Chongqing Changan Automobile Company Limited
2020 Semi-annual Report Financial Statements
August 2020
2
The Financial Statements
I. Auditing Report
Semi-annual report is audited
□ Yes √ No
No audit on the semi-annual financial report.II. Financial statement ment
Financial in notes to the statements of the unit is: RMB yuan
1. Consolidated Balance Sheet
In RMB Yuan
Account June 30 2020 December 31 2019
Current assets:
Cash 17326421237.43 10066171353.48
Transactional financial assets 4173150897.00 2419476200.00
Notes receivable 21629277146.93 26805635587.19
Accounts receivable 2299982425.41 838314076.82
Prepayments 636088225.27 623801896.07
Other receivables 1042027106.65 3731755992.46
Inventories 4040392469.99 3375441488.37
Contract assets 2055476727.43
Other current assets 1100242219.66 1746120128.04
Total current assets 54303058455.77 49606716722.43
Non-current assets:
Long-term receivables 12808010205.56 11008336989.09
Other equity investment 734506100.00 734506100.00
Investment properties 6989493.94 7102849.72
Fixed assets 25896056062.39 26939490554.19
Construction in progress 1793015326.03 1729803028.43
3
Intangible assets 5048286334.37 5209619313.49
Devlopment expenditure 516943366.86 814745464.20
Goodwill 42586584.41 9804394.00
Long-term deferred expenses 11768576.59 14327639.90
Deferred tax assets 1640537797.01 1542600534.93
Total non-current assets 48498699847.16 48010336867.95
Total assets 102801758302.93 97617053590.38
Current liabilities:
Short-term loans 365525472.30 229580000.00
Notes payable 17021001941.49 13430543294.23
Accounts payable 18206448534.41 18905725271.50
Advances from customers 2315641685.78
Contract liabilities 2162739729.94
Payroll payable 899656704.69 1046335781.91
Taxes payable 448654660.12 889092442.80
Other payables 3074351444.31 4809918141.45
Interest payables 1167776.43 40384.93
Other current liabilities 4569806449.83 4253942761.77
Total current liabilities 46748184937.09 45880779379.44
Non-current liabilities:
Long-term loans 1555300000.00 55300000.00
Long-term payable 702461540.35 857356423.71
Long term payroll payable 43359523.52 45932000.00
Estimated liabilities 3169800842.14 3352580839.28
Deferred earnings 3450963103.29 3194291079.21
Deferred tax liabilities 557904374.46 296742890.29
Total non-current liabilities 9479789383.76 7802203232.49
Total liabilities 56227974320.85 53682982611.93
Owners’ equity:
Share capital 4802648511.00 4802648511.00
Capital reserves 5366097594.66 5366097594.66
Other Comprehensive Income 146761519.56 139994580.19
4
Special reserves 78399497.78 47076242.71
Surplus reserves 2401324255.50 2401324255.50
Retained earnings 33873337962.28 31271171559.60
Equity attributable to owners 46668569340.78 44028312743.66
Minority interests -94785358.70 -94241765.21
Total equity 46573783982.08 43934070978.45
Total liabilities and owener’s equity 102801758302.93 97617053590.38
Legal person: Zhu Huarong Chief financial officer: Zhang Deyong The head of accounting department: Chen Jianfeng
2. Balance sheet
In RMB Yuan
Account June 30 2020 December 31 2019
Current assets:
Cash 13159786888.55 6563020335.56
Transactional financial assets 162945000.00 184245000.00
Notes receivable 20639888071.96 25837326483.09
Accounts receivable 5793044421.21 5094270365.72
Prepayments 477501198.01 403105316.24
Other receivables 2087736557.44 2597314344.40
Inventories 2692995183.22 1735570691.28
Contract assets 1412177092.60
Other current assets 413864092.40 798430035.62
Total current assets 46839938505.39 43213282571.91
Non-current assets:
Long-term equity investments 15927040641.38 16052319271.82
Other equity investment 724309400.00 724309400.00
Fixed assets 19696145485.76 20301231002.41
Construction in progress 1630762467.34 1545211000.22
Intangible assets 3851090092.12 4030438649.57
Development expenditure 436066340.39 431774377.27
Long-term deferred expenses 7742327.63 9719259.84
Deferred tax assets 1401475134.44 1318884054.48
5
Total non-current assets 43674631889.06 44413887015.61
Total assets 90514570394.45 87627169587.52
Current liabilities:
Short-term loans 29580000.00 29580000.00
Notes payable 15032991305.12 11983445725.06
Accounts payable 15706279887.99 15601432751.74
Advances from customers
1870992349.08
Contract liabilities 1807709690.50
Payroll payable 597737081.03 641340149.30
Taxes payable 307533461.81 453619905.66
Other payables 2664677248.88 4301257819.04
Interest payables 1167776.43 40384.93
Other current liabilities 3747004808.36 3400065879.02
Total current liabilities 39893513483.69 38281734578.90
Non-current liabilities:
Long-term loans 1555300000.00 55300000.00
Long-term payable 130720735.03 285768478.89
Long term payroll payable 20430629.02 22747000.00
Estimated liabilities 2330116808.17 2413434397.36
Deferred earnings 2169871239.55 2135615106.85
Deferred tax liabilities 78580341.60 81775341.60
Total non-current liabilities 6285019753.37 4994640324.70
Total liabilities 46178533237.06 43276374903.60
Owners' equity:
Share capital 4802648511.00 4802648511.00
Capital reserves 5014772792.87 5014772792.87
Other comprehensive income 259380413.58 259380413.58
Special reserves 21702787.13 19917658.63
Surplus reserves 2401324255.50 2401324255.50
Retained earnings 31836208397.31 31852751052.34
Total owners' equity 44336037157.39 44350794683.92
Total liabilities and owners’ equity 90514570394.45 87627169587.52
6
3. Consolidated Income Statement
In RMB Yuan
Account Current Period Prior Period
1.Total operating revenue 32781657479.10 29875780096.84
Less:Operating cost 29734615697.63 27419410626.92
Tax and surcharges 1206286383.45 1080270474.78
Operating expenses 1270717082.07 1443216541.30
General and administrative expenses 1164152772.91 843160552.62
Research and development expenses 1464554423.42 1720159658.88
Financial expenses -98053545.38 -96832709.15
Interest expense 20373153.36 28216059.24
Interest income 131048028.86 128484820.10
Add: Other income 215977955.28 620733074.11
Investment income 3000803663.99 -108336709.94
Including: Investment income from associates and joint
venture
-528282156.89 -108336709.94
Gains from changes in fair value 1753674697.00 40337151.27
Credit impairment loss -23300119.01 -9529733.66
Asset impairment loss -208242617.71 -152676538.06
Gain on disposal of assets 33428646.97 9392459.28
3.Operating profit 2811726891.52 -2133685345.51
Add: Non-operating income 31178860.44 18836680.44
Less: Non-operating expenses 51351646.13 12645067.20
4.Total profit 2791554105.83 -2127493732.27
Less: Income tax expense 189931296.64 116567696.08
5.Net profit 2601622809.19 -2244061428.35
Classification by going concern
Net profit from continuing operations 2601622809.19 -2244061428.35
Net profit from discontinued operations
Classification by ownership attribution
Net profit attributable to owners 2602166402.68 -2240039761.11
Minority interests -543593.49 -4021667.24
6.Other comprehensive income net of tax 6766939.37 22567848.13
Net after-tax net of other comprehensive income 6766939.37 22567848.13
7
attributable to the parent company owner
Other comprehensive income that will be reclassified
into profit or loss
6766939.37 22567848.13
Foreign currency financial statement translation
difference
6766939.37 22567848.13
7.Total comprehensive income 2608389748.56 -2221493580.22
Total comprehensive income attributable to owners 2608933342.05 -2217471912.98
Total comprehensive income attributable to minority
interest
-543593.49 -4021667.24
8.Earnings per share
Basic earnings per share 0.54 -0.47
Diluted earnings per share Not applicable Not applicable
4. Income Statement
In RMB Yuan
Account Current Period Prior Period
1.Operating revenue 29758919897.37 26805108322.22
Less: Operating cost 27911858903.03 24637906770.95
Tax and surcharges 762021502.79 855166897.03
Operating expenses 961039656.72 902216576.48
General and administrative expenses 726483524.17 307874508.68
Research and development expenses 1380814145.22 1710222941.73
Financial expenses -97970764.79 -88753361.46
Interest expense 4888747.72 14997114.41
Interest income 110304548.86 109584194.58
Add: Other income 57884810.14 406839978.09
Investment income 2317139772.66 -73898822.33
Including: Investment income from associates and joint
venture
-430245711.08 -78048193.41
Gains from changes in fair value -21300000.00 51830000.00
Credit impairment loss -21114561.28 -4381254.25
Asset impairment loss -162746163.89 -141818001.51
Gain on disposal of assets -10976304.75 6747426.61
2.Operating profit 273560483.11 -1274206684.58
8
Add: Non-operating income 22925521.70 14232341.29
Less: Non-operating expenses 43916807.17 8718726.38
3.Total profit 252569197.64 -1268693069.67
Less: Income tax expense -85786079.95 99788296.30
4.Net profit 338355277.59 -1368481365.97
Net profit from continuing operations 338355277.59 -1368481365.97
Net profit from discontinued operations
5.Other comprehensive income net of tax
6.Total comprehensive income 338355277.59 -1368481365.97
7.Earnings per share
Basic earnings per share 0.07 -0.28
Diluted earnings per share 不适用 不适用
5. Consolidated cash flow statement
In RMB Yuan
Account Current Period Prior Period
1.Cash flows from operating activities:
Cash received from sale of goods or rendering of services 39547166284.75 37501789702.13
Refunds of taxes 212875606.35 305232064.00
Cash received relating to other operating activities 1460594720.28 3464749370.24
Subtotal of cash inflows 41220636611.38 41271771136.37
Cash paid for goods and services 26823061336.77 29029097098.22
Cash paid to and on behalf of employees 2602751432.93 2984764831.32
Cash paid for all types of taxes 1774453965.05 1743016544.47
Cash paid relating to other operating activities 3107783183.03 3294629031.41
Subtotal of cash outflows 34308049917.78 37051507505.42
Net cash flows from operating activities 6912586693.60 4220263630.95
2.Cashflows from investing activities:
Cash received from investment income 52200268.08
Net cash received from disposal of fixed assets intangible assets
and other long-term assets
50925772.51 5214056.34
Cash received relating to other investing activities 2401804.55 1478695.29
9
Subtotal of cash inflows 105527845.14 6692751.63
Cash paid for acquisition of fixed assets intangible assets and
other long-term assets
1240508778.71 2438475206.69
Cash paid for acquisition of investments 13494996.00 936788517.00
Cash paid relating to other investing activities 104231229.20 315938190.60
Subtotal of cash outflows 1358235003.91 3691201914.29
Net cash flows from investing activities -1252707158.77 -3684509162.66
3.Cash flows from financing activities:
Absorb cash received from investment
Cash received relating to other financing activities 1661945472.30 41000000.00
Cash received relating to other financing activities 330073299.87 37159887.74
Subtotal of cash inflows 1992018772.17 78159887.74
Cash repayments of borrowings 26000000.00 27708100.00
Cash paid for distribution of dividends or profits and interest
expenses
14711837.52 23367744.44
Cash paid relating to other financing activities 141928386.47 92571987.62
Subtotal of cash outflows 182640223.99 143647832.06
Net cash flows from financing activities 1809378548.18 -65487944.32
4.Effect of changes in exchange rate on cash -8613576.66 29186874.52
5.Net increase in cash and cash equivalents 7460644506.35 499453398.49
Add: Opening balance of cash and cash equivalents 9360474674.89 9648153614.80
6.Closing balance of cash and cash equivalents 16821119181.24 10147607013.29
6. Cash flow statement
In RMB Yuan
Account Current Period Prior Period
1.Cash flows from operating activities:
Cash received from sale of goods or rendering of services 35373943984.62 34665878858.45
Cash received relating to other operating activities 307884774.24 2199853209.77
Subtotal of cash inflows 35681828758.86 36865732068.22
10
Cash paid for goods and services 24853008533.51 26688730896.99
Cash paid to and on behalf of employees 1869061222.17 2093118245.08
Cash paid for all types of taxes 745408673.77 1228855624.27
Cash paid relating to other operating activities 1991778401.18 3878425262.91
Subtotal of cash outflows 29459256830.63 33889130029.25
Net cash flows from operating activities 6222571928.23 2976602038.97
2.Cashflows from investing activities:
Cash received from return on investments 56622717.45 4398333.33
Net cash received from disposal of fixed assets intangible assets
and other long-term assets
93034.76
Subtotal of cash inflows 56715752.21 4398333.33
Cash paid for acquisition of fixed assets intangible assets and
other long-term assets
992736013.34 2281259200.99
Cash paid for acquisition of investments 186108581.00 997294972.55
Cash paid relating to other investing activities
300000000.00
Subtotal of cash outflows 1178844594.34 3578554173.54
Net cash flows from investing activities -1122128842.13 -3574155840.21
3.Cash flows from financing activities:
Cash received from borrowings 1500000000.00
Subtotal of cash inflows 1500000000.00
Cash paid for distribution of dividends or profits and interest
expenses
3676533.11 14997114.41
Subtotal of cash outflows 3676533.11 14997114.41
Net cash flows from financing activities 1496323466.89 -14997114.41
4.Effect of changes in exchange rate on cash
5.Net increase in cash and cash equivalents 6596766552.99 -612550915.65
Add: Opening balance of cash and cash equivalents 6563020335.56 7310973018.99
6.Closing balance of cash and cash equivalents 13159786888.55 6698422103.34
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7. Consolidated statement of changes in shareholders’ equity
In RMB Yuan
Items
Current period
Equity attributable to owners
Minority interest Total equity
Share capital Capital reserves
Less:
Treasury
shares
Special
reserves
Surplus reserves
General
reserves
Retained earnings
Other
comprehensive
income
I. At end of last year 4802648511.00 5366097594.66 47076242.71 2401324255.50 31271171559.60 139994580.19 -94241765.21 43934070978.45
II. At beginning of year 4802648511.00 5366097594.66 47076242.71 2401324255.50 31271171559.60 139994580.19 -94241765.21 43934070978.45
III. Changes during the year 31323255.07 2602166402.68 6766939.37 -543593.49 2639713003.63
1.Total comprehensive
income
2602166402.68 6766939.37 -543593.49 2608389748.56
2. Capital contributed by
owners and capital decreases
3. Distribution of profit
Distribution to owners
4. Special reserves 31323255.07 31323255.07
(1) Pick-up in current
period
58125436.05 58125436.05
(2) Used in current period -26802180.98 -26802180.98
IV. At end of current period 4802648511.00 5366097594.66 78399497.78 2401324255.50 33873337962.28 146761519.56 -94785358.70 46573783982.08
12
Prior period
In RMB Yuan
Items
Prior period
Equity attributable to owners
Minority interest Total equity
Share capital Capital reserves
Less:
Treasury
shares
Special
reserves
Surplus reserves
General
reserves
Retained earnings
Other
comprehensive
income
I. At end of last year 4802648511.00 5057242440.17 41222369.10 2401324255.50 33707011170.31 235509930.44 -92036723.19 46152921953.33
II. At beginning of year 4802648511.00 5057242440.17 - 41222369.10 2401324255.50 33707011170.31 235509930.44 -92036723.19 46152921953.33
III. Changes during the year - - - 31431730.08 - -2326487434.31 22567848.13 -4021667.24 -2276509523.34
1.Total comprehensive
income
-2240039761.11 22567848.13 -4021667.24 -2221493580.22
2. Capital contributed by
owners and capital decreases
-
3. Distribution of profit -86447673.20 -86447673.20
Distribution to owners -86447673.20 -86447673.20
4. Special reserves 31431730.08 31431730.08
(1) Pick-up in current
period
36229412.78 36229412.78
(2) Used in current period -4797682.70 -4797682.70
IV. At end of current period 4802648511.00 5057242440.17 - 72654099.18 2401324255.50 - 31380523736.00 258077778.57 -96058390.43 43876412429.99
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8. Statement of changes in shareholders’ equity
In RMB Yuan
Items
Current period
Share capital Capital reserves
Less:
Treasury
shares
Special
reserves
Surplus reserves Retained earnings
Other
comprehensive
income
Total equity
I. At end of last year 4802648511.00 5014772792.87 19917658.63 2401324255.50 31852751052.34 259380413.58 44350794683.92
Add: others -354897932.62 -354897932.62
II. At beginning of year 4802648511.00 5014772792.87 19917658.63 2401324255.50 31497853119.72 259380413.58 43995896751.30
III. Changes during the year 1785128.50 338355277.59 340140406.09
1.Total comprehensive income 338355277.59 338355277.59
2. Capital contributed by owners and
capital decreases
The amount of shares paid into the owner's
equity
3. Distribution of profit
Distribution to owners
4. Special reserves 1785128.50 1785128.50
(1) Pick-up in current period 23380155.36 23380155.36
(2) Used in current period -21595026.86 -21595026.86
IV. At end of current period 4802648511.00 5014772792.87 21702787.13 2401324255.50 31836208397.31 259380413.58 44336037157.39
14
Prior period
In RMB Yuan
Items
Prior period
Share capital Capital reserves
Less:
Treasury
shares
Special
reserves
Surplus reserves Retained earnings
Other
comprehensive
income
Total equity
I. At end of last year 4802648511.00 4705917638.38 19835367.61 2401324255.50 34682279143.32 149525803.58 46761530719.39
II. At beginning of year 4802648511.00 4705917638.38 - 19835367.61 2401324255.50 34682279143.32 149525803.58 46761530719.39
III. Changes during the year - - - 6116128.10 - -1454929039.17 - -1448812911.07
1.Total comprehensive income -1368481365.97 - -1368481365.97
2. Capital contributed by owners and
capital decreases
-
The amount of shares paid into the owner's
equity
3. Distribution of profit -86447673.20 -86447673.20
Distribution to owners -86447673.20 -86447673.20
4. Special reserves 6116128.10 6116128.10
(1) Pick-up in current period 23037668.82 23037668.82
(2) Used in current period -16921540.72 -16921540.72
IV. At end of current period 4802648511.00 4705917638.38 - 25951495.71 2401324255.50 33227350104.15 149525803.58 45312717808.32
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III. CORPORATE INFORMATION
Chongqing Changan Automobile Company Limited (hereafter referred to as the “Company”) is a company limited by shares
registered in Chongqing People’s Republic of China. It was establish on 31 October 1996 with an indefinite business period. The
ordinary A shares of Renminbi issued by the company and the B shares of domestically listed foreign shares have been listed on the
Shenzhen Stock Exchange. Changan Group is headquartered at 260 Jianxin East Road Jiangbei District Chongqing China.
After the establishment of the company the share capital and shareholding structure have undergone several changes. As of June 30
2020 the company’s controlling shareholder China Changan Automobile Group Company Limited (hereinafter referred to as “China
Changan”) and its wholly-owned subsidiary Zhonghui Futong (Hong Kong) Investment Company Limited held a total of ordinary
shares of the company 1082165183 shares with an equity ratio of 22.53%. China South Industries Group Co. Ltd. (hereinafter
referred to as “China South Group”) the parent company of China Changan and its wholly-owned subsidiary South Industries
International Holdings (Hong Kong) Company Limited hold 1003625399 ordinary shares of the company with a 20.90%
shareholding ratio. China Changan and W China South Group holds ordinary shares 2085790582 in total with a shareholding ratio
of 43.43%.
The Company and its subsidiaries collectively refer to as the Group and its main business activities are: the manufacturing and sales
of automobiles (including cars) automobile engine products and supporting parts.The holding company and ultimate holding company of the Company are China Changan and China South Group respectively.The scope of consolidation in the consolidated financial statement is determined based on control. For the consolidation scope of this
year please refer to Note VIII.IV. BASIS OF PREPERATION
The financial statements have been prepared in accordance with Accounting Standards for Business Enterprises-Basic Standard and
the specific standards issued and modified subsequently and the implementation guidance interpretations and other relevant
provisions issued subsequently by the MOF (correctly referred to as “Accounting Standards for Business Enterprises”).The financial statements are presented on a going concern basis.The financial statements have been prepared under the historical cost convention except for certain financial instruments. If the
assets are impaired the corresponding provisions should be made accordingly.
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V. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
According to the actual production and operation characteristics the group formulated the specific accounting policies and
accounting estimates mainly reflected in provision of accounts receivables (note 5 (9)) inventory valuation (Note 5 (10))
depreciation of fixed assets intangible assets amortization (Note 5 (15) (18)) condition of capitalization of research and development
expense (Note 5 (18)) and revenue recognition and measurement (Note 5 (24)).
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 30 June 2020 and the financial results
and the cash flows for the half year then ended in accordance with 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 currency in accordance with the operating circumstances. At the end of the
reporting period the foreign currency 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 under common control and business combinations
involving entities not under common control.
Business combination involving entities under common control
A business combination involving entities under common control is a business combination in which all of the combining entities are
ultimately controlled by the same party or parties both before and after the combination and that control is not transitory. For a
business combination involving entities under common control the party which on the combination date obtains control of another
entity participating in the combination is the acquiring party while that other entity participating in the combination is a party being
acquired. Combination date is the date on which 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 involving entities under common control
shall be measured at their carrying amounts at the combination date as recorded by the party being acquired. The difference between
the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination (or the
aggregate face value of shares issued as consideration) shall be adjusted to capital reserve. If the capital reserve is not sufficient to
absorb the difference any excess shall be adjusted against retained earnings.
Business combination involving entities not under common control
A business combination involving entities not under common control is a business combination in which all of the combining entities
17
are not ultimately controlled by the same party or parties both before and after the combination. For a business combination
involving entities not under common control the party that on the acquisition date obtains control of another entity participating in
the combination is the acquirer while that other entity participating in the combination is the acquiree. Acquisition date is the date on
which the acquirer effectively obtains control of the acquiree.The acquirer shall measure the acquiree’s identifiable assets liabilities and contingent liabilities acquired in the business combination
at their fair values on the acquisition date.Goodwill is initially recognised and measured at cost being the excess of the aggregate of the fair value of the consideration
transferred (or the fair value of the equity securities issued) and any fair value of the Group’s previously held equity interest in the
acquiree over the Group’s interest 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 of the fair value of the consideration transferred (or
the fair value of the equity securities issued) and any fair value of the Group’s previously held equity interest in the acquiree is lower
than the Group’s interest in the fair value of the acquiree’s net identifiable assets the Group reassesses the measurement of the fair
value of the acquiree’s identifiable assets liabilities and contingent liabilities and the fair value of the consideration transferred (or
the fair value of the equity securities issued) together with the fair value of the Group’s previously held equity interest in the
acquiree. If after that reassessment the aggregate of the fair value of the consideration transferred (or the fair value of the equity
securities issued) and the Group’s previously held equity interest in the acquiree is still lower than the Group’s interest in the fair
value of the acquiree’s net identifiable assets the Group recognise the remaining difference in profit or loss.
5. Consolidated financial statements
The scope of the consolidated financial statements which include the financial statements of the Company and all of its subsidiaries
is determined on the basis of control. A subsidiary is an entity that is controlled by the Company (such as an enterprise a deemed
separate entity or a structured entity controlled by the Company).In the preparation of the consolidated financial statements the financial statements of the subsidiaries are prepared for the same
reporting period as the Company using consistent accounting policies. All intra-group assets and liabilities equity income expenses
and cash flows relating 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 the subsidiary 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 under common control the operating
results and cash flows of the acquiree should be included in the consolidated financial statements from the day that the Group gains
control till the Group ceases the control of it. While preparing the consolidated financial statements the acquirer should adjust the
subsidiary’s financial statements on the basis of the fair values of the identifiable assets liabilities and contingent liabilities
recognized on the acquisition date.With respect to subsidiaries acquired through business combinations involving entities under common control the operating results
and cash flows of the acquiree should be included in the consolidated financial statements from the beginning of the period in which
the combination occurs.
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If the changes of relevant facts and circumstances will result in the changes of one or more control elements then the Group should
reassess whether it has taken control of the investee.
6. Joint venture arrangement classification and joint operation
Joint venture arrangements are classified into joint operation and joint venture. Joint operation refers to those joint venture
arrangements relevant assets and liabilities of which are enjoyed and assumed by the joint venturers. Joint ventures refer to those
joint venture arrangements only the right to net assets of which is enjoyed by the joint venturers.
Any joint venturer shall recognize the following items related to its share of benefits in the joint operation and conduct accounting
treatment in accordance with relevant accounting standards for business enterprises: assets it solely holds and its share of jointly-held
assets based on its percentage; liabilities it solely assumes and its share of jointly-assumed liabilities based on its percentage; incomes
from sale of output enjoyed by it from the joint operation; incomes from sale of output from the joint operation based on its
percentage; and separate costs and costs for the joint operation based on its percentage.
7. Cash and cash equivalents
Cash comprises cash on hand and bank deposits which can be used for payment at any time; Cash equivalents are short-term highly
liquid investments held by the Group that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
8. Foreign currency translation
The Group translates the amount of foreign currency transactions occurred into functional currency.The foreign currency transactions are recorded on initial recognition in the functional currency by applying 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 the People’s Bank of China at the balance sheet date. The exchange gains or losses arising from occurrence of
transactions and exchange of currencies except for those relating to foreign currency borrowings specifically for construction and
acquisition of fixed assets capitalized are dealt with in the profit and loss accounts. Non-monetary foreign currency items measured
at historical cost remain to be translated at the spot exchange rate prevailing on the transaction date 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 spot exchange rate prevailing on the date when the fair values are determined. The exchange difference thus resulted should be
charged to the current income or other comprehensive income account of the current period.When preparing consolidated financial statements the financial statements of the subsidiaries presented in foreign currencies are
translated into Renminbi as follows: asset and liability accounts 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 the applicable exchange rates
ruling at the transaction dates; income and expense in income statement are translated into Renminbi at spot exchange rates on
transaction occurrence; total difference between translated assets and translated liabilities and shareholders’ equity is separately listed
as “foreign currency exchange differences” below retained profits. The translation difference arising from the settlement of oversea
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subsidiaries is charged to the current 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 using the 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 be separately 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 a financial 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 to the contractual provision of the
instrument.
A financial asset (or where applicable a part of a financial asset or part of a group of similar financial assets) is primarily
derecognized (i.e. removed from the Group’s consolidated balance sheet) when:
1) the rights to receive cash flows from the financial asset have expired;
2) the Group has transferred its rights to receive cash flows from the financial asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) has transferred
substantially all the risks and rewards of the financial asset or (b) has neither transferred nor retained substantially all the risks and
rewards of the asset but has transferred control of the financial asset.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are
substantially modified such an exchange or modification is treated as a derecognition of the original liability and a recognition of a
new liability and the difference between the respective carrying amounts is recognized in profit or loss.Regular way purchases and sales of financial assets are recognized and derecognized using trade date accounting. Regular way
purchases or sales are purchases or sales of financial assets that require delivery within the period generally established by regulation
or convention in the marketplace. The trade date is the date that the Group committed to purchase or sell a financial asset.
Classification and measurement of financial assets
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash 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 financial assets at fair value through other comprehensive income. All affected related financial assets will be reclassified only if
the Group changes its business model for managing financial assets.
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Financial assets are measured at fair value on initial recognition but accounts receivable or notes receivable arising from the sale of
goods or rendering of services that do not contain significant financing components or for which the Group has applied the practical
expedient of not adjusting the effect of a significant financing component due within one year are initially measured at the
transaction price.
For financial assets at fair value through profit or loss relevant transaction costs are directly recognized in profit or loss and
transaction costs relating to other financial assets are included in the initial recognition amounts.The subsequent measurement of financial assets depends on their classification as follows:
Debt investments measured at amortized cost
The 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 in order to collect contractual cash flows; the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Financial assets at amortized cost are subsequently measured using the effective interest method. Gains and losses are
recognized in profit or loss when the asset is derecognized modified or impaired.
Debt investments at fair value through other comprehensive income
The Group measures debt investments at fair value through other comprehensive income if both of the following conditions are met:
the financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling; the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. Interest income is recognized using the effective interest method. The interest income impairment
losses and foreign exchange revaluation are recognized in profit or loss. The remaining fair value changes are recognized in other
comprehensive income. Upon derecognition the cumulative fair value change recognized in other comprehensive income is recycled
to profit or loss.
Equity investments at fair value through other comprehensive income
The Group can elect to classify irrevocably its equity investments which are not held for trading as equity investments designated at
fair value through other comprehensive income. Only the relevant dividend income (excluding the dividend income explicitly
recovered as part of the investment cost) is recognized in profit or loss. Subsequent changes in the fair value are included in other
comprehensive income and no provision for impairment is made. When the financial asset is derecognized the accumulated gains or
losses previously included in other comprehensive income are transferred from other comprehensive income to retained earnings.
Financial assets at fair value through profit or loss
The financial assets other than the above financial assets measured at amortized cost and financial assets at fair value through other
comprehensive income are classified as financial assets at fair value through profit or loss. Such financial assets are subsequently
measured at fair value with net changes in fair value recognized in profit or loss.
Classification and measurement of financial liabilities
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Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss other financial
liabilities or as derivatives designated as hedging instruments in an effective hedge as appropriate. For financial liabilities at fair
value through profit or loss relevant transaction costs are directly recognized in profit or loss and transaction costs relating to 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 loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and 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 in fair value recognized in profit or loss. Gains or losses on liabilities designated at fair value through profit or
loss are recognised in profit or loss except for the gains or losses arising from the Group’s own credit risk which are presented in
other comprehensive income with no subsequent reclassification to profit or loss.Other financial liabilities
Other financial liabilities are subsequently measured at amortized cost using the effective interest method.Impairment of financial assets
On the basis of expected credit losses the Group performs impairment treatment on financial assets measured at amortized cost and
equity instrument investments measured at fair value and whose 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 the Group uses a simplified measurement
method to measure the loss provision vased on the expected credit loss amount for the entire duration.
For financial assets other than the simplified measurement method mentioned above the Group assesses on each balance sheet date
whether its credit risk has not increased significantly since initial recognition it is in the first stage. The Group measures the loss
provision based on the amount equivalent to the expected credit loss in the next 12 months and calculates the interest income based
on the book balance and the actual interest rate; if the credit risk has increased significantly since initial recognition but has not yet
suffered credit impairment it is in the second at this stage the Group measures the loss provision based on the amount equivalent to
the expected credit loss for the entire duration and calculates the interest income based on the book balance and the actual interest
rate; If credit impairment occurs after initial recognition it is in the third stage. The amount of expected credit losses is measured
over the entire duration of the loss allowance and interest income is calculated based on amortized cost and effective interest rate.
For financial instruments with low credit risk on the balance sheet date the Group assumes that their credit risk has not increased
significantly since initial recognition.The Group assesses the expected credit losses of financial instruments based on individual items and portfolios. The Group has
considered the credit risk characteristics of different customers and evaluated the expected credit losses of accounts receivable and
other receivables based on the ageing combination.
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Please refer to Note X.3 for the disclosure of the Group’s judgment criteria for significant increase in credit risk the definition of
credit impairment assets that have occurred and assumptions about the expected credit loss measurement.When the Group no longer reasonably expects to be able to fully or partially recover the contractual cash flows of financial assets
the Group directly writes down the book balance of the financial asset.Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognized amounts; and there is an intention to settle on a net basis or to realise the assets and
settle the liabilities simultaneously.Transfer of financial assets
If the Group transfers substantially all the risks and rewards of ownership of the financial asset the Group derecognizes the financial
asset; and if the Group retains substantially all the risks and rewards 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 of the financial asset the Group
determines whether it has retained control of the financial asset. In this case: (i) if the Group has not retained control it derecognizes
the financial asset and recognize separately as assets or liabilities any rights and obligations created not retained in the transfer; (ii) if
the Group has retained control it continues to recognize the financial asset to the extent of its continuing involvement in the
transferred financial asset and recognizes an associated liability.
10. Inventories
Inventory includes raw materials goods in transit work in progress finished goods consigned processing 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 and condition. Weighted average method is assigned to the determination of
actual costs of inventories. 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. If the cost is higher than the net
realizable value provision for the inventory should be made through profit or loss. If factors that resulted in the provision for the
inventory have disappeared and made the net realizable value higher than their book value the amount of the write-down should be
reversed to the extent of the amount of the provision for the inventory and the reversed amount should be recognized in the income
statement for the current period.
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Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. The impairment provision should be made on a basis of each item of inventories
according to the difference between cost and net realizable value. For large numbers of inventories at relatively low unit prices the
provision for loss on decline in value of inventories should be made by category.
11. Contract assets and contract liabilities
The Group lists contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations
and customer payments. The group offsets the contract 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 to customers and this right depends on
factors other than the passage of time.
For the determination method and accounting treatment method of the expected credit loss of the contract assets of the Group please
refer to the notes V.9.
Contract liabilities
Contract liabilities refer to the obligation to transfer goods or services to customers for the consideration received or receivable from
customers such as the payment received before the transfer of promised goods or services.
12. Assets related to contract costs
The Group’s assets related to contract costs include contract acquisition costs and contract performance costs. According to their
liquidity they are separately listed in inventory other current assets and other non-current assets.If the incremental cost incurred by the Group for obtaining the contract is expected to be recovered it shall be recognized as an asset
as the cost of obtaining the contract unless the asset amortization period does not exceed one year.The cost incurred by the Group for the performance of the contract that does not apply to the scope of relevant standards such as
inventory fixed assets or intangible assets and meets the following conditions at the same time is recognized as an asset as the
contract performance cost:
(1) The cost is directly related to a current or expected contract including direct labor direct materials manufacturing expenses (or
similar expenses) clearly borne by the customer and other costs incurred solely due to the contract;
(2) This cost increases the company's future resources for fulfilling contract performance obligations;
(3) The cost is expected to be recovered.
The Group amortizes the assets related to the contract cost on the same basis as the income recognition related to the assets and is
included in the current profit and loss.
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If the book value of assets related to contract costs is higher than the difference between the following two items the Group will
make provision for impairment of the excess part and recognize it as an asset impairment loss:
(1) The remaining consideration that the enterprise is expected to obtain due to the transfer of goods or services related to the asset;
(2) Estimate the costs that will be incurred for the transfer of the relevant goods or services.
If the depreciation factors of the previous period have changed and the difference of (1) minus (2) is higher than the book value of
the asset the original provision for asset depreciation should be reversed and included in the current profit and loss but reversed The
subsequent book value of the asset should not exceed the book value of the asset on the date of reversal under the assumption that no
impairment provision is made.
13. Long-term equity investments
Long-term equity investments include investments in subsidiaries joint ventures and associates.The long-term investments are initially recorded at costs on acquisition. Long-term investments acquired from business combination
under common control shall be initially measured at the carrying value of the held interest of the party being acquired; The difference
between the initial measured amounts and the book value of consideration adjust the capital reserves (if the capital reserve is
insufficient to be offset retained earnings should be adjusted); Long-term investments acquired from business combination not under
common control shall be initially measured at the cost (or the sum of the cost and the carrying value of the previously held equity
interest in the acquire for the business combination achieved by stages) which include the fair value of the consideration paid the
liabilities beard and the fair value of issued equity instrument; the other comprehensive income produced from the investment before
the acquisition should be transferred into the current year investment income on disposal.Long-term investments acquired not from
business combination are initially measured at 1)the consideration together with the cost necessary incurred; 2) the fair value of the
equity instruments; and 3) the consideration agreed in the investment agreement by the investors otherwise the agreed consideration
were not fair.The Company adopted cost method to account for long-term investments in the subsidiaries in the separate financial statements of the
Company. Control is the power to govern the financial and 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 initial investment. The cost of long-term equity
investment should be adjusted in case of additional investment or disinvestments. When cash dividends or profits are declared by
the invested enterprise is recognized as investment income in current period.The equity method is applied to account for long-term equity investments when the Group has jointly control or significant
influence on the investee enterprise. Joint control is the contractually agreed sharing of control over an economic activity and exists
only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing
control (the venturers). Significant influence is the power to participate in the financial and operating policy decisions of an economic
activity but is not control or joint control over those policies.Under equity method when the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in
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the fair values of the investee’s identifiable net assets at the acquisition date the difference is accounted for as an initial cost. As to
the initial investment cost is less than the investing enterprise’s interest in the fair values of the investee’s identifiable net assets at the
acquisition date the difference shall be charged to the income statement for the current 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 investee enterprise for the current period as a
gain or loss on investment and also increases or decreases the carrying amount of the investment. When recognizing its share in the
net profit or loss of the investee entities the Group should based on the fair values of the identifiable assets of the investee entity
when the investment is acquired in accordance with the Group’s accounting policies and periods after eliminating the portion of the
profits or losses arising from internal transactions with joint ventures and associates attributable to the investing entity according to
the share ratio (but losses arising from internal transactions that belong to losses on the impairment of assets should be recognized in
full) recognize the net profit of the investee entity after making appropriate adjustments. The book value of the investment is reduced
to the extent that the Group’s share of the profit or cash dividend declared to be distributed by the investee enterprise. However the
share of net loss is only recognized to the extent that the book value of the investment is reduced to zero except to the extent that the
Group has incurred obligations to assume additional losses. The Group shall adjust the carrying amount of the long-term equity
investment for other changes in owners’ equity of the investee enterprise (other than net profits or losses) and include the
corresponding adjustments in equity which should be realized through profit or loss in subsequent settlement of the respective
long-term investment.On settlement of a long-term equity investment the difference between the proceeds actually received and the carrying amount shall
be recognized in the income statement for the current period. As to other comprehensive income recognized based on measurement
of the original equity investment by employing the equity method accounting treatment shall be made on the same basis as would be
required if the invested entity had directly disposed of the assets or liabilities related thereto when measurement by employing the
equity method is terminated. As to any change in owners' equity of the invested entity other than net profit or loss other
comprehensive income and profit distribution the investing party shall be transferred to the income statement for the current period.If the remaining equities still be measured under the equity method accumulative change previously recorded in other
comprehensive income shall be transferred to current profit or loss in measurement on the same basis as the invested entity had
directly disposed of the assets or liabilities related thereto. The income or loss recorded in the equity directly should been transferred
to the current income statement on settlement of the equity investment on the disposal proportion.
14. 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 after appreciation and rented building.The initial measurement of the investment property shall be measured at its actual cost. The follow-up expenses pertinent to an
investment property shall be included in the cost of the investment property if the economic benefits pertinent to this real estate are
likely to flow into the 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.
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15. Fixed assets
A fixed asset probably shall be recognized only when the economic benefits associated with the asset will flow to the Group and the
cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteria shall be
included in the cost of the fixed asset and the book value of the component of the fixed asset that is replaced shall be derecognized.Otherwise such expenditure shall be recognized in the income statement in the period during which they are incurred.
Fixed assets are initially measured at actual cost on acquisition. The cost of a purchased fixed asset comprises the purchase price
relevant taxes and any directly attributable expenditure for bringing 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 residual values and annual depreciation rates
for each category of fixed assets are as follows:
Category Deprecation period Residual rate (%) Yearly deprecation rate (%)
Buildings 20 to 35 years 3% 2.77%-4.85%
Machinery (Note) 5 to 20 years 3% 4.85%-19.40%
Vehicles 4 to 10 years 3% 9.70%-24.25%
Others 3 to 21 years 3% 4.62%-32.33%
Note: the molds in machinery should be depreciated in units-of-production method.The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method applied at least at the
end of each year and makes adjustments if necessary.
16. Construction in progress
The cost of construction in progress is determined according to the actual expenditure for the construction including all necessary
construction expenditure incurred during the construction period borrowing costs that should be capitalized before the construction
reaches the condition for intended use and other relevant expenses.
Construction in progress is transferred to fixed assets when the asset is ready for its intended use.
17. Borrowing costs
Borrowing costs are interest and other costs incurred by the Group in connection with the borrowing of the funds. Borrowing costs
include interest amortization of discounts or premiums related to borrowings ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings.The borrowing costs that are directly attributable to the acquisition construction or production of a qualifying asset are capitalized
otherwise the borrowing costs are expensed in the period during which they are incurred. A qualifying asset is an asset (an item of
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property plant and equipment and inventory etc.) that necessarily takes a substantial period of time to get ready for its intended use
of sale.The capitalization of borrowing costs is as part of the cost of a qualifying asset shall commence when:
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 necessary to prepare the qualifying asset for its
intended use or sale have been done. And subsequent borrowing costs are recognized in the income statement.
During the capitalization period the amount of interest to be capitalized for each accounting period shall be determined as follows:
1) where funds are borrowed for a specific-purpose the amount of interest to be capitalized is the actual interest expense incurred
on that borrowing for the period less any bank interest earned form depositing the borrowed funds before being used on the asset or
any investment income on the temporary investment of those funds;
2) where funds are borrowed for a general-purpose the amount of interest to be capitalized on such borrowings is determined by
applying a weighted average interest rate to the weighted average of the excess amounts of cumulative expenditure on the asset over
and above the amounts of specific-purpose borrowings.
During the construction or manufacture of assets that are qualified for capitalization if abnormal discontinuance other than
procedures necessary for their reaching the expected useful conditions happens and the duration of the discontinuance is over three
months the capitalization of the borrowing costs is suspended. Borrowing costs incurred during the discontinuance are recognized as
expense and charged to the income statement of the current period till the construction or manufacture of the assets resumes.
18. Intangible assets
An intangible asset probably shall be recognized only when the economic benefits associated with the asset will flow to the Group
and the cost of the asset can be measured reliably. Intangible assets are initially measured at cost. The cost of intangible assets
acquired in a business combination 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 beneficial period expected to generate economic
benefits. An intangible asset shall be regarded as having an indefinite useful life when there is no foreseeable limit to the period over
which the asset is expected 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 years
Software 2 years
Trademark 10 years
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Non-patent technology 5 years
Land use rights that are purchased or acquired through the payment of land use fees are accounted for as intangible assets. With
respect to self-developed properties the corresponding land use right and buildings should be recorded as intangible and fixed assets
separately. As to the purchased properties if the reasonable allocation of outlays cannot be made between land and buildings all
assets purchased will be recorded as fixed assets. The cost of a finite useful life intangible asset is amortized using the straight-line
method during the estimated useful life. For an intangible asset with a finite useful life the Group reviews the estimated useful life
and amortization method at least at the end of each year and adjusts if necessary.The Group should test an intangible asset with an indefinite useful life for impairment by comparing its recoverable amount with its
carrying amount annually whenever there is an indication that the intangible asset may be impaired. An intangible asset with an
indefinite useful life shall not be amortized.The useful life of an intangible asset that is not being amortised shall be reviewed each period to determine whether events and
circumstances continue to support an indefinite useful life assessment for that asset. If there are indicators that the intangible asset
has finite useful life the accounting treatment would be in accordance with the intangible asset with finite useful life.
19. Research and development expenditures
The Group classified the internal research and development expenditures as follows: research expenditures 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 and use or sell the intangible assets; (c) the usefulness of methods for
intangible assets to generate economic benefits shall be proved including being able to prove that there is a potential market for the
products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible
assets will be used internally; (d) it is able to finish the development of the intangible assets and able to use or sell the intangible
assets with the support of sufficient technologies financial resources and other resources; and (e) the development expenditures of
the intangible assets can be reliably measured. Expenses incurred that don’t meet the above requirements unanimously should be
expensed in the income statement of the reporting period.The Group discriminates between research and development stage with the condition that the project research has been determined
in which the relevant research complete all the fractionalization of products measurements and final product scheme under final
approval of management. The expenditures incurred before project-determination stage is charged to the current income otherwise it
is recorded as development cost.
20. Impairment of assets
The Group determines the impairment of assets other than the impairment of inventory deferred income taxes and financial assets
using the following methods:
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The Group assesses at the balance sheet date whether there is any indication that an asset may be impaired. If any indication exists
that an asset may be impaired the Group estimates the recoverable amount of the asset and performs impairment tests. Goodwill
arising from a business combination and an intangible asset with an indefinite useful life are tested for impairment at least at the end
of every year irrespective of whether there is any indication that the asset may be impaired. An intangible asset which is not ready
for its intended use is tested for impairment at least at the end of every year.The recoverable amount of an asset is the higher of its fair value less costs to sell and the present value of the future cash flow
expected to be derived from the asset. The Group estimates the recoverable amount on an individual basis. If it is not possible to
estimate the recoverable amount of the individual asset the Group determines the recoverable amount of the asset group to which the
asset belongs. Identification of an asset group is based on whether major cash flows generated 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 the carrying amount is reduced to the
recoverable amount. The impairment of asset is provided for and 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 business combination is allocated on a
reasonable basis to related asset groups; if it is impossible to allocate to the related asset groups it is allocated to each of the related
sets of asset groups. Each of the related asset groups or related sets of asset groups is a group or set of asset group that is able to
benefit from the synergies of the business combination and shall not be larger than a reportable segment determined by the Group.When an impairment test is conducted on an asset group or a set of asset groups that contains goodwill if there is any indication of
impairment the Group firstly tests the asset group or the set of asset groups excluding the amount of goodwill allocated for
impairment i.e. it determines and compares the recoverable amount with the related carrying amount and then recognize impairment
loss if any. Thereafter the Group tests the asset group or set of asset groups including goodwill for impairment the carrying amount
(including the portion of the carrying amount of goodwill allocated) of the related asset group or set of asset groups is compared to its
recoverable amount. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount the amount
of the impairment loss is firstly eliminated by and amortized to the book value of the goodwill included in the asset group or set of
asset groups and then eliminated by the book value of other assets according to the proportion of the book values of assets other than
the goodwill in the asset group or set of asset groups.Once the above impairment loss is recognized it cannot be reversed in subsequent periods.
21. Long-term deferred expenses
The long-term deferred expenses represent the payment for the improvement on buildings and other expenses which have been paid
and should be deferred in the following years. Long-term deferred expenses are amortized on the straight-line basis over the expected
beneficial period and are presented at actual expenditure net of accumulated amortization.
22. Employee benefits
Employee benefits refer to all kinds of remunerations or compensation made by enterprises to their employees in exchange for
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services provided by the employees or termination of labor relation. Employee compensation includes short-term compensation and
post-employment benefits. The benefits offered by enterprises to the spouse children the dependents of the employee the family
member of deceased employee and other beneficiaries are also employee compensation.Short-term employee salaries
During the accounting period of employee rendering service the actural employees salaries and are 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 local government and the relevant expenditure is
recognized when incurred in the costs of relevant assets 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 a separately administered fund. The
benefits are unfunded. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit
actuarial valuation method.Remeasurements arising from defined benefit pension plans are recognised immediately in the consolidated statement of financial
position with a corresponding debit or credit to retained profits 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 amendment or 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 under administrative expenses in the consolidated statement of profit or loss
by function: ?service costs comprising current service costs past-service costs gains and losses on curtailments and non-routine
settlements;net interest expense or income.Termination benefits
Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when the
Group recognises restructuring costs involving the payment of termination benefits.
23. Provisions
An obligation related to a contingency shall be recognised by the Group as a provision when all of the following conditions are
satisfied except for contingent considerations and contingent liabilities assumed in a business combination not involving entities
31
under common control:
1) the obligation is a present obligation of the Group;
2) it is probable that an outflow of economic benefits from the Group will be required to settle the obligation;
3) a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are initially measured according to the current best estimate for the expenditure necessary for the performance
of relevant present obligations with comprehensive consideration given to factors such as the risks uncertainty and time value of
money relating to contingencies. The book value of the contingent liabilities should be reviewed at each balance sheet date. If there is
objective evidence showing that the book value cannot reflect the present best estimate the book value should be adjusted according
to the best estimate.The contingent liabilities of the acquiree acquired in the business combination involving entities not under common control are
measured at fair value upon initial recognition. After initial recognition the balance of the amount recognized according to the
estimated liabilities and the amount initially recognized after deducting the accumulated amortization determined by the revenue
recognition principle is subsequently measured at the higher of the two.
24. Share-based payments
The share-based payments shall consist of equity-settled share-based payments and cash-settled share-based payments. The term
"equity-settled share-based payment" refers to a transaction in which an enterprise grants shares or other equity instruments as a
consideration in return for services.The equity-settled share-based payment in return for employee services shall be measured at the fair value of the equity instruments
granted to the employees. As to an equity-settled share-based payment in return for services of employees if the right may be
exercised immediately after the grant the fair value of the equity instruments shall on the date of the grant be included in the
relevant cost or expense and the capital reserves shall be increased accordingly. As to a equity-settled share-based payment in return
for employee services if the right cannot be exercised until the vesting period comes to an end or until the prescribed performance
conditions are met then on each balance sheet date within the vesting period the services obtained in the current period shall based
on the best estimate of the number of vested equity instruments be included in the relevant costs or expenses and the capital reserves
at the fair value of the equities instruments on the date of the grant. The fair value is determined using Black-Scholes model (Note
13).
Within the vesting period or before the prescribed performance conditons are met the relevant costs or expenses and capital reserves
shall be determined and increased based on the best estimate of the number of vested equity instruments on each balance sheet date.
For awards that do not ultimately vest because non-market performance and/or service conditions have not been met no expense is
recognised. Where awards include a market or non-vesting condition the transactions are treated as vesting irrespective of whether
the market or non-vesting condition is satisfied provided that all other performance and/or service conditions are satisfied.Where the terms of an equity-settled award are modified as a minimum an expense is recognised as if the terms had not been
modified if the original terms of the award are met. In addition an expense is recognised for any modification that increases the total
32
fair value of the share-based payments or is otherwise beneficial to the employee as measured at the date of modification.Where an equity-settled award is cancelled it is treated as if it had vested on the date of cancellation and any expense not yet
recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of
either the Group or the employee are not met. However if a new award is substituted for the cancelled award and is designated as a
replacement award on the date that it is granted the cancelled and new awards are treated as if they were a modification of the
original award as described in the previous paragraph.
25. Revenue generated from contracts with customers
The Group has fulfilled its performance obligations in the contract that is revenue is recognized when the customer obtains control
of the relevant goods or services. Obtaining control of related goods or services means being able to lead the use of the goods or the
provision of the services and obtain almost all of the economic benefits from it.Sales contract
Commodity sales contracts between the Group and customers are usually based on contracts and performance obligations should
include transfer of goods transportation services and free maintenance. The Group generally considers the following factors and
recognizes revenue at the xx time point: the current right to receive payment for the product the transfer of major risks and rewards
in the ownership of the product the transfer of the legal ownership of the product the transfer of the physical asset of the product
Transfer the customer accepts the product.Provide service contract
The performance obligations of the service provision contract between the Group and its customers are due to the fact that the
customers obtain and consume the economic benefits brought by the Group’s performance at the same time as the Group’s
performance and the Group has the right to accumulate Part of the revenue from the completed performance so far the Group
regards it as a performance obligation performed within a certain period of time and recognizes the revenue according to the
performance progress unless the performance progress cannot be reasonably determined. The Group determines the performance
progress of the services provided in accordance with the output method. When the performance progress cannot be reasonably
determined if the cost incurred by the Group is expected to be compensated the revenue shall be recognized according to the amount
of the cost incurred until the performance progress can be reasonably determined.Variable consideration
Some of the contracts between the Group and customers have sales rebates and other arrangements that lead to changes in the agreed
amount of consideration forming variable consideration. The Group determines the best estimate of the variable consideration based
on the expected value or the most likely amount but the transaction price including the variable consideration does not exceed the
amount that the accumulated recognized revenue will most likely not be materially reversed when the relevant uncertainty is
eliminated Amount.Warranty obligations
In accordance with contractual agreements and legal provisions the Group provides quality assurance for the products sold. For
guarantee quality assurance to ensure that the products sold meet the established standards the Group conducts accounting treatment
in accordance with Notes XII 29. For the service quality assurance that provides a separate service in addition to the established
33
standards to ensure that the goods sold meet the established standards the Group regards it as a single performance obligation based
on the stand-alone selling price of the goods and services provided. In a relative proportion part of the transaction price is allocated
to service quality assurance and revenue is recognized when the customer obtains control of the service. When assessing whether the
quality assurance provides a separate service in addition to ensuring that the products sold meet the established standards the Group
considers whether the quality assurance is a legal requirement the quality assurance period and the nature of the group's
commitment to perform tasks.Reward Points Program
The Group grants customers reward points when selling goods or providing services and customers can exchange reward points for
free or discounted goods or services. The reward points program provides customers with a major right. The Group regards it as a
single performance obligation and allocates part of the transaction price to reward points in proportion to the stand-alone selling
price of the goods or services provided and the reward points. Revenue is recognized when the points are exchanged for control of
goods or services or when the points expire.Principal/agent
For the Group to lead a third party to provide services to customers on behalf of the Group the Group 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 the Group is the main responsible person And recognize revenue based on the total consideration received or
receivable. Otherwise the Group acts as an agent and recognizes revenue based on the amount of commission or handling fee
expected to be entitled to receive. This amount shall be the net amount of the total consideration received or receivable minus the
price payable to other related parties or based on The established commission amount or ratio is determined.
26. Government grants
A government grant is recognized only when there is reasonable assurance that the entity will comply with any conditions attached to
the grant and the grant will be received. Monetary grants are accounted for at received or receivable amount. Non-monetary grants
are accounted for at fair 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 and construct the long-term assets shall
be recognized as the government grant related to assets. A government grant which is not specified by the government documents
shall be judged based on the basic conditions to obtain the government grant. The one whose basic condition was to purchase and
construct the long-term assets shall be recognized as the government grant related to assets.The Group uses the gross method to account for government grants.Government grants related to income to be used as compensation for future expenses or losses shall be recognized as deferred income
and shall be charged to the current profit or loss or be used to write down the relevant loss during the recognition of the relevant cost
expenses or losses; or used as compensation for relevant expenses or losses already incurred by enterprises shall be directly charged
to the profit and loss account in the current period or used to write down the relevant cost.The government grants related to assets shall be used to write down the book value of the relevant assets or be recognized as deferred
income. The government grants related to assets recognized as deferred income shall be charged to the profit and loss reasonably
and systematically in stages over the useful lives of the relevant assets. The government grants measured at nominal amount shall be
34
directly charged to the current profit and loss. The remaining book value of the government grants related to assets should be
charged to the profit and loss account in the current period when the relative assets sold transferred disposed or damaged.
27. Income taxes
Income tax comprises current and deferred tax. Income tax is recognized as an income or an expense and include in the income
statement for the current period except to the extent that the tax arises from a business combination or if it relates to a transaction or
event which is recognized directly in equity.
Current income tax liabilities or assets for the current and prior periods are measured at the amount 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 and liabilities and their carrying amounts and
temporary differences between the carrying amounts and the tax bases of items the tax bases of which can be determined for tax
purposes but which have not been recognized as assets and liabilities deferred taxes are provided using the liability method.
A deferred tax liability is recognized for all taxable temporary differences except:
(1) to the extent that the deferred tax liability arises from the initial recognition of goodwill or the initial recognition of an asset
or liability in a transaction which contains both of the following characteristics: the transaction is not a business combination
and at the time of the transaction it affects neither 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 reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
A deferred tax asset is recognized for deductible temporary differences carry forward of unused tax credits and unused tax losses to
the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry
forward of unused tax 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 business combination and at the time of the transaction affects neither the accounting
profit nor taxable profit or loss; and
(2) in respect of deductible temporary differences associated with investments in subsidiaries associates and interests in joint
ventures deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
At the balance sheet date deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realized or the liability is settled according to the requirements of tax laws. The measurement of deferred tax assets and
deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects at the balance
35
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 is probable that sufficient taxable income
cannot be generated to use the tax benefits of deferred tax assets the book value of deferred tax assets should be reduced. When it is
probable that sufficient 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 such reduction should be reversed.When the following conditions are met at the same time the deferred tax assets and deferred tax liabilities are listed at the net amount
after offset: the legal right to settle the current income tax assets and current income tax liabilities at the net amount; the deferred tax
assets and deferred tax liabilities are related to the income tax levied by the same tax collection and management 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 tax liabilities are reversed the tax payer involved intends to settle the current income tax assets and current
income tax liabilities with net amount or obtain assets and pay off debts at the same time.
28. Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. An operating lease is a
lease other than a finance lease.The Group recording the operating lease as a lessee
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term and either included in
the cost of another related asset or charged to the income statement for the current period. The contingent rents shall be recorded in
the profits and losses of 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 a straight-line basis over the lease term.The contingent rents shall be recorded in the profits and losses of the period in which they actually arise.
29. Profit distribution
The cash dividend of the Group is recognized as liabilities after the approval of general meeting of stockholders.
30. Safety fund
The safety fund extracted by the Group shall be recognized as the cost of the related products or income statement while be
recognized as special reserve. When using safety fund it shall be distinguished whether it will form fixed assets or not. The
expenditure shall write down the special reserve; the capital expenditure shall be recognized as fixed assets when meet the expected
conditions for use and write down the special reserve while recognizing accumulated depreciation with the same amount.
36
31. 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 an orderly transaction between market participants at the measurement date.The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either
in the principal market for the asset or liability or in the absence of a principal market in the most advantageous market for the asset
or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is
measured using 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’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it 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 which sufficient data are available to measure
fair value maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value
hierarchy described as follows based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 –
based on quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – based on valuation techniques for
which the lowest level input that is significant to the fair value measurement is observable either directly or indirectly; Level 3 –
based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis the Group determines whether transfers
have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each reporting period.
32. Significant accounting judgments and estimates
The preparation of financial statements requires management to make judgments estimates and assumptions that affect the amounts
and disclosures of revenues expenses assets and liabilities and the disclosure of contingent liabilities at the balance sheet date.However uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the
carrying amounts of the assets or liabilities affected in the future.Judgments
In the process of applying the Group’s accounting policies management has made the following judgments which have significant
effect on the financial statements:
Operating leases - as lessor
The Group has entered into commercial property leases on its investment property portfolio. The Group has determined based on an
evaluation of the terms and conditions of the arrangements that it retains all the significant risks and rewards of ownership of these
properties which are leased out on operating leases.
Business model
The classification of financial assets at initial recognition depends on the business model of the Group’s management of financial
37
assets. When judging the business model the Group considers the methods including enterprise evaluation and reporting of financial
asset performance to key management personnel risks affecting financial asset performance and its anagement method and the way
in which related business managers get paid. When evaluating whether to take contract cash flow as the goal the Group needs to
analyze and judge the reasons time frequency and value of the sale of financial assets before the due date.
Contract cash flow characteristics
The classification of financial assets at initial recognitions depends on the contractual cash flow characteristics of the financial assets.Ite is necessary to determine whether the contractual cash flow is only for the payment of principal and interest based on outstanding
principal including correction of the time value of money during the evaluation it is necessary to determine whether there is a
significant difference compared to the benchmark cash flow. For financial assets that include prepayment characteristics it is
necessary to determine whether the fair value of the prepayment characteristics is very small etc.Uncertainty of accounting estimates
The crucial assumptions of significant accounting estimates in future and other crucial sources of estimated uncertainty which may
result in the significant adjustments to the book value of the subsequent accounting period are as the following:
Impairment of financial instruments
The 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 credit risk of
the debtor based on historical repayment data combined with economic policies macroeconomic indicators industry risks and other
factors. Different estimates may affect the provision for impairment losses. The provision for impairment losses may not be equal to
the actual amount of future impairment losses.Impairment of non-current assets other than financial assets (goodwill excluded)
The Group assesses at each reporting date whether there is an indication that non-current assets other 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 asset or the relevant assets group exceeds its recoverable amount which is the higher one of the net amount of
the fair value of the asset minus the disposal expenses and the present value of the expected future cash flow of the asset the asset is
considered impaired. The fair value minus the disposal expenses is determined by reference to the recent market transactions price or
observed market price less any directly attributable expenditure for disposing. When making an estimate of the present value of the
future cash flow of an asset the Group should estimate the future cash flows of the asset or the relevant assets group with the
appropriate discount rate selected to reflect the present value of the future cash flows.
Fair value of unlisted equity investments
For unlisted equity instrument investments several valuation models are used to estimate the fair value. This requires the Group to
make estimates of unobservable market parameters such as price-to-book ration discount rate sustainable growth rate asset price
index etc. and is therefore uncertain.
Development expenditures
38
When determining the capitalization amount management should make assumptions such as the expected cash flows of the assets
related the applicable discount rate and expected benefit period.
Deferred tax assets
The Group should recognize the deferred income tax assets arising from all the existing unutilized tax deficits and deductible
temporary differences to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted
from the deductible temporary differences. Enormous accounting judgments as well as the tax planning are compulsory for
management to estimate the time and amount of prospective taxable profits and thus determine the appropriate amount of the
deferred tax assets concerned.Warranty
The Group provides warranties on automobile and undertakes to repair or replace items that fail to perform satisfactorily based on
certain pre-determined conditions. Factors that influence estimation of related warranty claim include: 1) renewal of laws and
regulations; 2) quality promotion of Group products; 3) change of parts and labour cost. In general the Group records warranty based
on selling volume and estimated compensatory unit warranty cost deduction multi-agreed compensation from suppliers. As at
balance sheet day the Group launches retrospective analysis on warranty carrying amount in consideration of accrual warranty
payment during relative warranty period and recent trends of product renovation and replacement and further adjustment if
necessary. Any increase or decrease in the provision would affect profit or loss in future years.
Depreciation and amortization
The Group’s management determines the estimated useful lives and residual value of fixed assets and intangible assets. This estimate
is based on the historical experience of actual useful lives of fixed assets and intangible assets of similar nature and functions.Management will increase the depreciation and amortization charges where useful lives are less than previously estimated.
39
33. Changes in accounting policies and estimates
In 2017 the Ministry of Finance issued the revised "Accounting Standards for Business Enterprises No. 14-Revenue" (referred to
as the "New Revenue Standards"). Since January 1 2020 the Group will conduct accounting treatment in accordance with the
newly revised standards. According to the convergence regulations the comparable period information will not be adjusted. The
difference between the implementation of the new standards and the current standards on the first day will be retrospectively
adjusted for retained earnings at the beginning of the reporting period . According to the time set by the Ministry of Finance the
company will implement the new revenue standards from January 1 2020. According to the convergence regulations no
adjustment will be made to the comparable period information.The new revenue standard establishes a new revenue recognition model for regulating revenue generated from contracts with
customers. According to the new revenue standards the method of revenue recognition should reflect the entity's transfer of goods
or services to customers and the amount of revenue should reflect the amount of consideration that the entity expects to be
entitled to because of the transfer of these goods or services to customers. At the same time the new revenue standard also
regulates the judgments and estimates required for each link of revenue recognition. The Group only adjusts the cumulative
impact of contracts that have not been completed on January 1 2020. For contract changes or changes that occurred before
January 1 2020 the Group adopts a simplified approach to all contracts that are subject to contract changes. The final
arrangement is to identify the fulfilled and unfulfilled performance obligations determine the transaction price and allocate the
transaction price between the fulfilled and unfulfilled performance obligations.The impact of the implementation of the new revenue standard on the 2020 financial statements is as follows:
Consolidated balance sheet
In RMB Yuan
Account December 31 2019 January 01 2020 Adjustment
Current assets:
Cash 10066171353.48 10066171353.48
Transactional financial assets 2419476200.00 2419476200.00
Notes receivable 26805635587.19 26805635587.19
Accounts receivable 838314076.82 838314076.82
Prepayments 623801896.07 623801896.07
Other receivables 3731755992.46 269534090.37 -3462221902.09
Inventories 3375441488.37 3375441488.37
Contract assets 3462221902.09 3462221902.09
Other current assets 1746120128.04 1746120128.04
Total current assets 49606716722.43 49606716722.43
Non-current assets:
Long-term receivables 11008336989.09 11008336989.09
40
Other equity investment 734506100.00 734506100.00
Investment properties 7102849.72 7102849.72
Fixed assets 26939490554.19 26939490554.19
Construction in progress 1729803028.43 1729803028.43
Intangible assets 5209619313.49 5209619313.49
Devlopment expenditure 814745464.20 814745464.20
Goodwill 9804394.00 9804394.00
Long-term deferred expenses 14327639.90 14327639.90
Deferred tax assets 1542600534.93 1542600534.93
Total non-current assets 48010336867.95 48010336867.95
Total assets 97617053590.38 97617053590.38
Current liabilities:
Short-term loans 229580000.00 229580000.00
Notes payable 13430543294.23 13430543294.23
Accounts payable 18905725271.50 18905725271.50
Advances from customers 2315641685.78 -2315641685.78
Contract liabilities 2315641685.78 2315641685.78
Payroll payable 1046335781.91 1046335781.91
Taxes payable 889092442.80 889092442.80
Other payables 4809918141.45 4809918141.45
Other current liabilities 4253942761.77 4253942761.77
Total current liabilities 45880779379.44 45880779379.44
Non-current liabilities:
Long-term loans 55300000.00 55300000.00
Long-term payable 857356423.71 857356423.71
Long term payroll payable 45932000.00 45932000.00
Estimated liabilities 3352580839.28 3352580839.28
Deferred earnings 3194291079.21 3194291079.21
Deferred tax liabilities 296742890.29 296742890.29
Total non-current liabilities 7802203232.49 7802203232.49
Total liabilities 53682982611.93 53682982611.93
Owners’ equity:
Share capital 4802648511.00 4802648511.00
Capital reserves 5366097594.66 5366097594.66
41
Other Comprehensive Income 139994580.19 139994580.19
Special reserves 47076242.71 47076242.71
Surplus reserves 2401324255.50 2401324255.50
Retained earnings 31271171559.60 31271171559.60
Equity attributable to owners 44028312743.66 44028312743.66
Minority interests -94241765.21 -94241765.21
Total equity 43934070978.45 43934070978.45
Total liabilities and owener’s equity 97617053590.38 97617053590.38
Balance sheet
单位：元
Account December 31 2019 January 01 2020 Adjustment
Current assets:
Cash 6563020335.56 6563020335.56
Transactional financial assets 184245000.00 184245000.00
Notes receivable 25837326483.09 25837326483.09
Accounts receivable 5094270365.72 5094270365.72
Prepayments 403105316.24 403105316.24
Other receivables 2597314344.40 941161145.80 -1656153198.60
Inventories 1735570691.28 1735570691.28
Contract assets 1656153198.60 1656153198.60
Other current assets 798430035.62 798430035.62
Total current assets 43213282571.91 43213282571.91
Non-current assets:
Long-term equity investments 16052319271.82 16052319271.82
Other equity investment 724309400.00 724309400.00
Fixed assets 20301231002.41 20301231002.41
Construction in progress 1545211000.22 1545211000.22
Intangible assets 4030438649.57 4030438649.57
Development expenditure 431774377.27 431774377.27
Long-term deferred expenses 9719259.84 9719259.84
Deferred tax assets 1318884054.48 1318884054.48
Total non-current assets 44413887015.61 44413887015.61
Total assets 87627169587.52 87627169587.52
42
Current liabilities:
Short-term loans 29580000.00 29580000.00
Notes payable 11983445725.06 11983445725.06
Accounts payable 15601432751.74 15601432751.74
Advances from customers 1870992349.08 -1870992349.08
Contract liabilities 1870992349.08 1870992349.08
Payroll payable 641340149.30 641340149.30
Taxes payable 453619905.66 453619905.66
Other payables 4301257819.04 4301257819.04
Other current liabilities 3400065879.02 3400065879.02
Total current liabilities 38281734578.90 38281734578.90
Non-current liabilities:
Long-term loans 55300000.00 55300000.00
Long-term payable 285768478.89 285768478.89
Long term payroll payable 22747000.00 22747000.00
Estimated liabilities 2413434397.36 2413434397.36
Deferred earnings 2135615106.85 2135615106.85
Deferred tax liabilities 81775341.60 81775341.60
Total non-current liabilities 4994640324.70 4994640324.70
Total liabilities 43276374903.60 43276374903.60
Owners' equity:
Share capital 4802648511.00 4802648511.00
Capital reserves 5014772792.87 5014772792.87
Other comprehensive income 259380413.58 259380413.58
Special reserves 19917658.63 19917658.63
Surplus reserves 2401324255.50 2401324255.50
Retained earnings 31852751052.34 31852751052.34
Total owners' equity 44350794683.92 44350794683.92
Total liabilities and owners’ equity 87627169587.52 87627169587.52
VI. Taxes
1. Main taxes and tax rates
Value added tax (“VAT”) - VAT payable is the difference between VAT output and less
deductible VAT input for the current year.
43
VAT output of sales of products has been calculated by applying a rate of 13% to the taxable
value since 1 April 2019 (16% before 1 April 2019).
And VAT output of income from providing labor services has been calculated by applying a
rate of 6% to the taxable value during this year.
Consumption tax - Consumption tax is calculated at 1% 3% or 5% of taxable income.
City maintenance and construction
tax
-
7% of the turnover tax paid is calculated and paid.
Educational surcharge - 3% of the actual turnover tax paid is calculated and paid.
Local educational surcharge - 2% of the turnover tax actually paid is calculated and paid.
Corporate income tax - Corporate income tax is paid at 15% or 25% of taxable income.
2. Tax benefits
According to the relevant provisions of the national high-tech identification and relevant tax preferential policies the following
companies of the group are identified as high-tech enterprises and are subjected to the preferential corporate income tax rate of 15%
within the prescribed period: the company (2018-2020) and the Company’s subsidiaries including Hefei Changan Automobile
Company Limited (2019-2021) Hebei Changan Automobile Company Limited (2017-2019) Baoding Changan Bus Manufacturing
Company Limited (2017-2019) Chongqing Changan Connected Car Technology Co. Ltd. (2019-2021) and Beijing Changan
Automotive Engineering Technology Company Limited (2018-2020).
In accordance to Circular for Further Implementation of Tax Incentives In the Development of Western Regions (Cai Shui [2011] No.
58) collectively issued by the ministry of Finance the Customs General Administration and the National Taxation Bureau of PRC
from 1 January 2011 to 31 December 2020 enterprises located in the Western Region and engaged in encouraged business would be
entitled to a preferential CIT rate of 15%. The Company’s subsidiaries including Chongqing Changan Special Automobile Co. Ltd
Chongqing Changan Automobile Supporting Service Co. Ltd. and Chongqing Changan Suzuki Automobile Co. Ltd. are qualified to
the requirement and are subjected to the preferential tax rate of 15%.VII. Notes to the consolidated financial statements
1. Cash
In RMB Yuan
Item Ending Beginning
Cash 14977.41 18280.08
Cash at bank 16821104203.83 9360456394.81
Other cash 505302056.19 705696678.59
Total 17326421237.43 10066171353.48
44
As at 30 June 2020 the book value of restricted cash and cash equivalents is RMB 505302056.19 which was mainly restricted for
the issuance of acceptance bill.
As at 30 June 2020 the cash at bank oversea is equivalent to RMB 219602378.35.
2. Transactional financial assets
Item Ending Beginning
Financial assets measured at fair value and whose changes
are included in the current profit and loss-equity
instrument investment
4173150897.00 2419476200.00
Total 4173150897.00 2419476200.00
3. Notes receivable
(1) Classification of notes receivable
In RMB Yuan
Type Ending Beginning
Commercial acceptance bill 2109965475.65 7475629607.72
Bank acceptance bill 19519311671.28 19330005979.47
Total 21629277146.93 26805635587.19
(2) The notes receivable pledged as follows:
Type 30 June 2019 31 December 2018
Commercial acceptance bill 361829675.00 365040070.00
Bank acceptance bill 5791544234.00 2760059280.00
Total 6153373909.00 3125099350.00
The bank acceptance bill of the above amount has been pledged for the notereceivable on 30 June 2020 and 31 December 2019.
(3) Endorsed or discounted but unexpired notes receivable as at the end of reporting period are as follows:
In RMB Yuan
Type
Ending Beginning
Derecognition Un-derecognition Derecognition Un-derecognition
Commercial acceptance bill 662937930.00
Bank acceptance bill 993166843.10 1937078894.54
Total 993166843.10 - 2600016824.54 -
4. Accounts receivable
(1)Aging analysis of the accounts receivable is as follows:
In RMB Yuan
45
Aging Ending Beginning
Within 1 year 2129247041.33 678737828.90
1 to 2 years 124986062.13 141612978.25
2 to 3 years 49822288.08 33700863.10
Over 3 years 98670214.99 68414880.58
Total 2402725606.53 922466550.83
Less: Provision - 102743181.12 -84152474.01
Total 2299982425.41 838314076.82
(2)The movements in provision for impairment of accounts receivable are as follows:
Beginning balance
Addition Deduction
Ending balance
Provision Other Reversal Write-off
2020 84152474.01 19762832.77 1172125.66 102743181.12
2019 90614319.90 13362617.00 6450000.00 13374462.89 84152474.01
(3)Analysis of accounts receivable by category is as follows:
Item
Ending
Balance Provision
Amount (%) Amount (%)
Individually analyzed for provision 1644201932.79 68.43 64203085.58 3.90
Accounts receivable analyzed as groups for provision 758523673.74 31.57 38540095.54 5.08
Total 2402725606.53 100.00 102743181.12 4.28
Item
Beginning
Balance Provision
Amount (%) Amount (%)
Individually analyzed for provision 216876810.50 23.51 49267460.68 22.72
Accounts receivable analyzed as groups for provision 705589740.33 76.49 34885013.33 4.94
Total 922466550.83 100.00 84152474.01 9.12
(4)The Group’s accounts receivable was analyzed for provision by expected credit loss model
46
Ending Beginning
Estimated face
value for default
Expected credit
loss rate (%)
Expected credit loss
for the entire duration
Face balance
Provision
ratio (%)
Provision for
bad debt
Within 1 year 659634029.05 1.11 7354250.99 601963326.69 0.80 4799025.50
1 to 2 years 54905522.87 7.04 3866061.16 56368999.03 7.54 4250219.24
2 to 3 years 11522151.00 33.80 3894643.60 20043284.25 31.23 6258614.71
3 to 4 years 14417151.43 43.31 6243620.13 10355210.70 42.66 4417566.60
4 to 5 years 1531440.86 46.89 718141.13 2411538.03 45.52 1097691.19
Over 5 years 16513378.53 99.70 16463378.53 14447381.63 97.33 14061896.09
Total 758523673.74 5.08 38540095.54 705589740.33 4.94 34885013.33
(5)As at June 30 2020 accounts receivable from Top 5 clients amounted to RMB1526610729.58 accounted for 63.54% of the
total accounts receivable (December 31 2019：RMB191520443.31，accounted for 20.76% of the total amount).
(6) As of June 30 2020 the Group has no accounts receivable that are derecognized as the transfer of financial assets (2018: Nil).
5. Prepayments
(1) An aged analysis of the prepayments is as follows:
In RMB Yuan
Aging
Ending Beginning
Amount % Amount %
Within 1 year 516320018.74 81.17 427508750.42 68.53
1 to 2 years 110947847.63 17.44 190277683.92 30.50
2 to 3 years 7818383.63 1.23 4480529.56 0.72
Over 3 years 1001975.27 0.16 1534932.17 0.25
Total 636088225.27 100.00 623801896.07 100.00
(2)As at 30 June 2020 the total amount of the top five prepayments was RMB 371147084.34 accounting for 58.35% of the total
amount of prepayments (2019: RMB 465836148.17 accounting for 74.68%).
6. Other receivables
(1)Aging analysis of other receivables is as follows:
Ending Beginning
Within 1 year 960768073.61 130092224.20
47
1 to 2 years 51044853.03 133414975.39
2 to 3 years 24464905.99 1265977.01
Over 3 years 18827421.03 17715984.88
Total 1055105253.66 282489161.48
Provision -13078147.01 - 12955071.11
Total 1042027106.65 269534090.37
(2)Other receivables are classified by nature as follows:
Nature Ending Beginning
New energy subsidy 96341496.10 5401842.90
Reserve 32179103.25 41810604.18
Equity transfer receivable 798700000.00
Other 114806507.30 222321643.29
Total 1042027106.65 269534090.37
(3)In 2020 the changes in the provision for bad debts for other receivables based on the 12-month expected credit losses and the
expected credit losses for the entire duration are as follows:
Stage 1
12-month ECLs
Stage 2
Lifetime ECLs
Stage 3
Credit-impaired
financial assets
(Lifetime ECLs)
Total
Balance at the end of the previous year 291182.01 111686526.12 13616375.98 125594084.11
Changes in accounting policies 0.00 -111066213.00 -1572800.00 -112639013.00
Opening balance 291182.01 620313.12 12043575.98 12955071.11
Changes due to the opening balance
- Transfer to Stage 2 -274825.18 274825.18
- Transfer to Stage 3 -826113.91 826113.91
- Turn back Stage 2
- Turn back Stage 1
Provision 81146.21 57668.33 138814.54
Reversal -15738.64 -15738.64
48
Ending balance 81764.40 126692.72 12869689.89 13078147.01
Movement of other account receivable balance as follow:
Stage 1
12-month ECLs
Stage 2
Lifetime ECLs
Stage 3
Credit-impaired
financial assets
(Lifetime ECLs)
Total
Balance at the end of the previous year 2205778389.26 1637955311.33 13616375.98 3857350076.57
Changes in accounting policies -1940287730.49 -1633000384.60 -1572800.00 -3574860915.09
Opening balance 265490658.77 4954926.73 12043575.98 282489161.48
Changes due to the opening balance
- Transfer to Stage 2 -2700041.57 2700041.57
- Transfer to Stage 3 -826113.91 826113.91
- Turn back Stage 2
- Turn back Stage 1
Addition 876669396.33 222877.06 876892273.39
Derecognition -102971320.63 -4918.00 -102976238.63
Write-off -1299942.58 -1299942.58
Ending balance 1035188750.32 7046813.45 12869689.89 1055105253.66
(4)In 2019 the changes in the provision for bad debts for other receivables based on the 12-month expected credit losses and the
expected credit losses for the entire duration are as follows:
Stage 1
12-month ECLs
Stage 2
Lifetime ECLs
Stage 3
Credit-impaired
financial assets
(Lifetime ECLs)
Total
Opening balance 688784.69 473328.51 6686050.38 7848163.58
Changes due to the
opening balance
- Transfer to Stage 2 - - - -
- Transfer to Stage 3 -150000.00 -348425.91 498425.91 -
- Turn back Stage 2 - - - -
- Turn back Stage 1 - - - -
Provision 135958.46 111637659.12 7431094.18 119204711.76
Reversal -383561.14 -76035.60 - -459596.74
Transfer - - - -
Write-off - - -999194.49 -999194.49
49
Closing balance 291182.01 111686526.12 13616375.98 125594084.11
Movement of other account receivable balance as follow:
Stage 1
12-month ECLs
Stage 2
Lifetime ECLs
Stage 3
Credit-impaired
financial assets
(Lifetime ECLs)
Total
Opening balance 3228443949.91 5738281.45 6686050.38 3240868281.74
Changes due to the opening
balance
- Transfer to Stage 2 -2203754203.78 2203754203.78 - -
- Transfer to Stage 3 -5079519.22) -2850000.87 7929520.09 -
- Turn back Stage 2 - - - -
- Turn back Stage 1 - - - -
Addition 1603831056.07 667724.40 - 1604498780.47
Derecognition -417662893.72 -569354897.43 - -987017791.15
Write-off - - -999194.49 -999194.49
Closing balance 2205778389.26 1637955311.33 13616375.98 3857350076.57
(5)As at June 30 2020 top five debtors of other receivables are as follows:
Debtors Amount Aging
Proportion of total other
receivables (%)
First 798700000.00 Within 6 months 75.70
Second 124312677.99 1-2 years 11.78
Third 76449253.20 Within 6 months 7.25
Fourth 10944887.98 Within 6 months 1.04
Fifth 8403835.35 Within 6 months 0.80
Total 1018810654.52 96.56
As at 31 December 2019 top five debtors of other receivables are as follows:
Debtors Amount Aging
Proportion of total other
receivables (%)
First 1770677411.60 0-4 years 45.90
Second 1071115340.00 Within 1year 27.77
Third 430588852.51 0-5 years 11.16
Fourth 131582160.00 Within 1 year 3.41
50
Fifth 124312677.94 1-2 years 3.22
Total 3528276442.05 91.46
(6) As of June 30 2020 the Group has no other receivables derecognized as financial asset transfers. (December 31 2019: Nil).
7. Inventory
(1) Classification of inventory
In RMB Yuan
Item
Ending Beginning
Balance Provision Net value Balance Provision Net value
Raw materials 757653010.63 353832972.07 403820038.56 843669443.37 350525510.02 493143933.35
Work in transit 74730000.00 - 74730000.00 293575861.15 - 293575861.15
Work in progress 1017286537.93 91270247.87 926016290.06 657730109.07 28324925.14 629405183.93
Commodity stock 2758195870.81 156547980.65 2601647890.16 1958389227.87 83956153.45 1874433074.42
Revolving materials - - - 51101639.03 - 51101639.03
Spare parts 34178251.21 - 34178251.21 33781796.49 - 33781796.49
Total 4642043670.58 601651200.59 4040392469.99 3838248076.98 462806588.61 3375441488.37
(2) Provision for inventory
In RMB Yuan
Type Beginning Provision
Deduction
Ending
Reversal Write-off
Raw materials 350525510.02 13899766.91 5905198.31 4687106.55 -
Work in progress 28324925.14 71004875.39 708212.46 7351340.20 -
Commodity stock 83956153.45 132318652.44 3372139.06 28491314.07 27863372.11
Total 462806588.61 217223294.74 9985549.83 40529760.82 27863372.11
8. Contract assets (applicable from January 1 2020)
(1) Classification of Contract assets
In RMB Yuan
Item
Ending Beginning
Balance
Provision for
impairment
Net value Balance
Provision for
impairment
Net value
New energy
business
2172702076.43 117225349.00 2055476727.43 3574860915.09 112639013.00 3462221902.09
Total 2172702076.43 117225349.00 2055476727.43 3574860915.09 112639013.00 3462221902.09
51
(2) Current contract assets provision for impairment
In RMB Yuan
Balance at the end
of the previous year
Changes in
accounting policies
Provision for
this year
Deduction
Ending balance
Reversal Write-off
2020
112639013.00 4586336.00
117225349.00
(3) The contract assets with provision for impairment losses using the simplified method are as follows:
In RMB Yuan
Item
Ending
Estimated book balance in default Expected credit loss rate Lifetime expected credit loss
New energy business 2172702076.43 5.40 117225349.00
Total 2172702076.43 5.40 117225349.00
9. Other current assets
In RMB Yuan
Item Ending Beginning
Accrual input tax 794281653.55 1428518317.99
Entrusted Loan 300000000.00 300000000.00
Others 5960566.11 17601810.05
Total 1100242219.66 1746120128.04
10. Other equity instrument investments
Accumulative changes
in fair value included
in other
comprehensive
income
Fair value
Dividends
Income
Reason for being
designated
as fair value through
other comprehensive
income
Corun Hybrid Power Technology Co. Ltd 4820300.00 204820300.00 -
Unlisted equity
instruments
China South Industry Group Finance Co. Ltd. 158945000.00 315965800.00 -
Unlisted equity
instruments
Guoqi (Beijing) Intelligent Network
Association Automotive Research Institute
Co. Ltd.
50000000.00 100000000.00 -
Unlisted equity
instruments
Guoqi Automobile Power Cell Research Co.Ltd.
12538500.00 52538500.00 -
Unlisted equity
instruments
52
China North Industries Group Financial
Leasing Co. Ltd.
3629500.00 34181500.00 -
Unlisted equity
instruments
Zhong Fa Lian Investment Co. Ltd. - 21000000.00 -
Unlisted equity
instruments
Chongqing Ante trading Co. Ltd - 3000000.00 -
Unlisted equity
instruments
CAERI(Beijing) automobile Lightweight
Technology Research Institution Co. Ltd.
- 3000000.00 -
Unlisted equity
instruments
Sichuan Glass Co. Ltd. - - -
Unlisted equity
instruments
合计 229933300.00 734506100.00
53
11. Long-term equity investment
In RMB Yuan
Investee Beginning balance
Increase or
decrease
Investment income under
equity method
Other equity
variation
Cash dividends
declared
Other Deduction Provision Ending balance
Provision ending
balance
Joint Venture
Changan Ford Automobile Co. Ltd. 1782823327.91 -570006507.40 1212816820.51
Changan Mazda Automobile Co. Ltd. 2177010905.02 323202621.60 2500213526.62
Changan Mazda Engine Co. Ltd. 830272340.69 11597486.28 -37000000.00 804869826.97
Changan PSA Automobiles Co. Ltd. 346038983.87 -114234986.00 -231803997.87
Changan Weilai New Energy
Automobile Technology Co. Ltd.
-12871719.42 -18666611.81 31538331.23
Nanchang Jiangling Holding Co. Ltd. 2081815165.31 34848792.52 2116663957.83
Associates
Chongqing Changan Kuayue
Automobile Co. Ltd.
192005274.10 27957230.96 219962505.06
Chongqing Changan Kuayue
Automobile Sales Co. Ltd. (note1)
Beijing Fang’an cresent taxi Co. Ltd.
(note1)
Changan Automobile Financing Co.Ltd 2195040654.44 123493951.66 2318534606.10
Hainan Anxinxing Information
Technology Co. Ltd.
3560384.10 -795039.88 2765344.22
Nanjing Chelai Travel Technology Co. 1474945.09 -143024.65 1331920.44
54
Ltd.Hunan Guoxin Semiconductor
Technology Co. Ltd.
25152447.20 -126648.85 25025798.35
Nanjing Leading Equity Investment
Partnership
935218323.32
32.16
935218355.48
Nanjing Leading Equity Investment
Management Co. Ltd.
1445415.69
-93594.67
1351821.02
Jiangling Holdings Co. Ltd. 398992953.62 -94049105.60 304943848.02
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
(Note 2)
2565221040.00 -232817307.40 2332403732.60
Anhe (Chongqing) Equity Investment
Fund Management Co. Ltd.
1939605.86 -419202.42 1520403.44
Hangzhou Chelizi Intelligent
Technology Co. Ltd.
7527572.23 1753349.94 9280922.17
Beijing Wutong Chelian Technology
Co. Ltd.
4094510.40 -17183381.33 -13088870.93
Pakistan Master Automobile Co. Ltd. 36795899.66 -2600212.00 34195687.66
Total 11008336989.09 2565221040.00 -528282156.89 -37000000.00 -200265666.64 12808010205.56 --
Note1: As at June 30 2020 the Group is not responsible for extra loss from Chongqing Changan Kuayue Automobile Sales Co. Ltd. and Beijing Fang’an cresent taxi Co. Ltd. Therefore when
excess losses of these two associates occurred the Group just reduced its correspondent long-term equity investment to zero and did not recognize contingent liabilities accordingly.Note2: In 2020 Chongqing Changan New Energy Automobile Technology Co. Ltd. introduced a strategic investor. The company lost control over it and its shareholding ratio was reduced to
48.96%. It will no longer be included in the scope of consolidation and will be followed up by the equity method. Metering.
55
12. Investment property
According to the cost of the investment real estate
In RMB Yuan
Item Beginning Addition Deduction Ending
I. Original cost 10050100.00 10050100.00
Buildings 10050100.00 10050100.00
II. Accumulated depreciationand
amortization
2947250.28 113355.78 3060606.06
Buildings 2947250.28 113355.78 3060606.06
III. Net Value 7102849.72 -113355.78 6989493.94
Buildings 7102849.72 -113355.78 6989493.94
IV. Impairment Provision 7102849.72 -113355.78 6989493.94
Buildings 7102849.72 -113355.78 6989493.94
13. Fixed assets
Beginning Ending
Fixed assets 25896056062.39 26939490554.19
Fixed assets cleanup
total 25896056062.39 26939490554.19
Fixed assets
In RMB Yuan
Item Beginning Addition Deduction Ending
I. Original cost 46410278338.13 362437404.30 349430828.47 46423284913.96
Buildings 11144160050.01 391688.99 791082.72 11143760656.28
Machinery 25623584497.53 301790428.81 231669579.38 25693705346.96
Vehicles 1355868955.84 853112.65 100357287.31 1256364781.18
Other Equipments 8286664834.75 59402173.85 16612879.06 8329454129.54
II. Accumulated
depreciation
18610392441.59 1341667160.44 199611157.36 19752448444.67
Buildings 2515402360.27 173789227.82 326755.36 2688864832.73
Machinery 11496523762.29 889236401.15 123506026.96 12262254136.48
Vehicles 629232960.52 86129280.66 71207725.68 644154515.50
Other Equipments 3969233358.51 192512250.81 4570649.36 4157174959.96
56
III. Net Value 27799885896.54 -979229756.14 149819671.11 26670836469.29
Buildings 8628757689.74 -173397538.83 464327.36 8454895823.55
Machinery 14127060735.24 -587445972.34 108163552.42 13431451210.48
Vehicles 726635995.32 -85276168.01 29149561.63 612210265.68
Other Equipments 4317431476.24 -133110076.96 12042229.70 4172279169.58
IV.Impairment Provision 860395342.35 1004872.80 86619808.25 774780406.90
Buildings 85592184.71 - 85592184.71
Machinery 631047449.99 78191258.02 552856191.97
Vehicles 36761889.19 1004872.80 7970158.80 29796603.19
Other Equipments 106993818.46 458391.43 106535427.03
V. Book Value 26939490554.19 -980234628.94 63199862.86 25896056062.39
Buildings 8543165505.03 -173397538.83 464327.36 8369303638.84
Machinery 13496013285.25 -587445972.34 29972294.40 12878595018.51
Vehicles 689874106.13 -86281040.81 21179402.83 582413662.49
Other Equipments 4210437657.78 -133110076.96 11583838.27 4065743742.55
The depreciation during the reporting period is RMB 1341667160.44. During the period the construction in progress amounting to
RMB 366499861.3 is transferred to the fixed asset.
14. Construction in progress
(1) Details of construction in progress
In RMB Yuan
Item
Closing balance Openning balance
Balance Provision Book value Balance Provision Book value
Vehicle production equipment 131759496.47 131759496.47 163180665.02 - 163180665.02
Yuzui motor city project 105456656.33 105456656.33 39547629.19 - 39547629.19
Engine plant 985844453.47 985844453.47 880128770.64 - 880128770.64
Vehicle research institution 56076752.30 56076752.30 40087119.45 - 40087119.45
Vehicle moulds 208172446.27 208172446.27 284573714.88 - 284573714.88
Light vehicle technical
transformation project of
Baoding Changan bus
48832435.33 48832435.33 65394282.59 - 65394282.59
Beijing vehicle construction 71002689.79 71002689.79 60307306.09 - 60307306.09
57
project
Car production Project Of
Hefei Changan
4218237.16 4218237.16 6491703.97 - 6491703.97
Others 231050886.91 49398728.00 181652158.91 239490564.60 49398728.00 190091836.60
Total 1842414054.03 49398728.00 1793015326.03 1779201756.43 49398728.00 1729803028.43
(2) Movement of major construction in progress projects
In RMB Yuan
Item Beginning Addition
Transferred to fixed
assets
Deduction Ending
Vehicle production equipment 163180665.02 38172278.22 69593446.77 131759496.47
Yuzui motor city project 39547629.19 71463192.85 5554165.71 105456656.33
Engine plant 880128770.64 126482988.92 20767306.09 985844453.47
Vehicle research institution 40087119.45 35444551.49 19454918.64 56076752.30
Vehicle moulds 284573714.88 61338065.13 137739333.74 208172446.27
Light vehicle technical
transformation project of
Baoding Changan bus
65394282.59 57177161.14 73739008.40 48832435.33
Beijing vehicle construction
project
60307306.09 10834303.92 138920.22 71002689.79
Car production Project Of
Hefei Changan
6491703.97 8206689.90 10480156.71 4218237.16
Others 190091836.60 20753118.07 29032605.02 160190.74 181652158.91
Total 1729803028.43 429872349.64 366499861.30 160190.74 1793015326.03
(3) Provision for impairment of construction in progress
On June 30 2020 the balance of impairment provision for construction in progress was RMB 49398728.00. There was no accrued
or resold amount in the current year. (As of December 31 2019 the amount of impairment provision for construction in progress was
RMB 49398728.00).
15. Intangible assets
Details of intangible assets
In RMB Yuan
Item Beginning Addition Deduction Ending
I. Original cost 10490391183.90 379638618.07 28911602.62 10841118199.35
Land use rights 2753082390.28 2753082390.28
Software use rights 705159803.48 2892485.99 708052289.47
Trademark use rights 211784400.00 1536.47 211782863.53
Non-patent technology 6820364590.14 376746132.08 28910066.15 7168200656.07
58
II. Accumulated amortization 5003686933.67 514642717.04 2582722.47 5515746928.24
Land use rights 461981506.33 27980857.36 489962363.69
Software use rights 564665067.35 14506702.89 579171770.24
Trademark use rights 188453466.62 8749999.98 197203466.60
Non-patent technology 3788586893.37 463405156.81 2582722.47 4249409327.71
III. Net value 5486704250.23 -135004098.97 26328880.15 5325371271.11
Land use rights 2291100883.95 -27980857.36 2263120026.59
Software use rights 140494736.13 -11614216.90 128880519.23
Trademark use rights 23330933.38 -8749999.98 1536.47 14579396.93
Non-patent technology 3031777696.77 -86659024.73 26327343.68 2918791328.36
IV. Impairment provision 277084936.74 277084936.74
Land use rights -
Software use rights 23617923.17 23617923.17
Non-patent technology 253467013.57 253467013.57
V. Book value 5209619313.49 -135004098.97 26328880.15 5048286334.37
Land use rights 2291100883.95 -27980857.36 2263120026.59
Software use rights 116876812.96 -11614216.90 105262596.06
Trademark use rights 23330933.38 -8749999.98 1536.47 14579396.93
Non-patent technology 2778310683.20 -86659024.73 26327343.68 2665324314.79
As at 30 June 2020 the intangible assets from internal research and development account for 52.8% of total intangible assets.
16. Development expenditure
In RMB Yuan
Item Beginning Addition
Deduction
Ending Included in current
profit and loss
Recognized as
intangible assets
Other
reductions
Automobile
Development
814745464.20 366481969.95 22883914.03 376296822.32 265103330.94 516943366.86
Total 814745464.20 366481969.95 22883914.03 376296822.32 265103330.94 516943366.86
Note: On June 30 2020 Chongqing Changan New Energy Automobile Technology Co. Ltd. was no longer included in the scope of
consolidation and its development expenditure balance at the beginning of the year was transferred from other reductions.
17. Goodwill
In RMB Yuan
Investee Beginning Addition Deduction Ending
Impairment
provision
59
Hebei Changan Automobile Co. Ltd 9804394.00 9804394.00
Nanjing Changan Automobile Co. Ltd 73465335.00
Changan Weilai New Energy Automobile
Technology Co. Ltd.
32782190.41 32782190.41
Total 9804394.00 32782190.41 42586584.41 73465335.00
18. Long-term deferred expenses
In RMB Yuan
Item Beginning Addition Amortization Ending
Long-term deferred expenses 14327639.90 166065.12 2725128.43 11768576.59
Total 14327639.90 166065.12 2725128.43 11768576.59
19. Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities:
In RMB Yuan
Item Ending Beginning
Deferred tax assets:
Provision for the impairment of assets 195653594.70 164441555.61
Accrued expenses and contingent liabilities 863580630.22 868144392.63
Unpaid tech development expense and
advertisement expense
100553896.97 53515293.21
Deferred income 412073835.87 410605039.66
Unpaid salary and bonus and others 68675839.25 45894253.82
Subtotal 1640537797.01 1542600534.93
Deferred tax liabilities:
Changes in fair value of trading financial assets 507030506.4 243979301.85
Fair value adjustment of business combination not
under the same control
39335008.50 41224728.88
Others 11538859.56 11538859.56
Subtotal 557904374.46 296742890.29
20. Provision for the impairment of assets
In RMB Yuan
Item Beginning Current Deduction Ending
60
accrual
Reversal Write-off
Other
reduction
I. Bad debt provision 97107545.12 19901647.31 1187864.30 - 115821328.13
II. Provision for impairment of contract assets 112639013.00 4586336.00 117225349.00
III. Provision for obsolete inventory 462806588.61 217223294.74 9985549.83 40529760.82 27863372.11 601651200.59
IV. Provision for the impairment of fixed
assets
860395342.35 1004872.80 86619808.25 774780406.90
V. Provision for the impairment of intangible
assets
277084936.74 277084936.74
VI. Provision for the impairment of goodwill 73465335.00 73465335.00
VII. Provision for the impairment of
available-for-sale financial assets
49398728.00 49398728.00
Total 1932897488.82 242716150.85 11173414.13 127149569.07 27863372.11 2009427284.36
21. Short-term loans
In RMB Yuan
Item Ending Beginning
Pledge loans 50000000.00 50000000.00
Credit loans 315525472.30 179580000.00
Total 365525472.30 229580000.00
22. Notes payable
In RMB Yuan
Item Ending Beginning
Commercial acceptance bill 2803761463.16 2551863471.51
Bank acceptance bill 14217240478.33 10878679822.72
Total 17021001941.49 13430543294.23
23. Accounts payable
In RMB Yuan
Item Ending Beginning
Accounts payable 18206448534.41 18905725271.50
total 18206448534.41 18905725271.50
61
24. Contract liabilities (applicable from January 1 2020)
In RMB Yuan
Item Ending Beginning
Payment 2162739729.94 2315641685.78
total 2162739729.94 2315641685.78
Note: Contract liabilities are mainly the advance receipts collected by the Group from customers before the performance obligations
are fulfilled. The related revenue of the contract will be recognized when the Group fulfills its performance obligations.
25. Payroll payable
In RMB Yuan
Item Beginning Addition Deduction Ending
Short term salary benefits 972606354.60 2355576601.66 2567610264.06 760572692.20
Defined contribution plans 68484427.31 165667817.43 103828904.94 130323339.80
Early retirement benefits and
others
5245000.00 22477102.71 18961430.02 8760672.69
Total 1046335781.91 2543721521.80 2690400599.02 899656704.69
Short term salary benefits as follows:
In RMB Yuan
Item Beginning Addition Deduction Ending
Salary bonus allowance
and subsidy
777811109.08 1861583042.41 2167875073.48 471519078.01
Employee benefit 11657039.54 120191337.32 127527360.08 4321016.78
Social insurance 11380417.43 155106082.91 95196580.81 71289919.53
Housing accumulation fund 2797302.45 135252535.37 124882733.53 13167104.29
Labor fund and employee
education fund
168960486.10 83443603.65 52128516.16 200275573.59
Total 972606354.60 2355576601.66 2567610264.06 760572692.20
Defined contribution plans as follows:
In RMB Yuan
Item Beginning Addition Deduction Ending
Basic retirement
security
61036996.88 160243022.88 99301280.64 121978739.12
Unemployment
insurance
7447430.43 5424794.55 4527624.30 8344600.68
Total 68484427.31 165667817.43 103828904.94 130323339.80
62
26. Taxes payable
In RMB Yuan
Item Ending Beginning
Value-added tax 100005350.24 84852296.03
Consumption tax 297692384.99 629406972.37
Corporate income tax 23178777.31 120351092.86
City maintenance and construction tax education
additional expenses
13725286.76 34455756.66
Others 14052860.82 20026324.88
Total 448654660.12 889092442.80
27. Other payables
Item Ending Beginning
Dividend payable 1167776.43 40384.93
Other payables 3073183667.88 4809877756.52
合计 3074351444.31 4809918141.45
Dividend payable
In RMB Yuan
Item Ending Beginning
Interest on long-term borrowings with interest
payments due
1138824.98 8216.67
Interest payable on short-term loans 28951.45 32168.26
Total 1167776.43 40384.93
Other payables
In RMB Yuan
Item Ending Beginning
Deposits of dealer and supplier 152403024.39 284705119.28
Maintenance fees 71072432.97 158503895.70
Advertising fees 215104111.47 405752873.43
Warehousing and transport fees 429551017.85 247969064.86
Advance receipt of equity transfer - 831300000.00
Purchase and construction of fixed assets
intangible assets and project deposits
1225514269.65 2091437803.04
Others 979538811.55 790209000.21
Total 3073183667.88 4809877756.52
63
28. Estimated liabilities
In RMB Yuan
Item Beginning Addition Deduction Ending
product quality assurance 2762766347.50 362013019.76 499183282.39 2625596084.87
Supplier compensation 589814491.78 45609734.51 544204757.27
Total 3352580839.28 362013019.76 544793016.90 3169800842.14
Note: The product quality assurance is the maintenance cost of the estimated three-package period of the sold vehicle.
29. Other current liabilities
In RMB Yuan
Item Ending Beginning
Accrued utilities 13728982.55 25777106.11
Accrued transportation fee 531631020.43 501351278.96
Accrued maintenance fee 45276063.03 39493497.48
Accrued technology transfer and development
fee
308326480.76 101005700.82
Accrued commercial discount payable 2830265407.90 3028296317.93
Accrued market development expense 482066300.72 355903653.68
Accrued rental fee 79555300.00 83111810.66
Others 278956894.44 119003396.13
Total 4569806449.83 4253942761.77
30. Non-current liabilities due within one year
In RMB Yuan
Item Ending Beginning
Credit loan 1555300000.00 55300000.00
Total 1555300000.00 55300000.00
31.Long-term payables
Item Ending Beginning
Special payables 702461540.35 857356423.71
Total 702461540.35 857356423.71
Special payables
64
Item Beginning Addition Deduction Ending
New vehicle product 13397745.48 2032200.00 906362.96 14523582.52
Land relocation compensation 555350709.40 555350709.40
Development and
industrialization of C206 pure
electric cars
31167.55 23196.00 7971.55
Intelligent manufacturing
project
167757531.08 2238300.00 140724363.46 29271467.62
Lightweight design of
automobile structure
48960118.00 13153605.26 35806512.74
Others 71859152.20 10761953.00 15119808.68 67501296.52
Total 857356423.71 15032453.00 169927336.36 702461540.35
32. Deferred income
30 June 2020
In RMB Yuan
Item Beginning Addition Deduction Ending
Government grants related to
assets
2858873083.08 267690549.97 146117354.84 2980446278.21
Government grants related to
income
209830081.10 300000000.00 39313256.02 470516825.08
Others 125587915.03 8118378.89 133706293.92
Total 3194291079.21 575808928.86 319136904.78 3450963103.29
As at 30 June 2020 details of liabilities related to government grants are as follows:
Item Beginning Addition
Recorded to
other income
Ending
Relates to
asset/gain
Project subsidy funds 2259609252.14 142587149.97 65267136.32 2336929265.79 Related to asset
Subsidies for plant
construction
400927900.80 125103400.00 35929748.82 490101551.98 Related to asset
Technical innovation funds 16150000.00 16150000.00 Related to asset
Other asset - related subsidies 182185930.14 - 44920469.70 137265460.44 Related to asset
Income-related government
subsidies
209830081.10 300000000.00 39313256.02 470516825.08 Related to income
Total 3068703164.18 567690549.97 185430610.86 3450963103.29
65
33. Share capital
In RMB Yuan
Beginning
Current movement
Ending Issuance of
shares
Stock dividend
Transfer of
reserve to
common shares
others Subtotal
The sum of
shares
4802648511.00 - - - - - 4802648511.00
34. Capital reserves
In RMB Yuan
Item Beginning Addition Deduction Ending
Share premium 4938329830.94 4938329830.94
Capital reserve transferred
arising from the old standards
44496899.00 44496899.00
Restricted capital reserve of
equity investments
17015985.20 17015985.20
Others 366254879.52 366254879.52
Total 5366097594.66 5366097594.66
35. Other comprehensive income
In RMB Yuan
2019/1/1
Increase or
decrease
2019/12/31
Increase or
decrease
2020/6/30
Remeasure the net liabilities or
changes in net assets of defined
benefit plans
1175000.00 254000.00 1429000.00 1429000.00
Under the equity method the
invested unit's share of other
comprehensive income that cannot
be reclassified into profit and loss
-2088068.00 -2088068.00 -2088068.00
Changes in the fair value of other
equity instrument investments
131858460.00 63584845.00 195443305.00 195443305.00
Translation differences of foreign
currency financial statements
-60928211.01 6138554.20 -54789656.81 6766939.37 -48022717.44
Total 70017180.99 69977399.20 139994580.19 6766939.37 146761519.56
66
36. Surplus reserves
In RMB Yuan
Item Beginning Addition Deduction Ending
Statutory surplus 2401324255.50 - - 2401324255.50
Total 2401324255.50 - - 2401324255.50
37. Retained earnings
In RMB Yuan
Item Sum
Retained earnings at beginning of year 31271171559.60
Add: Net profit belong to parent company 2602166402.68
Retained earnings at the end 33873337962.28
38. Operating revenue and cost
In RMB Yuan
Report period Same period of last year
Revenue Cost Revenue Cost
Main business 32014959151.44 29353108421.60 29100899960.18 26869270640.75
Other business 766698327.66 381507276.03 774880136.66 550139986.17
Total 32781657479.10 29734615697.63 29875780096.84 27419410626.92
39. Tax and surcharges
In RMB Yuan
Item Report period Same period of last year
Consumption tax 954339591.94 858219663.65
City maintenance and construction tax 79821375.83 66201215.72
Education additional expenses 50469342.13 48193289.93
Others 121656073.55 107656305.48
Total 1206286383.45 1080270474.78
40. Operating expenses
In RMB Yuan
Item Report period Same period of last year
Payroll and welfare 204419163.59 217259045.38
67
Promotional advertising fees and sales
service fees
863454318.26 315728251.14
Transportation expenses 110198692.55 840974104.51
Travelling expenses 21867777.56 39917298.97
Package expenses 4637273.00 12659730.13
Administrative expenses 1929938.37 2538568.31
Consulting fee 993897.25 3900858.69
Training fee 1557051.04 3755007.88
Others 61658970.45 6483676.29
Total 1270717082.07 1443216541.30
41. General and administrative expenses
In RMB Yuan
Item Report period Same period of last year
Payroll and welfare 710197732.15 511834200.57
Administrative expenses 1813546.15 8543521.30
Depreciation and amortization 133684029.10 138824075.95
Miscellaneous service charges 11389441.25 5974056.43
Traffic and travelling expenses 19024299.22 22241582.82
Entertainment expenses 450275.19 1162489.46
Others 287593449.85 154580626.09
Total 1164152772.91 843160552.62
42. Research and development expenses
Item Report period Same period of last year
Wages and benefits 519844836.98 868126885.03
Material fee 58974839.13 85090579.88
Subcontract fee 171587497.89 119210568.21
Travel research fee 10103859.15 17519367.04
Test fee 43007880.00 49958628.39
Depreciation and amortization 580661427.53 501999298.39
other fee 80374082.74 78254331.94
Total 1464554423.42 1720159658.88
68
43. Financial expenses
In RMB Yuan
Item Report period Same period of last year
Interest expense 20373153.36 28216059.24
Less: interest income 131048028.86 128484820.10
Exchange gain or loss 4908537.21 -2640391.42
Others 7712792.91 6076443.13
Total -98053545.38 -96832709.15
44. Assets disposal income
In RMB Yuan
Item Report period Same period of last year
Included in 2018 non-recurring
gains and losses
Fixed assets disposal income 33428646.97 9392459.28 33428646.97
Total 33428646.97 9392459.28 33428646.97
45. Impairment loss on assets
In RMB Yuan
Item Report period Same period of last year
1. Bad debt loss 207237744.91 152676538.06
2. Impairment provision of obsolete inventory 1004872.80
Total 208242617.71 152676538.06
46. Credit impairment loss (applicable from January 1 2019)
Item Report period Same period of last year
I. Notes receivable and bad debts of accounts receivable 18590707.11 7380783.24
2. Impairment of contranct assets 123075.90 2148950.42
3. Loss of bad debts of other receivables 4586336.00
Total 23300119.01 9529733.66
47. Changes in fair value gains and losses
Sources of income from changes in fair value Report period Same period of last year
Transactional financial assets 1753674697.00 40337151.27
69
Total 1753674697.00 40337151.27
48. Investment income
In RMB Yuan
Item Report period Same period of last year
1.Long-term equity investment income under equity
method
-528282156.89 -108336709.94
2.Investment income from disposal of long-term
equity investments
3514298597.59
3.Investment income obtained during the period of
holding trading financial assets
7903143.08
4.Others 6884080.21
Total 3000803663.99 -108336709.94
49. Other income
In RMB Yuan
Item Report period Same period of last year Explain
R&D special funds 49313256.03 476456238.65
Deferred revenue amortization 146117354.84 110976095.19
Other government subsidies 20547344.41 33300740.27
Total 215977955.28 620733074.11 --
50. Non-operating income
In RMB Yuan
Item Report period Same period of last year
Fines and others 31178860.44 18836680.44
Total 31178860.44 18836680.44
51. Non-operating expenses
In RMB Yuan
Item Report period Same period of last year
Donation 16759250.00 2300000.00
Vehicle reward 6029776.00
Fines and late fees 130851.84 1065115.94
70
Others 34461544.29 3250175.26
Total 51351646.13 12645067.20
52. Income tax expenses
In RMB Yuan
Item Report period Same period of last year
Current income tax expense 26707074.55 31508825.01
Deferred income tax adjustment 163224222.09 85058871.07
Total 189931296.64 116567696.08
53. Notes to cash flow statement
(1) The major cash received relating to other operating activities
In RMB Yuan
Item Amount
Interest income 120704400.68
Government grants related to operating activities 474224889.28
Others 865665430.32
Total 1460594720.28
(2) The major cash paid relating to other operating activities
In RMB Yuan
Item Amount
Selling expenses 933772246.27
Administrative expenses 1025434454.14
R&D expensess 401581519.34
Others 746994963.28
Total 3107783183.03
(3) The major cash received relating to other investing activities
In RMB Yuan
Item Amount
Others 2401804.55
Total 2401804.55
(4) The major cash paid relating to other investing activities
In RMB Yuan
Item Amount
71
Disposal of subsidiary equity 104231229.20
Total 104231229.20
(5) The major cash received relating to other financing activities
In RMB Yuan
Item Amount
Redemption of the deposit for acceptance 330073299.87
Total 330073299.87
(6) The major cash paid relating to other financing activities
Item Amount
Payment of acceptance billsother 129678677.47
Others 12249709.00
Total 141928386.47
54. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
In RMB Yuan
Supplementary information Current Amount Prior-period Amount
1. Cash flow relating to operating activities calculated by
adjusting the net profit
Net profit 2601622809.19 -2244061428.35
Add: credit impairment loss 23300119.01 9529733.66
Add: provision for assets impairment 208242617.71 152676538.06
Depreciation of fixed assets oil and gas assets productive
biological assets
1341780516.22 1412926235.60
Amortization of intangible assets 514642717.04 485234277.39
Amortization of long-term deferred expense 2725128.43 1190008.24
Disposal loss/(income) on fixed assets intangible assets and
others long-term assets(with “-” for gains)
-33428646.97 -9392459.28
Loss of fair value change (revenue is marked with "-") -1753674697.00 -40337151.27
Financial expense(with “-” for gains) 20373153.36 28216059.24
Investment loss(with “-” for gains) -3000803663.99 108336709.94
Decrease in deferred tax assets(with “-” for gains) -97937262.08 91826434.28
Increase in deferred tax debts(with “-” for gains) 261161484.17 -6753936.40
Decrease in inventory(with “-” for gains) -664950981.62 -787955680.07
Decrease in operating receivables(with “-” for gains) 4982533829.23 3615249233.77
72
Increase in operating payables(with “-” for gains) 2756790261.85 1406660271.88
Others -249790690.95 -3081215.74
Net cash flows from operating activities 6912586693.60 4220263630.95
2. Investment and financing activities involving no cash
incomings / outgoings
3. Movement of cash and cash equivalents
Ending balance of cash equivalents 16821119181.24 10147607013.29
Less: beginning balance of cash equivalents 9360474674.89 9648153614.80
Net increase in cash and cash equivalents 7460644506.35 499453398.49
(2) Cash and cash equivalents
In RMB Yuan
Item Ending balance Beginning balance
I. Cash
Including: Cash on hand 14977.41 18280.08
Bank deposits that can be readily used 16821104203.83 9360456394.81
II. Ending balance of cash and cash equivalents 16821119181.24 9360474674.89
VIII. The change of consolidation scope
1. Business combination not under the Same Control
The company originally held 50% of the equity of Changan Weilai New Energy Automobile Technology Co. Ltd. (hereinafter
referred to as "Changan Weilai") and was able to exercise joint control over it accounting for the equity method. In 2020 the
company will increase its investment in Changan Weilai through cash increase and other methods. The transaction date is June 4
2020. After the capital increase is completed the company holds a total of 95.38% of the equity of Changan Weilai and confirmed
goodwill of RMB 32782190.41.
2. Combination under the same control
□ Applicable √ Not Applicable
3. Counter purchase
□ Applicable √ Not Applicable
4. Disposing subsidiary
Whether there is a single disposal of the subsidiary company investment that is the loss of control of the situation
□ Applicable √ Not Applicable
73
Whether there is a situation of the loss of control over the period of the investment and the loss of control of the subsidiary company
through multiple transactions
□ Applicable √ Not Applicable
5. Change of consolidation scope due to other reasons
(1) Newly established subsidiary companies during the reporting period
Name
Registered
Address
Type of
business
Registered Capital(Ten
Thousand Yuan)
Proportion of shares enjoyed
by the group
Chongqing Changan Automobile
Software Technology Co. Ltd.
Chongqing Sales 9900
100%
(2) Subsidiary clearing during the reporting period
□ Applicable √ Not Applicable
Subsidiary clearing during the reporting period and related circumstances:
□ Applicable √ Not Applicable
(3) Other reduced subsidiaries during the reporting period
Chongqing Changan New Energy Automobile Technology Co. Ltd. introduced a strategic investor. The company lost control over it
and its shareholding ratio was reduced to 48.96%. It was no longer included in the scope of consolidation and was subsequently
measured by the equity method.IX. Stake in other entities
1. Rights in subsidaries
The subsidiaries of the Company are as follows：
Company name
Main
operating
place
Registered
place
Nature of
business
Registered
capital (ten
thousand)
Total proportion
of shareholders
(%)
Direct Indirect
I. The subsidiary formed by establishment or investment
Hebei Changan Automobile Co. Ltd. (Note
1)
Dingzhou Dingzhou Manufacturing 46469 94.22
-
Chongqing Changan International
Automobile Sales Co. Ltd.
Chongqing Chongqing Sales 1376 100.00
-
Chongqing Changan Vehicle Networking
Technology Co. Ltd.
Chongqing Chongqing Lease 8850 100.00
-
Chongqing Changan Special Automobile
Sales Co. Ltd (Note 2)
Chongqing Chongqing Sales 2000 50.00 -
Chongqing Changan Automobile Supporting
Service Co. Ltd.
Chongqing Chongqing Sales 3000 99.00 1.00
Chongqing Changan New Energy Chongqing Chongqing R&D 2900 100.00 -
74
Automobile Co. Ltd.
Chongqing Changan Europe Design
Academy Co. Ltd.
Turin Italy Turin Italy R&D EUR1738.36 100.00 -
Changan United Kingdom R&D Center Co.
Ltd.Nottingham
United
Kingdom
Nottingham
United
Kingdom
R&D GBP2482 100.00 -
Beijing Changan R&D Center Co. Ltd. Beijing Beijing R&D 100 100.00 -
Changan Japan Designing Center Co.Ltd Habin Habin R&D JPY2000 100.00 -
Changan United States R&D Center Co.
Ltd.Troy
United
states
Troy
United
states
R&D USD154 100.00 -
Changan Automobile Russia Co. Ltd.
Moscow
Russia
Moscow
Russia
Sales RUB220382 100.00 -
Changan Brazil Holdings Limited
St. Paul
Brazil
St. Paul
Brazil
Sales BRL100 100.00 -
Shenzhen Changan New Energy Automobile
Service Co. Ltd
Shenzhen Shenzhen Sales 14800 100.00 -
Hangzhou Changan Yixing Technology Co.Ltd.Hangzhou Hangzhou Lease 500 100.00 -
Hefei Changan Yixing Technology Co. Ltd. Hefei Hefei Lease 500 100.00 -
Nanjing Changan Connected Car
Technology Co. Ltd.Nanjing Nanjing Lease 500 100.00 -
Nanjing Changan New Energy Automobile
Sales & Service Co. Ltd.Nanjing Nanjing Sales 5000 100.00
Fuzhou Fuqing Changan New Energy
Automobile Sales & Service Co. Ltd.
Fuzhou Fuzhou Sales 200 100.00 -
Xiamen Changan New Energy Automobile
Sales & Service Co. Ltd.Xiamen Xiamen Sales 200 100.00 -
Guangzhou Changan New Energy
Automobile Sales & Service Co. Ltd.
Guangzhou Guangzhou Sales 400 100.00 -
Chongqing Chehemei Technology Co. Ltd. Chongqing Chongqing Sales 1000 100.00
Chongqing Changan Automobile Software
Technology Co. Ltd.
Chongqing Chongqing R&D 9900 100.00 -
II. The subsidiary formed by business combination not under common control
Nanjing Changan Automobile Co.Ltd.(Note1)
Nanjing Nanjing Manufacturing 60181 84.73 -
Chongqing Changan Suzuki Automobile Co.
Ltd.
Chongqing Chongqing Manufacturing 133764 100.00
Zhenjiang Demao Hairun Equity Investment
Fund Partnership (Limited Partnership)
Zhenjiang Zhenjiang
Financial
industry
150001 100.00
Changan Weilai New Energy Automobile Nanjing Nanjing Manufacturing 18800 95.38
75
Note 1: The Company owns 93.79% and 95.70% of voting shares of Nanjing Changan Automobile Co. Ltd. And Hebei Changan
Automobile Co. Ltd. respectively the difference between proportion of voting shares and proportion of shares held is due to the
voting right consigned from minority shareholders.Note 2: The remaining shareholders of Chongqing Changan Special Automobile Co. Ltd. made an agreement with the Company that
the remaining shareholders are to vote in accordance with the Company. The main financial and operating policies have been
controlled by the Company so it is included in the scope of consolidated financial statements.
As at June 30 2020 the Group has no subsidiaries with important minority interests.
2. Transctions result in change of holdingshare proportion but no effect in control of subsidiaries
□ Applicable √ Not applicable
3. Stakes in joint ventures and associates
Sales & Service Co. Ltd.III. The subsidiary formed by business combination under common control
Hebei Baoding Changan Bus Co. Ltd. Dingzhou Dingzhou Manufacturing 3000 100.00 -
Hefei Changan Automobile Co.Ltd. Hefei Hefei Manufacturing 77500 100.00 -
Company name
Main
operating
place
Registered
place
Nature of business
Registered
capital (ten
thousand)
Total proportion of
shareholders (%)
Accounting
treatment
Direct Inderect
I. Joint ventures
Changan Ford Automobile
Co. Ltd.
Chongqing Chongqing
Manufacture and sale
ofautomobiles and
components
USD24100 50.00 - Equity
Changan Mazda Automobile
Co. Ltd.
Nanjing Nanjing
Manufacture and sale
ofautomobiles and
components
USD11097 50.00 - Equity
Changan Mazda Engine Co.
Ltd. (Note 1)
Nanjing Nanjing
Manufacture and sale
ofautomobiles and
components
USD20996 50.00 - Equity
Jiangling Investment Co. Ltd. Nanchang Nanchang
Manufacture and sale
ofautomobiles and
components
100000 50.00 - Equity
II. Associates
Chongqing Changan Kuayue
Automobile Co. Ltd.
Chongqing Chongqing
Develop product and
sale of automobile and
components; import
and export goods.
6533 34.30 - Equity
Chongqing Changan Kuayue
Automobile Sales Co. Ltd.
Chongqing Chongqing
Sale of Changan
Kuayue’ s automobile
300 34.30 - Equity
76
and agricultural cars
and components.Technical advisory
services for automobile
Beijing Fang’an Taxi Co. Ltd. Beijing Beijing
For the car loan
business
2897.96 20.70 - Equity
Chongqing Auto Finance Co.
ltd.
Chongqing Chongqing
Provide car loan;
provide vehicle loans
and operating
equipment loans to car
dealers including the
construction loans of
exhibition hallspare
parts loans and
maintenance equipment
loans etc.
476843.1 28.66 - Equity
Hainan Anxinxing
Information Technology Co.Ltd.
Chengmai
County
Chengmai
County
Software and hardware
technology
development technical
consulting auto parts
sales
3000 30.00 - Equity
Nanjing Chelai Travel
Technology Co. Ltd.Nanjing Nanjing
Car sales leasing
software technology
development technical
services
10000 10.00 - Equity
Hunan Guoxin Semiconductor
Technology Co. Ltd.Zhuzhou Zhuzhou
Technology
development
consulting technical
services technology
transfer in the field of
power semiconductors
50000 25.00 - Equity
Beijing Wutong Chelian
Technology Co. Ltd.
Beijing Beijing
Technology
development technical
consulting technical
services technology
transfer
20000 - - Equity
Anhe (Chongqing) Equity
Investment Fund Management
Co. Ltd.
Chongqing Chongqing
Equity investment
management
1000 - - Equity
Hangzhou Chelizi Intelligent
Technology Co. Ltd.Hangzhou Hangzhou Car travel service 630 - - Equity
Pakistan Master Motors Co.Ltd.Lahore
Pakistan
Lahore
Pakistan
Manufacture and sale
ofautomobiles and
components
PKR75000 30000 Equity
77
X. 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
In RMB Yuan
2019.6.30
Financial Assets Measured at
Fair Value and Their Changes
Included in Current Profits and
Losses
Measured at amortized cost
Measured at fair value and
its changes are included in
other comprehensive income
Cash 17326421237.43
Transactional financial assets 4173150897.00
Notes receivable 21629277146.93
Accounts receivable 2299982425.41
Other receivables 1042027106.65
Other current assets 315431147.57
Investment in other equity
instruments
734506100.00
Total 4173150897.00 42613139063.99 734506100.00
In RMB Yuan
2019.12.31
Financial assets measured at fair
value and whose changes are
included in the current profit and
loss (standard requirements)
Financial assets measured at
amortized cost
Financial assets measured at
fair value with changes
included in other
comprehensive income
(designated)
Cash - 10066171353.48 -
Transactional financial
assets
2419476200.00 - -
Jiangling Holding Co. Ltd. Nanchang Nanchang
Manufacture and sale
ofautomobiles and
components
200000
25.00
- Equity
Nanjing Leading Equity
Investment Partnership
Nanjing Nanjing
Equity investment
venture capital
investment
976000 15.00 - Equity
Nanjing Leading Equity
Investment Management Co.Ltd.Nanjing Nanjing
Equity investment
management
1000 16.39 - Equity
78
Notes receivable - 26805635587.19 -
Accounts receivable - 838314076.82 -
Other receivables - 3731755992.46 -
Other current assets - 317546789.66 -
Investment in other equity
instruments
- - 734506100.00
Total 2419476200.00 41759423799.61 734506100.00
Financial liabilities
In RMB Yuan
2020.6.30 2019.12.31
Short-term loans 365525472.30 229580000.00
Notes payable 17021001941.49 13430543294.23
Accounts payable 18206448534.41 18905725271.50
Other payables 3074351444.31 4809918141.45
Long-term loan 1555300000.00 55300000.00
Total 40222627392.51 37431066707.18
79
2. Transfer of financial assets
The transferred financial assets that entirely derecognized but continuing involved
As at June 30 2020 the book value of the bank acceptance bill that the Group has endorsed to the supplier to settle accounts payable
is RMB 991651260.00 (December 31 2019: RMB 1894125685.18). On June 30 2020 its maturity date is 1 to 6 months.
According to the relevant provisions of the "Negotiable Instruments Law" if the accepting bank refuses to pay its holder has the
right to recourse against the Group ("continued involvement "). The Group believes that the Group has transferred almost all of its
risks and rewards and therefore terminates the confirmation of the book value of the settlement accounts payable and the related
accounts payable. The maximum loss and undiscounted cash flow of continuing involvement and repurchase are equal to its book
value. The Group believes that continued involvement in fair value is not significant.In the first half of 2020 the Group did not recognize gains or losses on its transfer date. The Group shall continue to be involved in
the proceeds or expenses of the year in which the recognition of financial assets has been terminated and the cumulative recognition
thereof. Endorsements occur roughly and evenly during the year.
3. Risks of financial instruments
The Group’s principal financial instruments except for derivatives include bank loans bonds payable cash etc. The main purpose
of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and
liabilities such as accounts receivable and accounts payable which arise directly from its operations.The main risks arising from the Group’s financial instruments are credit risk liquidity risk and market risk. The Group’s risk
management policies are summarized below:
Credit risk
The Group trades only with recognized creditworthy third parties. It is the Group’s policy that all customers who wish to trade on
credit terms are subject to credit verification procedures. In addition receivable balances are monitored on an ongoing basis with the
result that the Group’s exposure to bad debts is not significant. For transactions that do not occur in the country of the relevant
operating unit the Group does not offer credit terms without the approval of the special department of credit control.Since the counterparties of monetary funds and bank acceptance bills receivable are banks with good reputation and high credit ratings these financial
instruments have low credit risk.With respect to credit risk arising from the other financial assets of the Group which comprise cash and cash equivalents
available-for-sale financial assets other receivables dividend receivables and certain derivatives financial instruments the Group’s
exposure to credit risk arising from default of the counterparty with a maximum exposure equal to the carrying amount of these
instruments listed as book value of financial assets in consolidated financial statements. In 2020 there was no credit risk arising
from financial guarantee.No gage is required since the Group trades only with recognized creditworthy third parties. Credit risks are managed by clients and
industries collectively. As at 30 June 2020 among the Group’s collections with specific credit risk 63.54% of accounts receivables of
the Group are due from top five clients. The Group does not hold any gage from or enhance credit limit to these clients.
Credit Risk Increasing the Judgment Criteria Significantly
The Group assesses whether the credit risk of the relevant financial instruments has increased significantly since the initial
confirmation on each balance sheet day. In determining whether credit risk has increased significantly since the initial confirmation
80
the Group considers that reasonable and valid information including qualitative and quantitative analysis based on the Group's
historical data external credit risk rating and forward-looking information can be obtained without unnecessary additional costs or
efforts. Based on a single financial instrument or a portfolio of financial instruments with similar credit risk characteristics the Group
compares the risk of default of financial instruments on the balance sheet date with the risk of default on the initial confirmation date
to determine the change of default risk of financial instruments during the expected lifetime.When triggering one or more of the following quantitative and qualitative criteria the Group believes that the credit risk of financial
instruments has increased significantly:
Quantitative criteria are that the probability of default of the remaining duration of the reporting day rises by more than a certain
percentage compared with the initial confirmation
Qualitative criteria include major adverse changes in the debtor's business or financial situation early warning customer lists etc.The upper limit indicator is that the debtor's contract payments (including principal and interest) are overdue for more than [30] days.Other financial assets of the Group include monetary funds sellable financial assets other receivables etc. The credit risk of these
financial assets originates from the default of the counterparty and the maximum risk exposure equals the book value of these
instruments. The Group faces no credit risk in this year due to the provision of financial guarantees.
Definition of assets with impaired credit
In order to determine whether credit impairment occurs the defining criteria adopted by the Group are consistent with the internal
objectives of credit risk management for relevant financial instruments taking into account quantitative and qualitative indicators.When assessing whether the debtor has suffered credit impairment the Group mainly considers the following factors:
Major financial difficulties occur to the issuer or debtor;
The debtor breaches the contract such as defaulting of the interest or overdue principal etc.The creditor gives the debtor concessions in no other case for economic or contractual considerations 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 lead to the disappearance of the active market of the financial assets;
Purchase or derivation of a financial asset at a substantial discount reflects the credit losses.
Credit impairment of financial assets may be caused by the interaction of multiple events not necessarily by separate identifiable
events.Parameters for Measuring Expected Credit Loss
Depending on whether credit risk has increased significantly and whether credit impairment has occurred the Group measures
impairment provision for different assets by anticipated credit losses for 12 months or the whole life period respectively. The key
parameters of anticipated credit loss measurement include default probability default loss rate and default risk exposure. Considering
the quantitative analysis and forward-looking information of historical statistics (such as counterparty ratings guarantees and
81
collateral types repayment methods etc.) the Group establishes a default probability default loss rate and default risk exposure
model.The relevant definitions are as follows:
The probability of default refers to the possibility that the debtor will not be able to fulfil its obligation to pay in the next 12 months
or throughout the remaining period. The default probability of the group is adjusted based on the results of XX model and
forward-looking information is added to reflect the default probability of the debtor under the current macroeconomic environment.The default loss rate refers to the group's expectation of the extent of loss from exposure to default risk. According to the type of
counterparty the way and priority of recourse and the different collateral the loss rate of breach of contract is also different. The
default loss rate is the percentage of risk exposure loss at the time of default which is calculated on the basis of the next 12 months
or the whole duration.The default risk exposure is the amount that the group should be repaid in the event of default in the next 12 months or throughout
the remaining period.Prospective information
The assessment of significant increase in credit risk and the calculation of anticipated credit losses involve forward-looking
information. Through historical data analysis the Group identifies key economic indicators affecting credit risk and expected credit
loss of various business types.The impact of these economic indicators on default probability and default loss rate varies with different business types. In this
process the Group applies expert judgment to forecast these economic indicators annually based on the results of expert judgment
and determines the impact of these economic indicators on default probability and default loss rate through [regression analysis].Liquidity risk
The Group adopts cycle liquidity planning instrument to manage capital shortage risks. The instrument takes into consideration the
maturity date of financial instruments plus estimated cash flow from the Group’s operations.The Group’s objective is to maintain a balance between continuity of funding and flexibility and sufficient cash to support operating
capital through financing functions by the use of bank loans debentures etc.Market risk
Interest rate risk
The Group’s revenue and operating cash flows are seldomly influenced by the interest fluctuation. As at 30 June 2019 the Group’s
loans are bearing fixed interest rate and the Group is not hedging the risk currently.
Foreign currency risk
The Group’s exposures to fluctuation in foreign currency exchange rate mainly arise from operating activities where transactions are
settled in currencies other than the units' functional currency and net investment to offshore subsidiary.
82
In 30 June 2019 the Group only has limited transactional currency exposures of its total revenue that is valued in currencies other
than the units' functional currency. Since most of the Group’s businesses are operated in China mainland the estimated influence of
fluctuation of foreign currency is insignificant; therefore the Group hasn’t carried out large amount of hedging to reduce the risk.
Equity instruments investment price risk
The Group is exposed to equity price risk arising from individual equity investments classified as transactional financial investments
(Note VII 2) as at 30 June 2020. The Group’s listed investments are listed on the Shanghai and Shenzhen stock exchanges and valued
at quoted market prices at the end of the reporting period. The following table demonstrates the sensitivity to every 5% change (based
on the carrying amount as at the end of reporting period) in the Group’s net profit and fair value of the equity investments with all
other variables held constant based on their carrying amounts at the end of the reporting period.
Carrying amount of equity
investments
Change in fair value Increase/(decrease) in equity
2020.6.30
Shanghai- Transactional
financial assets
162945000.00 5% 6925162.50
Shanghai- Transactional
financial assets
162945000.00 -5% -6925162.50
Shenzhen-Transactional
financial assets
4010205897.00 5% 170433750.62
Shenzhen-Transactional
financial assets
4010205897.00 -5% -170433750.62
2019.12.31
Shanghai- Available for sale 184245000.00 5% 7830412.50
Shanghai- Available for sale 184245000.00 -5% -7830412.50
Shenzhen- Available for sale 2235231200.00 5% 94997326.00
Shenzhen- Available for sale 2235231200.00 -5% -94997326.00
4. Capital management
The main goal of the Group’s capital management is to ensure that the ability of continuous operation and maintain a healthy capital
ratios in order to support business development and to maximize shareholder value.The Group manages the capital structure and adjusts it with the change of economy trend and the risk feature of the assets. To
maintain or adjust the capital structure the Group can rectify dividend distribution return capital to shareholders or issue new shares.The Group is not subject to external mandatory capital requirements constraints. The goal principle and procedure of capital
management stay the same in 2019 and 30 June 2020.
83
The Group’s leverage ratio on the balance sheet date is as follows:
30 June 2020 31 December 2019
Leverage ratio 54.70% 54.99%
XI. Disclosure of fair value
1. Assets and liabilities measured at fair value
June 30 2020
In RMB Yuan
Input measured at fair value
Quoted price in active
market
(The first level)
Important and
observable input
(The second level)
Important but unobservable
input
(The third level)
Total
Transactional financial assets 4173150897.00 4173150897.00
Other equity instruments 734506100.00 734506100.00
Total 4173150897.00 734506100.00 4907656997.00
December 31 2019
In RMB Yuan
Input measured at fair value
Quoted price in active
market
(The first level)
Important and observable
input
(The second level)
Important but
unobservable input (The
third level)
Total
Transactional financial
assets
184245000.00 2235231200.00 - 2419476200.00
Other equity instruments - - 734506100.00 734506100.00
Total 184245000.00 2235231200.00 734506100.00 3153982300.00
2. Fair value valuation
The management has assessed the monetary funds notes receivable and accounts receivable other receivables short-term loans
other payables bills payable and accounts payable. The fair value is equal to the book value because the remaining period is not long.The fair value of financial assets and financial liabilities is determined by the amount of voluntarily exchange of assets or debt
settlement between the parties to the transaction in a fair transaction rather than the amount of money that is forced to sell or
liquidate.Long-term borrowings and long-term borrowings due within one year are determined using the discounted future cash flow method
to determine the fair value using the market yields of other financial instruments with similar contractual terms credit risk and
84
remaining maturity as the discount rate. On June 30 2020 the risk assessment of long-term borrowings and long-term borrowings
due within one year was not significant.The equity instruments listed by the Company include unrestricted ordinary shares and restricted shares. The unrestricted ordinary
shares investment determines the fair value by market quotation and the restricted stock investment uses the discounted valuation
model to estimate the fair value. We believe that the fair value and its changes estimated by valuation techniques are reasonable and
are also the most appropriate value on the balance sheet date.XII. Related parties and related party transactions
1. Parent company of the Company
Parent company Place of registration Registered capital Nature of the business
Proportion of
shares in the
Company (%)
Proportion of
voting rights in
the company (%)
China Changan
Automobile Group
Co Ltd.
Beijing 6092273400.00
Manufacture and sale of
automobiles engine and
components
22.53% 22.53%
The Final controlling party is China South Industries Group corporation
2. Subsidiaries
See subsidiaries in IX. Stake in other entities.
3. Joint ventures and associates
See Joint ventures and associates in IX.3 Stake in other entities.
4. Other related parties
Other related parties Relationship
Chongqing Qingshan Transmission Sales Co. Ltd. Subordinate company of South Industries
Hubei Xiaogan Huazhong Automobile Light Co. Ltd. Subordinate company of South Industries
Chongqing Changrong Machinery Co. Ltd. Subordinate company of South Industries
Chengdu Lingchuan Special Industry Co. Ltd. Subordinate company of South Industries
Chengdu Lingchuan Vehicle Oil Tank Co. Ltd. Subordinate company of South Industries
Chongqing Changfeng Jiquan Machinery Co. Ltd. Subordinate company of South Industries
Chongqing Construction Tongda Industrial Co. Ltd. Subordinate company of South Industries
Yunnan Xiyi Industries Co. Ltd. Subordinate company of South Industries
Chongqing Shangfang Auto Parts Co. Ltd. Subordinate company of South Industries
85
Other related parties Relationship
Chongqing Dajiang Xinda Vehicle Co. Ltd. Subordinate company of South Industries
Chongqing Dajiang Guoli Precision Machinery Manufacturing Co. Ltd. Subordinate company of South Industries
Chongqing Jianshe Automobile Air-conditioner Co. Ltd. Subordinate company of South Industries
China South Industries Group Finance Co. Ltd. Subordinate company of South Industries
Southwest Ordnance Industry Corporation Subordinate company of South Industries
Chengdu Wanyou Filter Co. Ltd. Subordinate company of South Industries
Chongqing Yihong Engineering Plastic Products Co. Ltd. Subordinate company of South Industries
Beijing Beiji Mechanical and Electrical Industry Co. Ltd. Subordinate company of South Industries
Chengdu Jialing Huaxi Optical & Precision Machinery Co. Ltd. Subordinate company of South Industries
Chongqing Nexteer Steering System Co. Ltd. Subordinate company of South Industries
Chongqing Dajiang Jiexin Forging Co. Ltd. Subordinate company of South Industries
Chongqing Jialing Yimin Special Equipment Co. Ltd. Subordinate company of South Industries
Chengdu Guangming Tianzhong Environmental Technology Co. Ltd. Subordinate company of South Industries
Chongqing Xiyi Automobile Connecting Rod Co. Ltd. Subordinate company of South Industries
Chongqing Changan Industry (Group) Co. Ltd. Subordinate company of South Industries
Hubei Huazhong Marelli Automotive Lighting Co. Ltd. Subordinate company of South Industries
Chongqing Changan Real Estate Development Co. Ltd.
Subordinate company of Changan Industry
Chongqing Changan Construction Engineering Co. Ltd. Subordinate company of Changan Industry
Chongqing Changan Property Management Co. Ltd.
Subordinate company of Changan Industry
China Changan Automobile Group Co. Ltd.
Parent company
China Changan Automobile Group Co. Ltd. Chongqing Qingshan Transmission Branch China Changan Branch
Sichuan Jian'an Industry Co. Ltd. Subordinate company of China Changan
Southern Inte Air Conditioning Co. Ltd. Subordinate company of China Changan
Sichuan Ningjiang Shanchuan Machinery Co. Ltd. Subordinate company of China Changan
Chengdu Huachuan Denso Co. Ltd. Subordinate company of China Changan
Chongqing Automotive Air Conditioner Co. Ltd. Subordinate company of China Changan
Southern Trina Chassis Systems Co. Ltd.Subordinate company of China Changan
Chongqing Changan Minsheng Logistics Co. Ltd.
Subordinate company of China Changan
Chongqing Wanyou Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Chongqing Wanyou Longrui Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Chongqing Wanyou Longxing Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Chengdu Wanyou Xiangyu Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Chengdu Wanyou Trading Co. Ltd.
Subordinate company of China Changan
86
Other related parties Relationship
Hafei Automobile Co. Ltd.Subordinate company of China Changan
Chongqing Anfu Automobile Marketing Co. Ltd.
Subordinate company of China Changan
China Changan Automobile Group Tianjin Sales Co. Ltd.
Subordinate company of China Changan
Chengdu Ningjiang Showa Auto Parts Co. Ltd.
Subordinate company of China Changan
Harbin Dongan Automobile Power Co. Ltd. Subordinate company of China Changan
Harbin Dongan Automobile Engine Manufacturing Co. Ltd.Subordinate company of China Changan
Zhonghui Fortis (Hong Kong) Investment Co. Ltd.Subordinate company of China Changan
China North Industries Group Financial Leasing Co. Ltd.
Subordinate company of China Changan
Wanyou Automobile Investment Co. Ltd.Subordinate company of China Changan
Chengdu Wanyou Automobile Trading Service Co. Ltd.
Subordinate company of China Changan
Chongqing Wanyou Economic Development Co. Ltd.
Subordinate company of China Changan
Chongqing Wanyou Zunda Automobile Sales Service Co. Ltd..Subordinate company of China Changan
Yunnan Wanyou Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Guizhou Wanyou Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Yunnan Xiangyu Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Guangxi Wanyou Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Nanning Wanyou Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Chongqing Fuji Supply Chain Management Co. Ltd.
Subordinate company of China Changan
Panzhihua Wanyou Automobile Sales Service Co. Ltd Subordinate company of China Changan
Ya'an Wanyou Automobile Sales Service Co. Ltd.Subordinate company of China Changan
Chongqing Wanyou Ducheng Automobile Sales Service Co. Ltd Subordinate company of China Changan
Chongqing Wanyou Xingjian Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Luzhou Wanyou Automobile Service Co. Ltd. Subordinate company of China Changan
Southern Faurecia Auto Parts Co. Ltd. Subordinate company of China Changan
Chengdu Wanyou Automobile Sales Service Co. Ltd. Subordinate company of China Changan
Bazhong Wanyou Automobile Sales Service Co. Ltd.
Subordinate company of China Changan
Harbin Broadcom Auto Parts Manufacturing Co. Ltd.Subordinate company of China Changan
China Changan Automobile Group Hefei Investment Co. Ltd. Subordinate company of China Changan
5. Related-party transaction
(1) Goods purchased and services received
In RMB Yuan
87
Related parties
Nature of the
transaction
Current amount
Approved
transaction amount
Whether
it exceeds
the
transactio
n amount
Prior-period
amount
Changan Ford Automobile Co. Ltd.
Purchase of
spare parts
4825291.25 4161704.83 Yes 1290483.83
Changan Mazda Automobile Co. Ltd.
Purchase of
spare parts
- 24596000.00 No -
Changan Auto Finance Co. Ltd.
Purchase of
spare parts
- 1100000.00 No -
Hangzhou Cherizi Intelligent Technology
Co. Ltd.
Purchase of
spare parts、
Accept service
32858.40 2477105.19 No 3150482.79
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
Purchase of
spare parts
292316059.70 2913152000.00 No -
Chongqing Qingshan Transmission Sales
Co. Ltd.
Purchase of
spare parts
3951626.52 10380349.56 No 3559602.32
Hubei Xiaogan Huazhong Automotive
Lamp Co. Ltd.
Accept service 38549124.98 100294692.47 No 46683372.83
Chongqing Changrong Machinery Co.
Ltd.
Accept service 68484512.99 87999257.12 No 6433171.02
Chengdu Lingchuan Special Industry Co.
Ltd.Purchase of
spare parts
- 81402637.59 No 9930016.99
Chengdu Lingchuan Vehicle Fuel Tank
Co. Ltd.
Accept service 4856159.30 24721523.51 No 18186753.45
Chongqing Changfeng Jiquan Machinery
Co. Ltd.
Purchase of
spare parts
39562.52 13116014.09 No 10396114.98
Chongqing Construction Tongda
Industrial Co. Ltd.Purchase of
spare parts
15227209.83 37741834.31 No -
Yunnan Xiyi Industry Co. Ltd.Purchase of
spare parts
31247072.00 85283366.75 No 30665985.08
Chongqing Shangfang Auto Parts Co.
Ltd.Purchase of
spare parts
18227944.17 46753393.44 No 15447216.43
Chongqing Dajiang Xinda Vehicle Co.
Ltd.Purchase of
spare parts
- 9208.73 No 7009231.20
Chongqing Dajiang Yuqiang Plastic
Products Co. Ltd.Purchase of
spare parts
60582775.09 181289169.09 No 70660688.47
Chongqing Jianshe Vehicle Air
Conditioner Co. Ltd.
Purchase of
spare parts
50801423.79 120259712.43 No 45884509.86
88
Related parties
Nature of the
transaction
Current amount
Approved
transaction amount
Whether
it exceeds
the
transactio
n amount
Prior-period
amount
Chengdu Wanyou Filter Co. Ltd.
Purchase of
spare parts
47326318.61 110217592.57 No 56809638.72
Chongqing Yihong Engineering Plastic
Products Co. Ltd.Purchase of
spare parts
1785587.35 6841082.30 No 3943111.25
Beijing Beiji Electromechanical Industry
Co. Ltd.
Purchase of
spare parts、
Accept service
262158.45 697033.72 No 21611.25
Chengdu Jialing Huaxi Optical Precision
Machinery Co. Ltd.
Accept service 6983371.89 15441943.93 No 6120347.20
Chongqing Nexteer Steering System Co.
Ltd.
Accept service 303123612.34 850598822.58 No 319878978.48
Chongqing Dajiang Jiexin Forging Co.
Ltd.
Accept service 1330537.16 2830268.77 No 1178761.66
Chengdu Guangming Tianzhong
Environmental Technology Co. Ltd.
Accept service - - No (1885.21)
Chongqing Xiyi Automobile Connecting
Rod Co. Ltd.
Accept service (1571.72) - No (5769.12)
Chongqing Changan Industry (Group)
Co. Ltd.
Purchase of
spare parts
2646670.74 10123723.73 No 348568.01
Hubei Huazhong Marelli Automotive
Lighting Co. Ltd.Purchase of
spare parts
379667416.38 354480088.86 Yes -
Chongqing Changan Construction
Engineering Co. Ltd.
Purchase of
spare parts
- 190379474.50 No 7313785.24
Chongqing Changan Property
Management Co. Ltd.
Accept service 2933009.46 4252500.00 No 1812064.04
China Changan Automobile Group Co.
Ltd. Chongqing Qingshan Transmission
Branch
Purchase of
spare parts、
Accept service
1091053146.70 1956447808.69 No 455343757.53
Sichuan Jian'an Industry Co. Ltd. Accept service 300829143.28 905645453.27 No 353770028.01
Southern Inte Air Conditioning Co. Ltd. Accept service 173331986.97 414801618.97 No 153661141.06
Sichuan Ningjiang Shanchuan Machinery
Co. Ltd.
Accept service 97803118.73 207425439.69 No 51016595.30
Chengdu Huachuan Denso Co. Ltd. Accept service 196376880.72 402906003.30 No 130426180.96
Southern Trina Chassis Systems Co. Ltd. Accept service 307409807.58 602765517.99 No 202875095.90
Chongqing Changan Minsheng Logistics Accept service 865998486.41 2728794918.17 No 827152859.32
89
Related parties
Nature of the
transaction
Current amount
Approved
transaction amount
Whether
it exceeds
the
transactio
n amount
Prior-period
amount
Co. Ltd.
Chengdu Wanyou Xiangyu Automobile
Sales Service Co. Ltd.
Accept service 426011.37 865631.43 No 248627.10
Chengdu Wanyou Trading Co. Ltd. Accept service 10555.36 82713.89 No 18514.24
Chongqing Anfu Automobile Marketing
Co. Ltd.
Purchase of
spare parts
43818.58 - Yes -
China Changan Automobile Group
Tianjin Sales Co. Ltd.
Accept service 6413.27 51612.68 No 25144.55
Chengdu Ningjiang Showa Auto Parts
Co. Ltd.
Accept service 43467720.96 130921565.82 No 47772865.85
Harbin Dongan Automobile Power Co.Ltd.Purchase of
spare parts
451467256.21 1063183700.68 No 420102474.82
Harbin Dongan Automobile Engine
Manufacturing Co. Ltd.Purchase of
spare parts
417266451.54 1260355536.15 No 353143739.85
Chengdu Wanyou Automobile Trading
Service Co. Ltd.Purchase of
spare parts
411726.27 1566868.08 No 464001.50
Chongqing Wanyou Economic
Development Co. Ltd.
Purchase of
spare parts
571494801.82 583856955.71 No 134932176.36
Yunnan Wanyou Automobile Sales
Service Co. Ltd.Purchase of
spare parts
780899.66 3099140.81 No 1084974.53
Guizhou Wanyou Automobile Sales
Service Co. Ltd.Purchase of
spare parts
655606.26 2661096.18 No 986717.54
Yunnan Xiangyu Automobile Sales
Service Co. Ltd.Purchase of
spare parts
79915.55 361697.69 No 124427.22
Panzhihua Wanyou Automobile Sales
Service Co. Ltd.Purchase of
spare parts
90562.92 219811.59 No 13092.15
Ya'an Wanyou Automobile Sales Service
Co. Ltd.
Purchase of
spare parts
112581.31 390845.20 No 128960.48
Chongqing Wanyou Ducheng
Automobile Sales Service Co. Ltd.
Purchase of
spare parts
274639.05 1034263.79 No 327791.37
Chongqing Wanyou Xingjian Automobile
Sales Service Co. Ltd.Purchase of
spare parts
160585.36 699496.18 No 257093.48
Luzhou Wanyou Automobile Service Co.Ltd.Purchase of
spare parts
84600.36 138350.93 No 20198.04
90
Related parties
Nature of the
transaction
Current amount
Approved
transaction amount
Whether
it exceeds
the
transactio
n amount
Prior-period
amount
Southern Faurecia Auto Parts Co. Ltd.Purchase of
spare parts
200998771.72 421007240.46 No 114560039.57
Bazhong Wanyou Automobile Sales
Service Co. Ltd.Purchase of
spare parts
41138.48 52948.05 No 14698.71
Harbin Broadcom Auto Parts
Manufacturing Co. Ltd.Changan Ford
Automobile Co.Ltd.
Purchase of
spare parts
- 167559.70 No -
Total 6055875357.64 15970104295.17 3915188036.21
The price of the Group’s purchase from related parties is based on contracts agreed by both parties.Note：The company calculated the actual amount of related party transactions according to the related parties under the same control
of the South Group and compared with the transaction amount approved at the beginning of the year.
(2) Goods sold and services offered
In RMB Yuan
Related parties Nature of the transaction Current amount Prior-period Amount
Changan Ford Automobile Co. Ltd. Sales of spare parts、staff support 743941.88 856081.97
Changan Mazda Automobile EngCo.
Ltd.Sales of spare parts、staff support 4036655.18 2683010.71
Changan Mazda Engine Co. Ltd. Sales of spare parts、staff support - 12830.19
Nanjing Chelai Travel Technology Co.Ltd.Sales of spare parts - 50442.48
Chongqing Changan Kuayue
Automobile Co. Ltd.
Training fee 137603.78 5913.00
Hangzhou Chelizi Intelligent
Technology Co. Ltd.
Car rental income - 8193799.97
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
Income from trademark right 972051413.45 -
Chongqing Changan Industrial (Group)
Co. Ltd.
Sales of spare parts - 124339.62
Chengdu Lingchuan Special Industry
Co. Ltd.
Electricity fee - 2011.39
Chengdu Lingchuan Vehicle Fuel Tank
Co. Ltd.
Sales of spare parts 1668185.97 1362120.82
Yunnan Xiyi Industry Co. Ltd. Sales of vehicles and spare parts 2559166.80 2876531.50
Chongqing Shangfang Auto Parts Co.
Ltd.Sales of spare parts - 20037.74
Chongqing Dajiang Yuqiang Plastic Sales of vehicles and spare parts 558413.01 345391.14
91
Related parties Nature of the transaction Current amount Prior-period Amount
Products Co. Ltd.
Chongqing Jianshe Vehicle Air
Conditioner Co. Ltd.
Sales of vehicles and spare parts - 12037.74
Ordnance Equipment Group Finance
Co. Ltd.
Sales of vehicles and spare parts - 1260010.87
Chengdu Wanyou Filter Co. Ltd. Sales of spare parts、Training fee - 76460.18
Chongqing Yihong Engineering Plastic
Products Co. Ltd.
Electricity fee - 943.30
Chongqing Changan Industry (Group)
Co. Ltd.
Sales of vehicles and spare parts - 312427.84
Chongqing Changan Construction
Engineering Co. Ltd.
Sales of vehicles and spare parts - 19563.79
China Changan Automobile Group Co.
Ltd. Chongqing Qingshan Transmission
Branch
Sales of vehicles and spare parts 1579125.47 270959.66
Sichuan Ningjiang Shanchuan
Machinery Co. Ltd.Sales of vehicles 305799.06 -
Chongqing Changan Minsheng Logistics
Co. Ltd.
Sales of vehicles and spare parts 507924.04 9676923.83
Chengdu Wanyou Xiangyu Automobile
Sales Service Co. Ltd.Sales of spare parts 514114179.34 414364744.60
Chongqing Anfu Automobile Marketing
Co. Ltd.
Sales of spare parts 7627054.89 34296238.49
China Changan Automobile Group
Tianjin Sales Co. Ltd.Sales of spare parts 62075372.58 62048690.92
Chengdu Ningjiang Showa Auto Parts
Co. Ltd.
Sales of vehicles and spare parts - 559797.07
Harbin Dongan Automobile Power Co.Ltd.Sales of vehicles and spare parts 31887.37 6860735.86
Harbin Dongan Automobile Engine
Manufacturing Co. Ltd.Sales of vehicles and spare parts 23028367.10 11294757.38
China North Industries Group Financial
Leasing Co. Ltd.Sales of vehicles and spare parts 77547.17 -
Wanyou Automobile Investment Co.Ltd.Sales of vehicles and spare parts 264690859.01 194731627.80
Chengdu Wanyou Automobile Trading
Service Co. Ltd.Sales of vehicles and spare parts 190745183.84 173518730.23
Chongqing Wanyou Economic
Development Co. Ltd.
Sales of vehicles and spare parts 695050958.14 602957695.96
Chongqing Wanyou Zunda Automobile
Sales Service Co. Ltd.Sales of vehicles and spare parts 131579690.10 150130921.74
Yunnan Wanyou Automobile Sales Sales of vehicles and spare parts 437318866.83 309384958.88
92
Related parties Nature of the transaction Current amount Prior-period Amount
Service Co. Ltd.Guizhou Wanyou Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts 370715806.38 347551447.54
Yunnan Xiangyu Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts 43517953.51 45082563.98
Panzhihua Wanyou Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts 144054.09 -
Ya'an Wanyou Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts 252146.29 -
Chongqing Wanyou Ducheng
Automobile Sales Service Co. Ltd.
Sales of vehicles and spare parts 347013.72 5998.70
Chongqing Wanyou Xingjian
Automobile Sales Service Co. Ltd.
Sales of vehicles and spare parts 496623.26 -
Luzhou Wanyou Automobile Service
Co. Ltd.
Sales of vehicles and spare parts 284227.69 -
Chengdu Wanyou Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts (196660.99) 3373560.20
Bazhong Wanyou Automobile Sales
Service Co. Ltd.Sales of vehicles and spare parts 183115.86 -
China Changan Automobile Group Hefei
Investment Co. Ltd.Sales of vehicles and spare parts 66969966.54 -
Total 3793202441.36 2384324307.09
The price of the Group’s purchase from related parties is based on contracts agreed by both parties.
(3) Related-party leasing
Rent assets to related parties
In RMB Yuan
Lessee
Type of leased
assets
Starting date Expiring date
Report period
recognized rental
Chongqing Changan Industrial (Group)
Co. Ltd.
Building 2018.01.01 2032.12.31 3283373.71
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
Building 2020.01.01 2020.12.31 2098588.40
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
Battery
workshop
2020.01.01 2020.12.31 1175045.73
Chongqing Changan Min Sheng
Logistics Co. Ltd.
Building 2019.10.01 2020.09.30 601461.41
Rent assets from related parties
In RMB Yuan
93
Lessor
Type of
leased assets
Starting date Expiring date
Report period
recognized
rental
(4) Other related transactions
Integrated service charges
In RMB Yuan
Related parties Nature of the transaction Report period Amount
Same period of last
period Amount
Changan Industries (Group)
Co. Ltd
Payment of land rental fees 13960191.76 13960191.76
Payment of building rental fees 2129622.09 2320098.28
Payment of utilities 62495905.46 41936461.05
Payment of fire fighting fees - -
Others 4286872.15 5598032.75
Total 82872591.46 63814783.84
Purchase of project materials
In RMB Yuan
Related parties Report period Amount
Same period of last period
Amount
Chongqing Changan Construction Co. Ltd 66354530.30 219003991.17
Chongqing Changan Min Sheng Logistics Co. Ltd. 1646984.15 510059.11
Changan Industries (Group) Co. Ltd 17522.13 6163.00
Total 68019036.58 219520213.28
Staff expenses for technical supporting
In RMB Yuan
Related parties Report period Amount
Same period of last period
Amount
Changan Mazda Automobile Co.Ltd. 7021656.61 7242531.36
Changan Ford Automobile Co.Ltd. 9057020.82 10419283.74
Changan Mazda Engine Co. Ltd. - 833481.46
Jiangling Holding Co. Ltd. - 884649.40
Changan PSA Automobiles Co. Ltd. - 242271.06
Hainan Anxinxing Information Technology Co. Ltd. - 652302.36
94
Total 16078677.43 20274519.38
Techonology development service charges
In RMB Yuan
Related parties Report period Amount
Same period of last period
Amount
Changan Ford Automobile Co.Ltd. - 769811.32
Harbin Dongan Auto Engine Co. Ltd. - 11320754.71
Total - 12090566.03
Collection of trademark use rights fees
In RMB Yuan
Related parties Report period Amount
Same period of last period
Amount
Chongqing Changan Kuayue Automobile Co. Ltd. 9596603.77 8689641.51
Related party monetary funds
In RMB Yuan
Related parties Ending Amount Beginning Amount
China South Industries Group Finance Co. Ltd 5495658697.16 5352685473.98
Changan Automobile Finance Co. Ltd 3500000000.00 1200000000.00
In the first half of 2020 the annual rate of return of the company in the financial limited liability company of China South Industries
Group Finance Co. Ltd and Changan automobile finance co. ltd is 1.81% and 2.89% respectively.
Borrowing
Short-term borrowing
In RMB Yuan
Related parties Ending Amount Beginning Amount
China South Industries Group Finance Co. Ltd 330000000.00 200000000.00
Interest income of deferred payment
In RMB Yuan
Related parties Report period Amount
Same period of last period
Amount
Wanyou Automobile Investment Co. Ltd. 18756.64 -
Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. 624381.42 373037.00
China Changan Automobile Group Tianjin Sales Co. Ltd. - 14735.00
95
Related parties Report period Amount
Same period of last period
Amount
Chengdu Wanyou Auto Trade Service Co. Ltd. 165392.98 193056.00
Yunnan Wanyou Automobile Sales & Service Co. Ltd. 54715.93 349378.00
Guizhou Wanyou Automobile Sales & Service Co. Ltd. 200337.69 97614.00
Guangxi Wanyou Automobile Sales & Service Co. Ltd. - 64825.00
Nanning Wanyou Automobile Sales & Service Co. Ltd. - 34018.00
Chongqing Wanyou Economic Development Co. Ltd. 81141.59 153555.00
Yunnan Xiangyu Auto Sales and Service Co. Ltd. - 78469.00
China Changan Automobile Group Hefei Investment
Co. Ltd.
20224.78 -
Total 1164951.03 1358687.00
6. Payment and receivables of related parties
Payment receivables of related listed companies
In RMB Yuan
Items Related parties
Ending balance Beginning balance
Book balance
Provision
for
bad-debts
Book balance
Provision
for
bad-debts
Notes
receivable
Harbin Dongan Automotive Engine
Manufacturing Co. Ltd.
13938175.05 - 9190280.17 -
Notes
receivable
Wanyou Automobile Investment Co. Ltd. 2191420000.00 - 2602280000.00 -
Notes
receivable
Chengdu Wanyou Automobile Trading
Service Co. Ltd.
26500000.00 - 9500000.00 -
Notes
receivable
Chongqing Wanyou Economic
Development Co. Ltd.
15000000.00 - 8000000.00 -
Notes
receivable
Guizhou Wanyou Automobile Sales and
Service Co. Ltd
16500000.00 - 3500000.00 -
Subtotal 2263358175.05 - 2632470280.17 -
Account
receivable
Jiangling Holding Co. Ltd. 39964487.77 - 40768788.19 -
Account
receivable
Chongqing Changan Minsheng Logistics
Co. Ltd.
31032040.00 - 31516680.23 -
Account
receivable
Changan Ford Automobile Co. Ltd. 174282.81 - 19811465.27 -
Account Changan Weilai New Energy Automobile - - 16596799.90 -
96
Items Related parties
Ending balance Beginning balance
Book balance
Provision
for
bad-debts
Book balance
Provision
for
bad-debts
receivable Technology Co. Ltd.
Account
receivable
Chongqing Changan Crossing Vehicle Co.
Ltd.
12275376.76 - 11194267.89 -
Account
receivable
Harbin Dongan Automobile Engine
Manufacturing Co. Ltd.
5077565.84 - 9855355.88 -
Account
receivable
Changan Mazda Automobile Co. Ltd. - - 5775176.73 -
Account
receivable
Changan Mazda Engine Co. Ltd. - - 5042050.65 -
Account
receivable
China Changan Automobile Group Co.
Ltd. Chongqing Qingshan Transmission
Branch
1647356.43 - 1737782.37 -
Account
receivable
Chongqing Changan Industry (Group) Co.
Ltd.
719539.69 - 719539.69 -
Account
receivable
Hainan Anxinxing Information Technology
Co. Ltd.
- - 555058.16 -
Account
receivable
Nanning Wanyou Automobile Sales
Service Co. Ltd.- - 13398.00 -
Account
receivable
Guangxi Wanyou Automobile Sales
Service Co. Ltd.- - 997.60 -
Account
receivable
Chongqing Wanyou Economic
Development Co. Ltd.
- - 50.00 -
Account
receivable
Changan Auto Finance Co. Ltd. 34280.44 - - -
Account
receivable
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
1125261727.03 - - -
Subtotal 1216186656.77 - 143587410.56 -
Other
receivable
Changan Ford Automobile Co.Ltd. 124312677.99 - 124312677.99 -
Other
receivable
Ordnance Equipment Group Finance Co.Ltd.
222083.89 - - -
Other
receivable
Ordnance Equipment Group Finance Co.Ltd.
1157446.69 - 1157446.69 -
Other Hafei Automobile Co. Ltd. 1500000.00 - 1500000.00 -
97
Items Related parties
Ending balance Beginning balance
Book balance
Provision
for
bad-debts
Book balance
Provision
for
bad-debts
receivable
Other
receivable
Changan Mazda Automobile Co. Ltd. - 8505710.03 -
Other
receivable
Chongqing Changan Minsheng Logistics
Co. Ltd.
- 2000.00 -
Subtotal 127192208.57 - 135477834.71 -
Advanced
payment
Chongqing Changan New Energy
Automobile Technology Co. Ltd.
1746847.67 - - -
Advanced
payment
Sichuan Ningjiang Shanchuan Machinery
Co. Ltd.
698.29 - - -
Subtotal 1747545.96 - - -
Accounts payable to related parties of listed companies
In RMB Yuan
Items Related parties Ending balance
Beginning
balance
Notes
payable
Chongqing Changan New Energy Automobile Technology Co. Ltd. 50758200.00 -
Notes
payable
Hubei Xiaogan Huazhong Automotive Lamp Co. Ltd. 14190000.00 10780000.00
Notes
payable
Chongqing Construction Tongda Industrial Co. Ltd. 9790000.00 1830000.00
Notes
payable
Chongqing Shangfang Auto Parts Co. Ltd. 13430000.00 4290000.00
Notes
payable
Chongqing Dajiang Yuqiang Plastic Products Co. Ltd. 76250000.00 53810000.00
Notes
payable
Chongqing Jianshe Vehicle Air Conditioner Co. Ltd. 54807896.33 33330000.00
Notes
payable
Chengdu Wanyou Filter Co. Ltd. 13590000.00 21280000.00
Notes
payable
Chengdu Jialing Huaxi Optical Precision Machinery Co. Ltd. 7820000.00 5990000.00
Notes
payable
Chongqing Nexteer Steering System Co. Ltd. 335060000.00 74380000.00
98
Items Related parties Ending balance
Beginning
balance
Notes
payable
Chongqing Changan Industry (Group) Co. Ltd. 1052750.94 -
Notes
payable
Hubei Huazhong Marelli Automotive Lighting Co. Ltd. 35970000.00 20220000.00
Notes
payable
Chongqing Changan Construction Engineering Co. Ltd. 73390060.00 121867838.20
Notes
payable
China Changan Automobile Group Co. Ltd. Chongqing Qingshan
Transmission Branch
481590000.00 2340000.00
Notes
payable
Sichuan Jian'an Industry Co. Ltd. 8900000.00 9040000.00
Notes
payable
Southern Inte Air Conditioning Co. Ltd. 175960000.00 23620000.00
Notes
payable
Sichuan Ningjiang Shanchuan Machinery Co. Ltd. 41910000.00 20130000.00
Notes
payable
Chengdu Huachuan Denso Co. Ltd. 3970000.00 5250000.00
Notes
payable
Southern Trina Chassis Systems Co. Ltd. 1800000.00 -
Notes
payable
Chongqing Changan Minsheng Logistics Co. Ltd. 245490874.09 208474669.94
Notes
payable
Chengdu Ningjiang Showa Auto Parts Co. Ltd. 53630000.00 33410000.00
Notes
payable
Harbin Dongan Automobile Power Co. Ltd. 448020000.00 456350000.00
Notes
payable
Harbin Dongan Automobile Engine Manufacturing Co. Ltd. 272510000.00 215280000.00
Notes
payable
Southern Faurecia Auto Parts Co. Ltd. 10900000.00 10430000.00
Notes
payable
Chongqing Wanyou Economic Development Co. Ltd. - 85000000.00
Notes
payable
Chongqing Dajiang Jiexin Forging Co. Ltd. - 990000.00
Notes
payable
Chongqing Changfeng Jiquan Machinery Co. Ltd. - 6530000.00
Notes
payable
Chengdu Lingchuan Special Industry Co. Ltd. - 11750000.00
99
Items Related parties Ending balance
Beginning
balance
Subtotal 2430789781.36 1436372508.14
Account
payable
Changan Ford Automobile Co. Ltd. 2205450.09 -
Account
payable
Jiangling Holdings Co. Ltd. 102373.73 54252872.36
Account
payable
Hangzhou Cherizi Intelligent Technology Co. Ltd. 47430.00 10300.00
Account
payable
Chongqing Changan New Energy Automobile Technology Co. Ltd. 51067341.49 -
Account
payable
Chongqing Qingshan Transmission Sales Co. Ltd. 4688757.02 6000654.43
Account
payable
Hubei Xiaogan Huazhong Automotive Lamp Co. Ltd. 20321529.68 16125402.98
Account
payable
Chongqing Changrong Machinery Co. Ltd. 31588885.68 34631661.73
Account
payable
Chengdu Lingchuan Special Industry Co. Ltd. 83416.46 11517508.37
Account
payable
Chengdu Lingchuan Vehicle Fuel Tank Co. Ltd. 1322372.50 2314165.15
Account
payable
Chongqing Changfeng Jiquan Machinery Co. Ltd. 18385.26 771021.74
Account
payable
Chongqing Construction Tongda Industrial Co. Ltd. 12686425.28 13392905.91
Account
payable
Yunnan Xiyi Industry Co. Ltd. 10359553.43 10260364.91
Account
payable
Chongqing Shangfang Auto Parts Co. Ltd. 10053054.65 9623137.04
Account
payable
Chongqing Dajiang Yuqiang Plastic Products Co. Ltd. 22871520.77 43490517.76
Account
payable
Chongqing Jianshe Vehicle Air Conditioner Co. Ltd. 23175345.06 36717236.76
Account
payable
Chengdu Wanyou Filter Co. Ltd. 24267680.72 14735390.09
Account
payable
Chongqing Yihong Engineering Plastic Products Co. Ltd. 635885.86 2483796.69
Account Chengdu Jialing Huaxi Optical Precision Machinery Co. Ltd. 2361138.41 2296210.05
100
Items Related parties Ending balance
Beginning
balance
payable
Account
payable
Chongqing Nexteer Steering System Co. Ltd. 262870488.08 275441045.49
Account
payable
Chongqing Dajiang Jiexin Forging Co. Ltd. 705714.98 407750.93
Account
payable
Chongqing Jialing Yimin Special Equipment Co. Ltd. 104496.50 104496.50
Account
payable
Chengdu Guangming Tianzhong Environmental Technology Co. Ltd. 83175.03 83175.03
Account
payable
Chongqing Xiyi Automobile Connecting Rod Co. Ltd. 42457.58 44233.62
Account
payable
Chongqing Changan Industry (Group) Co. Ltd. 355985.02 1091699.47
Account
payable
Hubei Huazhong Marelli Automotive Lighting Co. Ltd. 131231660.26 124726255.34
Account
payable
China Changan Automobile Group Co. Ltd. Chongqing Qingshan
Transmission Branch
232087750.72 394961436.10
Account
payable
Sichuan Jian'an Industry Co. Ltd. 74999608.58 92109316.98
Account
payable
Southern Inte Air Conditioning Co. Ltd. 56895179.13 166469317.60
Account
payable
Sichuan Ningjiang Shanchuan Machinery Co. Ltd. 18709148.33 9726316.79
Account
payable
Chengdu Huachuan Denso Co. Ltd. 40851167.54 37881398.09
Account
payable
Southern Trina Chassis Systems Co. Ltd. 128293897.03 113131244.68
Account
payable
Chongqing Changan Minsheng Logistics Co. Ltd. 10442349.66 77014716.44
Account
payable
Hafei Automobile Co. Ltd. 661117.68 661117.68
Account
payable
Chengdu Ningjiang Showa Auto Parts Co. Ltd. 28498953.39 49157712.35
Account
payable
Harbin Dongan Automobile Power Co. Ltd. 218070561.01 203956811.46
Account Harbin Dongan Automobile Engine Manufacturing Co. Ltd. 133347777.10 228154563.74
101
Items Related parties Ending balance
Beginning
balance
payable
Account
payable
Chongqing Wanyou Economic Development Co. Ltd. 216078209.48 75873758.78
Account
payable
Chongqing Wanyou Xingjian Automobile Sales Service Co. Ltd. 9264.78 -
Account
payable
Southern Faurecia Auto Parts Co. Ltd. 76765551.38 90040708.53
Account
payable
Chongqing Dajiang Xinda Vehicle Co. Ltd. - 4267143.49
Account
payable
Chongqing Automotive Air Conditioner Co. Ltd. - 205041.51
Account
payable
Chongqing Changan Crossing Vehicle Co. Ltd. - 47749.88
Account
payable
Beijing Beiji Mechanical and Electrical Industry Co. Ltd. - 6129.88
Account
payable
Changan Ford Automobile Co. Ltd. - 5890.05
Subtotal 1848961059.35
2204192176.3
8
Contract
liabilities
Changan Mazda Automobile Co. Ltd. 1423660.83 -
Contract
liabilities
Changan Mazda Engine Co. Ltd. 3256185.92 -
Contract
liabilities
Chongqing Shangfang Auto Parts Co. Ltd. 3980.00 3980.00
Contract
liabilities
China Changan Automobile Group Co. Ltd. Chongqing Qingshan
Transmission Branch
1.57 -
Contract
liabilities
Chongqing Wanyou Automobile Sales Service Co. Ltd. 86425.66 -
Contract
liabilities
Chengdu Wanyou Xiangyu Automobile Sales Service Co. Ltd. 27144500.69 65138573.75
Contract
liabilities
Hafei Automobile Co. Ltd. 670500.00 670500.00
Contract
liabilities
Chongqing Anfu Automobile Marketing Co. Ltd. 2180268.00 1507840.00
Contract China Changan Automobile Group Tianjin Sales Co. Ltd. 3680686.89 2144856.26
102
Items Related parties Ending balance
Beginning
balance
liabilities
Contract
liabilities
Wanyou Automobile Investment Co. Ltd. 5347008.74 69383313.74
Contract
liabilities
Chengdu Wanyou Automobile Trading Service Co. Ltd. 7890116.87 39526387.91
Contract
liabilities
Chongqing Wanyou Economic Development Co. Ltd. 44265770.78 142137256.41
Contract
liabilities
Chongqing Wanyou Zunda Automobile Sales Service Co. Ltd. 7282961.81 755716.55
Contract
liabilities
Yunnan Wanyou Automobile Sales Service Co. Ltd. 18994713.86 42896658.83
Contract
liabilities
Guizhou Wanyou Automobile Sales Service Co. Ltd. 27977493.85 52269285.08
Contract
liabilities
Yunnan Xiangyu Automobile Sales Service Co. Ltd. 1971343.67 5542733.67
Contract
liabilities
Panzhihua Wanyou Automobile Sales Service Co. Ltd. 2173.15 -
Contract
liabilities
Ya'an Wanyou Automobile Sales Service Co. Ltd. 21840.00 -
Contract
liabilities
Chongqing Wanyou Ducheng Automobile Sales Service Co. Ltd. 87279.35 -
Contract
liabilities
Chongqing Wanyou Xingjian Automobile Sales Service Co. Ltd. 77522.48 -
Contract
liabilities
Luzhou Wanyou Automobile Service Co. Ltd. 24390.55 -
Contract
liabilities
Chengdu Wanyou Automobile Sales Service Co. Ltd. 500317.00 1489422.47
Contract
liabilities
Bazhong Wanyou Automobile Sales Service Co. Ltd. 89330.80 50000.00
Contract
liabilities
Jiangling Holdings Co. Ltd. - 6854200.00
Contract
liabilities
China Changan Automobile Group Hefei Investment Co. Ltd. 4776515.65 4033352.74
Contract
liabilities
Changan Auto Finance Co. Ltd. - 41300.00
Contract Chongqing Changan Minsheng Logistics Co. Ltd. - 259.00
103
Items Related parties Ending balance
Beginning
balance
liabilities
Subtotal 157754988.12 434445636.41
Other
payables
Yunnan Wanyou Automobile Sales Service Co. Ltd. 10599.68 108223.30
Other
payables
Guizhou Wanyou Automobile Sales Service Co. Ltd. 5475.56 5016.48
Other
payables
Panzhihua Wanyou Automobile Sales Service Co. Ltd. 13793.08 16219.40
Other
payables
Ya'an Wanyou Automobile Sales Service Co. Ltd. 1853.44 12267.46
Other
payables
Chongqing Wanyou Ducheng Automobile Sales Service Co. Ltd. 3116.82 5889.92
Other
payables
Chongqing Changan Minsheng Logistics Co. Ltd. 442398207.89 191519531.45
Other
payables
Chongqing Changan Crossing Vehicle Co. Ltd. - 64412855.00
Other
payables
Chongqing Changan Industry (Group) Co. Ltd. 19834668.85 4770656.96
Other
payables
Chongqing Changan Construction Engineering Co. Ltd. 1105910.99 2356505.24
Other
payables
Chongqing Changan Property Management Co. Ltd. 4656723.41 1655478.59
Other
payables
Changan Ford Automobile Co. Ltd. - 1461694.00
Other
payables
Sichuan Jian'an Industry Co. Ltd. 6188.00 579179.33
Other
payables
Chongqing Wanyou Economic Development Co. Ltd. 23882.15 415466.55
Other
payables
Southern Inte Air Conditioning Co. Ltd. - 190324.96
Other
payables
Changan Mazda Engine Co. Ltd. - 144115.79
Other
payables
Chengdu Wanyou Filter Co. Ltd. 120000.00 121303.84
Other
payables
Nanning Wanyou Automobile Sales Service Co. Ltd. - 120520.60
104
Items Related parties Ending balance
Beginning
balance
Other
payables
China Changan Automobile Group Tianjin Sales Co. Ltd. - 100000.00
Other
payables
Harbin Dongan Automobile Power Co. Ltd. - 67239.90
Other
payables
Southern Trina Chassis Systems Co. Ltd. 36431.20 65122.43
Other
payables
Chengdu Wanyou Automobile Trading Service Co. Ltd. - 58295.80
Other
payables
Chengdu Huachuan Denso Co. Ltd. 31591.08 51037.08
Other
payables
Chongqing Dajiang Xinda Vehicle Co. Ltd. - 50000.00
Other
payables
Guangxi Wanyou Automobile Sales Service Co. Ltd. - 48424.07
Other
payables
Chengdu Lingchuan Special Industry Co. Ltd. - 26343.16
Other
payables
Chengdu Wanyou Xiangyu Automobile Sales Service Co. Ltd. - 20493.00
Other
payables
Hubei Xiaogan Huazhong Automotive Lamp Co. Ltd. - 10951.72
Other
payables
Sichuan Ningjiang Shanchuan Machinery Co. Ltd. - 8324.53
Other
payables
Luzhou Wanyou Automobile Service Co. Ltd. - 3770.68
Other
payables
Bazhong Wanyou Automobile Sales Service Co. Ltd. - 2683.74
Other
payables
Chengdu Wanyou Trading Co. Ltd. 816.23 1176.14
Other
payables
Chongqing Changfeng Jiquan Machinery Co. Ltd. - 800.00
Other
payables
Hubei Huazhong Marelli Automotive Lighting Co. Ltd. - 389785.41
Other
payables
Chongqing Nexteer Steering System Co. Ltd. - 307910.00
Other
payables
Harbin Dongan Automobile Engine Manufacturing Co. Ltd. 290793.25 304924.09
105
Items Related parties Ending balance
Beginning
balance
Other
payables
Chongqing Anfu Automobile Marketing Co. Ltd. - 300000.00
Other
payables
Chongqing Changrong Machinery Co. Ltd. - 299999.63
Other
payables
Chongqing Changan New Energy Automobile Technology Co. Ltd. 177488.10 -
Other
payables
Chongqing Changan Minsheng Logistics Co. Ltd. 20000.00 -
Other
payables
Chongqing Wanyou Zunda Automobile Sales Service Co. Ltd. 550000.00 -
Other
payables
Luzhou Wanyou Automobile Service Co. Ltd. 4544.61 -
Other
payables
Southern Faurecia Auto Parts Co. Ltd. 254250.00 -
Subtotal 469546334.34 270012530.25
XIII. Share-based payments
1. General information
2020.06
The total amount of the employee services as a result of the share-based
payments
The equity settled share based payments are as follows:
2019.06
The accumulated amount of equity settled share-based payments included in
capital reserve
The amount of equity settled share-based payments included in expense
2. Share-based payment scheme
On 23 September 2016 the share option was approved to be granted on 23 September 2016 by the 12th meeting
of the seventh session of the Board of Directors and the 8th meeting of the seventh session of Board of
Supervisors. According to the share option scheme the Company granted 29140000 options to 202 employees
conferring rights to purchase 1 A share of Changan Automobile for each option before the expiration date. Share
options are granted to directors chief executive officers and key technical and management personnel.
106
The share option will expire in 5 years. After the vesting period of 24 month since the grant date the option shall
be exercised in three periods. In each exercise period 1/3 of the total options could be exercised when the
prescribed performance conditions are met. The exercise price is RMB14.12 per share. The options granted shall
be exercised before the expiration date. The share should not be exercised unless the prescribed conditions are met.The exercisable shares not exercised in above periods will be written off by the Company. The company has
disclosed in June 1 2017 "The 2016 annual notice of the implementation of equity distribution".According to the
company's stock option incentive plan (Revised Draft) the relevant provisions on the stock option price
adjustment if dividends and capital reserve capitalization stock dividends stock split delivery allotment
issuance or reduced matters occur before the stock exercise the stock option price should be adjusted. The
exercise price of the adjusted stock option is 13.478 yuan. The incentive object must be exercised within the
validity period of the option exercise. If the exercise conditions are not met the current stock options may not be
exercised. If part of the stock options that meet the exercise conditions but are not exercised in the above exercise
period are cancelled by the company.The performance indicators of the share option includes:
(1) Return on equity (ROE)
(2) Net profit growth rate attributable to owners
(3) Economic value added (EVA) and
(4) The ratio of prime operating revenue to operating revenue
The above net profit and ROE are based on net profit and weighted average net assets attributable to owners
deducting non-recurring gains and losses.The exercise terms of share options:
Exercise
Period
Exercise
Ratio
Exercise Time Exercise Terms
The 1
st
exercise
period
The 1st trading day since 2
4 month after the grant date
to the last trading day sinc
e 36 month after the grant
date
2017 net profit growth rate based on 2015 average
growth rate ≥3.2%(growth amount equivalent to
RMB10182000000);
ROE≥15%
The above indicators≥benchmark average and ≥75
quartile
△EVA>0;
The ratio of prime operating revenue to operating
revenue≥95%
The 2
nd
exercise
period
The 1st trading day since 3
6 month after the grant date
to the last trading day sinc
e 48 month after the grant
date
2018 net profit growth rate based on 2015 averag
e growth rate ≥3.2%(growth amount equivalent to
RMB10507000000);
ROE≥15%
The above indicators≥benchmark average and ≥75
quartile
△EVA>0;
The ratio of prime operating revenue to operating
107
revenue≥95%
The 3
rd
exercise
period
The 1st trading day since 4
8 month after the grant date
to the last trading day sinc
e 60 month after the grant
date
2019 net profit growth rate based on 2015 averag
e growth rate ≥3.2%(growth amount equivalent to
RMB10844000000);
ROE≥15%
The above indicators≥benchmark average and ≥75
quartile
△EVA>0;
The ratio of prime operating revenue to operating
revenue≥95%
On the grant date the fair value of the above stock options of the Company was RMB 139527600.00. As the
performance appraisal target of the first and second exercise periods of the stock option incentive plan of the
company has not reached the target and a total of 21 incentive objects have respectively terminated the labor
contract with the company the company no longer meets the stock option incentive conditions. On December 31
2019 a total of 29.14 million stock options were cancelled. The share option fee confirmed by the company in
June 2019 is RMB 0.00.The fair value of the equity-settled share option is determined using Black-Scholes model based on the estimate in
accordance with the terms and conditions of the share options. The input variables are as follows:
Valuation factors 2016
Dividend rate (%) 0%
Expected volatility (%) 29.78%
Historical volatility (%) 29.78%
Risk-free rate (%) 2.4987%
Expected duration (year) 4
Share price as at the grant date (Yuan) 15.43
The expected duration of the option is based on the historical data of the past which is not necessarily reflected in
the exercise of the right in future.The expected volatility is based on the assumption that the historical volatility
reflects the future trend but not necessarily the actual results.XIV. Commitments and Contingencies
1. Significant commitments
Investment commitment
By June 30th 2020 the group has no investment commitment that has been signed but not yet fully fulfilled.
108
2. Contingencies
By June 30th 2020 the company has no significant contingencies that need to be published.
XV. Events after the balance sheet date
1. Significant non-adjusting events
□ Applicable √Not Applicable
2. Distribution of profit
□ Applicable √ Not Applicable
3. Sales return
□ Applicable √ Not Applicable
XVI. Other important events
1. Correction of accounting error of earlier stage
□ Applicable √ Not Applicable
2. Debt restructuring
□ Applicable √ Not Applicable
3. Asset replacement
□ Applicable √ Not Applicable
4. Annuity plan
□ Applicable √ Not Applicable
5. Discontinuing operation
□ Applicable √ Not Applicable
6. Information on business branch
Identify business branch of the group according to internal organization structure management requirements internal reporting rules
and identify the report and information disclosed of the brand based on the identified branch.Identify business branch of the group according to internal organization structure management requirements internal reporting rules
109
and identify the report and information disclosed of the brand based on the identified branch.business branch refers to the component of the group that meets the following conditions:
(1) the component has income and expenditure incurred in routine activities;
(2) the management of the company regularly evaluates the operation performance of the component to decide the company’s
resource distribution and evaluate its overall performance
(3) The group receives related accounting information on the financial situation operation performance and cash flow.
If two or more components have similar economic features and meet the conditions they should be consolidated into one branch.Income and profit of the group consists of automobile manufacturing and domestic sales. Main asset of the group is in China. The
management of the group evaluates the performance of the group as a whole. Thus report of the branch is not included in this year’s
report.XVII. Notes to the main items of the parent company’s financial statements
1. Account Receivables
(1)The aging analysis is as follow:
In RMB Yuan
Account receivable age Ending Beginning
Within 1 year 4258303879.00 3555684864.42
1 to 2 years 644991910.51 822210403.02
2 to 3 years 568696835.44 482665541.27
Over 3 years 360166448.23 256419059.60
Total 5832159073.18 5116979868.31
Bad debt provision -39114651.97 -22709502.59
5793044421.21 5094270365.72
(2) The changes in the provision for bad debts of accounts receivable are as follows
In RMB Yuan
Items Beginning balance Provision Decrease Ending balance
2020.06.30 22709502.59 16405289.98 140.60 39114651.97
2019.12.31 15559782.05 7149720.54 22709502.59
(3) Disclosure of accounts receivable
In RMB Yuan
Items
Ending
Book balance Provision for bad-debts
110
Amount (%) Amount (%)
Individual assessment of credit
expected loss and provision for bad
debts
5533699691.47 94.88 10079188.59 0.18
Assess bad debt provision for
expected credit expected loss
according to credit risk
characteristics combination
298459381.71 5.12 29035463.38 9.73
Total 5832159073.18 100.00 39114651.97 0.67
Items
Beginning
Book balance Provision for bad-debts
Amount (%) Amount (%)
Individual assessment of credit
expected loss and provision for bad
debts
4991086298.96 97.54
Assess bad debt provision for
expected credit expected loss
according to credit risk
characteristics combination
125893569.35 2.46 22709502.59
18.04
Total 5116979868.31 100.00 22709502.59 0.44
(4) The parent company's portfolio of expected credit losses based on credit risk assessment is as follows:
In RMB Yuan
Ending Beginning
Estimated book
balance in
default
Expected
credit
loss rate
(%)
Lifetime
expected credit
loss
Estimated book
balance in
default
Expected credit
loss rate (%)
Lifetime
expected credit
loss
Within 1 year 262887578.65 2.66 6990427.49 90224930.90 2.49 2248850.10
1 to 2 years 65.00 10.82 7.03 26.00 22.04 5.73
2 to 3 years 10885166.00 34.02 3703548.10 18843871.50 32.27 6080101.72
3 to 4 years 12760271.43 50.27 6415180.13 4898440.32 50.10 2454244.41
4 to 5 years - - - - - -
Over 5 years 11926300.63 100.00 11926300.63 11926300.63 100.00 11926300.63
Total 298459381.71 9.73 29035463.38 125893569.35 18.04 22709502.59
111
（5）As of June 30 2020 the top five accounts receivable totaled RMB 4928714691.57 accounting for 84.51% of the total
accounts receivable (As of December 31 2019 the top five accounts receivable totaled RMB 4011467403.94 Accounting for
78.40% of the total accounts receivable).
（6）As of June 30 2020 the Group has no accounts receivable that are derecognized as the transfer of financial assets (December
31 2019: None)
2. Other receivables
(1)The aging analysis is as follow:
In RMB Yuan
Account receivable age Ending Beginning
Within 1 year 1833502273.67 601025929.83
1 to 2 years 44921624.68 334100615.63
2 to 3 years 203660776.86 259642.21
Over 3 years 9493155.47 9493155.47
Total 2091577830.68 944879343.14
Bad debt provision -3841273.24 - 3718197.34
2087736557.44 941161145.80
（2）Other receivables are classified by nature as follows:
In RMB Yuan
Items Ending Beginning
Equity transfer receivable 798700000.00
Subsidy 5318000.00 3458000.00
Loans to subsidiaries 1077303980.00 640557716.20
Reserve fund 31996661.76 36352884.22
Asset disposal 5789491.11 23424046.17
Other receivables 168628424.57 237368499.21
Total 2087736557.44 941161145.80
（3）The changes in bad debt provision for other receivables based on 12-month expected credit losses and the entire lifetime
expected credit losses are as follows（Only for 2020）：
In RMB Yuan
Bad debt provision The first stage The second stage The second stage Total
112
Expected credit
losses in the next
12 months
Expected credit
loss for the entire
life
(Single evaluation)
Expected credit
loss for the entire
life
(Group evaluation)
Balance at the end of the previous year 1095164331.54 1614084422.33 2850000.87 2712098754.74
Changes in accounting policies -157274027.00 -1609945384.60 -1767219411.60
Balance on January 1 2020 937890304.54 4139037.73 2850000.87 944879343.14
In this period Balance on January 1 2020
--Transfer to the second stage -2700041.57 2700041.57
--Transfer to the third stage -826113.91 826113.91
--Turn back to the second stage
--Turn back to the first stage
Current provision 1241942939.89 1241942939.89
Current return -95244452.35 -95244452.35
Ending balance
The changes in the balance of other receivables are as follows：
In RMB Yuan
Bad debt provision
The first stage The second stage The second stage
Total
Expected credit
losses in the next
12 months
Expected credit loss
for the entire life
(Single evaluation)
Expected credit
loss for the entire
life
(Group evaluation)
Balance at the end of the previous year 1095164331.54 1614084422.33 2850000.87 2712098754.74
Changes in accounting policies 102251573.00 -1609945384.60 0.00 -1507693811.60
Balance on January 1 2019 1197415904.54 4139037.73 2850000.87 1204404943.14
In this period Balance on January 1 2019
--Transfer to the second stage -2700041.57 2700041.57
--Transfer to the third stage -826113.91 826113.91
--Turn back to the second stage
--Turn back to the first stage
New in this period 982417339.89 982417339.89
Termination confirmation -95244452.35 -95244452.35
Write off this year
113
Total 2081888750.51 6012965.39 3676114.78 2091577830.68
（4）The changes in bad debt provision for other receivables based on 12-month expected credit losses and the entire lifetime
expected credit losses are as follows（Only for 2019）：
In RMB Yuan
Bad debt provision
The first stage The second stage The second stage
Total
Expected credit
losses in the next
12 months
Expected credit loss
for the entire life
(Single evaluation)
Expected credit
loss for the entire
life
(Group evaluation)
Balance on January 1 2019 155223.55 348425.91 99781.94 603431.40
In this period Balance on January 1 2019
--Transfer to the second stage - - - -
--Transfer to the third stage -348425.91 348425.91
--Turn back to the second stage - - - -
--Turn back to the first stage - - - -
Current provision 135958.46 111643227.46 2501574.96 114280760.88
Current return - - - -
Resale of the current period - - -99781.94 -99781.94
Write off this year - - - -
Other changes - - - -
Total 291182.01 111643227.46 2850000.87 114784410.34
The changes in the balance of other receivables are as follows：
In RMB Yuan
Bad debt provision
The first stage The second stage The second stage
Total
Expected credit
losses in the next
12 months
Expected credit loss
for the entire life
(Single evaluation)
Expected credit
loss for the entire
life
(Group evaluation)
Balance on January 1 2019 2326952103.37 436899.38 99781.94 2326952103.37
In this period Balance on January 1 2019
--Transfer to the second stage -1664613313.78 1664613313.78 - -1664613313.78
--Transfer to the third stage -2413101.49 -436899.38 2850000.87 -2413101.49
--Turn back to the second stage - - - -
114
(5) As of June 30 2020 the top five other receivables are as follows:
In RMB Yuan
(6)As of June 30 2020 the Group had no other receivables derecognized as financial asset transfers (December 31 2019:
None).--Turn back to the first stage - - - -
New in this period 706450278.94 516085890.00 1222536168.94
Termination confirmation -271211635.50 -566614781.45 - -837826416.95
Write off this year - - -99781.94 -99781.94
Other changes -
Total 1095164331.54 1614084422.33 2850000.87 2712098754.74
company name Amount Aging Proportion to the total balance of other receivables (%)
First place 877303980.00 within half year 41.94
Second place 798700000.00 In half year 38.19
Third place 200000000.00 2 to 3 years 9.56
Fourth place 124312677.99 within 5 year 5.94
Fifth place 10944887.98 within 6 mounths 0.52
Total 2011261545.97 96.15
115
3. Long-term equity investment
In RMB Yuan
Invested in
beginning
amount
increase/decrease
Investment gains and
losses under the equity
method
Other
equity
changes
cash bonus in current
period
Other reduction
impairment
provision in
current period
Ending balance Impairment
1、Joint ventures
Changan Ford Automobile Co.
Ltd
1782823327.91 -570006507.40 1212816820.51
Changan Mazda Automobile
Co.Ltd.
2177010905.02 323202621.60 2500213526.62
Changan Ford Mazda Engine
Co. Ltd.
830272340.69 11597486.28 -37000000.00 804869826.97
Changan PSA Automobiles Co.
Ltd.
346038983.87 -114234986.00 -231803997.87 -
Changan Weilai New Energy
Automobile Technology Co.
Ltd.
-12871719.42 -18666611.81 31538331.23 -
Jiangling Investment Co. Ltd. 2081815165.31 34848792.52 2116663957.83
2、Associated Enterprises
Chongqing Changan Kuayue
Automobile Co. Ltd
192005274.10 27957230.96 219962505.06
Chongqing Changan Kuayue
Automobile Marketing Co.
Ltd.- -
Beijing Fang’an Xinyue taxi - -
116
Invested in
beginning
amount
increase/decrease
Investment gains and
losses under the equity
method
Other
equity
changes
cash bonus in current
period
Other reduction
impairment
provision in
current period
Ending balance Impairment
Co. Ltd
Chongqing Auto Finance Co.
Ltd.
2195040654.44 123493951.66 2318534606.10
Hainan Anxinxing Information
Technology Co. Ltd.
3560384.10 -795039.88 2765344.22
Nanjing Chelai Travel
Technology Co. Ltd.
1474945.09 -143024.65 1331920.44
Hunan Guoxin Semiconductor
Technology Co. Ltd.
25152447.20 -126648.85 25025798.35
Nanjing Leading Equity
Investment Partnership
935218323.32 32.16 935218355.48
Nanjing Lingxing Equity
Investment Management Co.Ltd.
1445415.69 -93594.67 1351821.02
Jiangling Holding Co. Ltd. 398992953.62 -94049105.60 304943848.02
Chongqing Changan New
Energy Automobile Technology
Co. Ltd.
1610174778.05 -153230307.40 1456944470.65
3、Subsidiaries
Nanjing Changan Automobile
Co. Ltd.
422533259.00 422533259.00
Hebei Changan Automobile 438223236.00 438223236.00
117
Invested in
beginning
amount
increase/decrease
Investment gains and
losses under the equity
method
Other
equity
changes
cash bonus in current
period
Other reduction
impairment
provision in
current period
Ending balance Impairment
Co. Ltd.
Chongqing Changan
Automobile International Sales
Service Co. Ltd.
13068581.00 13068581.00
Chongqing Changan
Automobile Customer Service
Co. Ltd.
29700000.00 29700000.00
Chongqing Changan Chelian
Technology Co. Ltd.
88500000.00 88500000.00
Chongqing Changan Special
Vehicle Co. Ltd.
2500000.00 2500000.00
Chongqing Changan Europe
Design Center Co. Ltd
155469913.50 155469913.50
Chongqing Changan new
Engergy Automobile Co. Ltd
- -
Changan United Kingdom
R&D Center Co. Ltd.
250093850.95 250093850.95
Beijing Changan Automotive
engineering and Technology
Reseach Co. Ltd.
1000000.00 1000000.00
Changan Japan Design Center
Co. Ltd.
1396370.15 1396370.15
Changan United States R&D 10243460.00 10243460.00
118
Invested in
beginning
amount
increase/decrease
Investment gains and
losses under the equity
method
Other
equity
changes
cash bonus in current
period
Other reduction
impairment
provision in
current period
Ending balance Impairment
Center Co. Ltd.
Baoding Changan Bus
Manufacturing Co. Ltd.
176002613.18 176002613.18
Hefei Changan Automobile Co.Ltd
35367765.23 35367765.23
Changan Automobile Russia
Co. Ltd.
251242589.15 251242589.15
Changan Brazil Holding Co.
Ltd
2584556.97 2584556.97
Shenzhen Changan New
Engergy Automobile Service
Co. Ltd
184800000.00 13338871.00 198138871.00
Nanjing Changan New Energy
Automobile Sales & Service
Co. Ltd.
50000000.00 50000000.00
Fuzhou Changan New Energy
Automobile Sales & Service
Co. Ltd.
2000000.00 2000000.00
Xiamen Changan New Energy
Automobile Sales & Service
Co. Ltd.
2000000.00 2000000.00
Guangzhou Changan New
Energy Automobile Sales &
4000000.00 4000000.00
119
Invested in
beginning
amount
increase/decrease
Investment gains and
losses under the equity
method
Other
equity
changes
cash bonus in current
period
Other reduction
impairment
provision in
current period
Ending balance Impairment
Service Co. Ltd.
Chongqing Changan New
Energy Automobile Technology
Co. Ltd.
1238742571.54 -1238742571.54 -
Changan Suzuki Automobile
Co. Ltd.
594949059.30 594949059.30
Zhenjiang Demao Hairun
Equity Investment Fund
Partnership (Limited
Partnership)
1129922044.91 1129922044.91
Chongqing Chehemei
Technology Co. Ltd.
10000000.00 10000000.00
Chongqing Changan
Automobile Software
Technology Co. Ltd.
- 99000000.00 99000000.00
Changan Weilai New Energy
Automobile Technology Co.
Ltd.
- 58461669.77 58461669.77
Total 16052319271.82 1780975318.82 -430245711.08 -37000000.00 -1439008238.18 － 15927040641.38 －
120
4. Operating revenue and cost
In RMB Yuan
Report period Same period of last year
Revenue Cost Revenue Cost
Main business 28058352585.87 26601356969.23 25956607065.04 24182358106.88
Other business 1700567311.50 1310501933.80 848501257.18 455548664.07
Total 29758919897.37 27911858903.03 26805108322.22 24637906770.95
5. Investment income
(1) Details of investment income
In RMB Yuan
Items Current amount Prior-period amount
Long-term equity investment income measured by cost
method
608962802.11
Long-term equity investment income measured by equity
method
-430245711.08 -78048193.41
investment income from long -term equity investment
disposition
2124526141.26
Investment income obtained during the period of holding
trading financial assets
2840290.34
others 11056250.03 4149371.08
Total 2317139772.66 -73898822.33
(2) Long-term equity investment incomemeasured by cost accounting method
In RMB Yuan
Items Current amount Prior-period amount
Chongqing Changan Automobile Customer Service Co.
Ltd.
603900000.00
Zhenjiang Demao Hairun Equity Investment Fund
Partnership (Limited Partnership)
5062802.11
Total 608962802.11
(3) Long-term equity investment income measured by equity accounting method
In RMB Yuan
Invested in company Current amount Prior-period amount
Changan Ford Automobile Co. Ltd -570006507.40 -388312379.14
Changan Mazda Automobile Engine Co. Ltd 11597486.28 22279051.96
Hainan Anxinxing Information Technology Co. Ltd. -795039.88 -775195.24
Nanjing Chelai Travel Technology Co. Ltd. -143024.65 -238955.00
Jiangling Holding Co. Ltd -94049105.60 -236679161.41
Changan Mazda Automobile Co. Ltd 323202621.60 431236189.88
Chongqing Changan Kuayue Automobile Co. Ltd 27957230.96 39038877.69
Changan Suzuki Automobile Co. Ltd. -114234986.00 -37577002.31
Changan Auto Finance Co. Ltd. 123493951.66 121622360.91
Changan Weilai New Energy Automobile Technology Co.
Ltd.
-18666611.81 -16493522.92
Hunan Guoxin Semiconductor Technology Co. Ltd. -126648.85 -145569.13
Jiangling Investment Co. Ltd. 34848792.52
Chongqing Changan New Energy Automobile Technology
Co. Ltd.
-153230307.40
121
Nanjing Leading Equity Investment Partnership (Limited
Partnership)
32.16 -12002888.70
Nanjing Leading Equity Investment Management Co. Ltd. -93594.67
Total -430245711.08 -78048193.41
XVIII. Additional information
1. Non-recurring profit and loss statement of current period
In RMB Yuan
Items Amount Explanation
Profit and loss of non-current assets disposition 3547727244.56
Government subsidies counted in current profit and loss (except the
government subsidies which are closely related with business events and
given certain amount according to national standards)
215977955.28
In addition to the effective hedging business related to the normal
business of the company the gains and losses from changes in fair value
arising from the holding of trading financial assets derivative financial
assets trading financial liabilities derivative financial liabilities and
disposal of transactional financial assets derivative finance investment
income from trading financial assets trading financial liabilities
derivative financial liabilities and other debt investments
1753674697.00
Gains and losses from entrusted loans 6884080.21
Interest on deferred payment of funds received from non - financial
enterprises
21549119.75
Other non-business incomings and outgoings except above-mentioned
items
-20172785.69
Less: amount influenced by income tax 293310943.88
Amount influenced by minority shareholders’ interest (after tax) 13274663.08
Total 5219054704.15
Notes:Profit and loss of non-current assets disposition are mainly from the disposal of the equity of Chongqing Changan New
Energy Automobile Technology Co. Ltd. and Changan PSA Peugeot Citroen Automobile Co. Ltd. held during the period.
If the company identifies non-recurring profit and loss defined by Information Disclosure by Companies Offering Securities to the
Public No. 1--non-recurring profit and loss and non-recurring profit and loss defined by Information Disclosure by Companies
Offering Securities to the Public No. 1--non-recurring profit and loss as recurring profit and loss explain the reasons.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
In RMB Yuan
Profit in report period
Weighted average return on
equity
Earnings per share
Basic EPS Basic EPS
Net profit belonging to the Company’s common
stockholders
5.74% 0.54 Not applicable
Net profit belonging to the Company’s common
stockholders after deducting non-recurring profit and loss
-5.75% -0.54 Not applicable
3. Accounting data difference by domestic and foreign accouting standards
(1) Net profit and net asset differences from financial statements by global GAAC and prc GAAC
□ Applicable √ Not applicable
(2) Net profit and net asset differences from financial statements by GAAC abroad and PRC GAAP
□ Applicable √ Not applicable
122
(3) Description on accounting data differences by domestic and foreign accounting standards. If auditing institutions abroad
have adjusted the data differences identify the name of the auditing institution abroad.None
4. Others
□ Applicable √ Not applicable
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