technology; UNI-K, as thesecond product of UNI series, made a wonderful appearance in Guangzhou International Auto Show 2020. Changan Automobile's high-end product series Vision-V was officially released at Beijing auto show, depicting the innovative form of future cars and the pleasantexperience of travel for users. Oushang X5, built on MPa's exclusive SUV platform, had a vehicle engine system comparable to themainstream medium and high-end models; Oushang X7 EV- the first intelligent pure electric SUV, and Oushang Keshan EV-the firstpure electric high-end business travel MPV were officially released, marking that Chang'an Oushang officially entered the pure electricera. Represented by CS55plus blue whale and Ruicheng CC blue whale, Chang'an "blue whale family" models are recognized by moreand more users with the annual cumulative sales of more than 0.9 million vehicles, setting a new market benchmark for China'sautomobile power technology. Changan Ford explorers entered the mainstream joint venture medium and large-scale SUV circuit;Lincoln adventurer's sales quickly ranked in the forefront of the segment market after listing, competing with the first-line luxurybrands. Chang'an Mazda CX-30, a new generation of SUV for travel, was launched on the market, further enriching Mazda's productline in China.

With clear brand upward path, the Company released group brand management principle 3.0, clarified the four business brandstructure and strategic direction, promoted the new and upward development of products and people, clarified the brand positioning of"technology Chang'an intelligent partner" of passenger cars, and the brand positioning of "walking with a better life" of Oushangautomobile. The Company renewed the brand visual image, flattened the monochrome logo more in line with the new trend of youthand digital. The brand-new brand exclusive font "Chang'an gravitation body" was officially unveiled, and through the font design, thebrand's "sense of technology with temperature" and "sense of partner care" were conveyed. 57% of the users of UNI-T, a new seriesproduct, are grabbed from a joint venture brand; UNI-K real cars showed up at Guangzhou auto show, receiving the attention far more

Chongqing Changan Automobile Company Limited 2020 Annual Report

than UNI-T and CS75plus over the same period. Through the innovation of communication forms, such as live broadcasting activitieson the market, public welfare live broadcasting with goods, and "together" film and television implantation, the company can achievea win-win situation of brand value penetration and user flow, and directly reach the new generation of consumers. "Ten thousand peoplewe media" cloud live broadcasting had an average of 3000 per day, with a total of more than 0.42 million live broadcasting, and thenumber of communicators exceeded 4.4 billion. The Company promoted the continuous improvement of brand potential, planned aseries of activities of Chang'an Automobile Brand day, created hot topics such as "Chang'an Automobile ark structure", and carried outmulti-directional communication through mainstream media, so as to make the company's brand potential rise.

List of products listed in 2020

Date of listingModel nameModel features
March,2020Eado PLUSEado plus, a quality sedan Evolver, leading the new style of contemporary sedan. The new generation of sports modeling: new high-value dual modeling front face with star pupil eye LED light group, set fashion and dynamic in one; humanized care type central control layout, super fiber zero sitting seat, star night piano keys, red and black two-color interior, collision with a fashionable and dynamic exquisite cockpit. International quality blue whale power: equipped with blue whale NE 1.4T high pressure direct injection engine, the peak power is 116kw, the peak torque 260N?m, the surging power is on the verge; the low fuel consumption of 5.9L per 100 km with 190 km more per tank of oil; meeting the national 6th emission standards, fuel saving and environmental protection. Embracing intelligent luxury driving cabin: adopting integrated dual 10.25 inch high-definition large screen, in-call intelligent interactive system, PAB early warning auxiliary braking system, pause and go full speed adaptive cruise, 360 ° look around dash cam to make life more comfortable. Intelligent health management system: through the "material selection and production control system", strictly controlling the odor and VOC, equipped with "pm 0.1 filter guard + healthy fresh air purification system" and self-drying air conditioning function, to create a healthy, environmentally friendly and comfortable driving environment for users.
August,2020CS55PLUS Blue Whale VersionCS55PLUS blue whale is another fashionable and personalized SUV for young people in the compact SUV market under the international R&D pattern of Changan Automobile. Style design: CS55PLUS blue whale version, with a new family design, stimulates the visual impact of lava explosion. Equipped with Obsidian gradual change grille, fierce battle unbounded LED high and low light integrated headlamp, 18 inch edge shadow wheel hub, laser sword through LED tail lamp, the first to catch the eye; technology care for central control layout, hot blood gushes for driving and control; CS55PLUS blue whale version with both cutting edge and momentum, making the eye-catching style further. Blue whale power: CS55PLUS blue whale version is equipped with blue whale NE1.5T high-pressure direct injection engine, which interprets the leading R&D concept of "strength, quiet and clean" with a number of global first launches and global leading technologies. The maximum rated power is 132kw, and the maximum torque of 300N·m can be output at 1250rpm, which gives consideration to power performance, energy saving and environmental protection. Intelligent interaction: CS55PLUS blue whale version is equipped with IFLYTEK 2.0 system, which makes the system operation more fluent. 360° HD panoramic image, 360° dash

Chongqing Changan Automobile Company Limited 2020 Annual Report

cam, intelligent voice interaction for every trip. Quality technology: CS55PLUS blue whale version, from the advanced wisdom factory, with wisdom to creating first-class quality. Through a series of high standard and rigorous tests covering active and passive safety, high standard vehicle quality is ensured. Safety defense: CS55PLUS blue whale version, equipped with high-strength energy absorbing body, 6 airbags configuration, TPMS intelligent tire pressure monitoring, etc., to fully protect the body safety and help you cross the border. Comfortable driving: the whole system is equipped with fresh air system, PM0.1filter, enhanced four-wheel independent suspension system, Nexteer electronic power steering system, CS55PLUS blue whale version, not afraid of bumpy road, just enjoy the road ahead.
September,2020CS75PLUS 2021 VersionCS75 plus is based on the concept of Changan performance family. Through the upgrade of platform architecture and power system, it comprehensively considers the balance of various performances under the scenario of users, and is positioned as the car of A+class SUV tomorrow. With advanced product strength, it can meet the user's future car demand. Design: CS75 plus is designed by a European design team composed of more than 200 foreign designers from 24 countries. It adopts the design concept of Yuyue, with tension front face, dynamic posture and coordinated color, making the whole car full of future design style. Wisdom: the high matching vehicles are equipped with the intelligent functions of APA5.0, mobile phone bluetooth key and so on. The AT model of Changan, equipped with the intelligent system of the Indus vehicle, is developed by Changan and Tencent Integrate Tencent's ecological resources and become a truly intelligent Internet vehicle. Power: it is equipped with the classic power combination "blue whale 1.5TGDI + Aisin 6AT" and the gold power combination "blue whale 2.0 TGDI + Aisin 8AT". Both engines have won the title of "top ten engines of China heart", and the transmission is the latest generation of Aisin transmission. Safety: CS75 plus has won 6 outstanding achievements in C-NCAP five-star safety and China Insurance Research Institute collision. It is equipped with 6 airbags and 38.3% high strength steel, leading the level of the same class.
June, 2020UNI-TUNI-T meets the diversified needs of the young generation of consumers through its new design, powerful intelligent vehicle system, new blue whale power and platform architecture, and L3 level automatic driving technology. Lattice gravity: UNI-T grille adopts parametric design, based on the geometric application of multivariate function, accurately arranges 150 diamond elements; abandons complex body lines, sculptures light and shadow changes with simple and elegant "pure surface"; hidden door handle and body surface are integrated; the original V-shaped spoiler is one of the symbolic designs of UNI-T, whose inspiration comes from aerodynamics A new swept wing design. Smart gravity: the integrated dual 10.3 inch screen design is adopted to provide AI active services such as exclusive greeting for getting on, bright screen for sight, distraction reminder for getting off the highway, and advanced technology configuration such as L3 level automatic driving in the future. In addition, it is equipped with incall vehicle remote control system and IACC integrated adaptive cruise system for intelligent assistance and easy travel. Racing gravity: the blue whale NE1.5T high pressure direct injection engine carried by UNI-T coming from the blue whale NE power platform, the first modular engine development

Chongqing Changan Automobile Company Limited 2020 Annual Report

platform in China. Its maximum power is 132kw (180hp), 1250rpm (1250-3500rpm) can output the maximum torque up to 300N.m, so that the turbine hysteresis is reduced to not be perceived by the driver, and the fuel consumption per 100 km is 6.3L, meeting the national 6B emission, taking into account the power performance, energy saving and environmental protection. Equipped with a new blue whale 7-speed wet dual clutch transmission, quick response, no sense switching, calmly cope with various working conditions. The comprehensive transmission efficiency is as high as 94.3%, and the surging power has no damage to output. Safety and health: PM0.1 filtering system is equipped in the whole system to comprehensively filter virus; steel strength is up to 1500MPa, and high strength steel and above account for 61%, making the body of steel; meanwhile, AEB automatic emergency braking auxiliary system, LDW lane departure warning and other active intelligent safety systems are equipped to provide all-round safety protection.
November,2020Oushang X5Oushang X5 is a brand new strategic model of Oushang automobile. It has four super product forces: super sense design, super moving force, super sense intelligence, super sense space, and refreshes the new benchmark of sport SUV. Oushang X5 is the first SUV to show the beauty of light and shadow with the brand-new "shaping light" aesthetic design. Inspired by light, Oushang X5 creates the most wonderful light and shadow flow with the new body shape by designing the dynamic body surface. It has the lowest center of mass height of 630 mm and the widest body of 1860 mm. It perfectly presents the body surface of wide body and low prone motion posture, and makes light and shadow flow’s form and spirit, speed and power are displayed incisively and vividly. Oushang X5 is equipped with blue whale NE 1.5T high-pressure direct injection engine, blue whale 7-speed wet dual clutch transmission and racing sports chassis adjustment. The maximum power is 132kw, the maximum torque is 300N·m, and it has 180 powerful horsepower. At the same time, starting response time is only 360ms, acceleration speed 0-60km/h is only 3.63s, surging new power with speed and power, completely release the dynamic. Cool and fun with the latest generation of smart power. Onstyle3.0 intelligent ecosystem caters to the needs and characteristics of modern young people's car life, brings them a new experience of fast, smart, simple and pleasant, and comes with FOTA auto upgrade function. There are also intelligent systems such as face recognition, remote vehicle control, the car KTV, track mode, etc. through intelligence and technology. Oushang X5 is born for young people. It is dedicated to become the first high gloss car for contemporary young people with dynamic appearance and sports soul in mind.
December,2020Oushang X7The 2021 Oushang X7 is a popular urban SUV. It is sincerely recommended by 100 thousand old car owners to continue its popularity. With the "three good" label of "good looking, good driving, good fuel saving", it will bring more comfortable and intelligent driving experience for the enterprising family of the popular generation. The 2021 Oushang X7 adopts the design concept of "natural aesthetics" in appearance design, and is recognized by the international CMF Design Award; 2780mm super long wheelbase brings super comfortable riding space and 140mm comfortable leg space in the second row at the same time; open Onstyle intelligent Internet connected vehicle system is equipped with internal and external

Chongqing Changan Automobile Company Limited 2020 Annual Report

dual camera face recognition system, supporting APA 5.0 one click automatic parking,combined with Huawei hicar, realizes the full scene experience with mobile phone as the core;Oushang X7 is equipped with bluecore 1.5TGDI aluminum engine + blue whale 7-speed wetdual clutch transmission power combination, 8 million km rigorous test verification, shiftsensitive and smooth, more fuel-efficient; car height strong steel accounted for 75%, plus frontairbag + front side airbag combination, can maximize the protection of driving safety. PM0.1high efficiency anti-virus filter is equipped with wake-up LED light group and 3000lmmillisecond level lighting, which brings safe and intimate driving experience; flexiblesubframe can absorb and attenuate vibration and noise from road surface, and upgrade NVHperformance in an all-round way.

5. Accelerate the promotion of "Beidou Tianshu" and "Shangri La" plans, technology leading product innovationAccelerate the implementation of "Beidou Tianshu" plan, establish software technology company, build vehicle software platform,and deeply cultivate software to define vehicle. The second "Beidou Tianshu" achievement conference was held, and the Tianshuscience and technology project cooperation agreement was signed with Chongqing Municipality government, focusing on thedevelopment of automatic driving platform above L4 level, the development of automatic driving vehicle, and the commercial operationof automatic driving, so as to realize the mass production and large-scale commercial operation of driving platform after 2025. Thefirst mass production experience of L3 level automatic driving in China has been completed; the industry's first line of sight brightscreen, automatic ventilation of smoking, lip recognition, etc. have promoted the evolution of intelligent interaction from "voice based"to "voice + video". The company participated in and led the formulation of the first international standard of China's automobilemultimedia, which marked the beginning of China's multimedia integration technology to the world.

The Company further promoted the "Shangri La" plan, completed the reform of the mixed ownership of Chang'an new energy,and introduced the four party strategic investors. The company have mastered 17 core technologies including seven in one electricdrive assembly, pure electric platform EPA1、EPA2 and safety battery. Changan new energy's first smart power exchange demonstrationstation, built with CATL, Aodong, State Grid, iron tower and other power exchange alliance partners, was officially opened to thepublic and put into demonstration operation. It took only 30 seconds to replace the power battery once. The successful launch of bluewhale 2.0T longitudinal B prototype indicates that the research and development of Chang'an blue whale 2.0T longitudinal engine hasachieved phased results, which will further boost the light vehicle project to achieve cost reduction.The Company focused on customers and developed high-quality products. UNI and classic series support each other while forminga performance division. Classic products are added and popular products are overlapped; UNI series of high-end products shapedinteresting future mass producers of science and technology. The architecture of Chang'an ark has entered the application verificationstage, covering all A0-C models. Blue whale NE 1.5T engine won the title of "China heart" top ten engines in 2020, and successfullychallenged the Guinness world record of "longest live video" with full load operation. The Company focused on new technologydevelopment, it won 10 awards in the 2020 "China automobile industry science and Technology Award", ranking first amongautomobile enterprises; CS75 plus won the CCTV annual best intelligent connected vehicle Award; UNI won the "Horizon Cup" annualintelligent SUV award of China's intelligent car, and won the first place in the 2020 "i-vista automatic driving challenge" automaticparking and No.1 of independent brand of car in the automatic braking.

6. Build marketing system and improve customer experience

At the end of the reporting period, the company had 1617 cooperative distributors. The Company focused on customers, built acollaborative marketing system of product planning, brand promotion and marketing tactics, and promoted the four efficiency changesof "contact, making deal, customer acquisition and collaboration". By strengthening the channel carrying capacity, Chang'an passengercar built new UNI service center, experience store and other channels with the channel point coverage rate significantly improved;Oushang has implemented the differentiated store building strategy, and the prefecture level city coverage rate exceeded 70%.Accelerate the digital transformation of marketing, operate UNI planet public domain platform and Chang'an gravity private domain

Chongqing Changan Automobile Company Limited 2020 Annual Report

APP, and directly connect to the three values of "marketing, users and ecology"; Oushang automobile uses Oushang style APP to realizedealers' direct connection to customers and their orders.In order to provide 19 million users with pleasant experience and temperature, Changan Automobile adhered to the service conceptof "fast, direct, accurate and interactive", started the "No.1 Project" - customer service project, unswervingly implemented the "fivepromises", and transformed from serving customers to operating customers. The company carried out 28 operations such as "inventory,channel upgrade, loan approval" to quickly respond to customer needs, improved customer experience and met customers' diversifiedneeds at the same time. The Company conducted the service product planning work, created professional, convenient, active andpleasant service products, listened to the voice of customers, set up a team of chief experience officer, interacted with the company'ssenior executives online. The Company launched the Online Changan encyclopedia sharing interactive platform for users to solve theproblems in the process of using the car with online a month cumulative customer visits more than 400 thousand. Customer satisfactioncontinued to improve, in the report on customer satisfaction evaluation of 20 brand automobile 4S stores released by China ConsumerAssociation, Chang'an Automobile won the first place in service satisfaction of its own brand 4S stores with a high score of 84.2.

7. Continuously deepen joint venture and cooperation, and steadily improve business qualityThe Company unswervingly pushed forward the "revitalization plan" of Changan Ford, focus on "two leading items, five majorimprovements", and through a series of measures such as strengthening operation monitoring, increasing new product launch, andimplementing the optimization of marketing system, the Company promoted the steady improvement of Changan Ford's businessquality. Changan Ford gradually stabilized and picked up its sales volume, and achieved a year-on-year outperformance over theindustry in terms of annual sales volume, with a sales volume of 253 thousand vehicles, a year-on-year increase of 37.7%, accountingfor the market share increasing by 0.41% year-on-year, rising to the 12th place in the sales ranking of joint venture narrow sensepassenger car enterprises. Four brand-new models, including Ford Explorer and Lincoln adventurer were successfully launched, andthey achieved high attention and top sales in the market segments. Among them, Ford Explorer went on the market in July, and itscumulative sales exceeded 10000 in three months. From October to December, its market share in the market segments was more than20%, and its annual sales volume ranked third in the market segments.Chang'an Mazda continued to create characteristic products and adhere to value marketing. The next generation Mazda 3 Axela Xignition honor and Mazda CX-30 X ignition honor are officially listed; the next generation Mazda3 Axela has won six excellentevaluations in the C-IASI collision test of China Insurance Research Institute, showing super safety strength. Chang'an Mazda definedthe future product plan, launched the next generation product project, implemented the digital marketing reform with innovative andrich marketing ideas and forms, and continued to provide users with favorite products, technologies and service experience.

8. Actively build supporting system to meet the production demand of core parts

The Company actively promoted the continuous optimization and improvement of the supporting system through going out andinviting in and opening up the supply chain channels, established a supplier library covering the whole industry so as to meet thecompany's differentiated needs. At the same time, the Company optimized the supplier performance evaluation, so that the fittest canbe eliminated, and the supplier system can be activated, so as to strengthen the competition, reduce the procurement cost, and providesupport for the long-term operation of the enterprise. Different procurement strategies were formulated for different products: theCompany actively promoted the centralized procurement of bulk materials, integrated common brand businesses such as passengercars, Oushang and Kaicheng, centralized procurement volume, unified bidding points, and reduced the procurement costs; the Companycoordinated R&D, procurement and production, and actively promote platform and modular work. In the next five years, the value ofplatform and modular parts will account for a large proportion through scale efficiency, the status of parts was reduced by 50%, andthe cost was reduced by 30%.The Company actively promoted the strategic cooperation with suppliers according to the characteristics of product categories andthe company's development needs, worked with suppliers to give full play to their respective advantages, achieved resource sharing,cost optimization, partnership depth cooperation, and established Chang'an supplier community with Chang'an characteristics. Basedon "mutual respect, value creation and benefit sharing", the Company encouraged suppliers to tap the potential of cost reduction andjointly promote vave to achieve the situation of cost reduction, achievement sharing and benefit win-win.

Chongqing Changan Automobile Company Limited 2020 Annual Report

CS75 series, the main model of Changan Automobile, adopted a combination of self-made production and external procurement.Key parts, such as blue whale direct injection engine, are independently researched and developed by Changan Automobile, which caneffectively control the cost and enhance the quality control of key parts through self-made. In cooperation with international first-classparts enterprises, the Company purchased Aisin 8AT and 6AT transmissions and Chongqing Qingshan Industrial Co., Ltd 7-speed wetdual clutch transmission, Berg Warner AWD all wheel drive system, and Wutong car link TINNOVE intelligent system. Externalprocurement integrated industry resources, selected suitable suppliers, made CS75 be safer and more intelligent, maximized enterprisebenefits, and provided support for continuous improvement of company performance.

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

20202019Increase/decrease on a y-o-y basis (%)
SumShare of operating income(%)SumShare of operating income (%)
Operating revenue84,565,544,146.58100.00%70,595,245,133.28100.00%19.79%
Industry
Automobile84,565,544,146.58100.00%70,595,245,133.28100.00%19.79%
Products
Vehicles82,795,178,990.4897.91%69,392,923,811.9398.30%19.31%
Provision of labor services and others1,770,365,156.102.09%1,202,321,321.351.70%47.25%
Area
China80,532,222,529.7195.23%67,531,869,212.5995.66%19.25%
Overseas4,033,321,616.874.77%3,063,375,920.694.34%31.66%

Chongqing Changan Automobile Company Limited 2020 Annual Report

Unit : Yuan

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
Automobile84,565,544,146.5872,473,471,726.8514.30%19.79%20.32%Down 0.38 points
Products
Sales of products82,795,178,990.4871,490,822,214.2013.65%19.31%19.79%Down 0.35 points
IndustryItem20202019Increase/decrease on a year-on-year basis (%)
Automobile IndustrySales volume2,003,6631,759,91613.85%
China1,921,2091,690,16313.67%
Overseas82,45467,75321.70%
Production volume2,033,1601,797,02613.14%
China1,950,7061,729,27312.80%
Overseas82,45467,75321.70%
Stock volume86,83758,37148.77%
Market share(%)7.92%6.81%Up 1.11 points
Product CategoryCapacity statusProduction volumeSales volume
New energy passenger car700 thousand30,67134,926

Chongqing Changan Automobile Company Limited 2020 Annual Report

New Energy Commercial Vehicle170 thousand2,4222,187
Industry classificationItem20202019Increase/decrease on a year-on-year basis (%)
AmountRatio in operation cost (%)AmountRatio in operation cost (%)
Automobile ProductionProduct Sale7,149,08298.64%5,967,92299.08%19.79%
Provision of labor services and others98,2651.36%55,3370.92%77.58%
Total7,247,347100.00%6,023,259100.00%20.32%
Total sales amount to top 5 customers (RMB)7,255,859,946.45
Proportion of sales to top 5 customers in the annual sales (%)8.58%
Proportion of sales amount of the related party in the top 5 customers(%)4.52%

Chongqing Changan Automobile Company Limited 2020 Annual Report

Top 5 customers

Unit : Yuan

Serial No.companySales valueproportion in total sales(%)
1First1,754,076,224.002.07%
2Second1,681,023,197.661.99%
3Third1,624,459,884.381.92%
4Fourth1,149,704,763.571.36%
5Fifth1,046,595,876.841.24%
total7,255,859,946.458.58%
Total purchase amount to top 5 suppliers (RMB)10,409,278,935.75
Proportion of purchase to top 5 suppliers in the annual purchase (%)14.56%
Proportion of purchase amount of the related party in the top 5 suppliers(%)8.38%
Serial No.Company namePurchase valueProportion in the total purchase(%)
1First3,684,739,124.135.15%
2Second2,310,795,366.633.23%
3Third1,516,055,918.292.12%
4Fourth1,526,698,062.322.14%
5Fifth1,370,990,464.381.92%
Total10,409,278,935.7514.56%
Item20202019increase/decrease(%)Description of major changes
Selling expense3,413,296,854.704,591,170,885.94-25.66%
Management expense4,273,555,030.822,265,231,518.6588.66%New energy points and employee compensation increase
Financial expense-210,224,449.63-190,849,511.73-10.15%

Chongqing Changan Automobile Company Limited 2020 Annual Report

R&D expense3,153,888,007.293,169,063,761.13-0.48%
20202019Changes in ratio
Labor Number6,6367,829-15.24%
Proportion of labor in the Company16.47%21. 30%Down 4.83 pionts
Investment value (yuan)4,141,752,049.284,478,435,313.28-7.52%
Proportion of investment in the revenue4.90%6.34%Down 1.44 pionts
Capitalization (yuan)987,864,041.991,309,371,552.15-24.55%
Proportion of capitalization in R&D investment23.85%29.24%Down 5.39 pionts
Item20202019Increase/decrease(%)
Subtotal of cash inflows from operating activities89,514,237,309.6375,201,286,289.3719.03%
Subtotal of cash outflows from operating activities78,838,283,830.3971,319,538,050.9810.54%
Net cash flows from operating activities10,675,953,479.243,881,748,238.39175.03%
Subtotal of cash inflows from investing activities6,821,367,307.442,291,173,505.54197.72%
Subtotal of cash outflows from investing activities3,216,664,440.156,085,786,845.19-47.14%
Net cash flows from investing activities3,604,702,867.29-3,794,613,339.65195.00%
Subtotal of cash inflows from financing activities8,600,917,401.42337,719,805.562446.76%
Subtotal of cash outflows from financing activities1,553,526,997.52738,294,133.17110.42%

Chongqing Changan Automobile Company Limited 2020 Annual Report

Net cash flows from financing activities7,047,390,403.90-400,574,327.611859.32%
Net increase in cash and cash equivalents21,295,493,382.74-287,678,939.917502.52%
ItemDec.31,2020Dec.31,2019Increase/ decrease (%)instructions
AmountRatio in total assets(%)AmountRatio in total assets(%)
Cash32,001,775,600.0726.47%10,066,171,353.4810.31%16.16%Net cash flow from operating activities increased, net cash flow from investing activities increased, net cash flow from financing activities increased
Notes receivable2,141,197,139.451.77%838,314,076.820.86%0.91%Mainly due to the changes in the scope of consolidation in the current period, the accounts receivable in the original consolidation scope were turned into accounts receivable outside the consolidation scope
Inventory5,967,516,230.574.94%3,375,441,488.373.46%1.48%In order to cope with the peak

Chongqing Changan Automobile Company Limited 2020 Annual Report

sales season before the Spring Festival, increase inventory reserves in advance
Investment property6,876,138.160.01%7,102,849.720.01%0.00%
Long-term equity investments12,109,089,795.6710.01%11,008,336,989.0911.28%-1.27%
Fixed assets26,436,757,696.9621.86%26,939,490,554.1927.60%-5.74%
Construction in progress1,048,036,148.700.87%1,729,803,028.431.77%-0.90%During the reporting period, the project was converted to fixed assets
Short-term loans578,000,000.000.48%229,580,000.000.24%0.24%During the epidemic, the company obtained special loans from financial institutions to deal with uncertain risks
Long-term loans955,300,000.000.79%55,300,000.000.06%0.73%Caused by the company's new special loan
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 assets2,419,476,200.002,035,390,665.86-4,250,612,465.86204,254,400.00
Equity instrument investment734,506,100.00-39,516,100.00-3,000,000.00691,990,000.00
Subtotal of financial assets3,153,982,300.002,035,390,665.86-39,516,100.00-4,253,612,465.86896,244,400.00
Others-----
Total3,153,982,300.002,035,390,665.86-39,516,100.00-4,253,612,465.86896,244,400.00
Financial liabilities------

Chongqing Changan Automobile Company Limited 2020 Annual Report

Whether the measurement attributes of main assets in the reporting period have significantly changed

□ Yes √ No

3、Property rights limits by the end of report period

ItemBook value at the end of this yearLimited Reason
Cash1,345,807,542.44Used to open the acceptance deposit
Notes receivable and accounts receivable7,320,550,460.00Notes receivable pledge to issue notes payable
Intangible assets17,661,564.48Obtain liquidity borrowings and obtain commercial acceptance bills
Fixed assets22,953,779.68Obtain liquidity borrowings and obtain commercial acceptance bills
Total8,706,973,346.60
External investment
Investment Amount in the report period(RMB)Investment Amount in 2017(RMB)Variance rate
3,790,000,0001,800,000,000110.56%
Particulars of investees
Company NamePrincipal businessProportion in the investees’ equity (%
Zhongqi Chuangzhi Technology Co., Ltd.Licensed items: technology import and export; import and export agency; import and export of goods (items that are subject to approval in accordance with the law can only be carried out after the approval of the relevant departments, and the specific business items are subject to the approval results) General projects: technical services, technology development, technical consultation, technical exchanges, technology transfer, technology promotion; industrial design services; software development; industrial automatic control system device manufacturing; industrial automatic control system device sales; mechanical parts and components sales; electric power Sales of electronic components; sales of electronic products; research and development of auto parts; retail of auto parts; wholesale of auto parts; sales of new energy vehicle production and testing equipment; sales of new energy vehicles; motor vehicle3.125%

Chongqing Changan Automobile Company Limited 2020 Annual Report

modification services; integrated circuit manufacturing; electronic components Device manufacturing; engineering and technical research and experimental development; electrical signal equipment manufacturing; sales of new catalytic materials and additives; research and development of electronic special materials; battery sales; battery manufacturing (except for items subject to approval according to law, independent of business license Carry out business activities)
Chongqing Changan Kaicheng Automobile Technology Co., Ltd.Licensed items: car rental, technology import and export, import and export of goods (items that are subject to approval in accordance with the law can only be carried out after the approval of the relevant departments, and the specific business projects are subject to the approval documents or licenses of the relevant departments) General items: new automobile sales, automobile parts wholesale, automobile parts and accessories manufacturing, new energy automobile sales, new energy automobile electrical accessories sales, automobile parts research and development, technical services, technical development, technical consultation, technical exchanges, Technology transfer, technology promotion, engineering and technology research and experimental development, software development, information consulting services (not including licensing information consulting services), mold manufacturing, mold sales, domestic cargo transportation agency, energy saving management services, energy recovery system research and development, New energy prime mover equipment manufacturing, emerging energy technology research and development, Internet sales (except for the sale of commodities that require licenses), old automobile sales, automobile spare parts retail, motor vehicle repair and maintenance (except for items subject to legal approval, business operations License to carry out business activities independently according to law)83.64%
Hefei Changan Automobile Co., Ltd.Changan brand series cars, other passenger cars, light trucks, special vehicles and (pure electric) new energy vehicles; design, manufacturing, product sales and after-sales service of auto parts; warehousing (except dangerous goods) services, house leasing; technology Consultation and services (should be subject to administrative permission and shall not operate without permission).100%

Chongqing Changan Automobile Company Limited 2020 Annual Report

3、Major non-equity investment in the reporting period

Please refer to Notes V to Financial Statement Item 13” Construction in progress”.

4、Investment of Financial Assets

(1)Equity-holdings in financial enterprises

√ 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%33,630,0000.51%180,929,400.0010,891,844.22Transactional financial assetsInitial investment
Stock300750CATL1,000,000,82122,999,5751.06%000.001,989,583,062.47Transactional financial assetsInitial investment
Total1,050,000,82158,499,575--33,630,000--180,929,400.002,000,474,906.69----
Year of RaisingRecruitment methodTotal funds raisedThe total amount of funds raised in the current period has been usedThe total amount of funds raised has been usedThe total amount of funds raised during the reporting periodCumulative total amount of funds raised for change of purposeProportion of total raised funds for cumulative changesThe total amount of funds raised has not been usedThe purpose and destination of the raised funds not yet usedAmount of funds raised after being idle for more than two years
2020Non-public offering of shares598,608.41325,207.93325,207.93000%273,400.48Deposited in a special account for raised funds0
Total--598,608.41325,207.93325,207.93000%273,400.48--0
Description of the overall use of raised funds
The board of directors of the company believes that the company has disclosed the storage and actual use of the company’s raised funds in a timely, true, accurate and complete manner in accordance with the "Guidelines for the Standardized Operation of Listed Companies on the Shenzhen

Chongqing Changan Automobile Company Limited 2020 Annual Report

Stock Exchange" and relevant format guidelines. Violations of fund management. The company has faithfully fulfilled its obligation to disclose theinvestment direction and progress of the raised funds.

(2) Promise of raised funds

√ Applicable □ Not applicable

Unit: ten thousand yuan

Total funds raised598,608.41Total funds raised this year325,207.93
The total amount of funds raised during the reporting periodNot applicableThe total amount of funds raised has been invested325,207.93
Proportion of total raised funds for cumulative changesNot applicable
Commitment to investment projectsWhether the project has been changedTotal committed investment of raised funds (Note 1)Adjusted total investmentCommitment investment amount as of the end of the period (1)Amount invested this yearCumulative investment amount as of the end of the period (2)Investment progress as of the end of the period% (3) = (2)/(1)Whether the project has reached the intended usable stateBenefits realized this yearWhether it meets the expected returnWhether the feasibility of the project has changed significantlyReasons for not reaching the planned construction period
H series fifth phase, NE1 series first phase engine production capacity construction projectNo141,568.38141,568.38141,568.3841,447.9441,447.9429%NoNot applicableNot applicableNoNot applicable
Crash Laboratory Capacity Upgrade Construction ProjectNo11,505.7511,505.7511,505.75567.96567.965%NoNot applicableNot applicableNoNot applicable
CD569 production line construction projectNo15,576.2215,576.2215,576.2257.0857.080%NoNot applicableNot applicableNoNot applicable
Hefei Changan Automobile Co., Ltd. adjustment and upgrade projectNo249,958.06249,958.06249,958.06103,134.95103,134.9541%NoNot applicableNot applicableNoNot applicable
Supplementary working capitalNo180,000.00180,000.00180,000.00180,000.00180,000.00100%NoNot applicableNot applicableNoNot applicable
Total598,608.41598,608.41598,608.41325,207.93325,207.9354%-----
The situation and reasons for not reaching the planned progress or expected benefits (divided into specific projects)There was no such situation during the reporting period.
Description of major changes in the feasibility of the projectThere was no such situation during the reporting period.
Preliminary investment and replacement of raised funds investment projectsOn November 18, 2020, the Ninth Meeting of the Eighth Session of the Board of Directors of the Company reviewed and approved the "Proposal on the Use of Raised Funds to Replace Early Investment in Own Funds", and agreed to use raised funds of RMB 1,378,818,553.05 to replace pre-invested investment projects. Self-funded. The replacement of the raised funds has been verified by the Ernst & Young Hua Ming (2020) Special Zi No. 60662431_D05 special report issued by Ernst & Young Hua Ming Certified Public Accountants (special general partnership).
Temporarily supplement liquidity with idle raised fundsThere was no such situation during the reporting period.

Chongqing Changan Automobile Company Limited 2020 Annual Report

Cash management of idle raised funds and investment in related productsThere was no such situation during the reporting period.
Permanently supplement working capital with over-raised funds or return bank loansThere was no such situation during the reporting period.
The amount of funds raised and the reason for its formationThe fundraising project is still in progress, and the raised funds have not been used up yet.
Other use of raised fundsThere was no such situation during the reporting period.

Chongqing Changan Automobile Company Limited 2020 Annual Report

to the "Announcement on the Progress of the Sale of Equity in Joint Ventures" (Announcement Number: 2020-42).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 business135-199,097
Chongqing Changan Auto Union Technology Co., Ltd.8,850100%Lease130,1399,297-38,369
Changan Mazda Automobile Co. Ltd11,097USD50%Produce and sell auto and parts1,134,6531,726,463147,568
Nanchang Jiangling Investment Co., Ltd.100,00050%Investment management, industrial investment and asset management465,069--107,202
Chongqing Changan New Energy Automobile Technology Co., Ltd.20,22348.95%Produce and sell auto and parts568,443214,791-116,190
NameAcquisition and disposal of subsidiaries during the reporting periodOn the overall production and operation and performance impact
Chongqing Changan Automobile Software Technology Co., Ltd.Newly establishedNo major influence
Changan Weilai New Energy Automobile Technology Co., Ltd.Business combination not under common controlNo major influence
Chongqing Changan Kaicheng Automobile Technology Co., Ltd.Newly establishedNo major influence
Chongqing Changan New Energy Automobile Technology Co., Ltd.Dilution of equityMajor influence

Chongqing Changan Automobile Company Limited 2020 Annual Report

VIII. Structural main business under the company control

□Applicable √Not applicable

IX. The company's future development prospect

1. Industry pattern and trend

(1) New era: the global automobile industry undergoing profound changes, and the new era breeding new opportunities.Macro environment: the world is facing a great change that has not happened in a century. The fourth industrial revolutionpromotes the transformation of global economic growth momentum, with an average annual growth rate of 2.5% in the next five years.China held the Fifth Plenary Session of the 19th CPC Central Committee to start a new journey of building a modern socialist countryin an all-round way, with an average annual economic growth of 5.2% in the next five years.

Policy orientation: guide the automobile industry to "zero emission" transformation. The government should improve theconsumption environment, encourage car sales in the countryside, trade in old cars for new ones, and use new energy, so as to stabilizethe sustained and good development trend of the industry. The government will accelerate the construction of standards, infrastructureand systems.

Industry trend: new technologies such as electrification, intellectualization and digitization accelerated the innovation andintegration. New energy has entered a period of rapid development, automatic driving L3 has entered a period of popularization, andL4 has gradually entered into commercial operation. Global auto companies are restructuring their business: product function, customerecology and business model. Global auto sales grow by 3% annually, and China's first market position is more consolidated, with anaverage annual growth of more than 3-4%.

Consumption characteristics: the third and fourth tier cities will be the main contribution of new car increment in the future. Newenergy, special vehicles, second-hand cars and other markets have great potential for growth. The additional replacement contributedmore than 50% to the sales of new cars. China has entered the third consumer society, and its consumption values are moving towardsquality, high-end and personalized characer.

(2) New pattern: China's auto industry speeding up the reshuffle and reshaping the competition pattern

The survival of the fittest is accelerated, Matthew effect is highlighted, and leading enterprises of independent brands rise. Thestable share of independent brands can be maintained at about 30%. With the expansion of competition and cooperation fields broughtby industrial transformation, enterprises need to build core competitiveness, strengthen cooperation, integrate global cross-border andpeer high-quality resources to become an efficient way to enhance competitiveness. The overseas expansion of Chinese automobileenterprises is the only way to become stronger. The 2022 is the turning point of joint venture development, and the cooperation patternwill be reconstructed.

(3) New strategy: brand upward and four modernizations transformation being the theme of Chinese brand transformation

The strategic transformation of major Chinese brands tends to be the same, focusing on five aspects: stronger autonomy, brandupward, digital transformation, ecological cooperation and overseas expansion. The planning of domestic automobile enterprises haschanged from scale expansion to focus on development quality.

2. Company development strategy

The company adheres to the new development concept, persist in innovation driven, adhere to open cooperation, adhere to thetransformation and development, and guide the development of China's national automobile brand with the development of high quality.Strengthen the direction of the third entrpereneurship, and accelerate the transformation to an intelligent low-carbon travel technologycompany by strengthening the main business, fast transformation, seizing the market and building the ecology. Strengthenmanufacturing advantages, speed up the improvement of scientific and technological capabilities, take science and technology as themeans, and "intelligent, electric" as the characteristics, promote the development of the company to the sharing industry and ecological

Chongqing Changan Automobile Company Limited 2020 Annual Report

industry, and form a "new automobile + new ecological" industrial company.

3. Business plan

The business objective of the board of directors of the company in 2021 is to produce and sell more than 2.15 million vehicles. Inorder to achieve the above goals, the company takes "firm transformation, innovative breakthrough, digital drive, quality improvementand efficiency" as the key, focuses on revenue, cost and profit, strengthens marketing traction and pays close attention to businessquality. The Company will focus on the following work: firstly, pay close attention to the implementation of strategy to transform tointelligent low-carbon travel technology company; secondly, promote the innovation and breakthrough to drive transformation andupgrading; thirdly, pay attention to income growth, consolidate the foundation and do incremental reform to promote high-qualitydevelopment; fourthly, strive for cost breakthrough to achieve cost reduction in the whole region and promote quality and efficiencyimprovement; fifthly, improve efficiency to build "efficiency" as the core of the organization; Sixthly, build the ability to createdifferentiated competitive advantage; seventhly, strengthen brand promotion and cultural innovation to form a strong Chinese brandimage and strong IP; eighthly, strengthen basic guarantees and lead high-quality development.

4. Capital expenditure plan of the company in 2021

In order to achieve the strategic objectives of the company, it is estimated that the investment plan of the company and itscontrolling subsidiaries will be 3.56 billion yuan in 2021, including 2.27 billion yuan in fixed assets and 1.29 billion yuan in equityinvestment. Fixed assets investment has continuously focused on new products and R&D capacity construction, increased investmentin high-end new energy products, and continuously improved core R&D capabilities such as intelligence and modeling and digitaloperation capabilities. Equity investment mainly supports the development of middle and high-end brands, strengthens the R&D andoperation investment of high-level automatic driving technology, and continues to layout travel and industrial ecological development.The company will study and formulate various channels' fund-raising plan and fund use plan according to the project progress and theoperation and financing environment, so as to improve the efficiency of fund use and reduce the cost of funds.

5. Possible risks

Firstly, the risk of COVID-19.

COVID-19 sporadic risk has not yet been completely eliminated, and for a longer period of time, our country needs to maintaininternal anti rebound and external input control measures. Once sporadic epidemic occurs, travel control will be strictly implementedin medium and high-risk areas, and there may be local impact on customer collection at sales terminals.

Countermeasures: firstly, speed up the process of new marketing layout, increase online promotion and service, strengthen usercontacts, and strive to control the market impact to the minimum; secondly, strengthen the service experience of users in the wholeprocess of car purchase and use by strengthening auto finance and other post market services.

Secondly, the risk of macroeconomic growth falling short of expectations.

On the one hand, China's economic development is still in the stage of structural adjustment, transformation and upgrading, andeconomic growth is still facing downward pressure. On the other hand, the world economy will still face uncertainties and risks in2021. Firstly, the vaccine can not be popularized globally within this year, and the effectiveness of the vaccine still needs to be furtherverified; secondly, the hidden danger of financial crisis caused by the huge debts of many countries still exists. After the outbreak ofthe epidemic, many countries generally adopted large-scale loose monetary policy and financial rescue measures, which led to the riseof global public debt, limited the policy room for maneuver, and weakened the ability to deal with the crisis; thirdly, Global tradeprotectionism may continue to affect the recovery of the world economy. Western populism and protectionism will not disappear in ashort time. Trade frictions may still cause tension in international economic and trade relations and inhibit market confidence andeconomic recovery momentum. As an alternative consumption, automobile has a strong correlation with the macroeconomic situation,residents' employment and income expectations. If the macroeconomic growth is less than expected, it may lead to the lack of consumerconfidence.

Countermeasures: strengthen the research on the macroeconomic situation. The company has formed a research and judgmentmechanism of daily, weekly, monthly and quarterly information tracking and strategic environment. On the basis of fully studying and

Chongqing Changan Automobile Company Limited 2020 Annual Report

judging the situation, the company has made a good plan to deal with the challenges of the external environment, timely adjusted itsbusiness strategy, and made scientific response.Thirdly, the risk of increasing competition in the industry.On the one hand, after the conclusion of RCEP and China-EU investment agreement, foreign brands may accelerate China's marketlayout and intensify market competition. On the other hand, the products of domestic emerging automobile manufacturers areaccelerating to go on the market, while the weak brands are being eliminated in the competition, the enterprise integration andreorganization are speeding up, and the change of products and brands is speeding up.

Countermeasures: on the one hand, strengthen technological innovation, accelerate product upgrading and new productintroduction, and enhance product competitiveness; on the other hand, focus on improving organizational efficiency, accelerate thepace of reform, vigorously promote organizational mechanism reform, fully stimulate personnel vitality and organizational efficiency,process efficiency, improve operational efficiency, and accelerate the implementation of the company's third innovation andentrepreneurship strategy.Fourthly, the risk of supply chain.First, the impact of global COVID-19 on the automobile industry chain can not be completely eliminated in the short term. Duringthe epidemic period, investment in global manufacturing industry declined. After production gradually recovered, there was a capacitygap in some parts. For example, the shortage of auto chips since the end of last year will continue in phases. Second, due to the longautomobile industry chain and wide regional distribution, the global division of labor and cooperation has been affected by the epidemicsituation, and the production efficiency of some parts enterprises has declined. In addition, the sporadic epidemic in China may involveauto parts gathering areas, which also poses potential risks to the production and supply guarantee of vehicle enterprises.Countermeasures: first, optimize the production organization mode to ensure the normal production operation; second, strengthenthe cooperation, sharing and symbiosis relationship among enterprises in the industrial chain, increase the reserve of risk componentsin time; third, continuously promote the backup alternatives of some key core components.X. Registration form for reception, research, communication, interview,etc. during thereporting period

DateMannerType of Reception ObjectIndex
2020.01.14On-Site SurveyInstitutionFor details, see the January 16, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 14, 2020 investor relations activities record sheet
2020.01.21On-Site SurveyInstitutionFor details, see the January 21, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 21, 2020 investor relations activities record sheet
2020.04.30"Panorama·Roadshow World" WebcastAll investorsFor details, see the May 6, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: April 30, 2020 investor relations activities record sheet
2020.05.07Telephone conferenceInstitutionFor details, see the May 9, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 7, 2020 investor relations activities record sheet
2020.05.08Telephone conferenceInstitutionFor details, see the May 9, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 8, 2020 investor

Chongqing Changan Automobile Company Limited 2020 Annual Report

relations activities record sheet
2020.05.12Telephone conferenceInstitutionFor details, see the May 14, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 12, 2020 investor relations activities record sheet(1)
2020.05.12On-Site SurveyInstitutionFor details, see the May 14, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 12, 2020 investor relations activities record sheet(2)
2020.06.24On-Site SurveyInstitutionFor details, see the June 28, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 24, 2020 investor relations activities record sheet
2020.07.14Telephone conferenceInstitutionFor details, see the July 17, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 14, 2020 investor relations activities record sheet
2020.07.15Telephone conferenceInstitutionFor details, see the July 17, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 15, 2020 investor relations activities record sheet
2020.07.16Telephone conferenceInstitutionFor details, see the July 17, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 16, 2020 investor relations activities record sheet
2020.07.17On-Site SurveyInstitutionFor details, see the July 21, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 17, 2020 investor relations activities record sheet
2020.08.31On-Site SurveyInstitutionFor details, see the September 2, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: August 31, 2020 investor relations activities record sheet
2020.09.01On-Site SurveyInstitutionFor details, see the September 3, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 1, 2020 investor relations activities record sheet
2020.10.16On-Site SurveyInstitutionFor details, see the October 20, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: October 16, 2020 investor relations activities record sheet
2020.11.03On-Site SurveyInstitutionFor details, see the November 6, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 3, 2020 investor relations activities record sheet (1)
2020.11.03On-Site SurveyInstitutionFor details, see the November 6, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 3, 2020 investor relations activities record sheet (2)
2020.11.06On-Site SurveyInstitutionFor details, see the November 9, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 6, 2020 investor relations activities record sheet
2020.12.03On-Site SurveyInstitutionFor details, see the December 7, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 3, 2020 investor relations activities record sheet
2020.12.07On-Site SurveyInstitutionFor details, see the December 9, 2020 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 7, 2020

Chongqing Changan Automobile Company Limited 2020 Annual Report

investor relations activities record sheet
Reception Times20
Number of Agencies302
Number of Individuals0
Number of other entities0
Whether to disclose undisclosed important informationNo

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chapter 5 Important MattersⅠ. Company common stock profit distribution and capital reserves converting into share capital

During 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 guarantee systemof the dividend return for investors. For details of the company’s specific distribution policy, please refer to the Articles of Association.Company’s reported profit distribution plan and equity shares in line with the relevant provisions of the Articles of Association andrelevant provisions.

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 listed companies in dividends annualThe net profit ratio (%) attributable to shareholders of listed companies in

Chongqing Changan Automobile Company Limited 2020 Annual Report

consolidated statementsconsolidated statements
20201,664,515,021.643,324,251,164.1650.07%
2019--2,646,719,356.53-
201886,447,673.20680,728,392.0312.70%
For every 10 shares to send bonus shares-
For every 10 shares dividend number (RMB) (tax included)3.06
Number of transfers for every 10 shares (shares)4
The equity base of distribution plan(shares)5,439,591,574
Total cash dividends (yuan) (tax included)1,664,515,021.64
Distributable profits (yuan)35,848,636,357.95
Proportion (%) of cash dividends to total profit distribution100%
Cash dividend policy:
Others
Detailed statement of profit allocation or plan that capital accumulation fund turn to be added
The fifteenth meeting of the eighth session of the company's board of directors reviewed and approved the "Proposal on the 2020 Profit Distribution Plan", which still needs to be submitted to the company's 2020 annual general meeting of shareholders for deliberation.The matter complies with the company's articles of association, the relevant decision-making procedures and mechanisms are complete, and the legitimate rights and interests of small and medium investors are fully protected. Independent directors perform their duties and express their opinions.
CommitmentsCommitment entityCommitment contentCommitment timeperiod for commitmentPerformance
Other small shareholders commitmentChina Changan Automobile Group Co., Ltd.In 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,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 2020 Annual Report

With the continuous development ability and management level is improved significantly. Under such condition, the enterprise will be affiliated into the company.
Commitments made during IPO or refinancingSouthern Industrial Asset Management Co., Ltd.The shares of Changan Auto subscribed through this issuance will not be transferred in any way within 36 months after the end of this issuance, including but not limited to public transfer through the securities market or through agreement.October 202036 monthsNormal performance
China South Industries Group Co., Ltd.October 202036 monthsNormal performance
China Changan Automobile Group Co., Ltd.October 202036 monthsNormal performance
China Southern Fund Management Co., Ltd.The company agrees not to transfer the shares subscribed for this time within six months from the date of the end of this issuance of Changan Automobile (referring to the date when the shares of this issuance are listed). The company entrusts the board of directors of Changan Automobile to apply to the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. to lock up the above-mentioned subscription shares of the company to ensure that the above-mentioned shares held by the company will not be transferred within six months from the end of the issuance.October 20206 monthsNormal performance
China Galaxy Securities Co., Ltd.October 20206 monthsNormal performance
JPMorgan Chase Bank, National AssociationOctober 20206 monthsNormal performance
Guotai Junan Securities Co., Ltd.October 20206 monthsNormal performance
Caitong Fund Management Co., Ltd.October 20206 monthsNormal performance
Wells Fargo Fund ManagementOctober 20206 monthsNormal performance

Chongqing Changan Automobile Company Limited 2020 Annual Report

Co., Ltd.
Guosen Securities Co., Ltd.October 20206 monthsNormal performance
Chuangjin Hexin Fund Management Co., Ltd.October 20206 monthsNormal performance
Invesco Great Wall Fund Management Co., Ltd.October 20206 monthsNormal performance
Southern Industrial Asset Management Co., Ltd.1. The company promises to strictly abide by the "Securities Law" on the purchase and sale of listed company stocks, from six months before the issuance to six months after the completion of the issuance, not through centralized bidding transactions, block transactions, etc. Directly or indirectly buy and sell Changan Automobile stocks. 2. If the company violates the aforesaid commitment to buy and sell the shares of Changan Automobile Company, it shall belong to Changan Automobile for the proceeds from the illegal trading of shares of Changan Automobile Company, and shall be willing to bear corresponding legal liabilities.August 2020Six months before the issuance to six months after the completion of the issuanceNormal performance
China South Industries Group Co., Ltd.August 2020Six months before the issuance to six months after the completion of the issuanceNormal performance
China Changan Automobile Group Co., Ltd.August 2020Six months before the issuance to six months after the completion of the issuanceNormal performance
Whether the promise is fulfilled on timeYes

Chongqing Changan Automobile Company Limited 2020 Annual Report

□Applicable √Not-applicable

IV. The non-operating fund occupation situation of the controlling shareholders and theiraffiliates to the listed companies

□Applicable √Not-applicable

During the reporting period there does not exist non-operating fund of the listed company occupied by the controlling shareholderand its affiliated parties.V. The board of directors, supervisors, and independent directors (if applicable) explaining the"non standard audit report" from the accounting firm during the reporting period

□Applicable √Not-applicable

Certified public accountants do not issue "non-standard audit report" for the current report.VI. Explaining the change with last year's financial statements, accounting policies, accountingestimate and accounting methods

√Applicable □ Not-applicable

For details, please refer to “31. Accounting Policies and Changes in Accounting Estimates” of the “Significant Accounting Policiesand Accounting Estimates” in Note 3 to the Financial Statements in the “2020 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 established a new subsidiary, Chongqing Changan Automobile Software TechnologyCo., Ltd., co-established Chongqing Changan Kaicheng Automobile Technology Co., Ltd. with Chongqing Linkong DevelopmentInvestment Group Co., Ltd., accounting for 83.64% of the equity, acquired Changan Weilai New Energy Automobile Technology Co.,Ltd., and a total of three companies were included in the scope of the consolidated statement. Chongqing Changan New EnergyAutomobile Technology Co., Ltd. introduced strategic investors and its shareholding ratio was reduced to 48.95%. It was no longerincluded in the scope of consolidation, and subsequent measurement was carried out according to the equity method.

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

Chongqing Changan Automobile Company Limited 2020 Annual Report

Domestic accounting firms payment (ten thousand Yuan)386
A continuous years of domestic accounting firms audit service14
Domestic accounting firm of Certified Public Accountants nameQiao Chun, Hu Yan

Chongqing Changan Automobile Company Limited 2020 Annual Report

3 proposals related to the restricted stock incentive plan. For details, please refer to the "Announcement on Resolutions of the SecondMeeting of the Eighth Board of Directors" ( Announcement number: 2020-63).On February 1, 2021, the company held the eleventh meeting of the eighth session of the board of directors, and reviewed andapproved two proposals related to the revision of the restricted stock incentive plan. For details, please refer to the "Resolutions of theEleventh Meeting of the Eighth Board of Directors" Announcement (Announcement Number: 2021-05).On February 18, 2021, the company held the first extraordinary general meeting of shareholders in 2021, and reviewed andapproved 3 proposals related to the restricted stock incentive plan. For details, please refer to the "Announcement on Resolutions ofthe First Extraordinary General Meeting of 2021" (Announcement) Number: 2021-13).

On February 22, 2021, the company held the twelfth meeting of the eighth session of the board of directors, at which it reviewedand approved the "Proposal on Adjusting the List of Restricted A Shares Incentive Plan and the Number of Incentives Granted" and"Regarding the Restriction of A Shares" The Proposal for the First Grant of Restricted Stocks to Incentives of the Stock Incentive Plan.For details, please refer to the "Announcement on Resolutions of the Twelfth Meeting of the Eighth Board of Directors" (AnnouncementNumber: 2021-14).On March 5, 2021, the shares granted by equity incentives is listed for circulation. For details, please refer to the "Announcementon Completion of Registration for the First Grant of A Share Restricted Stock Incentive Plan" (Announcement No.: 2021-20).

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

On January 17, 2020, Changan Automobile signed an agreement with China First Automobile Co., Ltd., Dongfeng Motor GroupCo., Ltd., China South Industries Group Co., Ltd., and Nanjing Jiangning Economic Development Technology Development Co., Ltd.to jointly initiate the establishment of China Automobile Chuangzhi Technology Co., Ltd., with a registered capital of 16 billion yuan,of which Changan Automobile invested 500 million yuan, holding 3.125% of the shares. For details, please refer to the "Announcementon Related Party Transactions of T3 Technology Platform Companies" (Announcement No.: 2020-06).

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.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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
Announcement on related party transactions regarding the subscription of non-publicly issued A shares by related partiesApril 28, 2020http://www.cninfo.com.cn
Announcement on expected daily related transactions in 2020April 30, 2020http://www.cninfo.com.cn
Announcement on related-party transactions on entrusted loans to Jiangling Holdings for one yearJune 23, 2020http://www.cninfo.com.cn
Announcement on related party transactions regarding the provision of financial services by China South Industry Group Finance Co.,Ltd (Note 1)August 31, 2020http://www.cninfo.com.cn
Announcement on related party transactions regarding the provision of financial services by Changan Automobile Fiannce Co.,Ltd (Note 2)August 31, 2020http://www.cninfo.com.cn

Chongqing Changan Automobile Company Limited 2020 Annual Report

services 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.

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 June 22, 2020, the first meeting of the eighth session of the company’s board of directors reviewed and approved the "Proposal

Chongqing Changan Automobile Company Limited 2020 Annual Report

on the Extension of the Entrusted Loan to Jiangling Holdings for One Year", and agreed to extend the entrusted loan of 300 millionyuan to the joint venture Jiangling Holdings Co., Ltd. for one year. For details, please refer to the "Announcement on Related-PartyTransactions on the Extension of Entrusted Loans to Jiangling Holdings for One Year" (Announcement No.: 2020-57).

4、Major contracts for daily operations

□Applicable √ Not-applicable

5、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

2020, The Company coordinated the entire company, contributed its poverty relief efforts by overcoming the COVID-19 impacton poverty alleviation, scientifically and efficiently carrying out the work of precision poverty alleviation.

(1)Fixed Poverty Alleviation Programs in 2020

——The company donated RMB 4.5 million to Luxi County.

In terms of educational poverty alleviation projects: firstly, the upgrading and reconstruction project of Zuma Primary school inXiangyang Township of Luxi County, with an investment of 1.5 million yuan, was used to improve the facilities of Zuma primaryschool in Xiangyang Township. The construction contents included teaching building, hardening of school roads, basketball court, etc.Secondly, the skills training project for rural new vocational farmers in Luxi County, with an investment of 500,000 yuan, providedskills training for 100 farmers with employment intention and ability (no less than 50 poverty-stricken households with filing card),and the training content is mainly welder and electrician skills. Through "help each othet " training, let them master one skill andincrease their income by transferring labor force.

On the health poverty alleviation projects: support the allocation project of negative pressure ambulance in Luxi County with aninvestment of 390,000 yuan. 2 negative pressure ambulances according to the relevant procurement requirements were purchased forthe usage by Luxi County People's Hospital and Luxi County traditional Chinese medicine hospital. Through the allocation of negativepressure ambulance, we can improve the prevention and control ability of infectious diseases in Luxi County, and enhance theemergency response ability of sudden infectious diseases.

On the livelihood poverty alleviation projects: firstly, Luxi County dynamic monitoring prevention and control poverty returnfund, with an investment of 1.51 million yuan, was mainly used for poor households, marginal households, monitoring households andother difficult groups. The implementation of the project can consolidate the achievements of poverty alleviation in Luxi County,improve the quality of poverty alleviation, and prevent the returning to poverty and the increase of poverty population. Secondly, Luxi

Chongqing Changan Automobile Company Limited 2020 Annual Report

County emergency rescue vehicle configuration project invested 600,000 yuan to purchase fire engines. In accordance with the relevantprocurement requirements, four small emergency rescue water tankers were purchased for fire fighting operations, and the propertyrights of the assets were owned by the fire rescue brigade of Luxi County. The implementation of the project can effectively avoid theoccurrence of poverty caused by disaster.

——6 million yuan donated to Yanshan County for poverty alleviationOn the industrial development poverty alleviation project: Panlong Township black feather silky fowl house dehumidificationequipment purchase project invested 2.36 million yuan, which was organized and implemented by Panlong Township People'sgovernment. The cooperative development mode of "government + cooperative + industry + Post (poor households)" was adopted, andthe government invested the assistance funds into Yunyan breeding professional cooperative of Yanshan County to implement thepurchase of black feather silky fowl house dehumidification equipment. The term of cooperation is 60 months. The cooperativevoluntarily takes the farm and its property as the risk mortgage of cooperative funds, and pays 180,000 yuan of cooperative incomeevery 12 months. The cooperative income is mainly used for public welfare post labor remuneration and public welfare undertakings,so as to consolidate the achievements of poverty alleviation.On the education poverty alleviation project: firstly, all schools in Ameng town implemented the campus ancillary projects, withan investment of 1.1 million, a wall of 200 metres , a retaining wall of 900 m?, a hardening of 1200㎡of activity site, 90㎡of newtoilet bath room, 18㎡ of duty room and the gate. We should improve the conditions for running schools and make them meet therequirements of balanced development of compulsory education. Secondly, the construction project of shower halls in Yanshan CountyCampus, with an investment of 2 million, was used to implement 15 bathrooms (540 square meters in total) with solar energy andshower equipment. The implementation of the project has met the needs of 15 rural schools, improved school conditions and promotedthe healthy growth of rural students.On the health poverty alleviation project: Yanshan County negative pressure ambulance project, with an investment of 540,000yuan, purchased two Chang'an RuiXing M90 negative pressure ambulances, equipped with transfer ventilator and defibrillator on thebasis of standard configuration. The status of no negative pressure ambulance in Yanshan County can be changed, which is conduciveto the transshipment of infectious diseases, especially the current epidemic prevention and control of COVID-19.——Poverty alleviation the Company donated 300,000 yuan to Pengshui County, ChongqingAccording to the spirit of the notice of Chongqing development and Reform Commission poverty alleviation group leading groupoffice on printing and distributing the key points of Counterpart Assistance in Pengshui County in 2020 ( [2020] No.1), Chang'anAutomobile invested 300,000 yuan of Counterpart Assistance Fund in Pengshui County, Chongqing, after the deliberation and approvalof the president's office meeting of Chang'an Automobile on May 20, 2020.——Poverty alleviation the Company donated 200,000 yuan to Chongqing Youyang CountyAccording to the spirit of the notice of Chongqing Jiangbei District Counterpart Assistance leading group office on 2020 JiangbeiYouyang counterpart assistance work plan (Jiangbei counterpart Office [2020] No. 2), Chang'an Automobile invested 200,000 yuan inYouyang County for the construction project of 7 groups of hot springs and 5 groups of Dagou Bianmin road in gantian village, MuyeTownship, Youyang County.

(2) Poverty alleviation through consumption in 2020

Chang'an Automobile and the people's daily client completed the first network wide public welfare live broadcasting with goodsactivities in Luxi and Yanshan counties of Yunnan Province, with the theme of "poverty alleviation, love and innovation". The totalnumber of viewers reached 34.1 million, the number of praise exceeded 10 million, and the sales of live broadcasting with goodsreached 1.33493 million yuan.According to the arrangement of the local government, the company's subsidiaries, all employees, enterprises and institutions,social organizations, cadres and employees, and social caring people affiliated to the Chang'an Automobile ecosystem were extensivelymobilized to purchase more than 1.1 million yuan of agricultural and sideline products from Pengshui and Youyang counties inChongqing, promoting the poor people to increase their income; more than 5,000 people were registered as members of Chongqing

Chongqing Changan Automobile Company Limited 2020 Annual Report

poverty alleviation Museum of China social poverty alleviation network and participated in poverty alleviation through consumption.The Company actively responded to the call, and organized employees to carry out cultural and tourism consumption poverty alleviationactivities in Pengshui.

Changan Automobile Statistics on Poverty Alleviation in 2020

(3) Effective link work plan between strengthening and expanding the achievements of poverty alleviation and RuralRevitalization in 2021In 2021, the company will take a higher position to make overall arrangement, vigorously promote and innovate ideas, do a goodjob in consolidating and expanding the achievements of poverty alleviation, effectively link up with rural revitalization, create acharacteristic poverty alleviation mode of "one machine, two wings", earnestly fulfill its social responsibility, and make newcontributions to the comprehensive construction of a socialist modern country.

——Target task

According to the 2021 work plan, 11.5 million yuan (including 1 million yuan from Chang'an Mazda Automobile Co., Ltd.) willbe invested in poverty alleviation in Luxi County and Yanshan County of Yunnan Province, and 500,000 yuan will be invested inconsumption poverty alleviation plan.

IndicatorUnitQuantity / Details
Ⅰ. Total————
1.funds10 thousand RMB1100
2. Material10 thousand RMB0
Ⅱ. Subdivision————
1. Industrial poverty alleviation——236
1.1 Industrial poverty alleviation project——1)The purchase project of dehumidification equipment for Heiyu black chicken brooding house in Panlong township of Yanshan County: 236
2. Education poverty alleviation——510
2.1 Project and investment of improving educational resources in poor areas10 thousand RMB1)The University of Ameng town, Yanshan County, carried out the campus affiliated project:110 2)Yanshan County Campus Love bathhouse construction project: 200 3) Project of upgrading in Zuma primary school in Xiangyang Township of Luxi County: 150 4)4) Luxi County Rural New Vocational farmers skills training project: 50
3. Medical and health poverty alleviation——93
3.1 Medical and health resources invested in poverty areas10 thousand RMB1)Configuration project of negative pressure ambulance in Luxi County: 39 2)Configuration project of negative pressure ambulance in Yanshan County: 54
4. Other projects - people's livelihood poverty alleviation——261
4.1 Amount of investment10 thousand RMB1)Luxi County dynamic monitoring prevention and control of poverty Fund: 151 2) Luxi County emergency rescue vehicle configuration project: 60 3) Pengshui County: 30 4)Group 7 hot spring and group 5 Dagou Bianmin road construction project of gantian village, Muye Township, Youyang County: 20

Chongqing Changan Automobile Company Limited 2020 Annual Report

According to the key points of the poverty alleviation group of Chongqing development and Reform Commission, 300,000 yuanof aid donation plan and 500,000 yuan of consumption poverty alleviation guidance plan were invested in Pengshui County, Chongqing.

According to the work plan of Counterpart Assistance in Jiangbei District, it is planned to invest 800,000 yuan in Youyang County,Chongqing.

——Key work

It is planned to invest 12.6 million yuan in poverty alleviation funds to realize rural industrial prosperity, ecological livability andaffluence, and comprehensively promote rural revitalization.

Innovate the poverty alleviation mode, and introduce the e-commerce of agricultural products in designated poverty alleviationareas into the PMS platform of customer service company. Passenger car marketing division and sales company of Oushang AutomobileDivision issued policies to encourage dealers to purchase characteristic agricultural products on PMS platform of customer servicecompany as new car gift and feedback gift to carry out promotional activities. It not only enriches the promotion resources, but alsopromotes the sales of characteristic agricultural products in designated poverty alleviation areas, helps the poverty alleviation regionalcharacteristic agricultural and sideline products to the whole country, forms a long-term mechanism, and consolidates and expands theachievements of poverty alleviation.

Deepen the cooperation between schools and enterprises, give full play to the advantages of automobile industry, set up "Chang'anAutomobile class" in poverty areas with skill training as the starting point, carry out automobile training base construction, automobileprofessional teacher training and other projects, spare no effort to build a state-level automobile training demonstration base, and planto recruit 100 students, so as to train one person, get employment one, and get rid of poverty one, and truly stimulate the inner motivation.

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 in strict accordance with the "environmental protection law ofthe people's Republic of China" and national and local emission standards, and there was no illegal emission incident or administrativepenalty incident by local ecological and environmental authorities.Waste water mainly comes from the treatment of surface treatmentwastewater, spray painting wastewater and oil containing wastewater before the coating workshop, which is discharged afterphysicochemical and biochemical treatment. The exhaust gas is mainly painted waste gas and flue gas. The exhaust gas of the spraypaint is absorbed, concentrated and burned, and the exhaust gas of the oven is discharged after burning. Two sulfur oxide and nitrogenoxide are mainly from the waste gas from the clean energy of natural gas. All of the exhaust gases from energy and natural gascombustion are organized emissions. The company's headquarters and subsidiaries have a sound environmental management system,which has passed the environmental management system certification.Pollution discharge information

During the reporting period, there were 403 pollutant outlets and 19 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 vehicle Manufacturingindustry (painting process) air pollutant emission standard in Beijing, national industrial enterprise boundary environmental noiseemission standard and so on. The total emission of major pollutants: 868.697tons of chemical oxygen, 75.0146 tons of ammonianitrogen, 201.836 tons of sulfur dioxide, 255.144 tons of nitrogen oxides and quantitative volatile organic compounds 4070.796 tons.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 qualification andare safely disposed by the units with hazardous waste business qualification. During the reporting period, 12,365 tons of hazardouswaste and 115,496 tons of general industrial solid waste were disposed.Construction and operation of pollution prevention facilities

During the reporting period, the main waste gas prevention and control facilities include foundry dust removal and deodorizationfacilities in engine factories, welding dust removal facilities in vehicle factories and treatment facilities for coating volatile organicwaste gas; together with wastewater treatment facilities, they are included in preventive maintenance management of equipment, withaccount books, operation instructions, preventive maintenance rules, preventive maintenance plans and implementation records, andequipment spot inspection records, operating records and so on. The facilities are running normally. The key pollutant discharge unitsare all equipped with automatic wastewater monitoring facilities and entrusted the tripartite company to operate and maintain thefacilities.Administrative licensing of environmental impact assessment and other environmental protection for construction projects

In accordance with the regulations of the State Council on environmental protection and management of construction projects, thePeople's Republic of China Environmental Impact Assessment Law, the regulations on environmental protection in Chongqing, andthe 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 EIA approval of CD569 production line project, DCT shell self-made project, DCT shell self-made phase II project, mask production line and other projects has been obtained, and the environmental protection acceptance of NE1phase I production line project (phase I), emission laboratory project and mask production line project has been completed.Emergency preparedness and exercise of emergency environmental events

During the reporting period, each base prepared (revised) emergency resource investigation report, environmental risk assessmentreport, emergency plan for environmental emergencies and on-site disposal plan according to the requirements of laws and regulations;each base prepared emergency drill plan according to the requirements of laws and regulations, and carried out 20 factory levelemergency drills and 384 workshop level emergency drills as planned, continuously improving the practicability of emergency planand the emergency department of employees. Each base continued to carry out the investigation and rectification of environmentalemergencies, and prevent the occurrence of environmental emergencies. No environmental emergency occurred during the reportingperiod.Programming and implementation of self-monitoring of the environment

In 2020, Key sewage units of Changan Automobile: Liangjiang Factory, Jiangbei Engine Factory, Yubei Factory, Beijing Changan,Hefei Changan, Chongqing LingYao Automobile, Nanjing Chang'an, Chongqing Chang'an Kaicheng Automobile Technology (HebeiChang'an and Baoding Changan Bus). All the key sewage made self-monitoring schemes, and self-monitoring has been carried out,and information disclosure has been carried out according to the requirements of the local ecological environment department.Others

During the reporting period, all bases carried out the declaration of national sewage permits in accordance with regulations andobtained national sewage permits. Jiangbei Engine Factory, Nanjing Chang'an, Chongqing LingYao Automobile have carried out goodenvironmental protection, while the others are all environmental integrity enterprises.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 2020 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 shares18,9000.00%560,747,663560,766,56310.46%
1、State-owned legal person shares00.00%283,138,318283,138,3185.28%
2、Other domestic holdings18,9000.00%244,899,065244,917,9654.57%
Among them: shareholding by domestic legal persons00.00%244,899,065244,899,0654.57%
Senior management personnel shares18,9000.00%18,9000.00%
3、Foreign shareholding00.00%32,710,28032,710,2800.61%
Circulated shares4,802,629,611100.00%4,802,629,61189.54%
1、Domestic listed RMB shares3,900,643,46981.22%3,900,643,46972.72%
2、Domestic listed foreign shares901,986,14218.78%901,986,14216.82%
Total shares4,802,648,511100.00%560,747,6635,363,396,174100.00%

Chongqing Changan Automobile Company Limited 2020 Annual Report

April 27, 2020 and May 22, 2020, respectively, to deliberate and pass the "Proposal on the Company's Non-public Issuance of A Shares",etc. 13 Motions. The third meeting of the eighth session of the board of directors and the third extraordinary general meeting ofshareholders in 2020 were held on July 24, 2020 and August 10, 2020, respectively, to deliberate and approve the "Regarding theadjustment of the company’s 2020 non-public issuance of A shares. -The issuance of 5 proposals including the "Proposal on the ValidityPeriod of Resolutions of the General Meeting of Shareholders".

2. The review process of the issuance regulatory authority

On June 9, 2020, the company received the "China Securities Regulatory Commission Administrative License ApplicationAcceptance Form" issued by the China Securities Regulatory Commission; on September 7, 2020, the application for non-publicissuance of shares was approved by the China Securities Regulatory Commission’s Issuance Review Committee; On September 18,2020, the company received the "Approval of Chongqing Changan Automobile Co., Ltd. Non-public Issuance of Shares" issued by theChina Securities Regulatory Commission (Zheng Jian Xu Xu [2020] No. 2256), which approved the company's non-public issuance ofno more than 1,440,794,553 shares New shares.Ownership transfer of stock change

√ applicable □ not applicable

The company's non-public offering of 560,747,663 shares in 2020 will be listed on the Shenzhen Stock Exchange on October 26,2020.Progress in the implementation of stock repurchase

□ 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 and dilutedearnings per share, the net assets per share belonging to the common shareholder of the company

√ applicable □ not applicable

Due to the non-public offering of shares in 2020, the total share capital increased by 560,747,663 shares (accounting for 10.46%of the total share capital after the issuance). At the same time, the issuance price is higher than the net assets per share, so the basicearnings per share for the most recent year and the most recent period will be increased. As a result, the net assets per share attributableto the company’s common shareholders have risen, and the overall impact on the company’s financial indicators is relatively small.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 South Industries Group Co., Ltd.2,764,4862,764,486Non-public issuance of A shares in 20202023-10-26
China Changan93,457,94493,457,944Non-public issuance of2023-10-26

Chongqing Changan Automobile Company Limited 2020 Annual Report

Automobile Co., Ltd.A shares in 2020
Southern Industrial Asset Management Co., Ltd.186,915,888186,915,888Non-public issuance of A shares in 20202023-10-26
China Southern Fund Management Co., Ltd.147,289,719147,289,719Non-public issuance of A shares in 20202021-04-26
China Galaxy Securities Co., Ltd.38,317,75738,317,757Non-public issuance of A shares in 20202021-04-26
JPMorgan Chase Bank, National Association32,710,28032,710,280Non-public issuance of A shares in 20202021-04-26
Guotai Junan Securities Co., Ltd.14,018,69114,018,691Non-public issuance of A shares in 20202021-04-26
Caitong Fund Management Co., Ltd.10,990,65410,990,654Non-public issuance of A shares in 20202021-04-26
Wells Fargo Fund Management Co., Ltd.10,319,62610,319,626Non-public issuance of A shares in 20202021-04-26
Guosen Securities Co., Ltd.10,280,37310,280,373Non-public issuance of A shares in 20202021-04-26
Chuangjin Hexin Fund Management Co., Ltd.9,345,7949,345,794Non-public issuance of A shares in 20202021-04-26
Invesco Great Wall Fund Management Co., Ltd.4,336,4514,336,451Non-public issuance of A shares in 20202021-04-26
Zhu Huarong18,900--18,900Executive lock stocks6 months after the retirement
Total18,900-560,747,663560,766,563----
The name of the stock and itsIssue dateIssue price (or interest rate)Issue numberListing dateNumber of approved listingTransaction termination

Chongqing Changan Automobile Company Limited 2020 Annual Report

derivative securitiestransactionsdate
Stocks
The company's non-public offering of shares in 20202020-10-2610.70 yuan/share560,747,6632020-10-26560,747,663
Number of ordinary shareholders at the period-end351,846Number of ordinary shareholders at the month-end prior to the disclosure of this Report381,802Number 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 of0

Chongqing Changan Automobile Company Limited 2020 Annual Report

this Report
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 Changan Automobile Co., Ltd.State-owned legal person shares19.05%1,021,502,89093,457,94493,457,944928,044,946No pledge or freeze
China South Industries Group Co., Ltd.State-owned legal person shares18.72%1,003,844,571-31,468,1022,764,4861,001,080,085No pledge or freeze
China securities finance Co, Ltddomestic general legal person shares4.37%234,265,333--234,265,333No pledge or freeze
Southern Industrial Asset Management Co., Ltd.State-owned legal person shares3.48%186,915,888186,915,888186,915,888-No pledge or freeze
Hong Kong Central Clearing Company Limitedforeign legal person shares3.45%184,875,17967,178,451-184,875,179No pledge or freeze
United Prosperity (Hongkong) Investment Co., Limitedforeign legal person shares2.87%154,120,237--154,120,237No pledge or freeze
Central Huijin Investment Ltd.domestic general legal person shares1.03%55,393,100--55,393,100No pledge or freeze
China Galaxy Securities Co., Ltd.domestic general legal person shares0.71%38,317,75738,315,35738,317,757-No pledge or freeze
JPMORGAN CHASE BANK,NATIONAL ASSOCIATIONforeign legal person shares0.61%32,710,37832,710,24332,710,28098No pledge or freeze
CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTDforeign legal person shares0.53%28,319,47421,973,069-28,319,474No pledge or freeze
Explanation on the relationship and the action alike of above shareholdersAmong the top 10 shareholders, China South Industries Group Co., Ltd., With its wholly-owned subsidiary, Southern Industrial Asset Management 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

Chongqing Changan Automobile Company Limited 2020 Annual Report

TypeAmount
China Changan Automobile Co., Ltd.1,001,080,085RMB ordinary shares1,001,080,085
China South Industries Group Co., Ltd.928,044,946RMB ordinary shares928,044,946
China securities finance Co, Ltd234,265,333RMB ordinary shares234,265,333
Hong Kong Central Clearing Company Limited184,875,179RMB ordinary shares184,875,179
United Prosperity (Hongkong) Investment Co., Limited154,120,237Domestic listed foreign shares154,120,237
Central Huijin Investment Ltd.55,393,100RMB ordinary shares55,393,100
CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD28,319,474Domestic listed foreign shares28,319,474
CAPE ANN GLOBAL DEVELOPING MARKETS FUND27,629,760Domestic listed foreign shares27,629,760
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED26,727,436Domestic listed foreign shares26,727,436
DRAGON BILLION SELECT MASTER FUND24,203,339Domestic listed foreign shares24,203,339
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., With its wholly-owned subsidiary, Southern Industrial Asset Management 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”.
NameLegal /RepresentativeDate of establishmentOrganization codeBusiness scope and major products:
CHINA CHANGAN AUTOMOBILE GROUP CO., LTDZhou ZhipingDec 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;Operating telecommunications services; acting as an agent for bookkeeping.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 Xianping29 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 equity and equity during the reporting period, the controlling shareholder of listed companies in other domestic and foreign marketsTo the reporting period, direct or indirect holding companies: Harbin Dongan Auto Engine Co., Ltd. (stock code 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 2020 Annual Report

Actual control people control the company through trust or other asset management method.

□Available √Not available

4、Other legal shareholders with over 10% holding

□Available √ Not available

5、 Reduced shareholdings of controlling shareholders, actual controllers, restructuring parties and othercommitting parties

□Available √ Not available

Chongqing Changan Automobile Company Limited 2020 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)
Zhu HuarongChairman, Secretary of the Party CommitteepresentM552020-06-222023-06-2225,200--25,200
Tan XiaogangDirectorpresentM572020-06-222023-06-22
Zhou ZhipingDirectorpresentM502020-06-222023-06-22
Zhang BoDirectorpresentM422021-02-182023-06-22
Liu GangDirectorpresentM542021-02-182023-06-22
Wang JunDirector, President, Deputy Secretary of the Party CommitteepresentM482020-06-222023-06-22
Zhang DeyongDirector, The chief accountantpresentM462020-06-222023-06-22
Liu Jipengindependent directorpresentM642020-06-222023-06-22
Li Qingwenindependent directorpresentM652020-06-222023-06-22
Chen Quanshiindependent directorpresentM752020-06-222023-06-22
Ren Xiaochangindependent directorpresentM642020-06-222023-06-22
Pang Yongindependent directorpresentM512020-06-222023-06-22

Chongqing Changan Automobile Company Limited 2020 Annual Report

Tan Xiaoshengindependent directorpresentM502020-06-222023-06-22
Wei Xinjiangindependent directorpresentM512020-06-222023-06-22
Cao Xingquanindependent directorpresentM492020-06-222023-06-22
Yan MingChairman of the supervisorypresentM552020-06-222023-06-22
Sun DahongSupervisorpresentM542020-06-222023-06-22
Zhao JunSupervisorpresentM592020-06-222023-06-22
Wang YanhuiEmployee SupervisorpresentF542020-06-192023-06-22
Luo YanEmployee SupervisorpresentF462020-06-192023-06-22
Yuan MingxueDeputy Secretary of the Party CommitteepresentM522020-07-132023-06-22
Liu BoDeputy Vice DirectorpresentM542020-07-132023-06-22
He ChaobingDeputy Vice DirectorpresentM532020-07-132023-06-22
Li WeiDeputy Vice DirectorpresentM542020-07-132023-06-22
Hua ZhanbiaoCommission for Discipline InspectionpresentM532020-07-132023-06-22
Tan BenhongDeputy Vice DirectorpresentM452020-07-132023-06-22
Ye PeiDeputy Vice DirectorpresentM452020-07-132023-06-22
Zhao FeiDeputy Vice DirectorpresentM462020-07-132023-06-22
Chen WeiVice PresidentpresentM482020-07-132023-06-22
Li MingcaiVice PresidentpresentM392020-07-132023-06-22
Li JunBoard SectarypresentF512020-07-132023-06-22
Zhang BaolinChairman of the boardDepartureM582017-09-222020-06-05
ZhangDeputy ViceDepartureF542016-03-232020-07-13

Chongqing Changan Automobile Company Limited 2020 Annual Report

JingjingDirector
Liu ZhengjunDeputy Vice DirectorDepartureM552020-07-132020-10-22
Zhang DongjunDirectorDepartureM542018-05-182020-06-22
Lv LaishengDirectorDepartureM462020-06-222020-11-13
Zhao HuixiaSupervisorDepartureM602016-03-232020-06-22
Total25,200--25,200
NameDutiesTypeDateReason
Zhu HuarongDirector ,ChairmanElectionJune 22th, 2020Appointment due to work
Tan XiaogangDirectorElectionJune 22th, 2020Appointment due to work
Lv LaishengDirectorElectionJune 22th, 2020Appointment due to work
Zhou ZhipingDirectorElectionJune 22th, 2020Appointment due to work
Zhang BoDirectorElectionJune 22th, 2021Appointment due to work
Liu GangDirectorElectionFeb 18th, 2021Appointment due to work
Wang JunDirectorElectionFeb 18th, 2020Appointment due to work
Zhang DeyongDirectorElectionJune 22th, 2020Appointment due to work
Liu Jipengindependent directorElectionJune 22th, 2020Appointment due to work
Li Qingwenindependent directorElectionJune 22th, 2020Appointment due to work
Chen Quanshiindependent directorElectionJune 22th, 2020Appointment due to work
Ren Xiaochangindependent directorElectionJune 22th, 2020Appointment due to work
Pang Yongindependent directorElectionJune 22th, 2020Appointment due to work
Tan Xiaoshengindependent directorElectionJune 22th, 2020Appointment due to work
Wei Xinjiangindependent directorElectionJune 22th, 2020Appointment due to work
Cao Xingquanindependent directorElectionJune 22th, 2020Appointment due to work
Yan MingSupervisory board chairmanElectionJune 22th, 2020Appointment due to work
Sun DahongSupervisorElectionJune 22th, 2020Appointment due to work
Zhao JunSupervisorElectionJune 22th, 2020Appointment due to work
Wang YanhuiEmployee SupervisorElectionJune 19th, 2020Appointment due to work
Luo YanEmployee SupervisorElectionJune 19th, 2020Appointment due to work
Zhu HuarongPresident, Party SecretaryrecruitmentJuly 13th, 2020Appointment due to work
Wang JunPresidentrecruitmentOct 15th, 2020Appointment due to work

Chongqing Changan Automobile Company Limited 2020 Annual Report

Wang JunDeputy Secretary of the Party Committee (Identified as a senior manager)recruitmentJuly 13th, 2020Appointment due to work
Yuan MingxueExecutive Vice PresidentrecruitmentJuly 13th, 2020Appointment due to work
Liu BoDeputy Vice DirectorrecruitmentJuly 13th, 2020Appointment due to work
He ChaobingDeputy Vice DirectorrecruitmentJuly 13th, 2020Appointment due to work
Li WeiDeputy Vice DirectorrecruitmentJuly 13th, 2020Appointment due to work
Hua ZhanbiaoSecretary of the Commission for Discipline Inspection (identified as a senior manager)recruitmentJuly 13th, 2020Appointment due to work
Tan BenhongDeputy Vice DirectorrecruitmentJuly 13th, 2020Appointment due to work
Liu ZhengjunDeputy Vice DirectorrecruitmentJuly 13th, 2020Appointment due to work
Zhang DeyongThe chief accountantrecruitmentJuly 13th, 2020Appointment due to work
Ye PeiVice PresidentrecruitmentJuly 13th, 2020Appointment due to work
Zhao FeiVice PresidentrecruitmentJuly 13th, 2020Appointment due to work
Chen WeiVice PresidentrecruitmentJuly 13th, 2020Appointment due to work
Li MingcaiVice PresidentrecruitmentJuly 13th, 2020Appointment due to work
Li JunBoard SectaryrecruitmentJuly 13th, 2020Appointment due to work
Yuan MingxueDeputy Secretary of the Party Committee (Identified as a senior manager)recruitmentMarch 30, 2021Appointment due to work
Ye PeiDeputy Vice DirectorrecruitmentMarch 30, 2021Appointment due to work
Zhao FeiDeputy Vice DirectorrecruitmentMarch 30, 2021Appointment due to work
Zhang BaolinChairmanDepartureJune 5th, 2020Job change
Zhang DongjunDirectorDepartureJune 22th, 2020General election
Zhao HuixiaSupervisorDepartureJune 22th, 2020General election
Zhang JingjingDeputy Vice DirectorDepartureOct 15th, 2020General election
Zhu HuarongPresidentDepartureOct 22th, 2020Job change
Liu zhengjunDeputy Vice DirectorDepartureJune 13th, 2020Job change
Lv LaishengDirectorDepartureNov 13th, 2020Job change
Yuan MingxueExecutive Vice PresidentDepartureMarch 30, 2021Job change
Ye PeiVice PresidentDepartureMarch 30, 2021Job change
Zhao FeiVice PresidentDepartureMarch 30, 2021Job change

Chongqing Changan Automobile Company Limited 2020 Annual Report

managers

1、Directors

Mr. Zhu Huarong, Director, Chairman and Secretary of the party committee. He was born in 1965, master graduate student, seniorengineer. Currently he is the president assistant of South Industries Group, the director of China Changan Automobile Group and thedirector. He was vice director of Changan Technology Department, the chief engineer of Changan Automobile Manufacture Factory,president assistant of Changan Automobile (Group) Co., Ltd. and director of technical center, director of science and technologycommittee, vice President of Changan Automobile (Group) Co., Ltd and the leader of engineering research division., vice Presidentand secretary of party committee of Chongqing Changan Automobile, the vice secretary of party committee of China ChanganAutomobile Group, president of Changan Automobile.Mr. Tan Xiaogang, Director. He was born in 1963, the master’s degree, researcher-level senior engineer. Currently, he is thedirector of Development & Planning Department of China South Industries Group. He used to be the Vice Director, executive ViceDirector of Workshop No. 343, deputy Secretary of the Yuanling County CPC Committee in Hunan Province, director, executivedeputy general manager, and general manager of Hunan Yunjian Co. Ltd, Chariman, the Secretary of the Party Committee of HunanYunjian Group, and vice director of Development & Planning Department of China South Industries Group.Mr. Zhou Zhiping, Director. Born in 1971, the doctor graduate, senior engineer. He is currently the employee director, director ofthe Audit and Risk Management Department (Office of the Supervisory Board) of China South Industries Group Corporation, chairman,president and party secretary of China Changan Automobile Group. He was deputy director of Motor sector of development andplanning department of China South Industries Group Corp, manager and director of long-term planning sector of development andplanning department of China South Industries Group Corporation, deputy director and director of capital operation Department ofChina South Industries Group Corp, the general manager of the southern industrial asset management Ltd, the secretary of partycommittee and the labor union chairman of Changan Automobile.Mr. Zhang Bo, director. Born in 1978, master's degree, senior accountant. He is currently the Director of the Finance Departmentof China South Industries Group Co., Ltd. Served as the Deputy Director and Deputy Director of the Finance Division of the FinanceDepartment (General Division) of the China South Industries Group Corporation, Investigator and Deputy Director of the FinanceDepartment of the Finance Department of China South Industries Group Corporation, Director and Chief Accountant of ChongqingWangjiang Industry Co., Ltd., Deputy Director of the Finance Department of China South Industries Group Co., Ltd. (in charge ofwork).Mr. Liu Gang, director. Born in 1966, bachelor's degree, senior engineer. He is currently the director of the Science and TechnologyQuality Network Information Department of China South Industries Group Co., Ltd. Served as Deputy Director and Director of theResearch Department of the 58th Research Institute of China Ordnance Industry, Deputy Director and Director of the 58th ResearchInstitute of China Ordnance Industry, Deputy Director of the Southwest Region Department of China Ordnance Equipment GroupCorporation, and Vice President of China Ordnance Equipment Research Institute Director, Director of the Science and TechnologyQuality Department (Information Department) and Director of the Science and Technology and Information Department of ChinaSouth Industries Group Corporation.

Mr. Wang Jun, Director, President and Deputy Secretary of the Party Committee. Born in 1972, master's degree, senior engineer.Served as Deputy Director and Director of the Scientific Research Management Division of the Company’s Technology Center,Director of the Science and Technology Management Division of the Science and Technology Quality Department, Deputy Directorand Director of the Product Planning Division of the Automotive Engineering Research Institute, Manager of the Product ManagementDivision of the Marketing Department of Changan Automobile Sales Co., Ltd. Director, Deputy Minister and Minister of the ProductPlanning Division of the Marketing Department, Assistant to the President of Changan Automobile and General Manager of ChanganAutomobile Sales Co., Ltd., Secretary of the Party Committee, Deputy General Manager and General Manager of the CommercialVehicle Division, Executive Vice President of Changan Automobile, and Integrated Management of Two IndustrializationsRepresentative, chairman of the labor union, president of Chang'an Automobile University.

Chongqing Changan Automobile Company Limited 2020 Annual Report

Mr. Zhang Deyong, director, the chief accountant, born in 1975, MPAcc, senior accountant. He was the Deputy Director, Director,Assistant to the Director of the Finance Division of China Institute of Weaponry and Equipment Group, Deputy Director of the FinanceDepartment of China Weaponry and Equipment Group Corporation Member, deputy director of the financial department of ChinaWeapon Equipment Group Corporation (on duty), director, chief accountant and member of the party committee of Chongqing ChanganIndustry Group Co., Ltd., executive vice president of Changan Automobile.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. He is currently the dean, second-level professor, and doctoral supervisor of the CapitalFinance Research Institute of China University of Political Science and Law; the chief expert of major projects of the National SocialScience Fund; Legal adviser to the State-owned Assets Supervision and Administration Commission of the State Council; the viceChairman of China Enterprise Reform and Development Research Association; Deputy director of the independent board of directorsof the China listed companies Association; Member of Legal Advisory Committee of Shenzhen Stock Exchange. He is a famous experton joint-stock systems and corporate issues, specializing in the combination of joint-stock systems, collectivization, andinternationalization theory and practice. He has published more than 400 articles on newspapers and magazines domestic and abroad,such as People’s Daily and Economic Research Journal and received more than 800 interviews by domestic and overseas newspaperand magazines. In the last 20 years, he has managed the shareholding system reform, corporate strategy, acquisition and reorganization,financing scheme design for over 300 companies, 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. Theseenterprises cover more than 20 provinces and cities, including various industries. He is called “the first person in stock reform” bymedia.

Mr. Li Qingwen, independent director. He was born in 1956, master degree. He is currently the dean of the Automobile EvaluationInstitute, dean o of Beijing invisible unicorn information technology institute and vice chairman of the China Automobile TalentResearch 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. Chen Quanshi, independent director, born in 1945, bachelor's degree. He is currently a professor and director of theDepartment of Automotive Engineering of Tsinghua University and honorary director of the Electric Vehicle Branch of the ChinaAutomobile Engineering Society. He once served as director of the Electric Vehicle Research Office, vice president of the School ofMechanical Engineering of Tsinghua University, head of the Department of Automotive Engineering, and director of the AutomobileResearch Institute. To undertake the topic of "Fuel Cell City Passenger Vehicle Technology Research" in the major national "863"electric vehicle projects, national energy conservation and new energy vehicle 863 major projects; He won the first prize for scientificand technological progress in Beijing in 2009 and the second prize for national invention(ranked second). He published a monograph"Fuel Cell Electric Vehicle"(first author) 2004, Tsinghua University Press; Editor-in-Chief of Advanced Electric Vehicle Technology(First Author) the first edition of 2007 (won the second prize of the National Machinery Industry Science and Technology ProgressAward).

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 and technologyspecial (EV) projects, and the committee member of the second national strategic emerging industry development expert advisorycommittee. He is the expert of the Chinese machinery industry science and technology, the special subsidy expert of the State Counciland the evaluation expert of the national science and technology award, the member of the academic committee of China Academy ofinternational engineering. Its main research and scientific research projects have won the awards such as provincial and ministeriallevel and scientific and technological progress awards, including 3 second-level awards and 3 third-level awards.

Mr. Pang Yong, independent director, born in 1969, master’s degree. Currently, he is the chairman and CEO of IDEO, and adjunct

Chongqing Changan Automobile Company Limited 2020 Annual Report

professor of Jilin University, the vice president of the China Federation of Industry and Commerce Automobile Dealers, the vicepresident of the China-Europe Alumni Automobile Industry Association, a member of the Jiusan Society, and a member of Alxa SEE.As a senior expert in the Chinese automobile industry, an advocate of the lean operation model of China's automobile marketing,focusing on digital services for the implementation of the new four modernizations in the automotive industry, he led team to build adata- and technology-driven channel dealer competitiveness database and evaluation system "AD-CAS", based on the solution + SaaSplatform to enable the implementation of a new model of automobile retail. Enthusiastic for public welfare, there are special scholarshipprograms for students in Tsinghua University, Jilin University, Beijing University of Aeronautics and Astronautics, and TongjiUniversity.

Mr. Tan Xiaosheng, independent director, born in 1970, bachelor. Founder, chairman, senior engineer of Beijing Cyber YingjieTechnology Co., Ltd., founder of Zhengqi College. Served as the technical president and chief security officer of 360 Group.In 2020,he was awarded the title of the first batch of network security innovation and entrepreneurial instructors from the Cyber SecurityIndustry Development Center of the Ministry of Industry and Information Technology, and a cyber security expert from the CyberSecurity Bureau of the Ministry of Public Security. In 2018, he was awarded the title of Excellent Network Security Talent by the ChinaInternet Development Foundation, and is a director and deputy secretary-general of the China Computer Federation (CCF). In 2012,he was awarded the title of Zhongguancun High-end Leading Talent, and a member of the Safety Science and Engineering ProfessionalTeaching Committee of the Ministry of Education. Worked successively in Xi'an Jiaotong University, Peking University Founder,Shenzhen Hyundai, Shenzhen Haoxin, 3721, Yahoo China, MySpace China, 360 Group, engaged in anti-virus system under DOSoperating system, disk copy software, Chinese character operating system, large-scale management information System research anddevelopment, leading the telecommunication business support system, search engine, big data/cloud computing platform system,network security research, network security product development team.

Mr. Wei Xinjiang, independent director, was born in 1969, PHD, researcher. He is currently the Deputy General Manager of theDevelopment Planning Department of China Life Pension Insurance Co., Ltd. and senior researcher of China life financial researchinstitute. He was engaged in teaching and scientific research for 13 years at the International Investment Department of the ChineseAcademy of Finance and the Institute of Finance and economics of foreign trade and Economy University. He studied at Hollandbusiness school, the University of Birmingham, the European Commission and the United Nations Hague International Court of justicefor 3 years. He is the expert in international business, overseas M & A, operation of capital market and so on. It has rich research onfinance, insurance, overseas investment, and comprehensive finance and so on. He also served as a part-time professor and postgraduateinstructor of School of Finance and Finance of Renmin University of China, the School of International Business and Economics ofthe University of International Business and Economics and the Holland business school. He has published nearly 160 papers ininternational and domestic journals, and 8 books, such as the fraud and anti-fraud of automobile insurance, the comparative study ofthe anti-monopoly policies between the United States and the EU, and the analysis of the accounting statements and investment valueof 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 20 years of civil and commercial law teaching and research experience, including 17 years of teaching at SouthwestUniversity of Political Science and Law. He is a lecturer in the National fine course "Business Law" and the National Resource sharingcourse "Business Law". He focuses on the study of commercial law, company law, securities law, and insurance law. He has presidedover or participated in more than 20 various scientific research topics, published more than 60 academic papers, published more than10 academic works and participated in teaching materials; He is the executive director and director of the China Law Conference Law,Insurance Law, and Securities Law Research Association; He once served as vice president of the Fourth Division of the ChongqingFirst Intermediate People's Court Civil Trial; Member of Chongqing People's Procuratorate Expert Committee on Civil AdministrationSupervision; He has participated in many national and local legislative consultations, engaged in a large number of professionalconsultations, special lectures, and legal services in enterprise restructuring, capital operations, and corporate governance, andconcurrently served as an arbitrator in arbitration institutions in Shenzhen, Chongqing, and Zunyi.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 Equipment GroupFinance Co., Ltd. Baoding Tianwei Group Co., Ltd. He served as Deputy Minister and Minister of Organization Department of JialingIndustrial Co., Ltd.; United Front Department Minister, Party School Executive Vice President, Director of Human ResourcesDevelopment Management Office of Jialing Industrial Co., Ltd.; Deputy Party Secretary and Disciplinary Committee Secretary ofJialing Industry Co., Ltd..; Deputy Director of Human Resources Department of China South Industries (Exchange); Deputy Directorand Director of the Party Group Work Department(Supervision Department) of China South Industries Co., Ltd., Deputy Chairman ofthe Party Group Discipline Inspection Unit, Member, Deputy Secretary, Member and Secretary of the CPC Ordnance Group directlyunder the Committee; Director of the Supervision Department of China South Industries and deputy leader of the Party GroupDiscipline Inspection Unit; Audit and Risk Department Inspector of China South Industries; Chairman of the Supervisory Board ofBaoding Tianwei Group Co., Ltd., Zhonghui Fortis(Shenzhen) Co., Ltd., Southern Industrial Assets Management Co., Ltd.,WeaponryEquipment Group Finance Co., Ltd.

Mr. Sun Dahong, Supervisor. He was born in 1966, master degree, senior economist. Currently, he is the vice director of the legaldepartment. He used to be the vice director of legal division under the general office in China South Industries Group, vice directorand director of Legal Advisor Division in China South Industries Group, and director of Legal Affairs Division of general office,deputydirector of general office and the chief of Secrets Agency in South Industries Group.

Mr. Zhao Jun, supervisor. Born in 1961, bachelor degree, senior engineer. He is currently the Intermediate Specialist of the Auditand Risk Management Department (Office of Supervisory Affairs) of China South Industries Group Co., Ltd., and the Chairman of theSupervisory Board of Southern Industrial Asset Management Co., Ltd. Served as Deputy Director and Director of the OperationDepartment of the Economic and Trade Bureau of China South Industries Corporation, Director of the Economic Operation Departmentof the Economic Operation Department of China South Industries Group Corporation, Deputy General Manager of Beijing BeijiMechanical and Electrical Industry Co., Ltd., China South Industries Group Corporation Director of the Economic OperationDepartment, Director of the Office of Directors Affairs, Director of the Capital Operation Department, Chief Accountant, Director ofthe Board of Directors, Secretary of the Party Committee, Secretary of the Disciplinary Committee, Chairman of the Labor Union ofBeijing Beiji Mechanical and Electrical Industry Co., Ltd., Audit and Risk Department of China South Industries Group Corporationdeputy director.

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 and technologyand project management department, director of science and technology and project management department, Secretary of Party branch,executive vice chairman of science and Technology Association, director of comprehensive planning department, press spokesman ofthe 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, labor technologyfixed member, schemer in workshop No.232 of No.3 plant, chief of welfare section of Salary Division of HR Department, and chief ofwelfare office III.

3、Senior Management other than Directors and Supervisors

Mr.Yuan Mingxue, Deputy Secretary of the Party Committee, Chairman of the Labor Union, President of Chang'an AutomobileUniversity. Born in 1968, master’s degree, senior engineer, he used to be the Vice Director and Director of the General Manager’sOffice, Director of the Quality Control Department, Assistant to President, and Vice President of Changan Automobile (Group) CO.,LTD, the Deputy Executive President and the Secretary of CPC of Chognqing Changan Suzuki Auto. Co., Ltd, vice president and themajor executive vice president of the Company.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 managementdepartment, 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 andparty secretary of changan Ford Motor Co., Ltd.

Mr. Li Wei, Executive Vice President. Born in 1966, master's degree, senior engineer. Served as the director of the ChanganCompany's Test and Inspection Institute, the director of the Test Institute of the Automobile Research Institute, the director of the BodyDesign Institute, the director of the Beijing Research Institute, the assistant to the president of Changan Automobile and the executivevice president and party secretary of the Changan Automobile Engineering Research Institute, General Manager and Secretary of theParty Committee of Chongqing Changan New Energy Automobile Technology Co., Ltd.

Mr. Hua Dubiao, Secretary of the Commission for Discipline Inspection and Director of the Office of the Inspection Work LeadingGroup. Born in 1967, bachelor degree, senior accountant. Served as Deputy Director of the Company’s Audit Department, DeputyDirector of the Audit and Supervision Department, Director of the Audit Department, Director of the Audit and Supervision Department,Deputy Secretary of the Party Branch, Deputy Secretary of the Company’s Disciplinary Committee, Assistant President of the Companyand Director of the Finance Department, and Secretary of the Party Branch, General Manager of Chongqing Changan Auto UnionTechnology Co., Ltd.

Mr. Tan Benhong, the executive vice president. Born in 1975, master’s degree, engineer. He was the deputy director of the Changancompany Automobile Technology Department, the product technology manager of the Nanjing factory of Changan Ford AutomobileCo., Ltd., the deputy director of the reception office and the secretarial reception department of the Changan Company office, thedirector of the technical Planning Institute of the Automobile Engineering Research Institute, the deputy chief engineer of theAutomobile Engineering Research Institute and the director of the Institute of technical planning and research, the Vice president ofthe General Academy of automobile engineering research, Dean of Beijing Research Institute, the department head of marketdepartment, brand public relations, product planning department, and vice deputy President and Secretary of the Party committee ofthe Research Institute, the spokesman of company news, and the director of the Institute of styling design.

Mr. Ye Pei, the executive vice president and general manager and the secretary of the party committee of the passenger carmarketing department, Secretary of the party committee, deputy director of the passenger car operation management committee, bornin 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. Directorof 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 manufacturing logisticsDepartment of commercial vehicle business department, Secretary of the party branch, assistant to the general manager of the company,Secretary of the strategic planning department, Secretary of the party branch, general manager and party secretary of the car salesdepartment, vice president of Changan Automobile.

Mr. Zhao Fei, the executive vice president and executive vice president of Changan Ford, Secretary of the party committee, bornin 1974, master's degree, senior engineer. He used to be the technical director and technical quality manager of the engine Departmentof Changan Ford Mazda Automobile Co., Ltd.; Engine Director of Changan Ford Mazda Automobile Co., Ltd..; Institute Director of

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chang 'an Automobile Research Institute Engine Technology; Deputy director of Chang 'an Engine 4 Factory; China Chang'an Group'sdeputy general manager of science and technology development department; Director and General Manager of Harbin DonganAutomobile Engine Manufacturing Co. Ltd.. Party secretary and chairman of Harbin Dongan automobile engine manufacturing Co.,Ltd., assistant to President and minister of strategic planning, party branch secretary, vice president of Changan Automobile.Mr. Chen Wei, Vice President and Director of Safety Production of the company, Deputy Director of the European BusinessManagement Committee, Secretary of the Party Committee of Lingyao Automobile. Born in 1972, undergraduate, engineer. He onceserved as secretary of the Youth League Committee of Chang 'an Automobile Manufacturing Plant, director of the factory office, deputydirector, director, and party committee secretary; Vice President of Personnel and Secretary of Discipline Committee of Changan FordCo., Ltd.; Chang 'an Automobile Manufacturing and Logistics Department Minister, Party Branch Secretary, Director of the OTDProject of the company, General Manager of Beijing Chang' an Automobile Company, Secretary of the Party Committee, and Directorof the Beijing Research Institute Construction Project.

Mr. Li Mingcai, vice president and General Manager of International Sales Company, General Counsel of the Company, andRepresentative of Managers of Integration of Industrialization and Industrialization. Born in 1981, master's degree. He used to be theacting manager and manager of the sales department of Chongqing Changan Automobile International Sales Service Co., Ltd.. ChanganAutomobile Overseas Business Development Department Assistant General Manager and Sales Regional Manager, Deputy GeneralManager of Overseas Business Development Department, General Manager of International Sales Company, Deputy General Managerof Changan Automobile Overseas Business Development Department, Director of Russian JV Project, Brazilian Project Manager,general manager of overseas business department.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
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, director of the Audit and Risk Management Department (Office of the Supervisory Board) of China South Industries Group Corporation, chairman, president and party secretary of China Changan Automobile GroupY, Receiving the Payment allowance in China Changan
Tan XiaogangChina South Industries Group CorpDirector of the Strategic DevelopmentY
Zhang BoChina South IndustriesDirector of Finance DepartmentY

Chongqing Changan Automobile Company Limited 2020 Annual Report

Group Corp
Liu GangChina South Industries Group CorpDirector of Information Department of Science and Technology Quality NetworkY
Yan MingChina South Industries Group CorpAudit and Risk Department Senior SpecialistY
Zhao JunChina South Industries Group CorpAudit and Risk Management Department (Office of Supervisors Affairs) Intermediate SpecialistY
Sun DahongChina South Industries Group CorpDeputy Director of Legal DepartmentY
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 LawDean of Capital Finance Research Institute, China University of Political Science and Law, second-level professor, doctoral supervisor; chief expert of major projects of the National Social Science Fund; legal counsel of the State-owned Assets Supervision and Administration Commission of the State Council; vice chairman of China Enterprise Reform and Development Research Association; independent of China Association of Listed Companies Deputy Director of the Board Committee; Member of the Legal Advisory Committee of the Shenzhen Stock ExchangeY
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., LtdFounder, Chairman, Senior Engineer, Beijing Cyber Yingjie Technology Co., Ltd., Founder of Zhengqi CollegeY
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

Chongqing Changan Automobile Company Limited 2020 Annual Report

Wei XinjiangChina Life Insurance (Group)Deputy General Manager of Development Planning Department of China Life Pension Insurance Co., Ltd., 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 other work unitThis table only shows the main office performance and position of independent directors.

Chongqing Changan Automobile Company Limited 2020 Annual Report

executives who receive remuneration from the company will receive a total of 27.8058 million yuan in remuneration payable from thecompany.Payment of directors, supervisors and senior managers got from the company during the reporting period

NamePositionGenderagestatusTotal earning from the company(yuan)
Zhu HuarongChairman, Secretary of the Party CommitteeM55Present2,028,522
Wang JunDirector, President, Deputy Secretary of the Party CommitteeM48Present1,477,221
Zhou ZhipingDirectorM50Present-
Liu GangDirectorM54Present-
Tan XiaogangDirectorM57Present-
Zhang BoDirectorM42Present-
Zhang DeyongDirector, Chief accountantM46Present1,901,256
Liu JipengIndependent DirectorM64Present120,000
Li QingwenIndependent DirectorM65Present120,000
Chen QuanshiIndependent DirectorM75Present120,000
Ren XiaochangIndependent DirectorM64Present120,000
Pang YongIndependent DirectorM51Present120,000
Tan XiaoshengIndependent DirectorM50Present120,000
Wei XinjiangIndependent DirectorM51Present120,000
Cao XingquanIndependent DirectorM49Present120,000
Yan MingChairman of the supervisoryM55Present-
Sun DahongSupervisorM54Departure-
Zhao HuixiaSupervisorM60Present-
Wang YanhuiEmployee SupervisorF54Present984,878
Luo YanEmployee SupervisorF46Present314,536
Yuan MingxueDeputy Secretary of the Party CommitteeM52Present1,919,865
Liu BoExecutive vice presidentM54Present1,728,522
He ChaobingExecutive vice presidentM53Present1,440,522
Zhang JingjingExecutive vice presidentF54Departure1,710,341
Li WeiExecutive vice presidentM54Present1,428,522
Hua ZhanbiaoCommission for Discipline InspectionM53Present1,428,522
Tan BenhongExecutive vice presidentM45Present1,464,522

Chongqing Changan Automobile Company Limited 2020 Annual Report

Liu ZhengjunExecutive vice presidentM55Departure1,731,248
Ye PeiExecutive vice presidentM45Present2,018,755
Zhao FeiExecutive vice presidentM46Present1,411,155
Chen Weivice presidentM48Present1,452,522
Li Mingcaivice presidentM39Present1,464,522
Li Junthe Secretary of BODF51Present940,371
Total--------27,805,802
Number of employees in the parent company(persons)27,835
Number of employees in major subsidiaries(persons)12,463
Total number of active employees(persons)40,298
Total number of current salaried employees(persons)40,298
Number of retired employees whose parent company and major subsidiary bear the costs(persons)6,509
Professional composition
Professional component categoriesProfessional Composition(persons)
Production personnel25,984
Sales staff1,708
Technicians8,054
Finance staff379
Administrators402
Managers3,771
Total40,298
Educational Background
Type of educationNumber(persons)

Chongqing Changan Automobile Company Limited 2020 Annual Report

PHD100
Postgraduate1,961
Bachelor degree11,402
University specialty9,353
Secondary school, high school and corresponding education15,358
Secondary and below2,124
Total40,298

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 promoted thestandard operation of the Company. The actual situation of the corporate governance of the Company is in line withthe 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 "Enterprise AccountingStandards", improved the basic accounting management, established a sound financial system, optimized accountingand statements preparation process, strengthened the financial supervision, conducted the in-depth implementationof financial management, established the management foundation work, accounting and finance managementauthorization, the monetary fund management, financing, purchasing and payment, fixed assets, projects underconstruction, accounting policy, accounting estimate, consolidated financial statements, cost management, inventorymanagement, financial analysis and other financial management system to ensure the quality of accountinginformation and the safety of the Company property. According to internal control deficiencies identified standardsof the financial report, there is no internal control defects over financial reporting in the report period. The full textof the internal control self-evaluation report is published on http://www.cninfo.com.cn on April 20, 2021.Whether there are differences between corporate governance and the related requirements of "company law"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 situation

In December 2009, according to the national “Automobile Industry Adjustment and Revitalization Plan”regarding promoting auto enterprise merger restructuring and further optimization of state-owned economy strategylayout requirements, the actual controller of the company China South Industries Group Corporation and ChinaAviation Industry Group Company proceeded industry restructuring, China Aviation Industry Group Companytransferred 100% equity of Jiangxi Changhe Automobile Co., LTD free. (hereinafter referred to as "ChangheAutomobile") and 100% stake of Harbin Hafei Automobile Industry Group co., LTD. (hereinafter referred to as"Haqi group") into the company's controlling shareholder China Changan Automobile Group Co., LTD. (hereinafterreferred to as "China Changan").This above-mentioned behavior led to competition between the company and

Chongqing Changan Automobile Company Limited 2020 Annual Report

subordinate enterprise of China Changan, the controlling shareholder. To finally solve the possible competition andbetter maintain the interests of company’s investors, the company’s controlling shareholder China Changancommitment:⒈When Jiangxi Changhe Automobile Co., Ltd. and Harbin Hafei Automobile Industry Group Co.,LTD. can make profits for two successive years with sustainable development ability and improved managementlevel, it’s proposed to affiliate the two companies into Changan automobile. In October 28, 2013, the controllingshareholder of China Changan transferred Jiangxi Changhe Automobile Co. Ltd. to Jiangxi provincial state ownedenterprise assets (Holdings) Limited, China Changan proposed Jiangxi Changhe Automobile Co. Ltd. injectedcommitment matter was removed. In order to solve the possible horizontal competition between Hafei AutomobileCo., Ltd. and the company, on January 25, 2019, Haqi Group, a subsidiary of the company's controlling shareholderChina Changan, transferred 38% of the shares of Hafei Automobile Co., Ltd. to Harbin Yungu Automobile. IndustrialDevelopment 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
2020 First Interim Shareholders MeetingInterim44.572%Jan. 13, 2020Jan. 14, 2020http//www.cninfo.com.cn 2020 First Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2020-04)
2019 Annual Shareholders MeetingAnnual59.488%May. 22, 2020May. 23, 2020http//www.cninfo.com.cn 2019 Annual Shareholders Meeting Resolution Announcement(Announcement Number: 2020-44)
2020 Second Interim Shareholders MeetingInterim46.695%June. 22, 2020June. 23, 2020http//www.cninfo.com.cn 2020 Second Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2020-55)
2020 Third Interim Shareholders MeetingInterim16.823%August. 10, 2020August. 11, 2020http//www.cninfo.com.cn 2020 Third Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2020-74)
2020 Fourth Interim Shareholders MeetingInterim20.783%September. 30, 2020October. 9, 2020http//www.cninfo.com.cn 2020 Fourth Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2020-85)
Independent directors attend board of directors and the shareholders meeting
Names of independent directorsTimes of attending the board of directors during the reportTimes of presenceTimes of attendance byTimes of entrustTimes of absenceWhether absent from the meeting

Chongqing Changan Automobile Company Limited 2020 Annual Report

periodcommunication modeattendancefor two consecutive times
Liu Jipeng17215N
Li Qingwen17215N
Chen Quanshi171151N
Ren Xiaochang17215N
Pang Yong17215N
Tan Xiaosheng17215N
Wei Xinjiang171151N
Cao Xingquan17215N
Times for independent directors attending the shareholders meeting3

Chongqing Changan Automobile Company Limited 2020 Annual Report

time. The audit committee voted and made resolutions on company's annual financial report, and agreed to submitthe 2019 financial report to the board of directors for approval; Review the proposal on Recruitment of 2020 AnnualFinancial Report Auditor and Recruitment of 2020 Annual Internal Control Report Auditor, and agreed to submit theproposal to the board of directors for approval of continuing to hire Ernst & Young Hua Ming as the company's 2020annual financial report auditor and 2020 Annual internal control report auditor; Review the internal control auditreport of 2019, internal control self-evaluation report of 2019 and audit work report of the first quarter of 2020.

4) Review the report on audit and inspection in the half year of 2020;

5) Review the internal control report of the third quarter of 2020;

6) Review the overall audit plan and relevant audit requirements for 2020.

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 3 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 of the company's A-share restricted stock incentive plan (Draft) and itsabstract, the motion of the company's A-share restricted stock incentive plan implementation assessmentmanagement measures, and the motion of requesting the general meeting of shareholders to authorize the board ofdirectors to handle matters related to equity incentive;

3) Review and agree to the motion on the annual salary distribution plan for deputy management performancein 2019.

3、Compensation and Review Committee

The strategy and investment committee under the board of directors consists of three non-independent directorsand one independent director. The chairman is Mr.Zhu Huarong. During the reporting period, the strategy andinvestment committee held 6 meetings and performed the following duties:

1) Review and approve the proposal on participating in T3 technology platform company;

2) Review and agree to the motion on the company's investment plan in 2020, the motion on the company'sfinancing plan in 2020, the motion on the bill pool business, and the motion on the company's forward foreignexchange purchase transaction;

3) Review and agree to 11 proposals related to non-public offering of A-shares, including the proposal on thecompany's compliance with the conditions for non-public offering of A-shares;

4) Review and agree to the financial statements of 2019 and financial budget of 2020;

5) Review and agree to the proposal on the disposal of trading financial assets at the right time;

6) Review and agree to the proposal on forward foreign exchange settlement of subsidiaries of the company.Ⅶ. The work of the board of supervisorsThe board of supervisors found whether the company was at risk or not in the supervision during the reportperiod

□ Yes √ No

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 management

For 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 controlApril. 20, 2021
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 statement95.97%
proportion of revenue in the assessment accounting for the revenue in the financial statement98.18%
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

Chongqing Changan Automobile Company Limited 2020 Annual Report

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, 2020, according to “Basic Norms of Enterprise Internal Control” and other related regulations.
Disclosure date of audit report of internal controlApril.20, 2021
Disclosure index of audit report of internal controlInternal control audit report will be published on http://www.cninfo.com.cn on April.20, 2021
type of opinion on internal control audit reportstandard and unqualified opinion
Whether there is huge deficiency in the non-financial reportNo

Chongqing Changan Automobile Company Limited 2020 Annual Report

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 the annualreport ?

□ Yes √ No

Chongqing Changan Automobile Company Limited 2020 Annual Report

Chapter 10 Auditor’s Report

Ernst & Young Hua Ming Shen Zi (2021) No. 60662431_D01

Chongqing Changan Automobile Company Limited

To the shareholders ofChongqing Changan Automobile Company Limited

Chongqing Changan Automobile Company Limited 2020 Annual Report

Auditor’s Report

Ernst & Young Hua Ming Shen Zi (2021) 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 Changan AutomobileCompany Limited, which comprise the consolidated and the company balance sheet as at 31December 2020, and the consolidated and the company income statements, the statementsof changes in equity and the cash flow statements for the year then ended and notes to thefinancial statements.

In our opinion, the accompanying financial statements of Chongqing Changan AutomobileCompany Limited present fairly, in all material respects, the consolidated and the Company’sfinancial position as at 31 December 2020, and the consolidated and the Company’s financialperformance and cash flows for the year then ended in accordance with AccountingStandards 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 to providea 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 matters wereaddressed in the context of our audit of the financial statements as a whole, and in formingour opinion thereon, and we do not provide a separate opinion on these matters. For eachmatter below, our description of how our audit addressed the matter is provided in thatcontext.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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Key audit matters (continued)

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit ofthe 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 maintain the quality and safety of the sold vehicle, Chongqing Changan Automobile Company Limited also 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. Extra 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 27 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.

Chongqing Changan Automobile Company Limited 2020 Annual Report

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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 criteria 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.

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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 do notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation 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 material misstatementof this other information, we are required to report that fact. We have nothing to report inthis 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 realistic alternativebut to do so.

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

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Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements asa whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurancebut is not a guarantee that an audit conducted in accordance with CSAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and aregenerally considered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of these financialstatements.

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 including the disclosures, structure and content of thefinancial statements, and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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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 any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on our independence,and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine thosematters that were of most significance in the audit of the financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated inour report because the adverse consequences of doing so would reasonably be expected tooutweigh 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 17 April 2021

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET31 December 2020(Expressed in Renminbi Yuan)

Notes V2020/12/312019/12/31
Current assets
Cash132,001,775,600.0710,066,171,353.48
Financial assets held for trading2204,254,400.002,419,476,200.00
Notes receivable328,371,541,054.7526,805,635,587.19
Accounts receivable42,141,197,139.45838,314,076.82
Prepayments5460,703,603.80623,801,896.07
Other receivables6723,919,037.363,731,755,992.46
Inventories75,967,516,230.573,375,441,488.37
Contract assets81,450,031,414.61-
Other current assets91,568,711,870.611,746,120,128.04
Total current assets72,889,650,351.2249,606,716,722.43
Non-current assets
Long-term equity investments1012,109,089,795.6711,008,336,989.09
Other equity instrument investment11691,990,000.00734,506,100.00
Investment property126,876,138.167,102,849.72
Fixed assets1326,436,757,696.9626,939,490,554.19
Construction in progress141,048,036,148.701,729,803,028.43
Intangible assets154,946,035,052.465,209,619,313.49
Development expenditure16596,577,787.95814,745,464.20
Goodwill1748,883,188.379,804,394.00
Long-term deferred expenses1810,642,512.5114,327,639.90
Deferred tax assets192,131,266,677.521,542,600,534.93
Total non-current assets48,026,154,998.3048,010,336,867.95
TOTAL ASSETS120,915,805,349.5297,617,053,590.38

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET (continued)31 December 2020(Expressed in Renminbi Yuan)

Notes V2020/12/312019/12/31
Current liabilities
Short-term loans20578,000,000.00229,580,000.00
Notes payable2117,574,014,553.4613,430,543,294.23
Accounts payable2223,118,793,794.4218,905,725,271.50
Contract liabilities234,471,158,190.75
Advances from customers23-2,315,641,685.78
Payroll payable242,015,868,366.571,046,335,781.91
Taxes payable251,292,001,263.86889,092,442.80
Other payables264,475,215,625.984,809,918,141.45
Contingent liabilities273,125,170,942.463,352,580,839.28
Non-current liabilities due within one year29100,000,000.00-
Other current liabilities285,842,758,104.084,253,942,761.77
Total current liabilities62,592,980,841.5849,233,360,218.72
Non-current liabilities
Long-term loans29955,300,000.0055,300,000.00
Special payable30261,260,928.70857,356,423.71
Long term payroll payable3141,634,000.0045,932,000.00
Deferred income323,469,017,384.883,194,291,079.21
Deferred tax liabilities19115,304,728.61296,742,890.29
Total non-current liabilities4,842,517,042.194,449,622,393.21
Total liabilities67,435,497,883.7753,682,982,611.93

Chongqing Changan Automobile Company LimitedCONSOLIDATED BALANCE SHEET (continued)31 December 2020(Expressed in Renminbi Yuan)

Notes V2020/12/312019/12/31
Owners’ equity
Share capital335,363,396,174.004,802,648,511.00
Capital reserves3410,930,781,918.645,366,097,594.66
Other Comprehensive Income3578,420,720.78139,994,580.19
Special reserves3640,847,443.4147,076,242.71
Surplus reserves372,681,698,087.002,401,324,255.50
Retained earnings3834,315,048,892.2631,271,171,559.60
Equity attributable to owners53,410,193,236.0944,028,312,743.66
Minority interests70,114,229.66(94,241,765.21)
Total equity53,480,307,465.7543,934,070,978.45
TOTAL LIABILITIES
AND OWNERS’ EQUITY120,915,805,349.5297,617,053,590.38

Chongqing Changan Automobile Company LimitedCONSOLIDATED INCOME STATEMENTYear ended 31 December 2020(Expressed in Renminbi Yuan)

Notes V20202019
Operating revenue3984,565,544,146.5870,595,245,133.28
Less: Operating cost3972,473,471,726.8560,232,585,428.08
Tax and surcharges403,228,273,573.842,488,057,067.83
Operating expenses413,413,296,854.704,591,170,885.94
General and administrative424,273,555,030.822,265,231,518.65
expenses
Research and development433,153,888,007.293,169,063,761.13
expenses
Financial income44(210,224,449.63)(190,849,511.73)
Interest expense46,672,055.3440,109,729.93
Interest income341,543,220.81245,520,358.56
Add: Other incomes45797,901,407.241,537,625,620.93
Investment income or loss463,153,614,176.97(2,109,369,113.31)
Including: Investment
loss from associates and joint venture(566,732,463.22)(2,158,815,891.20)
Earnings from fair value changes472,035,390,665.86889,154,888.69
Credit impairment loss48(107,743,059.89)(125,657,732.02)
Impairment loss59(1,517,807,107.17)(395,506,650.22)
Gain on disposal of assets5029,465,046.0756,658,864.17
Operating profit/ (loss)2,624,104,531.79(2,107,108,138.38)
Add: Non-operating income5161,938,556.8949,703,849.18
Less: Non-operating expenses5289,458,043.64184,962,615.32
Total profit/ (loss)2,596,585,045.04(2,242,366,904.52)
Less: Income tax expense53(691,893,597.66)406,764,986.36
Net profit/(loss)3,288,478,642.70(2,649,131,890.88)
Classification by going concern
Net profit/(loss) from continuing operations3,288,478,642.70(2,649,131,890.88)
Classification by ownership attribution
Net profit/(loss) attributable to owners3,324,251,164.16(2,646,719,356.53)
Minority interests(35,772,521.46)(2,412,534.35)

Chongqing Changan Automobile Company LimitedCONSOLIDATED INCOME STATEMENT (continued)Year ended 31 December 2020(Expressed in Renminbi Yuan)

The notes form an integral part of the financial statements.

Notes V20202019
Other comprehensive income,
net of tax
Total comprehensive income35(61,573,859.4169,977,399.20
attributable to owners,)
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 plan(207,000.00)254,000.00
Changes in fair value of
other equity investment(33,588,685.00)63,584,845.00
(33,795,685.00)63,838,845.00
Other comprehensive income
to be reclassified to profit
or loss in subsequent periods:
Foreign currency reserve(27,778,174.41)6,138,554.20
(27,778,174.41)6,138,554.20
Total comprehensive income
attributable to minority
interests, net of tax--
Total comprehensive income3,226,904,783.29(2,579,154,491.68)
Total comprehensive income
attributable to owners3,262,677,304.75(2,576,741,957.33)
Total comprehensive income(35,772,521.46)(2,412,534.35)
attributable to minority
interest
Earnings per share54
Basic earnings per share0.68(0.55)
Diluted earnings per shareNot ApplicableNot Applicable

Chongqing Changan Automobile Company LimitedCONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITYYear ended 31 December 2020(Expressed in Renminbi Yuan)

2020

Equity attributable to owners
Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsSubtotalMinority interestTotal equity
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
Changes during the year:
Total comprehensive income--(61,573,859.41)--3,324,251,164.163,262,677,304.75(35,772,521.463,226,904,783.29
Capital contributed by owners and capital decreases
1.Ordinary shares invested by shareholders560,747,663.005,426,124,109.65----5,986,871,772.65-5,986,871,772.65
2.Acquisition of minority shareholders-(1,175,706.59)----(1,175,706.59)(11,074,002.41(12,249,709.00)
3.Others-139,735,920.92----139,735,920.92210,264,079.08350,000,000.00
Distribution of profit
1.Distribution to owners----280,373,831.50(280,373,831.50)---
Special reserves
1.Provided---75,056,248.96--75,056,248.96816,634.5175,872,883.47
2.Ultilized---(81,285,048.26)--(81,285,048.26)(481,014.92(81,766,063.18)
Acquire subsidiaries-------602,820.07602,820.07
At 31 December 20205,363,396,174.0010,930,781,918.6478,420,720.7840,847,443.412,681,698,087.0034,315,048,892.2653,410,193,236.0970,114,229.6653,480,307,465.75

Chongqing Changan Automobile Company LimitedCONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)Year ended 31 December 2020(Expressed in Renminbi Yuan)

2019

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 CASH FLOW STATEMENTYear ended 31 December 2020(Expressed in Renminbi Yuan)

Notes V20202019
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sale of goods
or rendering of services87,031,938,095.6170,578,207,834.29
Refunds of taxes444,012,154.77603,916,897.39
Cash received relating to other
operating activities552,038,287,059.254,019,161,557.69
Subtotal of cash inflows89,514,237,309.6375,201,286,289.37
Cash paid for goods and services63,468,931,047.1455,704,810,280.08
Cash paid to and on behalf of employees6,048,636,349.995,633,184,648.81
Cash paid for all types of taxes4,803,725,415.522,955,141,047.76
Cash paid relating to other
operating activities554,516,991,017.747,026,402,074.33
Subtotal of cash outflows78,838,283,830.3971,319,538,050.98
Net cash flows from operating
activities5610,675,953,479.243,881,748,238.39
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from recovery
of investment5,040,464,165.86831,429,574.25
Cash received from return
on investment1,100,783,602.421,386,844,687.60
Net cash received from disposal of
fixed assets, intangible assets
and other long-term assets599,808,833.6172,899,243.69
Cash received relating to other
investing activities5580,310,705.55-
Subtotal of cash inflows6,821,367,307.442,291,173,505.54
Cash paid for acquisition of
fixed assets, intangible assets
and other long-term assets2,960,046,781.424,783,722,428.46
Cash paid for acquisition of
investments152,201,597.001,002,064,416.73
Other cash disbursed in connection with investment activities55104,416,061.73300,000,000.00
Subtotal of cash outflows3,216,664,440.156,085,786,845.19
Net cash flows from investing activities3,604,702,867.29(3,794,613,339.65)

Chongqing Changan Automobile Company LimitedCONSOLIDATED CASH FLOW STATEMENT (continued)Year ended 31 December 2020(Expressed in Renminbi Yuan)

Notes V20202019
CASH FLOWS FROM
FINANCING ACTIVITIES:
Cash received from absorbing equity investments6,342,679,154.12-
Including: cash received by the subsidiary from absorbing minority shareholders' investment4,620,000.00-
Cash received from borrowings2,223,525,472.30304,880,000.00
Cash received relating to
other financing activities5534,712,775.0032,839,805.56
Sub-total of cash inflows8,600,917,401.42337,719,805.56
Cash repayments of borrowings875,105,472.30216,594,120.00
Cash paid for distribution of dividends or profits and interest
expenses45,485,683.50126,540,808.63
Cash paid relating to
other financing activities55632,935,841.72395,159,204.54
Sub-total of cash outflows1,553,526,997.52738,294,133.17
Net cash flows from financing activities7,047,390,403.90(400,574,327.61)
EFFECT OF CHANGES IN
EXCHANGE RATE ON CASH(32,553,367.69)25,760,488.96
NET INCREASE IN CASH
AND CASH EQUIVALENTS21,295,493,382.74(287,678,939.91)
Add: Opening balance of
cash and cash equivalents9,360,474,674.899,648,153,614.80
CLOSING BALANCE OF
CASH AND CASH EQUIVLANT5630,655,968,057.639,360,474,674.89

Chongqing Changan Automobile Company LimitedBALANCE SHEET31 December 2020(Expressed in Renminbi Yuan)

Notes XIV2020/12/312019/12/31
Current assets
Cash25,238,014,025.386,563,020,335.56
Financial assets held for trading180,929,400.00184,245,000.00
Notes receivable27,248,111,565.1325,837,326,483.09
Accounts receivable15,464,541,185.635,094,270,365.72
Prepayments294,088,044.01403,105,316.24
Other receivables21,990,616,778.832,597,314,344.40
Inventories4,332,579,774.461,735,570,691.28
Contract assets941,046,613.60-
Other current assets322,467,261.74798,430,035.62
Total current assets66,012,394,648.7843,213,282,571.91
Non-current assets
Long-term equity investments315,911,304,527.8716,052,319,271.82
Other equity instrument investment681,630,000.00724,309,400.00
Fixed assets19,757,553,675.9920,301,231,002.41
Construction in progress586,144,839.341,545,211,000.22
Intangible assets3,653,199,216.484,030,438,649.57
Development expenditure555,569,523.02431,774,377.27
Long-term deferred expenses7,470,626.869,719,259.84
Deferred tax assets1,803,491,965.401,318,884,054.48
Total non-current assets42,956,364,374.9644,413,887,015.61
TOTAL ASSETS108,968,759,023.7487,627,169,587.52

Chongqing Changan Automobile Company LimitedBALANCE SHEET (continued)31 December 2020(Expressed in Renminbi Yuan)

2020/12/312019/12/31
Current liabilities
Short term loans510,000,000.0029,580,000.00
Notes payable14,600,240,612.8611,983,445,725.06
Accounts payable18,770,044,628.4415,601,432,751.74
Contract liabilities3,885,522,883.33-
Advances from customers-1,870,992,349.08
Payroll payable1,604,474,120.45641,340,149.30
Taxes payable1,045,768,022.62453,619,905.66
Other payables3,166,636,684.634,301,257,819.04
Contingent liabilities2,196,924,682.572,413,434,397.36
Non-current liabilities due within one year100,000,000.00-
Other current liabilities5,235,294,795.793,400,065,879.02
Total current liabilities51,114,906,430.6940,695,168,976.26
Non-current liabilities
Long term loans955,300,000.0055,300,000.00
Long term payable187,142,303.66285,768,478.89
Long term payroll payable21,657,000.0022,747,000.00
Deferred income2,112,507,625.972,135,615,106.85
Deferred tax liabilities75,158,651.3881,775,341.60
Total non-current liabilities3,351,765,581.012,581,205,927.34
Total liabilities54,466,672,011.7043,276,374,903.60
Owner’s equity
Share capital5,363,396,174.004,802,648,511.00
Capital reserves10,440,896,902.525,014,772,792.87
Other comprehensive income159,954,052.00259,380,413.58
Special reserves7,505,438.5719,917,658.63
Surplus reserves2,681,698,087.002,401,324,255.50
Retained earnings35,848,636,357.9531,852,751,052.34
Total owner’s equity54,502,087,012.0444,350,794,683.92
TOTAL LIABILITIES
AND OWNERS’ EQUITY108,968,759,023.7487,627,169,587.52

Chongqing Changan Automobile Company LimitedINCOME STATEMENTYear ended 31 December 2020(Expressed in Renminbi Yuan)

Notes XIV20202019
Operating revenue481,557,686,002.1864,952,750,206.63
Less: Operating cost471,325,749,326.5256,966,369,777.83
Tax and surcharges2,076,319,015.771,763,695,806.32
Operating expenses2,676,426,234.733,173,277,654.38
General and administrative
expenses3,508,937,049.671,433,878,532.92
Research and development2,833,804,608.422,659,328,815.49
expenses
Financial income(240,206,881.20)(159,213,197.04)
Interest income30,585,489.7522,298,902.58
Interest expense283,501,457.93194,548,964.11
Add: Other income219,840,648.40765,866,705.17
Investment income/(loss)55,645,410,110.30(2,023,549,132.39)
Including: Investment income from associates
and from joint venture(345,896,085.57)(2,081,317,451.25)
Earnings from fair value changes8,051,845.0760,705,000.00
Impairment of credit(74,210,826.52)(121,430,481.42)
Impairment loss(960,333,823.74)(303,604,164.62)
Gain/(loss) on disposal of assets(12,218,555.20)45,709,560.34
Operating profit4,203,196,046.58(2,460,889,696.19)
Add: Non-operating income43,045,534.6432,324,558.40
Less: Non-operating expenses88,772,476.11165,234,410.53
Total profit4,157,469,105.11(2,593,799,548.32)
Less: Income tax expense(473,687,949.10)234,818,079.03
Net profit4,631,157,054.21(2,828,617,627.35)
Classification by going concern
Net profit from continuing
operations4,631,157,054.21(2,828,617,627.35)

Chongqing Changan Automobile Company LimitedINCOME STATEMENT (continued)Year ended 31 December 2020(Expressed in Renminbi Yuan)

Notes XIV20202019
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 plan(52,000.00)216,000.00
Changes in fair value of
other equity investment(33,727,490.00)63,321,260.00
(33,779,490.00)63,537,260.00
Other comprehensive income
to be reclassified to profit
or loss in subsequent periods:
Reclassification of financial assets recognized in other comprehensive income amounts(65,646,871.58)-
Total comprehensive income4,531,730,692.63(2,765,080,367.35)

Chongqing Changan Automobile Company LimitedSTATMENT OF CHANGES IN SHAREHOLDERS’ EQUITYYear ended 31 December 2020(Expressed in Renminbi Yuan)

Share capitalCapital reservesOther comprehensive incomeSpecial reservesSurplus reservesRetained earningsTotal owner’s equity
Balance at the end of the previous year and balance at the beginning of the current year4,802,648,511.005,014,772,792.87259,380,413.5819,917,658.632,401,324,255.5031,852,751,052.3444,350,794,683.92
Changes during the year:
Total comprehensive income--(99,426,361.58--4,631,157,054.214,531,730,692.63
Capital contributed by owners and capital decreases
1.Ordinary shares invested by shareholders560,747,663.005,426,124,109.65----5,986,871,772.65
Distribution of profit
1.Distribution to owners----280,373,831.50(280,373,831.50)-
Special reserves
1.Provided---47,093,693.47--47,093,693.47
2.Ultilized---(59,505,913.53)--(59,505,913.53)
Disposal subsidiaries-----(354,897,917.10)(354,897,917.10)
At 31 December 20205,363,396,174.0010,440,896,902.52159,954,052.007,505,438.572,681,698,087.0035,848,636,357.9554,502,087,012.04

Chongqing Changan Automobile Company LimitedSTATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)Year ended 31 December 2020(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

The notes form an integral part of the financial statements.

Chongqing Changan Automobile Company LimitedCASH FLOW STATEMENTYear ended 31 December 2020(Expressed in Renminbi Yuan)

20202019
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash received from sale of goods
or rendering of services76,182,140,798.1063,365,386,343.87
Cash received relating to other
operating activities649,216,551.282,494,240,256.21
Subtotal of cash inflows76,831,357,349.3865,859,626,600.08
Cash paid for goods and services56,827,422,505.1450,430,826,053.22
Cash paid to and on behalf of
employees4,447,227,440.623,965,479,429.67
Cash paid for all types of taxes2,531,097,548.181,889,492,304.51
Cash paid relating to other
operating activities4,442,718,068.096,407,581,336.30
Subtotal of cash outflows68,248,465,562.0362,693,379,123.70
Net cash flows from operating
activities8,582,891,787.353,166,247,476.38
CASH FLOWS FROM
INVESTING ACTIVITIES
Cash received from recovery
of investment5,032,818,905.43831,300,000.00
Cash received from return
on investment1,706,242,444.171,395,166,228.50
Net cash received from disposal
of fixed assets, intangible assets and other
long-term assets4,999,947.9560,445,420.20
Cash received relating to other
investing activities16,388,900.00-
Subtotal of cash inflows6,760,450,197.552,286,911,648.70
Cash paid for acquisition of
fixed assets, intangible assets
and other long-term assets1,884,767,686.714,021,334,954.67
Cash paid for acquisition of
investments2,268,598,581.001,855,926,872.55
Cash paid relating to other
investing activities-300,000,000.00
Subtotal of cash outflows4,153,366,267.716,177,261,827.22
Net cash flows from investing activities2,607,083,929.84(3,890,350,178.52)

Chongqing Changan Automobile Company LimitedCASH FLOW STATEMENT (continued)Year ended 31 December 2020(Expressed in Renminbi Yuan)

20202019
CASH FLOWS FROM
FINANCING ACTIVITIES
Cash received from absorbing equity investments5,988,059,154.12-
Cash received from borrowings2,039,580,000.0084,880,000.00
Sub-total of cash inflows8,027,639,154.1284,880,000.00
Cash repayments of borrowings559,160,000.00-
Cash paid for distribution of dividends or profits and for
interest expenses29,417,041.35108,729,981.28
Cash paid relating to other financing activities1,187,381.47-
Sub-total of cash outflows589,764,422.82108,729,981.28
Net cash flows from financing activities7,437,874,731.30(23,849,981.28)
EFFECT OF CHANGES IN
EXCHANGE RATE ON CASH--
NET INCREASE IN CASH
AND CASH EQUIVALENTS18,627,850,448.49(747,952,683.42)
Add: Cash and cash equivalents at
beginning of year6,563,020,335.577,310,973,018.99
CASH AND CASH EQUIVLANT
AT END OF YEAR25,190,870,784.066,563,020,335.57

I CORPORATE INFORMATION

Chongqing Changan Automobile Company Limited (hereafter referred to as “the Company”) is acompany limited by shares registered in Chongqing, People’s Republic of China. It wasestablished on 31 October 1996 with an indefinite business period. The ordinary A shares ofRenminbi issued by the company and the B shares of domestically listed foreign shares have beenlisted on the Shenzhen Stock Exchange. The company is headquartered at 260 Jianxin East Road,Jiangbei District, Chongqing, China.

In September 2020, with the approval of the China Securities Regulatory Commission, thecompany non-public issued 560,747,663 A-shares to 12 specific investors, including China SouthIndustries Group Co., Ltd. (hereinafter referred to as " China South Group "), China ChanganAutomobile Group Co., Ltd. (hereinafter referred to as "China Changan") and South IndustryAssets Management Co., Ltd.(hereinafter referred to as "Southern Assets"), etc. After thecompletion of the additional issuance, the total share capital increased to RMB 5,363,396,174.00.

Until December 31, 2020, the company’s controlling shareholder China Changan and its wholly-owned subsidiary Zhonghui Futong (Hong Kong) Investment Company Limited held a total ofordinary shares of the company 1,175,623,127 shares with an equity ratio of 21.92%. ChinaChangan’s parent company China South Group and its wholly-owned subsidiary South Assets andSouth Industries International Holdings (Hong Kong) Company Ltd. hold 1,193,305,773 ordinaryshares of the company, with a 22.25% shareholding ratio. China Changan and China South Grouphold ordinary shares 2,368,928,900 in total with a shareholding ratio of 44.17%.

The Company and its subsidiaries collectively refer to as “the Group”, and its main businessactivities are: the manufacturing and sales of automobiles (including cars), automobile engineproducts, and supporting parts.

The holding company and ultimate holding company of the Company are China Changan andChina South Group respectively.

According to the Articles of Association, the financial statements, which has been approved bythe board of directors on 17 April 2021, was submitted to general meeting of shareholders forapproval.

The scope of consolidation in the consolidated financial statement is determined based oncontrol. For the consolidation scope of this year, please refer to Note VII.

II BASIS OF PREPERATION

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

The financial statements are presented on a going concern basis.

The financial statements have been prepared under the historical cost convention, except forcertain financial instruments. If the assets are impaired, the corresponding provisions should bemade accordingly.

III SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

According to the actual production and operation characteristics, the group formulated thespecific accounting policies and accounting estimates, mainly reflected in provision of accountsreceivables, inventory valuation, depreciation of fixed assets, intangible assets amortization,condition of capitalization of research and development expense and revenue recognition andmeasurement.

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 31December 2020 and the financial results and the cash flows for the year then ended in accordancewith Accounting Standards for 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 the currency is Yuan. Each entity in the Group determines its own functional currencyin accordance with the operating circumstances. At the end of the reporting period, the foreigncurrency financial statements are translated into the reporting currency of the Company of RMB.

4. Business combination

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

4. Business combination (continued)

Business combination involving entities under common controlA business combination involving entities under common control is a business combination inwhich all of the combining entities are ultimately controlled by the same party or parties bothbefore and after the combination, and that control is not transitory. For a business combinationinvolving entities under common control, the party which, on the combination date, obtainscontrol of another entity participating in the combination is the acquiring party, while that otherentity participating in the combination is a party being acquired. Combination date is the date onwhich the acquiring party effectively obtains control of the party being acquired.

Assets and liabilities that are obtained by the acquiring party in a business combination involvingentities under common control shall be measured at their carrying amounts at the combinationdate as recorded by the party being acquired. The difference between the carrying amount of thenet assets obtained and the carrying amount of the consideration paid for the combination (orthe aggregate face value of shares issued as consideration) shall be adjusted to capital reserve. Ifthe capital reserve is not sufficient to absorb the difference, any excess shall be adjusted againstretained earnings.

Business combination involving entities not under common controlA business combination involving entities not under common control is a business combinationin which all of the combining entities are not ultimately controlled by the same party or partiesboth before and after the combination. For a business combination involving entities not undercommon control, the party that, on the acquisition date, obtains control of another entityparticipating in the combination is the acquirer, while that other entity participating in thecombination is the acquiree. Acquisition date is the date on which the acquirer effectively obtainscontrol of the acquiree.

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

Goodwill is initially recognized and measured at cost, being the excess of the aggregate of thefair value of the consideration transferred (or the fair value of the equity securities issued) andany fair value of the Group’s previously held equity interest in the acquiree over the Group’sinterest in the fair value of the acquiree’s net identifiable assets. After initial recognition,goodwill is measured at cost less any accumulated impairment losses. Where the aggregate ofthe fair value of the consideration transferred (or the fair value of the equity securities issued) andany fair value of the Group’s previously held equity interest in the acquiree is lower than theGroup’s interest in the fair value of the acquiree’s net identifiable assets, the Group reassessesthe measurement of the fair value of the acquiree’s identifiable assets, liabilities and contingentliabilities and the fair value of the consideration transferred (or the fair value of the equitysecurities issued), together with the fair value of the Group’s previously held equity interest in theacquiree. If after that reassessment, the aggregate of the fair value of the considerationtransferred (or the fair value of the equity securities issued) and the Group’s previously held equityinterest in the acquiree is still lower than the Group’s interest in the fair value of the acquiree’s netidentifiable assets, the Group recognize the remaining difference in profit or loss.

5. Consolidated financial statements

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

In the preparation of the consolidated financial statements, the financial statements of thesubsidiaries are prepared for the same reporting period as the Company, using consistentaccounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flowsrelating to transactions between members of the Group are eliminated in full on consolidation.

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

With respect to subsidiaries acquired through business combinations involving entities not undercommon control, the operating results and cash flows of the acquiree should be included in theconsolidated financial statements, from the day that the Group gains control, till the Groupceases the control of it. While preparing the consolidated financial statements, the acquirershould adjust the subsidiary’s financial statements, on the basis of the fair values of theidentifiable assets, liabilities and contingent liabilities recognized on the acquisition date.

With respect to subsidiaries acquired through business combinations involving entities undercommon control, the operating results and cash flows of the acquiree should be included in theconsolidated financial statements from the beginning of the period in which the combinationoccurs.

If the changes of relevant facts and circumstances will result in the changes of one or more controlelements, 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 operationrefers to those joint venture arrangements, relevant assets and liabilities of which are enjoyedand assumed by the joint ventures. Joint ventures refer to those joint venture arrangements, onlythe right to net assets of which is enjoyed by the joint ventures.

Any joint venture shall recognize the following items related to its share of benefits in the jointoperation and conduct accounting treatment in accordance with relevant accounting standardsfor business enterprises: assets it solely holds and its share of jointly-held assets based on itspercentage; liabilities it solely assumes and its share of jointly-assumed liabilities based on itspercentage; incomes from sale of output enjoyed by it from the joint operation; incomes fromsale of output from the joint operation based on its percentage; and separate costs and costs forthe 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; Cashequivalents are short-term, highly liquid investments held by the Group, that are readilyconvertible to known amounts of cash and which are subject to an insignificant risk of changes invalue.

8. Foreign currency translation

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

The foreign currency transactions are recorded, on initial recognition in the functional currency,by applying to the foreign currency amount at the spot exchange rate on the transaction dates.Foreign currency monetary items are translated using the spot exchange rate quoted by thePeople’s Bank of China at the balance sheet date. The exchange gains or losses arising fromoccurrence of transactions and exchange of currencies, except for those relating to foreigncurrency borrowings specifically for construction and acquisition of fixed assets capitalized, aredealt 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 transactiondate, and the amount denominated in the functional currency should not be changed. Non-monetary foreign currency items measured at fair value should be translated at the spotexchange rate prevailing on the date when the fair values are determined. The exchangedifference thus resulted should be charged to the current income or other comprehensive incomeaccount of the current period.

When preparing consolidated financial statements, the financial statements of the subsidiariespresented in foreign currencies are translated into Renminbi as follows: asset and liabilityaccounts are translated into Renminbi at exchange rates ruling at the balance sheet date;shareholders’ equity accounts other than retained profits are translated into Renminbi at theapplicable exchange rates ruling at the transaction dates; income and expense in incomestatement are translated into Renminbi at spot exchange rates on transaction occurrence; totaldifference between translated assets and translated liabilities and shareholders’ equity isseparately listed as “foreign currency exchange differences” below retained profits. Thetranslation difference arising from the settlement of oversea subsidiaries is charged to thecurrent liquidation profit and loss in proportion to the settlement ratio of the assets concerned.

Foreign currency cash flows and the cash flows of foreign subsidiaries should be translated usingthe average exchange rate prevailing on the transaction month during which the cash flows occur.The amount of the effect on the cash arising from the change in the exchange rate should beseparately presented as an adjustment item in the cash flow statement.

9. Financial instruments

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

Recognition and derecognition

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

A financial asset (or, where applicable, a part of a financial asset or part of a group of similarfinancial assets) is primarily derecognized (i.e., removed from the Group’s consolidated balancesheet) 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 hasassumed an obligation to pay the received cash flows in full without material delay to a third partyunder a “pass-through” arrangement; and either (a) has transferred substantially all the risks andrewards of the financial asset, or (b) has neither transferred nor retained substantially all the risksand rewards of the asset, but has transferred control of the financial asset.

A financial liability is derecognized when the obligation under the liability is discharged orcancelled, or expires. When an existing financial liability is replaced by another from the samelender on substantially different terms, or the terms of an existing liability are substantiallymodified, such an exchange or modification is treated as a derecognition of the original liabilityand a recognition of a new liability, and the difference between the respective carrying amountsis recognized in profit or loss.

Regular way purchases and sales of financial assets are recognized and derecognized using tradedate accounting. Regular way purchases or sales are purchases or sales of financial assets thatrequire delivery within the period generally established by regulation or convention in themarketplace. The trade date is the date that the Group committed to purchase or sell a financialasset.

Classification and measurement of financial assets

The classification of financial assets at initial recognition depends on the financial asset’scontractual cash flow characteristics and the Group’s business model for managing them:

financial assets at fair value through profit or loss, financial assets at amortized cost and financialassets at fair value through other comprehensive income. All affected related financial assets willbe reclassified only if the Group changes its business model for managing financial assets.

9. Financial instruments (continued)

Classification and measurement of financial assets (Continued)

Financial assets are measured at fair value on initial recognition, but accounts receivable or notesreceivable arising from the sale of goods or rendering of services that do not contain significantfinancing components or for which the Group has applied the practical expedient of not adjustingthe effect of a significant financing component due within one year, are initially measured at thetransaction price.

For financial assets 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 inthe initial recognition amounts.

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 financial asset is held within a business model with the objective to hold financial assets inorder to collect contractual cash flows; the contractual terms of the financial asset give rise onspecified dates to cash flows that are solely payments of principal and interest on the principalamount outstanding. Financial assets at amortized cost are subsequently measured using theeffective interest method. Gains and losses are recognized in profit or loss when the asset isderecognized, modified or impaired.

Debt investments at fair value through other comprehensive incomeThe Group measures debt investments at fair value through other comprehensive income if bothof the following conditions are met: the financial asset is held within a business model with theobjective of both holding to collect contractual cash flows and selling; the contractual terms ofthe financial asset give rise on specified dates to cash flows that are solely payments of principaland interest on the principal amount outstanding. Interest income is recognized using theeffective interest method. The interest income, impairment losses and foreign exchangerevaluation are recognized in profit or loss. The remaining fair value changes are recognized inother comprehensive income. Upon derecognition, the cumulative fair value change recognizedin 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 tradingas equity investments designated at fair value through other comprehensive income. Only therelevant dividend income (excluding the dividend income explicitly recovered as part of theinvestment cost) is recognized in profit or loss. Subsequent changes in the fair value are includedin other comprehensive income, and no provision for impairment is made. When the financialasset is derecognized, the accumulated gains or losses previously included in othercomprehensive income are transferred from other comprehensive income to retained earnings.

9. Financial instruments (continued)

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 andfinancial assets at fair value through other comprehensive income are classified as financialassets at fair value through profit or loss. Such financial assets are subsequently measured at fairvalue with net changes in fair value recognized in profit or loss.

Classification and measurement of financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value throughprofit or loss, other financial liabilities. For financial liabilities at fair value through profit or loss,relevant transaction costs are directly recognized in profit or loss, and transaction costs relatingto other financial assets are included in the initial recognition 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 tradingand financial liabilities designated upon initial recognition as at fair value through profit or loss.Financial liabilities held for trading are subsequently measured at fair value with net changes infair value recognized in profit or loss. Gains or losses on liabilities designated at fair value throughprofit or loss are recognised in profit or loss, except for the gains or losses arising from the Group’sown credit risk which are presented in other comprehensive income with no subsequentreclassification to profit or loss.

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

9. Financial instruments (continued)

Impairment of financial assets

On the basis of expected credit losses, the Group performs impairment treatment on financialassets measured at amortized cost and equity instrument investments measured at fair value andwhose changes are included in other comprehensive income, and reserves for loss are recognized.

For receivables and contract assets that do not contain significant financing components, theGroup uses a simplified measurement method to measure the loss provision vased on theexpected credit loss amount for the entire duration.

For financial assets other than the simplified measurement method mentioned above, the Groupassesses on each balance sheet date whether its credit risk has not increased significantly sinceinitial recognition, it is in the first stage. The Group measures the loss provision based on theamount equivalent to the expected credit loss in the next 12 months, and calculates the interestincome based on the book balance and the actual interest rate; if the credit risk has increasedsignificantly since initial recognition but has not yet suffered credit impairment, it is in the secondat this stage, the Group measures the loss provision based on the amount equivalent to theexpected credit loss for the entire duration, and calculates the interest income based on the bookbalance and the actual interest rate; If credit impairment occurs after initial recognition, it is inthe third stage. The amount of expected credit losses is measured over the entire duration of theloss allowance, and interest income is calculated based on amortized cost and effective interestrate. For financial instruments with low credit risk on the balance sheet date, the Group assumesthat their credit risk has not increased significantly since initial recognition.

The Group assesses the expected credit losses of financial instruments based on individual itemsand portfolios. The Group has considered the credit risk characteristics of different customers andevaluated the expected credit losses of accounts receivable and other receivables based on theageing combination.

Please refer to Note VIII.3 for the disclosure of the Group’s judgment criteria for significantincrease in credit risk, the definition of credit impairment assets that have occurred, andassumptions about the expected credit loss measurement.

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

9. Financial instruments (continued)

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balancesheet if there is a currently enforceable legal right to offset the recognized amounts; and there isan intention to settle on a net basis, or to realize 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 Group derecognizes the financial asset; and if the Group retains substantially all the risks andrewards of the financial asset, the Group does not derecognize the financial asset.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership ofthe financial asset, the Group determines whether it has retained control of the financial asset. Inthis case: (i) if the Group has not retained control, it derecognizes the financial asset andrecognize separately as assets or liabilities any rights and obligations created not retained in thetransfer; (ii) if the Group has retained control, it continues to recognize the financial asset to theextent of its continuing involvement in the transferred financial asset and recognizes anassociated liability.

10. Inventories

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

Inventory is initially carried at the actual cost. Inventory costs comprise all costs of purchase,costs of conversion and other costs incurred in bringing the inventory to its present location andcondition. Weighted average method is assigned to the determination of actual costs ofinventories. One-off writing off method is adopted 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. Ifthe cost is higher than the net realizable value, provision for the inventory should be madethrough profit or loss. If factors that resulted in the provision for the inventory have disappearedand made the net realizable value higher than their book value, the amount of the write-downshould be reversed, to the extent of the amount of the provision for the inventory, and thereversed amount should be recognized in the income statement for the current period.

Net realizable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary to make the sale. Theimpairment provision should be made on a basis of each item of inventories according to thedifference between cost and net realizable value. For large numbers of inventories at relativelylow unit prices, the provision for loss on decline in value of inventories should be made bycategory.

11. Long-term equity investments

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

Long-term equity investments are recognized at initial investment cost upon acquisition. For along-term equity investment acquired through a business combination under common control,the initial investment cost of the long-term equity investment shall be the absorbing party’sshare of the carrying amount of the owners’ equity of the party being absorbed in theconsolidated financial statements of the ultimate controlling party at combination date. Thedifference between the initial investment cost and the carrying amount of cash paid, non-cashassets transferred and liabilities assumed shall be adjusted to capital reserve. If the balance ofcapital reserve is not sufficient, any excess shall be adjusted to retained earnings. Any othercomprehensive income previously recognized shall be accounted for on the same basis as wouldhave been required if the investee had directly disposed of the related assets or liabilities. Theportion recognized based on changes in the investee’s equity (other than net profit or loss, othercomprehensive income and profit appropriation) is charged to profit or loss upon disposal of suchlong-term equity investment. For those partially disposed equity investments, gains or lossesupon disposal are proportionately recognized in profit or loss when they still constitute long-term equity investments after the disposal and are fully charged to profit or loss when they arereclassified to financial instruments after the disposal. For business combination involvingentities not under common control, the initial investment cost should be the cost of acquisition(for step acquisitions not under common control, the initial investment cost is the sum of thecarrying amount of the equity investment in the acquiree held before the acquisition date andthe additional investment cost paid on the acquisition date), which is the sum of the fair value ofassets transferred, liabilities incurred or assumed and equity instruments issued. If the equityinvestments in the acquiree involve other comprehensive income prior to the acquisition date,when disposing of the investments, the relevant other comprehensive income will be accountedfor on the same basis as would have been required if the investee had directly disposed of therelated assets or liabilities. The portion recognized based on changes in the investee’s equity(other than net profit or loss, other comprehensive income and profit appropriation) is chargedto profit or loss upon disposal of such long-term equity investment. The initial investment costof a long-term equity investment acquired otherwise than through a business combination shallbe determined as follows: for a long-term equity investment acquired by paying cash, the initialinvestment cost shall be the actual purchase price has been paid plus those costs, taxes and othernecessary expenditures directly attributable to the acquisition of the long-term equityinvestment; for those acquired by the issue of equity securities, the initial investment cost shallbe the fair value of the equity securities issued.

11. Long-term equity investments (continued)

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

Under cost method, the long-term equity investment is valued at the cost of the initialinvestment. The cost of long-term equity investment should be adjusted in case of additionalinvestment or disinvestments. When cash dividends or profits are declared by the investedenterprise is recognized as investment income in current period.

The equity method is applied to account for long-term equity investments, when the Group hasjointly control, or significant influence on the investee enterprise. Joint control is thecontractually agreed sharing of control over an economic activity, and exists only when thestrategic financial and operating decisions relating to the activity require the unanimous consentof the parties sharing control (the ventures). Significant influence is the power to participate inthe financial and operating policy decisions of an economic activity but is not control or jointcontrol over those policies.

Under equity method, when the initial investment cost of a long-term equity investment exceedsthe investing enterprise’s interest in the fair values of the investee’s identifiable net assets at theacquisition date, the difference is accounted for as an initial cost. As to the initial investment costis less than the investing enterprise’s interest in the fair values of the investee’s identifiable netassets at the acquisition date, the difference shall be charged to the income statement for thecurrent period, and the cost of the long-term equity investment shall be adjusted accordingly.

Under equity method, the Group recognizes its share of post-acquisition equity in the investeeenterprise for the current period as a gain or loss on investment, and also increases or decreasesthe carrying amount of the investment. When recognizing its share in the net profit or loss of theinvestee entities, the Group should, based on the fair values of the identifiable assets of theinvestee entity when the investment is acquired, in accordance with the Group’s accountingpolicies and periods, after eliminating the portion of the profits or losses, arising from internaltransactions with joint ventures and associates, attributable to the investing entity according tothe 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 entityafter making appropriate adjustments. The book value of the investment is reduced to the extentthat the Group’s share of the profit or cash dividend declared to be distributed by the investeeenterprise. However, the share of net loss is only recognized to the extent that the book value ofthe investment is reduced to zero, except to the extent that the Group has incurred obligationsto assume additional losses. The Group shall adjust the carrying amount of the long-term equityinvestment for other changes in owners’ equity of the investee enterprise (other than net profitsor losses), and include the corresponding adjustments in equity, which should be realized throughprofit or loss in subsequent settlement of the respective long-term investment.

11. Long-term equity investments (continued)

On settlement of a long-term equity investment, the difference between the proceeds actuallyreceived and the carrying amount shall be recognized in the income statement for the currentperiod. As to other comprehensive income recognized based on measurement of the originalequity investment by employing the equity method, accounting treatment shall be made on thesame basis as would be required if the invested entity had directly disposed of the assets orliabilities related thereto when measurement by employing the equity method is terminated. Asto 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 theincome statement for the current period. If the remaining equities still be measured under theequity method, accumulative change previously recorded in other comprehensive income shallbe transferred to current profit or loss, in measurement on the same basis as the invested entityhad directly disposed of the assets or liabilities related thereto. The income or loss recorded inthe equity directly should been transferred to the current income statement on settlement of theequity investment on the disposal proportion.

12. Investment property

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

The initial measurement of the investment property shall be measured at its actual cost. Thefollow-up expenses pertinent to an investment property shall be included in the cost of theinvestment property, if the economic benefits pertinent to this real estate are likely to flow intothe enterprise, and, the cost of the investment property can be reliably measured. Otherwise,they should be included in the current profits and losses upon occurrence.

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

13. Fixed assets

A fixed asset probably shall be recognized only when the economic benefits associated with theasset will flow to the Group and the cost of the asset can be measured reliably. Subsequentexpenditure incurred for a fixed asset that meet the recognition criteria shall be included in thecost of the fixed asset, and the book value of the component of the fixed asset that is replacedshall be derecognized. Otherwise, such expenditure shall be recognized in the income statementin the period during which they are incurred.

Fixed assets are initially measured at actual cost on acquisition. The cost of a purchased fixedasset comprises the purchase price, relevant taxes and any directly attributable expenditure forbringing the asset to working condition 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 residualvalues and annual 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.

14. Construction in progress

The cost of construction in progress is determined according to the actual expenditure for theconstruction, including all necessary construction expenditure incurred during the constructionperiod, borrowing costs that should be capitalized before the construction reaches the conditionfor intended use and other relevant expenses.

Construction in progress is transferred to fixed assets when the asset is ready for its intended use.

15. Borrowing costs

Borrowing costs are interest and other costs incurred by the Group in connection with theborrowing of the funds. Borrowing costs include interest, amortization of discounts or premiumsrelated to borrowings, ancillary costs incurred in connection with the arrangement of borrowings,and exchange differences arising from foreign currency borrowings.

The borrowing costs that are directly attributable to the acquisition, construction or productionof a qualifying asset are capitalized, otherwise the borrowing costs are expensed in the periodduring which they are incurred. A qualifying asset is an asset (an item of property, plant andequipment and inventory etc.) that necessarily takes a substantial period of time to get ready forits intended use of sale.

The capitalization of borrowing costs is as part of the cost of a qualifying asset shall commencewhen:

1) expenditure for the asset is being incurred;

2) borrowing costs are being incurred; and

3) activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalization of borrowing costs shall be ceased when substantially all the activities necessaryto prepare the qualifying asset for its intended use or sale have been done. And subsequentborrowing costs are recognized in the income statement.

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

1) where funds are borrowed for a specific-purpose, the amount of interest to be capitalizedis the actual interest expense incurred on that borrowing for the period less any bank interestearned form depositing the borrowed funds before being used on the asset or any investmentincome on the temporary investment of those funds;

2) where funds are borrowed for a general-purpose, the amount of interest to be capitalizedon such borrowings is determined by applying a weighted average interest rate to the weightedaverage of the excess amounts of cumulative expenditure on the asset over and above theamounts of specific-purpose borrowings.

15. Borrowing costs (continued)

During the construction or manufacture of assets that are qualified for capitalization, if abnormaldiscontinuance, other than procedures necessary for their reaching the expected usefulconditions, happens, and the duration of the discontinuance is over three months, thecapitalization of the borrowing costs is suspended. Borrowing costs incurred during thediscontinuance are recognized as expense and charged to the income statement of the currentperiod, till the construction or manufacture of the assets resumes.

16. Intangible assets

An intangible asset probably shall be recognized only when the economic benefits associatedwith the asset will flow to the Group and the cost of the asset can be measured reliably. Intangibleassets are initially measured at cost. The cost of intangible assets acquired in a businesscombination is the fair value as at the date of acquisition, if the fair value can be reliably measured.

The useful life of the intangible assets shall be assessed according to the estimated beneficialperiod expected to generate economic benefits. An intangible asset shall be regarded as havingan indefinite useful life when there is no foreseeable limit to the period over which the asset isexpected to generate economic benefits for the 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 areaccounted for as intangible assets. With respect to self-developed properties, the correspondingland use right and buildings should be recorded as intangible and fixed assets separately. As tothe purchased properties, if the reasonable allocation of outlays cannot be made between landand buildings, all assets purchased will be recorded as fixed assets. The cost of a finite useful lifeintangible asset is amortized using the straight-line method during the estimated useful life. Foran intangible asset with a finite useful life, the Group reviews the estimated useful life andamortization method at least at the end of each year and adjusts if necessary.

16. Intangible assets (continued)

The Group should test an intangible asset with an indefinite useful life for impairment bycomparing its recoverable amount with its carrying amount annually, whenever there is anindication that the intangible asset may be impaired. An intangible asset with an indefinite usefullife shall not be amortized.

The useful life of an intangible asset that is not being amortised shall be reviewed each period todetermine whether events and circumstances continue to support an indefinite useful lifeassessment for that asset. If there are indicators that the intangible asset has finite useful life, theaccounting treatment would be in accordance with the intangible asset with finite useful life.

17. Research and development expenditures

The Group classified the internal research and development expenditures as follows: researchexpenditures and development 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 technically feasible to finish intangible assets for use or sale; (b) it is intended to finish anduse or sell the intangible assets; (c) the usefulness of methods for intangible assets to generateeconomic benefits shall be proved, including being able to prove that there is a potential marketfor the products manufactured by applying the intangible assets or there is a potential market forthe intangible assets itself or the intangible assets will be used internally; (d) it is able to finish thedevelopment of the intangible assets, and able to use or sell the intangible assets, with thesupport of sufficient technologies, financial resources and other resources; and (e) thedevelopment expenditures of the intangible assets can be reliably measured. Expenses incurredthat don’t meet the above requirements unanimously should be expensed in the incomestatement of the reporting period.

The Group discriminates between research and development stage with the condition that theproject research has been determined, in which the relevant research complete all thefractionalization of products measurements and final product scheme under final approval ofmanagement. The expenditures incurred before project-determination stage is charged to thecurrent income, otherwise it is recorded as development cost.

18. Impairment of assets

The Group determines the impairment of assets, other than the impairment of inventory,contract assets and assets related to contract costs, 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 maybe impaired. If any indication exists that an asset may be impaired, the Group estimates therecoverable amount of the asset and performs impairment tests. Goodwill arising from a businesscombination and an intangible asset with an indefinite useful life are tested for impairment atleast at the end of every year, irrespective of whether there is any indication that the asset maybe impaired. An intangible asset which is not ready for its intended use is tested for impairmentat 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 presentvalue of the future cash flow expected to be derived from the asset. The Group estimates therecoverable amount on an individual basis. If it is not possible to estimate the recoverable amountof the individual asset, the Group determines the recoverable amount of the asset group to whichthe asset belongs. Identification of an asset group is based on whether major cash flowsgenerated by the asset group are independent of the cash flows from other assets or asset groups.

When the recoverable amount of an asset or asset group is less than its carrying amount, thecarrying amount is reduced to the recoverable amount. The impairment of asset is provided forand the impairment loss is recognized in the income statement for the current period.

For the purpose of impairment testing, the carrying amount of goodwill acquired in a businesscombination is allocated, on a reasonable basis, to related asset groups; if it is impossible toallocate to the related asset groups, it is allocated to each of the related sets of asset groups. Eachof the related asset groups or related sets of asset groups is a group or set of asset group that isable to benefit from the synergies of the business combination and shall not be larger than areportable segment determined by the Group.

18. Impairment of assets (continued)

When an impairment test is conducted on an asset group or a set of asset groups that containsgoodwill, if there is any indication of impairment, the Group firstly tests the asset group or theset of asset groups excluding the amount of goodwill allocated for impairment, i.e., it determinesand compares the recoverable amount with the related carrying amount and then recognizeimpairment loss if any. Thereafter, the Group tests the asset group or set of asset groups includinggoodwill for impairment, the carrying amount (including the portion of the carrying amount ofgoodwill allocated) of the related asset group or set of asset groups is compared to its recoverableamount. 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 tothe book value of the goodwill included in the asset group or set of asset groups, and theneliminated by the book value of other assets according to the proportion of the book values ofassets other than the goodwill in the asset group 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 andother expenses, which have been paid and should be deferred in the following years. Long-termdeferred expenses are amortized on the straight-line basis over the expected beneficial periodand are presented at actual expenditure net of accumulated amortization.

20. Employee benefits

Employee benefits refer to all kinds of remunerations or compensation made by enterprises totheir employees in exchange for services provided by the employees or termination of laborrelation. Employee compensation includes short-term compensation and post-employmentbenefits. The benefits offered by enterprises to the spouse, children, the dependents of theemployee, the family member of deceased employee and other beneficiaries are also employeecompensation.

20. Employee benefits (continued)

Short-term employee salaries

During the accounting period of employee rendering service, the actual employees salaries andare charged to the 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 localgovernment and the relevant expenditure, is recognized, when incurred, in the costs of relevantassets or the profit and loss for the current period.

Post-employment benefits (Defined benefit plan)

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

Remeasurements arising from defined benefit pension plans are recognised immediately in theconsolidated statement of financial position with a corresponding debit or credit to retainedprofits through other comprehensive income in the period in which they occur.Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss at the earlier of: the date of the plan amendmentor curtailment; 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 Group recognises the following changes in the net defined benefit obligation underadministrative expenses in the consolidated statement of profit or loss by function: ?service costscomprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements;net interest expense or income.

Termination benefits

Termination benefits are recognized at the earlier of when the Group can no longer withdraw theoffer of those benefits and when the Group recognises restructuring costs involving the paymentof termination benefits.

21. Provisions

An obligation related to a contingency shall be recognised by the Group as a provision when allof the following conditions are satisfied, except for contingent considerations and contingentliabilities assumed in a business combination 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 theexpenditure necessary for the performance of relevant present obligations, with comprehensiveconsideration given to factors such as the risks, uncertainty and time value of money relating tocontingencies. The book value of the contingent liabilities should be reviewed at each balancesheet date. If there is objective evidence showing that the book value cannot reflect the presentbest estimate, the book value should be adjusted according to the best estimate.

The contingent liabilities of the acquiree acquired in the business combination involving entitiesnot under common control are measured at fair value upon initial recognition. After initialrecognition, the balance of the amount recognized according to the estimated liabilities and theamount initially recognized after deducting the accumulated amortization determined by therevenue recognition principle is subsequently measured at the higher of the two.

22. Revenue from contracts with customers

The Group has fulfilled its performance obligations in the contracts, that is, the revenue isrecognized when the customer obtains control of the relevant goods or services. Obtainingcontrol over related goods or services means being able to lead the use of the goods or theprovision of the services and obtain almost all of the economic benefits from it.

Contracts for the sale of goods

A contract for the sale of goods between the Group and the customer usually includes theperformance obligation to transfer of goods, transportation services and free maintenance. TheGroup allocates the transaction price to each individual performance obligation in accordancewith the relative proportion of the stand-alone selling price of the goods or services promised byeach individual performance obligation on the date of contract commencement. Regarding theperformance obligations of the transferred goods, the Group usually recognizes revenue at thepoint when the performance obligations are fulfilled based on the following indicators, whichinclude: a present right to payment for goods, the transfer of significant risks and rewards ofownership of goods, the transfer of legal title to goods, the transfer of physical possession ofgoods, the customer’s acceptance of goods.

22. Revenue from contracts with customers (continued)

Provide service contract

The performance obligations of the service provision contract between the Group and the

customer are due to the fact that the customer obtains and consumes the economic benefitsbrought by the performance of the group at the same time the group performs the contract, andthe group has the right to accumulate the economic benefits during the entire contract period.The Group regards it as a performance obligation performed within a period, and recognizes therevenue according to the performance progress, unless the performance progress cannot bereasonably determined. In accordance with the output method, the Group determines theprogress of the performance of the service provided based on the completed or deliveredproducts. When the performance progress cannot be reasonably determined, if the cost incurredby the Group is expected to be compensated, the revenue will be recognized according to theamount of the cost incurred until the performance progress can be reasonably determined.

Variable consideration

Some contracts between the Group and customers have sales rebate arrangements, formingvariable consideration. The Group determines the best estimate of the variable considerationbased on the expected value or the most likely amount, but the transaction price including thevariable consideration does not exceed the amount that the accumulated recognized revenuewill most likely not be materially reversed when the relevant uncertainty is eliminated.

Warranty obligations

In accordance with contractual agreements and legal provisions, the Group provides qualityassurance for the goods sold. For guarantee quality assurance to ensure that the products soldmeet the established standards, the Group conducts accounting treatment in accordance withNote III, 21. For the service quality assurance that provides a separate service in addition to theestablished standards to ensure that the goods sold meet the established standards, the Groupregards it as a single performance obligation, based on the stand-alone selling price of the qualityassurance of the goods and services provided. In a relative proportion, part of the transactionprice is allocated to service quality assurance, and revenue is recognized when the customerobtains control of the service. When assessing whether the quality assurance provides a separateservice in addition to ensuring that the products sold meet the established standards, the Groupconsiders whether the quality assurance is a legal requirement, the quality assurance period, andthe nature of the group's commitment to perform tasks.

22. Revenue from contracts with customers (continued)

Principal/agent

For the Group to lead a third party to provide services to customers on behalf of the Group, theGroup has the right to independently determine the price of the goods or services traded, that is,the Group can control the relevant goods before transferring the goods to the customers, so theGroup is the main responsible person, and recognize revenue based on the total considerationreceived or receivable. Otherwise, the Group acts as an agent and recognizes revenue based onthe amount of commission or fees expected to be charged. This amount should be based on thenet amount of the total consideration received or receivable minus the price payable to otherrelated parties, or based on the established commission amount or proportions, etc.

23. Contract assets and contract liabilities

The Group lists contract assets or contract liabilities in the balance sheet based on therelationship between performance obligations and customer payments. The group offsets thecontract assets and contract liabilities under the same contract as net amount.

Contract assets

Contract assets refer to the right to receive consideration for the transfer of goods or services tocustomers, and this right depends on factors other than the passage of time.

The determination method and accounting treatment method of the expected credit loss of thecontract assets of the Group refer to Note III, 9.

Contract liabilities

Contract liabilities refer to the obligation to transfer goods or services to customers for theconsideration received or receivable from customers, such as the payment received bycompanies before the transfer of promised goods or services

24. Government grants

A government grant is recognized only when there is reasonable assurance that the entity willcomply with any conditions attached to the grant and the grant will be received. Monetary grantsare accounted for at received or receivable amount. Non-monetary grants are accounted for atfair value. If there is no reliable fair value available, the grants are accounted for a nominal amount.

A government grant which is specified by the government documents to be used to purchase andconstruct the long-term assets shall be recognized as the government grant related to assets. Agovernment grant which is not specified by the government documents shall be judged based onthe basic conditions to obtain the government grant. The one whose basic condition was topurchase and construct the long-term assets shall be recognized as the government grant relatedto 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 lossesshall be recognized as deferred income and shall be charged to the current profit or loss or beused to write down the relevant loss, during the recognition of the relevant cost expenses orlosses; or used as compensation for relevant expenses or losses already incurred by enterprisesshall be directly charged to the profit and loss account in the current period or used to write downthe relevant cost.

The government grants related to assets shall be used to write down the book value of therelevant assets or be recognized as deferred income. The government grants related to assets,recognized as deferred income, shall be charged to the profit and loss reasonably andsystematically in stages over the useful lives of the relevant assets. The government grantsmeasured at nominal amount shall be directly charged to the current profit and loss. Theremaining book value of the government grants related to assets should be charged to the profitand loss account in the current period when the relative assets sold, transferred, disposed ordamaged.

25. Income taxes

Income tax comprises current and deferred tax. Income tax is recognized as an income or anexpense and include in the income statement for the current period, except to the extent that thetax arises from a business combination or if it relates to a transaction or event which is recognizeddirectly in equity.

Current income tax liabilities or assets for the current and prior periods, are measured at theamount expected to 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 andliabilities and their carrying amounts, and temporary differences between the carrying amountsand the tax bases of items, the tax bases of which can be determined for tax purposes, but whichhave not been recognized as assets and liabilities, deferred taxes are provided using the liabilitymethod.

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 thefollowing characteristics: the transaction is not a business combination and at the time ofthe transaction, it affects neither the accounting profit nor taxable profit or loss.

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

associates and interests in jointly-controlled enterprises, where the timing of the reversalof the temporary differences can be controlled and it is probable that the temporarydifferences will not reverse in the foreseeable future.

25. Income taxes (continued)

A deferred tax asset is recognized for deductible temporary differences, carry forward of unusedtax credits and unused tax losses, to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences, and the carry forward of unusedtax credits and unused tax losses can be utilized 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 businesscombination and, at the time of the transaction, affects neither the accounting profit nortaxable 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 theextent that it is probable that the temporary differences will reverse in the foreseeablefuture and taxable profit will be available against which the temporary differences can beutilized.

At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates thatare expected to apply to the period when the asset is realized or the liability is settled, accordingto the requirements of tax laws. The measurement of deferred tax assets and deferred taxliabilities reflects the tax consequences that would follow from the manner in which the Groupexpects at the balance sheet date, to recover the assets or settle the liabilities.

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

When the following conditions are met at the same time, the deferred tax assets and deferredtax liabilities are listed at the net amount after offset: the legal right to settle the current incometax assets and current income tax liabilities at the net amount; the deferred tax assets anddeferred tax liabilities are related to the income tax levied by the same tax collection andmanagement department on the same taxable subject or different taxpaying subjects However,in the future, during each period when the significant deferred tax assets and deferred taxliabilities 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 toownership 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 overthe lease term, and either included in the cost of another related asset or charged to the incomestatement for the current period. The contingent rents shall be recorded in the profits and lossesof the period in which they actually arise.

The Group recording the operating lease as a lessor

Rental income from operating leases is recognized by the lesser in the income statement on astraight-line basis over the lease term. The contingent rents shall be recorded in the profits andlosses 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 meetingof stockholders.

28. Safety fund

The safety fund extracted by the Group shall be recognized as the cost of the related products orincome statement, while be recognized as special reserve. When using safety fund, it shall bedistinguished whether it will form fixed assets or not. The expenditure shall write down thespecial reserve; the capital expenditure shall be recognized as fixed assets when meet theexpected conditions for use, and write down the special reserve while recognizing accumulateddepreciation 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 the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. The fair valuemeasurement is based on the presumption that the transaction to sell the asset or transfer theliability takes place either in the principal market for the asset or liability, or in the absence of aprincipal market, in the most advantageous market for the asset or liability. The principal or themost 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 theasset or liability, assuming that market participants act in their economic best interest.

29. Fair value measurement (continued)

The Group measures equity investments at fair value at the end of each reporting period. Fairvalue is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurementis based on the presumption that the transaction to sell the asset or transfer the liability takesplace in the principal market for the asset or liability or in the most advantageous market for theasset or liability when a principal market is absent. The principal or the most advantageousmarket must be accessible to by the Group. The fair value of an asset or a liability is measuredusing the assumptions that market participants would use when pricing the asset or liability,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’sability to generate economic benefits by using the asset in its highest and best use or by sellingit to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for whichsufficient data and other supporting information are available to measure fair value, givingpriority to the use of relevant observable inputs, and using unobservable inputs only whenobservable inputs are unavailable or not feasible to obtain.

All assets and liabilities for which fair value is measured or disclosed in the financial statementsare categorized within the fair value hierarchy, described as follows, based on the lowest levelinput that is significant to the fair value measurement as a whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value

measurement is directly or indirectly observable

Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, theGroup determines whether transfers have occurred between levels in the hierarchy byreassessing categorization at the end of each reporting period.

30. Significant accounting judgments and estimates

The preparation of financial statements requires management to make judgments, estimatesand assumptions that affect the amounts and disclosures of revenues, expenses, assets andliabilities, and the disclosure of contingent liabilities, at the balance sheet date. However,uncertainty about these assumptions and estimates could result in outcomes that could requirea 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 followingjudgments which have significant effect on the financial statements:

30. Significant accounting judgments and estimates (continued)

Business modelThe classification of financial assets at initial recognition depends on the business model of theGroup’s management of financial assets. When judging the business model, the Group considersthe methods including enterprise evaluation and reporting of financial asset performance to keymanagement personnel, risks affecting financial asset performance and its anagement methodand the way in which related business managers get paid. When evaluating whether to takecontract cash flow as the goal, the Group needs to analyze and judge the reasons, time, frequencyand 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 flowcharacteristics of the financial assets. It is necessary to determine whether the contractual cashflow is only for the payment of principal and interest based on outstanding principal, includingcorrection of the time value of money during the evaluation, it is necessary to determine whetherthere is a significant difference compared to the benchmark cash flow. For financial assets thatinclude prepayment characteristics, it is necessary to determine whether the fair value of theprepayment characteristics is very small, etc.

Uncertainty of accounting estimates

The crucial assumptions of significant accounting estimates in future and other crucial sources ofestimated uncertainty, which may result in the significant adjustments to the book value of thesubsequent accounting period, are as the following:

Impairment of financial instrumentsThe Group uses the expected credit loss model to assess the impairment of financial instruments.The application of the expected credit loss model requires significant judgments and estimates.All reasonable and valid information must be considered, including forward-looking information.In making these judgments and estimates, the Group infers the expected changes in the creditrisk of the debtor based on historical repayment data combined with economic policies,macroeconomic indicators, industry risks and other factors. Different estimates may affect theprovision for impairment losses. The provision for impairment losses may not be equal to theactual amount of future impairment losses.

30. Significant accounting judgments and estimates (continued)

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 assetsother than financial assets may be impaired. If there is any sign of possible assets impairment,the assets concerned should be subject to impairment test. When the carrying amount of an assetor the relevant assets group exceeds its recoverable amount which is the higher one of the netamount of the fair value of the asset minus the disposal expenses and the present value of theexpected future cash flow of the asset, the asset is considered impaired. The fair value minus thedisposal expenses is determined by reference to the recent market transactions price or observedmarket price less any directly attributable expenditure for disposing. When making an estimateof the present value of the future cash flow of an asset, the Group should estimate the future cashflows of the asset or the relevant assets group, with the appropriate discount rate selected toreflect the present value of the future cash flows.

Fair value of unlisted equity investmentsFor unlisted equity instrument investments, several valuation models are used to estimate thefair value. This requires the Group to make estimates of unobservable market parameters such asprice-to-book ration, discount rate, sustainable growth rate, asset price index, etc., and istherefore uncertain.

Development expendituresWhen determining the capitalization amount, management should make assumptions such asthe expected cash flows of the assets related, the applicable discount rate and expected benefitperiod.

Deferred tax assetsThe Group should recognize the deferred income tax assets arising from all the existing unutilizedtax deficits and deductible temporary differences to the extent of the amount of the taxableincome which it is most likely to obtain and which can be deducted from the deductibletemporary differences. Enormous accounting judgments, as well as the tax planning arecompulsory for management to estimate the time and amount of prospective taxable profits andthus determine the appropriate amount of the deferred tax assets concerned.

WarrantyThe Group provides warranties on automobile and undertakes to repair or replace items that failto perform satisfactorily based on certain pre-determined conditions. Factors that influenceestimation of related warranty claim include: 1) renewal of laws and regulations; 2) qualitypromotion of Group products; 3) change of parts and labour cost. In general, the Group recordswarranty based on selling volume and estimated compensatory unit warranty cost, deductionmulti-agreed compensation from suppliers. As at balance sheet day, the Group launchesretrospective analysis on warranty carrying amount in consideration of accrual warranty paymentduring relative warranty period, and recent trends of product renovation and replacement, andfurther adjustment if necessary. Any increase or decrease in the provision would affect profit orloss in future years.

30. Significant accounting judgments and estimates (continued)

Uncertainty of accounting estimates (continued)

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

31. Changes in accounting policies and estimates

Changes in accounting policies

New revenue standard

In 2017, the Ministry of Finance issued the revised "Accounting Standards for Business EnterprisesNo. 14-Revenue" (referred to as the "New Revenue Standards"). The Group began accountingtreatment in accordance with the newly revised standards from January 1, 2020. According to theconvergence regulations, the comparable period information will not be adjusted. The differencebetween the implementation of the new standards and the current standards on the first day willbe retrospectively adjusted for retained earnings at the beginning of the reporting period.

The new revenue standard establishes a new revenue recognition model for regulating revenuegenerated from contracts with customers. According to the new revenue standards, the methodof recognizing revenue should reflect the entity's transfer of goods or services to customers, andthe amount of revenue should reflect the amount of consideration that the entity expects to beentitled to because of the transfer of these goods or services to customers. At the same time, thenew revenue standard also regulates the judgments and estimates required for each link ofrevenue recognition.

31. Changes in accounting policies and estimates (continued)

Changes in accounting policies (continued)

The impacts of the implementation of the new revenue standard on the 2020 financialstatements are as follows:

Statement amountAssumption based on original standardinfluences
Consolidated balance sheet
Other receivables723,919,037.362,173,950,451.97(1,450,031,414.61)
Contract assets1,450,031,414.61-1,450,031,414.61
Advances from customers-3,779,593,859.42(3,779,593,859.42)
Contract liabilities4,471,158,190.75-4,471,158,190.75
Accrued expenses5,842,758,104.085,850,330,954.08(7,572,850.00)
Contingent liabilities3,125,170,942.463,651,955,144.45(526,784,201.99)
Deferred income3,469,017,384.883,626,224,664.22(157,207,279.34)
19,082,055,074.1419,082,055,074.14-
Consolidated income statement
Operating revenue84,565,544,146.5885,520,191,499.26(954,647,352.68)
Operating expense72,473,471,726.8570,577,149,304.691,896,322,422.16
Selling expense3,413,296,854.706,264,266,629.54(2,850,969,774.84)
160,452,312,728.13162,361,607,433.49-

31. Changes in accounting policies and estimates (continued)

Changes in accounting policies (continued)

The impacts of the implementation of the new revenue standard on the 2020 financialstatements are as follows: (continued)

Company balance sheet

Statement amountAssumption based on original standardInfluences
Company balance sheet
Other receivables1,990,616,778.832,931,663,392.43(941,046,613.60)
Contract assets941,046,613.60-941,046,613.60
Advances from customers-3,305,994,526.82(3,305,994,526.82)
Contract liabilities3,885,522,883.33-3,885,522,883.33
Accrued expense5,235,294,795.795,242,867,645.79(7,572,850.00)
Contingent liabilities2,196,924,682.572,723,708,884.56(526,784,201.99)
Deferred income2,112,507,625.972,157,678,930.49(45,171,304.52)
16,361,913,380.0916,361,913,380.09-
Company income statement
Operating revenue81,557,686,002.1882,423,906,188.52(866,220,186.34
Operating expense71,325,749,326.5269,761,208,670.261,564,540,656.26
Selling expense2,676,426,234.735,107,187,077.33(2,430,760,842.60
155,559,861,563.43157,292,301,936.11-

31. Changes in accounting policies and estimates (continued)

Changes in accounting policies (continued)

New revenue standard (continued)

The main effects of retrospective adjustments caused by the changes in the accounting policiesof the above new revenue standard on the financial statements are as follows:

Listed based on original standardThe influence of new revenue standardListed based on new standard
Book valueReclassificationRemeasurementBook value
2019/12/312020/01/01
The Group
Advances from customers2,315,641,685.78(2,315,641,685.78)--
Contract liabilities-2,940,466,751.09-2,940,466,751.09
Other receivables3,731,755,992.46(2,998,531,577.48)-733,224,414.98
Contract Assets-2,998,531,577.48-2,998,531,577.48
Contingent liabilities3,352,580,839.28(499,237,150.28)-2,853,343,689.00
Deferred income3,194,291,079.21(125,587,915.03)-3,068,703,164.18
The company
Advances from customers1,870,992,349.08(1,870,992,349.08)--
Contract liabilities-2,412,342,550.41-2,412,342,550.41
Other receivables2,597,314,344.40(1,415,538,410.60)-1,181,775,933.80
Contract Assets-1,415,538,410.60-1,415,538,410.60
Contingent liabilities2,413,434,397.36(499,237,150.28)-1,914,197,247.08
Deferred income2,135,615,106.85(42,113,051.05)-2,093,502,055.80

31. Changes in accounting policies and estimates (continued)

Changes in accounting policies (continued)

New revenue standard (continued)

Related party disclosure scope

According to the requirements of the "Accounting Standards for Business Interpretation No. 13",from January 1, 2020, the following parties that were not previously regarded as related partiesare regarded as related parties: other members of the company's corporate group (includingparent companies and subsidiaries) ) Joint ventures and their subsidiaries or associates and theirsubsidiaries. This accounting policy change has affected the judgment of related parties and thedisclosure of related party transactions, and the comparative data will not be adjustedretrospectively in accordance with the convergence regulations.

Changes in the presentation of financial statements

According to the “Questions and Answers on the Implementation of Accounting Standards forBusiness Enterprises” issued by the Ministry of Finance in December 2020, the Group reclassifiedthe impairment losses of contract assets that were originally included in the “credit impairmentlosses” in the income statement to “asset impairment losses”. The impact of this accountingpolicy change has no impact on the merger and the company's net profit and owners' equity.

IV TAXES

1. Main taxes and tax rates

Value added tax (“VAT”)-The income from the sale of goods and the income from the provision of services are calculated at the tax rates of 13% and 6%, respectively, and the VAT is calculated on the basis of the difference after deducting the input tax that is allowed to be deducted in the current period.
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%, 20% or 25% of taxable income.

V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Cash

20202019
Cash52,569.1318,280.08
Cash at bank30,655,915,488.509,360,456,394.81
Other cash1,345,807,542.44705,696,678.59
Total32,001,775,600.0710,066,171,353.48
20202019
Equity instrument investment180,929,400.002,419,476,200.00
Derivative financial assets23,325,000.00-
Total204,254,400.002,419,476,200.00
20202019
Commercial acceptance bill11,456,829,106.127,475,629,607.72
Bank acceptance bill16,914,711,948.6319,330,005,979.47
Total28,371,541,054.7526,805,635,587.19

(2) Pledged notes receivable

20202019
Commercial acceptance bill1,707,332,200.00365,040,070.00
Bank acceptance bill5,613,218,260.002,760,059,280.00
Total7,320,550,460.003,125,099,350.00
20202019
DerecognitionUn-derecognitionDerecognitionUn-derecognition
Commercial acceptance bill270,434,540.00-662,937,930.00-
Bank acceptance bill4,823,033,140.36-1,937,078,894.54-
Total5,093,467,680.36-2,600,016,824.54-
Aging20202019
Within 1 year1,801,562,183.50678,737,828.90
1 to 2 years371,018,064.79141,612,978.25
2 to 3 years60,086,826.2233,700,863.10
Over 3 years98,021,103.1668,414,880.58
Total2,330,688,177.67922,466,550.83
Less: Provision(189,491,038.22)(84,152,474.01)
2,141,197,139.45838,314,076.82
Beginning balanceAdditionDeductionEnding balance
ProvisionReversalWrite-off
202084,152,474.01105,402,877.0828,657.8735,655.00189,491,038.22
201990,614,319.9013,362,617.006,450,000.0013,374,462.8984,152,474.01

4. Accounts receivable (continued)

(3) Analysis of accounts receivable by category as at 31 December 2020 is as follows:

Item2020
BalanceProvision
Amount(%)Amount(%)
Individually analyzed for provision1,739,103,610.2674.62129,549,853.467.45
Provision based on the combination of credit risk characteristics591,584,567.4125.3859,941,184.7610.13
Total2,330,688,177.67100.00189,491,038.228.13
Item2019
BalanceProvision
Amount(%)Amount(%)
Individually analyzed for provision216,876,810.5023.5149,267,460.6822.72
Provision based on the combination of credit risk characteristics705,589,740.3376.4934,885,013.334.94
Total922,466,550.83100.0084,152,474.019.12
20202019
Estimated face value for defaultExpected credit loss rate (%)Expected credit loss for the entire durationFace balanceProvision ratio (%)Provision for bad debt
Within 1 year380,624,542.700.431,629,902.59601,963,326.690.804,799,025.50
1 to 2 years114,659,032.1612.3214,121,441.4156,368,999.037.544,250,219.24
2 to 3 years52,003,007.1240.0720,836,462.3720,043,284.2531.236,258,614.71
Over 3 years44,297,985.4352.7223,353,378.3927,214,130.3671.9419,577,153.88
Total591,584,567.4110.1359,941,184.76705,589,740.334.9434,885,013.33

4. Accounts receivable (continued)

(5) As at 31 December 2020, accounts receivable from Top 5 clients amounted to

RMB1,427,737,884.48, accounted for 61.26% of the total accounts receivable (2019:

RMB191,520,443.31,accounted for 20.76% of the total amount).

(6) There were no accounts receivable derecognized due to transfer of financial assets during

2020 (2019: Nil).

5. Prepayments

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

Aging20202019
AmountPercentage (%)AmountPercentage (%)
Within 1 year399,060,385.6486.61427,508,750.4268.53
1 to 2 years25,223,574.665.48190,277,683.9230.50
2 to 3 years36,342,451.327.894,480,529.560.72
Over 3 years77,192.180.021,534,932.170.25
Total460,703,603.80100.00623,801,896.07100.00

6. Other receivables

(1) Aging analysis of other receivables as at 31 December 2020 is as follows:

20202019
Within 1 year331,458,596.481,627,799,420.78
1 to 2 years129,964,617.731,667,806,094.07
2 to 3 years194,978,317.34503,954,545.01
Over 3 years79,338,758.6057,790,016.71
Total735,740,290.153,857,350,076.57
Provision(11,821,252.79)(125,594,084.11)
723,919,037.363,731,755,992.46
Nature20202019
New energy subsidy517,224,182.803,462,221,902.09
Reserve18,868,220.2841,810,604.18
Margin4,075,233.9013,965,172.56
Other183,751,400.38213,758,313.63
Total723,919,037.363,731,755,992.46

6. Other receivables (continued)

(3) For other receivables, the changes in the provision for bad debts based on 12-monthexpected credit losses and the entire duration of expected credit losses are as follows:

2020

Stage 1 12-month ECLsStage 2 Lifetime ECLsStage 3 Credit-impaired financial assets (Lifetime ECLs)Total
Opening balance291,182.01111,686,526.1213,616,375.98125,594,084.11
Impact of applying the new revenue standard-(111,066,213.00)(1,572,800.00)(112,639,013.00)
Balance at the beginning of the year adjusted in accordance with the new income standards291,182.01620,313.1212,043,575.9812,955,071.11
Changes due to the opening balance
- Transfer to Stage 2----
- Transfer to Stage 3-(534,931.90)534,931.90-
- Turn back Stage 2----
- Turn back Stage 1----
Provision--4,323,884.004,323,884.00
Reversal(21,912.55)(43,298.66)(1,889,832.11)(1,955,043.32)
Transfer----
Write-off--(3,502,659.00)(3,502,659.00)
Closing balance269,269.4642,082.5611,509,900.7711,821,252.79

6. Other receivables (continued)

(3) For other receivables, the changes in the provision for bad debts based on 12-monthexpected credit losses and the entire duration of expected credit losses are as follows: (continued)

2019

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)

(4) at 31 December 2020, top five debtors of other receivables are as follows:

2020

DebtorsAmountNatureAgingProportion of total other receivables (%)Provision
First404,133,442.00New energy subsidyWithin 1year54.93-
Second113,090,740.80New energy subsidyWithin 1year15.37-
Third124,312,677.99Commission processing payments2-3years16.90-
Fourth6,750,000.00Subsidy paymentWithin 1year0.92-
Fifth4,205,240.91Steel models0-2 years0.574,205,240.91
Total652,492,101.7088.694,205,240.91
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

7. Inventories

(1) Classification of inventories

Item20202019
BalanceProvisionNet valueBalanceProvisionNet value
Raw materials774,157,630.94361,595,043.64412,562,587.30843,669,443.37350,525,510.02493,143,933.35
Material in transit221,894,049.90-221,894,049.90293,575,861.15-293,575,861.15
Work in progress870,386,230.2074,926,608.94795,459,621.26657,730,109.0728,324,925.14629,405,183.93
Finish goods4,703,486,357.31214,237,621.884,489,248,735.431,958,389,227.8783,956,153.451,874,433,074.42
Consigned processing material18,085,079.75-18,085,079.7551,101,639.03-51,101,639.03
Consumables30,266,156.93-30,266,156.9333,781,796.49-33,781,796.49
Total6,618,275,505.03650,759,274.465,967,516,230.573,838,248,076.98462,806,588.613,375,441,488.37
TypeBeginning balanceProvisionReversalWritten offEnding balance
Raw materials350,525,510.0294,085,337.2782,618.0482,933,185.61361,595,043.64
Work in progress28,324,925.1460,682,147.02-14,080,463.2274,926,608.94
Finish goods83,956,153.45171,283,419.921,661.3141,000,290.18214,237,621.88
Total462,806,588.61326,050,904.2184,279.35138,013,939.01650,759,274.46
TypeBeginning balanceProvisionReversalWritten offEnding balance
Raw materials181,897,353.27176,755,422.474,166.698,123,099.03350,525,510.02
Work in progress35,473,526.732,744,458.87-9,893,060.4628,324,925.14
Finish goods76,519,657.3345,220,725.836,155.4837,778,074.2383,956,153.45
Total293,890,537.33224,720,607.1710,322.1755,794,233.72462,806,588.61

7. Inventories (continued)

(3) Note for inventory provision

The Group assesses whether the cost of inventory is higher than the net realizable value andmakes provision of the difference. Net realizable value is the estimated by selling price in theordinary course of business deduct estimated costs in further production to sell and estimatednecessary distribution expense and tax expense. The reversal of inventory provisions is due toprice rebound of previous impaired inventories by net realizable value test, while written offinventory provisions are due to selling off of previous impaired inventories in current year.

8. Contract assets

Item2020
Book balanceImpairmentBook value
Contract assets1,584,180,347.49134,148,932.881,450,031,414.61
Balance at the end of the previous yearChanges in accounting policiesBalance at the beginning of the yearProvisionReverseWrite offend of year balance
-112,639,013.00112,639,013.0050,796,386.8829,286,467.00-134,148,932.88
20202019
Input VAT to be deducted847,632,683.611,428,518,317.99
Prepaid taxes and fees (Note 2)402,351,805.17-
Entrusted loan (Note 1)300,000,000.00300,000,000.00
Others18,727,381.8317,601,810.05
Total1,568,711,870.611,746,120,128.04

10. Long-term equity investments

2020

InvesteeBeginning balanceAdditionInvestment income under equity methodOther equity variationCash dividends declaredOther DeductionProvisionEnding balance of book valueEnding balance of provision
Joint Venture
Changan Ford Automobile Co., Ltd.1,782,823,327.91-8,710,167.26----1,791,533,495.17-
Changan Mazda Automobile Co., Ltd.2,177,010,905.02-723,987,717.26-(905,000,000.00)--1,995,998,622.28-
Changan Mazda Engine Co., Ltd.830,272,340.69-39,596,915.75-(37,000,000.00)--832,869,256.44-
Changan PSA Automobiles Co., Ltd.(note 4)346,038,983.87-(114,234,986.00)--(231,803,997.87)---
Changan Weilai New Energy Co., Ltd.(note 3)(12,871,719.42)-(18,666,611.81)--31,538,331.23---
Nanchang Jiangling Holding Co., Ltd.2,081,815,165.31-(536,007,531.47)----1,545,807,633.84-
Subtotal7,205,089,003.38-103,385,670.99-(942,000,000.00)(200,265,666.64)-6,166,209,007.73-
Associates
Chongqing Changan Kuayue Automobile Co., Ltd.192,005,274.10-45,730,860.11----237,736,134.21-
Chongqing Changan Kuayue Automobile Sales Co., Ltd. (note1)---------
Beijing Fang’an cresent taxi Co., Ltd. (note1)---------
Changan Automobile Financing Co.,Ltd2,195,040,654.44-207,337,580.14-(64,528,859.83)--2,337,849,374.75-
Hainan Anxinxing Information Technology Co., Ltd.3,560,384.10-(1,244,331.18)----2,316,052.92-
Nanjing Chelai Travel Technology Co., Ltd.1,474,945.09-(282,339.82)----1,192,605.27-
Hunan Guoxin Semiconductor Technology Co., Ltd.25,152,447.20-221,362.27----25,373,809.47-
Beijing Wutong Chelian Technology Co., Ltd. (note1)4,094,510.4050,198,870.93(54,293,381.33)------
Anhe (Chongqing) Equity Investment Fund Management Co., Ltd.1,939,605.86406,125.00(827,553.39)----1,518,177.47-
Hangzhou Chelizi Intelligent Technology Co., Ltd.7,527,572.23-2,165,392.69----9,692,964.92-
Nanjing Leading Equity Investment Management Co., Ltd. (Limited Partnership)935,218,323.32-64,418,284.31----999,636,607.63-
Nanjing Leading Equity Investment Partnership1,445,415.69-(183,235.30)----1,262,180.39-
Pakistan Master Automobile Co., Ltd.36,795,899.66-(3,245,798.19)----33,550,101.47-
Jiangling Holding Co., Ltd.398,992,953.62-(197,256,309.37)----201,736,644.25-
Chongqing Changan New Energy Vehicles Technology Co., Ltd.(note 2)-2,723,674,800.34(732,658,665.15)----1,991,016,135.19-
Zhongqi Chuangzhi Technology Co., Ltd.-100,000,000.00-----100,000,000.00-
Subtotal3,803,247,985.712,874,279,796.27(670,118,134.21)-(64,528,859.83)--5,942,880,787.94-
Total11,008,336,989.092,874,279,796.27(566,732,463.22)-(1,006,528,859.83)(200,265,666.64)-12,109,089,795.67-

10. Long-term equity investments(continued)

Note 1: On 2020 December 31, the Group of Chongqing Changan Kuayue Automobile Co., Ltd., Beijing Fang’an cresent taxi Co., Ltd. and Beijing Wutong

Chelian Technology Co., Ltd. did not have the obligation to undertake extra losses, so the excess loss when it occurs, only the long-term equityinvestment was written down to zero. The excess losses related to the investment in the above three companies were not recognized.

Note 2: In January 2020, the Group introduced investors to increase capital in Chongqing Changan New Energy Vehicles Technology Co., Ltd. After the

capital increase, Chongqing Changan New Energy Vehicles Technology Co., Ltd. changed from a subsidiary to an associate.

Note 3: In May 2020, the Group increased its capital in Changan Weilai New Energy Automobile Technology Co., Ltd. After the capital increase, Changan

Weilai New Energy Automobile Technology Co., Ltd. changed from a joint venture to a subsidiary.

Note 4: In April 2020, the Group sold its 50% equity interest in Changan PSA Automobile Co., Ltd. After the transaction is completed, the Group no longer

holds any equity in Changan PSA Automobile Co., Ltd.

10. Long-term equity investments(continued)

2019

InvesteeBeginning balanceAdditionInvestment income under equity methodOther equity variationCash dividends declaredOther DeductionProvisionEnding balance of book valueEnding balance of provision
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 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(Limited 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-
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. Ltd8,090,000.00208,090,000.00-Unlisted equity instruments
China South Industry Group Finance Co., Ltd.160,099,200.00317,120,000.0023,884,391.86Unlisted equity instruments
Guoqi (Beijing) Intelligent Network Association Automotive Research Institute Co., Ltd.3,900,000.0053,900,000.00-Unlisted equity instruments
Guoqi Automobile Power Cell Research Co., Ltd.13,680,000.0053,680,000.00-Unlisted equity instruments
China South Industry Group Financial Leasing Co., Ltd. (note2)4,648,000.0035,200,000.00-Unlisted equity instruments
Zhong Fa Lian Investment Co., Ltd.-21,000,000.001,470,000.00Unlisted 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
Total190,417,200.00691,990,000.0025,354,391.86

11. Investment in other equity instruments(continued)

2019

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. Ltd4,820,300.00204,820,300.00-Unlisted equity instruments
China South Industry Group Finance Co., Ltd.158,945,000.00315,965,800.0038,343,163.30Unlisted equity instruments
Guoqi (Beijing) Intelligent Network Association Automotive Research Institute Co., Ltd.50,000,000.00100,000,000.00-Unlisted equity instruments
Guoqi Automobile Power Cell Research Co., Ltd.12,538,500.0052,538,500.00-Unlisted equity instruments
United Prosperity Investment (ShenZhen) Co., Ltd3,629,500.0034,181,500.00-Unlisted equity instruments
Zhong Fa Lian Investment Co., Ltd.-21,000,000.00-Unlisted equity instruments
Chongqing Ante trading Co., Ltd(note 1)-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
Total229,933,300.00734,506,100.0038,343,163.30

12. Investment property

Cost Model

ItemBuildings
20202019
Original cost
Beginning and Ending balance10,050,100.0010,050,100.00
Accumulated depreciation and amortization
Beginning2,947,250.282,720,538.72
Accrual226,711.56226,711.56
Ending3,173,961.842,947,250.28
Impairment Provision
Beginning and Ending--
Carrying amount
Ending6,876,138.167,102,849.72
Beginning7,102,849.727,329,561.28

13. Fixed assets

(1) Details of fixed assets

2020

ItemBuildingsMachineryVehiclesOther EquipmentTotal
Original cost
Beginning11,144,160,050.0125,623,584,497.531,355,868,955.848,286,664,834.7546,410,278,338.13
Purchase3,782,255.9210,233,771.87716,168.53712,526.8015,444,723.12
Transfer from Construction in progress1,627,629,987.71995,605,904.96358,185,689.31956,035,182.683,937,456,764.66
Other addition-797,980.55433,482.761,277,742.962,509,206.27
Other deduction-501,642.49-28,817,283.3929,318,925.88
Disposal5,762,657.18238,939,328.14282,022,974.05106,295,085.12633,020,044.49
Ending12,769,809,636.4626,390,781,184.281,433,181,322.399,109,577,918.6849,703,350,061.81
Accumulated depreciation
Beginning2,515,402,360.2711,496,523,762.29629,232,960.523,969,233,358.5118,610,392,441.59
Accrual426,238,876.062,001,832,540.31224,120,391.54625,582,568.773,277,774,376.68
Other addition-151,492.51104,035.84289,523.48545,051.83
Other deduction-101,641.45-5,787,985.655,889,627.10
Disposal2,548,389.2372,346,228.79201,387,475.6753,292,079.12329,574,172.81
Ending2,939,092,847.1013,426,059,924.87652,069,912.234,536,025,385.9921,553,248,070.19
Impairment provision
Beginning85,592,184.71631,047,449.9936,761,889.19106,993,818.46860,395,342.35
Accrual15,087,215.95716,207,552.01112,398,091.07174,235,148.811,017,928,007.84
Disposal-91,414,911.1425,119,945.6548,444,198.74164,979,055.53
Ending100,679,400.661,255,840,090.86124,040,034.61232,784,768.531,713,344,294.66
Carrying amount
Ending9,730,037,388.7011,708,881,168.55657,071,375.554,340,767,764.1626,436,757,696.96
Beginning8,543,165,505.0313,496,013,285.25689,874,106.134,210,437,657.7826,939,490,554.19

13. Fixed assets (continued)

(1) Details of fixed assets (continued)

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
Disposal10,598,771.511,695,411,683.7914,198,727.44540,601,707.842,260,810,890.58
Ending11,144,160,050.0125,623,584,497.531,355,868,955.848,286,664,834.7546,410,278,338.13
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
Disposal4,681,943.621,326,233,165.2713,079,362.87414,130,901.341,758,125,373.10
Ending2,515,402,360.2711,496,523,762.29629,232,960.523,969,233,358.5118,610,392,441.59
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
Disposal109,876.41348,207,151.12429,524.8874,425,853.47423,172,405.88
Ending85,592,184.71631,047,449.9936,761,889.19106,993,818.46860,395,342.35
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
Item20202019
Buildings172,080,235.6774,985,870.88
Machinery31,896,067.269,443,408.12

13. Fixed assets (continued)

(4) Fixed assets without property certificate as at 31 December 2020 are as follow:

ItemCarrying amountReason for incomplete certificate of title
Assembly workshop787,042,105.81Under processing
R&D Center758,592,108.08Under processing
Painting workshop587,526,470.84Under processing
Welding workshop514,927,690.13Under processing
Yuzui Auto City235,107,029.57Under processing
Stamping Workshop208,974,780.42Under processing
H plant Phase IV143,466,732.14Under processing
Other plants118,567,180.28Under processing
Other supporting facilities116,845,557.39Under processing
New energy battery production plant69,700,148.90Under processing
S series machine plant59,686,333.17Under processing
Engine workshop59,671,609.69Under processing
No.2 factory building, No.2 public station building33,525,809.96Under processing
EA Phase I Foundry Workshop31,734,419.89Under processing
Emission Capability Laboratory23,760,281.88Under processing
Staff cafeteria22,751,911.75Under processing
Office building17,498,065.47Under processing
Vehicle capability Lab6,833,126.87Under processing
Buildings in testing projects of Dianjiang4,492,797.04Under processing
Technology center workshop4,136,776.66Under processing

14. Construction in progress

(1) Details of construction in progress

Item20202019
BalanceProvisionCarrying amountBalanceProvisionCarrying amount
Mini-bus production equipment17,743,577.36-17,743,577.3659,110,263.16-59,110,263.16
Car production equipment88,814,216.88-88,814,216.88104,070,401.86-104,070,401.86
Engine plant146,394,397.19-146,394,397.19880,128,770.64-880,128,770.64
Vehicle research institution38,021,494.37-38,021,494.3740,087,119.45-40,087,119.45
Vehicle moulds241,611,437.4421,532,971.11220,078,466.33284,573,714.88-284,573,714.88
Car production Project of Hefei Changan336,334.75-336,334.756,491,703.97-6,491,703.97
Others586,467,649.8349,819,988.01536,647,661.82404,739,782.4749,398,728.00355,341,054.47
Total1,119,389,107.8271,352,959.121,048,036,148.701,779,201,756.4349,398,728.001,729,803,028.43

14. Construction in progress (continued)

(2) Movements of significant construction in progress in 2020

ProjectBudget (RMB0,000)Beginning balanceAdditionOther deductionTransfer to fixed assetsThe project investments’ proportion of budgetProgress of constructionSource of fundsEnding balance
Mini-bus production equipment539,977.0059,110,263.16139,253,474.77-180,620,160.5780%80%Self-funded17,743,577.36
Car production equipment773,144.00104,070,401.86221,519,672.72-236,775,857.7033%33%Self-raised and additional issuance88,814,216.88
Engine plant983,766.00880,128,770.64612,968,962.61-1,346,703,336.0698%98%Self-raised and additional issuance146,394,397.19
Vehicle research institution276,363.0040,087,119.45223,477,230.09-225,542,855.1790%90%Self-funded38,021,494.37
Vehicle moulds268,991.20284,573,714.88275,966,240.96-340,461,489.5194%94%Self-funded220,078,466.33
Car production project of Hefei Changan459,601.006,491,703.97756,193,521.41-762,348,890.6385%85%Self-raised and additional issuance336,334.75
Others355,341,054.471,026,929,366.45618,584.08845,004,175.02536,647,661.82
Total1,729,803,028.433,256,308,469.01618,584.083,937,456,764.661,048,036,148.70

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
Total5,383,844,030.754,303,696,292.687,957,737,295.001,729,803,028.43

15. Intangible assets

2020

ItemLand use rightsSoftware use rightsTrademark use rightsNon-patent technologyTotal
Original cost
Beginning2,753,082,390.28705,159,803.48211,784,400.006,820,364,590.1410,490,391,183.90
Purchase183,379,766.5627,638,917.08-84,000.00211,102,683.64
Internal research and development---813,240,999.00813,240,999.00
Other additions-388,564.73--388,564.73
Other deduction---68,815,550.2168,815,550.21
Disposal-360,323.10--360,323.10
Ending2,936,462,156.84732,826,962.19211,784,400.007,564,874,038.9311,445,947,557.96
Accumulated amortization
Beginning461,981,506.33564,665,067.35188,453,466.623,788,586,893.375,003,686,933.67
Accrual60,286,821.3254,937,693.5717,500,000.00959,903,041.031,092,627,555.92
Other additions-100,148.02--100,148.02
Other deduction---3,678,080.323,678,080.32
Disposal-357,312.00--357,312.00
Ending522,268,327.65619,345,596.94205,953,466.624,744,811,854.086,092,379,245.29
Impairment provision
Beginning-23,617,923.17-253,467,013.57277,084,936.74
Accrual---130,448,323.47130,448,323.47
Ending-23,617,923.17-383,915,337.04407,533,260.21
Carrying amount
Ending2,414,193,829.1989,863,442.085,830,933.382,436,146,847.814,946,035,052.46
Beginning2,291,100,883.95116,876,812.9623,330,933.382,778,310,683.205,209,619,313.49

15. Intangible assets(continued)

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
Disposal---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
Disposal---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
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
ItemBeginning balanceAdditionDeductionEnding balance
Internal research and developmentRecognized as intangible assetsCharged to income Statement of the current yearOther deduction
Automobile Development814,745,464.20987,864,041.99813,240,999.00169,848,928.41222,941,790.83596,577,787.95
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

17. Goodwill

2020

InvesteeBeginning balanceAdditionDeductionEnding balance
Hebei Changan Automobile Co., Ltd.9,804,394.00--9,804,394.00
Nanjing Changan Automobile Co., Ltd.----
Changan Weilai New Energy Automobile Technology Co., Ltd.-39,078,794.37-39,078,794.37
Total9,804,394.0039,078,794.37-48,883,188.37
InvesteeBeginning balanceAdditionDeductionEnding balance
Hebei Changan Automobile Co., Ltd.9,804,394.00--9,804,394.00
Nanjing Changan Automobile Co., Ltd.----
Total9,804,394.00--9,804,394.00
InvesteeBeginning balanceAdditionDeductionEnding balance
Nanjing Changan Automobile Co., Ltd.73,465,335.00--73,465,335.00
ItemBeginning balanceAdditionAmortizationEnding balance
202014,327,639.902,068,879.755,754,007.1410,642,512.51
201917,104,601.673,991,609.296,768,571.0614,327,639.90

19. Deferred tax assets and liabilities

Deferred income tax assets and deferred income tax liabilities that are not offset:

Item20202019
Deferred tax assets:Deductible temporary differencesDeferred tax assetsDeductible temporary differencesDeferred tax assets
Assets provision2,269,403,109.47340,410,466.421,096,277,037.39164,441,555.61
Accrued expenses and contingent liabilities7,445,862,452.351,116,879,367.855,787,629,284.18868,144,392.63
Unpaid tech development expense and advertisement expense847,106,263.84127,040,348.39356,768,621.3753,515,293.21
Deferred income2,844,260,662.36426,639,099.352,737,366,931.07410,605,039.66
Unpaid salary and bonus and others801,812,028.91120,297,395.51305,961,692.4445,894,253.82
Total14,208,444,516.932,131,266,677.5210,284,003,566.451,542,600,534.93
Item20202019
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 reserve383,159,045.1057,473,856.771,626,528,679.00243,979,301.85
Fair value adjustment of business combination not under common control243,865,514.8736,579,827.23274,831,525.8741,224,728.88
Other141,673,630.7821,251,044.6176,925,730.4011,538,859.56
Total768,698,190.75115,304,728.611,978,285,935.27296,742,890.29
Item20202019
The deductible temporary difference2,819,701,163.812,819,674,898.01
The deductible tax loss4,237,027,432.338,045,254,649.13
Total7,056,728,596.1410,864,929,547.14

19. Deferred tax assets and liabilities (continued)

Maturity period for unrecognized deductible tax losses:

Year20202019
2020-114,124,498.57
202135,367,098.1035,368,427.70
2022190,021,844.24200,696,545.78
2023719,486,343.29962,591,126.51
2024767,913,990.65668,059,432.50
2025 and beyond2,524,238,156.056,064,414,618.07
Total4,237,027,432.338,045,254,649.13
Item20202019
Mortgage loans48,000,000.0050,000,000.00
guaranteed loan530,000,000.00179,580,000.00
Total578,000,000.00229,580,000.00
Item20202019
Commercial acceptance bill4,562,217,151.912,551,863,471.51
Bank acceptance bill13,011,797,401.5510,878,679,822.72
Total17,574,014,553.4613,430,543,294.23

22. Accounts payable

20202019
Accounts payable23,118,793,794.4218,905,725,271.50
Item2020
Contract liabilities
Advance payment3,779,593,859.42
Advance service payment691,564,331.33
Total4,471,158,190.75
Item2019
Advances from customers
Advance payment2,315,641,685.78
ItemBeginningAdditionDeductionEnding
Short term salary benefits972,606,354.606,737,651,651.495,789,564,740.621,920,693,265.47
Defined contribution plans68,484,427.31347,393,568.42324,797,894.6391,080,101.10
Early retirement benefits5,245,000.004,246,951.865,396,951.864,095,000.00
Total1,046,335,781.917,089,292,171.776,119,759,587.112,015,868,366.57
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

24. Payroll payable (continued)

Short term salary benefits:

2020

ItemBeginningAdditionDeductionEnding
Salary, bonus, allowance and subsidy777,811,109.085,592,280,564.924,794,404,461.841,575,687,212.16
Employee benefit11,657,039.54317,688,040.15278,893,211.3650,451,868.33
Social insurance11,380,417.43304,903,209.37286,237,969.4430,045,657.36
Medical insurance1,520,154.30279,890,193.81262,090,668.8019,319,679.31
Industrial injury insurance8,620,121.1424,401,854.3023,633,194.989,388,780.46
Maternity insurance1,240,141.99611,161.26514,105.661,337,197.59
Housing accumulation fund2,797,302.45376,304,300.74304,469,566.8274,632,036.37
Labor fund and employee education fund168,960,486.10146,475,536.31125,559,531.16189,876,491.25
Total972,606,354.606,737,651,651.495,789,564,740.621,920,693,265.47
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

24. Payroll payable (continued)

Defined contribution plans:

2020

ItemBeginningAdditionDeductionEnding
Basic retirement security61,036,996.88336,307,315.34315,115,429.8682,228,882.36
Unemployment insurance7,447,430.4311,086,253.089,682,464.778,851,218.74
Total68,484,427.31347,393,568.42324,797,894.6391,080,101.10
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
Item20202019
Value-added tax441,502,809.1284,852,296.03
Consumption tax730,908,794.38629,406,972.37
Corporate income tax60,154,873.22120,351,092.86
City maintenance and construction tax and education surcharge35,664,425.8534,455,756.66
Others23,770,361.2920,026,324.88
Total1,292,001,263.86889,092,442.80

26. Other payables

Item20202019
Purchase and construction of fixed assets, intangible assets and engineering deposits1,627,340,431.422,091,437,803.04
Advanced receipt of land and plant disposal fees1,000,000,000.00-
Advertisement fees642,353,999.96405,752,873.43
Maintenance fees213,623,566.01158,503,895.70
Customer and supplier margin190,379,159.39284,705,119.28
Storage fees and freight120,627,263.12247,969,064.86
Advanced receipt of equity transfer-831,300,000.00
Others680,891,206.08790,249,385.14
Total4,475,215,625.984,809,918,141.45
Item2019. 12.31Changes in accounting policies2020. 1.1AdditionDeductionOther deductionEnding
Warranty2,762,766,347.50(499,237,150.28)2,263,529,197.221,118,651,818.06724,142,611.51102,338,997.542,555,699,406.23
Supplier compensation589,814,491.78-589,814,491.7845,679,606.8766,022,562.42-569,471,536.23
Total3,352,580,839.28(499,237,150.28)2,853,343,689.001,164,331,424.93790,165,173.93102,338,997.543,125,170,942.46
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

28. Other current liabilities

Item20202019
Accrued commercial discount payable3,661,553,908.153,028,296,317.93
Accrued transportation fee646,608,569.79501,351,278.96
Accrued market development expense475,834,141.44355,903,653.68
Accrued utilities25,513,787.1125,777,106.11
Accrued labor service fee56,717,786.0239,493,497.48
Accrued technology royalty78,382,904.18101,005,700.82
Accrued lease fee82,867,604.5683,111,810.66
Accrued negative points for fuel consumption674,762,264.15-
Others140,517,138.68119,003,396.13
Total5,842,758,104.084,253,942,761.77
Item20202019
Credit loan1,055,300,000.0055,300,000.00
Deduction: Loan within 1 year100,000,000.00-
Net long-term borrowings955,300,000.0055,300,000.00

30. Long-term payables

20202019
Special payables261,260,928.70857,356,423.71
ItemBeginningAdditionDeductionOther deductionEnding
Land relocation compensation of Nanjing changan555,350,709.40-500,000,000.00-55,350,709.40
Intelligent manufacturing project167,757,531.08129,500,264.00165,392,557.11-131,865,237.97
Lightweight design of automobile structure48,960,118.001,997,500.0044,043,149.51-6,914,468.49
Others85,288,065.2329,079,748.0045,237,300.392,000,000.0067,130,512.84
Total857,356,423.71160,577,512.00754,673,007.012,000,000.00261,260,928.70
ItemBeginningAdditionDeductionEnding
Changan automobile E class Gasoline engine cylinder block, cylinder head production line project22,984,695.64-22,984,695.64-
Land relocation compensation of Nanjing changan55,350,709.40500,000,000.00-555,350,709.40
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
Others67,580,954.9677,982,460.3260,275,350.0585,288,065.23
Total303,590,824.69667,145,359.87113,379,760.85857,356,423.71
Item20202019
Net obligation of defined benefit plan30,832,000.0031,965,000.00
Early retirement10,802,000.0013,967,000.00
Total41,634,000.0045,932,000.00

31. Long-term payroll payable (continued)

In addition to basic retirement security and unemployment insurance, which are managed bylocal government, the Group offers different kinds of overall pension and annual compensationto some retired employees until their death. The group provides subsidies to former militarypersonnel who participated in specific wars and offers large medical treatment insurance for allretired personnel. The group also offered early-retired salary, social insurances and housingaccumulation fund with different standards until their formal retirement (Male: Age 60; Female:

Age 50 or 55). These amounts of social insurances and housing accumulation fund are based oncost base and statutory proportion.

The present value of the defined benefits plans is valued by expected cumulative welfare unitsdetermination, which was ensured by Aon Hewitt China at 31 December 2020.

The related plans recognized in the profit and loss of the defined benefit plan are as follows:

20202019
Service costs- current period45,000.0043,000.00
Net interest1,000,000.001,050,000.00
Net post-employment benefit costs1,045,000.001,093,000.00
Recorded in general administrative expenses1,045,000.001,093,000.00
Defined Benefit Plan Obligation
20202019
Beginning balance31,965,000.0033,534,000.00
Charged to income Statement of the current period
Service costs- current period45,000.0043,000.00
Interest expense, net1,000,000.001,050,000.00
Actuarial losses charged to other comprehensive income207,000.00(254,000.00)
Benefits Payment(2,385,000.00)(2,408,000.00)
Ending balance30,832,000.0031,965,000.00

32. Deferred income

2020

Item2019.12.31Changes in accounting policies2020.1.1AdditionDeduction2020.12.31
Government grants related to assets2,858,873,083.08-2,858,873,083.08387,053,262.98385,555,108.942,860,371,237.12
Government grants related to gains209,830,081.10-209,830,081.10553,180,000.00154,363,933.34608,646,147.76
Others125,587,915.03(125,587,915.03)----
Total3,194,291,079.21(125,587,915.03)3,068,703,164.18940,233,262.98539,919,042.283,469,017,384.88
Item2019.1.1AdditionDeduction2020.12.31
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
Item2020.1.1AdditionRecognized in other income2020.12.31
Related to assets:2,858,873,083.08387,053,262.98385,555,108.942,860,371,237.12
Production and construction subsidies1,927,840,212.16156,916,000.00157,326,208.191,927,430,003.97
R&D technology subsidies550,362,176.88143,478,662.9851,743,710.12642,097,129.74
Other government subsidies380,670,694.0486,658,600.00176,485,190.63290,844,103.41
Related to gains209,830,081.10553,180,000.00154,363,933.34608,646,147.76
R&D technology subsidies204,560,206.76300,000,000.00152,012,644.80352,547,561.96
Other government subsidies5,269,874.34253,180,000.002,351,288.54256,098,585.80
Total3,068,703,164.18940,233,262.98539,919,042.283,469,017,384.88

32. Deferred income (continued)

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

Item2020.1.1AdditionRecognized in other incomeOther deduction2020.12.31
Related to assets:2,871,932,225.37224,667,080.00237,726,222.29-2,858,873,083.08
Production and construction subsidies1,934,513,955.92123,792,000.00130,465,743.76-1,927,840,212.16
R&D technology subsidies558,282,025.1130,500,000.0038,419,848.23-550,362,176.88
Other government subsidies379,136,244.3470,375,080.0068,840,630.30-380,670,694.04
Related to gains:673,754,999.84703,273,000.00467,197,918.74700,000,000.00209,830,081.10
R&D technology subsidies71,456,238.68600,000,000.00466,896,031.92-204,560,206.76
Other government subsidies602,298,761.16103,273,000.00301,886.82700,000,000.005,269,874.34
Total3,545,687,225.21927,940,080.00704,924,141.03700,000,000.003,068,703,164.18

33. Share capital

2020

movement
31 December 2019Issuance of sharesStock dividendTransfer of reserve to common sharesOthersSub-total31 December 2020
I.Restricted shares
1Shares held by state-owned legal persons-283,138,318.00---283,138,318.00283,138,318.00
2Other domestic shareholdings-244,899,065.00---244,899,065.00244,899,065.00
3Foreign shareholdings-32,710,280.00---32,710,280.0032,710,280.00
4Shares held by domestic natural person18,900.00-----18,900.00
Total of restricted shares18,900.00560,747,663.00---560,747,663.00560,766,563.00
II.Unrestricted shares
1RMB ordinary shares3,900,643,469.00-----3,900,643,469.00
2Foreign-funded shares listed domestically901,986,142.00-----901,986,142.00
Total of unrestricted shares4,802,629,611.00-----4,802,629,611.00
III.Total shares4,802,648,511.00560,747,663.00---560,747,663.005,363,396,174.00

33. Share capital (continued)

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 persons139,762,403.00---(139,762,403.00)(139,762,403.00)-
2Shares held by domestic natural person18,900.00-----18,900.00
Total of restricted shares139,781,303.00---(139,762,403.00)(139,762,403.00)18,900.00
II.Unrestricted shares
1RMB ordinary shares3,760,881,066.00---139,762,403.00139,762,403.003,900,643,469.00
2Foreign-funded shares listed domestically901,986,142.00-----901,986,142.00
Total of unrestricted shares4,662,867,208.00---139,762,403.00139,762,403.004,802,629,611.00
III.Total shares4,802,648,511.00-----4,802,648,511.00

34. Capital reserves

2020

ItemBeginningAdditionDeductionEnding
Share premium4,938,329,830.945,426,124,109.65-10,364,453,940.59
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)366,254,879.52139,735,920.921,175,706.59504,815,093.85
Total5,366,097,594.665,565,860,030.571,175,706.5910,930,781,918.64
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
Others33,437,825.03332,817,054.49-366,254,879.52
Total5,057,242,440.17332,817,054.4923,961,900.005,366,097,594.66

35. Other comprehensive income

Accumulated other comprehensive income in consolidated balance sheet attributable to parentcompany is as follows:

2019.12.31Movement2020.12.31
Re-measurement of changes in defined benefit plans1,429,000.00(207,000.00)1,222,000.00
Other comprehensive income that cannot be transferred to profit or loss under the equity method(2,088,068.00)-(2,088,068.00)
Changes in the fair value of other equity instrument investments195,443,305.00(33,588,685.00)161,854,620.00
Translation difference of foreign currency financial statements(54,789,656.81)(27,778,174.41)(82,567,831.22)
Total139,994,580.19(61,573,859.41)78,420,720.78
Item2018.12.312019 accounting policy changes2019.1.1Movement2019.12.31
Re-measurement of changes in defined benefit plans1,175,000.00-1,175,000.00254,000.001,429,000.00
Other comprehensive income that cannot be transferred to profit or loss under the equity method(2,088,068.00)-(2,088,068.00)-(2,088,068.00)
Changes in the fair value of other equity instrument investments297,351,209.45(165,492,749.45)131,858,460.0063,584,845.00195,443,305.00
Translation difference of foreign currency financial statements(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
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 plan207,000.00--207,000.00-
Fair value change of Investment in other equity instruments39,516,100.00-5,927,415.0033,588,685.00-
Subtotal39,723,100.00-5,927,415.0033,795,685.00-
Other comprehensive income will be reclassified to profit or loss in subsequent period
Foreign currency translation difference27,778,174.41--27,778,174.41-
Subtotal27,778,174.41--27,778,174.41-
Total67,501,274.41-5,927,415.0061,573,859.41-

35. Other comprehensive income (continued)

2019

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-
ItemBeginningAdditionDeductionEnding
Safety fund47,076,242.7175,056,248.9681,285,048.2640,847,443.41
ItemBeginningAdditionDeductionEnding
Safety fund41,222,369.1079,135,417.5473,281,543.9347,076,242.71

37 Surplus reserves

2020

ItemBeginningAdditionDeductionEnding
Statutory surplus2,401,324,255.50280,373,831.50-2,681,698,087.00
ItemBeginningAdditionDeductionEnding
Statutory surplus2,401,324,255.50--2,401,324,255.50
Item20202019
Retained earnings at beginning of the year31,271,171,559.6033,707,011,170.31
Adjustment-297,351,209.45
Retained earnings after adjustment31,271,171,559.6034,004,362,379.76
Add: Profits attributable to parent company for the current year3,324,251,164.16(2,646,719,356.53)
Less: Appropriation to statutory surplus reserves280,373,831.50-
Less: Ordinary share dividend of cash-86,471,463.63
Retained earnings at the end of year34,315,048,892.2631,271,171,559.60
Item20202019
RevenueCostRevenueCost
Main business82,944,092,566.8271,505,612,191.8469,315,716,509.2959,445,831,613.01
Other business1,621,451,579.76967,859,535.011,279,528,623.99786,753,815.07
Total84,565,544,146.5872,473,471,726.8570,595,245,133.2860,232,585,428.08
Item20202019
Sale of goods82,795,178,990.4869,392,923,811.93
Provide labor and other services1,770,365,156.101,202,321,321.35
Total84,565,544,146.5870,595,245,133.28

39. Operating revenue and cost (continued)

The breakdown of operating revenue generated from contracts with customers is as follows:

Item2020
Revenue recognition time
Recognize revenue at a certain point in time83,994,052,692.32
Recognize revenue within a certain period of time571,491,454.26
Total84,565,544,146.58
Item2020
Sales of goods2,315,641,685.78
Provision of services and others138,296,090.10
Total2,453,937,775.88
Item2020
Within 1 year3,933,781,216.77
More than 1 year537,376,973.98
Total4,471,158,190.75
Item20202019
Consumption tax2,524,467,098.371,998,619,440.93
City maintenance and construction tax257,640,935.66160,739,584.91
Educational surcharge190,517,078.15118,587,412.13
Others255,648,461.66210,110,629.86
Total3,228,273,573.842,488,057,067.83

41. Operating expenses

Item20202019
Payroll and welfare472,740,938.97420,884,406.19
Promotion, advertising fee and Sales service fee2,565,795,656.382,224,959,385.19
Transportation and storage fees231,401,208.991,796,397,367.83
Travelling expenses65,224,349.3289,905,543.70
Package expenses15,020,690.688,979,853.46
Consulting fee7,974,664.269,278,821.91
Training fee12,005,918.5328,185,324.64
Others43,133,427.5712,580,183.02
Total3,413,296,854.704,591,170,885.94
Item20202019
Payroll and welfare2,673,763,574.521,360,795,649.37
Administrative expenses298,175,266.20314,648,478.13
Depreciation and amortization266,028,419.76276,550,788.64
Miscellaneous service charges74,107,526.2260,861,235.59
Traffic expenses38,609,198.8539,399,677.23
Travelling expenses13,777,623.0224,604,006.43
Negative points for fuel consumption738,036,573.58-
Others171,056,848.67188,371,683.26
Total4,273,555,030.822,265,231,518.65
Item20202019
Payroll and welfare1,085,597,553.811,079,128,106.16
Material fee173,917,059.32223,007,996.05
Subcontract fee326,554,128.18321,189,407.67
Survey and traffic expenses75,341,701.4681,309,580.38
Test fee154,511,546.94187,139,269.95
Depreciation and amortization1,243,446,193.511,129,018,488.23
Others94,519,824.07148,270,912.69
Total3,153,888,007.293,169,063,761.13
Item20202019
Interest income341,543,220.81245,520,358.56
Less: Foreign exchange gain or loss47,017,013.03(8,130,682.63)
Interest expense46,672,055.3440,109,729.93
Others37,629,702.8122,691,799.53
Total210,224,449.63190,849,511.73

45. Other income

Item20202019Amount recognized in 2020 as non-recurring profit and loss
Other income797,901,407.241,537,625,620.93797,901,407.24
Item20202019
Related to gains:412,346,298.301,299,899,398.64
R&D technology subsidies101,578,276.00496,981,504.00
Production and construction subsidies137,903,518.45313,061,513.87
Other government subsidies18,500,570.5122,658,462.03
Amortization of deferred income-income154,363,933.34467,197,918.74
Related to assets:385,555,108.94237,726,222.29
Amortization of deferred Income-Assets385,555,108.94237,726,222.29
Total797,901,407.241,537,625,620.93

46. Investment income/(loss)

Item20202019
Long-term equity investment losses accounted for by the equity method(566,732,463.22)(2,158,815,891.20)
Losses arising from business combination not under common control(6,937,641.07)-
The investment income of financial asset held for trading during its holding period2,840,290.344,332,388.16
Dividend income from remaining investments in other equity instruments25,354,391.8638,343,163.30
Investment income from disposal of long-term equity investments1,438,639,602.10-
Gains from the remeasurement of the remaining equity at fair value after the loss of control2,246,681,836.54-
Interest income from entrusted loan13,768,160.426,771,226.43
Total3,153,614,176.97(2,109,369,113.31)
Item20202019
Equity instrument investment2,000,217,365.86889,154,888.69
Derivative financial assets35,173,300.00-
Total2,035,390,665.86889,154,888.69
Item20202019
Bad debt for account receivable105,374,219.216,912,617.00
Bad debt for other receivables2,368,840.68118,745,115.02
Total107,743,059.89125,657,732.02
Item20202019
Impairment of inventory325,966,624.86224,710,285.00
Impairment of fixed assets1,017,928,007.84122,973,101.85
Impairment of intangible assets130,448,323.4747,739,930.25
Impairment of construction in progress21,954,231.1283,333.12
Impairment of contract assets21,509,919.88-
Total1,517,807,107.17395,506,650.22
Item20202019Amount recognized in 2020 as non-recurring profit and loss
Gain on disposal of fixed-assets29,465,046.0756,658,864.1729,465,046.07

51. Non-operating income

Item20202019Amount recognized in 2020 as non-recurring profit and loss
Fines, penalties and others61,938,556.8949,703,849.1861,938,556.89
Item20202019Amount recognized in 2020 as non-recurring profit and loss
Donation17,300,950.0030,198,295.9217,300,950.00
Fines and penalties69,135,425.3981,475,589.3769,135,425.39
Others3,021,668.2573,288,730.033,021,668.25
Total89,458,043.64184,962,615.3289,458,043.64
Item20202019
Current income tax expense72,283,291.61166,789,357.70
Deferred income tax expense(764,176,889.27)239,975,628.66
Total(691,893,597.66)406,764,986.36
Item20202019
Profit/(loss) before tax2,596,585,045.04(2,242,366,904.52)
Tax at the applicable tax rate389,487,756.76(336,355,035.69)
Impact of different tax rates of subsidiaries(23,809,703.40)(46,985,923.84)
Adjustments to current income tax of previous period(50,457,750.46)14,818,867.16
Profit or loss attributable to joint ventures and associates100,558,727.83343,593,516.87
Non-taxable income(452,046,612.16)(6,647,240.42)
Non-deductible tax expense9,866,001.008,783,277.80
Usage previous deductible losses(714,292,371.18)(66,761,248.99)
Unrecognized deductible temporary differences and deductible losses268,065,428.20722,485,517.59
Additional deduction arising from research and development expense(219,265,074.25)(226,166,744.12)
Tax expense under actual tax rate of the Group(691,893,597.66)406,764,986.36

54. Earnings per share (“EPS”)

The basic EPS is calculated by dividing the net profit of the current period attributable to theordinary shareholders of the Company by the weighted average number of outstanding ordinaryshares.

The Company has no dilutive potential ordinary shares.

Item20202019
Earnings
Net profit attributable to ordinary shareholders3,324,251,164.16(2,646,719,356.53)
Shares
Weighted average ordinary shares4,904,043,979.004,802,648,511.00
Item20202019
Interest income341,543,220.81245,520,358.56
Government grants related to operating activities1,358,793,139.942,427,786,919.77
Others337,950,698.501,345,854,279.36
Total2,038,287,059.254,019,161,557.69
Item20202019
Selling expense2,907,979,028.674,243,108,756.85
Administrative expense595,726,462.97701,218,540.63
Research and development expenses650,927,200.65737,909,170.70
Refund of government subsidies-700,000,000.00
Others362,358,325.45644,165,606.15
Total4,516,991,017.747,026,402,074.33

55. Notes to cash flow statement (continued)

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

Item20202019
Net cash received from business combinations63,921,805.55-
Capital occupation fee for equity transfer16,388,900.00-
Total80,310,705.55-
Item20202019
Cash transferred out from the loss of control of the subsidiary104,416,061.73-
Entrusted Loan-300,000,000.00
Total104,416,061.73300,000,000.00
Item20202019
Withdraw for deposit of bill34,712,775.0032,839,805.56
Item20202019
Payment for deposit of bill619,498,751.25395,159,204.54
Acquisition of minority shareholders' equity12,249,709.00-
Others1,187,381.47-
Total632,935,841.72395,159,204.54

56. Supplementary information of cash flow statement

(1) Supplementary information of cash flow statement

Supplementary information20202019
1.Cash flows from operating activities calculated by adjusting the net profit
Net profit/(loss)3,288,478,642.70(2,649,131,890.88)
Add: impairment provision for assets1,625,550,167.06521,164,382.24
Depreciation of fixed assets3,277,774,376.683,015,917,705.20
Depreciation and amortization of investment property226,711.56226,711.56
Amortization of intangible assets1,092,627,555.921,025,061,962.48
Amortization of long-term deferred expense5,754,007.146,768,571.06
Increase in deferred income400,314,220.70(489,017,455.52)
Disposal loss on fixed assets, intangible assets and others long-term assets(29,465,046.07)(56,658,864.17)
Loss of abandonment of fixed assets(15,036,905.39)61,599,450.00
Income of fair value movement(2,035,390,665.86)(889,154,888.69)
Financial expense30,283,155.3440,109,729.93
Investment income(3,153,614,176.97)2,109,369,113.31
Decrease in deferred tax assets(588,666,142.59)112,953,903.96
Decrease in inventory(3,384,304,795.07)1,317,268,683.80
Deferred income tax liabilities Decreased(175,510,746.68)127,021,724.70
Increase in operating receivables(3,375,612,982.71)(6,933,919,137.79)
Increase in operating payables13,720,446,966.406,610,407,218.35
Others(7,900,862.92)(48,238,681.15)
Net cash flows from operating activities10,675,953,479.243,881,748,238.39
2.Movement of cash and cash equivalents
Ending balance of cash30,655,968,057.639,360,474,674.89
Less: beginning balance of cash9,360,474,674.899,648,153,614.80
Decrease in cash and cash equivalents21,295,493,382.74(287,678,939.91)

56. Supplementary information of cash flow statement (continued)

(2) Endorsement of bills:

Item20202019
Endorsed bank acceptance received by sales and providing service9,857,912,334.043,292,638,946.70
Item20202019
I. Cash
Including: Cash on hand52,569.1318,280.08
Bank deposits that can be readily used30,655,915,488.509,360,456,394.81
II. Cash equivalents--
III. Ending balance of cash and cash equivalents30,655,968,057.639,360,474,674.89
Item20202019Notes
Cash and cash equivalents1,345,807,542.44705,696,678.59Note 1
Notes receivable and accounts receivable7,320,550,460.003,125,099,350.00Note 2
Intangible assets17,661,564.4818,080,415.84Note 3
Fixed assets22,953,779.6824,200,714.44Note 3

58. Foreign Monetary Item

Item20202019
Original CurrencyExchange RateTranslated to RMBOriginal CurrencyExchange RateTranslated to RMB
Cash
USD21,483,168.616.5249140,175,526.8512,051,146.326.976284,071,206.96
GBP4,066,951.808.890336,156,421.592,705,025.179.150124,751,250.81
EUR7,424,040.688.025059,577,926.463,335,742.037.815526,070,491.84
JPY152,166,150.480.06329,616,900.71128,999,237.000.06418,267,045.10
SUR1,115,202,784.150.087797,803,284.17746,523,266.530.112984,257,705.03
BRL572,816.921.2563719,629.90571,845.631.7378993,754.73
Accounts receivable
USD12,537,939.366.524981,808,800.5320,851,192.186.9762145,462,086.89
SUR230,799,878.570.087720,241,149.35-0.1129-
Other receivables
USD30,144.606.5249196,690.502,102,288.896.976214,665,987.75
JPY14,802,218.990.0632935,500.2417,101,991.070.06411,095,998.20
EUR907,595.178.02507,283,451.241,710,130.007.815513,365,521.02
GBP736,839.368.89036,550,722.961,312,803.709.150112,012,285.14
Accounts Payable
USD-6.5249-528,062.066.97623,683,866.54
JPY10,281,275.000.0632649,776.5810,747,095.930.0641688,738.39
EUR1,835,735.948.025014,731,780.92960,196.007.81557,504,411.84
GBP193,751.558.89031,722,509.40462,384.839.15014,230,867.43
SUR226,057,035.010.087719,825,201.97-0.1129-
Other Payables
USD31,839.336.5249207,748.445,502,387.246.976238,385,753.86
GBP166,491.568.89031,480,159.92178,041.969.15011,629,101.74

VI Changes in the scope of consolidation

1. Business combination not under common control

The company originally held 50% of the equity of Changan Weilai New Energy Co., Ltd.(hereinafter referred to as "Changan Weilai"), and was able to exercise joint control over it,accounting for it under the equity method. During the year, the company acquired a 45.38%equity interest in Changan Weilai with cash of RMB 90,000,001.00, and the purchase date wasMay 31, 2020. After the completion of the acquisition, the company held a total of 95.38% of theequity of Changan Weilai.

The goodwill arising from the merger was RMB 39,078,794.37. Changan Wei’s net loss from thedate of purchase to the end of the year was RMB 98,349,164.08, and the net cash inflow was RMB47,225,153.06.

2. Disposal of subsidiaries

According to the company and Chongqing Changxin Equity Investment Fund Partnership (LimitedPartnership), Nanjing Runke Industry Investment Co., Ltd., Chongqing Liangjiang New Area ForBusiness Management Partnership (Limited Partnership) and Chongqing Nanfang IndustrialEquity Investment Fund Partnership (Limited Partnership) (hereinafter collectively referred to asthe "investor") signed in January 2020 a capital increase agreement, the investor will increase thecapital of the company's wholly-owned subsidiary New Energy Technology by RMB2,840,000,000.00. After the capital increase is completed, the investors hold a total of 51.05% ofthe equity in New Energy Technology, the company’s equity in New Energy Technology hasdropped to 48.95%, and the New Energy Technology has been changed from a subsidiary of thecompany to an associated company. Since the completion date of the capital increase (January21, 2020), the Group will no longer incorporate new energy technology into the scope ofconsolidation.

Company nameRegistered placeBusiness natureThe group's total shareholding ratio (%)The group's total voting rights (%)The reasons for not being a subsidiary
Chongqing Changan New Energy Vehicles Technology Co., Ltd.(“ New Energy Technology”)ChongqingProduction and sales of new energy vehicles and parts48.95%48.95%New investors lead to dilution of equity

2. Disposal of subsidiaries (continued)

The relevant financial information of New Energy Technology are listed as follows:

Item2020.1.21 Book value2019.12.31 Book value
Current assets2,164,329,019.082,076,322,906.26
Non-current assets312,127,143.58313,681,265.71
Current liabilities1,895,124,201.321,774,027,393.40
Non-current liabilities104,338,997.54102,187,361.53
Net assets476,992,963.80513,789,417.04
Fair value of remaining equity2,723,674,800.34
Disposal income2,246,681,836.54
Item2020.1.1-2020.1.21
Operating income123,654,831.27
Operating cost153,495,233.77
Net loss64,659,825.75

VII Shares in other entities

1. Shares in subsidiaries

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 4)DingzhouDingzhouManufacturing46,469-95.62
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&DEUR1,738100.00
Changan United Kingdom R&D Center Co., Ltd.Nottingham, United KingdomNottingham, United KingdomR&DGBP2,639100.00-
Beijing Changan R&D Center Co., Ltd.BeijingBeijingR&D100100.00-
Changan Japan Designing Center Co.,Ltd.Yokohama, JapanYokohama, JapanR&DJPY1,000100.00-
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.ShenzhenShenzhenSales23,525100.00
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-
Guangzhou Changan New Energy Automobile Co. Ltd.GuangzhouGuangzhouSales400100.00-
Chongqing Chehemei Technology Co., Ltd.ChongqingChongqingSales1,000100-
Chongqing Changan Kaicheng Automobile Technology Co., Ltd. (note 4)ChongqingChongqingR&D100,00083.64
Chongqing Changan Automobile Software Technology Co., Ltd.ChongqingChongqingSales9,900100.00-

1. Shares in subsidiaries (continued)

Note 1: The proportion of the company's voting rights in Nanjing Changan Automobile Co., Ltd.

is 91.53%. The reason for the inconsistency between the shareholding ratio and theproportion of voting rights is that some minority shareholders entrust the company toexercise their voting rights.

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

have signed the "Concerted Acting Persons Agreement" with the company, all agreeingto vote in accordance with the company's voting intentions, so the company can exercisecontrol over it, so it is included in the scope of consolidated financial report.

Note 3: The original Chongqing Changan Suzuki Automobile Co., Ltd. was renamed Chongqing

Lingyao Automobile Co., Ltd. in December 2020.

Note 4: In 2020, the company cooperated with Chongqing Linkong Development and Investment

Group Co., Ltd. to jointly establish Chongqing Changan Kaicheng AutomobileTechnology Co., Ltd. with a registered capital of 1 billion yuan and the equity accountsfor 83.64% by using the equity, cash and part of the assets of Hebei Changan AutomobileCo., Ltd. and Baoding Changan Bus Manufacturing Co., Ltd.

As at 31 December 2020, the Group has no subsidiaries with important minority interests.

Company nameMain operating placeRegistered placeNature of businessRegistered capital (0,000)Total proportion of shareholders (%)
directindirect
II. subsidiaries acquired through business combinations not under common control
Nanjing Changan Automobile Co., Ltd.(note1)NanjingNanjingManufacturing60,18184.73-
Chongqing Changan Lingyao Automobile Co., Ltd.(note3)ChongqingChongqingManufacturing133,764100.00-
Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership)ZhenjiangZhenjiangfinance150,001100.00-
Changan Weilai New Energy Automobile Technology Co., Ltd.NanjingNanjingR&D28,80095.38-
III. The subsidiary formed by business combination under common control
Hebei Baoding Changan Bus Co., Ltd. (note 4)DingzhouDingzhouManufacturing3,000-100.00
Hefei Changan Automobile Co.,Ltd.HefeiHefeiManufacturing227,500100.00-

2. Shares in joint ventures and associates

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
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 and export goods.6,53334.30-The equity method
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
Chongqing Changan New Energy Vehicles Technology Co., Ltd.ChongqingChongqingProduction and sales of new energy vehicles and parts20,22348.95The equity method
Beijing Fang’an cresent taxi Co., Ltd.BeijingBeijingRegional taxi operation2,69822.24-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.476,84328.66-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 transfer39,799-49.00The 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

2. Shares in joint ventures and associates (continued)

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.976,00016.39-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
Zhongqi Chuangzhi Technology Co., Ltd.NanjingNanjingR&D1,600,0003.125The 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 greatinfluence in the share of profit and loss in joint venture and associates, the Group adopts equitymethod to deal with the investment to it.

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

20202019
Current assets14,624,244,894.0015,855,818,973.00
Of which: cash and cash equivalent6,755,423,262.006,147,195,270.00
Non-current assets28,801,167,167.0031,865,453,438.00
Total assets43,425,412,061.0047,721,272,411.00
Current liabilities31,412,152,044.0033,821,313,974.00
Non-current liabilities8,318,215,122.0010,133,779,777.00
Total liabilities39,730,367,166.0043,955,093,751.00
Minority interests-84,802,769.00
Equity attributable to owners3,695,044,895.003,681,375,891.00
Net asset owned according to share proportion1,847,522,447.501,840,687,945.50
Adjustment(55,988,952.33)(57,864,617.59)
Book value of investment1,791,533,495.171,782,823,327.91
Operating revenue49,248,182,245.0028,096,027,801.00
Financial expenses- interest income90,144,727.0064,059,181.00
Financial expenses- interest expense796,370,449.00713,200,770.00
Income tax expense165,666,598.00(954,312,779.00)
Net profit/(loss)15,753,435.00(3,850,695,209.00)
Dividend--

2. Shares in joint ventures and associates (continued)

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

20202019
Joint venture
Total book value of the investment4,374,675,512.565,422,265,675.47
Total amount calculated by shareholding proportion
Net profit/(loss)94,675,503.73(401,576,178.40)
Other comprehensive income--
Total comprehensive income94,675,503.73(401,576,178.40)
Associates
Total book value of the investment5,942,880,787.943,803,247,985.71
Total amount calculated by shareholding proportion
Net profit(670,118,134.21)169,721,466.40
Other comprehensive income--
Total comprehensive income(670,118,134.21)169,721,466.40

VIII 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

2020Financial 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 Other comprehensive income (specified)Total
Cash-32,001,775,600.07-32,001,775,600.07
Financial assets for trading204,254,400.00--204,254,400.00
Notes receivable-28,371,541,054.75-28,371,541,054.75
Accounts receivable-2,141,197,139.45-2,141,197,139.45
Other receivables-723,919,037.36-723,919,037.36
Other current assets-317,063,888.99-317,063,888.99
Investment in other equity instrument--691,990,000.00691,990,000.00
Total204,254,400.0063,555,496,720.62691,990,000.0064,451,741,120.62
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 Other comprehensive income (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

1. Classification of financial instruments (continued)

Financial liabilities

Item20202019
Short-term loans578,000,000.00229,580,000.00
Notes payable17,574,014,553.4613,430,543,294.23
Accounts payable23,118,793,794.4218,905,725,271.50
Other payables4,475,215,625.984,809,918,141.45
Long-term loan955,300,000.0055,300,000.00
Non-current liabilities due within one year100,000,000.00-
Total46,801,323,973.8637,431,066,707.18

3. Risks of financial instruments

The Group faces risks of various financial instruments in its daily activities, mainly including creditrisk, liquidity risk and market risk (including exchange rate risk, interest rate risk and price risk).The main financial instruments of the Group include monetary funds, equity investments, loans,bills receivable, accounts receivable, bills payable, accounts payable, etc. The risks associated withthese financial instruments and the risk management strategies adopted by the Group to reducethese risks are described below.

The Group has formulated risk management policies to identify and analyze the risks faced by theGroup, set appropriate risk acceptance levels and design corresponding internal controlprocedures to monitor the Group's risk levels. The Group will periodically re-examine these riskmanagement policies and related internal control systems to adapt to changes in marketconditions or the Group ’s operating activities. The internal audit department also regularly andirregularly checks whether the implementation of the internal control system complies with therisk management policy.

Credit risk

The Group only deals with recognized and reputable customers. In accordance with the Group'spolicy, a credit review is required for all customers who require credit transactions. In addition, theGroup continuously monitors the balance of accounts receivable to ensure that the Group doesnot face significant bad debt risk. For transactions that are not settled with the relevant businessunit's bookkeeping standard currency, the Group does not provide credit transaction conditionsunless specifically approved by the Group's credit control department.

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

With respect to credit risk arising from the other financial assets of the Group, which compriseaccounts receivable, other receivables, dividend receivables and certain derivatives financialinstruments, the Group’s exposure to credit risk arising from default of the counterparty, with amaximum exposure equal to the carrying amount of these instruments, listed as book value offinancial assets in consolidated financial statements. In 2020, there was no credit risk arising fromfinancial guarantee.

Since the Group only trades with approved and reputable customers, there is no need forcollateral. Credit risk is centralized and managed according to customers. As at the balance sheetdate, the Group has a specific concentration of credit risks. 61.26% of the Group's accountsreceivable (December 31, 2019: 20.76%) originated from the top five customers with the balanceof accounts receivable. The Group does not hold any collateral or other credit enhancements forthe balance of accounts receivable.

3. Risks of financial instruments (continued)

Credit risk (continued)

2020

Judgment criteria for significant increase in credit risk

The group evaluates on each balance sheet date whether the credit risk of the relevant financialinstruments has increased significantly since the initial recognition. In determining whether creditrisk has increased significantly since the initial recognition, the group considers that reasonableand evidence-based information can be obtained without unnecessary additional cost or effort,including qualitative and quantitative analysis based on the group's historical data, external creditrisk ratings and forward-looking information. Based on a single financial instrument or a portfolioof financial instruments with similar credit risk characteristics, the group compares the defaultrisk of financial instruments on the balance sheet date with the default risk on the initialconfirmation date to determine the change of default risk of financial instruments during theirexpected duration.

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

?the quantitative criterion is that the default probability of the remaining duration on the reportdate increases by more than a certain percentage compared with the initial confirmation;?qualitative criteria mainly include material adverse changes in the operating or financialsituation of the debtor, 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 standardconsistent with the internal credit risk management objectives for relevant financial instruments,and considers both quantitative and qualitative indicators. The group mainly takes the followingfactors into consideration when evaluating 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;?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 marketfor the financial asset;?purchase or source a financial asset at a substantial discount that reflects the fact that a creditloss has occurred.

The credit impairment of financial assets may be caused by the joint action of multiple events, butnot by events that can be identified separately.

3. Risks of financial instruments(continued)

Credit risk (continued)

A parameter for measuring expected credit losses

According to whether the credit risk has significantly increased and whether the creditimpairment has occurred, the group measures the impairment provision for different assets withthe expected credit loss of 12 months or the whole duration respectively. The key parameters ofexpected credit loss measurement include default probability, default loss rate and default riskexposure. The group takes into account the quantitative analysis and forward-looking informationof historical statistical data (such as counterparty rating, guarantee method and types ofcollateral, 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 repaymentobligations in the next 12 months or throughout the remaining period. The default probability ofthe group is adjusted based on the results of the historical credit loss model and forward-lookinginformation is added to reflect the default probability of the debtor in the current macroeconomicenvironment.?the default loss rate refers to the group's expectation of the extent of losses from default riskexposure. Default loss rates also vary depending on the type of counterparty, the type and priorityof recourse, and the collateral. The default loss rate is the percentage of the risk exposure loss atthe time of default, calculated on the 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 thenext 12 months or throughout the remaining duration.

The assessment of a significant increase in credit risk and the calculation of expected credit lossesinvolve forward-looking information. Through the analysis of historical data, the group identifiesthe key economic indicators that affect the credit risks and expected credit losses of each businesstype.

3. Risks of financial instruments (continued)

Credit risk (continued)

2020

Balance of book value
Expected credit loss in 12 monthsExpected credit loss for the entire duration
Stage IStage 2Stage 3Simplified measurement
Cash32,001,775,600.07---
Financial assets for trading204,254,400.00---
Notes receivable28,371,541,054.75---
Accounts Receivable---2,330,688,177.67
Other receivables720,859,859.963,370,529.4211,509,900.77-
Other current assets317,063,888.99---
Investment in other equity instrument691,990,000.00---
Balance of book value
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---

3. Risks of financial instruments (continued)

Liquidity risk

The Group adopts cycle liquidity planning instrument to manage capital shortage risks. Theinstrument takes into consideration the maturity date of financial instruments plus estimatedcash flow from the Group’s operations.

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