Chongqing Changan Automobile Company Limited 2019 Annual Report April 2020 Chapter 1 Important Notice Contents and Definitions The Board of Directors the Board of Supervisors Directors Supervisors and Senior Executives of our company hereby guarantee that no false or misleading statement or major omission was made to the materials in this report and that they will assume all the responsibilities individually and jointly for the trueness accuracy and completeness of the contents of this report.The Chairman of the Board Zhang Baolin the Chief Financial Officer Zhang Deyong and the responsible person of the accounting institution (Accountant in charge) Chen Jianfeng hereby declare that the Financial Statements enclosed in this annual report are true accurate and complete. Except the following directors all the directors attended the board meeting for reviewing the annual report.The name of the directors absent Positions Reasons for the absence Name of the consignee Zhu Huarong Directors Business trip Zhang Deyong The prospective description regarding future business plan and development strategy in this report does not constitute virtual commitment. The investors shall pay attention to the risk.The preplan profit distribution of the Company deliberated and approved by the Board is: no profit distribution and no conversion of capital reserve into share capital. CONTENTS Chapter 1 Important Notice Contents and Definitions ............................................. 1 Chapter 2 Company Profile & Main Financial Indexes ............................................. 4 Chapter 3 Analysis of Main Business ........................................................................ 9 Chapter 4 Business Discussion and Analysis ........................................................... 11 Chapter 5 Important Matters .................................................................................... 34 Chapter 6 Changes in the shareholding of the company and shareholders .............. 46 Chapter 7 Information about Directors Supervisors Senior Management and Employees ................................................................................................................... 52 Chapter 8 Corporate Governance ............................................................................. 65 Chapter 9 Corporate Bonds ...................................................................................... 71 Chapter 10 Auditor’s Report .................................................................................... 72 Chapter 11 Documents for Future Reference ......................................................... 239 Definitions Items Definitions Changan Auto. the Company Refers to Chongqing Changan Automobile Company Limited South Industries Refers to China South Industries Group Co. Ltd. the Company’s actual controller China Changan Refers to China Changan Automobile Group Co. Ltd. old name: China South Industries automobile Co. Ltd. a subsidiary company of South Industries Changan Industry Refers to Chongqing Changan Industry (Group) Co. Ltd. old name: Changan Automobile (Group) Co. Ltd. a subsidiary company of South Industries Nanjing Changan Refers to Nanjing Changan Automobile Co. Ltd. a subsidiary company of the Company Hebei Changan Refers to Hebei Changan Automobile Co. Ltd. a subsidiary company of the Company Hefei Changan Refers to Hefei Changan Automobile Co. Ltd. a subsidiary company of the Company Changan Bus Refers to Baoding Changan Bus Co. Ltd. a subsidiary company of the Company International Company Refers to Chongqing Changan Automobile International Sale Service Co. Ltd. a subsidiary company of the Company Changan Suzuki Refers to Chongqing Changan Suzuki Automobile Co. Ltd. a subsidiary company of the Company Changan Ford Refers to Changan Ford Automobile Co. Ltd. a JV of the Company Changan Mazda Refers to Changan Mazda Automobile Co. Ltd. a JV of the Company CME Refers to Changan Mazda Engine Co. Ltd. a JV of the Company Changan PSA Refers to Changan PSA Automobiles Co. Ltd. a JV of the Company Jiangling Holding Refers to Jiangling Holding Co. Ltd. an associate of the Company Changan Finance Refers to Changan Automobile Finacing Co. Ltd. an associate of the Company South Industries Finance Refers to China South Industries Group Finance Co. Ltd. a subsidiary company of South Industries UPI Refers to United Prosperity (Hong Kong)Investment Co. Ltd. a subsidiary company of China Changan Hafei Group Refers to Harbin Hafei Automobile Industry Group Co. Ltd. a subsidiary company of China Changan CMAL Refers to Chongqing Changan Minsheng APLL Logistics Co. Ltd. an associate of China Changan Chapter 2 Company Profile & Main Financial Indexes I. Basic Information Stock abbreviation Changan Automobile 、Changan B Stock Code 000625、200625Listed on Shenzhen Stock Exchange Company in Chinese name重庆长安汽车股份有限公司 Company abbreviation in Chinese name长安汽车 Company name in English Chongqing Changan Automobile Company Limited Legal representative Zhang Baolin Registered address No. 260 East Jianxin Road Jiangbei District Chongqing Post code of the registered address 400023 Office address No. 260 East Jianxin Road Jiangbei District Chongqing Post code of the office address 400023 Website http://www.changan.com.cn E-mail address cazqc@changan.com.cn Ⅱ. Contact Information Secretary of the Board of Directors Securities affairs representative Name Li Jun Contact address No. 260 East Jianxin Road Jiangbei District Chongqing TEL: 023-67594008 FAX: 023-67866055 E-mail address cazqc@changan.com.cn Ⅲ. Information Disclosure and Filing Site Newspaper selected by the Company for information disclosure China Securities Journal Securities Times Securities Daily Shanghai Securities News Hong Kong Commercial Daily Website selected by CSRC for publishing this annual report www.cninfo.com.cn The place where this annual report is prepared and kept Secretary's Office of Board of Directors IV. Changes of Registration Information Organization Code 9150000020286320X6 Changes in the main business since the company's listing Not applicable All previous changes of dominant stockholders In Dec. 2005 according to the restructuring program on automobile business the Company’s actual controller China South Industries Group Corporation made transferring of all state-owned shares of the Company as part of funding for China South Industries Automobile Company Limited. In March 2006 all shares held by Changan Group have been transferred to China South Industries Automobile Company Limited. China South Industries Automobile Company Limited became the majority shareholder of the Company and Changan Group holds zero share since then.In July 2009 with the approval of State Administration for Industry and Commerce “China South Industries Automobile Company Limited” changed its name to “China Changan Automobile Group Co. Ltd.”. With the change of its name no change occurred in its property ownership and control relation of the Company.V. Other Relevant Information The accounting firm employed by the Company: Name of the accounting firm Ernst & Young Hua Ming LLP (Special Ordinary Partner) Address of the accounting firm Level 16 Ernst & Young Tower Oriental Plaza No. 1 East Chang An Avenue Dong Cheng District Beijing China Name of the certified public accountant for signature Qiao Chun Hu Yan The recommendation agency engaged by the Company executing the persistent supervision responsibilities in the reporting period □ Applicable √ Not applicable The financial consultant engaged by the Company performing the duties of persistent supervision and guidance in the reporting period √ Applicable □ Not applicable Financial Consultant Address of financial consultant Name of financial consultant Supervision duration Shanghai Realize Investment Consulting Co. Ltd. No.639Xinhua Road Shanghai Ye Suqin September 2016 - September 2020 VI. Summary of Accounting Data and Financial Indexes Does the company conduct the retrospective adjustment or restatement of previous years accounting data due to changes in accounting policies or accounting errors? □Yes √ No 2019 2018 Increase/decrease on a y-o-y basis (%) 2017 Operating revenue (Yuan) 70595245133.28 66298270389.77 6.48% 80012205182.37 Net profit belonging to shareholders of the listed company (Yuan) -2646719356.53 680728392.03 -488.81% 7137234723.47 Net profit belonging to shareholders of the listed company after deduction of non-recurring profit and loss (Yuan) -4762446597.61 -3165070272.21 -50.47% 5716114648.34 Net cash flow arising from operating activities (Yuan) 3881748238.39 -3887475302.44 199.85% -1123470776.83 Basic earnings per share (Yuan/Share) -0.55 0.14 -492.86% 1.49 Diluted earnings per share (Yuan/Share) Not applicable Not applicable Not applicable Not applicable Return on equity (ROE) (%) -5.86% 1.45% Down 7.31 Points 15.65% End of 2019 End of 2018 Increase/decrease of the end of current year compared with that of the previous year (%) End of 2017 Total assets (Yuan) 97617053590.38 93488854098.95 4.42% 106125114622.69 Net assets belonging to shareholders of the listed company (Yuan) 44028312743.66 46244958676.52 -4.79% 47598690942.28 VII. The differences between domestic and international accounting standards (1).Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □ Applicable √ Not applicable No difference. (2). Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √ Not applicable No difference.VIII. Key financial indicators for the quarter Unit: Yuan First Quarter Second Quarter Third Quarter Forth Quarter Business income 16007950602.50 13867829494.34 15239641870.97 25479823165.47 Net profit attributable to shareholders of listing Corporation -2096352326.12 -143687434.99 -421470641.21 14791045.79 Net profit attributable to shareholders of the listing Corporation after deducting non-recurring gains and losses -2161147810.27 -750619786.17 -621493786.91 -1229185214.26 Net cash flows from operating activities 3258788381.35 961475249.60 -462439727.59 123924335.03 Whether or not the above mentioned financial indicators and the total number of the company has disclosed the major difference between quarterly reports and semi-annual report □ Yes √ No IX. Non-recurring items and amounts √ Applicable □Not applicable Unit: Yuan Item 2019 2018 2017 Non-recurring items and amounts(including accrued reversal assets impairment part) 56658864.17 8561074.73 41774452.23 Government subsidies included in the profit and loss of the current period (Except closely related to business operations in accordance with the national unified standard quota or quantitative enjoyment of government subsidies) 1537625620.93 2873192102.56 1613343216.59 The investment cost of the enterprise to obtain subsidiaries and joint ventures which is less than the fair value of the identifiable net assets of the investee when the investment is obtained - 1020821274.01 - In addition to the effective hedging business related to the company's normal business operations the fair value of gains and losses from changes in fair value 889154888.69 - - Gains and losses on entrusted loans 6771226.43 - - Except the above other operating income and expenses -135258766.14 48285737.46 29262070.84 Interest on deferred payment of funds received by non financial 28553488.65 29303167.73 33408866.16 enterprises Reduction: the impact of income tax 250459302.04 82007701.31 188136520.19 Impact of minority shareholders' equity (after tax) 17318779.61 52356990.94 108532010.50 Total 2115727241.08 3845798664.24 1421120075.13 According to “Public offering of securities information disclosure of the company's information disclosure announcement No. 1 –non-recurring gains and losses “Public offering of securities information disclosure of the company's information disclosureannouncement No. 1 – non-recurring gains and losses” defined non-recurring items and Public offering of securities informationdisclosure of the company's information disclosure announcement No. 1 - non-recurring gains and losses “The items listed in thenon-recurring items defined as recurring items shall be explained . □ Applicable √ Not applicableThe company in the reporting period does not base on the definition and listing of “Public offering of securities informationdisclosure of the company's information disclosure announcement No. 1 – non-recurring gains and losses” about non-recurring gains and losses to define a case of recurring profit or loss. Chapter 3 Analysis of Main Business I．The main business of the Company in the reporting period Does the Company need to comply with the disclosure requirements of special industry □ Yes √ No During the reporting period the company's main business is the R&D manufacturing and sale of cars the R&D and production of automobile engine products. Besides the company integrates advantageous resources to actively develop travel services new retail and carry out multi-dimensional industrial layout. Changan automobile always adheres to the mission of "leading the car civilization for the benefit of human life" and the concept of "energy conservation environmental protection scientific and technological intelligence" vigorously develops new energy and smart cars guides the automobile civilization by the use of scientific and technological innovation and provides customers with high quality products and services. After years of development the company owns many famous brands such as Changan passenger car Oushang automobile Kaicheng automobile Changan Ford Changan Mazda and so on. Up to now the company has successfully launched a series of classic brands such as CS series Eado series Raeton series Oushang and Honor series; a series of famous JV products such as all new Focus new Mondeo Kuga Escape CX-5 CX-8 Axela and so on. At the same time we have launched new energy vehicles such as Eado EV new Benben EV and CS15EV which are admired by the market and loved by the consumers.II. Major changes in assets 1、 Major changes in assets No significant changes in major assets during the reporting period 2、 Main Overseas Assets □ Applicable √ Not applicable III. Core Competence Analysis In 2019 Chang'an Automobile continued to iterate its innovation and entrepreneurship program took solid steps to advance its new energy "shangri-la" and its intelligent "Beidou Tianshu" programs and steadfastly moved toward intelligent travel technology companies. In 2019 the Company spent 4.478 billion yuan on product and technology projects development to build the industry's leading R & D strength. Constantly build classic products. CS75PLUS CS55PLUS CS85 COUPE new CS95 Oushang X7 KaichengF70 NE1.4T NE1.5T engines and other new products were launched on schedule. 72000 units of the CS75 plus were sold in its first four months on the market the fastest ever and the Oushang X7 is among the top 10 selling autonomous compact SUV in the country.Innovatively enhance R & D capability. The Company focused on breakthroughs in intelligent technology and new energy technologies continued to strengthen the "fashion intelligence Green pleasure" four major technology labels and N basic technologies made breakthroughs in 40 key technologies such as the three-level autopilot technology the development of ICAR platform fuel cells and applied terminal software platform and cockpit hardware platform and other advanced technologies. On the intelligent side the remote-controlled valet parking system APA5.0 (Multi-storey car park) was launched in mass production with CS75 plus for the first time and the Company mastered more than 30 key technologies on the L3 level limited automatic driving technology and rapidly advanced the engineering development; Level L4 autopilot in Xiantao Data Valley in Chongqing implemented a demonstration operation under the open road scenario. On the New Energy side independent innovation seven-in-one System Assembly performance improvement of the third generation of intelligent vehicle domain controller "Chang'an smart core" was raised by 70% to the industry-leading level.The image of technological innovation deeply rooted in people's minds. The official opening of Chang'an Automobile Global R & D Center marked the R&D 4.0 Era of "Open sharing Global Synergy". There were 904 patents applied for in the whole year of which 402 were applied for invention patents. As of 2019 there were 1415 valid invention patents. The joint innovation centers with Huawei Tencent Bosch Qingshan were set up to create new heights of innovations. CS75 plus won the 2019 international CMF design gold award and won the 2019 China Smart car index evaluation and China Automobile Health Index VOC / VOI Plate evaluation double titles. Blue Whale NE platform products with the highest thermal efficiency of 40% and several indicators leading the industry won the title of "Top 10 China Engines".The brand potential is steadily improving. The implementation of multi brand strategy Changan passenger vehicles medium and high-end passenger vehicles Oushang automobile and Kaicheng automobile adhere to the differentiated positioning clear the separation of landing path and accelerate the collaborative development; carry out the systematic construction of brand planning and management and focus on building brand value system brand indicators brand management principles and visual identity system; Changan passenger vehicle products exhibit the brand new momentum the brand positioning of "technology Chang'an smart partners" is clear with signed brand spokesperson take advantage of the opportunity of product marketing promote the new product listing with big IP steadily improve the brand potential; optimize the public opinion monitoring and maintenance system continue to create a positive image of smart dynamic service and other labels of public opinion and steadily improve the brand preference. Chapter 4 Business Discussion and Analysis I. Overview In 2019 it is the 70th anniversary of the founding of new China. Since 2018 China's automobile industry has declined for the first time in 28 years. Under the background of downward pressure on China's economy in the face of complex and changeable international trade situation and huge adjustment of industrial policies the downward trend of China's automobile market in 2019 has not been reversed and China's automobile industry is undergoing profound changes. Influenced by factors such as the slowdown of macro-economic growth trade friction and adjustment of industrial policies automobile sales in 2019 totaled 25.769 million down 8.2% year on year down 5.4% more from the previous year. Under the background of the overall transformation of the automobile market the passenger vehicle market is gradually changing from increment era to stock competition era. The annual sale of passenger vehicle market is 21.444 million down 9.6% year on year. Among them the SUV sales fell by 6.3% year-on-year and the decline was further expanded (-2.5% in 2018); the MPV sales fell by 20.2% year-on-year. Under the influence of joint venture product exploration and other factors the market share of Chinese brands fell year on year. Affected by the sharp decline of subsidies among the new energy passenger vehicles the sales of pure electric passenger vehicles was 834000 up by 5.9% year-on-year and the growth rate slowed down significantly experiencing a painful period after the decline of subsidies. (The above data is from China automobile industry production and marketing news “China Automobile Industry Association” and its industry information release.) Production and sales of China's auto industry in 2019 2019 Accumulative production（ten thousand） y-o-y increase （%） 2019 Accumulative production（ten thousand） y-o-y increase （%） Automobile 2572.1 -7.5 2576.9 -8.2 Passenger cars 2136.0 -9.2 2144.4 -9.6 Sedan 1023.3 -10.9 1030.8 -10.7 MPV 138.1 -18.1 138.4 -20.2 SUV 934.4 -6.0 935.3 -6.3 Cross-passenger car 40.2 -4.3 40.0 -11.7 New energy cars 124.2 -2.3 120.6 -4.0 New energy Passenger cars 109.1 2.0 106.0 0.7 EV 87.7 10.8 83.4 5.9 In 2019 facing the perplexing economic situation and industry challenges Changan automobile has not forgotten to start its mind and bear in mind its mission. Guided by Xi Jinping's socialist ideology with China's characteristics in the new era Changan automobile comprehensively implements the quality improvements of the "365" climbing action. Changan automobile focuses on "deepening reform improving efficiency emphasizing marketing and quality leading" and pushing ahead with the third pioneering undertaking plan. With the adjustment of the industry the transformation has achieved initial results and the business quality has steadily picked up which is conducive to the transformation and upgrading of enterprises to intelligent travel technology companies.In the whole year of 2019 the sales volume of Chang'an Automobile reached 1.76 million ranking sixth in the industry. The main business performance in the reporting period is as follows: 1. Deepening strategic transformation and steady implementation of reform and innovation The Company released the version 3.0 of "the third entrepreneurship innovation" and further clarified the overall development idea of "strengthening the main business stabilizing the transformation expanding the market and building the ecology". Through full study and judgment of the industry situation with the enterprise development plan the Company focused on the strategic layout of "intelligence" "travel" and "science and technology" to focus on the allocation of resources. Eight major reform projects including New energy Jiangling holding and Chang'an PSA were carried out in an orderly manner. Jiangling holding reform has become the first case of mixed reform of central enterprises local state-owned enterprises and private enterprises in the industry. Deepen organizational change build a full-time strategic business carrying team based on the requirements of matrix change continuously improve organizational vitality and efficiency; strengthen incentive constraints and constantly carry out the mechanism of personnel post matching and project follow-up investment; optimize personnel structure and increase the introduction and investment of talents in intelligent new energy capital operation and other fields. 2. Steady implementation of business measures and solid improvement of efficiency Guided by the 16 character policy of "increasing revenue saving expenditure reducing cost controlling investment reducing inventory financing realizing cash and conducting the reform" the company will vigorously promote the improvement of operation quality and reverse the downward trend of operation. By taking effective measures the average price of self-owned brand bicycles has steadily increased the results from the cost reduction and efficiency increase are remarkable and the business quality has gradually picked up. The 1/2 project has been vigorously promoted and the process efficiency has continuously improved and the process execution time has been significantly shortened. Optimize the operation process architecture and complete the design of multi-dimensional operation process architecture. Strengthen the data-driven management continuously strengthen the operation quality; continue to strengthen the internal and external integration of CA-DDM establish the standard details of data management capability maturity evaluation and strengthen the internal system integration and index governance. 3. Strive to create classic products with remarkable achievements in technological innovations CS85 Coupe CS75 Plus Reaton CC CS55 Plus Oushang X7 and other new or replacement products are on the market on schedule. The highly concerning A+SUV CS75 Plus was launched on September 6 with the sales volume over ten thousand in the first month of listing the fastest record of the company's product volume; its sales volume over twenty thousand in December for the first time and the cumulative sales volume over seventy thousand in first four months of its listing. With its high quality and high cost performance ten thousand vehicles of OushangX7 was sold in advance in 15 days and exceeded thirty-five thousand in 30 days which is conducive to the transformation and development of Oushang automobile. The independent R & D capacity has continuously improved the technical label of "fashion green intelligence and pleasure" has continuously strengthened and 40 key technologies such as the three-level technology of automatic driving the development of ICAR platform and fuel cell have achieved breakthroughs. The third generation power blue whale power was put into production on time leading the industry in many indicators and won the title of "top 10 China engines". The thirteen models completed the switch with the minimum investment launching the first shot of blue sky defense of independent brands.List of products listed in 2019 Date of listing Model name Model features March 2019 CS85 COUPE Chang'an CS85 COUPE inherited the family "Royal Yue" front face features with aggression; family-style double waist line design full face rich muscle feeling; domed streamer back design full style high-level sports; all-LED Matrix Star drill headlamps 3D stereo lamp belt personal and technological with rich "vitality" ; surrounding star cabin with elegant and easy ride experience; blue whale 2.0T+AIXIN8AT golden power combination with advanced performance and the driving passion; TENCENT TAI car intelligence system on board enjoy the pleasure of intelligent interactive experience. Chang'an CS85 COUPE smart and masculine coexistence sports and technology leading the new trend of the times and highlighting the style of new life.March 2019 Novel CS15 Novel CS15 from the second generation of family design language bring into the design concept of "Sun Born" build a stylish and flexible appearance and create a very forward-looking SUV aesthetics for the love of life of young mentality Sun born! The new CS15 features an enhanced lower body design a striking trapezoidal vision a radical and dynamic body posture a NAPPA leather upholstery a connected HD dual screen and a 120 degree wide angle camera integrated into the right rear view mirror flat back seat the area with soft bag texture a stylish and delicate cockpit.The new CS15 has been carefully trained by top experts with 20 years of chassis training experience and has a precise lightweight soft and flexible suspension equipped with ESP electronic stability control system ABS Anti-lock braking system EBD electronic brake force distribution function TCS traction control system HHC ramp start assist system BA brake assist TPMS tire pressure detection system which brings you a fully upgraded driving experience. April 2019 Novel CS95 The brand new design language super cabin experience super luxury interior materials: soft touching and first class seat comfort with luxury experience. LED multi-color atmosphere lamp: 16777216 kinds of colors infinitely regulated perfectly matching every scene in the journey; PM2.5 monitoring + air purifier: Escape from the dirty air in the city and enjoy the forest breath. 12.3 inch central control touch screen: high definition large screen wide viewing angle convenient and smooth interactive touch. 4G T-box (free traffic for the first car owner): intelligent voice interaction abundant traffic guarantee double power for intelligent travel. The industry's first Gaud map 3.0: support ADAS incremental update new UI real-time view of road traffic reasonable route planning avoid congestion travel more leisurely. Integrated adaptive cruise iACC: leading intelligent driving assistance system of the same level alleviating driving fatigue providing all-round safety guarantee and making the journey easy. Full 360° HD panoramic image: insight into the details around low-speed driving safety. April 2019 CS75 Million Version In order to give back the support and trust of millions of customers over the past five years since CS75 went public CS75 million versions have been launched to inherit the advantages of CS75 and give back to consumers with exclusive appearance interior decoration and power system. Equipped with DCT270 7-speed wet dual clutch automatic transmission the power transmission is more efficient and the driving experience is better; equipped with blue whale 280T direct injection supercharged engine it won the title of " top ten China engines" in 2018; equipped with ACC AEB LDW BSD APS and other systems it won the first good result in 2018 China intelligent automobile index evaluation.July2019 CS35PLUS Blue Whale version Positioning new power Internet social SUV. On the basis of popular CS35plus the brand-new version upgrades the sports beauty value and 1.4T blue whale power. It has five advantages: core model talent product and spectrum. Equipped with the first engine of Chang'an "blue whale NE" platform engine and the first product of Chang'an power in the 3.0 era it integrates more than 10 advanced technologies of the world's first mass production significantly improving the fuel efficiency and fuel economy and even reaching the international first-class performance level.July2019 Eado Blue Whale Eado blue whale redefines the new standard of compact car and establishes a new value proposition. 1. Extreme driving experience: the new power system perfectly balances power and fuel consumption; 2. High value: use cost maintenance purchase cost etc.; 3. Safety and reliability: five star safety standard design in Europe.Power: equipped with the strongest 1.4T turbocharged direct injection engine of the same level direct injection in the turbocharged cylinder it starts to overtake faster so the power comes; it has strong climbing full load and energy saving. High value: low cost of car purchase low cost of car use only 5.9L fuel consumption per 100 km; maintenance every 7500 km saving money and trouble.Safety: car designed according to European five star safety standards. The main structure of the vehicle is laser welded with the strength of 3.6 times that of the competitive body with spot welding; equipped with PAB warning auxiliary brake system the earliest alarm can be sent out 1.4s in advance ; the runaway braking distance is 5 meters shorter than that of the same level car; 51.6% of the car body is made of high-strength steel and the roof can bear 3 times the weight of the car body; large range of soft interior decoration and package; cage body frame structure is adopted to ensure the safety of users in all aspects.September 2019 CS75 PLUS CS75 plus is built based on the family concept of Chang'an performance. By upgrading the platform architecture and power system and comprehensively considering the balance of various performances in the car use scenario CS75 plus pursues the integration of people and cars overall coordination harmony and nature which can bring users a confident advanced and passionate driving experience. Design: CS75 plus is a European design team composed of more than 200 foreign designers from 25 countries. It adopts Yuyue's design concept with a tension front face a dynamic posture and coordinated colors making the whole car full of future design style Wisdom: the high performance car carries the intelligent functions of APA5.0 mobile phone Bluetooth key and so on. It is the AT model of the entire vehicle equipped with the Indus car intelligent system and integrates Tencent's ecological resources. It becomes a truly intelligent Internet vehicle.Power: it is equipped with classic power combination 1.5TGDI + Aisin 6AT and golden power combination blue whale 2.0 TGDI + Aisin 8AT. Both engines have won the title of "China's top ten engines" and the transmission adopts the latest generation of Aisin transmission Safety: CS75 plus is designed according to the safety standards of C-NCAP five-star and CBR two five-star 6 airbags are equipped with 38.3% high-strength steel of the whole vehicle leading the same level.October 2019 Raeton CC Raeton CC's extraordinary space is quite different. With 4800mm super long car body and 2770mm super long wheelbase it brings excellent atmosphere and spacious interior space which enables every passenger to stretch to their full capacity and feel comfortable which makes the experience stand the test. With professional adjustment of suspension frame and ultra fiber leather multi-functional seat from fresh and natural healthy air purification system to glass full screen panoramic skylight shows sincere texture technology which makes driving and riding become a kind of enjoyment. The idle noise of the whole vehicle is as low as 36.5 decibels and the mute performance reaches the joint venture level creating a "deep sea level" quiet cockpit; Raeton CC adopts a high-strength rigid body rich and perfect active and passive safety configuration and brings 360 degrees of all-round protection with strict safety standards; intelligent Internet system which combines human thinking and advanced technology creates interesting and considerate convenient travel and helps you to deal with it calmly. The road ahead is boundless.November 2019 CS55PLUS Positioning the mainstream compact SUV equipped with the classic power combination of bluecore 1.5T turbocharged engine and Aisin's third generation 6AT. Fashion and dynamic elements are integrated into the model to highlight the youth. Compared with CS55 the product strength is comprehensively improved in life dynamic design intelligent luxury driving cabin and ultimate quality driving control. Equipped with skyline neon tail lamp 10.25 inch polar dual screen IACC integrated adaptive cruise system 360 degree recording HD panoramic image AEB automatic emergency brake LAS Lane auxiliary system LCDA auxiliary line system and other intelligent driving aids system and Tencent intelligent system such as Wutong car Union and AI Xiao An. Create a high-quality car with more experience of high standard and rigorous test. 4. The "Beidou Tianshu" plan orderly implemented and the "Shangri La" plan steadily accelerated To strengthen the intelligent label the CS75 Plus with APA5.0 is first launched; L4 level automatic driving based on 5G is put into demonstration operation becoming the first brand in China. With the appearance of the first Wechat car version in the smart Expo Changan worked with Tencent to create the "strongest cross-border CP". The 8-year-old global R&D center with a total investment of 4.3 billion was officially put into use marking the official arrival of the R&D 4.0 era of "open sharing global collaboration".Significant progress has been made in the development of new energy financing including the completion of capital increase and mixed reform of new energy technology companies; and the debut of fuel cell vehicles went in the smart Expo. Changan smart core a high-tech product with full independent intellectual property rights first-class in the world and the first one in China has been released; core technologies such as fuel cell and battery safety have achieved phased results; the UK hydrogen fuel cell technology innovation center of new energy technology company has been unveiled and in the future the integration and control technology of the power system of the PCH fuel cell vehicle is to be built into the fuel cell power system unified platform: new energy products are increasingly abundant pure electric SUV E-Pro is listed in surprise and E-rock appears in Guangzhou auto show. 5. Strive for brand marketing and improve customer operation Continuously improve the brand potential energy with CS75Plus listing. The volume and attention are far higher than that of competing products in the same period; the launch of blue whale power drives the sound development of public opinion and deepens the users market and industry's recognition of the corporate image of "technology Chang'an". The focus of channel continues to sink with many 3.0 image stores of Chang'an passenger brand the fifth and sixth line channel coverage and core business circle products coverage continues to improve and realizes the transformation from the channel quantity to channel quality. Chang'an Oushang optimized the marketing organization steadily switched the store logo and continued to promote the transformation of channels to passenger use. The Company builds a direct communication and interaction platform between senior and professional personnel and customers and vigorously improve customer experience. The Company implements "2 times project" increase time and resource investment of key personnel and senior management and ensure more than 2 times of customer operation investment. The Company builds customer service system optimizes the process of complaint upgrading and the number of complaints of 10000 vehicles has improved significantly year on year. The Company releases "intimate partner plan" and makes "five promises of honest service" to users. The Company innovates the customer online service mode and more than 1000 technicians and engineers solve customer problems online and promote customer experience. 6. The joint venture cooperation deepening and bravely facing the challenges The two sides strengthen high-level communication release "Chang'an Ford acceleration plan" and complete the implementation of Lincoln brand cooperation. Changan Ford Research Institute was established to continuously cultivate localization development capability and 18 products will be launched to the Chinese market in the next three years. The new Focus active New Taurus and new Edge St/St-line were launched in August with good performance; the first strategic new product of Changan Ford acceleration plan and new Ford Edge Escape made full efforts to target the high-end market of twenty-thousand yuan level medium-sized four-wheel drive SUV and opened the prelude of Changan Ford's comprehensive counter attack with the promise of "more Ford more China" in the Ford 2.0 era. The Company further consolidates the cooperative relationship between Chang'an and Mazda integrates Mazda's resources in China and speeds up the adjustment of product structure; in 2019 The Company launches the next generation Mazda3 Axela 2020 CX-5 and other 2 products to effectively support the company's business quality. 7. Promote the construction of ecosphere and explore the future layout opportunities steadily The Company works with Huawei Lenovo NXP and other members of Shangrila alliance to establish the joint technology innovation centers and deepens strategic and cross-border cooperation with more than 30 strategic partners such as Tencent Huawei Gree and Xiaomi. The Company constantly studies brand strategy and firmly builds high-end brand confidence. The Company actively explores one belt one road overseas market and the first overseas joint venture company has been put into operation in Pakistan. The Company adjusts the travel business strategies of Chang'an and T3 integrates innovative marketing models such as Car for better Oushang style and smart stores and constantly optimizes the development direction of emerging businesses.II. Analysis of Main Business 1、Overview Whether it is the same as the summary in the business discussion and analysis.√ Yes □ No 2、Income and cost （1）Composition of the operating revenue Unit :Yuan 2019 2018 Increase/decrease on a y-o-y basis (%) Sum Share of operating Sum Share of operating income（%） income (%) Operating revenue 70595245133.28 100.00% 66298270389.77 100.00% 6.48% Industry Automobile 70595245133.28 100.00% 66298270389.77 100.00% 6.95% Products Vehicles 70528420564.07 99.91% 66276054153.09 99.97% 6.42% Provision of labor services and others 66824569.21 0.09% 22216236.68 0.03% 200.79% Area China 67531869212.59 95.66% 63892840365.38 96.37% 5.70% Overseas 3063375920.69 4.34% 2405430024.39 3.63% 27.35% （2）Accounted for more than 10% of the company's operating income or operating profit of the industry products or area √ Applicable □ Not applicable Unit : Yuan Operating Revenue Operating Cost Gross margin Increase/decrease on a year-on-year basis Operating Revenue (%) Increase/decre ase on a year-on-year basis Operating Cost (%) Increase/decrease on a year-on-year basis gross margin Industry Automobile 70595245133.28 60232585428.08 14.68% 6.48% 6.45% Up 0.03 points Products Sales of products 70528420564.07 60214857917.80 14.62% 6.42% 6.45% Down 0.03 points The company's statistics scope of main business in the reporting period was adjusted and the company has adjusted its main business data last year according to the scope in the reporting period. □Applicable √ Not applicable （3）Is the income from sales in kind greater than the service income √ Yes □ No Unit：One set Industry Item 2019 2018 Increase/decrease on a year-on-year basis (%) Automobile Industry Sales volume 1759971 2074575 -15.16% Production volume 1797429 1998865 -10.08% Stock volume 58379 46255 26.21% Market share（%） 6.83% 7.39% Down 0.56 points Note：The above sales volume and production volume are consistent with the date from the Company and its subsidiaries and JVs.The analysis over market share is based on the data from China Automobile Industry Association. As Jiangling Holdings Co. Ltd.completed the equity change the data no longer includes the traditional fuel vehicles and new energy vehicles of Jiangling Holdings Co. Ltd. and the previous data was adjusted accordingly. Notes to the year-on-year change of the relevant data by over 30% □ Applicable √ Not applicable （4）The company has signed a major sales contract as of the time of the fulfillment of this report □ Applicable √ Not applicable （5）Cost Unit: Ten Thousand Yuan Industry classification Item 2019 2018 Increase/decrease on a year-on-year basis (%) Amount Ratio in operation cost (%) Amount Ratio in operation cost (%) Automobile Production Product Sale 6021486 99.97% 5656441 99.97% 6.45% Provision of labor services and others 1773 0.03% 1906 0.03% -6.99% Total 6023259 100.00% 5658347 100.00% 6.45% （6）Notes to the change of the consolidated scope in the reporting year √ Applicable □ Not applicable During the reporting period Changan Automobile newly established one wholly owned subsidiaries Chongqing Chehe Mei Technology Co. Ltd. which was included in the consolidated statements. （7）Significant change or adjustment of the business products or services in the reporting period □ Applicable √ Not applicable （8）Main Customers and principal suppliers Main Customers Total sales amount to top 5 customers (RMB) 5297834284.21 Proportion of sales to top 5 customers in the annual sales (%) 7.50% Proportion of sales amount of the related party in the top 5 customers（%） 4.56% Top 5 customers Unit : Yuan Serial No. company Sales value proportion in total sales（%） 1 First 1294526146.64 1.83% 2 Second 1114790679.43 1.58% 3 Third 1020942159.56 1.45% 4 Fourth 964578663.52 1.37% 5 Fifth 902996635.06 1.28% total 5297834284.21 7.50% Other descriptions of major customers □ Applicable √ Not applicable Principal suppliers Total purchase amount to top 5 suppliers (RMB) 5328307085.27 Proportion of purchase to top 5 suppliers in the annual purchase (%) 8.85% Proportion of purchase amount of the related party in the top 5 suppliers（%） 5.25% Top 5 suppliers Unit : Yuan Serial No. Company name Purchase value Proportion in the total purchase(%) 1 First 1445693679.11 2.40% 2 Second 1287348187.93 2.14% 3 Third 876106469.95 1.45% 4 Fourth 863253483.29 1.43% 5 Fifth 855905264.99 1.42% Total 5328307085.27 8.85% Other descriptions of major suppliers □ Applicable √ Not applicable 3、Expenses Unit: Ten Thousand Yuan Item 2019 2018 increase/decrease （%） Description of major changes Selling expense 4591170885.94 5283255346.48 -13.10% Management expense 2265231518.65 2141231988.91 5.79% Financial expense -190849511.73 -427062035.06 55.31% In 2019 the average monthly deposit balance decreased significantly year-on-year and interest income decreased R&D expense 3169063761.13 3184788921.68 -0.49% 4、Research and Development Expenditure √Applicable □ Not applicable In 2019 Changan Automobile invested 4.478 billion yuan in product and technology project development and continued to build industry-leading research and development strength. R&D investment Table 2019 2018 Changes in ratio Labor Number 7829 7722 1.39% Proportion of labor in the Company 21.30% 21.43% Down 0.13 pionts Investment value (yuan) 4478435313.28 4464733629.10 0.31% Proportion of investment in the revenue 6.34% 6.73% Down 0.39 pionts Capitalization (yuan) 1309371552.15 1279944707.42 2.30% Proportion of capitalization in R&D investment 29.24% 28.67% Up 0.57 pionts Significant Change of the proportion of R&D investment in the revenue □ Applicable √ Not applicable Significant change of the proportion of capitalization in the R&D investment □ Applicable √ Not applicable 5、Cash Flow Unit: Yuan Item 2019 2018 Increase/decrease（%） Subtotal of cash inflows from operating activities 75201286289.37 81996970246.85 -8.29% Subtotal of cash outflows from operating activities 71319538050.98 85884445549.29 -16.96% Net cash flows from operating activities 3881748238.39 -3887475302.44 199.85% Subtotal of cash inflows from investing activities 2291173505.54 2488521707.35 -7.93% Subtotal of cash outflows from investing activities 6085786845.19 9057241752.33 -32.81% Net cash flows from investing activities -3794613339.65 -6568720044.98 42.23% Subtotal of cash inflows from financing activities 337719805.56 1195280377.20 -71.75% Subtotal of cash outflows from financing activities 738294133.17 2547968288.91 -71.02% Net cash flows from financing activities -400574327.61 -1352687911.71 70.39% Net increase in cash and cash equivalents -287678939.91 -11803151475.73 97.56% Notes to the year-on-year change of the relevant data by over 30% √ Applicable □ Not applicable In 2019 "net cash flow from operating activities" increased by 7.77 billion yuan from the previous year mainly due to a significant decrease in "cash from purchases of goods and labor services" compared to the previous year; "net cash flow frominvestment activities" An increase of 2.77 billion yuan over the previous year mainly due to a significant decrease in “cash paid forthe purchase and construction of fixed assets intangible assets and other long-term assets” and “cash paid for investments” comparedto the previous year; “net cash flow from financing activities The "amount" increased by 950 million yuan from the previous yearmainly because the "cash paid for dividends" decreased from the previous year.Notes to the significant difference between cash flow from operating activities and net profit in the reporting year √ Applicable □ Not applicable As for the significant difference between cash flow from operating activities and net profit in the reporting period refer to the item “Supplementary Information of the Cash Flow Statement” in the Financial Statements Note 56.III. Analysis of non principal business □ Applicable √ Not applicable IV. Assets and liability 1、The significant changes of the assets Unit: Yuan Item Dec.312019 Dec.312018 Increase/ decrease (%) instructions Amount Ratio in total assets （%） Amount Ratio in total assets （%） Cash 10066171353.48 10.31% 9980544526.14 10.68% -0.37% Notes receivable 838314076.82 0.86% 1409419600.50 1.51% -0.65% Subsidiaries Changan International and Baoding Changke have stepped up their collection efforts and made timely payments Inventory 3375441488.37 3.46% 4917420457.19 5.26% -1.80% Imported transmission resource reserves are gradually consumed and the amount of raw materials and materials in transit is reduced Investment property 7102849.72 0.01% 7329561.28 0.01% 0.00% Long-term equity investments 11008336989.09 11.28% 13275170118.83 14.20% -2.92% Fixed assets 26939490554.19 27.60% 22161054058.31 23.70% 3.90% Construction in progress 1729803028.43 1.77% 5383844030.75 5.76% -3.99% The first phase of global R & D projects and the adjustment of automobile product structure have been gradually solidified Short-term loans 229580000.00 0.24% 190000000.00 0.20% 0.04% Long-term loans 55300000.00 0.06% - 0.00% 0.06% 2、Assets and liabilities measured by fair value Unit: Yuan Item Amount at year beginning Profit and loss from changes in fair value in the current period Accumulated fair value changes included in equity Impairment provisions in the reporting period Amount purchased in the current period Amount sold in the current period Amount at year end Financial assets Transactional financial assets - 2419476200.00 2419476200.00 Equity instrument investment - 734506100.00 734506100.00 Subtotal of financial assets - 3153982300.00 3153982300.00 Others Total - 3153982300.00 3153982300.00 Financial liabilities - - - - - - Whether the measurement attributes of main assets in the reporting period have significantly changed □ Yes √ No 3、Property rights limits by the end of report period Item Book value at the end of this year Limited Reason Cash 705696678.59 Used to open the acceptance deposit Notes receivable and accounts receivable 3125099350.00 Notes receivable pledge to issue notes payable Intangible assets 18080415.84 Obtain liquidity borrowings and obtain commercial acceptance bills Fixed assets 24200714.44 Obtain liquidity borrowings and obtain commercial acceptance bills Total 3873077158.87 V. Analysis of Investment 1、General information √ Applicable □ Not applicable External investment Investment Amount in the report period （RMB） Investment Amount in 2017（RMB） Variance rate 1800000000 2933941217.67 -38.65% Particulars of investees Company Name Principal business Proportion in the investees’ equity (% Nanjing Leading Equity Investment Partnership (Limited Partnership) Equity investment venture capital investment; investment in non-publicly traded equity of non-listed companies non-publicly issued equity of listed companies and related services. (Projects subject to approval according to law may be operated after approval by relevant departments) 16.39% Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership) Equity investment (operating in accordance with the approved items and deadlines of the license documents). 50.25% 2、Major equity investment in the reporting period Unit: Yuan Company name Principal business Investment mode Investment amount Share-holdi ng ratio Capital source Partner Investment period Progress on book closing date Any litigations Disclosure date(in case) Disclosure index(in case) Nanjing Leading Equity Investment Partnership (Limited Partnership) Equity investment venture capital investment; investment in non-publicly traded equity of non-listed companies non-publicly issued equity of listed companies and related services. (Projects subject to approval according to law may be operated after approval by relevant departments) Newly established 1600000000 16.39% Its own capital Suning Investment Co.Ltd. China First Automobile Group Co. Ltd. Dongfeng Motor Group Co. Ltd.Shenzhen Tencent New Travel Limited Partnership (Limited Partnership) Shenzhen Segali Asset Management Co. Ltd.Hangzhou Alibaba Venture Capital Management Co. Ltd.Wuxi Feiye Investment Co. Ltd. Xianning Rongyi Smart Travel Industry Investment Fund (Limited Partnership) Nanjing Hengchuang Yunzhi Network Technology Co. Ltd. Nanjing Leading Equity Investment Management Co. Ltd.Indefinite duration Establishment completed industrial and commercial registration procedures completed No 2019-03-22 Announcement of the Establishment of Nanjing Leading Equity Investment Partnership (Limited Partnership) (Bulletin No: 2019-16) Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership) Equity investment (operating in accordance with the approved items and deadlines of the license documents).Newly established 200000000 50.25% Its own capital Jiantou Huake Investment Co. Ltd. Beijing Huake Lianzhi Technology Co. Ltd. China Construction Investment Management (Tianjin) Co. Ltd. Indefinite duration Establishment completed industrial and commercial registration procedures completed No 2019-04-30 Announcement of the Establishment of Chongqing Lianzhi Antou Equity Investment Partnership (Limited Partnership) (Bulletin No: 2019-30) Total -- -- 1800000000 -- -- -- -- -- -- -- -- 3、Major non-equity investment in the reporting periodPlease refer to Notes V to Financial Statement Item 13” Construction in progress”. 4、Investment of Financial Assets (1)Equity-holdings in financial enterprises √ Applicable □ Not applicable Securiti es variety Securities code Securities short name Initial investment cost（Yuan） Number of shares held at the beginning of the period（Share） Percentage of shares held at the beginning of the period Number of shares held at the end of the period（Share） Percentage of shares held at the end of the period Book value at the end of the period（Yuan） Reporting period profit and loss（Yuan） Accounting account Source of shares Stock 600369 Southwest Securities 50000000 35500000 0.63% 35500000 0.63% 184245000 60705000.00 Transactional financial assets Initial investment Stock 300750 CATL 1000000821 22999575 1.06% 22999575 1.04% 2235231200 828449888.69 Transactional financial assets Initial investment Total 1050000821 58499575 -- 58499575 -- 2419476200 889154888.69 -- -- (2) Derivative Investments □ Applicable √ Not applicable 5、Use of raised funds □ Applicable √ Not applicable VI. Selling of major assets and major equity 1、Selling of major assets □Applicable √ Not applicable There is no selling of major assets. 2、Selling of major equity √ Applicable □Not applicable On December 3 2019 Chongqing Changan New Energy Vehicle Technology Co. Ltd. (hereinafter referred to as "new energy technology company") a wholly-owned subsidiary of Changan Automobile introduced four strategic investors. The capital increase aims to accelerate the implementation of the “Shangri-La Plan” and achieve the company’s long-term development goals. After the capital increase is completed the company's share of the new energy technology company's equity has dropped from 100% to 48.9546% losing control of the new energy technology company. It is expected that the impact on the consolidated statement will be an increase in net profit of 2.291 billion yuan. It will be included in 2020 and the specific impact will be based on the company’sannual audit auditor’s audit results. For details please refer to the “Announcement on the Public Investment Increase of theWholly-owned Subsidiary Subsidiary Company and the Company’s Abandonment of Priority Subscription of Capital Contributions to Capital Increase and Capital Increase” ( Announcement number: 2019-67). On January 13 2020 the matter was reviewed and approved by the first extraordinary general meeting of shareholders in 2020 (Announcement No. 2020-04). On January 20 2020 new energy technology company completed the industrial and commercial change registration. For details please refer to the "Announcement on the Progress of the Wholly-owned Subsidiary Subsidiary's Capital Increase by Public Listing and the Company's Abandonment of Capital Increase and Share Priority Subscription of Investment Rights" (Announcement Number : 2020-04). On December 30 2019 Changan Automobile and Shenzhen Qianhai Ruizhi Investment Co. Ltd. (hereinafter referred to as "Qianhai Ruizhi") signed the "Equity Transfer Agreement" to transfer all the 50% equity of Changan PSA held to Qianhai Ruizhi.The transaction meets the company's actual business and future development needs optimizes the company's asset structure and is in line with the company's strategic transformation direction. The transfer price of the transaction is 1.63 billion yuan and the expected impact on the consolidated statement is to increase the pre-tax profit of 1.352 billion yuan. The generated profit will be included in the accounting period of the transaction completion (expected to be 2020). The specific impact is subject to the audit results of the company's annual auditor. For details please refer to the "Announcement on the Sale of Equity Interests in Joint Ventures" (Announcement No. 2020-02). On January 13 2020 the matter was reviewed and approved by the first extraordinary general meeting of shareholders in 2020 (Announcement No. 2020-04).VII. Analysis of main holding companies and equity companies √ Applicable □Not applicable Basic information of main subsidiary companies and shareholding companies which have an impact on over 10% of net profits Unit: ten thousand yuan Name Registered capital Equity held Main businesses Total assets Main operating income Net profit Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership) 150001 100% Engaged in non-securities equity investment activities and related consulting business 223524 0 70744 Chongqing Changan Automobile Customer Service Co. Ltd. 3000 100% Produce and sell auto and parts 113622 178521 36855 Hefei Changan Automobile Co. Ltd. 77500 100% Produce and sell auto and parts 777126 1035073 33548 Chongqing Changan Suzuki Motor Co. Ltd. 133764 100% Produce and sell auto and parts 257566 143734 -40315 Chongqing Changan New Energy Automobile Technology Co. Ltd. 9900 100% Produce and sell auto and parts 239000 381830 -48115 Changan Mazda Automobile Co. Ltd 11097USD 50% Produce and sell auto and parts 1262501 1621262 187025 Changan Peugeot Citroen Automobile Co. Ltd. 760000 50% Produce and sell auto and parts 639229 78265 -222096 Changan Ford Automobile Co. Ltd 24100USD 50% Produce and sell auto and parts 4772127 2809603 -385720 Subsidiaries acquired and sold in the reporting period √ Applicable □ Not applicable During the reporting period Changan Automobile newly established one wholly owned subsidiaries Chongqing Chehe Mei Technology Co. Ltd. which was included in the consolidated statements.Name Acquisition and disposal of subsidiaries during the reporting period On the overall production and operation and performance impact Chongqing Chehe Mei Technology Co. Ltd. Newly established No major influence VIII. Structural main business under the company control □Applicable √Not applicable IX. The company's future development prospect 1. Industry pattern and trend Due to the novel coronavirus global epidemic spread and the continuance of global trade frictions and geopolitical conflicts and other uncertain factors the global economy after a weak recovery at the end of last year again encountered the outbreak of black swan events and other strong interference and the global economic growth is still facing greater downside risk IMF recent forecast again lowered the 2020 global GDP growth under 3% based on the above factors. China's external environment is undergoing significant changes. The transformation and upgrading are in the critical period of climbing and structural adjustment. The economic operation itself is in a moderate decline channel. Combined with the impact of this coronavirus outbreak the counter cyclical adjustment policy will be further strengthened on the basis of last year and the goal of doubling GDP compared with 2010 is expected to be achieved. Namely the annual GDP growth rate is about 5.6%. The promotion of consumption quality and capacity expansion is an important means of stable growth in the current period. Automobile is an important component of consumption ranking first in the total retail sales accounting for more than 10%. It is expected that corresponding promotion policies will be issued. However based on the impact of macroeconomic downturn the expected decline in residents' income and other factors the automobile market will continue to shrink throughout the year.Policy trend: the recent meeting of the Political Bureau of the CPC Central Committee pointed out that the long-term trend of China's economic growth has not changed and efforts should be made to achieve the goal of building a moderately prosperous society in an all-round way and the objective of the 13th five year plan. Judging from the current situation this task is very arduous and requires further efforts of counter cyclical adjustment policies. Active fiscal policy should be more active and effective and give full play to the role of policy financing. A sound monetary policy should be more flexible and appropriate. The follow-up macro policy level will increase efforts and improve efficiency with small steps and high frequency; key directions: employment domestic demand foreign trade and investment; key areas: People's livelihood medical treatment emergency response high and new technology; small and micro enterprises areas with severe epidemic. Consumption trend: the trend of consumption upgrading is obvious and the proportion of sales of models above 100000 yuan is increasing year by year. However with the impact of the epidemic consumers pay more attention to health and safety and some of them will change from public travel to self-driving travel resulting in new demand for cars. There are obvious regional differences in China which brings about diversified and gradient development of automobile demand. Internet Aborigines have gradually become the main force of automobile consumption with strong demand for personalization and fashion. Only by offering high-quality and diversified products and services can we occupy the minds of consumers.Technology trend: with the breakthrough of big data chip artificial intelligence and communication technology (5g) it will bring subversive changes to the society industry and business model. Cross border integration of all parties mutual benefit and win-win results and implementation of commitments will be the general trend of intelligent development. At the same time the year 2025 will be the key turning point when the electrification returns to the market demand and technology. Competition situation: the competition pattern of the automobile industry is further chaotic and the differentiated competition shows its magic power. Under the influence of the epidemic situation a new round of elimination competition will appear. It is mainly reflected in the fact that multinational automobile enterprises regard China as the main battlefield; the price of joint venture brands is lowered the price war is constantly launched and the product profit space is accelerated to shrink; Chinese brands continue to integrate resources to develop electric and intelligent; new forces of vehicle manufacturing enter the stage of mass production and landing. 2. The Company Development Strategy In the face of the new normal of "low growth micro profit" in the automobile market the Company will comprehensively implement the "365" action of group company quality improvement focus on "customer-oriented firm reform innovative marketing and ultimate efficiency" and make every effort to promote the third entrepreneurship innovation plan work hard unswervingly to promote high-quality development and transform to intelligent travel technology company.We should attach equal importance to independence and joint venture coordinate traditional business with emerging business transform from serving customers to operating customers from operating products to brands from traditional products to intelligent + new energy products from providing traditional products to providing ecological products we will build into an intelligent travel technology company and move forward to a world-class automobile enterprise. 3. Business plan The operation goal of BOD in 2020: strive to produce and sell more than 1.91 million cars. In order to achieve the above goals the Company takes "customer-oriented firm reform innovative marketing and ultimate efficiency" as the main line vigorously promotes "efficiency 1/2 project" and "customer 2 times project" deepens the marketing system accelerates the implementation of reform projects and comprehensively improves the operation quality. The Company will focus on the following work: firstly strengthen the strategic direction and accelerate the transformation and development; secondly implement the "2 times project" with fine customer experience; thirdly promote 1/2 project and improve the efficiency in an all-round way; fourthly deepen the reform and innovation and stimulate the endogenous power; fifthly strengthen the sense of operation and improve the quality of operation; sixthly conduct the technological innovation and create classic products; seventhly accelerate the brand renewal and improve the brand potential energy; eighthly deepen marketing reform and improve system capacity; ninthly deepen joint venture cooperation and boost joint venture; tenthly improve the base construction and speed up overseas layout; Eleventhly innovate business model and promote steady transformation; twelfthly pay close attention to production and ensure production safety; thirteenthly comprehensively and strictly govern the party and improve the quality of Party construction; fourteenthly practice leading culture and inspire the vitality of all staff. 4. The company's capital expenditure plan for 2019 In order to achieve the company's strategic objectives it is estimated that the investment plan of the company and its holding subsidiaries in 2020 will be 3627.78 million yuan including 2427.78 million yuan of fixed assets investment and 120 million yuan of equity investment. Fixed asset investment focuses on the construction of new products and R&D capabilities which could maintain the competitiveness of independent passenger vehicle products and increase the investment in new energy and light vehicle products and continuously improve the core R&D capabilities such as intelligence modeling collision test etc. Equity investment is mainly to optimize the capital layout structure including investing in T3 travel T3 technology and strengthen the forward-looking layout in the intelligent field. According to the progress of the project combined with the operation and financing environment the company will study and formulate the fund-raising plan and fund use plan of various channels to improve the efficiency of fund use and reduce the cost of capital. 5. Possible risks Firstly novel coronavirus epidemic risk. First the delay in resumption of work results in the failure of timely supply of parts and components from some suppliers which makes the production organization more difficult. Some products fail to meet the market sales demand in time; second the passenger flow of customers into the 4S stores to purchase cars during the epidemic period is greatly reduced and the customer collection of the sales terminal is affected; third some small and micro enterprises are in a dilemma resulting in the decrease of income the frustration of consumption consumer confidence and the reduction of the car consumption. Countermeasures: the company has launched a comprehensive epidemic emergency plan. First ensure the production and supply through flexible production organization; second increase online promotion and service and strengthen users’ contacts; third strive to minimize market impact by strengthening auto financial services improving product selling points and enhancing user experience and so on.Secondly macroeconomic downside risks. China's economic development is still in an important stage of structural adjustment transformation and upgrading. Coupled with the impact of this epidemic the recent economic growth is facing a greater downside risk. Due to the strong correlation between automobile consumption and national economic growth it is expected that the automobile market will continue to decline in 2020 and the decline may be higher than that in the same period of last year. Countermeasures: the company has formed a research and judgment mechanism of daily weekly monthly and quarterly information tracking and strategic trend observation strengthened the research of macroeconomic situation actively adjusted on the basis of full research and judgment turned crisis into opportunity strengthened product research and development and market promotion strengthened the cooperation sharing and symbiosis between enterprises in the industrial chain and found new opportunities.Thirdly the risk of increasing competition between enterprises. First foreign brands continue to increase investment and competition in the Chinese market the price of joint venture brand products continues to decline the market as a whole shows the pace of more new products rapid price reduction and the industry's product profit space has accelerated to shrink. Second the new force of domestic car building products has accelerated their listing while weak brands have accelerated their elimination in the competition enterprises and brands have accelerated the replacement of old and new ones and in the process of great waves the vicious competition has increased the disturbance to the market. Countermeasures: on the one hand the Company will further focus on products and accelerate product replacement and new product introduction; on the other hand the Company will vigorously promote organizational mechanism and system reform fully stimulate personnel vitality organizational efficiency and process efficiency improve operation efficiency reduce management cost and product cost accelerate the pace of reform and accelerate the implementation of the company's third innovation and entrepreneurship strategy.X. Registration form for reception research communication interview，etc. during thereporting period Date Manner Type of Reception Object Index 2019.01.02 On-Site Survey Institution For details see the January 4 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 2 2019 investor relations activities record sheet 2019.01.10 On-Site Survey Institution For details see the January 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10 2019 investor relations activities record sheet(1) 2019.01.10 On-Site Survey Institution For details see the January 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10 2019 investor relations activities record sheet(2) 2019.01.10 On-Site Survey Institution For details see the January 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 10 2019 investor relations activities record sheet(3) 2019.01.11 On-Site Survey Institution For details see the January 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 11 2019 investor relations activities record sheet(1) 2019.01.11 On-Site Survey Institution For details see the January 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 11 2019 investor relations activities record sheet(2) 2019.01.15 On-Site Survey Institution For details see the January 17 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 15 2019 investor relations activities record sheet 2019.01.15 On-Site Survey Institution For details see the January 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 15 2019 investor relations activities record sheet(2) 2019.01.16 On-Site Survey Institution For details see the January 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 16 2019 investor relations activities record sheet 2019.01.18 On-Site Survey Institution For details see the January 22 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 18 2019 investor relations activities record sheet 2019.01.22 On-Site Survey Institution For details see the January 24 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 22 2019 investor relations activities record sheet(1) 2019.01.22 On-Site Survey Institution For details see the January 24 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: January 22 2019 investor relations activities record sheet(2) 2019.02.26 On-Site Survey Institution For details see the February 27 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: February 26 2019 investor relations activities record sheet 2019.02.28 On-Site Survey Institution For details see the March 1 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: February 28 2019 investor relations activities record sheet 2019.03.05 On-Site Survey Institution For details see the March 7 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 5 2019 investor relations activities record sheet 2019.03.14 On-Site Survey Institution For details see the March 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 14 2019 investor relations activities record sheet(1) 2019.03.14 On-Site Survey Institution For details see the March 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 14 2019 investor relations activities record sheet 2019.03.19 On-Site Survey Institution For details see the March 20 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 19 2019 investor relations activities record sheet 2019.03.22 On-Site Survey Institution For details see the March 25 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: March 22 2019 investor relations activities record sheet 2019.04.30 On-Site Survey Institution For details see the May 7 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: April 30 2019 investor relations activities record sheet 2019.05.06 On-Site Survey Institution For details see the May 7 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 6 2019 investor relations activities record sheet 2019.05.10 On-Site Survey Institution For details see the May 13 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 10 2019 investor relations activities record sheet 2019.05.14 On-Site Survey Institution For details see the May 16 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 14 2019 investor relations activities record sheet 2019.06.12 On-Site Survey Institution For details see the May 7 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: May 6 2019 investor relations activities record sheet 2019.06.12 On-Site Survey Institution For details see the June 14 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 12 2019 investor relations activities record sheet 2019.06.21 On-Site Survey Institution For details see the June 25 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 21 2019 investor relations activities record sheet 2019.06.28 On-Site Survey Institution For details see the July 2 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: June 28 2019 investor relations activities record sheet 2019.07.03 On-Site Survey Institution For details see the July 5 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 3 2019 investor relations activities record sheet 2019.07.05 On-Site Survey Institution For details see the July 10 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 5 2019 investor relations activities record sheet 2019.07.19 On-Site Survey Institution For details see the July 23 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 19 2019 investor relations activities record sheet 2019.07.23 On-Site Survey Institution For details see the July 24 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 23 2019 investor relations activities record sheet 2019.07.24 On-Site Survey Institution For details see the July 26 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 24 2019 investor relations activities record sheet (1) 2019.07.24 On-Site Survey Institution For details see the July 26 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: July 24 2019 investor relations activities record sheet (2) 2019.09.09 On-Site Survey Institution For details see the September 11 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 9 2019 investor relations activities record sheet 2019.09.10 On-Site Survey Institution For details see the September 11 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 10 2019 investor relations activities record sheet 2019.09.11 On-Site Survey Institution For details see the September 12 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 11 2019 investor relations activities record sheet (1) 2019.09.11 On-Site Survey Institution For details see the September 12 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 11 2019 investor relations activities record sheet (2) 2019.09.18 On-Site Survey Institution For details see the September 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 18 2019 investor relations activities record sheet 2019.09.26 On-Site Survey Institution For details see the September 29 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: September 26 2019 investor relations activities record sheet 2019.10.09 On-Site Survey Institution For details see the October 11 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: October 9 2019 investor relations activities record sheet 2019.11.01 On-Site Survey Institution For details see the November 5 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November r 1 2019 investor relations activities record sheet 2019.11.08 On-Site Survey Institution For details see the November 12 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 8 2019 investor relations activities record sheet 2019.11.14 On-Site Survey Institution For details see the November 18 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 14 2019 investor relations activities record sheet 2019.11.19 On-Site Survey Institution For details see the November 21 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: November 19 2019 investor relations activities record sheet 2019.12.06 On-Site Survey Institution For details see the December 10 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 6 2019 investor relations activities record sheet 2019.12.13 On-Site Survey Institution For details see the December 13 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 13 2019 investor relations activities record sheet 2019.12.17 On-Site Survey Institution For details see the December 17 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 17 2019 investor relations activities record sheet 2019.12.19 On-Site Survey Institution For details see the December 20 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 19 2019 investor relations activities record sheet 2019.12.20 On-Site Survey Institution For details see the December 20 2019 Shenzhen stock exchange interactive (http://irm.cninfo.com.cn) on the Changan Automobile: December 20 2019 investor relations activities record sheet Reception Times 49 Number of Agencies 152 Number of Individuals 0 Number of other entities 0 Whether to disclose undisclosed important information No Chapter 5 Important Matters Ⅰ. Company common stock profit distribution and capital reserves converting into share capital During the reporting period the common stock profit distribution policy especially the formulation implementation or the adjustment situation of cash dividend policy.√ applicable □ not applicable According to the China Securities Regulatory Commission requirements in combination with the practical situation of the company the Company has rectified the “Articles of Association” and clarified about the distributable profit caliber dividend distribution way principle form cash dividend conditions and proportion stock dividend condition plans to set up and review procedures the implementation the conditions of distribution policy adjustment and decision-making procedures etc to strengthen the supervision function of independent directors in the profit distribution plan policy adjustment and strengthen the guarantee system of the dividend return for investors. For details of the company’s specific distribution policy please refer to the Articles of Association. Since the net profit attributable to shareholders of the listed company is negative in 2019 no profit distribution will be made and no capital reserve will be converted into share capital.Special Statement for Cash Dividend Policy Whether comply with the company's articles of association or requirements of resolutions of the shareholders' general meeting: Yes Whether the standard of distribution and the proportion is clear: Yes Whether the related decision-making process and mechanism is complete: Yes Whether the independent directors play a proper role: Yes Whether the small and medium-sized shareholders have the chance to fully express their views and demands whether the legitimate rights and interests get fully protected: Yes Whether cash dividend policy is adjusted or changed whether the conditions and procedures are compliant and transparent: Not Applicable For the last three years (including the reporting period) the company profit distribution draft or plan and draft or plan that the capital reserves converting into share capital 2017 annual profit distribution plan is: Based on the existing total shares of 4802648511 distribute cash of RMB 4.46 yuan (including tax) to all the shareholders every 10 shares 2018 annual profit distribution plan is: Based on the existing total shares of 4802648511 distribute cash of RMB 0.18 yuan (including tax) to all the shareholders every 10 shares. In 2019 the preplan profit distribution of the Company deliberated and approved by the Board is: no profit distribution and no conversion of capital reserve into share capital.Share out Cash Bonus Table for last three years Unit: Yuan Year Cash dividend amount (tax included) Net profit attributable to shareholders of listed The net profit ratio (%) attributable to shareholders of companies in dividends annual consolidated statements listed companies in consolidated statements 2019 - -2646719356.53 - 2018 86447673.20 680728392.03 12.70% 2017 2141981235.91 7137234723.47 30.01% Ⅱ. Preplan of profit allocation and capital reserve converting into share equity during the reporting period For every 10 shares to send bonus shares - For every 10 shares dividend number (RMB) (tax included) - The equity base of distribution plan(shares) 4802648511 Total cash dividends (yuan) (tax included) - Distributable profits (yuan) 31852751052.34 Proportion (%) of cash dividends to total profit distribution - Cash dividend policy： Others Detailed statement of profit allocation or plan that capital accumulation fund turn to be added Audited by Ernst &Young Huaming certified public accountants (special ordinary partnership) the parent company annual net profit of 2019 is -2828617627.35 yuan added with early undistributed profit of 34767840143.32 yuan minus the allocated cash dividend of 86471463.63yuan during the reporting period so at the end of 2019 the undistributed profits can be used for distribution is 31852751052.34 yuan. At the end of 2019 monetary fund balance of the parent company is 6563020335.56 yuan. In 2019 the preplan profit distribution of the Company deliberated and approved by the Board is: no profit distribution and no conversion of capital reserve into share capital.III. Commitments Fulfillment Condition 1、Commitments that company shareholders actual controllers the acquirer directors supervisors and senior management personnel or other affiliated parties during the report period fulfilled and by the end of report period not yet fulfilled. Commitments Commit ment entity Commitment content Commitme nt time period for commitment Performance Share limited commitment China Changan When the company non-publicly subscribes for new shares of listed companies in 2017 the newly acquired shares of listed company can not be transferred within 36 Oct. 2017 36 months China Changan has fulfilled its commitment that the subscription of restricted shares has not been transferred within 36 months from October 14 2016 and the conditions months since the listing but can be transferred after 36 months according to relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange. for lifting the restricted shares have been met. The shares were listed and circulated on October 16 2019.Other small shareholders commitment China Changan In order to avoid and eventually solve the possible competition or potential competitors better maintain the interests of investors the company controlling shareholder China Changan made the commitment: In two consecutive years profit of Harbin Hf Automobile Industry Group Co With the continuous development ability and management level is improved significantly. Under such condition the enterprise will be affiliated into the company.September 2010 The Harbin Hefei Automobile Industry Group Co at present is still running at a loss The conditions have not yet reached the profitable for two consecutive years. 2、The assets of the company or project include the earnings forecast and during the report period the profit forecast still existed the company assets or projects achieve the profit forecast and explain the reasons □Applicable √Not-applicable IV. The non-operating fund occupation situation of the controlling shareholders and their affiliates to the listed companies □Applicable √Not-applicable During the reporting period there does not exist non-operating fund of the listed company occupied by the controlling shareholder and its affiliated parties.V. The board of directors supervisors and independent directors (if applicable) explaining the "non standard audit report" from the accounting firm during the reporting period □Applicable √Not-applicable Certified public accountants do not issue "non-standard audit report" for the current report. VI. Explaining the change with last year's financial statements accounting policies accounting estimate and accounting methods √Applicable □ Not-applicable For details please refer to “31. Accounting Policies and Changes in Accounting Estimates” of the “Significant Accounting Policies and Accounting Estimates” in Note 3 to the Financial Statements in the “2018 Annual Report of the Company”.VII. During the reporting period big accounting errors correction and the need for trace restatement □Applicable √Not-applicable During the reporting period no significant accounting errors correction and no need for trace restatement. VIII. Compared with financial report for last year the explanation to the scope change of consolidated statements √ Applicable □ Not applicable During the reporting period Changan Automobile newly established one wholly owned subsidiaries Chongqing Chehe Mei Technology Co. Ltd. which was included in the consolidated statements.IX. The appointment dismissal of the accounting firm The appointment of the accounting firm The name of the domestic accounting firm Ernst & Young Hua Ming LLP Domestic accounting firms payment (ten thousand Yuan) 386 A continuous years of domestic accounting firms audit service 13 Domestic accounting firm of Certified Public Accountants name Qiao Chun Hu Yan Whether to change the accounting firms □Applicable √Not-applicable Employ audit of internal control accounting firms financial adviser or sponsor √Applicable □Not-applicable Through the approval from the company's 2018 annual shareholders' meeting the company hired Ernst &Young Huaming certified public accountants (special ordinary partnership) as the company's 2019 annual internal control audit certified public accountants. In 2019 the internal control audit fee paid for the internal control auditing services provided by Ernst &Young Huaming certified public accountants (special ordinary partnership) is RMB 1.166 million yuan. X. After the disclosure of the annual report the Company faces the suspension and termination of the listing □Applicable √Not-applicable XI. Bankruptcy restructuring related matters □Applicable √Not-applicable During the report period no bankruptcy restructure related matters occur. XII. Crucial litigation and arbitration events □Applicable √Not-applicable During the reporting period the company has no crucial litigation and arbitration events. XIII．Punishment and rectification □Applicable √Not-applicable During the reporting period there’s no punishment and rectification. XIV. The integrity of company and its controlling shareholder actual controller □Applicable √Not-applicable XV. Company equity incentive plan the implementation of the employee stock ownership plan or other staff incentives. √Applicable □Not-applicable At the 50th meeting of the 7th board of directors A bill to cancel some stock options of the Company was deliberated and passed on Apr 19th 2019 and 9503400 stock options would be cancelled. For details please refer to The announcement of cancellation about some stock options of the company (Announcement Number: 2019-24) on Apr 23rd 2019. On May 15th 2019 the company disclosed Notice on the completion of cancellation about some stock options (Announcement Number: 2019-33) according to relevant regulations the company applied to the shenzhen branch of China securities registration and settlement co. LTD for the cancellation of stock options and completed the cancellation procedures.XVI. Significant related party transactions 1、Related transactions related to day-to-day operation For details please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements. 2、Assets or equity acquisition sales related transactions √Applicable □Not-applicable For details please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements. 3、Related transactions of common investment √Applicable □Not-applicable For details please refer to Chapter four " Major equity investment in the reporting period " in the Financial Statements. 4、Related rights and debt relations √Applicable □Not-applicable For details please refer to Note 9 "Related Party Relationships and Transactions" in the Financial Statements. Whether there is any non-business related credits and debts □Yes √ No There is no non-operating associated credits and debts during the reporting period. 5、Other significant related transactions √applicable □ not applicable Related queries in disclosure website of interim report of related transactions Name of temporary announcement Temporary announcement date Temporary announcement site name Related transaction announcement thet Chongqing Automobile Finance Co. Ltd. provides financial services (Note 1) Feb 1st 2019 http://www.cninfo.com.cn Related Transactions Announcement that China South Industries Group Co. Ltd. provides financial service for the company (Note 2) Feb 1st 2019 http://www.cninfo.com.cn Announcement about increasing estimated amount of 2019 daily related transaction Feb 1st 2019 http://www.cninfo.com.cn Supplementary announcement about increasing estimated amount of 2019 daily related transaction Feb 21st 2019 http://www.cninfo.com.cn Announcement of Related Transactions for Providing Entrusted Loans to Jiangling Holdings Limited Apr 23rd 2019 http://www.cninfo.com.cn Note 1：Changan Automobile has signed a Financial Service Agreement with China South Industry Group Finance Co.Ltd and strictly implemented the approval procedures from BOD meeting and Shareholders' meeting. In accordance with " Administrative Measures for Financial Companies of Enterprise Groups" issued by CBRC Changan Automobile reviewed China South Industry Group Finance Co.Ltd and issued a risk assessment report.(For details please refer to " A report on risk assessment of China South Industry Group Finance Co.Ltd " disclosed on http://www.cninfo.com.cn on Feb. 28th 2020) In 2019 China South Industry Group Finance Co.Ltd provided the following services for the company: ①Provide the maximum deposit balance of not more than 5.5 billion and the deposit interest rates should not be lower than that of other domestic financial institutions over the same period; ②Provide the maximum credit total of 12 billion yuan and related credit services the credit rate provided by the finance Company for Changan Automobile should not be higher than that of other domestic financial institutions over the same period; ③Provide the maximum credit total of 15 billion auto financial services and other financial services and set the prices for financial services in accordance with the standards not higher than market fair prices or national standards.Note 2：Changan Automobile has signed a Financial Service Agreement with Changan Automobile Fiannce Co.Ltd and strictly implemented the approval procedures from BOD meeting and Shareholders' meeting. In accordance with "Administrative Measures for Motor Financing Companies" issued by CBRC Changan Automobile reviewed Changan auto finance and issued a risk assessment report.(For details please refer to " A report on risk assessment of Changan Automobile Finance" disclosed on http://www.cninfo.com.cn on Feb. 28th 2020) In 2019 Changan auto Finance provided the following services for the company: ①Provide the maximum deposit balance of not more than 3.5 billion and the deposit interest rates should not be lower than that of other domestic financial institutions over the same period; ②Provide the maximum of 2 billion yuan in auto finance personal consumer credit discount service and set the prices for financial services in accordance with the standards not higher than market fair prices or national standards; ③Provide the maximum credit total of 6 billion auto financial services and other financial services and set the prices for financial services in accordance with the standards not higher than market fair prices or national standards.XVII. Major contract and its performance 1、Trusteeship contracting leasing matters （1）Trusteeship □Applicable √ Not-applicable Information about Trusteeship There is no Trusteeship during the reporting period. （2）contracting □Applicable √ Not-applicable Information about contracting There is no contracting during the reporting period. （3）Leasing √Applicable □Not-applicable Information about leasing Related party rental situation can be found in the note nine of financial statements 5 (2) related party relationships and transactions.Projects whose profit and loss to the company during the reporting period is more than 10% of total profits □Applicable √ Not-applicable Projects whose profit and loss to the company during the reporting period can’t be more than 10% of total profits 2、Major guarantee □Applicable √ Not-applicable There’s no major guarantee during the report period. 3、 Entrust others for cash assets management (1) Entrust financial situation □Applicable √ Not-applicable There’s no entrusting situation during the reporting period. (2) Entrusted loans situation √ Applicable □ Not applicable On April 19th 2019 the 51st meeting of the 7th board of directors reviewed and approved the "Proposal on Providing Entrusted Loans to Jiangling Holdings Co. Ltd." agreeing that Changan Automobile provide entrusted loans of 300 million to its joint venture Jiangling Holdings Co. Ltd. For details please refer to the "Announcement of Related Transactions for Providing Entrusted Loans to Jiangling Holdings Limited " (Announcement Number: 2019-27). 4、Other major contract □Applicable √ Not-applicable There’s no other major contract during the reporting period.XVIII. Social responsibility 1、Performance of social responsibilities The full text of the company's social responsibility report has been published on the website of www.cninfo.com.cn on the same day as the company's annual report. 2、Fulfillment of social responsibility for targeted poverty alleviation √ Applicable □ Not applicable In 2019 Changan Automobile actively responded to the Guiding Opinions of the Central Committee of the Communist Party of China and the State Council on the Three-Year Action to Win the Strong Fight against Poverty comprehensively implemented the spirit of the Nineteenth National Congress of the CPC and the Central Conference on Poverty Alleviation and Development. In accordance with the decision-making and deployment of the Party Central Committee and the State Council and in accordance with the actual situation of the enterprise the company have effectively promoted targeted poverty alleviation work and completed the assistance to Yunnan Luxi Yanshan Jiangxi Jishui Hebei Fuping Chongqing Pengshui and Youyang. （1）Fixed Poverty Alleviation Programs in Yunnan “Two Counties” in 2019 The company donated RMB 9 million to Luxi County.On education poverty alleviation projects: invest 1.5 million yuan on the renovation project of dangerous buildings in Alou Primary School of Yongning Village Committee to improve the school infrastructure and provide a safe learning environment for the school students.On poverty alleviation projects for people's livelihood: invest 4.7 million yuan to improve the living environment through the support of rural domestic waste collection and transportation facilities project for the disposal of garbage trucks and stainless steel trash cans (hanging barrels) on demand in Luxi County On the industrial poverty alleviation project: invest 2.8 million yuan to support the construction project of factory nursery base in Jinma The company donated RMB 9 million to Yanshan County.On education poverty alleviation projects: invest 0.3 million yuan on the 980 square metre student complex building of Dageda hope primary school to solve the problem of teaching rooms for school students in grades 1-3 and kindergartens; invest 2 million yuan on the 960 square metre new comprehensive building and 120 square metre latrines and ancillary engineering projects of the Biyun hope primary school.On poverty alleviation projects for people's livelihood: donate 2.89 million yuan to 9 townships for the purchase of the garbage collection vehicles; donate 3.81 million yuan on the project of garbage collection bins (boxes) to purchase domestic garbage collection boxes in 11 townships. （2）Fixed Poverty Alleviation Program in Jishui County Jiangxi Province in 2019 The company donated RMB 2 million to to Jishui County.On the health poverty alleviation project: support the health express project and invest 2 million yuan to purchase medical ambulances for Jishui County. （3）Fixed Poverty Alleviation Programs in Pengshui and Youyang Counties of Chongqing in 2019 According to the "Notice of the Chongqing Municipal Development and Reform Commission's Leading Group for Poverty Alleviation on Carrying out Donation Assistance and Reporting Poverty Alleviation Materials"( Yu Development and Reform Commission of the Poverty Alleviation Group issued [2019] Document No. 1) Changan Automobile donated 300000 yuan to Pengshui County for poverty alleviation.In accordance with the spirit of the Notice of the Office of the People's Government of Jiangbei District of Chongqing on the Work Plan of Aiding Youyang County in 2019 (No. 5 of Jiangbei Prefecture Office) Changan Automobile donated 200000 yuan to Youyang County for the"Golden Plum" planting project in Changsha Village of Lixi Town. （4）Fixed Poverty Alleviation Program inn Fuping Hebei Province in 2019 According to the letter of the poverty alleviation Working Group Office of the State Administration of organ affairs on Further Strengthening the assistance to mengxiang automobile training base of Fuping Vocational Education Center the poverty alleviation work was carried out in Fuping County Hebei Province and materials such as complete vehicles parts machinery and equipment were donated to mengxiang automobile training base of Fuping vocational and technical education center including 38 vehicles 77 parts and components (2 categories and 8 kinds of materials) 30 sets of machinery and equipment equivalent to 9.15 million yuan in total. Changan Automobile Statistics on Poverty Alleviation in 2019 Indicator Unit Quantity / Details Ⅰ. Total —— —— 1.funds 10 thousand RMB 2050 2. Material 10 thousand RMB 915 Ⅱ. Subdivision —— —— 1. Industrial poverty alleviation —— 300 1.1 Industrial poverty alleviation project type —— 1) Construction Project of Factory Seedling Raising Base in Jinma Town Luxi; 280 2) "Golden Plum" Planting Project in Changsha （5）Follow-up precision poverty alleviation plan In 2020 Changan Automobile will adhere to targeted poverty alleviation focus on the combination of poverty alleviation with supporting the will and wisdom complete the task of poverty alleviation in Luxi County Yanshan County Pengshui County Youyang County etc. spread the concept of "love the world" and establish the image of excellent corporate citizens of Changan automobile. 3、Fulfill the social responsibility of the environmental protection Whether the listed companies and their subsidiaries belong to the key pollutant discharge units announced by the environmental protection department √Yes □No Basic status Changan Automobile mainly produces engines and automobiles. The main pollutants are chemical oxygen demand ammonia nitrogen total nickel toluene xylene and non-methane hydrocarbonetc. Waste water mainly comes from the treatment of surface treatment wastewater spray painting wastewater and oil containing wastewater before the coating workshop which is discharged after physicochemical and biochemical treatment. The exhaust gas is mainly painted waste gas and flue gas. The exhaust gas of the spray paint is absorbed concentrated and burned and the exhaust gas of the oven is discharged after burning. Two sulfur oxide and nitrogen oxide are mainly from the waste gas from the clean energy of natural gas. All of the exhaust gases from energy and natural gas combustion are organized emissions. The company's headquarters and subsidiaries have a sound environmental management system which has passed the environmental management system certification.Pollution discharge information Village Lixi Town Youyang; 20 2. Education poverty alleviation —— 1295 2.1 Funding for poor students 10 thousand RMB 1) Renovation project of dangerous buildings in Alou Primary School of Yongning Village Committee in Luxi County; 150 2) Dageda Hope Primary School Project in Yanshan county; 30 3) Biyun Hope Primary School Project in Yanshan county; 200 4) Mengxiang automobile training base project of Fuping vocational and Technical Education Center; 915 3. Medical and health poverty alleviation —— 200 3.1 Medical and health resources invested in poverty areas 10 thousand RMB Jishui County Health Express (Medical Ambulance) Project; 200 4. Other projects - people's livelihood poverty alleviation —— 1170 4.1 Amount of investment 10 thousand RMB 1) Luxi Waste Collection and Transportation Facility Project; 470 2) Yanshan Garbage Collection Vehicle Purchase and Construction Project; 289 3) Inkshan Garbage Collection Tank Purchase Construction Project; 381 4) Pengshui County; 30 During the reporting period there were 412 pollutant outlets and 17 water pollutant outlets. The emission standards were strictly implemented according to the national sewage comprehensive discharge standard the water pollutant discharge standard in Beijing the national standard for the comprehensive emission of air pollutants the standard for the emission of air pollutants on the surface of automobile manufacturing in Chongqing the standard for the comprehensive emission of air pollutants and the vehicle Manufacturing industry (painting process) air pollutant emission standard in Beijing national industrial enterprise boundary environmental noise emission standard and so on. The total emission of major pollutants: 641.11 tons of chemical oxygen 58.33 tons of ammonia nitrogen 26.98 tons of sulfur dioxide 163.45 tons of nitrogen oxides and quantitative volatile organic compounds 2245.02 tons. All the pollutants in the company are discharged and there is no excess total emission. Solid wastes are separately collected and stored. Main dangerous wastes are wastewater and sludge treatment paint slag phosphated residue and waste solvent etc. The units with hazardous waste business qualification are entrusted to dispose hazardous wastes. The general industrial solid wastes and household garbage are disposed by the units with qualification according to the requirement of the local government. The waste electrical and electronic products are disassembled by the units with qualification and are safely disposed by the units with hazardous waste business qualification. During the reporting period 70000 tons of hazardous waste and 86400 tons of general industrial solid waste were disposed. Construction and operation of pollution prevention facilities During the reporting period the main waste gas prevention and control facilities include foundry dust removal and deodorization facilities in engine factories welding dust removal facilities in vehicle factories and treatment facilities for coating volatile organic waste gas; together with wastewater treatment facilities they are included in preventive maintenance management of equipment with account books operation instructions preventive maintenance rules preventive maintenance plans and implementation records and equipment spot inspection records operating records and so on. The facilities are running normally. The key pollutant discharge units are all equipped with automatic wastewater monitoring facilities and entrusted the tripartite company to operate and maintain the facilities. Administrative licensing of environmental impact assessment and other environmental protection for construction projects In accordance with the regulations of the State Council on environmental protection and management of construction projects the People's Republic of China Environmental Impact Assessment Law the regulations on environmental protection in Chongqing and the Interim Measures for the construction project completion of environmental protection and acceptance by the Ministry of environmental protection of the state the environmental impact assessment and completion ring of the new modified and expanded projects are required and strictly enforce the environmental impact assessment system and the "Three Simultaneity" system. During the reporting period the environmental impact assessment approvals for the second phase of the crash laboratory and the CS85 project have been obtained and the completion of the environmental protection acceptance of the new energy first phase project electric drive project and automobile product structure adjustment project has been completed. Emergency preparedness and exercise of emergency environmental events Continue to carry out environmental protection emergency drills to improve the emergency response capabilities of environmental emergencies. During the reporting period all bases had environmental risk assessment reports and emergency response plans for environmental emergencies. Jiangbei Engine Factory of Chongqing Headquarters Changan completed the revision and filing of emergency response plans for environmental emergencies. Each base station prepared emergency drill plans and carried out emergency response in accordance with regulatory requirements Drills to continuously improve the practicality of emergency plans and employees' emergency response capabilities. No sudden environmental incident occurred.Programming and implementation of self-monitoring of the environment In 2019 Key sewage units of Changan Automobile: OuShang Automotive Division Jiangbei Engine Factory Yubei Factory Beijing Changan Hefei Changan. All the key sewage made self-monitoring schemes and self-monitoring has been carried out and information disclosure has been carried out according to the requirements of the local ecological environment department.Others During the reporting period all bases carried out the declaration of national sewage permits in accordance with regulations and obtained national sewage permits. OuShang Automotive Division Jiangbei Engine Factory Yubei Factory and Mould Business Department have carried out environmental credit evaluation work all of which have been awarded the title of Environmental Integrity Enterprise.XIX. Other important events √Applicable □Not-applicable For details please refer to "2、Selling of major equity" in Section IV "VI. Selling of major assets and major equity" of the annual report.XX. Important matters of the Company's subsidiary √Applicable □Not-applicable For details please refer to "2、Selling of major equity" in Section IV "VI. Selling of major assets and major equity" of the annual report. Chapter 6 Changes in the shareholding of the company and shareholders I. Change in shareholdings 1、Change in shareholdings Unit: One share Balance before current change Addition and deduction（+，-） during change Balance after current change Quantity Ratio (%) Additional issued Stock dividend Provident fund transfer other Quantity Ratio (%) Non-circulated shares 139781303 2.91% -139762403 18900 0.00% 1、State-owned legal person shares 139762403 2.91% -139762403 0 0.00% 2、Senior management personnel shares 18900 0.00% 18900 0.00% Circulated shares 4662867208 97.09% +139762403 4802629611 100.00% 1、Domestic listed RMB shares 3760881066 78.31% +139762403 3900643469 81.22% 2、Domestic listed foreign shares 901986142 18.78% 901986142 18.78% Total shares 4802648511 100.00% 0 4802648511 100.00% Reason of stock changes √ applicable □ not applicable The company issued 139762403 shares of RMB common shares (A shares) to China Changan on October 14 2016 and released the restricted sales and listed circulation on October 16 2019. Approval of stock changes □ applicable √ not applicable Ownership transfer of stock change □ applicable √ not applicable Progress in the implementation of stock repurchase □ applicable √ not applicable Progress in the implementation of the reduction of stock by means of centralized bidding □ applicable √ not applicable The influence of share changes on financial indicators such as the latest year and the latest basic earnings per share and diluted earnings per share the net assets per share belonging to the common shareholder of the company □ applicable √ not applicable Other contents which the company regards necessary and securities supervising institution requires the Company to disclose.□ applicable √ not applicable 2、Change in Non-circulated shares √ Available □Not-available Unit：one share Name of shareholders Non-circulated shares held at the year-beginning Decrease during the reporting period Increase during the reporting period Non-circulated shares held at the year-end Reason for non-circulated shares Date for the circulated shares China Changan Automobile Co. Ltd. 139762403 139762403 - - Non - public offering shares of 139762403 in 2016 2019-10-16 Zhu Huarong 18900 - - 18900 Executive lock stocks 6 months after the retirement Total 139781303 139762403 - 18900 -- -- II. Issuing and listing of securities 1、Securities issuance (excluding preferred stocks) during the reporting period □ applicable √ not applicable 2、Changes in the total number of shares of the Company and changes in the structure of the shareholders and in the structure of the Company's assets and liabilities □ applicable √ not applicable 3、Existing internal staff shares □ Available √ Non available III. Shareholders and actual controllers situation 1、The number of shareholders of the company and the stock Unit: one share Number of ordinary shareholders at the period-end 154222 Number of ordinary shareholders at the month-end prior to the disclosure of this Report 142292 Number of preferred shareholders with resumed voting rights at the period-end 0 Number of preferred shareholders with resumed voting rights at the month-end prior to the disclosure of this Report 0 Holding more than 5% of the shareholders or top 10 shareholders situation Name of shareholders Nature of Shareholders Percentage of total shares （%） Shares held at the year-end increases and decreases during the report period Non-circulat ed shares held at the year-end Circulated shares held at the year-end Pledged/ Frozen cases Share status amount China South Industries Group Co. Ltd.State-owned legal person shares 21.56% 1035312673 - - 1035312673 No pledge or freeze China Changan Automobile Co. Ltd. State-owned legal person shares 19.32% 928044946 - - 928044946 No pledge or freeze China securities finance Co Ltd domestic general legal person shares 4.88% 234265333 - - 234265333 No pledge or freeze United Prosperity (Hongkong) Investment Co.Limited foreign legal person shares 3.21% 154120237 - - 154120237 No pledge or freeze Hong Kong Central Clearing Company Limited foreign legal person shares 2.45% 117696728 94048681 - 117696728 No pledge or freeze Central Huijin Investment Ltd.domestic general legal person shares 1.15% 55393100 - - 55393100 No pledge or freeze DRAGON BILLION SELECT MASTER FUND foreign legal person shares 0.79% 38006736 -2590378 - 38006736 No pledge or freeze GIC PRIVATE foreign legal 0.73% 35283393 -9519830 - 35283393 No pledge or LIMITED person shares freeze CAPE ANN GLOBAL DEVELOPING MARKETS FUND foreign legal person shares 0.45% 21851125 8551149 - 21851125 No pledge or freeze Industrial and Commercial Bank of China-E Fund Value Growth Hybrid Securities Investment Fund fund finance products etc. 0.43% 20672905 20672905 - 20672905 No pledge or freeze Explanation on the relationship and the action alike of above shareholders Among the top 10 shareholders China South Industries Group Co. Ltd. the actual controller; China Changan Automobile Group Co. Ltd. the controlling shareholder and its wholly owned subsidiary United Prosperity(Hong Kong) Investment Co. Limited. belong to the concerted actor regulated by “Disclosure Administration ofShares Change Information of The Listed Company”.The ten largest circulated shareholders Name of shareholders Shares at the year end Shares type Type Amount China South Industries Group Co. Ltd. 1035312673 RMB ordinary shares 1035312673 China Changan Automobile Co. Ltd. 928044946 RMB ordinary shares 928044946 China securities finance Co Ltd 234265333 RMB ordinary shares 234265333 United Prosperity (Hongkong) Investment Co. Limited 154120237 Domestic listed foreign shares 154120237 Hong Kong Central Clearing Company Limited 117696728 RMB ordinary shares 117696728 Central Huijin Investment Ltd. 55393100 RMB ordinary shares 55393100 DRAGON BILLION SELECT MASTER FUND 38006736 Domestic listed foreign shares 38006736 GIC PRIVATE LIMITED 35283393 Domestic listed foreign shares 35283393 CAPE ANN GLOBAL DEVELOPING MARKETS FUND 21851125 Domestic listed foreign shares 21851125 Industrial and Commercial Bank of China-E Fund Value Growth Hybrid Securities Investment Fund 20672905 RMB ordinary shares 20672905 The top 10 shareholders to sell circulated shares and the infinite tradable relationship between shareholders and top 10 shareholders or concerted action Among the top 10 shareholders China South Industries Group Co. Ltd. the actual controller; China Changan Automobile Group Co. Ltd. the controlling shareholder and its wholly owned subsidiary United Prosperity (Hong Kong) Investment Co. Limited. belongto the concerted actor regulated by “Disclosure Administration of Shares ChangeInformation of The Listed Company”.Whether the company top 10 shareholders of ordinary shares and the top 10 circulated shareholders agreed on the repurchase transactions during the report period □Available √Not- available The company top 10 shareholders of ordinary shares and the top 10 circulated shareholders did not agree on the repurchase transactions during the reporting period。 2、The controlling shareholder of the company. Nature of the controlling shareholder: the central state-owned Type of the controlling shareholder: legal person Name Legal /Representative Date of establishment Organization code Business scope and major products: CHINA CHANGAN AUTOMOBILE GROUP CO. LTD Liu Weidong Dec 26th 2005 911100007109339 484 Design development manufacture and sales of automobile &motorcycle automobile &motorcycle engine automotive and motor cycle components& parts; sales of optical products electronic and photoelectron products night-time vision device information and communication equipment; technical development technical transfer technical consultation technical training and other technical service relative with the operation mentioned above; imports and exports; merge and acquisition and consultation of assets restructuring.The controlling equity and equity during the reporting period the controlling shareholder of listed companies in other domestic and foreign markets To the reporting period the holding companies: Harbin Dongan Auto Engine Co. Ltd. (stock code 600178); Hunan Tianyan Machinery Co. Ltd. (stock code 600698) Chongqing Changan Minsheng APLL Logistics Co. Ltd(stock code 01292.HK) The change of controlling shareholder during the reporting period □Available √ Not- available No changes in controlling shareholder during the reporting period. 3、The ultimate controller of the Company Nature of the ultimate controller: the central state-owned asset management institution Type of the ultimate controller: legal person Name Legal /Representative Date of establishment Organization code Business scope and major products: China South Industries Group Corp.Xu Ping 29 Jun.1999 91110000710926 043F investment and management of state-owned assets; manufacturing of guns and firearms; engineering prospecting designing construction contracting construction supervision; equipment installation etc.The controlling equity To the reporting period direct or indirect holding companies: Harbin Dongan Auto Engine Co. Ltd. (stock and equity during the reporting period the controlling shareholder of listed companies in other domestic and foreign markets code 600178); Baoding Tianwei Electric Co. Ltd. (stock code 600550); Jiangling Motors Co. Ltd. (stock code 000550); Hunan Tianyan Machinery Co. Ltd. (stock code 600698); Chongqing Jianshe Automotive Systems Co. Ltd. (stock code 200054); China Optical Group Co. Ltd. (stock code 002189); Yunnan West Instrument industrial Co. Ltd. (stock code 002265); Chongqing Changan Minsheng logistics Limited (stock code 01292.HK).The change of the ultimate controller during the reporting period □Available √ Not- available No changes in the ultimate controller during the reporting period.Relationship among the Company and its controlling shareholders: Actual control people control the company through trust or other asset management method. □Available √Not available 4、Other legal shareholders with over 10% holding □Available √ Not available 5、 Reduced shareholdings of controlling shareholders actual controllers restructuring parties and other committing parties □Available √ Not available Chapter 7 Information about Directors Supervisors Senior Management and Employees Ⅰ. Share ownership changes of directors supervisors and senior management Name Position As state Gender Age Term start date Term Termination date Shares held at beginning（stock） increased share number in this issue（stock） decrease d share number in this issue（stock） share number at the end（stock） Zhang Baolin Chairman present M 57 2017-09-22 Up to now Zhu Huarong Director President present M 54 2016-03-23 Up to now 25200 - - 25200 Zhou Zhiping Director present M 49 2016-03-23 Up to now Tan Xiaogang Director present M 56 2016-03-23 Up to now Zhang Dongjun Director present M 53 2018-05-18 Up to now Zhang Deyong Director The chief accountant present M 45 2018-05-18 Up to now Liu Jipeng independent director present M 63 2016-03-23 Up to now Li Qingwen independent director present M 63 2016-03-23 Up to now Chen Quanshi independent director present M 74 2016-03-23 Up to now Ren Xiaochang independent director present M 63 2017-09-20 Up to now Pang Yong independent director present M 50 2016-03-23 Up to now Tan Xiaosheng independent director present M 49 2016-03-23 Up to now Wei Xinjiang independent director present M 50 2017-09-20 Up to now Cao Xingquan independent director present M 48 2018-05-18 Up to now Yan Ming Chairman of the supervisory present M 54 2019-01-03 Up to now Sun Dahong Supervisor present M 53 2016-03-23 Up to now Zhao Huixia Supervisor present M 59 2016-03-23 Up to now Wang Yanhui Employee Supervisor present F 53 2020-04-18 Up to now Luo Yan Employee Supervisor present F 45 2016-03-23 Up to now Yuan Mingxue Executive Vice President present M 51 2016-03-23 Up to now Liu Bo Deputy Vice Director present M 53 2016-03-23 Up to now He Chaobing Deputy Vice Director present M 52 2016-03-23 Up to now Zhang Jingjing Deputy Vice Director present F 53 2016-03-23 Up to now Li Wei Deputy Vice Director present M 53 2016-03-23 Up to now Tan Benhong Deputy Vice Director present M 44 2017-08-31 Up to now Liu Zhengjun Deputy Vice Director present M 54 2017-11-24 Up to now Ye Pei Vice President present M 44 2018-09-21 Up to now Zhao Fei Vice President present M 45 2018-09-21 Up to now Chen Wei Vice President present M 47 2018-09-21 Up to now Li Mingcai Vice President present M 38 2018-09-21 Up to now Li Jun Board Sectary present F 50 2016-03-23 Up to now Zhang Anguo Employee Supervisor departure M 60 2016-03-23 2019-06-12 Total 25200 - - 25200 Ⅱ. Personnel Changes of directors supervisors and senior management Name Position Type Term Reason Yan Ming Chairman of the supervisory elected 2019-01-03 recruitment for work needs Wang Yanhui Employee Supervisor elected 2020-04-18 recruitment for work needs Zhang Anguo Employee Supervisor departure 2019-06-12 reached the statutory retirement age Ⅲ. Employment Professional Background Main Work Experience and Main Duties and Responsibilities of present directors supervisors and senior managers 1、Directors Mr. Zhang Baolin Chairman born in 1962. He has obtained a postgraduate degree a senior economist and senior political &ideological worker. He currently holds the position of the member of the Party Group and the Vice General Manager of China South Industries Group and the Chairman of Chongqing Changan Automobile. He used to work as Vice Secretary and Secretary of the League Committee of the South-west Industries Bureau in China Industries Company Secretary of the Party Committee of Chongqing Changfeng Machinery Factory Senior Deputy General Manager and General Manager of Chengdu Wanyou Company Director Vice President and Deputy General Manager of Changan Automobile (Group) Co. Ltd. the President of the Company the vice secretary of the Party Committee of China Changan the president assistant of South Industries Group the General Manager and the vice Chairman of the Company the General Manager of China Changan Automobile Co Ltd.Mr. Zhu Huarong Director and President Secretary of the party committee. He was born in 1965 master graduate student senior engineer. Currently he is the president assistant of South Industries Group the director of China Changan Automobile Group and the director、president and the vice secretary of party committee of Chongqing Changan Automobile. He was vice director of Changan Technology Department the chief engineer of Changan Automobile Manufacture Factory president assistant of Changan Automobile (Group) Co. Ltd. and director of technical center director of science and technology committee vice President of Changan Automobile (Group) Co. Ltd and the leader of engineering research division. vice President and secretary of party committee of Chongqing Changan Automobile the vice secretary of party committee of China Changan Automobile Group Mr. Zhou Zhiping Director. He was born in 1971 the doctor graduate senior engineer. Currently he is staff director of China South Industries Group director secretary of the Party Committee Union Chairman of Chongqing Changan Automobile. He was deputy director of Motor sector of development and planning department of China South Industries Group Corp manager and director of long-term planning sector of development and planning department of China South Industries Group Corporation deputy director and director of capital operation Department of China South Industries Group Corp the general manager of the southern industrial asset management Ltd the staff director of China South Industries Group the secretary of party committee and the labor union chairman of the Company.Mr. Tan Xiaogang Director. He was born in 1963 the master’s degree researcher-level senior engineer. Currently he is the director of Development & Planning Department of China South Industries Group. He used to be the Vice Director executive Vice Director of Workshop No. 343 deputy Secretary of the Yuanling County CPC Committee in Hunan Province director executive deputy general manager and general manager of Hunan Yunjian Co. Ltd Chariman the Secretary of the Party Committee of Hunan Yunjian Group and vice director of Development & Planning Department of China South Industries Group.Mr.Zhang Dongjun Director is born in 1966 master’s degree. Now he is the Director and Chief Accountant of China Changan Automobile Group Co Ltd. He used to be the deputy director of the comprehensive technology department the director the director of the technical management office the deputy general manager of the southern industrial asset management company the deputy director of the capital operation department of the southern industrial automobile company the general manager of the capital operation department of China changan capital the assistant to the President.Mr. Zhang Deyong director The chief accountant born in 1975 MPAcc senior accountant. He is the chief accountant of the Company . He was the Deputy Director Director Assistant to the Director of the Finance Division of China Institute of Weaponry and Equipment Group Deputy Director of the Finance Department of China Weaponry and Equipment Group Corporation Member deputy director of the financial department of China Weapon Equipment Group Corporation (on duty) director chief accountant and member of the party committee of Chongqing Changan Industry Group Co. Ltd.Mr. Liu Jipeng independent director. He was born in 1956 master degree. He has the certificates of Phase II Professor Senior Fellow Senior Economist and Certified Public Accountant and currently serves as Dean and Phase II Professor of Business School of China University of Political Science and Law. Currently he is the dean professor and PhD supervisor of Capital Finance Institute in China University of Political Science and Law; Legal adviser to the State-owned Assets Supervision and Administration Commission of the State Council; the vice Chairman of China Enterprise Reform and Development Research Association; Deputy director of the independent board of directors of the China listed companies Association. He is a famous expert on joint-stock systems and corporate issues specializing in the combination of joint-stock systems collectivization and internationalization theory and practice. He has published more than 400 articles on newspapers and magazines domestic and abroad such as People’s Daily and Economic Research Journal and received more than 800 interviews by domestic and overseas newspaper and magazines. In the last 20 years he has managed the shareholding system reform corporate strategy acquisition and reorganization financing scheme design for over 300 companies such as National Electricity Company Aviation Industry Corporation of China Chinalco Haier Group Hainan Airlines Wanxiang Group Li-ning Sproting Goods Co Tianjin Development Zone Head Office. These enterprises cover more than 20 provinces and cities including various industries. He is called “the first person in stock reform” by media.Mr. Li Qingwen independent director. He was born in 1956 master degree. He is currently the dean of the Automobile Evaluation Institute dean o of Beijing invisible unicorn information technology institute and vice chairman of the China Automobile Talent Research Association. He once served as chairman of China Energy Automobile Communications Group president of China Automobile Newspaper president of China Energy Newspaper director and deputy director of the General Office of Heilongjiang Provincial People's Government and secretary of Hailin Municipal Committee of Heilongjiang Province. Since 1998 his works with a total of over one million words in automotive research monographs reviews and interviews have been published.Mr. Tan Xiaosheng independent director born in 1970 bachelor’s degree. Currently he is Beijing Saiboyingjie Technology Co.Ltd founder senior engineer deputy secretary-general of the CCF outstanding cyber security talents in 2018 high-end leader of Zhongguancun in 2012 technical expert of the Network Security Bureau of the Ministry of Public Security and chairman of the CCF YOCSEF 2015-2016 headquarters and successively worked at Xi'an Jiaotong University Peking University Founder Group Shenzhen Modern Shenzhen Haoxin 3721 Yahoo! China MySpace China. From 2009 to 2019 he worked at 360 Company and served as vice president of technology chief privacy officer chief security officer and technical president. He is also an adjunct professor and manager of the School of Computer Science at Chongqing University of Posts and Telecommunications an adjunct professor at Xidian University and an enterprise tutor at Beijing University of Posts and Telecommunications. Technical areas: network security technology cloud computing platform technology operational automation technology search engine technology.Mr. Pang Yong independent director born in 1969 master’s degree. Currently he is the chairman and CEO of IDEO and adjunct professor of Jilin University the vice president of the China Federation of Industry and Commerce Automobile Dealers the vice president of the China-Europe Alumni Automobile Industry Association a member of the Jiusan Society and a member of Alxa SEE. As a senior expert in the Chinese automobile industry an advocate of the lean operation model of China's automobile marketing focusing on the automotive industry + consulting + marketing solutions and digital transformation services he led the team to build a data and technology-driven channel dealer competitiveness database and The evaluation system "AD-CAS" utilizes the SaaS platform to realize the digital upgrade of China's automotive omni-channel and builds a cloud service for all new retail scenes of vehicles-Yimai Car. Enthusiastic for public welfare there are special scholarship programs for young students in Tsinghua University Jilin University Beijing University of Aeronautics and Astronautics and Tongji University.Mr. Chen Quanshi independent director born in 1945 bachelor's degree. Currently He is currently a professor and director of the Department of Automotive Engineering of Tsinghua University director of the Electric Vehicle Research Office and honorary director of the Electric Vehicle Branch of the China Automobile Engineering Society. He once served as vice president of the School of Mechanical Engineering of Tsinghua University head of the Department of Automotive Engineering and director of the Automobile Research Institute. To undertake the topic of "Fuel Cell City Passenger Vehicle Technology Research" in the major national "863" electric vehicle projects national energy conservation and new energy vehicle 863 major projects; He won the first prize for scientific and technological progress in Beijing in 2009 and the second prize for national invention(ranked second). He published a monograph "Fuel Cell Electric Vehicle"(first author) 2004 Tsinghua University Press; Editor-in-Chief of Advanced Electric Vehicle Technology (First Author) the first edition of 2007 (won the second prize of the National Machinery Industry Science and Technology Progress Award).Mr. Ren Xiaochang independent director was born in 1956 bachelor's degree. He served as the chairman and general manager of China Automobile Engineering Research Institute the group expert of the 12th Five-Year plan national key science and technology special (EV) projects and the committee member of the second national strategic emerging industry development expert advisory committee. He is the expert of the Chinese machinery industry science and technology the special subsidy expert of the State Council and the evaluation expert of the national science and technology awardthe member of the academic committee of China Academy of international engineering. Its main research and scientific research projects have won the awards such as provincial and ministerial level and scientific and technological progress awards including 3 second-level awards and 3 third-level awards.Mr. Wei Xinjiang independent director was born in 1969 PHD. He is currently assistant general manager of China Life Insurance (Group) company strategic planning department and senior researcher of China life financial research institute. He was engaged in teaching and scientific research for 13 years at the International Investment Department of the Chinese Academy of Finance and the Institute of Finance and economics of foreign trade and Economy University. He studied at Holland business school the University of Birmingham the European Commission and the United Nations Hague International Court of justice for 3 years.He is the expert in international business overseas M & A operation of capital market and so on. It has rich research on finance insurance overseas investment and comprehensive finance and so on. He also served as a part-time professor and postgraduate instructor of the International College of Renmin University of China Xi’an Jiaotong-Liverpool University and the Holland business school. He has published nearly 150 papers in international and domestic journals and 8 books such as the fraud and anti-fraud of automobile insurance the comparative study of the anti-monopoly policies between the United States and the EU and the analysis of the accounting statements and investment value of the enterprises.Mr. Cao Xingquan independent director born in 1971 doctor of law. He is currently a professor at the School of Civil and Commercial Law of Southwest University of Political Science and Law and a doctoral tutor in the direction of civil and commercial law. He has 17 years of civil and commercial law teaching and research experience including 14 years of teaching at Southwest University of Political Science and Law. He is a lecturer in the National fine course "Business Law" and the National Resource sharing course "Business Law". He focuses on the study of commercial law company law securities law and insurance law. He has presided over or participated in more than 20 various scientific research topics published more than 60 academic papers published more than 10 academic works and participated in teaching materials; He is the executive director and director of the China Law Conference Law Insurance Law and Securities Law Research Association; He once served as vice president of the Fourth Division of the Chongqing First Intermediate People's Court Civil Trial; Member of Chongqing People's Procuratorate Expert Committee on Civil Administration Supervision; He has participated in many national and local legislative consultations engaged in a large number of professional consultations special lectures and legal services in enterprise restructuring capital operations and corporate governance and concurrently served as an arbitrator in arbitration committees in Shenzhen Chongqing and Zunyi. 2、Supervisors Mr. Yan Ming Chairman of the Supervisory Board born in 1965 Master of Law Senior Political Engineer. He is currently the senior professional of the Audit and Risk Department of China South Industries Co. Ltd. Chairman of the Weaponry Equipment Group Finance Co. Ltd. Baoding Tianwei Group Co. Ltd. He served as Deputy Minister and Minister of Organization Department of Jialing Industrial Co. Ltd.; United Front Department Minister Party School Executive Vice President Director of Human Resources Development Management Office of Jialing Industrial Co. Ltd.; Deputy Party Secretary and Disciplinary Committee Secretary of Jialing Industry Co. Ltd..; Deputy Director of Human Resources Department of China South Industries (Exchange); Deputy Director and Director of the Party Group Work Department(Supervision Department) of China South Industries Co. Ltd. Deputy Chairman of the Party Group Discipline Inspection Unit Member Deputy Secretary Member and Secretary of the CPC Ordnance Group directly under the Committee; Director of the Supervision Department of China South Industries and deputy leader of the Party Group Discipline Inspection Unit; Audit and Risk Department Inspector of China South Industries; Chairman of the Supervisory Board of Baoding Tianwei Group Co. Ltd. Zhonghui Fortis(Shenzhen) Co. Ltd. Southern Industrial Assets Management Co. Ltd.Weaponry Equipment Group Finance Co. Ltd.Mr. Sun Dahong Supervisor. He was born in 1966 master degree senior economist. Currently he is the vice director of the legal department. He used to be the vice director of legal division under the general office in China South Industries Group vice director and director of Legal Advisor Division in China South Industries Group and director of Legal Affairs Division of general officedeputy director of general office and the chief of Secrets Agency in South Industries Group.Mr. Zhao Huixia Supervisor. He was born in 1960 bachelor degree senior account. Currently he is the professional senior staff.He used to be the deputy general accountant and director of Hafei Automobile Co vice general manager of Harbin Hafei Automobile Industry Group vice general manager of Hafei Automobile Co the Secretary of the Party Committee and Vice President of Hafei Automobile Industry Group vice general manager of AVIC Automobile Industry Co. Ltd Assistant President and general manager of Operations Management Department of China Changan Automobile Group Co Ltd.Ms. Wang Yanhui employee supervisor. She was born in 1966 bachelor's degree senior engineer. She is currently the project director of the commissioned development business of Changan Automobile. She used to be the deputy director of science and technology management division director of science and technology management division deputy director of science and technology and project management department director of science and technology and project management department Secretary of Party branch executive vice chairman of science and Technology Association director of comprehensive planning department press spokesman of the company and project director of strategic planning department.Ms. Luo Yan staff supervisor. She was born in 1974 bachelor degree assistant economist. Currently she is the chief of salary & performance section of HR department. She used to be the maintenance electricians engineering measurer person labor technology fixed member schemer in workshop No.232 of No.3 plant chief of welfare section of Salary Division of HR Department and chief of welfare office III. 3、Senior Management other than Directors and Supervisors Mr.Yuan Mingxue the major executive vice president born in 1968 master’s degree senior engineer he used to be the Vice Director and Director of the General Manager’s Office Director of the Quality Control Department Assistant to President and Vice President of Changan Automobile (Group) CO. LTD the Deputy Executive President and the Secretary of CPC of Chognqing Changan Suzuki Auto. Co. Ltd vice president of the Company. Mr. Liu Bo Executive Vice President and Head of Automobile Engineering General Institute born in 1966 Master's degree Senior Researcher-level Engineer. He used to serve as the Vice Director of Workshop No.71 of Jiangling Machinery Plant the Vice Director of Engine Research Division under Company Technology Department the Vice Director of the Technical Center the Vice Director Executive vice Director of Automobile Engineering Institute Assistant to the President and the Director of Project Supervision Office of the Company the Director of the Project Administration Department President of Changan Automobile Engineering Research Institute. Mr. He Chaobing Secretary of the party committee of auchan automotive divisionExecutive Vice President and Director of Operations Management Committee born in 1967 master's degree Senior engineer. A former director of fourth development center and Vice President of Automobile Engineering Research Institute Deputy director of commercial vehicle business management department President assistant and general manager of the Beijing Changan Automobile Co. Ltd President assistant and director of purchase department President assistant and vice general manager of the commercial vehicle division Executive vice president and party secretary of changan Ford Motor Co. Ltd.Ms Zhang Jingjing Executive Vice President (Deputy director of development planning department of China north equipment group corporation (Temporary post)). Born in 1966 bachelor's degree professor-level and senior engineer. She used to serve as former deputy chief engineer of the 2nd factory of the Company vice director of development and planning department of the Company deputy director of Science and Technology Committee of the Company deputy director of the administration office the director of the project department the minister of the Company's human resources department the company CEO assistant and the director of Quality Department and General Counsel.Mr. Li Wei executive vice president born in 1966. Master graduate student senior engineer. The former president of institute of automobile body design directorthe Beijing Institute executive vice president assistant president of Changan automobile and deputy vice president and the Secretary of the Party Committee of Changan Automotive Engineering Research Institute General manager of chongqing changan new energy automobile technology co. LTD.Mr. Tan Benhong the executive vice president and the director of the Institute of styling design. Born in 1975 master’s degree engineer. He was the deputy director of the Changan company Automobile Technology Department the product technology manager of the Nanjing factory of Changan Ford Automobile Co. Ltd. the deputy director of the reception office and the secretarial reception department of the Changan Company office the director of the technical Planning Institute of the Automobile Engineering Research Institute the deputy chief engineer of the Automobile Engineering Research Institute and the director of the Institute of technical planning and research the Vice president of the General Academy of automobile engineering research Dean of Beijing Research Institute the department head of market department brand public relations product planning department and vice deputy President and Secretary of the Party committee of the Research Institute and the spokesman of company news.Mr. Liu Zhengjun executive vice president general manager of Chongqing changan Co. Ltd. general manager of new marketing business department director of Chelizi joint venture project director of light vehicle operation management committee.He was born in 1965 bachelor's degree and senior engineer. He is currently the chief economist of China Changan. He used to be the deputy director and director of the inspection department of the quality department in the company the vice department head and department head of the quality department of the Company the director of the office of the quality division the general manager and party secretary of the Hebei Changan Automobile Co. Ltd. the vice chairman general manager chairman of Hafei automobile.Mr. Ye Pei vice president and general manager and the secretary of the party committee of the passenger car marketing department Secretary of the party committee deputy director of the passenger car operation management committee born in 1975 master's degree engineer. He once served as the deputy chief of the Jiangling Engine Branch General Administration Division deputy chief of the quality division deputy director of the quality management department assistant general manager of Nanjing Changan Automobile Co. Ltd. deputy minister of quality and director of the quality evaluation and improvement department. Director of Market Quality Office deputy director of the company's office general manager of Nanjing Changan Automobile Co. Ltd. Secretary of the party committee Deputy general manager of commercial vehicle business department and manufacturing logistics Department of commercial vehicle business department Secretary of the party branch assistant to the general manager of the company Secretary of the strategic planning department Secretary of the party branch general manager and party secretary of the car sales department.Mr. Chen Wei Vice President and Director of Safety Production of the company Deputy Director of the European Business Management Committee born in 1972 undergraduate engineer. He once served as secretary of the Youth League Committee of Chang 'an Automobile Manufacturing Plant director of the factory office deputy director director and party committee secretary; Vice President of Personnel and Secretary of Discipline Committee of Changan Ford Co. Ltd.; Chang 'an Automobile Manufacturing and Logistics Department Minister Party Branch Secretary Director of the OTD Project of the company General Manager of Beijing Chang' an Automobile Company Secretary of the Party Committee and Director of the Beijing Research Institute Construction Project. Mr. Li Mingcai vice president and general manager of overseas business department general counsel of the company 1981 master's degree. He used to be the acting manager and manager of the sales department of Chongqing Changan Automobile International Sales Service Co. Ltd.. Changan Automobile Overseas Business Development Department Assistant General Manager and Sales Regional Manager Deputy General Manager of Overseas Business Development Department General Manager of International Sales Company Deputy General Manager of Changan Automobile Overseas Business Development Department Director of Russian JV Project Brazilian Project Manager. Mr. Zhao Fei vice president and executive vice president of Changan Ford Secretary of the party committee born in 1974 master's degree senior engineer. He used to be the technical director and technical quality manager of the engine Department of Changan Ford Mazda Automobile Co. Ltd.; Engine Director of Changan Ford Mazda Automobile Co. Ltd..; Institute Director of Chang 'an Automobile Research Institute Engine Technology; Deputy director of Chang 'an Engine 4 Factory; China Chang'an Group's deputy general manager of science and technology development department; Director and General Manager of Harbin Dongan Automobile Engine Manufacturing Co. Ltd.. Party secretary and chairman of Harbin Dongan automobile engine manufacturing Co. Ltd. assistant to President and minister of strategic planning party branch secretary.Ms. Li Jun the Secretary of BOD and the Vice Director of Capital Operation Department was born in 1969 MBA senior accountant. She used to be the Vice Director of Security Investment Office Director of Capital Operation Office of the Financial Department Director of the BOD Office Vice director of the finance department of the Company. Employment in shareholders’ work unit √Applicable □ Not applicable Name Name of shareholders’ work unit Position in shareholders’ work unit Term start date Term end date Whether get allowance in shareholders’ work unit Zhangbaolin China South Industries Group Corp.secretary of the party committee vice president Y Zhu Huarong China South Industries Group Corp 、 China Changan the Assistant President of China South Industries Group Corp the director of China Changan N Zhou Zhiping China South Industries Group Corp 、 China Changan the employee director of China South Industries Group Corp the general manager and the secretary of party committee of China Changan Y Receiving the Payment allowance in China Changan Tan Xiaogang China South Industries Group Corp Director of the Strategic Development Y Zhang Dongjun China Changan vice president general accountant Y Yan Ming China South Industries Group Corp Audit and Risk Department Senior Specialist Y Sun Dahong China South Industries Group Corp Deputy Director of Legal Department Y Zhao Huixia China Changan the professional senior staff Y Liu Zhengjun China Changan the chief economist of China Changan N Employment in other work unit √Applicable □ Not applicable Name Name of other work units Position in other work units Term start date Term end date Whether get allowance in other work unit Liu Jipeng China University of Political Science and Law the dean professor and PhD supervisor of Capital Finance Institute in China University of Political Science and Law; Legal adviser to the State-owned Assets Supervision and Administration Commission of the State Council; the vice Chairman of China Enterprise Reform and Development Research Association; Deputy director of the independent board of directors of the China listed companies Association.Y Li Qingwen China Energy& Automobile Media Group the dean of the Automobile Evaluation Institute dean o of Beijing invisible unicorn information technology institute and vice chairman of the China Automobile Talent Research Association Y Tan Xiaosheng Beijing Saiboyingjie Technology Co. Ltd The founder of Beijing Saiboyingjie Technology Co.Ltd、senior engineeringY Pang Yong IDEO Chairman and CEO of IDEO adjunct professor of Jilin University the vice president of the China Federation of Industry and Commerce Automobile Dealers the vice president of the China-Europe Alumni Automobile Industry Association a member of the Jiusan Society and a member of Alxa SEE.Y Wei Xinjiang China Life Insurance (Group) assistant general manager of China Life Insurance (Group) company strategic planning department and senior researcher of China life financial research institute Y Chen Quanshi Tsinghua University a professor and director of the Department of Automotive Engineering of Tsinghua University director of the Electric Vehicle Research Office and honorary director of the Electric Vehicle Branch of the China Automobile Engineering Society. Y Cao Xingquan Southwest University a professor at the School of Civil and Commercial Law of Southwest University of Political Science and Law and a doctoral tutor in the direction of civil and commercial law Y Position in other This table only shows the main office performance and position of independent directors. work unit Securities regulatory agency’s punishment to the current and former directors supervisors and senior management during the reporting period in recent three years. □Applicable √Not applicable Ⅳ. Remuneration of directors supervisors and senior management Payment decision-making process determination basis the actual payment of directors supervisors and senior managers Decision-making process: except the independent directors the annual remuneration of directors supervisors and senior management is referring to the wage management regulations and rating standard of South Industries Group. Payment of company independent directors is prescribed by the board of directors and submitted to the board of directors of the company and approved by the shareholders' general meeting.The basis: the senior management evaluation is divided into annual appraisal mid-term assessment term-change assessment and "look back" examination. Annual appraisal is to evaluate the business performance which senior management is in charge of and the employee representatives and part of the units give to democratic appraisal or special evaluation on senior management the assessment results will feedback to themselves in time on the problems existing in their work and relevant suggestions for improvement which will be rectified in the coming new year. At the same time the assessment results will be linked with the annual performance award. Mid-term assessment is mainly to evaluate the business performance which senior management is in charge of assessment results are related to the targeted training position promotion post communication etc; term-change assessment is that the employee representative gives democratic evaluation on all the senior management and does special visit to part of unit and the assessment results are related to the targeted training position promotion post communication training and post appointment of the senior management; new office head "look back" examination is mainly to look back the adjusted team understand the working status of the new team in time check the configuration effect of the new group promote the new group into role as soon as possible and reduce the risk of personnel employment. Actual payments: senior managers pay basic salary monthly annual performance prize combines annual appraisal status the rest delays payment according to the company's business situation. In 2019 the remuneration the directors supervisors and senior managers receiving from the company is 10.4609 million yuan in total.Payment of directors supervisors and senior managers got from the company during the reporting period Name Position Gender age status Total earning from the company(yuan) Zhang Baolin Chairman of the board M 57 Present - Zhu Huarong Director and President Secretary of Party Committee M 54 Present 836325.00 Zhou Zhiping Director M 49 Present - Tan Xiaogang Director M 56 Present - Zhang Dongjun Director M 53 Present - Zhang Deyong Director Chief accountant M 45 Present 597414.75 Liu Jipeng Independent Director M 63 Present 120000.00 Li Qingwen Independent Director M 63 Present 120000.00 Chen Quanshi Independent Director M 74 Present 120000.00 Ren Xiaochang Independent Director M 63 Present 120000.00 Pang Yong Independent Director M 50 Present 120000.00 Tan Xiaosheng Independent Director M 49 Present 120000.00 Wei Xinjiang Independent Director M 50 Present 120000.00 Cao Xingquan Independent Director M 48 Present 120000.00 Yan Ming Chairman of the supervisory M 54 Present - Sun Dahong Supervisor M 53 Present - Zhao Huixia Supervisor M 59 Present - Wang Yanhui Employee Supervisor F 53 Present - Luo Yan Employee Supervisor F 45 Present 290771.00 Yuan Mingxue Major Executive vice president M 51 Present 674373.00 Liu Bo Executive vice president M 53 Present 697145.00 He Chaobing Executive vice president M 52 Present 695079.00 Zhang Jingjing Executive vice president F 53 Present 673654.00 Li Wei Executive vice president M 53 Present 675168.00 Tan Benhong Executive vice president M 44 Present 665022.00 Liu Zhengjun Executive vice president M 54 Present 608757.00 Ye Pei vice president M 44 Present 635344.00 Zhao Fei vice president M 45 Present 627821.00 Chen Wei vice president M 47 Present 599204.00 Li Mingcai vice president M 38 Present 578937.00 Li Jun the Secretary of BOD F 50 Present 537018.66 Zhang Anguo Employee Supervisor M 60 Retirement age 108873.00 Total -- -- -- -- 10460906.41 Stock-ownership incentive awarded to directors supervisors and senior managers during the reporting period □ Applicable √ Not applicable Ⅴ. Core technology team or key technical personnel changes during the reporting period (not the directors supervisors and senior management) During the reporting period the company's core technical team and key technical personnel remained stable. Ⅵ. The Employees of the Company 1. The number of employees professional composition and education level Number of employees in the parent company(persons) 23455 Number of employees in major subsidiaries(persons) 13309 Total number of active employees(persons) 36764 Total number of current salaried employees(persons) 36764 Number of retired employees whose parent company and major subsidiary bear the costs(persons) 6385 Professional composition Professional component categories Professional Composition(persons) Production personnel 21006 Sales staff 1726 Technicians 9180 Finance staff 408 Administrators 416 Managers 4028 Total 36764 Educational Background Type of education Number（persons） PHD 116 Postgraduate 2269 Bachelor degree 11892 University specialty 7879 Secondary school high school and corresponding education 12324 Secondary and below 2284 Total 36764 2. Compensation policy The company actively deepens the reform of the distribution system continuously optimizes and improves the compensation system; adheres to the principle of benefit orientation establishes the mechanism of gross salary/labor cost generation improves the distribution efficiency strengthens the double benchmarking of performance compensation and guides the unit to continuously improve the labor productivity and human resource value creativity. Based on the sorting and evaluation of positions combined with the market benchmarking the company establishes the broadband salary standard and reasonably sets the salary gap. Meanwhile the company adheres to the salary strategy of following and leading implements the differential distribution and focuses on key and core positions to support the company's strategy. 3. Training plan The company's training will be guided by Xi Jinping's new socialist ideology with China's characteristics and the nineteenth spirits of the party. With the strategic deployment of "365" climbing action of the quality improvement and the "third pioneering undertaking innovation and entrepreneurship plan" the Company will focus on six key abilities "customer orientation firm reform innovative marketing and extreme efficiency". The Company will make good use of the pilot project of annual education objectives for higher vocational personnel make full use of social resources solidly promote training programs at all levels build a new talent team to support the strategy and promote the transformation of the company into an intelligent travel technology company. 4. Outsourcing of services □ Applicable √ Not applicable Chapter 8 Corporate Governance I. The basic situation of corporate governance In strict accordance with the requirements of the Company Law the Securities Law and the relevant laws and regulations of the CSRC the Company continuously improved the corporate governance structure and promoted the standard operation of the Company. The actual situation of the corporate governance of the Company is in line with the relevant requirements of the CSRC normative documents on corporate governance.The company has established an effective internal control system over the financial report. According to company’s operation and management characteristics the company strictly implemented the "Enterprise Accounting Standards" improved the basic accounting management established a sound financial system optimized accounting and statements preparation process strengthened the financial supervision conducted the in-depth implementation of financial management established the management foundation work accounting and finance management authorization the monetary fund management financing purchasing and payment fixed assets projects under construction accounting policy accounting estimate consolidated financial statements cost management inventory management financial analysis and other financial management system to ensure the quality of accounting information and the safety of the Company property. According to internal control deficiencies identified standards of the financial report there is no internal control defects over financial reporting in the report period. The full text of the internal control self-evaluation report is published on http://www.cninfo.com.cn on April 30 2020.Whether there are differences between corporate governance and the related requirements of "company law" and China CSRC.□yes √no There is no difference between corporate governance and the related requirements of "company law" and China CSRC. Ⅱ. Independent completion situation in terms of business personnel assets organization and finance which is relative to the controlling shareholders The company and the controlling shareholders are fully independent in terms of business assets personnel organization and finance. Ⅲ. Competition situation In December 2009 according to the national “Automobile Industry Adjustment and Revitalization Plan” regarding promoting auto enterprise merger restructuring and further optimization of state-owned economy strategy layout requirements the actual controller of the company China South Industries Group Corporation and China Aviation Industry Group Company proceeded industry restructuring China Aviation Industry Group Company transferred 100% equity of Jiangxi Changhe Automobile Co. LTD free. (hereinafter referred to as "Changhe Automobile") and 100% stake of Harbin Hafei Automobile Industry Group co. LTD. (hereinafter referred to as "Haqi group") into the company's controlling shareholder China Changan Automobile Group Co. LTD. (hereinafter referred to as "China Changan").This above-mentioned behavior led to competition between the company and subordinate enterprise of China Changan the controlling shareholder. To finally solve the possible competition and better maintain the interests of company’s investors the company’s controlling shareholder China Changan commitment:⒈When Jiangxi Changhe Automobile Co. Ltd. and Harbin Hafei Automobile Industry Group Co. LTD. can make profits for two successive years with sustainable development ability and improved management level it’s proposed to affiliate the two companies into Changan automobile. In October 28 2013 the controlling shareholder of China Changan transferred Jiangxi Changhe Automobile Co. Ltd. to Jiangxi provincial state owned enterprise assets (Holdings) Limited China Changan proposed Jiangxi Changhe Automobile Co. Ltd.injected commitment matter was removed. In order to solve the possible horizontal competition between Hafei Automobile Co. Ltd. and the company on January 25 2019 Haqi Group a subsidiary of the company's controlling shareholder China Changan transferred 38% of the shares of Hafei Automobile Co. Ltd. to Harbin Yungu Automobile. Industrial Development Co. Ltd. Haqi Group has lost control of Hafei Automobile Co. Ltd.IV. Annual shareholders meeting and interim shareholders meeting during the reporting period 1、Shareholders meeting during the reporting period Meeting Session Type Investors' participation ratio Opening Time Disclosure Time Disclosure Index 2019 First Interim Shareholders Meeting Interim 43.615% Jan. 3 2019 Jan. 4 2019 http//www.cninfo.com.cn 2019 First Interim Shareholders Meeting Resolution Announcement(Announcement Number: 2019-02) 2018 Annual Shareholders Meeting Annual 58.387% June. 27th 2019 June. 28th 2019 http//www.cninfo.com.cn 2018 Annual Shareholders Meeting Resolution Announcement(Announcement Number: 2019-45) 2、Preferred shareholders’ request to hold the interim shareholders meeting with restoration of voting rights □Applicable √ Non-applicable V. Duties performed by independent directors during the reporting period. 1、Independent directors attend board of directors and the shareholders meeting Independent directors attend board of directors and the shareholders meeting Names of independent directors Times of attending the board of directors during the report period Times of presence Times of attendance by communication mode Times of entrust attendance Times of absence Whether absent from the meeting for two consecutive times Liu Jipeng 14 1 12 1 N Li Qingwen 14 12 2 N Chen Quanshi 14 2 12 N Ren Xiaochang 14 2 12 N Pang Yong 14 2 12 N Tan Xiaosheng 14 2 12 N Wei Xinjiang 14 2 12 N Cao Xingquan 14 2 12 N Times for independent directors attending the shareholders meeting 1 The explanation on absence in two consecutive board of directors meetings □Applicable √ Non-applicable 2、Independent directors express disagreement to company related matters Whether independent directors express disagreement to company related matters.□ Yes √ No Independent directors did not express disagreement to company related matters during the reporting period. 3、Other explanation on the fulfillment of responsibility of independent directors Whether the suggestions of Independent directors are adopted or not √Yes □No Explanation on whether the suggestions of Independent directors are adopted or not During the reporting period the company adopted the proposals of independent directors on the equity acquisition and related transactions and other aspects.VI. Duty performance of specialized committees of the board of directors during the report period 1、Audit Committee The audit committee under the board of directors consists of one non-independent directors and two independent director. The chairman of the committee is Mr. Liu Jipeng who is an independent director. During the reporting period the audit committee held 3 meetings and performed the following duties: 1) Reviewed the financial and accounting statements prepared by the company and will maintain close communication with the auditors urge the accounting firm to submit audit reports within the agreed time limit; review and agree on the 2019 Action Plan of the Audit and Legal Department; 2) After the Ernst & Young Hua Ming issued 2018 annual audit report the audit committee reviewed the 2018 annual financial statements (AUDIT) and major adjustments related to accounting firms concluded the audit work of the Ernst & Young Hua Ming. The audit committee considered that Ernst & Young Hua Ming had professional competence worked diligently maintained their independence in audit and completed 2018 annual audit task on time. The audit committee voted and made resolutions on company's annual financial report and agreed to submit the 2018 financial report to the board of directors for approval. 3) Reviewed the proposal on Recruitment of 2019 Annual Financial Report Auditor and Recruitment of 2019 Annual Internal Control Report Auditor and agreed to submit the proposal to the board of directors for approval of continuing to hire Ernst & Young Hua Ming as the company's 2019 annual financial report auditor and 2019 Annual internal control report auditor. 2、Compensation and Review Committee The compensation and review committee under the board of directors consists of 3 independent directors. The chairman of the committee is Mr. Chen Quanshi. During the reporting period the committee held 2 meetings and performed the following duties: 1) Review and agree to the "Bill on the Cancellation of Some Stock Options of the Company". 2) Review and agree to the motion on the annual salary distribution plan for deputy management performance in 2018. 3、Compensation and Review Committee The strategy and investment committee under the board of directors consists of four non-independent directors and one independent director. The chairman is Mr. Zhangbaolin. During the reporting period the strategy and investment committee held 8 meetings and performed the following duties: 1) Review and agree to the "Proposal on Investment Plan in 2019 Proposal on Financing Plan in 2019 Proposal on Developing Bill Pool Business Proposal on Signing with Weapon Equipment Group Finance Co. Ltd. "Proposal on Signing of" Financial Service Agreement "with Changan Automobile Finance Co. Ltd. and" Proposal on Carrying Forward Foreign Exchange Settlement Transactions by Subsidiaries of the Company "; 2) Review and agree to the "Proposal on Participating in the Establishment of Nanjing Lingxing Equity Investment Partnership (Limited Partnership) "; 3) Examine and agree to the "Explanation of financial statements for 2018 and financial budget for 2019 "; 4) Review and agree to the "Proposal on Participating in the Establishment of Chongqing Lianzhi'an Investment Equity Investment Partnership (Limited Partnership) "; 5) Review and agree to the "Proposal on Subsidiary Joint Ventures to Increase Capital and Shares by Public Listing ". 6) Review and agree to the "Proposal on the wholly-owned subsidiary's capital increase and share expansion through public listing ". 7) Review and agree to the "Proposal on the Company's Subsidiaries to Carry Forward Foreign Exchange Settlement Transactions ". 8) Review and agree to the "Proposal on the sale of equity in joint ventures ". Ⅶ. The work of the board of supervisors The board of supervisors found whether the company was at risk or not in the supervision during the report period □ Yes √ No The Board of Supervisors supervised and inspected the legal compliance of the company's financial situation "three important and one big" decisions business management activities and implementation of major strategies.The Supervisory Board has no objection to the supervision matters during the reporting period.Ⅷ. The evaluation and incentive of senior management For details please refer to Section 7 of this year's report. "IV. Remuneration of directors supervisors and senior management." Ⅸ. Internal Control 1、Significant Deficiency of Internal Control found during the report period □ Yes √ No 2、Self-assessment report of internal control Disclosure date of self-assessment report of internal control Apr. 30 2020 Disclosure index of self-assessment report of internal control http://www.cninfo.com.cn proportion of total asset in the assessment accounting for the total asset in the financial statement 92.28% proportion of revenue in the assessment accounting for the revenue in the financial statement 98.97% Deficiency Definition Standard Type Financial Report Non Financial Report qualitative standard 1. Fraud behavior of the directors supervisors and senior management. 2. The company has corrected the published financial report the significant wrong report due to fraud and mistakes the significant mistakes in the financial report found by certified public accountants but not found by the company’s internal control. 3. The supervision of audit committee on the company’s external financial report and internal control of financial report is not effective. 1.Lack democratic decision-making procedure or violation of democratic decision-making procedure 2.Violate national laws and regulations and get punished 3.Great loss of middle and senior management and senior technical personnel 4.Frequent media negative news with a large range 5.Signifant business lacks regulation control or regulation system becomes ineffective 6.The significant deficiencies of internal control is not corrected quantitative standard The amount of misstatement of the financial statements falls within the following ranges: Wrong report ≥ 1% of total asset Determine the internal control deficiencies in financial reporting by reference to the quantitative criteria. Financial Report Major Defects 0 Non-financial reporting significant number of defects 0 Financial Reporting Key Number of defects 0 Non-financial reporting Number of important defects 0 Ⅹ. Internal control audit report √Applicable □Not applicable deliberations in the internal control audit report The audit opinion of the internal control audit report compiled by Ernst & Young Hua Ming Accounting Firm: Chongqing Changan Automobile Co. Ltd keeps the effective financial report internal control on significant aspects from Dec.31st 2019 according to “Basic Norms of Enterprise Internal Control” and other related regulations. Disclosure date of audit report of internal control Apr.30 2020 Disclosure index of audit report of internal control Internal control audit report will be published on http://www.cninfo.com.cn on Apr.30 2020 type of opinion on internal control audit report standard and unqualified opinion Whether there is huge deficiency in the non-financial report No Whether the accounting firm issued non-standard internal control audit report or not? □ Yes √ No Whether the internal control audit report issued by the Accounting Firm agreed with the self-assessment report of the board of directors or not? √ Yes □ No Chapter 9 Corporate Bonds Is there a corporate bond that is publicly issued and listed on the stock exchange and fails to be fully paid up or not due on maturity until the approval of the annual report ? □ Yes √ NO Chapter 10 Auditor’s Report Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited To the shareholders of Chongqing Changan Automobile Company Limited Auditor’s Report Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited To the shareholders of Chongqing Changan Automobile Company Limited Opinion We have audited the accompanying financial statements of Chongqing Changan Automobile Company Limited which comprise the consolidated and the company balance sheet as at 31 December 2019 and the consolidated and the company income statements the statements of changes in equity and the cash flow statements for the year then ended and notes to the financial statements.In our opinion the accompanying financial statements of Chongqing Changan Automobile Company Limited present fairly in all material respects the consolidated and the Company’s f inancial posit ion as at 31 December 2019 and the consolidated and the Company’s f inancial performance and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises (“ASBEs”). Basis for opinion We conducted our audit in accordance with China Standards on Audit ing (“CSAs”). Our responsibilit ies under those standards are further described in the Auditor’s responsibilit ies for the audit of the financial statements sect ion of our report. We are independent of the Company in accordance with China Code of Ethics for Cert if ied Public Accountants (the “Code”) and we have fulfilled our other ethical responsibilit ies in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key audit matters Key audit matters are those matters that in our professional judgement were of most signif icance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. For each matter below our descript ion of how our audit addressed the matter is provided in that context. Auditor’s Report (continued) Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited Key audit matters (continued) We have fulfilled the responsibilit ies described in the Auditor’s responsibilit ies for the audit of the f inancial statements sect ion of our report including in relat ion to these matters. Accordingly our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures including the procedures performed to address the matters below provide the basis for our audit opinion on the accompanying financial statements.Key audit matter How our audit addressed the key audit matter Provision for warrant ies According to after-sales maintenance contracts or related national laws and regulations Chongqing Changan Automobile Company Limited provides warranties on automobile and undertakes to repair or replace items that fail to perform sat isfactorily based on certain pre-determined condit ions. In addit ion in order to improve customer satisfact ion and to maintain the quality and safety of the sold vehicle Chongqing Changan Automobile Company Limited also provides extra free repairing service or promotes a recall based on needs. Chongqing Changan Automobile Company Limited should est imate and recognize the warranty costs and the corresponding liabilit ies.Provisions for warranties granted by Chongqing Changan Automobile Company Limited for the vehicles sold are recognized based on sales volume and past experience of the cost of repair and replacement and labor cost which involves a number of assumptions and judgments.Provision for extra free repairing service program or recalls are recognized based on the vehicles involved and the est imated average cost of repair and replacement and labor cost which involves a number of assumpt ions and judgments. Any increase or decrease in the provision would have a significant impact on the financial statements.Refer to Note III 21 30 and Note V 28 of the consolidated financial statements for the disclosures of the provision for warranties.With regard to the warranty provisions audited by us: ? We understood and evaluated the process of the warranty provisions. In addition we tested the key controls and application controls over the process of the warranty provisions.? We assessed the reasonableness and evaluated the major assumptions of management’s warranty provision models. We tested the samples of payment of the warranty provisions and tested the mathematical accuracy of calculations therein by re-performing the calculations regarding the balance of the provisions.? We reviewed the adequacy of disclosures in the financial statements. Auditor’s Report (continued) Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited Key audit matters (continued) Key audit matter How our audit addressed the key audit matter Capitalizat ion of internal development costs The research and development act ivit ies launched by Chongqing Changan Automobile Company Limited mainly include technology development product process design and product manufacturing process design. Management capitalized the costs on development projects met the criteria set out in the accounting standard for capitalization.The expenditures in development stage are capitalized that should meet all the condit ions including technically feasible use or sale intention market f inance resources and etc. The judgment should be made according to every project and agreed by all related departments. In addit ion for projects that have been capitalized in the past the judgment whether the expenditures in development can be continuing capitalized should be made according the latest progress and future expectations of the project.The judgment made by the management would have a significant impact on the financial statements.Refer to Note III 17 30 and Note V 16 of the consolidated financial statements for the disclosures of capitalization of internal development costs.With regard to the capitalization of internal development costs audited by us: ? We understood evaluated and validated the key controls over the capitalization of internal development costs.? We assessed the criterias set by the management related to the capitalization of the costs under development stage. We assessed the accuracy of the start point and the stop point for capitalization of internal development costs. We also tested samples of projects to review the feasibility reports and other reports for important stages.? We reviewed the adequacy of disclosures in the financial statements. Auditor’s Report (continued) Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited Other informantion The management of the Chongqing Changan Automobile Company Limited (the “Management”) is responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.Management’s and governance’ responsibility for the financial statements The Management is responsible for the preparat ion and fair presentat ion of these financial statements in accordance with ASBEs and for designing implementing and maintaining such internal control as the management determines is necessary to enable the preparat ion of f inancial statements that are free from material misstatement whether due to fraud or error.In preparing the financial statements the Management is responsible for assessing the Company’s ability to cont inue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operat ions or has no realist ic alternat ive but to do so.Those charged with governance are responsible for overseeing the Company’s f inancial report ing process. Auditor’s Report (continued) Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited Auditor’s responsibilities for the audit of the financial statements Our object ives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with CSAs we exercise professional judgement and maintain professional skept icism throughout the audit. We also: (1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control. (2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. (3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. (4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However future events or conditions may cause the Company to cease to continue as a going concern. (5) Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Auditor’s Report (continued) Ernst & Young Hua Ming Shen Zi (2020) No. 60662431_D01 Chongqing Changan Automobile Company Limited Auditor’s responsibilities for the audit of the financial statements (continued) (6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction supervision and performance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and t iming of the audit and significant audit f indings including any significant deficiencies in internal control that we ident ify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relat ionships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards. From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulat ion precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communicat ion.Qiao Chun Ernst & Young Hua Ming (LLP) Chinese Cert if ied Public Accountant (Engagement partner) Hu Yan Chinese Cert if ied Public Accountant Beijing the People’s Republic of China 28 April 2020 Chongqing Changan Automobile Company Limited CONSOLIDATED BALANCE SHEET 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 Current assets Cash 1 10066171353.48 9980544526.14 Financial assets held for trading 2 2419476200.00 - Notes receivable 3 26805635587.19 20561625805.24 Accounts receivable 4 838314076.82 1409419600.50 Prepayments 5 623801896.07 866249749.51 Other receivables 6 3731755992.46 3233020118.16 Inventories 7 3375441488.37 4917420457.19 Other current assets 8 1746120128.04 2244998158.77 Total current assets 49606716722.43 43213278415.51 Non-current assets Available-for-sale financial assets 9 - 1957873311.31 Long-term equity investments 10 11008336989.09 13275170118.83 Other equity instrument investment 11 734506100.00 - Investment property 12 7102849.72 7329561.28 Fixed assets 13 26939490554.19 22161054058.31 Construction in progress 14 1729803028.43 5383844030.75 Intangible assets 15 5209619313.49 5018243552.80 Development expenditure 16 814745464.20 789597615.60 Goodwill 17 9804394.00 9804394.00 Long-term deferred expenses 18 14327639.90 17104601.67 Deferred tax assets 19 1542600534.93 1655554438.89 Total non-current assets 48010336867.95 50275575683.44 TOTAL ASSETS 97617053590.38 93488854098.95 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CONSOLIDATED BALANCE SHEET (continued) 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 Current liabilities Short-term loans 21 229580000.00 190000000.00 Notes payable 22 13430543294.23 14807862262.39 Accounts payable 23 18905725271.50 13916201276.95 Advances from customers 24 2315641685.78 1556482278.92 Payroll payable 25 1046335781.91 1362995277.56 Taxes payable 26 889092442.80 669316487.25 Other payables 27 4809918141.45 3079749015.81 Contingent liabilities 28 3352580839.28 3245322744.12 Other current liabilities 29 4253942761.77 4325441152.61 Current portion of 30 non-current liabilities - 6594120.00 Total current liabilities 49233360218.72 43159964615.61 Non-current liabilities Long-term loans 31 55300000.00 - Special payable 32 857356423.71 303590824.69 Long term payroll payable 33 45932000.00 53837000.00 Deferred income 34 3194291079.21 3683308534.73 Deferred tax liabilities 19 296742890.29 135231170.59 Total non-current liabilities 4449622393.21 4175967530.01 Total l iabil ities 53682982611.93 47335932145.62 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CONSOLIDATED BALANCE SHEET (continued) 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 Owners’ equity Share capital 35 4802648511.00 4802648511.00 Capital reserves 36 5366097594.66 5057242440.17 Other Comprehensive Income 37 139994580.19 235509930.44 Special reserves 38 47076242.71 41222369.10 Surplus reserves 39 2401324255.50 2401324255.50 Retained earnings 40 31271171559.60 33707011170.31 Equity attributable to owners 44028312743.66 46244958676.52 Minority interests (94241765.21 ) (92036723.19) Total equity 43934070978.45 46152921953.33 TOTAL LIABILITIES AND OWNERS’ EQUITY 97617053590.38 93488854098.95 The notes form an integral part of the financial statements.The financial statements have been signed by: Legal Principal in Charge Chief Representative: of Accountancy: Accountant: Chongqing Changan Automobile Company Limited CONSOLIDATED INCOME STATEMENT Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 Operating revenue 41 70595245133.28 66298270389.77 Less:Operating cost 41 60232585428.08 56583468369.14 Tax and surcharges 42 2488057067.83 2305917984.34 Operating expenses 43 4591170885.94 5283255346.48 General and administrative 44 2265231518.65 2141231988.91 expenses Research and development 45 3169063761.13 3184788921.68 expenses Financial income 46 (190849511.73 ) (427062035.06 ) Interest expense 40109729.93 11700010.25 Interest income 245520358.56 476922766.94 Add: Other incomes 47 1537625620.93 2873192102.56 Investment income or loss 48 (2109369113.31 ) (71306776.79 ) Including: Investment income from associates and joint venture (2158815891.20 ) (331883560.67 ) Earnings from fair value changes 49 889154888.69 -- Credit impairment loss 50 (125657732.02 ) -- ) Impairment loss 51 (395506650.22 ) (238554564.69 ) Gain on disposal of assets 52 56658864.17 8561074.73 Operating profit/ (loss) (2107108138.38 ) (201438349.91 ) Add:Non-operating income 53 49703849.18 916219224.68 Less:Non-operating expenses 54 184962615.32 56555550.94 Total profit/ (loss) (2242366904.52 ) 658225323.83 Less:Income tax expense 55 406764986.36 (65134058.04 ) Net profit (2649131890.88 ) 723359381.87 Classification by going concern Net profit from continuing operations (2649131890.88 ) 723359381.87 Classification by ownership attribution Net profit attributable to owners (2646719356.53 ) 680728392.03 Minority interests (2412534.35 ) 42630989.84 Chongqing Changan Automobile Company Limited CONSOLIDATED INCOME STATEMENT (continued) Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 Other comprehensive income net of tax Total comprehensive income attributable to owners net of tax 37 69977399.20 152550506.60 Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Change in net liability or assets from defined benefit plan 254000.00 (13214000.00 ) Changes in fair value of other equity investment 63584845.00 - Other comprehensive income not to be reclassified to profit or loss under equity method - (706228.88 ) 63838845.00 (13920228.88 ) Other comprehensive income to be reclassified to profit or loss in subsequent periods: Changes in fair value from available-for-sale financial assets - 177088959.46 Foreign currency reserve 6138554.20 (10618223.98 ) 6138554.20 166470735.48 Total comprehensive income attributable to minority interests net of tax - - Total comprehensive income (2579154491.68 ) 875909888.47 Total comprehensive income The notes form an integral part of the financial statements.attributable to owners (2576741957.33 ) 833278898.63 Total comprehensive income attributable to minority interest (2412534.35 ) 42630989.84 Earnings per share 56 Basic earnings per share (0.55 ) 0.14 Diluted earnings per share Not Applicable Not Applicable Chongqing Changan Automobile Company Limited CONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Year ended 31 December 2019 (Expressed in Renminbi Yuan) Equity attributable to owners Share capital Capital reserves Other comprehensive income Special reserves Surplus reserves Retained earnings Subtotal Minority interest Total equity At 31 December 2018 4802648511.00 5057242440.17 235509930.44 41222369.10 2401324255.50 33707011170.31 46244958676.52 (92036723.19 ) 46152921953.33 Changes in accounting standard - - (165492749.45 ） - - 297351209.45 131858460.00 - 131858460.00 At 1 January 2019 4802648511.00 5057242440.17 70017180.99 41222369.10 2401324255.50 34004362379.76 46376817136.52 (92036723.19 ) 46284780413.33 Changes during the year:Total comprehensive income - - 69977399.20 - - (2646719356.53 ) (2576741957.33 ） (2412534.35 ） (2579154491.68) Capital contributed by owners and capital decreases 1.The amount of share- based payments recorded in owners’ equity - (23961900.00 ) - - - - (23961900.00 ) - (23961900.00) 2.Others - 332817054.49 - - - - 332817054.49 - 332817054.49 Distribution of profit 1.Distribution to owners - - - - - (86471463.63 ) (86471463.63 ) - (86471463.63) Special reserves 1.Provided - - - 79135417.54 - - 79135417.54 1097065.37 80232482.91 2.Ult ilized - - - (73281543.93 ） - - (73281543.93 ） (889573.04 ） (74171116.97) At 31 December 2019 4802648511.00 5366097594.66 139994580.19 47076242.71 2401324255.50 31271171559.60 44028312743.66 (94241765.21 ） 43934070978.45 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued) Year ended 31 December 2018 (Expressed in Renminbi Yuan) Equity attributable to owners Share capital Capital reserves Other comprehensive income Special reserves Surplus reserves Retained earnings Subtotal Minority interest Total equity At 31 December 2017 4802648511.00 5099405956.94 82959423.84 28279733.06 2401324255.50 35184073061.94 47598690942.28 (135511683.82 ) 47463179258.46 Changes during the year Total comprehensive income - - 152550506.60 - - 680728392.03 833278898.63 42630989.84 875909888.47 Capital contributed by owners and capital decreases 1.The amount of share- based payments recorded in owners’ equity - (8735100.00 ) - - - - (8735100.00 ) - (8735100.00) 2.Others - (33428416.77 ) - - - - (33428416.77 ) 544858.43 (32883558.34) Distribution of profit 1.Distribution to owners - - - - - (2157790283.66 ) (2157790283.66 ) - (2157790283.66) Special reserves 1.Provided - - - 83826318.58 - - 83826318.58 1218813.93 85045132.51 2.Ult ilized - - - (69587419.73 ) - - (69587419.73 ) (919701.57 ) (70507121.30) 3.Effective portion of changes in special reserves from joint venture - - - (1296262.81 ) - - (1296262.81 ) - (1296262.81) At 31 December 2018 4802648511.00 5057242440.17 235509930.44 41222369.10 2401324255.50 33707011170.31 46244958676.52 (92036723.19 ) 46152921953.33 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from sale of goods or rendering of services 70578207834.29 76764633238.29 Refunds of taxes 603916897.39 464242119.33 Cash received relating to other operating activities 57 4019161557.69 4768094889.23 Subtotal of cash inflows 75201286289.37 81996970246.85 Cash paid for goods and services 55704810280.08 70504737377.42 Cash paid to and on behalf of employees 5633184648.81 6114219565.04 Cash paid for all types of taxes 2955141047.76 2496007225.13 Cash paid relating to other operating activities 57 7026402074.33 6769481381.70 Subtotal of cash outflows 71319538050.98 85884445549.29 Net cash flows from operating activities 58 3881748238.39 (3887475302.44 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash received from recovery of investment 831429574.25 - Cash received from return on investment 1386844687.60 1409353446.15 Net cash received from disposal of fixed assets intangible assets and other long-term assets 72899243.69 42904511.29 Cash received relating to other investing activities 57 - 1036263749.91 Subtotal of cash inflows 2291173505.54 2488521707.35 Cash paid for acquisition of fixed assets intangible assets and other long-term assets 4783722428.46 6488329782.76 Cash paid for acquisition of investments 1002064416.73 2034743750.00 Acquisition of net cash payments from subsidiaries and other business units - 534168219.57 Other cash disbursed in connection with investment activities 57 300000000.00 - Subtotal of cash outflows 6085786845.19 9057241752.33 Net cash flows from investing activities (3794613339.65 ) (6568720044.98 ) The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CONSOLIDATED CASH FLOW STATEMENT (continued) Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes V 2019 2018 CASH FLOWS FROM FINANCING ACTIVITIES: Cash received from borrowings 304880000.00 340000000.00 Cash received relating to other financing activities 57 32839805.56 855280377.20 Sub-total of cash inflows 337719805.56 1195280377.20 Cash repayments of borrowings 216594120.00 348133800.00 Cash paid for distribution of dividends or profits and interest expenses 126540808.63 2169490293.91 Cash paid relating to other financing activities 57 395159204.54 30344195.00 Sub-total of cash outflows 738294133.17 2547968288.91 Net cash flows from financing activities (400574327.61 ) (1352687911.71 ) EFFECT OF CHANGES IN EXCHANGE RATE ON CASH 25760488.96 5731783.40 NET INCREASE IN CASH AND CASH EQUIVALENTS (287678939.91 ) (11803151475.73 ) Add: Opening balance of cash and cash equivalents 9648153614.80 21451305090.53 CLOSING BALANCE OF CASH AND CASH EQUIVLANT 58 9360474674.89 9648153614.80 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited BALANCE SHEET 31 December 2019 (Expressed in Renminbi Yuan) Notes XIV 2019 2018 Current assets Cash 6563020335.56 7310973018.99 Financial assets held for trading 184245000.00 - Notes receivable 25837326483.09 19391160283.70 Accounts receivable 1 5094270365.72 5679160679.69 Prepayments 403105316.24 671849711.04 Other receivables 2 2597314344.40 2326885353.29 Inventories 1735570691.28 3851783233.12 Other current assets 798430035.62 1372588554.75 Total current assets 43213282571.91 40604400834.58 Non-current assets Available-for-sale financial assets - 541182000.00 Long-term equity investments 3 16052319271.82 18017137600.72 Other equity instrument investment 724309400.00 - Fixed assets 20301231002.41 16795537563.35 Construction in progress 1545211000.22 4114409774.13 Intangible assets 4030438649.57 4054893372.88 Development expenditure 431774377.27 559309970.45 Long-term deferred expenses 9719259.84 12555353.69 Deferred tax assets 1318884054.48 1533057523.95 Other non-current assets - 250000000.00 Total non-current assets 44413887015.61 45878083159.17 TOTAL ASSETS 87627169587.52 86482483993.75 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited BALANCE SHEET (continued) 31 December 2019 (Expressed in Renminbi Yuan) 2019 2018 Current liabilities Short term loans 29580000.00 - Notes payable 11983445725.06 13572757870.72 Accounts payable 15601432751.74 10690985635.15 Advances from customers 1870992349.08 1208631011.05 Payroll payable 641340149.30 1001765362.99 Taxes payable 453619905.66 604525457.30 Other payables 4301257819.04 3219909047.22 Contingent liabilities 2413434397.36 2372512543.49 Other current liabilities 3400065879.02 3923419042.37 Total current liabilities 40695168976.26 36594505970.29 Non-current liabilities Long term loans 55300000.00 - Long term payable 285768478.89 248240115.29 Long term payroll payable 22747000.00 24315000.00 Deferred income 2135615106.85 2827208446.74 Deferred tax liabilities 81775341.60 26683742.04 Total non-current liabilities 2581205927.34 3126447304.07 Total liabilities 43276374903.60 39720953274.36 Owner’s equity Share capital 4802648511.00 4802648511.00 Capital reserves 5014772792.87 4705917638.38 Other comprehensive income 259380413.58 149525803.58 Special reserves 19917658.63 19835367.61 Surplus reserves 2401324255.50 2401324255.50 Retained earnings 31852751052.34 34682279143.32 Total owner’s equity 44350794683.92 46761530719.39 TOTAL LIABILITIES AND OWNERS’ EQUITY 87627169587.52 86482483993.75 Chongqing Changan Automobile Company Limited INCOME STATEMENT Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes XIV 2019 2018 Operating revenue 4 64952750206.63 63379464762.20 Less: Operating cost 4 56966369777.83 54508948244.13 Tax and surcharges 1763695806.32 1897849791.26 Operating expenses 3173277654.38 4763764952.42 General and administrative expenses 1433878532.92 1601985466.76 Research and development 2659328815.49 3021080255.27 expenses Financial income (159213197.04 ) (449471788.18 ) Interest income 22298902.58 - Interest expense 194548964.11 464373610.97 Add: Other income 765866705.17 1799031976.58 Investment income 5 (2023549132.39 ) 383123214.36 Including:Investment income from associates and from joint venture (2081317451.25 ) (320199939.11 ) Earnings from fair value changes 60705000.00 - Impairment of credit (121430481.42 ) - Impairment loss (303604164.62 ) (166593138.09 ) Gain on disposal of assets 45709560.34 15582497.02 Operating profit (2460889696.19 ) 66452390.41 Add: Non-operating income 32324558.40 64148620.50 Less: Non-operating expenses 165234410.53 43385534.76 Total profit (2593799548.32 ) 87215476.15 Less: Income tax expense 234818079.03 (111891616.78 ) Net profit (2828617627.35 ) 199107092.93 Classification by going concern Net profit from continuing operations (2828617627.35 ) 199107092.93 Chongqing Changan Automobile Company Limited INCOME STATEMENT Year ended 31 December 2019 (Expressed in Renminbi Yuan) Notes XIV 2019 2018 Other comprehensive income net of tax Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Change in net liability or assets from defined benefit plan 216000.00 (13234000.00) Changes in fair value of other equity investment 63321260.00 - Other Comprehensive income not to be reclassified to profit or loss under equity method - (706228.88) 63537260.00 (13940228.88 ) Other comprehensive income to be reclassified to profit or loss in subsequent periods: Changes in fair value from available-for-sale financial assets - 30945621.58 Total comprehensive income (2765080367.35) 216112485.63 Chongqing Changan Automobile Company Limited STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Year ended 31 December 2019 (Expressed in Renminbi Yuan) Share capital Capital reserves Other comprehensive income Special reserves Surplus reserves Retained earnings Total owner’s equity At 31 December 2018 4802648511.00 4705917638.38 149525803.58 19835367.61 2401324255.50 34682279143.32 46761530719.39 Changes in accounting standard - - 46317350.00 - - 85561000.00 131878350.00 At 1 January 2019 4802648511.00 4705917638.38 195843153.58 19835367.61 2401324255.50 34767840143.32 46893409069.39 Changes during the year: Total comprehensive income- - 63537260.00 - - (2828617627.35 ） (2765080367.35 ） Capital contributed by owners and capital decreases 1.The amount of share-based payments recorded in owners’ equity - (23961900.00 ） - - - - (23961900.00 ） 2.Others - 332817054.49 - - - - 332817054.49 Distribut ion of profit 1.Distribut ion to owners - - - - - (86471463.63 ） (86471463.63 ） Special reserves 1.Provided - - - 49268965.50 - - 49268965.50 2.Ult ilized- - - (49186674.48 ） - - (49186674.48 ) At 31 December 2019 4802648511.00 5014772792.87 259380413.58 19917658.63 2401324255.50 31852751052.34 44350794683.92 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued) Year ended 31 December 2018 (Expressed in Renminbi Yuan) Share capital Capital reserves Other comprehensive income Special reserves Surplus reserves Retained earnings Total onwer’s equity At 31 December 2017 4802648511.00 4717192101.72 132520410.88 12013706.73 2401324255.50 36640962334.05 48706661319.88 Changes during the year Total comprehensive income - - 17005392.70 - - 199107092.93 216112485.63 Capital contributed by owners and capital decreases 1.The amount of share- based payments recorded in owners’ equity - (8735100.00 ) - - - - (8735100.00 ) 2.Others - (2539363.34 ) - - - - (2539363.34 ) Distribution of profit 1.Distribution to owners - - - - - (2157790283.66 ) (2157790283.66 ) Special reserves 1.Provided - - - 58994940.74 - - 58994940.74 2.Ult ilized - - - (49877017.05 ) - - (49877017.05 ) 3.Effective portion of changes in special reserves from joint venture - - - (1296262.81 ) - - (1296262.81 ) At 31 December 2018 4802648511.00 4705917638.38 149525803.58 19835367.61 2401324255.50 34682279143.32 46761530719.39 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CASH FLOW STATEMENT Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from sale of goods or rendering of services 63365386343.87 73237084046.94 Cash received relating to other operating activities 2494240256.21 3836274126.52 Subtotal of cash inflows 65859626600.08 77073358173.46 Cash paid for goods and services 50430826053.22 67590149087.20 Cash paid to and on behalf of employees 3965479429.67 4715386170.77 Cash paid for all types of taxes 1889492304.51 1723167770.46 Cash paid relating to other operating activities 6407581336.30 6515146136.99 Subtotal of cash outflows 62693379123.70 80543849165.42 Net cash flows from operating activities 3166247476.38 (3470490991.96) CASH FLOWS FROM INVESTING ACTIVITIES Cash received from recovery of investment 831300000.00 2937256.01 Cash received from return on investment 1395166228.50 1422371071.18 Net cash received from disposal of fixed assets intangible assets and other long-term assets 60445420.20 60014623.13 Cash received relating to other investing activities - 124782800.00 Subtotal of cash inflows 2286911648.70 1610105750.32 Cash paid for acquisition of fixed assets intangible assets and other long-term assets 4021334954.67 5973170360.48 Cash paid for acquisition of investments 1855926872.55 3132195583.18 Cash paid relating to other investing activities 300000000.00 200000000.00 Subtotal of cash outflows 6177261827.22 9305365943.66 Net cash flows from investing activities (3890350178.52 ) (7695260193.34 ) The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited CASH FLOW STATEMENT (continued) Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2019 2018 CASH FLOWS FROM FINANCING ACTIVITIES Cash received on loan 84880000.00 - Cash receipts relating to other financing activities - 461856503.42 Sub-total of cash inflows 84880000.00 461856503.42 Cash paid for distribution of dividends or profits and for interest expenses 108729981.28 2157790283.66 Cash paid relating to other financing activities - - Sub-total of cash outflows 108729981.28 2157790283.66 Net cash flows from financing activities (23849981.28 ) (1695933780.24 ) EFFECT OF CHANGES IN EXCHANGE RATE ON CASH - - NET INCREASE IN CASH AND CASH EQUIVALENTS (747952683.42) (12861684965.54 ) Add: Cash and cash equivalents at beginning of year 7310973018.99 20172657984.53 CASH AND CASH EQUIVLANT AT END OF YEAR 6563020335.57 7310973018.99 The notes form an integral part of the financial statements. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) I 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 domest ically 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 December 31 2019 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 1082165183shares with an equity rat io of 22.53%. China South Industries Group Co. Ltd. (hereinafter referred to as “ChinaSouth Group”) the parent company of China Changan and its wholly-owned subsidiary South Industries International Holdings (Hong Kong) Company Limited hold 1037857987 ordinary shares of the company with a 21.61% shareholding rat io. China Changan and W China South Group holds ordinary shares 2120023170 in total with a shareholding rat io of 44.14%.The Company and its subsidiaries collect ively refer to as the Group and its main business act ivit ies are: the manufacturing and sales of automobiles (including cars) automobile engine products and supporting parts.The holding company and ult imate holding company of the Company are China Changan and China South Group respectively. According to the Articles of Association the financial statements which has been approved by the board of directors on 28 April 2020 was submitted to general meet ing of shareholders for approval.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 VI. II BASIS OF PREPERATION 1. Basis of preparation 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.III SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES According to the actual production and operation characterist ics the group formulated the specific accounting policies and accounting est imates mainly reflected in provision of accounts receivables inventory valuation depreciat ion of f ixed assets intangible assets amort izat ion condit ion of capitalization of research and development expense and revenue recognit ion and measurement. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 1. Statement of compliance with Accounting Standards for Business Enterprises The financial statements present fairly and fully the financial posit ion of the Company as at 31 December 2019 and the financial results and the cash flows for the 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 report ing period the foreign currency financial statements are translated into the report ing currency of the Company of RMB. 4. Business combination Business combinations are classified into business combinations involving entit ies under common control and business combinations involving entit ies not under common control. Business combinat ion involving ent it ies under common control A business combination involving entit ies under common control is a business combination in which all of the combining entit ies are ult imately controlled by the same party or parties both before and after the combination and that control is not transitory. For a business combination involving entit ies 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 ent ity participating in the combination is a party being acquired. Combination date is the date on which the acquiring party effect ively obtains control of the party being acquired. Assets and liabilit ies that are obtained by the acquiring party in a business combination involving entit ies 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 combinat ion involving ent it ies not under common control A business combination involving entit ies not under common control is a business combination in which all of the combining entit ies are not ult imately controlled by the same party or parties both before and after the combination. For a business combination involving entit ies not under common control the party that on the acquisit ion date obtains control of another entity participating in the combination is the acquirer while that other entity participating in the combination is the acquiree. Acquisit ion date is the date on which the acquirer effect ively obtains control of the acquiree.The acquirer shall measure the acquiree’s identif iable assets liabilit ies and contingent liabilit ies acquired in the business combination at their fair values on the acquisit ion date.Goodwill is init ially 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 securit ies 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 identif iable assets. After init ial recognit ion goodwill is measured at cost less any accumulated impairment Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) losses. Where the aggregate of the fair value of the considerat ion transferred (or the fair value of the equity securit ies 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 liabilit ies and contingent liabilit ies and the fair value of the consideration transferred (or the fair value of the equity securit ies 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 securit ies issued) and the Group’s previously held equity interest in the acquiree is st ill lower than the Group’s interest in the fair value of the acquiree’s net ident ifiable assets the Group recognise the remaining difference in profit or loss. 5. Consolidated financial statements The scope of the consolidated f inancial 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 ent ity 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 report ing period as the Company using consistent accounting policies. All intra-group assets and liabilit ies equity income expenses and cash flows relat ing to transactions between members of the Group are eliminated in full on consolidation.When the current loss belong to minorit ies of the subsidiary exceeds the beginning equity of the subsidiary belong to minorit ies the exceeded part will st ill deduct the equity belong to minorit ies.With respect to subsidiaries acquired through business combinations involving entit ies 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 t ill the Group ceases the control of it. While preparing the consolidated financial statements the acquirer should adjust the subsidiary’s f inancial statements on the basis of the fair values of the identif iable assets liabilit ies and contingent liabilit ies recognized on the acquisit ion date.With respect to subsidiaries acquired through business combinations involving entit ies 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.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 liabilit ies of which are enjoyed and assumed by the joint ventures. Joint ventures refer to those joint venture arrangements only the right to net assets of which is enjoyed by the joint ventures. Any joint venture shall recognize the following items related to its share of benefits in the 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; liabilit ies it solely assumes and its share of jointly-assumed liabilit ies 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. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 7. Cash and cash equivalents Cash comprises cash on hand and bank deposits which can be used for payment at any t ime; 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 init ial recognit ion 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 transact ions and exchange of currencies except for those relat ing to foreign currency borrowings specifically for construct ion and acquisit ion of f ixed 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 liabilit ies and shareholders’ equity is separately listed as “foreign currency exchange differences” below retained profits. The translat ion difference arising from the settlement of oversea subsidiaries is charged to the current liquidation prof it and loss in proportion to the settlement rat io 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.Recognit ion and derecognit ion The Group recognizes a financial asset or a f inancial liability when the Group becomes a party to the contractual provision of the instrument. A financial asset (or where applicable a part of a f inancial asset or part of a group of similar f inancial 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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 exist ing financial liability is replaced by another from the same lender on substantially different terms or the terms of an exist ing liability are substantially modified such an exchange or modificat ion is treated as a derecognit ion of the original liability and a recognit ion of a new liability and the difference between the respective carrying amounts is recognized in profit or loss.Regular way purchases and sales of f inancial assets are recognized and derecognized using trade date accounting. Regular way purchases or sales are purchases or sales of f inancial 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 f inancial asset. Classification and measurement of f inancial assets The classification of f inancial assets at init ial recognit ion depends on the f inancial asset’s contractual cash flow characterist ics and the Group’s business model for managing them: financial assets at fair value through profit or loss f inancial assets at amort ized 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. Classificat ion and measurement of f inancial assets (Continued) Financial assets are measured at fair value on init ial recognit ion but accounts receivable or notes receivable arising from the sale of goods or rendering of services that do not contain significant f inancing components or for which the Group has applied the pract ical expedient of not adjusting the effect of a signif icant financing component due within one year are init ially measured at the transaction price. For f inancial assets at fair value through profit or loss relevant transaction costs are directly recognized in profit or loss and transaction costs relat ing to other f inancial assets are included in the init ial recognit ion amounts.The subsequent measurement of f inancial assets depends on their classification as follows: Debt investments measured at amort ized cost The Group measures financial assets at amortized cost if both of the following condit ions are met: the financial asset is held within a business model with the object ive to hold f inancial 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 effect ive 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 condit ions are met: the financial asset is held within a business model with the object ive 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 effect ive 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 derecognit ion the cumulative fair value change Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) recognized in other comprehensive income is recycled to prof it 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. Classification and measurement of f inancial assets (Continued) Financial assets at fair value through prof it 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 f inancial assets are subsequently measured at fair value with net changes in fair value recognized in profit or loss. Classification and measurement of f inancial liabilit ies Financial liabilit ies are classified at init ial recognit ion as f inancial liabilit ies at fair value through profit or loss other financial liabilit ies or as derivatives designated as hedging instruments in an effect ive hedge as appropriate. For financial liabilit ies at fair value through profit or loss relevant transaction costs are directly recognized in prof it or loss and transaction costs relat ing to other financial assets are included in the init ial recognit ion amounts.The subsequent measurement of f inancial liabilit ies depends on their classif ication as follows: Financial liabilit ies at fair value through prof it or loss Financial liabilit ies at fair value through profit or loss include financial liabilit ies held for trading and financial liabilit ies designated upon init ial recognit ion as at fair value through profit or loss. Financial liabilit ies held for trading are subsequently measured at fair value with net changes in fair value recognized in profit or loss. Gains or losses on liabilit ies designated at fair value through profit or loss are recognised in prof it 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 reclassif ication to profit or loss.Other f inancial liabilit ies Other financial liabilit ies are subsequently measured at amort ized cost using the effect ive interest method.Impairment of f inancial 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 simplif ied measurement method to measure the loss provision vased on the expected credit loss amount for the entire durat ion. For f inancial assets other than the simplif ied measurement method mentioned above the Group assesses on each balance sheet date whether its credit risk has not increased significantly since init ial recognit ion it is in the first stage. The Group measures the loss provision based on the amount equivalent to the expected credit Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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 init ial recognit ion 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 init ial recognit ion 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 effect ive 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 init ial recognit ion.The Group assesses the expected credit losses of f inancial instruments based on individual items and portfolios.The Group has considered the credit risk characterist ics of different customers and evaluated the expected credit losses of accounts receivable and other receivables based on the ageing combination.Please refer to Note VII.3 for the disclosure of the Group’s judgment criteria for signif icant increase in credit risk the definit ion 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 f inancial assets the Group directly writes down the book balance of the financial asset.Offsett ing of f inancial instruments Financial assets and financial liabilit ies 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 liabilit ies simultaneously.Transfer of f inancial assets If the Group transfers substantially all the risks and rewards of ownership of the f inancial asset the Group derecognizes the financial asset; and if the Group retains substantially all the risks and rewards of the f inancial 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 liabilit ies 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 f inished goods consigned processing materials low-value consumables and spare parts.Inventory is init ially 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 condit ion. Weighted average method is assigned to the determination of actual costs of inventories. One-off writ ing 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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.Net realizable value is the est imated selling price in the ordinary course of business less the est imated costs of completion and the est imated 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 relat ively low unit prices the provision for loss on decline in value of inventories should be made by category. 11. Long-term equity investments Long-term equity investments include investments in subsidiaries joint ventures and associates.The long-term investments are init ially recorded at costs on acquisit ion. Long-term investments acquired from business combination under common control shall be init ially measured at the carrying value of the held interest of the party being acquired; The difference between the init ial 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 init ially 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 liabilit ies beard and the fair value of issued equity instrument; the other comprehensive income produced from the investment before the acquisit ion should be transferred into the current year investment income on disposal.Long-term investments acquired not from business combination are init ially 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 act ivit ies.Under cost method the long-term equity investment is valued at the cost of the init ial investment. The cost of long-term equity investment should be adjusted in case of addit ional 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 act ivity and exists only when the strategic financial and operating decisions relat ing to the act ivity require the unanimous consent of the parties sharing control (the venturers). Significant influence is the power to part icipate in the financial and operating policy decisions of an economic act ivity but is not control or joint control over those policies.Under equity method when the init ial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in the fair values of the investee’s ident ifiable net assets at the acquisit ion date the difference is accounted for as an init ial cost. As to the init ial investment cost is less than the investing enterprise’s interest in the fair values of the investee’s ident ifiable net assets at the acquisit ion 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-acquisit ion 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 prof it or loss of the investee entit ies the Group should based Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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 port ion of the profits or losses arising from internal transactions with joint ventures and associates attributable to the investing entity according to the share rat io (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 addit ional 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 ent ity had directly disposed of the assets or liabilit ies 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 invest ing party shall be transferred to the income statement for the current period. If the remaining equit ies st ill 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 liabilit ies 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. 12. Investment property Investment property are propert ies held to earn rentals or for capital appreciat ion or both including rented land use right land use right which is held and prepared for transfer after appreciat ion and rented building.The init ial 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. 13. 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 f ixed asset that meet the recognit ion criteria shall be included in the cost of the f ixed 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 init ially measured at actual cost on acquisit ion. The cost of a purchased fixed asset comprises the purchase price relevant taxes and any directly attributable expenditure for bringing the asset to working condit ion for its intended use such as delivery and handling costs installat ion costs and other surcharges. Fixed assets are depreciated on straight-line basis. The est imated useful lives est imated residual values and annual depreciat ion rates for each category of f ixed assets are as follows: Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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-product ion method.The Group reviews the useful life and est imated net residual value of a f ixed asset and the depreciat ion method applied at least at the end of each year and makes adjustments if necessary. 14. Construction in progress The cost of construct ion in progress is determined according to the actual expenditure for the construct ion including all necessary construction expenditure incurred during the construct ion period borrowing costs that should be capitalized before the construct ion reaches the condit ion for intended use and other relevant expenses. Construct ion in progress is transferred to f ixed assets when the asset is ready for its intended use. 15. Borrowing costs Borrowing costs are interest and other costs incurred by the Group in connection with 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 acquisit ion construct ion 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 property plant and equipment and inventory etc.) that necessarily takes a substantial period of t ime 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) act ivit ies 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 act ivit ies 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 specif ic-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 deposit ing 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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 construct ion or manufacture of assets that are qualif ied for capitalization if abnormal discontinuance other than procedures necessary for their reaching the expected useful condit ions 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 t ill the construct ion or manufacture of the assets resumes. 16. Intangible assets An intangible asset probably shall be recognized only when the economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Intangible assets are init ially measured at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisit ion if the fair value can be reliably measured.The useful life of the intangible assets shall be assessed according to the est imated 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 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 propert ies 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 f inite useful life intangible asset is amortized using the straight-line method during the est imated useful life. For an intangible asset with a finite useful life the Group reviews the est imated 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. 17. 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. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) The expenditures in development stage are capitalized that should meet all the condit ions 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 f inancial 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 condit ion that the project research has been determined in which the relevant research complete all the fract ionalizat ion 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. 18. Impairment of assets The Group determines the impairment of assets other than the impairment of inventory deferred income taxes and financial assets using the following methods: The Group assesses at the balance sheet date whether there is any indication that an asset may be impaired. 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 irrespect ive 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 est imate the recoverable amount of the individual asset the Group determines the recoverable amount of the asset group to which the asset belongs. Identificat ion 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 test ing 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 port ion 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 f irstly 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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. 19. Long-term deferred expenses The long-term deferred expenses represent the payment for the improvement on buildings and other expenses which have been paid and should be deferred in the following years. Long-term deferred expenses are amortized on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortization. 20. Employee benefits Employee benefits refer to all kinds of remunerations or compensation made by enterprises to their employees in exchange for services provided by the employees or termination of labor relat ion. 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 contribut ions 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 f inancial posit ion with a corresponding debit or credit to retained prof its 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 administrat ive 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Termination benefits are recognized 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. 21. Provisions An obligation related to a contingency shall be recognised by the Group as a provision when all of the following condit ions are satisfied except for contingent considerations and contingent liabilit ies assumed in a business combination not involving entit ies 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 est imate can be made of the amount of the obligation. Contingent liabilit ies are init ially measured according to the current best est imate for the expenditure necessary for the performance of relevant present obligations with comprehensive consideration given to factors such as the risks uncertainty and t ime value of money relat ing to contingencies. The book value of the contingent liabilit ies should be reviewed at each balance sheet date. If there is object ive evidence showing that the book value cannot reflect the present best est imate the book value should be adjusted according to the best est imate.The contingent liabilit ies of the acquiree acquired in the business combination involving entit ies not under common control are measured at fair value upon init ial recognit ion. After init ial recognit ion the balance of the amount recognized according to the est imated liabilit ies and the amount init ially recognized after deducting the accumulated amortizat ion determined by the revenue recognit ion principle is subsequently measured at the higher of the two. 22. 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 vest ing period comes to an end or until the prescribed performance condit ions are met then on each balance sheet date within the vesting period the services obtained in the current period shall based on the best est imate 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 equit ies instruments on the date of the grant. The fair value is determined using Black-Scholes model (Note XI).Within the vesting period or before the prescribed performance conditons are met the relevant costs or expenses and capital reserves shall be determined and increased based on the best est imate of the number of vested equity instruments on each balance sheet date. For awards that do not ult imately vest because non-market performance and/or service condit ions have not been met no expense is recognised. Where awards include a market or non-vesting condit ion the transactions are treated as vesting irrespective of whether the market or non-vesting condit ion is sat isf ied provided that all other performance and/or service condit ions are satisfied. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Where the terms of an equity-settled award are modif ied 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 addit ion an expense is recognised for any modification that increases the total fair value of the share-based payments or is otherwise beneficial to the employee as measured at the date of modif ication.Where an equity-settled award is cancelled it is treated as if it had vested on the date of cancellat ion and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting condit ions 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. 23. Revenue Revenue is recognized only when an inflow of economic benefits is probable the amount of which can be reliably measured and all of the following condit ions are qualif ied.Revenue from the sale of goods The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the Group retains neither continuing management involvement to the degree usually associated with ownership nor effect ive control over the goods sold; and the amount of revenue can be measured reliably. The proceeds earned from sales of goods are determined based on the amount received or receivable as st ipulated in the contract or agreement otherwise the amount is not fair; If the amount received or receivable as st ipulated in the contract or agreement is collected in a defer method it includes the f inancing elements and should be determined according to the fair value of the amount received or receivable as st ipulated in the contract or agreement.Revenue from the rendering of services When the outcome of a transaction involving the rendering of services can be est imated reliably at the balance sheet date revenue associated with the transaction is recognized using the percentage of completion method or otherwise the revenue is recognized to the extent of costs incurred that are expected to be recoverable. The outcome of a transaction involving rendering of services can be est imated reliably when all of the following condit ions are sat isf ied: the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow into the Group; the stage of completion of the transaction can be measured reliably; and the costs incurred and to be incurred for the transaction can be measured reliably. The Group determines the stage of completion of a transaction involving the rendering of services by using the proportion of services performed to date to the total services to be performed. The total amount of revenue earned from rendering service are determined based on the amount received or receivable as st ipulated in the contract or agreement otherwise the amount is not fair.Interest income It should be measured based on the length of t ime for which the Group’s cash is used by others and the applicable effect ive interest rate.Royalty income Royalty income is recognized according to the agreed t ime and method by both parties in related contracts.Rental income Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Rental income from operat ing 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. 24. Government grants A government grant is recognized only when there is reasonable assurance that the entity will comply with any condit ions 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 condit ions to obtain the government grant. The one whose basic condit ion 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 recognit ion 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 prof it and loss reasonably and systematically in stages over the useful lives of the relevant assets. The government grants measured at nominal amount shall be 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 relat ive assets sold transferred disposed or damaged. 25. Income taxes Income tax comprises current and deferred tax. Income tax is recognized as an income or an expense 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 liabilit ies 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 liabilit ies 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 liabilit ies 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 init ial recognit ion of goodwill or the init ial recognit ion of an asset or liability in a transaction which contains both of the following characterist ics: the transaction is not a business combination and at the t ime of the transaction it affects neither the accounting profit nor taxable profit or loss. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) (2) in respect of taxable temporary differences associated with investments in subsidiaries associates and interests in jointly-controlled enterprises where the t iming 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 ut ilized except: (1) where the deferred tax asset relat ing to the deduct ible temporary differences arises from the init ial recognit ion of an asset or liability in a transaction that is not a business combination and at the t ime 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 ut ilized. At the balance sheet date deferred tax assets and liabilit ies 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 liabilit ies reflects the tax consequences that would follow from the manner in which the Group expects at the balance sheet date to recover the assets or settle the liabilit ies. 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 condit ions are met at the same t ime the deferred tax assets and deferred tax liabilit ies are listed at the net amount after offset: the legal right to settle the current income tax assets and current income tax liabilit ies at the net amount; the deferred tax assets and deferred tax liabilit ies are related to the income tax levied by the same tax collect ion and management department on the same taxable subject or different taxpaying subjects However in the future during each period when the signif icant deferred tax assets and deferred tax liabilit ies are reversed the tax payer involved intends to settle the current income tax assets and current income tax liabilit ies with net amount or obtain assets and pay off debts at the same t ime. 26. Leases A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. An operating lease is a lease other than a finance lease. The Group recording the operating lease as a lessee Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term and either included in the cost of another related asset or charged to the income statement for the 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 operat ing 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 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) actually arise. 27. Profit distribution The cash dividend of the Group is recognized as liabilit ies after the approval of general meeting of stockholders. 28. 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 dist inguished 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 condit ions for use and write down the special reserve while recognizing accumulated depreciat ion with the same amount. 29. Fair value measurement The Group measures its equity investments at fair value at the end of each report ing 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 liabilit ies 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 act ive markets for ident ical assets or liabilit ies; 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 signif icant to the fair value measurement is unobservable。 For assets and liabilit ies 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 signif icant to the fair value measurement as a whole) at the end of each report ing period. 30. Significant accounting judgments and estimates The preparation of f inancial statements requires management to make judgments est imates and assumptions that affect the amounts and disclosures of revenues expenses assets and liabilit ies and the disclosure of contingent liabilit ies at the balance sheet date. However uncertainty about these assumptions and est imates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) liabilit ies 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: Operat ing 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 condit ions of the arrangements that it retains al l the significant risks and rewards of ownership of these properties which are leased out on operating leases. Business model The classif ication of f inancial assets at init ial recognit ion depends on the business model of the Group’s management of f inancial assets. When judging the business model the Group considers the methods including enterprise evaluation and report ing of f inancial asset performance to key management personnel risks affect ing 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 t ime frequency and value of the sale of f inancial assets before the due date. Contract cash flow characterist ics The classificat ion of f inancial assets at init ial recognit ions depends on the contractual cash flow characterist ics 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 correct ion of the t ime 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 characterist ics it is necessary to determine whether the fair value of the prepayment characterist ics is very small etc.Uncertainty of accounting est imates The crucial assumptions of significant accounting est imates in future and other crucial sources of est imated uncertainty which may result in the significant adjustments to the book value of the subsequent accounting period are as the following: Impairment of f inancial instruments The Group uses the expected credit loss model to assess the impairment of f inancial instruments. The application of the expected credit loss model requires significant judgments and est imates. All reasonable and valid information must be considered including forward-looking information. In making these judgments and est imates 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 est imates 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 f inancial assets (goodwill excluded) The Group assesses at each report ing 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 est imate of the present value of the future cash flow of an asset the Group should est imate 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. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Fair value of unlisted equity investments For unlisted equity instrument investments several valuation models are used to est imate the fair value. This requires the Group to make est imates of unobservable market parameters such as price-to-book rat ion discount rate sustainable growth rate asset price index etc. and is therefore uncertain. Development expenditures 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 exist ing 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 est imate the t ime 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 condit ions. Factors that influence est imation 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 est imated compensatory unit warranty cost deduction mult i-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 relat ive 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. Depreciat ion and amort izat ion The Group’s management determines the est imated useful lives and residual value of f ixed assets and intangible assets. This est imate is based on the historical experience of actual useful lives of f ixed assets and intangible assets of similar nature and functions. Management will increase the depreciat ion and amortization charges where useful lives are less than previously est imated. 31. Changes in accounting policies and estimates Changes in accounting policies The New Guidelines for Financial Instruments In 2017 the Ministry of Finance issued the revised “Accounting Standard for enterprise No.22 –- Recognit ionand Measurement of Financial Instruments”; “Accounting Standard for enterprise No.23 – the Transfer of Financial Assets”; “Accounting Standard for enterprise No.24 – Hedging” and “Accounting Standard forenterprise No.37 – the List of Financial Instrument” (generally referred to as “the New Financial InstrumentGuidelines”). The Group will conduct accounting treatment in accordance with the new financial instrument standards from January 1 2019. According to the convergence provisions no adjustment will be made to the information of the comparable period. The difference between the new standards and the current standards implemented on the first day will be retroactively adjusted to adjust the undistributed profit or other comprehensive income at the beginning of 2019.The New Guidelines for Financial Instruments have changed the classification and measurement methods of f inancial assets which identified three main categories of measurement: amortized cost; other comprehensive income measured to fair value and whose changes; the current profit and loss measured to fair value and whose changes. Enterprises are supposed to consider their own business models and the contractual cash flow Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) characterist ics of f inancial assets to carry out the above classif ication. Equity instrument investment needs to be measured at fair value and its changes are included in the current profit and loss but at init ial recognit ion non-trading equity instrument investments can be irrevocably designated as financial assets measured at fair value and their changes are included in other comprehensive income.The New Standard for Financial Instruments requires that the impairment measurement of f inancial assets should be changed to “expected credit loss model” from “incurred loss model”. It is appropriate for the financial assets measured at amort ized cost and those measured at fair value with changes included in other comprehensive income.The Group designated part of the equity investment held as a financial asset measured at fair value and its changes included in other comprehensive income on January 1 2019 and reported as an investment in other equity instruments.The New Guidelines for Financial Instruments (cont inued) On the date of init ial implementation the classif ication and measurement results of f inancial assets in accordance with the financial instrument recognit ion and measurement standards before and after revision are as follows: The Group Recognition and measurement standards for f inancial instruments before amendment Recognition and measurement standards for f inancial instruments after amendment Measurement category Carrying amount Measurement category Carrying amount Cash Amortized cost (The loan and Account receivable) 9980544526.14 Amortized cost 9980544526.14 Account receivable Amortized cost (The loan and Account receivable) 1409419600.50 Amortized cost 1409419600.50 Notes receivable Amortized cost (The loan and Account receivable) 20561625805.24 Amortized cost 20561625805.24 Other account receivable Amortized cost (The loan and Account receivable) 3233020118.16 Amortized cost 3233020118.16 Equity investment Measure at fair value and its changes are included in the other comprehensive income (Assets available for sale) 1530321311.31 Measure at fair value and its changes are included in the current profit and loss (the Requirement of the Guidelines) 1530321311.31 Equity investment Amortized cost (Assets available for sale) 427552000.00 Measure at fair value and its changes are included in the other comprehensive income (Specified) 582679600.00 The Company Recognition and measurement standards for f inancial instruments before amendment Recognition and measurement standards for f inancial instruments after amendment Measurement category Carrying amount Measurement category Carrying amount Cash Amortized cost (The loan and Account 7310973018.99 Amortized cost 7310973018.99 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) receivable) Account receivable Amortized cost (The loan and Account receivable) 5679160679.69 Amortized cost 5679160679.69 Notes receivable Amortized cost (The loan and Account receivable) 19391160283.70 Amortized cost 19391160283.70 Other account receivable Amortized cost (The loan and Account receivable) 2326885353.29 Amortized cost 2326885353.29 Equity investment Measure at fair value and its changes are included in the other comprehensive income (Assets available for sale) 123540000.00 Measure at fair value and its changes are included in the current profit and loss (the Requirement of the Guidelines) 123540000.00 Equity investment Amortized cost (Assets available for sale) 417642000.00 Measure at fair value and its changes are included in the other comprehensive income (Specified) 572793000.00 The New Guidelines for Financial Instruments (cont inued) On the date of init ial implementation the origin face value adjustment of f inancial assets is the adjustment table for the new f inancial asset face value classif ied and measured in accordance with the revised financial instrument recognit ion and measurement standards: The Group Face value as listed in the original financial instrument standard 31 December 2018 Rearrange Remeasurement Face value as listed in the original financial instrument standard 1 January 2019 Financial assets measured at amortized cost Cash 9980544526.14 - - 9980544526.14 Account receivable 1409419600.50 - - 1409419600.50 Note receivable 20561625805.24 - - 20561625805.24 Other account receivable 3233020118.16 - - 3233020118.16 Equity investment-f inancial asset available for sale - - - - Balance as listed in the original f inancial instrument standard 427552000.00 - - - Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard) - (427552000.00) - - Balances listed under the new financial instrument standard - - - - Total financial assets measured at amortized cost 35612162050.04 (427552000.00) - 35184610050.04 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Measure at fair value and its changes are included in the other comprehensive income Equity investment-f inancial asset available for sale - - - - Balance as listed in the original f inancial instrument standard 1530321311.31 - - - Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard) - 427552000.00 - - Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard) - (1530321311.31) - - Remeasurement: f irst execution date fair value change - - 155127600.00 - Balances listed under the new financial instrument standard - - - 582679600.00 The New Guidelines for Financial Instruments (cont inued) The Group (continued) Face value as listed in the original financial instrument standard 31 December 2018 Rearrange Remeasurement Face value as listed in the original financial instrument standard 1 January 2019 Total f inancial assets measured at fair value and whose changes are recorded in other comprehensive income 1530321311.31 (1102769311.31) 155127600.00 582679600.00 Financial assets measured at fair value and whose changes are recorded in other comprehensive income Balances listed under the new financial instrument standard - - - - Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard) - 1530321311.31 - - Balance list under the new financial instrument standard - - - 1530321311.31 Total f inancial assets measured at fair value and whose changes are recorded into the current profit and loss - 1530321311.31 - 1530321311.31 Total 37142483361.35 - 155127600.00 37297610961.35 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) The New Guidelines for Financial Instruments (cont inued) On the date of init ial implementation the origin face value adjustment of f inancial assets is the adjustment table for the new f inancial asset face value classif ied and measured in accordance with the revised financial instrument recognit ion and measurement standards: The Company (continued) Face value as listed in the original f inancial instrument standard 31 December 2018 Rearrange Remeasurement Face value as listed in the original f inancial instrument standard 1 January 2019 Financial assets measured at amortized cost Cash 7310973018.99 - - 7310973018.99 Account receivable 5679160679.69 - - 5679160679.69 Note receivable 19391160283.70 - - 19391160283.70 Other account receivable 2326885353.29 - - 2326885353.29 Equity investment-f inancial asset available for sale - - - - Balance as listed in the original f inancial instrument standard 417642000.00 - - - Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard) - (417642000.00) - - Balances listed under the new financial instrument standard - - - - Total financial assets measured at amortized cost 35125821335.67 (417642000.00) - 34708179335.67 Measure at fair value and its changes are included in the other comprehensive income Equity investment-f inancial asset available for sale - - - - Balance as listed in the original f inancial instrument standard 123540000.00 - - - Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard) - 417642000.00 - - Less: transferred out to be measured at fair value and its changes are included in other comprehensive income (new financial instrument standard) - (123540000.00) - - Remeasurement: f irst execution date - - 155151000.00 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) fair value change The New Guidelines for Financial Instruments (cont inued) The Company (continued) Face value as listed in the original f inancial instrument standard 31 December 2018 Rearrange Remeasurement Face value as listed in the original f inancial instrument standard 1 January 2019 Total f inancial assets measured at fair value and whose changes are recorded in other comprehensive income 123540000.00 294102000.00 155151000.00 572793000.00 Financial assets measured at fair value and whose changes are recorded in other comprehensive income Balances listed under the new financial instrument standard - - - - Plus: transfer to the fair value measurement and its change into other comprehensive income – equity instruments (new financial instrument standard) - 123540000.00 - - Balance list under the new financial instrument standard - - - 123540000.00 Total f inancial assets measured at fair value and whose changes are recorded into the current prot and loss - 123540000.00 - 123540000.00 Total 35249361335.67 - 155151000.00 35404512335.67 Changes in the presentat ion of f inancial statements To meet the requirements of the Notice on Revising and Issuing Format of 2019 Financial Statements for General Business Enterprises (Cai Kuai [2019] No.6) and the Notice on Revising and Issuing Format of Consolidated Financial Statements (2019 edit ion) (Cai Kuai [2019] No.16) in the balance sheet the amounts previously presented in “notes and trade receivables” shall be split into “notes receivable” and “tradereceivables” the amounts previously presented in “notes and trade payables” shall be split into “notes payable”and “trade payables” the notes receivables at fair value through other comprehensive income previously presented in “other current assets” are separately presented in “receivables f inancing the “interests receivable” in “other receivables” is changed to reflect only the outstanding interests on f inancial instruments that expired and can be collected at the balance sheet date (the interests on the financial instrument accrued using the effect ive interest method are included in the outstanding amount of the corresponding financial instrument); the “interests payable” in “other payables” is changed to reflect only the outstanding interests on financial instruments that expired and should be paid at the balance sheet date (the interests on the financial instrument accrued using the effect ive interest method are included in the outstanding amount of the corresponding financial instrument) No need to retroactively adjust the comparative data according to the convergence provisions of the new financial instrument standards The cumulative effect of retrospective adjustments caused by the above changes in accounting policies are stated as follows: Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Face value before the changes in accounting policies Changes in accounting policies Face value after the changes in accounting policies 31 December 2018 The effects of the new financial instrument standard Other financial statement presentation method change impact 1 January 2019 The Group Notes receivable - - 20561625805.24 20561625805.24 Account receivable - - 1409419600.50 1409419600.50 Notes and account receivable 21971045405.74 - (21971045405.74) - Other account receivable 3250452923.70 - (17432805.54) 3233020118.16 Other current assets 2227565353.23 - 17432805.54 2244998158.77 Financial assets available for sale 1957873311.31 (1957873311.31) - - Financial assets for trading - 1530321311.31 - 1530321311.31 Investment in other equity instruments - 582679600.00 - 582679600.00 Notes payable - - 14807862262.39 14807862262.39 Account payable - - 13916201276.95 13916201276.95 Notes and account payable 28724063539.34 - (28724063539.34) - Research and development costs 2543265379.12 - 641523542.56 3184788921.68 Management costs 2782755531.47 - (641523542.56) 2141231988.91 The Company Notes receivable - - 19391160283.70 19391160283.70 Account receivable - - 5679160679.69 5679160679.69 Notes and account receivable 25070320963.39 - (25070320963.39) - Other account receivable 2344318158.83 - (17432805.54) 2326885353.29 Other current assets 1355155749.21 - 17432805.54 1372588554.75 Financial assets available for sale 541182000.00 (541182000.00) - - Financial assets for trading - 123540000.00 - 123540000.00 Investment in other equity instruments - 572793000.00 - 572793000.00 Notes payable - - 13572757870.72 13572757870.72 Account payable - - 10690985635.15 10690985635.15 Notes and account payable 24263743505.87 - (24263743505.87) - Research and development costs 2468444658.83 - 552635596.44 3021080255.27 Management costs 2154621063.20 - (552635596.44) 1601985466.76 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) IV TAXES 1. Main taxes and tax rates Value added tax (“VAT”) - VAT payable is the difference between VAT output and less deduct ible VAT input for the current year. VAT output of sales of products has been calculated by applying a rate of 13% to the taxable value since 1 April 2019 (16% before 1 April 2019). And VAT output of income from providing labor services has been calculated by applying a rate of 6% to the taxable value during this year. Consumption tax - Consumption tax is calculated at 1% 3% or 5% of taxable income. City maintenance and construct ion tax - 5% or 7% of the turnover tax paid is calculated and paid. Educat ional surcharge - 3% of the actual turnover tax paid is calculated and paid. Local educat ional 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 nat ional high-tech ident ificat ion and relevant tax preferent ial policies the following companies of the group are ident ified as high-tech enterprises and are subjected to the preferent ial 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 Implementat ion of Tax Incent ives In the Development of Western Regions (Cai Shui [2011] No. 58) collect ively issued by the ministry of Finance the Customs General Administrat ion and the National Taxat ion Bureau of PRC from 1 January 2011 to 31 December 2020 enterprises located in the Western Region and engaged in encouraged business would be ent itled to a preferent ial CIT rate of 15%. The Company’s subsidiaries including Chongqing Changan Special Automobile Co. Ltd Chongqing Changan Automobile Support ing Service Co. Ltd. and Chongqing Changan Suzuki Automobile Co. Ltd. are qualif ied to the requirement and are subjected to the preferent ial tax rate of 15%. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Cash Item 2019 2018 Cash 18280.08 14374.84 Cash at bank 9360456394.81 9648139239.96 Other cash 705696678.59 332390911.34 Total 10066171353.48 9980544526.14 As at 31 December 2019 the book value of restricted cash and cash equivalents is RMB705696678.59 (As at 31 December 2018: RMB332390911.34) which was mainly restricted for the issuance of acceptance bill. As at 31 December 2019 the cash at bank oversea is equivalent to RMB159973528.25 (As at 31 December 2018: RMB329881255.11). Cash at banks earns interest at floating rates based on daily bank deposit rates. Not ice deposits are made for periods of 7 days and short-term deposits are made for periods of 3 months to 12 months depending on the cash requirements of the Group and earn interest at respect ive deposit rates. 2、 Financial assets held for trading 2019 Financial assets measured at fair value and whose changes are recorded into the current profit and loss - Investment in equity instrument 2419476200.00 On December 31 2019 the financial assets held for trading measured at fair value are 35.5 million common shares of Southwest Securit ies Company Limited and 23 million restricted shares of Contemporary Amperex Technology Ltd . 3. Notes receivable (1) Classification of notes receivable Type 2019 2018 Commercial acceptance bill 7475629607.72 6687321419.20 Bank acceptance bill 19330005979.47 13874304386.04 Total 26805635587.19 20561625805.24 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 3. Notes receivable and accounts receivable(continued) (2) Pledged notes receivable Type 2019 2018 Commercial acceptance bill 365040070.00 384462570.00 Bank acceptance bill 2760059280.00 85160000.00 Total 3125099350.00 469622570.00 As at 31 December 2019 and 2018 notes receivable with above carrying amount were pledged to issue notes payable. (3) Endorsed or discounted but unexpired notes receivable as at the end of report ing period are as follow: 2019 2018 Derecognition Un-derecognition Derecognition Un-derecognition Commercial acceptance bill 662937930.00 - 147853740.00 - Bank acceptance bill 1937078894.54 - 1498687956.97 - Total 2600016824.54 - 1646541696.97 - (4) As at 31 December 2019 no note receivables converted to accounts receivable due to the non-acceptance (As at 31 December 2018: RMB29079401.00.) 4. Accounts receivable (1) Aging analysis of the accounts receivable as at 31 December 2019 is as follows: Aging 2019 2018 Within 1 year 678737828.90 1147795158.16 1 to 2 years 141612978.25 96258167.82 2 to 3 years 33700863.10 112117946.39 Over 3 years 68414880.58 143862648.03 Total 922466550.83 1500033920.40 Less: Provision (84152474.01) (90614319.90) 838314076.82 1409419600.50 (2) The movements in provision for impairment of accounts receivable are as follows: Beginning balance Addition Deduction Ending balance Provision Other Reversal Write-off 2019 90614319.90 13362617.00 - 6450000.00 13374462.89 84152474.01 2018 36030522.31 13490022.81 42008512.00 832031.73 82705.49 90614319.90 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 4. Notes receivable (continued) (3) Analysis of accounts receivable by category as at 31 December 2019 is as follows: Item 2019 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 Item 2018 Balance Provision Amount (%) Amount (%) Individually significant items and analyzed individually for provision 858892602.36 57.26 44226423.35 5.15 Accounts receivable analyzed as groups for provision Group 1. Accounts receivable analyzed for provision according to aging analysis 427323980.23 28.49 29225702.47 6.84 Group 2. Accounts receivable from related parties 185492616.70 12.37 - - Group subtotal 612816596.93 40.85 29225702.47 4.77 Individually insignificant items but analyzed individually for provision 28324721.11 1.89 17162194.08 60.59 合计 1500033920.40 100.00 90614319.90 6.04 (4) The Group’s accounts receivable was analyzed for provision by expected credit loss model 2019 2018 Est imated face value for default Expected credit loss rate (%) Expected credit loss for the entire durat ion Face balance Provision rat io (%) Provision for bad debt Within 1 year 601963326.69 0.80 4799025.50 356681581.72 0.02 68746.54 1 to 2 years 56368999.03 7.54 4250219.24 34680938.03 10.00 3468093.80 2 to 3 years 20043284.25 31.23 6258614.71 11214542.66 30.00 3364362.80 3 to 4 years 10355210.70 42.66 4417566.60 1106688.03 50.00 553344.02 4 to 5 years 2411538.03 45.52 1097691.19 9345372.38 80.00 7476297.90 Over 5 years 14447381.63 97.33 14061896.09 14294857.41 100.00 14294857.41 Total 705589740.33 4.94 34885013.33 427323980.23 6.84 29225702.47 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 4. Notes receivable (continued) (5) In 2019 provision for accounts receivable amounted to RMB13362617.00 (2018: RMB13490022.81). Provision for accounts receivable amounted to RMB6450000.00 has been reversed (2018: RMB832031.73). (6) As at 31 December 2019 Provision for accounts receivable amounted to RMB13374462.89 has been written off (2018: RMB82705.49). (7) As at 31 December 2019 accounts receivable from Top 5 clients amounted to RMB191520443.31 accounted for 20.76% of the total accounts receivable (2018：RMB564688036.12，accounted for37.65% of the total amount). (8) There were no accounts receivable derecognized due to transfer of f inancial assets during 2019 (2018: Nil). 5. Prepayments (1) Aging analysis of the prepayments is as follows: Aging 2019 2018 Amount Percentage (%) Amount Percentage (%) Within 1 year 427508750.42 68.53 781698728.24 90.24 1 to 2 years 190277683.92 30.50 77209604.94 8.91 2 to 3 years 4480529.56 0.72 5320836.56 0.61 Over 3 years 1534932.17 0.25 2020579.77 0.23 Total 623801896.07 100.00 866249749.51 100 (2) As at 31 December 2019 prepayments to Top 5 suppliers amounted to RMB465836148.17 which accounted for 74.68% of the total prepayments (2018: RMB692025641.94 which accounted for 79.89% of the total amount). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 6. Other receivables (1) Aging analysis of other receivables as at 31 December 2019 is as follows: 2019 2018 Within 1 year 1627799420.78 1959280906.55 1 to 2 years 1667806094.07 1185294003.76 2 to 3 years 503954545.01 73740285.90 Over 3 years 57790016.71 22553085.53 Total 3857350076.57 3240868281.74 Provision (125594084.11) (7848163.58) 3731755992.46 3233020118.16 (2) Other receivables are classified by nature as follows: Nature 2019 2018 New energy subsidy 3462221902.09 2847788412.50 Reserve 41810604.18 85243135.73 Margin 13965172.56 16370802.38 Other 213758313.63 283617767.55 Total 3731755992.46 3233020118.16 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 6. Other receivables (continued) (3) In 2019 the changes in the provision for bad debts for other receivables based on the 12-month expected credit losses and the expected credit losses for the entire duration are as follows: Stage 1 12-month ECLs Stage 2 Lifetime ECLs Stage 3 Credit-impaired financial assets (Lifet ime 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) Closing balance 291182.01 111686526.12 13616375.98 125594084.11 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 6. Other receivables (continued) Movement of other account receivable balance as follow: Stage 1 12-month ECLs Stage 2 Lifetime ECLs Stage 3 Credit-impaired financial assets (Lifet ime 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 (4) In 2018 movements of provisions for other receivables are as follows: Beginning balance Addition Deduction Ending balance Provision Other addition Reversal Write-off 2018 4156595.68 576587.36 4348209.00 1176673.66 56554.80 7848163.58 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 6. Other receivables (continued) Analysis of other receivables by category as at 31 December 2018 is as follows: Item 2018 Balance Provision Amount % Amount % Individually significant items and analyzed individually for provision 2780889774.62 85.80 - - Group 1. Other receivables analyzed for provision according to aging analysis 323279832.19 9.98 1212982.16 0.38 Group 2. Other receivables from related parties 126128653.39 3.89 - - Group subtotal 449408485.58 13.87 1212982.16 0.27 individually insignificant items but analyzed individually for provision 10570021.54 0.33 6635181.42 62.77 Total 3240868281.74 100 7848163.58 0.24 In groups other receivables were analyzed for provision by aging: Aging 2018 Balance Provision Amount % Within 1-year subtotal 317541550.74 98.22 290391.47 1 to 2 years 5113633.10 1.58 511363.31 2 to 3 years 253452.00 0.08 76035.60 3 to 4 years 34672.34 0.01 17336.17 4 to 5 years 93342.00 0.03 74673.60 Over 5 years 243182.01 0.08 243182.01 Total 323279832.19 100 1212982.16 (5) For the year ended 31 December 2019 provision for other receivables amounted to RMB119204711.76 have been accrued (2018: RMB576587.36). Provision for other receivables amounted to RMB459596.74 has been reversed (2018: RMB1176673.66). (6) For the year ended 31 December 2019 provision for impairment of other receivables amounted to RMB999194.49 has been written off (2018: RMB56554.80). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 6. Other receivables (continued) (7) As at 31 December 2019 top five debtors of other receivables are as follows: Debtors Amount Nature Aging Proportion of total other receivables (%) Provision First 1770677411.60 New energy subsidy 0-4 years 45.90 111066213.00 Second 1071115340.00 New energy subsidy Within 1year 27.77 - Third 430588852.51 New energy subsidy 0-5years 11.16 1572800.00 Fourth 131582160.00 New energy subsidy Within 1year 3.41 - Fifth 124312677.94 Commission processing 1-2years 3.22 - Total 3528276442.05 91.47 112639013.00 As at 31 December 2018 top five debtors of other receivables are as follows: Debtors Amount Nature Aging Proportion of total other receivables (%) Provision First 1667483759.60 New energy subsidy Within four years 51.45 - Second 538567705.00 New energy subsidy Within four years 16.62 - Third 414492285.00 New energy subsidy Within three years 12.79 - Fourth 124312677.94 Commission processing Within one year 3.84 - Fifth 107479260.00 New energy subsidy Within one year 3.32 - Total 2852335687.54 88.02 - (8) For the year ended 2019 there is no accounts receivable derecognized due to transfer of f inancial assets. (2018: Nil). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 7. Inventories (1) Classification of inventories Item 2019 2018 Balance Provision Net value Balance Provision Net value Raw materials 843669443.37 350525510.02 493143933.35 2029706541.33 181897353.27 1847809188.06 Material in transit 293575861.15 - 293575861.15 318420244.84 - 318420244.84 Work in progress 657730109.07 28324925.14 629405183.93 1413892484.38 35473526.73 1378418957.65 Finish goods 1958389227.87 83956153.45 1874433074.42 1292509122.51 76519657.33 1215989465.18 Consigned processing material 51101639.03 - 51101639.03 110310364.86 - 110310364.86 Consumables 33781796.49 - 33781796.49 46472236.60 - 46472236.60 Total 3838248076.98 462806588.61 3375441488.37 5211310994.52 293890537.33 4917420457.19 (2) Provision for inventories 2019 Type Beginning balance Additions Deduct ion Ending balance Provision Other Reversal or Written off Raw materials 181897353.27 176755422.47 - 8127265.72 350525510.02 Work in progress 35473526.73 2744458.87 - 9893060.46 28324925.14 Finish goods 76519657.33 45220725.83 - 37784229.71 83956153.45 Total 293890537.33 224720607.17 - 55804555.89 462806588.61 2018 Type Beginning balance Additions Deduct ion Ending balance Provision Other Reversal or Written off Raw materials 33713007.05 163124568.33 161591998.30 176532220.41 181897353.27 Work in progress 32329369.55 6303861.08 1985609.60 5145313.50 35473526.73 Finish goods 103902330.06 68184792.87 17456727.63 113024193.23 76519657.33 Total 169944706.66 237613222.28 181034335.53 294701727.14 293890537.33 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 7. Inventories(continued) (3) Note for inventory provision The Group assesses whether the cost of inventory is higher than the net realizable value and makes provision of the difference. Net realizable value is the est imated by selling price in the ordinary course of business deduct est imated costs in further production to sell and est imated necessary distribution expense and tax expense.The reversal of inventory provisions is due to price rebound of previous impaired inventories by net realizable value test while written off inventory provisions are due to selling off of previous impaired inventories in current year. 8. Other current assets Item 2019 2018 Input VAT to be deducted 1428518317.99 2227386063.11 Entrusted loan 300000000.00 - Others 17601810.05 17612095.66 Total 1746120128.04 2244998158.77 On December 31 2019 the entrusted loan is lent by the Group to our joint venture company Jiangling Holding Company Limited through China Everbright Bank Company Limited Chongqing branch. The loan term is one year and will expire on June 24 2020 with an annual interest rate of 4.35%. 9. Available-for-sale financial assets (only available for 2018) Item 2018 Book value Provision Net value Available-for-sale equity instrument Measured at fair value 1557441311.31 27120000.00 1530321311.31 Measured at historical cost 429361274.00 1809274.00 427552000.00 Total 1986802585.31 28929274.00 1957873311.31 Available-for-sale financial assets measured at fair value: As at 31 December 2018 the available-for-sale equity securit ies instrument measured at fair value is 35.50 million ordinary shares of Southwest Securit ies Co. Ltd. and 23 million restricted shares of Contemporary Amperex Technology Co. Ltd. Item 2018 Cost of equity instrument 1050000821.00 Fair value 1530321311.31 Accumulated amount of change in fair value recorded in other comprehensive income 349824952.31 Provision 27120000.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 9. Available-for-sale financial assets (only available for 2018) (continued) Available-for-sale financial assets measured at historical cost: 2018 Item Book value Provision Shareholding Ratio (%) Cash dividend in current year Beginning balance Addition Disposal Ending balance Beginning balance Addition Disposal Ending balance China South Industry Group Finance Co. Ltd. 80000000.00 - - 80000000.00 - - - - 3.83 48909006.75 Chongqing Ante trading Co. Ltd 3000000.00 - - 3000000.00 - - - - 10.00 - Sichuan Glass Co. Ltd. 1809274.00 - - 1809274.00 1809274.00 - - 1809274.00 0.64 - Zhong Fa Lian Investment Co. Ltd. 21000000.00 - - 21000000.00 - - - - 10.00 - CAERI(Beijing) automobile Lightweight Technology Research Institution Co. Ltd. 3000000.00 - - 3000000.00 - - - - 6.89 - Guoqi Automobile Power Cell Research Co. Ltd. 40000000.00 - - 40000000.00 - - - - 7.41 449438.20 United Prosperity Investment (ShenZhen) Co. Ltd 30552000.00 - - 30552000.00 - - - - 5.00 - Corun Hybrid Power Technology Co. Ltd 200000000.00 - - 200000000.00 - - - - 9.24 - Guoqi (Beijing) Intelligent Network Association Automotive Research Institute Co. Ltd. - 50000000.00 - 50000000.00 - - - - 5.56 - Total 379361274.00 50000000.00 - 429361274.00 1809274.00 - - 1809274.00 49358444.95 Impairment provisions movements of f inancial assets available for sale as follow: 2018 Provision for available-for-sale f inancial assets Beginning balance Addition Disposal Ending balance Available-for-sale f inancial assets measured at fair value 27120000.00 - - 27120000.00 Available-for-sale f inancial assets measured at historical cost 1809274.00 - - 1809274.00 Total 28929274.00 - - 28929274.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 10. Long-term equity investments 2019 Investee Beginning balance Addition Investment income under equity method Other equity variation Cash dividends declared Other Deduction Provision Book value ending balance Provision ending balance Joint Venture Jiangling Holding Co. Ltd. (note 2) 2493754915.53 - (221583996.94) - - (2272170918.59) - - - Changan Ford Automobile Co. Ltd. 3709784507.11 - (1926961179.20) - - - - 1782823327.91 - Changan Mazda Automobile Co. Ltd. 2472626663.41 - 929384241.61 - (1225000000.00) - - 2177010905.02 - Changan Ford Mazda Engine Co. Ltd. 827803757.96 - 39968582.73 - (37500000.00) - - 830272340.69 - Changan PSA Automobiles Co. Ltd. 1456519068.74 - (1110480084.87) - - - - 346038983.87 - Changan Weilai New Energy Automobile Technology Co. Ltd. 44065513.91 - (56937233.33) - - - - (12871719.42) - Nanchang Jiangling Holding Co. Ltd. - 2063742852.91 18072312.40 - - - - 2081815165.31 - Subtotal 11004554426.66 2063742852.91 (2328537357.60) - (1262500000.00) (2272170918.59) - 7205089003.38 - Associates Chongqing Changan Kuayue Automobile Co. Ltd. 116588234.97 - 75417039.13 - - - - 192005274.10 - Chongqing Changan Kuayue Automobile Sales Co. Ltd. (note1) - - - - - - - - Beijing Fang’an cresent taxi Co. Ltd. (note1) - - - - - - - - - Changan Automobile Financing Co.Ltd 2030617157.41 - 239321406.72 - (74897909.69) - - 2195040654.44 - Hainan Anxinxing Information Technology Co. Ltd. 5536555.21 - (1976171.11) - - - - 3560384.10 - Nanjing Chelai Travel Technology Co. Ltd. 1813616.14 - (338671.05) - - - - 1474945.09 - Hunan Guoxin Semiconductor Technology Co. Ltd. 25000000.00 - 152447.20 - - - - 25152447.20 - Beijing Wutong Chelian Technology Co. Ltd. 85856852.57 - (81762342.17) - - - - 4094510.40 - Anhe (Chongqing) Equity Investment Fund Management Co. Ltd. 2500000.00 - (560394.14) - - - - 1939605.86 - Hangzhou Chelizi Intelligent Technology Co.Ltd. 2703275.87 - 4824296.36 - - - - 7527572.23 - Nanjing Leading Equity Investment Partnership - 858267717.00 76950606.32 - - - - 935218323.32 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Nanjing Leading Equity Investment Management Co. Ltd. - 1500000.00 (54584.31) - - - - 1445415.69 - Pakistan Master Automobile Co. Ltd. - 36795899.66 - - - - - 36795899.66 - Jiangling Holding Co. Ltd. (Note 2) - 208428065.68 (142252166.55) 332817054.49 - - - 398992953.62 - Subtotal 2270615692.17 1104991682.34 169721466.40 332817054.49 (74897909.69) - - 3803247985.71 - Total 13275170118.83 3168734535.25 (2158815891.20) 332817054.49 (1337397909.69) (2272170918.59) - 11008336989.09 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 10. Long-term equity investments(continued) Note1: As at 31 December 2019 the Group is not responsible for extra loss from Chongqing Changan Kuayue Automobile Sales Co. Ltd. and Beijing Fang’an cresent taxi Co. Ltd.Therefore when excess losses of these two associates occurred the Group just reduced its correspondent long-term equity investment to zero and did not recognize contingent liabilit ies accordingly.Note2: In 2019 the joint venture of the group Jiangling Holding Co. Ltd. was separated into Jiangling Holding Co. Ltd. and the newly established Nanchang Jiangling Investment Co. Ltd . Jiangling Holdings Co. Ltd introduced new investors after the split. Upon complet ion of the capital increase the group held 25% of the equity of Jiangling Holding Co. Ltd which converted to an associate of the group. 2018 Investee Beginning balance Addition Investment income under equity method Other comprehensive income Other equity variation Cash dividends declared Other Deduction Provision Book value ending balance Provision ending balance Joint Venture Chongqing Changan Suzuki Automobile Co. Ltd. 1190705710.43 - (595756652.13) - - - (594949058.30) - - - Jiangling Holding Co. Ltd. 2907749943.37 - (409453173.08) (706228.88) (3835625.88) - - - 2493754915.53 - Changan Ford Automobile Co. Ltd. 4125426104.20 - (415641597.09) - - - - - 3709784507.11 - Changan Mazda Automobile Co. Ltd. 2439429811.02 - 1263196852.39 - - (1230000000.00) - - 2472626663.41 - Changan Ford Mazda Engine Co. Ltd. 903838395.08 - 38465362.88 - - (114500000.00) - - 827803757.96 - Changan PSA Automobiles Co. Ltd. 93561126.76 1800000000.00 (437042058.02) - - - - - 1456519068.74 - Changan Weilai New Energy Automobile Technology Co. Ltd. - 49000000.00 (4934486.09) - - - 44065513.91 Subtotal 11660711090.86 1849000000.00 (561165751.14) (706228.88) (3835625.88) (1344500000.00) (594949058.30) - 11004554426.66 - Associates Chongqing Changan Kuayue Automobile Co. Ltd. 101399892.43 - 28908342.54 - - (13720000.00) - - 116588234.97 - Chongqing Changan Kuayue Automobile Sales Co. Ltd. (note1) - - - - - - - - - - Beijing Fang’an cresent taxi Co. Ltd. - - - - - - - - - - Changan Automobile Financing Co.Ltd 1817669991.73 - 212947165.68 - - - - - 2030617157.41 - Zhenjiang Demao Hairun equity investment fund partnership (limited partnership)(note2) 518742921.95 - (239867.54) 77231613.62 - - (595734668.03) - - - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Hainan Anxinxing Information Technology Co. Ltd. - 6000000.00 (463444.79) - - - - - 5536555.21 - Nanjing Chelai Travel Technology Co. Ltd. - 2000000.00 (186383.86) - - - - 1813616.14 - Hunan Guoxin Semiconductor Technology Co. Ltd. - 25000000.00 - - - - - 25000000.00 - Beijing Wutong Chelian Technology Co. Ltd. - 98000000.00 (12143147.43) - - - - 85856852.57 - Anhe (Chongqing) Equity Investment Fund Management Co. Ltd. - 2500000.00 - - - - - 2500000.00 - Hangzhou Chelizi Intelligent Technology Co. Ltd. - 2243750.00 459525.87 - - 2703275.87 - Subtotal 2437812806.11 135743750.00 229282190.47 77231613.62 - (13720000.00) (595734668.03) - 2270615692.17 - Total 14098523896.97 1984743750.00 (331883560.67) 76525384.74 (3835625.88) (1358220000.00) (1190683726.33) - 13275170118.83 - 11. Investment in other equity instruments Accumulat ive 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 4097255.00 204820300.00 - Unlisted equity instruments China South Industry Group Finance Co. Ltd. 135103250.00 315965800.00 38343163.30 Unlisted equity instruments Guoqi (Beijing) Intelligent Network Associat ion Automot ive Research Inst itute Co. Ltd. 42500000.00 100000000.00 - Unlisted equity instruments Guoqi Automobile Power Cell Research Co. Ltd. 10657725.00 52538500.00 - Unlisted equity instruments United Prosperity Investment (ShenZhen) Co. Ltd 3085075.00 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 Inst itut ion Co. Ltd. - 3000000.00 - Unlisted equity instruments Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Sichuan Glass Co. Ltd. - - - Unlisted equity instruments 合计 195443305.00 734506100.00 38343163.30 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 12. Investment property Cost Model Item Builidings 2019 2018 Original cost Beginning and Ending 10050100.00 10050100.00 Accumulated depreciat ion and amort izat ion Beginning 2720538.72 2493827.16 Accrual 226711.56 226711.56 Ending 2947250.28 2720538.72 Impairment Provision Beginning and Ending - - Carrying amount Ending 7102849.72 7329561.28 Beginning 7329561.28 7556272.84 The investment property is rented to third parties in the form of operating lease. As at 31 December 2019 there is no investment property without property cert ificate (As at 31 December 2018: Nil). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 13. Fixed assets (1) Details of fixed assets 2019 Item Buildings Machinery Vehicles Other Equipment Total Original cost Beginning 9889579515.34 21927380270.82 1213223699.56 7644065328.46 40674248814.18 Purchase 10051085.36 10383228.89 923091.00 17745714.28 39103119.53 Transfer from Construct ion in progress 1255128220.82 5381232681.61 155920892.72 1165455499.85 7957737295.00 Other addit ion 10598771.51 1695411683.79 14198727.44 540601707.84 2260810890.58 Disposal 11144160050.01 25623584497.53 1355868955.84 8286664834.75 46410278338.13 Ending Accumulated depreciation Beginning 2147206657.32 11026127942.23 405520581.39 3773744928.55 17352600109.49 Accrual 372877646.57 1796628985.33 236791742.00 609619331.30 3015917705.20 Other addit ion 4681943.62 1326233165.27 13079362.87 414130901.34 1758125373.10 Disposal 2515402360.27 11496523762.29 629232960.52 3969233358.51 18610392441.59 Ending Impairment provision Beginning 82452249.51 895917567.96 36271972.06 145952856.85 1160594646.38 Accrual 3249811.61 83337033.15 919442.01 35466815.08 122973101.85 Other addit ion 109876.41 348207151.12 429524.88 74425853.47 423172405.88 Disposal 85592184.71 631047449.99 36761889.19 106993818.46 860395342.35 Ending Carrying amount Ending 8543165505.03 13496013285.25 689874106.13 4210437657.78 26939490554.19 Beginning 7659920608.51 10005334760.63 771431146.11 3724367543.06 22161054058.31 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 13. Fixed assets (continued) (1) Details of fixed assets (continued) 2018 Item Buildings Machinery Vehicles Other Equipment Total Original cost Beginning 7588350429.43 17780317915.84 758168041.39 4965243303.05 31092079689.71 Purchase 23926779.57 23571882.60 3099101.17 26846795.56 77444558.90 Transfer from Construct ion in progress 1327900008.98 756278671.99 432279275.46 1379046064.13 3895504020.56 Other addit ion 954716283.23 3602516085.77 24428654.75 1329694549.68 5911355573.43 Disposal 5313985.87 235304285.38 4751373.21 56765383.96 302135028.42 Ending 9889579515.34 21927380270.82 1213223699.56 7644065328.46 40674248814.18 Accumulated depreciation Beginning 1585639930.24 7183157682.85 207356765.94 2190616451.00 11166770830.03 Accrual 293956868.75 1410740403.02 181011982.63 448572044.96 2334281299.36 Other addit ion 269696084.63 2650379521.25 20023995.95 1165493091.83 4105592693.66 Disposal 2086226.30 218149664.89 2872163.13 30936659.24 254044713.56 Ending 2147206657.32 11026127942.23 405520581.39 3773744928.55 17352600109.49 Impairment provision Beginning 83371676.72 673609726.30 223852.23 123574653.73 880779908.98 Accrual 400000.00 87862065.28 36048119.83 17301545.17 141611730.28 Other addit ion 708576.48 149779328.80 - 6351188.48 156839093.76 Disposal 2028003.69 15333552.42 - 1274530.53 18636086.64 Ending 82452249.51 895917567.96 36271972.06 145952856.85 1160594646.38 Carrying amount Ending 7659920608.51 10005334760.63 771431146.11 3724367543.06 22161054058.31 Beginning 5919338822.47 9923550506.69 550587423.22 2651052198.32 19044528950.70 (2) Fixed assets that are temporarily unused 2019 Item Original cost Accumulated depreciation Impairment provision Carrying amount Buildings 129796057.23 65393233.85 44613642.16 19789181.22 Machinery 573645176.56 391306715.37 168519406.43 13819054.76 Vehicles 3245203.10 3146307.43 46835.20 52060.47 Other Equipment 297958260.66 206412768.71 86401828.63 5143663.32 Total 1004644697.55 666259025.36 299581712.42 38803959.77 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 13. Fixed assets (continued) (2) Fixed assets that are temporarily unused (continued) 2018 Item Original cost Accumulated depreciation Impairment provision Carrying amount Buildings 224485202.11 125177360.10 77423503.00 21884339.01 Machinery 1976159790.51 1347119942.38 615716084.44 13323763.69 Vehicles 1879595.78 1578167.36 275067.08 26361.34 Other Equipment 434967988.89 312070125.63 119315817.56 3582045.70 Total 2637492577.29 1785945595.47 812730472.08 38816509.74 (3) The book value of f ixed assets which are rented out under operat ing leases is as follow: Item 2019 2018 Buildings 74985870.88 56946778.73 Machinery 9443408.12 11813715.84 (4) Fixed assets without property cert ificate as at 31 December 2019 are as follow: Item Carrying amount Reason for incomplete certif icate of t itle Painting plant 584289477.40 Under processing Assemble plant 568400161.73 Under processing Welding workshop 307497805.57 Under processing Yu Zui Auto City 243927566.71 Under processing Welding Workshop 216339074.69 Under processing Stamping Workshop 215919166.74 Under processing H plant Phase IV 147826329.97 Under processing Other plant 91709015.23 Under processing Other facilit ies 73456456.32 Under processing S Engine plant 61499636.18 Under processing Engine Plant 58386780.80 Under processing New Energy Battery Workshop 52632785.72 Under processing Second plant and public building 34660294.32 Under processing EA Casting workshop Phase I 34065399.30 Under processing Staff cafeteria 28100103.33 Under processing Office building 17081906.23 Under processing Vehicle capability Lab 7031193.45 Under processing Buildings in test ing projects of Dianjiang 4644244.02 Under processing Technology center workshop 4504408.80 Under processing Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 14. Construction in progress (1) Details of construct ion in progress Item 2019 2018 Balance Provision Carrying amount Balance Provision Carrying amount Mini-bus production equipment 59110263.16 - 59110263.16 815889070.57 - 815889070.57 Yuzui motor city project 39547629.19 - 39547629.19 51962876.25 - 51962876.25 Car production equipment 104070401.86 - 104070401.86 181137313.03 - 181137313.03 Engine plant 880128770.64 - 880128770.64 1458726257.58 - 1458726257.58 Vehicle research inst itut ion 40087119.45 - 40087119.45 854570879.08 - 854570879.08 Vehicle moulds 284573714.88 - 284573714.88 420284566.37 - 420284566.37 Light vehicle technical transformation project of Baoding Changan bus 65394282.59 - 65394282.59 83207252.58 - 83207252.58 Beijing vehicle construct ion project 60307306.09 - 60307306.09 98585664.59 - 98585664.59 Car production Project of Hefei Changan 6491703.97 - 6491703.97 872832482.14 - 872832482.14 Others 239490564.60 49398728.00 190091836.60 595963063.44 49315394.88 546647668.56 Total 1779201756.43 49398728.00 1729803028.43 5433159425.63 49315394.88 5383844030.75 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 14. Construction in progress (continued) (2) Movements of significant construction in progress in 2019 Project Budget (RMB0000) Beginning balance Addition Transfer to fixed assets The project investments’ proportion of budget Progress of construction Source of funds Ending balance Mini-bus production equipment 539977.00 815889070.57 669970155.04 1426748962.45 77% 77% Self-raised 59110263.16 Yuzui motor city project 564027.00 51962876.25 127147462.86 139562709.92 80% 80% Self-raised 39547629.19 Car production equipment 735202.00 181137313.03 280561074.87 357627986.04 31% 31% Self-raised 104070401.86 Engine plant 942516.00 1458726257.58 1375360914.30 1953958401.24 95% 95% Self-raised 880128770.64 Vehicle research inst itut ion 251830.00 854570879.08 315087543.90 1129571303.53 90% 90% Self-raised 40087119.45 Vehicle moulds 242050.00 420284566.37 165308918.23 301019769.72 93% 93% Self-raised 284573714.88 Light vehicle technical transformation project of Baoding Changan Bus 143776.00 83207252.58 109955391.66 127768361.65 46% 46% Self-raised 65394282.59 Beijing vehicle construction project 513262.53 98585664.59 54616917.35 92895275.85 73% 73% Self-raised 60307306.09 Car production project of Hefei Changan 389601.00 872832482.14 996304527.39 1862645305.56 76% 76% Self-raised 6491703.97 Others 546647668.56 209383387.08 565939219.04 Self-raised 190091836.60 Total 5383844030.75 4303696292.68 7957737295.00 Self-raised 1729803028.43 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 14. Construction in progress (continued) (2) Movements of significant construction in progress in 2018： Project Budget (RMB0000) Beginning balance Addition Transfer to fixed assets The project investments’ proportion of budget Progress of construction Source of funds Ending balance Mini-bus production equipment 523977.00 997340616.73 822003529.66 1003455075.82 67% 67% Raised 815889070.57 Yuzui motor city project 564027.00 247220662.88 284256842.83 479514629.46 78% 78% Raised 51962876.25 Car production equipment 735202.00 165767240.81 525824999.59 510454927.37 28% 28% Raised 181137313.03 Engine plant 827789.00 341191269.61 1350482008.58 232947020.61 92% 92% Raised 1458726257.58 Vehicle research inst itut ion 226830.00 401869572.35 637783509.21 185082202.48 86% 86% Raised 854570879.08 Vehicle moulds 225550.00 365419879.40 365375476.56 310510789.59 92% 92% Raised 420284566.37 Light vehicle technical transformation project of Baoding Changan Bus 92867.00 28393497.74 99638888.18 44825133.34 57% 57% Raised 83207252.58 Beijing vehicle construction project 513262.53 163600842.58 177445536.24 242460714.23 72% 72% Raised 98585664.59 Car production project of Hefei Changan 412108.00 156409567.96 920575058.27 204152144.09 48% 48% Raised 872832482.14 Others 366960005.46 828626292.45 659967092.92 - - Raised 495484251.65 Total 3234173155.52 6045174895.79 3895504020.56 5383844030.75 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 15. Intangible assets 2019 Item Land use rights Software use rights Trademark use rights Non-patent technology Total Original cost Beginning 2753082390.28 632418610.26 211784400.00 5628937137.87 9226222538.41 Purchase - 72741193.22 - - 72741193.22 Internal research and development - - - 1191538130.67 1191538130.67 Other addit ions - - - 110678.40 110678.40 Ending 2753082390.28 705159803.48 211784400.00 6820364590.14 10490391183.90 Accumulated amort izat ion Beginning 403454284.03 510503061.87 170953466.62 2893723166.60 3978633979.12 Accrual 58527222.30 54162005.48 17500000.00 894872734.70 1025061962.48 Other addit ions - - - 9007.93 9007.93 Ending 461981506.33 564665067.35 188453466.62 3788586893.37 5003686933.67 Impairment provision Beginning - 23617923.17 - 205727083.32 229345006.49 Accrual - - - 47739930.25 47739930.25 Other addit ions - - - - - Ending - 23617923.17 - 253467013.57 277084936.74 Carrying amount Ending 2291100883.95 116876812.96 23330933.38 2778310683.20 5209619313.49 Beginning 2349628106.25 98297625.22 40830933.38 2529486887.95 5018243552.80 2018 Item Land use rights Software use rights Trademark use rights Non-patent technology Total Original cost Beginning 2384260724.00 440803454.31 211784400.00 4120145819.00 7156994397.31 Purchase - 123109392.52 - - 123109392.52 Internal research and development - - - 1297212770.58 1297212770.58 Other addit ions 368821666.28 68505763.43 - 211578548.29 648905978.00 Ending 2753082390.28 632418610.26 211784400.00 5628937137.87 9226222538.41 Accumulated amort izat ion Beginning 280991802.54 396959100.18 153453466.62 2054012177.29 2885416546.63 Accrual 49968327.29 56772368.14 17500000.00 641523542.56 765764237.99 Other addit ions 72494154.20 56771593.55 - 198187446.75 327453194.50 Ending 403454284.03 510503061.87 170953466.62 2893723166.60 3978633979.12 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Impairment provision Beginning - 21319804.81 - 202312916.20 223632721.01 Accrual - - - 3414167.12 3414167.12 Other addit ions - 2298118.36 - - 2298118.36 Ending - 23617923.17 - 205727083.32 229345006.49 Carrying amount Ending 2349628106.25 98297625.22 40830933.38 2529486887.95 5018243552.80 Beginning 2103268921.46 22524549.32 58330933.38 1863820725.51 4047945129.67 15. Intangible assets (continued) As at 31 December 2019 the intangible assets from internal research and development accounted for 53.33% of total intangible assets (as at 31 December 2018: 50.41%). As at 31 December 2019 there is no land use right with no cert ificate (As at 31 December 2018: Nil). 16. Development expenditure 2019 Item Beginning balance Addit ion Deduction Ending balance Internal research and development Recognized as intangible assets Charged to income Statement of the current year Automobile Development 789597615.60 1309371552.15 1191538130.67 92685572.88 814745464.20 2018 Item Beginning balance Addit ion Deduction Ending balance Internal research and development Recognized as intangible assets Charged to income Statement of the current year Automobile Development 836638328.10 1279944707.42 1297212770.58 29772649.34 789597615.60 17. Goodwill 2019 and 2018 Investee Beginning balance Addit ion Deduct ion Ending balance Business combinat ion under common control Disposal Hebei Changan Automobile Co. Ltd. 9804394.00 - - 9804394.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Nanjing Changan Automobile Co. Ltd. - - - - Total 9804394.00 - - 9804394.00 Movement of provision for goodwill is as follow: 2019 and 2018 Investee Beginning balance Addit ion Deduct ion Ending balance Accrual Disposal Nanjing Changan Automobile Co. Ltd. 73465335.00 - - 73465335.00 Due to the accumulated losses of Nanjing Changan Automobile Co. Ltd. provision for related goodwill has been fully accrued and amounted to RMB73465335.00. 18. Long-term deferred expenses 2019 Item Beginning balance Addit ion Amort izat ion Ending balance 2019 17104601.67 3991609.29 6768571.06 14327639.90 2018 13545589.39 7475597.77 3916585.49 17104601.67 19. Deferred tax assets and liabilities Deferred income tax assets and deferred income tax liabilit ies that are not offset: Item 2019 2018 Deferred tax assets： Deductible temporary differences Deferred tax assets Deductible temporary differences Deferred tax assets Assets provision 1096277037.39 164441555.61 1192875928.31 178931389.28 Accrued expenses and contingent liabilit ies 5787629284.18 868144392.63 5755288762.17 863293314.33 Unpaid tech development expense and advert isement expense 356768621.37 53515293.21 477578425.86 71636763.88 Deferred income 2737366931.07 410605039.66 3116680509.64 467502076.45 Unpaid salary and bonus and others 305961692.44 45894253.82 494605966.69 74190894.95 Total 10284003566.45 1542600534.93 11037029592.67 1655554438.89 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 19. Deferred tax assets and liabilities (continued) Item 2019 2018 Deferred tax liabilit ies： Taxable temporary differences Deferred tax liabilities Taxable temporary differences Deferred tax liabilities Available-for-sale f inancial assets on the changes in fair value recorded in capital reserve 1626528679.00 243979301.85 507440490.31 76116073.54 Fair value adjustment of business combination not under common control 274831525.87 41224728.88 394100647.03 59115097.05 Other 76925730.40 11538859.56 - - Total 1978285935.27 296742890.29 901541137.34 135231170.59 Unrecognized deduct ible temporary differences and tax losses of unrecognized are as follows: Item 2019 2018 The deduct ible temporary difference 2819674898.01 2438545953.61 The deduct ible tax loss 8045254649.13 4871204656.42 Total 10864929547.14 7309750610.03 Note: Due to the uncertainty of whether there will be enough taxable profit in future to ut ilize the above deductible loss no deferred tax assets have been recognized accordingly.Maturity period for unrecognized deductible tax losses: Year 2019 2018 2019 - 659281850.63 2020 114124498.57 348563349.93 2021 35368427.70 103219695.88 2022 200696545.78 898588459.22 2023 962591126.51 2861551300.76 2024 and onwards 6732474050.57 - Total 8045254649.13 4871204656.42 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 20. Provision for the impairment of assets 2019 Item Beginning Deduction Ending Reversal Write-off I. Bad debt provision 98462483.48 132567328.76 6909596.74 14373657.38 209746558.12 II. Provision for inventory 293890537.33 224720607.17 10322.17 55794233.72 462806588.61 III. Provision for fixed assets 1160594646.38 122973101.85 - 423172405.88 860395342.35 IV. Provision for construction in progress 49315394.88 83333.12 - - 49398728.00 V. Provision for intangible assets 229345006.49 47739930.25 - - 277084936.74 Ⅵ. Provision for goodwill 73465335.00 - - - 73465335.00 Total 1905073403.56 528084301.15 6919918.91 493340296.98 1932897488.82 Note: Accrued provision for f ixed assets is mainly due to the abandoned factory and impairment of machinery and molds for the discontinued productions this year Accrued provision for intangible assets is mainly due to the impairment of the non-patent technology for the discontinued productions.The Group adopted the new financial instruments accounting standard since January 1 2019 the amounts recorded in account “available for sale f inancial assets” in 2018 reclassified to the f inancial assets measured at fair value and the fair value changes recorded in other comprehensive income the provision accrued in account “available for sale f inancial assets” reclassif ied at January 1 2019 accordingly. 2018 Item Beginning Addition Deduction Ending provision Other addition Reversal Write-off I. Bad debt provision 40187117.99 14066610.17 46356721.00 2008705.39 139260.29 98462483.48 II. Provision for inventory 169944706.66 237613222.28 181034335.53 156142459.77 138559267.37 293890537.33 III. Provision for fixed assets 880779908.98 141611730.28 156839093.76 - 18636086.64 1160594646.38 IV. Provision for construction in progress - - 49315394.88 - - 49315394.88 V. Provision for intangible assets 223632721.01 3414167.12 2298118.36 - - 229345006.49 Ⅵ. Provision for goodwill 73465335.00 - - - - 73465335.00 Ⅶ. Provision for available-for-sale financial assets 28929274.00 - - - - 28929274.00 Total 1416939063.64 396705729.85 435843663.53 158151165.16 157334614.30 1934002677.56 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 21. Short-term loans Classification of short-term loans： Item 2019 2018 Mortgage loans 50000000.00 40000000.00 guaranteed loan 179580000.00 150000000.00 Total 229580000.00 190000000.00 As at 31 December 2019 the interest rates of the above loans were 3.91%-5.20% (as at 31 December 2018: 4.35%-5.20%). As at 31 December 2019 there is no overdue short-term loan (as at 31 December 2018: Nil). In 2019 the Group obtained a working capital mortgage of RMB 50000000.00 from China South Industry Group Finance Co. Ltd. with the land use right with book value of RMB 18080415.84 and fixed assets with book value of RMB 24200714.44 as collateral (2018: With the book value of the land use right of RMB 18499267.20 and the book value of the f ixed assets of RMB 26729742.04 the group obtains the working capital mortgage loan of RMB 40000000.00 from China South Industry Group Finance Co. Ltd. 22. Notes payable Item 2019 2018 Commercial acceptance bill 2551863471.51 2946482019.96 Bank acceptance bill 10878679822.72 11861380242.43 Total 13430543294.23 14807862262.39 As at 31 December 2019 there is no overdued unpaid notes payable (as at 31 December 2018: Nil) 23. Accounts payable 2019年 2018年 accounts payable 18905725271.50 13916201276.95 As at 31 December 2019 there is no significant accounts payable aged over one year (as at 31 December 2018: Nil). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 24. Advances from customers Item 2019 2018 Advances from customers 2315641685.78 1556482278.92 As at 31 December 2019 advances from customers of RMB260238126.83 aged over one year is mainly credit guarantee charged to dealers (as at 31 December 2018: RMB216726918.21). 25. Payroll payable 2019 Item Beginning Addit ion Deduction Ending Short term salary benefits 1271461842.35 4902928307.23 5201783794.98 972606354.60 Defined contribution plans 84410435.21 493073936.79 508999944.69 68484427.31 Early retirement benefits 7123000.00 8925762.83 10803762.83 5245000.00 Total 1362995277.56 5404928006.85 5721587502.50 1046335781.91 2018 Item Beginning Addit ion Deduction Ending Short term salary benefits 1567656287.03 5281251280.32 5577445725.00 1271461842.35 Defined contribution plans 68156035.30 566571969.66 550317569.75 84410435.21 Early retirement benefits 5073000.00 10387769.63 8337769.63 7123000.00 Total 1640885322.33 5858211019.61 6136101064.38 1362995277.56 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 25. Payroll payable (continued) Short term salary benefits： 2019 Item Beginning Addit ion Deduction Ending Salary bonus allowance and subsidy 1077447577.69 3939344440.24 4238980908.85 777811109.08 Employee benefit 45611590.61 230351764.50 264306315.57 11657039.54 Social insurance 3379369.66 325520272.55 317519224.78 11380417.43 Medical insurance 532854.88 284975364.87 283988065.45 1520154.30 Industrial injury insurance 1437746.05 36669991.37 29487616.28 8620121.14 Maternity insurance 1408768.73 3874916.31 4043543.05 1240141.99 Housing accumulation fund 9422677.58 290581751.15 297207126.28 2797302.45 Labor fund and employee education fund 135600626.81 117130078.79 83770219.50 168960486.10 Total 1271461842.35 4902928307.23 5201783794.98 972606354.60 2018 Item Beginning Addit ion Deduction Ending Salary bonus allowance and subsidy 1207501206.86 4488234330.21 4618287959.38 1077447577.69 Employee benefit 207402348.95 88951550.95 250742309.29 45611590.61 Social insurance (174158.92) 307202837.90 303649309.32 3379369.66 Medical insurance 559230.30 272234008.27 272260383.69 532854.88 Industrial injury insurance (3096589.29) 32563345.54 28029010.20 1437746.05 Maternity insurance 2363200.07 2405484.09 3359915.43 1408768.73 Housing accumulation fund 59222161.27 258334142.47 308133626.16 9422677.58 Labor fund and employee education fund 93704728.87 138528418.79 96632520.85 135600626.81 Total 1567656287.03 5281251280.32 5577445725.00 1271461842.35 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 25. Payroll payable (continued) Defined contribution plans： 2019 Item Beginning Addit ion Deduction Ending Basic ret irement security 76517169.90 477667218.04 493147391.06 61036996.88 Unemployment insurance 7893265.31 15406718.75 15852553.63 7447430.43 Total 84410435.21 493073936.79 508999944.69 68484427.31 2018 Item Beginning Addit ion Deduction Ending Basic ret irement security 60088662.53 551646640.84 535218133.47 76517169.90 Unemployment insurance 8067372.77 14925328.82 15099436.28 7893265.31 Total 68156035.30 566571969.66 550317569.75 84410435.21 The salary bonus allowance and subsidy employee benefits and other social insurances mentioned above are paid in t ime according to related laws and regulations and sets of the Group. 26. Taxes payable Item 2019 2018 Value-added tax 84852296.03 9641450.47 Consumption tax 629406972.37 658869177.63 Corporate income tax 120351092.86 (19968952.37) City maintenance and construct ion tax and educat ion surcharge 34455756.66 9333772.54 Others 20026324.88 11441038.98 Total 889092442.80 669316487.25 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 27. Other payables 2019 2018 Dividend payable - 79742.80 Other payables 4809918141.45 3079669273.01 Total 4809918141.45 3079749015.81 Other payables Item 2019 2018 Project funds 2091437803.04 1271262272.32 Deposits of dealer and supplier 284705119.28 133434563.54 Maintenance fees 158503895.70 205714188.51 Advertisement fees 405752873.43 750771372.18 Warehousing and transport fees 247969064.86 123222758.15 Advances of equity transfer 831300000.00 - Others 790249385.14 595264118.31 Total 4809918141.45 3079669273.01 28. Contingent liabilities 2019 Item Beginning Addit ion Deduct ion Ending Warranty 2610780818.12 781546593.88 629561064.50 2762766347.50 Supplier compensation 634541926.00 - 44727434.22 589814491.78 Total 3245322744.12 781546593.88 674288498.72 3352580839.28 2018 Item Beginning Addit ion Deduct ion Ending Warranty 2423958274.70 712598648.92 525776105.50 2610780818.12 Supplier compensation - 634541926.00 - 634541926.00 Total 2423958274.70 1347140574.92 525776105.50 3245322744.12 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 29. Other current liabilities Item 2019 2018 Accrued commercial discount payable 3028296317.93 2883344577.38 Accrued transportation fee 501351278.96 537462389.91 Accrued market development expense 355903653.68 443397362.38 Accrued utilities 25777106.11 36910207.22 Accrued labor service fee 39493497.48 37723105.48 Accrued technology royalty 101005700.82 128055835.93 Accrued lease fee 83111810.66 98306892.29 Others 119003396.13 160240782.02 Total 4253942761.77 4325441152.61 30. Current portion of non-current liabilities Item 2019 2018 Long-term loan within 1 year - 6594120.00 31. Long-term Loan Item 2019 2018 Credit loan 55300000.00 6594120.00 Deduct ion: Loan within 1 year - (6594120.00) Total 55300000.00 - As at 31 December 2019 the interest rates of the above loans were 1.00% (as at 31 December 2018: 3.044%). As at 31 December 2019 there is no overdue long-term loans (as at 31 December 2018: Nil). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 32. Long-term payables 2019 2018 Special payables 857356423.71 303590824.69 Special payables: 2019 Item Beginning Addition Deduction Ending New vehicle product 20684920.29 3026900.00 10314074.81 13397745.48 Changan automobile E class Gasoline engine cylinder block cylinder head production line project 22984695.64 - 22984695.64 - Land relocation compensation 55350709.40 500000000.00 - 555350709.40 Development and industrialization of C206 pure electric cars 3446280.58 - 3415113.03 31167.55 Intelligent manufacturing project 104783625.98 67802899.55 4828994.45 167757531.08 Lightweight design of automobile structure 52890838.71 21360000.00 25290720.71 48960118.00 Others 43449754.09 74955560.32 46546162.21 71859152.20 Total 303590824.69 667145359.87 113379760.85 857356423.71 2018 Item Beginning Addition Deduction Ending New vehicle product 7808326.58 22360900.00 9484306.29 20684920.29 Changan automobile E class Gasoline engine cylinder block cylinder head production line project 67480246.95 - 44495551.31 22984695.64 Land relocation compensation 55350709.40 - - 55350709.40 Development and industrialization of C206 pure electric cars 14582280.58 - 11136000.00 3446280.58 Intelligent manufacturing project 45455157.40 79908937.74 20580469.16 104783625.98 Lightweight design of automobile structure 63564705.20 1300829.00 11974695.49 52890838.71 Others 36365724.91 28760473.84 21676444.66 43449754.09 Total 290607151.02 132331140.58 119347466.91 303590824.69 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 33. Long-term payroll payable Item 2019 2018 Net obligat ion of defined benefit plan 31965000.00 33534000.00 Early ret irement 13967000.00 20303000.00 Total 45932000.00 53837000.00 In addit ion to basic ret irement security and unemployment insurance which are managed by local government the Group offers different kinds of overall pension and annual compensation to some retired employees until their death. The group provides subsidies to former military personnel who participated in specific wars and offers large medical treatment insurance for all ret ired personnel. The group also offered early-retired salary social insurances and housing accumulation fund with different standards until their formal ret irement (Male: Age 60; Female: Age 50 or 55). These amounts of social insurances and housing accumulation fund are based on cost base and statutory proportion.The present value of the defined benefits plans is valued by expected cumulative welfare units determination which was ensured by Aon Hewitt China at 31 December 2019. As at balance sheet day key actuarial assumptions are as follows: 2019 2018 Discount rate Ret ired employees 3.25% 3.25% Early ret ired employees 2.75% 3.00% Retirement age Male 60 60 Female 50 /55 50/55 Increase rate of key benefits Ret ired employees 0.0%-4.0% 0.0%-6.0% Early ret ired employees 0.0%-4.0% 0.0%-4.0% The future mortality rate is based on China experience life table of life insurance (2010-2013) “CL (2010-2013)” the table is a public stat ist ic in PRC.The sensit ive analyses of key assumption are as follows: 2019 Increase % Increase/(Decrease) in the obligation of defined benefits plan Decrease % Increase/(Decrease) in the obligation of defined benefits plan Discount rate 0.5% (1670000.00) 0.5% 1805000.00 Increase rate of key benefits 0.5% 1806000.00 0.5% (1682000.00) Mortality rate 5% (465000.00) 5% 489000.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2018 Increase % Increase/(Decrease) in the obligation of defined benefits plan Decrease % Increase/(Decrease) in the obligation of defined benefits plan Discount rate 0.5% (1907000.00) 0.5% 2061000.00 Increase rate of key benefits 0.5% 2101000.00 0.5% (1922000.00) Mortality rate 5% (476000.00) 5% 501000.00 The sensit ive analysis above is based on the deduction to reasonable change of key assumption as at the balance sheet date. Sensit ive analysis is resulted from fluctuation of main assumptions with other assumptions unchanged. As all assumptions are not isolated from each other sensit ive analysis shall not represent actual result of obligation of defined benefits plan.The related costs of the def ined benefit plan charged to income statement are as follows： 2019 2018 Service costs- current period 43000.00 (79656000.00) Net interest 1050000.00 4110000.00 Post employment benefits net 1093000.00 (75546000.00) Recorded in general administrat ive expenses 1093000.00 (75546000.00) Movement of present value of defined benefits plan is as follows: Defined Benefit Plan Obligat ion 2019 2018 Beginning balance 33534000.00 100782000.00 Charged to income Statement of the current period Service costs- current period 43000.00 (79656000.00) Interest expense net 1050000.00 4110000.00 Actuarial losses charged to other comprehensive income (254000.00) 13214000.00 Benefits Payment (2408000.00) (4916000.00) Ending balance 31965000.00 33534000.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 34. Deferred income 2019 Item Beginning Addition Deduction Ending Government grants related to assets 2871932225.37 224667080.00 237726222.29 2858873083.08 Government grants related to gains 673754999.84 703273000.00 1167197918.74 209830081.10 Others 137621309.52 25771589.42 37804983.91 125587915.03 Total 3683308534.73 953711669.42 1442729124.94 3194291079.21 2018 Item Beginning Addition Deduction Ending Government grants related to assets 2825085486.08 258126338.83 211279599.54 2871932225.37 Government grants related to gains 754048245.36 302298761.19 382592006.71 673754999.84 Others 48683687.61 142238902.00 53301280.09 137621309.52 Total 3627817419.05 702664002.02 647172886.34 3683308534.73 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 34. Deferred income(continued) As at 31 December 2019 details of liabilit ies related to government grants are as follows: Item Beginning Addition Recorded to non-operatin g income Deduction Ending Relates to asset/gain Funds for Beijing Changan project 1166388574.21 - 36308168.78 - 1130080405.43 Related to assets Subsidies for the automobile comprehensive test ing ground project 459704416.60 - 28199166.67 - 431505249.93 Related to assets Subsidies for the construction of Hefei new plants 326888250.56 120682000.00 55643599.74 - 391926650.82 Related to assets Funds for Yuzui motor city project 233030612.08 - 5683673.47 - 227346938.61 Related to assets New energy subsidy 132908316.53 70375080.00 58144047.49 - 145139349.04 Related to assets Light vehicle technical transformation project of Baoding Changan Bus 128340591.54 - 6820018.44 - 121520573.10 Related to assets Engine production restructure program 90977443.51 - 9022556.39 - 81954887.12 Related to assets Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line 76688194.59 - 15965833.33 - 60722361.26 Related to assets Changan automobile E class Gasoline engine cylinder block cylinder head production line project 45344600.00 - - - 45344600.00 Related to assets Expansion of production capacity project 37446511.51 - 4686606.83 - 32759904.68 Related to assets Funds for H series engine 32000000.08 - 5333333.33 - 26666666.75 Related to assets Others 142214714.16 33610000.00 11919217.82 - 163905496.34 Related to assets Subtotal 2871932225.37 224667080.00 237726222.29 - 2858873083.08 Subsidy of Nanjing new energy research and development 600000000.00 100000000.00 - 700000000.00 - Related to income Research and development fund subsidy of Hefei Changan 71456238.65 600000000.00 466896031.92 - 204560206.73 Related to income New energy power system research and development subsidy 2298761.19 - 37876.11 - 2260885.08 Related to income Other - 3273000.00 264010.71 - 3008989.29 Related to income Subtotal 673754999.84 703273000.00 467197918.74 700000000.00 209830081.10 Total 3545687225.21 927940080.00 704924141.03 700000000.00 3068703164.18 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 34. Deferred income (continued) As at 31 December 2018 details of liability related to government grants are as follows： Item Beginning Addition Recorded to non-operating income Ending Relates to asset/gain Funds for Beijing Changan project 1202042715.17 - 35654140.96 1166388574.21 Relates to asset Subsidies for the automobile comprehensive testing ground project 487903583.27 - 28199166.67 459704416.60 Relates to asset Subsidies for the construction of Hefei new plants 328769680.06 44876000.00 46757429.50 326888250.56 Relates to asset Funds for Yuzui motor city project 238714285.60 - 5683673.52 233030612.08 Relates to asset New energy subsidy 27738250.00 134157000.00 28986933.47 132908316.53 Relates to asset Light vehicle technical transformation project of Baoding Changan Bus 135160610.02 - 6820018.48 128340591.54 Relates to asset Engine production restructure program 100000000.00 - 9022556.49 90977443.51 Relates to asset Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line 92654027.88 - 15965833.29 76688194.59 Relates to asset Changan automobile E class Gasoline engine cylinder block cylinder head production line project - 45344600.00 - 45344600.00 Relates to asset Expansion of production capacity project 42133118.34 - 4686606.83 37446511.51 Relates to asset Funds for H series engine 37333333.40 - 5333333.32 32000000.08 Relates to asset Others 132635882.34 33748738.83 24169907.01 142214714.16 Relates to asset Subtotal 2825085486.08 258126338.83 211279599.54 2871932225.37 Subsidy of Nanjing new energy research and development 600000000.00 - - 600000000.00 Relates to income Research and development fund subsidy of Hefei Changan 154048245.36 300000000.00 382592006.71 71456238.65 Relates to income New energy power system research and development subsidy - 2298761.19 - 2298761.19 Relates to income Subtotal 754048245.36 302298761.19 382592006.71 673754999.84 Total 3579133731.44 560425100.02 593871606.25 3545687225.21 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 35. Share capital 2019 movement 31 December 2018 Issuance of shares Stock dividend Transfer of reserve to common shares Others Sub-total 31 December 2019 I. Restricted shares 1 Shares held by state-owned legal persons 139762403 - - - (139762403) (139762403) - 2 Shares held by domestic natural person 18900 - - - - - 18900 Total of restricted shares 139781303 - - - - 18900 II. Unrestricted shares 1 RMB ordinary shares 3760881066 - - - 139762403 139762403 3900643469 2 Foreign-funded shares listed domestically 901986142 - - - - - 901986142 Total of unrestricted shares 4662867208 - - - - 4802629611 III. Total shares 4802648511 - - - - - 4802648511 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2018 (Expressed in Renminbi Yuan) 35. Share capital (continued) 2018 movement 31 December 2017 Issuance of shares Stock dividend Transfer of reserve to common shares Others Sub-total 31 December 2018 I. Restricted shares 1 Shares held by state-owned legal persons 139762403 - - - - - 139762403 2 Shares held by domestic natural person 18900 - - - - - 18900 Total of restricted shares 139781303 - - - - - 139781303 II. Unrestricted shares 1 RMB ordinary shares 3760881066 - - - - - 3760881066 2 Foreign-funded shares listed domestically 901986142 - - - - - 901986142 Total of unrestricted shares 4662867208 - - - - - 4662867208 III. Total shares 4802648511 - - - - - 4802648511 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 36. Capital reserves 2019 Item Beginning Addition Deduction Ending Share premium 4938329830.94 - - 4938329830.94 Share-based payment 23961900.00 - 23961900.00 - Capital reserve transferred arising from the old standards 44496899.00 - - 44496899.00 Restricted capital reserve of equity investments 17015985.20 - - 17015985.20 Others (Note 1) 33437825.03 332817054.49 - 366254879.52 Total 5057242440.17 332817054.49 23961900.00 5366097594.66 2018 Item Beginning Addition Deduction Ending Share premium 4969218884.37 - 30889053.43 4938329830.94 Share-based payment 32697000.00 11014600.00 19749700.00 23961900.00 Capital reserve transferred arising from the old standards 44496899.00 - - 44496899.00 Restricted capital reserve of equity investments 17015985.20 - - 17015985.20 Others 35977188.37 - 2539363.34 33437825.03 Total 5099405956.94 11014600.00 53178116.77 5057242440.17 Note1: The increase in other capital reserve in 2019 is due to the change in the capital reserve of the joint venture Jiangling Holdings Co. Ltd. which is included in RMB 332817054.49. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 37. Other comprehensive income Accumulated other comprehensive income in balance sheet attributable to parent company is as follows: 31 December2018 Movement 1 January 2019 Movement 31 December 2019 Change in net liability or assets from defined benefit plan 1175000.00 - 1175000.00 254000.00 1429000.00 Comprehensive income which cannot be reclassified into profit and loss under equity method (2088068.00) - (2088068.00) - (2088068.00) Fair value change generated from available for sale financial assets 297351209.45 (165492749.45) 131858460.00 63584845.00 195443305.00 Foreign currency translat ion difference (60928211.01) - (60928211.01) 6138554.20 (54789656.81) Total 235509930.44 (165492749.45) 70017180.99 69977399.20 139994580.19 1 January 2018 Movement 31 December 2018 Change in net liability or assets from defined benefit plan 14389000.00 (13214000.00) 1175000.00 Comprehensive income which cannot be reclassified into profit and loss under equity method (1381839.12) (706228.88) (2088068.00) Fair value change generated from available for sale f inancial assets 120262249.99 177088959.46 297351209.45 Foreign currency translat ion difference (50309987.03) (10618223.98) (60928211.01) Total 82959423.84 152550506.60 235509930.44 Current occurrence amount of other comprehensive income in income statement attributable to parent company: 2019 Amount before tax Deduct: amounts transferred to income statement which were recognized in other comprehensive income in prior period Deduct: Income tax Amount attributable to owners Amount attributable to minority interests Other comprehensive income not to be reclassified to profit or loss in subsequent period Change in net liability or assets from defined benefit plan 254000.00 - - 254000.00 - Fair value change of Investment in other equity instruments 74805700.00 - 11220855.00 63584845.00 - Subtotal 75059700.00 - 11220855.00 63838845.00 - Other comprehensive income will be reclassified to profit or loss in subsequent period Foreign currency translat ion difference 6138554.20 - - 6138554.20 - Subtotal 6138554.20 - - 6138554.20 - Total 81198254.20 - 11220855.00 69977399.20 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 37. Other comprehensive income (continued) 2018 Amount before tax Deduct: amounts transferred to income statement which were recognized in other comprehensive income in prior period Deduct: Income tax Amount attributable to owners Amount attributable to minority interests Other comprehensive income not to be reclassified to profit or loss in subsequent period Change in net liability or assets from defined benefit plan (13214000.00) - - (13214000.00) - Comprehensive income which can not be reclassified into profit and loss under equity method (706228.88) - - (706228.88) - Subtotal (13920228.88) - - (13920228.88) - Other comprehensive income will be reclassified to profit or loss in subsequent period Fair value change of available for sale financial assets 208339952.31 - 31250992.85 177088959.46 - Foreign currency translat ion difference (10618223.98) - - (10618223.98) - Subtotal 197721728.33 - 31250992.85 166470735.48 - Total 183801499.45 - 31250992.85 152550506.60 - 38. Special reserves 2019 Item Beginning Addit ion Deduction Ending Safety fund 41222369.10 79135417.54 73281543.93 47076242.71 2018 Item Beginning Addit ion Deduction Ending Safety fund 28279733.06 83826318.58 70883682.54 41222369.10 The Group accrued safety fund according to the circular of (Cai Qi [2012] No. 16) issued by the Ministry of Finance and the State Administrat ion of work safety on 14 February 2012. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 39. Surplus reserves 2019 and 2018 Item Beginning Addit ion Deduction Ending Statutory surplus 2401324255.50 - - 2401324255.50 The Company appropriated statutory surplus reserves based on profit after tax. When statutory surplus reserves account for 50% of paid-in capital no further surplus reserve will be appropriated. 40. Retained earnings Item 2019 2018 Retained earnings at beginning of the year 33707011170.31 35184073061.94 Adjustment 297351209.45 - Retained earnings after adjustment 34004362379.76 35184073061.94 Add: Profits attributable to parent company for the current year (2646719356.53) 680728392.03 Less: Appropriat ion to statutory surplus reserves - - Less: Ordinary share dividend of cash 86471463.63 2157790283.66 Retained earnings at the end of year 31271171559.60 33707011170.31 Adjustment: as stated in note III 31 and note V 2 the common shares of Southwest Securit ies Company Limited and restricted shares of Contemporary Amperex Technology Company Limited held by the Group have been reclassified from financial assets at fair value through other comprehensive income to financial assets at fair value through profit or loss. Meanwhile the related other comprehensive income has been reclassified to retained earnings which affects the retained earnings at the beginning of the year about RMB297351209.45. According to the decision of the 65th meeting of the 7th Board of Directors of the Company no profit distribut ion will be made in 2019. The above profit distribution plan has yet to be considered and approved by the company's general meeting of shareholders. 41. Operating revenue and cost Item 2019 2018 Revenue Cost Revenue Cost Main business 69315716509.29 59445831613.01 64490487252.71 55116734739.05 Other business 1279528623.99 786753815.07 1807783137.06 1466733630.09 Total 70595245133.28 60232585428.08 66298270389.77 56583468369.14 Operating revenue listed as follows: Item 2019 2018 Sale of goods 70528420564.07 66276054153.09 Provide labor and other services 66824569.21 22216236.68 Total 70595245133.28 66298270389.77 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 42. Tax and surcharges Item 2019 2018 Consumption tax 1998619440.93 1887596418.76 City maintenance and construction tax 160739584.91 121084067.02 Educational surcharge 118587412.13 107471391.03 Others 210110629.86 189766107.53 Total 2488057067.83 2305917984.34 43. Operating expenses Item 2019 2018 Payroll and welfare 420884406.19 326700194.59 Promotion advertising fee and Sales service fee 2224959385.19 2981253072.70 Transportation expenses 1796397367.83 1728743073.33 Travelling expenses 89905543.70 82924351.46 Package expenses 8979853.46 18172933.96 Consulting fee 9278821.91 20414125.10 Training fee 28185324.64 58950405.11 Others 12580183.02 66097190.23 Total 4591170885.94 5283255346.48 44. General and administrative expenses Item 2019 2018 Payroll and welfare 1360795649.37 1230385974.33 Administrat ive expenses 314648478.13 378467226.08 Depreciat ion and amort izat ion 276550788.64 244302232.68 Miscellaneous service charges 60861235.59 53961042.11 Traffic expenses 39399677.23 65664475.92 Travelling expenses 24604006.43 54238378.61 Others 188371683.26 114212659.18 Total 2265231518.65 2141231988.91 45. Research and development expenses Item 2019 2018 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Payroll and welfare 1079128106.16 1432753634.55 Material fee 223007996.05 241258297.80 Subcontract fee 321189407.67 201398428.01 Survey and traffic expenses 81309580.38 128375837.23 Test fee 187139269.95 146093293.23 Depreciat ion and amort izat ion 1129018488.23 820906255.98 Others 148270912.69 214003174.88 Total 3169063761.13 3184788921.68 46. Financial income Item 2019 2018 Interest income 245520358.56 476922766.94 Less: Foreign exchange gain or loss (8130682.63) 14802579.62 Interest expense 40109729.93 11700010.25 Others 22691799.53 23358142.01 Total 190849511.73 427062035.06 47. Other income Item 2019 2018 Amount recognized in 2019 as non-recurring profit and loss Other income 1537625620.93 2873192102.56 1537625620.93 Government grants recognized as current income are as follows: Item 2019 2018 Relates to asset/gain New energy subsidy 58144047.49 28986933.47 Assets Subsidies for the construction of Hefei new plants 55643599.74 46757429.50 Assets Funds for Beijing Changan project 36308168.78 35654140.96 Assets Comprehensive testing f ield program 28199166.67 28199166.67 Assets Industry upgrading project for small displacement engine and technological transformation project for CB type engine production line 15965833.33 15965833.29 Assets Engine capacity structure adjustment project 9022556.39 9022556.49 Assets Light vehicle technical transformation project of Baoding Changan Bus 6820018.44 6820018.48 Assets Funds for Yuzui motor city project 5683673.47 5683673.52 Assets Funds for H series engine 5333333.33 5333333.32 Assets Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Expansion of production capacity project 4686606.83 4686606.83 Assets Other 11919217.82 24169907.01 Assets Subtotal 237726222.29 211279599.54 Hefei Changan R & D funding subsidies 466896031.92 382592006.71 Income Enterprise development fund 397250000.00 1426333900.00 Income Post stability subsidy 257216017.31 - Income Nanjing Changan R & D funding subsidies 61370000.00 151000000.00 Income Government grants for development expenses 39306000.00 478596700.00 Income Others 77861349.41 223389896.31 Income Subtotal 1299899398.64 2661912503.02 Total 1537625620.93 2873192102.56 48. Investment income Item 2019 2018 Long-term equity investment income under equity method (2158815891.20) (331883560.67) Gains generated by business combinations not under common control(note) - 209443337.73 The investment income of f inancial asset held for trading during its holding period 4332388.16 - Dividend income from remaining investments in other equity instruments 38343163.30 - Investment income during holding period from available-for-sale financial assets - 51133446.15 Entrusted loan interest income 6771226.43 - Total (2109369113.31) (71306776.79) 49. Fair value change 2019 2018 Financial assets held for trading 889154888.69 - 50、 Impairment loss of credit (only available for 2019) 2019 Bad debt for account receivable 6912617.00 Bad debt for other receivables 118745115.02 合计 125657732.02 51. Impairment loss on assets Item 2019 2018 I. Bad debt loss - 12057904.78 II. Impairment of inventory 224710285.00 81470762.51 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) III. Impairment of fixed assets 122973101.85 141611730.28 IV. Impairment of intangible assets 47739930.25 3414167.12 V．Impairment of available-for-sale financial assets 83333.12 - Total 395506650.22 238554564.69 52. Gain on disposal of assets Item 2019 2018 Amount recognized in 2018 as non-recurring profit and loss Gain on disposal of fixed-assets 56658864.17 8561074.73 56658864.17 53. Non-operating income Item 2019 2018 Amount recognized in 2019 as non-recurring profit and loss Gains generated by business combinations not under common control - 811377936.28 - Fines penalt ies and others 49703849.18 104841288.40 49703849.18 Total 49703849.18 916219224.68 49703849.18 54. Non-operating expenses Item 2019 2018 Amount recognized in 2019 as non-recurring profit and loss Donation 30198295.92 27582524.12 30198295.92 Vehicle premium 6029776.00 5098810.00 6029776.00 Fines and penalt ies 81475589.37 3860473.32 81475589.37 Others 67258954.03 20013743.50 67258954.03 Total 184962615.32 56555550.94 184962615.32 55. Income tax expense Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Item 2019 2018 Current income tax expense 166789357.70 59356673.11 Deferred income tax expense 239975628.66 (124490731.15) Total 406764986.36 (65134058.04) The relat ionship between income tax expense and profit before tax is as follows: Item 2019 2018 Profit/(loss) before tax (2242366904.52) 658225323.83 Tax at the applicable tax rate (336355035.69) 98733798.57 Impact of different tax rates of subsidiaries (46985923.84) (21467247.81) Adjustments to current income tax of previous period 14818867.16 (4629283.01) Profit or loss attributable to joint ventures and associates 343313319.80 66960893.21 Non-taxable income (6645717.84) (163680879.95) Non-deductible tax expense 9061952.29 3836286.40 Usage previous deductible losses (66761248.99) (19645340.05) Unrecognized deductible temporary differences and deductible losses 722485517.59 317046456.24 Additional deduction arising from research and development expense (226166744.12) (342288741.64) Tax expense under actual tax rate of the Group 406764986.36 (65134058.04) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 56. Earnings per share (“EPS”) The basic EPS is calculated by dividing the net profit of the current period attributable to the ordinary shareholders of the Company by the weighted average number of outstanding ordinary shares.The Company has no dilut ive potential ordinary shares. 2019 2018 Earnings Net profit attributable to ordinary shareholders (2646719356.53) 680728392.03 Shares Weighted average ordinary shares 4802648511.00 4802648511.00 Note: In 2019 no change in the number of ordinary shares or potential common shares has occurred.Therefore the total share capital is 4802648511 shares. The EPS for report ing period is calculated based on this number of shares. From the balance sheet day and to the approval date of report ing there is no event that may causes changes in ordinary shares or potential ordinary shares. 57. Notes to cash flow statement (1) Items of cash received relat ing to other operating act ivit ies are as follows: Item 2019 2018 Interest income 245520358.56 476922766.94 Government grants related to operat ing act ivit ies 2427786919.77 2972076736.91 Others 1345854279.36 1319095385.38 Total 4019161557.69 4768094889.23 (2) Items of cash paid relat ing to other operating act ivit ies are as follows: Item 2019 2018 Selling expense 4243108756.85 4309012845.31 Administrat ive expense 701218540.63 666543781.90 Research and development expenses 737909170.70 689870733.35 Refund of government subsidies 700000000.00 - Others 644165606.15 1104054021.14 Total 7026402074.33 6769481381.70 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 57. Notes to cash flow statement (continued) (3) Items of cash received relat ing to other investing act ivit ies are as follows: Item 2019 2018 Net cash received from business combinat ions - 1036263749.91 (4) items of cash received relat ing to other financing act ivit ies are as follows: 2019 2018 Entrusted loan 300000000.00 - (5) Items of cash received relat ing to other financing act ivit ies are as follows: Item 2019 2018 Withdraw for deposit of bill 32839805.56 855280377.20 (6) Items of cash paid relat ing to other financing act ivit ies are as follows: Item 2019 2018 Payment for deposit of bill 395159204.54 - Acquisit ion of minority shareholders' equity - 30344195.00 Total 395159204.54 30344195.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 58. Supplementary information of cash flow statement (1) Supplementary information of cash flow statement Supplementary information 2019 2018 1．Cash flows from operating activities calculated by adjusting the net prof it Net profit (2649131890.88) 723359381.87 Add: impairment provision for assets 521164382.24 238554564.69 Depreciation of f ixed assets 3015917705.20 2334281299.36 Depreciation and amortizat ion of investment property 226711.56 226711.56 Amortization of intangible assets 1025061962.48 765764237.99 Amortization of long-term deferred expense 6768571.06 3916585.49 Increase in deferred income (489017455.52) 52824676.85 Disposal loss on f ixed assets intangible assets and others long-term assets (56658864.17) (8561074.73) Loss of abandonment of f ixed assets 61599450.00 - Income of fair value movement (889154888.69) - Financial expense 40109729.93 11700010.25 Investment income 2109369113.31 71306776.79 Increase in deferred tax assets 112953903.96 (121696627.62) Decrease in inventory 1317268683.80 162147313.89 Deferred income tax liabilit ies increased 127021724.70 (2794103.52) Decrease in operating receivables (6933919137.79) 7012744770.54 Increase in operating payables 6610407218.35 (14321540062.30) Others (48238681.15) (809709763.55) Net cash flows from operating act ivit ies 3881748238.39 (3887475302.44) 2．Movement of cash and cash equivalents Ending balance of cash 9360474674.89 9648153614.80 Less: beginning balance of cash 9648153614.80 21451305090.53 Decrease in cash and cash equivalents (287678939.91) (11803151475.73) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 58. Supplementary information of cash flow statement (continued) (2) The major non-cash investing and financing act ivit ies: Item 2019 2018 Endorsed bank acceptance received by sales and providing service 3292638946.70 3032518773.00 (3) Cash and cash equivalents Item 2019 2018 I. Cash Including: Cash on hand 18280.08 14374.84 Bank deposits that can be readily used 9360456394.81 9648139239.96 II. Cash equivalents - - III. Ending balance of cash and cash equivalents 9360474674.89 9648153614.80 Note: The restricted cash and cash equivalents of the Group are not included in the cash and cash equivalents. 59. The assets with ownership or right restricted Item 2019 2018 Notes Cash and cash equivalents 705696678.59 332390911.34 Note 1 Notes receivable and Accounts receivable 3125099350.00 469622570.00 Note 2 Intangible assets 18080415.84 18499267.20 Note 3 Fixed assets 24200714.44 26729742.04 Note 3 Note 1: As at 31 December 2019 and 31 December 2018 the Group has restricted cash at banks for the issuance of bank acceptance bill.Note 2: As at 31 December 2019 notes receivable with a book value of RMB3125099350.00 (31 December 2018: RMB469622570.00) has been pledged to issue bank acceptance bills. Note 3: As at 31 December 2019 land use right with book value of RMB18080415.84 and fixed assets with book value of RMB24200714.44 has been pledged to obtain RMB50000000.00 short-term loan from China South Industry Group Finance Co. Ltd. The amortization of the land use right above is RMB418851.36 the depreciat ion of the fixed assets above is RMB2529027.60. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 60. Foreign Monetary Item Item 2019 2018 Original Currency Exchang e Rate Translated to RMB Original Currency Exchange Rate Translated to RMB Cash USD 12051146.32 6.9762 84071206.96 8751966.06 6.8632 60066493.46 GBP 2705025.17 9.1501 24751250.81 2373542.00 8.6762 20593325.10 EUR 3335742.03 7.8155 26070491.84 4048438.85 7.8023 31587134.44 JPY 128999237.00 0.0641 8267045.10 64912028.43 0.0619 4018054.56 SUR 746523266.53 0.1129 84257705.03 239651676.87 0.0990 23725516.01 BRL 571845.63 1.7378 993754.73 553990.20 1.8287 1013081.88 Accounts receivable USD 20851192.18 6.9762 145462086.89 14372769.49 6.8632 98643191.56 Other receivables USD 2102288.89 6.9762 14665987.75 2876923.86 6.8632 19744903.84 JPY 17101991.07 0.0641 1095998.20 16387327.63 0.0619 1014375.58 EUR 1710130.00 7.8155 13365521.02 3514473.56 7.8023 27420977.06 SUR 1312803.70 9.1501 12012285.14 1243071.00 8.6762 10785132.61 BRL - 1.7378 - 14146.87 1.8287 25870.38 Accounts Payable USD 528062.06 6.9762 3683866.54 868583.12 6.8632 5961259.67 JPY 10747095.93 0.0641 688738.39 20635052.40 0.0619 1277309.74 EUR 960196.00 7.8155 7504411.84 2451927.12 7.8023 19130670.97 GBP 462384.83 9.1501 4230867.43 965218.00 8.6762 8374424.41 Other Payables USD 5502387.24 6.9762 38385753.86 777462.07 6.8632 5335877.68 GBP 178041.96 9.1501 1629101.74 1760110.00 8.6762 15271066.38 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) VI Shares in other entities 1. Shares in subsidaries The subsidiaries of the Company are as follows： Company name Main operating place Registered place Nature of business Registered capital (0000) Total proportion of shareholders (%) direct indirect I. The subsidiary formed by establish or investment Hebei Changan Automobile Co.Ltd. (note 1) Dingzhou Dingzhou Manufact uring 46469 94.22 Chongqing Changan International Automobile Sales Co. Ltd. Chongqing Chongqing sales 1376 100.00 Chongqing Changan Connected Car Technology Co. Ltd. Chongqing Chongqing Lease 8850 100.00 1.00 Chongqing Changan Special Automobile Co. Ltd (note 2) Chongqing Chongqing Sales 2000 50.00 Chongqing Changan Automobile Supporting Service Co. Ltd. Chongqing Chongqing sales 3000 99.00 Chongqing Changan New Energy Automobile Co. Ltd. Chongqing Chongqing R&D 2900 100.00 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. Yokohama Japan Yokohama Japan R&D JPY2000 100.00 - Changan United States R&D Center Co. Ltd. Troy United states Detriot 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 - Changan automobile investment (Shenzhen) 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 Fuqing Changan New Energy Automobile Co. Ltd. Nanjing Nanjing Sales 200 100.00 - Xiamen Changan New Energy Automobile Co. Ltd. Xiamen Xiamen Sales 200 100.00 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Note 1: The Company's voting rights for Nanjing Changan Automobile Co. Ltd. and Hebei Changan Automobile Co. Ltd. are 93.79% and 95.62% respectively. The reason for the inconsistent ratio of shareholding ratio to voting rights is that some minority shareholders entrust the company to exercise voting rights.Note 2: The remaining shareholders of Chongqing Changan Special Purpose Vehicle Co. Ltd. signed the “Consensus Action People Agreement” with the company and they all agreed to vote according to the voting intention of the company. Therefore the company can control it so it will be included in the consolidated financial the scope of the report. As at 31 December 2019 the Group has no subsidiaries with important minority interests. 2. Shares in joint ventures and associates Guangzhou Changan New Energy Automobile Co. Ltd. Guangzhou Guangzhou Sales 400 100.00 - Chongqing Chehemei Technology Co. Ltd. Chongqing Chongqing Sales 1000 100 - Chongqing Changan New Energy Automobile Technology Co. Ltd. Chongqing Chongqing Sales 9900 100.00 - II. subsidiaries acquired through business combinations not under common control Nanjing Changan Automobile Co.Ltd.(note1) Nanjing Nanjing Manufact uring 60181 84.73 - Chongqing Changan Suzuki Automobile Co. Ltd. Chongqing Chongqing Manufact uring 133764 100.00 - Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership) Zhenjiang Zhenjiang finance 150001 100.00 - III. The subsidiary formed by business combination under common control Hebei Baoding Changan Bus Co.Ltd. Dingzhou Dingzhou Manufact uring 3000 100.00 - Hefei Changan Automobile Co.Ltd. Hefei Hefei Manufact uring 77500 100.00 - Company name Main operating place Registered place Nature of business Registered capital (0000) Total proportion of shareholders (%) Accounting treatment direct indirect I. Joint ventures Changan Ford Automobile Co. Ltd. Chongqing Chongqing Manufacture and sale of automobiles and comp onents USD24100 50.00 - The equity method Changan Mazda Automobile Co. Ltd. Nanjing Nanjing Manufacture and sale of automobiles and components USD11097 50.00 - The equity method Changan Mazda Engine Co. Ltd.(Note) Nanjing Nanjing Manufacture and sale of automobiles and components USD20966 50.00 - The equity method Changan PSA Automobiles Co. Ltd. Shenzhen Shenzhen Manufacture and sale of automobiles and components 760000 50.00 - The equity method Changan Weilai New Energy Automobile Technology Co. Ltd.Nanjing Nanjing Manufacture and sale of automobiles and components 9800 50.00 - The equity method Nanchang Jiangling Investment Co. Ltd.Nanchang Nanchang Management of investment industry and assets 100000 50.00 - The equity method II. Associates Chongqing Changan Kuayue Automobile Co.Ltd. Chongqing Chongqing Develop product and sale of automobile and components; import and 6533 34.30 - The equity method Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2. Shares in joint ventures and associates (continued) export goods. Chongqing Changan Kuayue Automobile Sales Co. Ltd. Chongqing Chongqing Sale of Changan Kuayue’ s automobile and agricultural cars and components. Technical advisory services for automobile 300 34.30 - The equity method Beijing Fang’an cresent taxi Co. Ltd. Beijing Beijing Regional taxi operat ion 2897.96 20.70 - The equity method Changan Automobile Finacing Co. Ltd. Chongqing Chongqing Provide car loan; provide vehicle loans and operat ing equipment loans to car dealers including the construct ion loans of exhibition hallspare parts loans and maintenance equipment loans etc. 476843.10 28.66 - The equity method Hainan Anxinxing Information Technology Co. Ltd. Chengmai Chengmai Software and hardware technology development technical consult ing auto parts sales 3000 30.00 - The equity method Nanjing Chelai Travel Technology Co. Ltd.Nanjing Nanjing Car sales leasing software technology development technical services 10000 10.00 - The equity method Hunan Guoxin Semiconductor Technology Co. Ltd.Zhuzhou Zhuzhou Technology development consult ing technical services technology transfer in the f ield of power semiconductors 50000 25.00 - The equity method Beijing Wutong Chelian Technology Co. Ltd. Beijing Beijing Technology development technical consult ing technical services technology transfer 20000 - 49.00 The equity method Anhe (Chongqing) Equity Investment Fund Management Co. Ltd. Chongqing Chongqing Equity investment management 1000 - 25.00 The equity method Hangzhou Chelizi Intelligent Technology Co. Ltd. Hangzhou Hangzhou Car travel service 630 - 20.00 The equity method Company name Main operating place Registered place Nature of business Registered capital (0000) Total proportion of shareholders (%) Accounting treatment direct indirect II. Associatess Pakistan Master Automobile Co. Ltd. Pakistan Pakistan Car travel service BRL75000 - 30.00 The equity method Jiangling Holding Co.Ltd.Nanchang Nanchang Production and sales of automobiles and auto parts 200000 25.00 - The equity method Nanjing Leading Equity Investment Partnership (Limited Partnership) Nanjing Nanjing Equity investment venture capital; investment in non-publicly traded equity such as non-listed companies 'equity listed companies' non-publicly issued equity and related services. 876000 16.39 - The equity method Nanjing Leading Equity Investment Management Co. Ltd. ) Nanjing Nanjing Entrusted with the management of private equity investment funds engaged in equity investment management and related services 1000 15.00 - The equity method Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2. Shares in joint ventures and associates (continued) Changan Ford Automobile Co. Ltd. is the important joint venture to the Group and makes great influence in the share of profit and loss in joint venture and associates the Group adopts equity method to deal with the investment to it.The table below shows the financial status of Changan Ford Automobile Co. Ltd. and all the information has been adjusted to eliminate the difference of the accounting policies. 2019 2018 Current assets 15855818973.00 13008234449.00 Of which: cash and cash equivalent 6147195270.00 2276585106.00 Non-current assets 31865453438.00 29167707557.00 Total assets 47721272411.00 42175942006.00 Current liabilities 33821313974.00 29971079402.00 Non-current liabilities 10133779777.00 4587988735.00 Total liabilities 43955093751.00 34559068137.00 Minority interests 84802769.00 78302490.00 Equity attributable to owners 3681375891.00 7538571379.00 Net asset owned according to share proportion 1840687945.50 3769285689.50 Adjustment (57864617.59) (59501182.39) Book value of investment 1782823327.91 3709784507.11 Operating revenue 28096027801.00 49754282303.00 Financial expenses- interest income 64059181.00 65983748.00 Financial expenses- interest expense 713200770.00 243439266.00 Income tax expense 954312779.00 (185229789.00) Net profit (3850695209.00) (792490479.00) Dividend - - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2. Shares in joint ventures and associates (continued) The table below shows the financial status of the less important joint ventures and associates: 2019 2018 Joint venture Total book value of the investment 5422265675.47 7294769919.55 Total amount calculated by shareholding proportion Net profit (401576178.40) (145524154.05) Other comprehensive income - (706228.88) Total comprehensive income (401576178.40) (146230382.93) Total book value of the investment 3803247985.71 2270615692.17 Total amount calculated by shareholding proportion Net profit 169721466.40 229282190.47 Other comprehensive income - 77231613.62 Total comprehensive income 169721466.40 306513804.09 As at 31 December 2019 since the Group has no obligation to undertake the extra loss of Chongqing Changan Kuayue Automobile Sales Co. Ltd and Beijing Fang’an cresent taxi Co. Ltd when extra loss occurs the Group writes down the long-term investment to zero without recognizing the extra loss. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) VII Risks associated with financial instruments 1. Classification of financial instruments As at balance sheet day the book values of f inancial instruments are as follows: Financial assets 2019 Financial assets measured at fair value and whose changes are recorded in the current profit and loss (standard required) Financial assets measured at amortized cost Financial assets measured at fair value and whose changes are recorded in the current profit and loss (specified) Total Cash - 10066171353.48 - 10066171353.48 Financial assets for trading 2419476200.00 - - 2419476200.00 Notes receivable - 26805635587.19 - 26805635587.19 Accounts receivable - 838314076.82 - 838314076.82 Other receivables - 3731755992.46 - 3731755992.46 Other current assets - 317546789.66 - 317546789.66 Investment in other equity instrument - - 734506100.00 734506100.00 Total 2419476200.00 41759423799.61 734506100.00 44913406099.61 2018 Loans and accounts receivable Available-for-sale financial assets Total Cash 9980544526.14 - 9980544526.14 Notes receivable 20561625805.24 - 20561625805.24 Accounts receivable 1409419600.50 - 1409419600.50 Other receivables 3233020118.16 - 3233020118.16 Other current assets 17432805.54 - 17432805.54 Financial asset available for sales - 1957873311.31 1957873311.31 Total 35202042855.58 1957873311.31 37159916166.89 Financial liabilities Other financial liabilities 2019 2018 Short-term loans 229580000.00 190000000.00 Notes payable 13430543294.23 14807862262.39 Accounts payable 18905725271.50 13916201276.95 Other payables 4809918141.45 3079749015.81 Long-term loan 55300000.00 6594120.00 Total 37431066707.18 32000406675.15 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2. Transfer of financial assets The transferred financial assets that entirely derecognized but continuing involved As at 31 December 2019 the Group has endorsed bank acceptance bill with a carrying amount of RMB1894125685.18 (2018: RMB1473189956.97) to suppliers to settle the accounts payable. The maturit ies of the notes are between 1 to 6 months. According to the relevant provisions of the "law of negotiable instruments" if the banks refuse the payment the holder has the right of recourse to the Group (the "continuing involvement"). The Group holds the view that almost all the risks and rewards concerned have been transferred; therefore the book value of the accounts payable should be derecognized. The maximum loss and the undiscounted cash flow of the continuing involvement and repurchase is equal to its book value the Group regards the fair value of the cont inuing involvement is not significant. In 2019 the Group didn’t recognize profit or loss on the transferring date. No revenue or expense should be recognized in accordance with the continuing involvement in the current period. The indorsement occurred flatly in this period. 3. Risks of financial instruments The Group faces risks of various financial instruments in its daily act ivit ies mainly including credit risk liquidity risk and market risk (including exchange rate risk interest rate risk and price risk). The main financial instruments of the Group include monetary funds equity investments loans bills receivable accounts receivable bills payable accounts payable etc. The risks associated with these f inancial instruments and the risk management strategies adopted by the Group to reduce these risks are described below.The Group has formulated risk management policies to identify and analyze the risks faced by the Group set appropriate risk acceptance levels and design corresponding internal control procedures to monitor the Group's risk levels. The Group will periodically re-examine these risk management policies and related internal control systems to adapt to changes in market condit ions or the Group ’s operat ing act ivit ies. The internal audit department also regularly and irregularly checks whether the implementation of the internal control system complies with the risk management policy. Credit risk The Group only deals with recognized and reputable third parties. In accordance with the Group's policy a credit review is required for all customers who require credit transactions. In addit ion the Group continuously monitors the balance of accounts receivable to ensure that the Group does not face significant bad debt risk. For transactions that are not settled with the relevant business unit's bookkeeping standard currency the Group does not provide credit transaction condit ions unless specif ically approved by the Group's credit control department.Since the counterparties of monetary funds and bank acceptance receivables are reputable banks with higher credit rat ings these financial instruments have lower credit risk. 3. Risks of financial instruments (continued) Credit risk (continued) With respect to credit risk arising from the other financial assets of the Group which comprise cash and available-for-sale financial assets other receivables dividend receivables and certain derivatives f inancial 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 f inancial assets in consolidated financial statements. In 2019 there was no credit risk arising from financial guarantee. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) No gage is required since the Group trades only with recognized creditworthy third parties. Credit risks are managed by clients and industries collect ively. As at 31 December 2019 among the Group’s collect ions with specific credit risk 20.76% (2018: 37.65%) 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. 2019 Judgment criteria for significant increase in credit risk The group evaluates on each balance sheet date whether the credit risk of the relevant financial instruments has increased significantly since the init ial recognit ion. In determining whether credit risk has increased significantly since the init ial recognit ion the group considers that reasonable and evidence-based information can be obtained without unnecessary addit ional cost or effort including qualitat ive and quantitat ive analysis based on the group's historical data external credit risk rat ings and forward-looking information. Based on a single financial instrument or a portfolio of f inancial instruments with similar credit risk characterist ics the group compares the default risk of f inancial instruments on the balance sheet date with the default risk on the init ial confirmat ion date to determine the change of default risk of f inancial instruments during their expected duration.When one or more of the following quantitat ive or qualitat ive criteria are triggered the group believes that the credit risk of f inancial instruments has significantly increased: ? the quantitat ive criterion is that the default probability of the remaining duration on the report date increases by more than a certain percentage compared with the init ial confirmation; ? qualitat ive criteria mainly include material adverse changes in the operating or f inancial situation of the debtor early warning customer list etc.; Definit ion of assets that have incurred credit impairment In order to determine whether credit impairment occurs the group adopts a definit ion standard consistent with the internal credit risk management object ives for relevant financial instruments and considers both quantitat ive and qualitat ive indicators. The group mainly takes the following factors into consideration when evaluating whether the debtor has credit impairment: ? signif icant financial diff icult ies of the issuer or debtor; ? debtor breaches the contract such as default or overdue payment of interest or principal; 3. Risks of financial instruments (continued) Credit risk (continued) ? the creditor gives the debtor concessions that the debtor would not have made under any other circumstances for economic or contractual reasons related to the debtor's f inancial diff icult ies; ? the debtor is likely to go bankrupt or undergo other financial restructuring; ? the financial diff icult ies of the issuer or debtor result in the disappearance of an act ive market for the financial asset; ? purchase or source a f inancial asset at a substantial discount that reflects the fact that a credit loss has occurred.The credit impairment of f inancial assets may be caused by the joint act ion of mult iple events but not by events that can be identified separately. A parameter for measuring expected credit losses Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) According to whether the credit risk has significantly increased and whether the credit impairment has occurred the group measures the impairment provision for different assets with the expected credit loss of 12 months or the whole duration respectively. The key parameters of expected credit loss measurement include default probability default loss rate and default risk exposure. The group takes into account the quantitat ive analysis and forward-looking information of historical stat ist ical data (such as counterparty rat ing guarantee method and types of collateral repayment method etc.) to establish default probability default loss rate and default risk exposure models.The relevant definit ion is as follows: ? probability of default is the probability that the debtor will not be able to meet its repayment obligations in the next 12 months or throughout the remaining period. The default probability of the group is adjusted based on the results of the historical credit loss model and forward-looking information is added to reflect the default probability of the debtor in the current macroeconomic environment.? the default loss rate refers to the group's expectation of the extent of losses from default risk exposure. Default loss rates also vary depending on the type of counterparty the type and priority of recourse and the collateral. The default loss rate is the percentage of the risk exposure loss at the t ime of default calculated on the basis of the next 12 months or the whole duration; ? default exposure is the amount that should be paid to the group at the t ime of default over the next 12 months or throughout the remaining duration.The assessment of a signif icant increase in credit risk and the calculation of expected credit losses involve forward-looking information. Through the analysis of historical data the group identifies the key economic indicators that affect the credit risks and expected credit losses of each business type. 3. Risks of financial instruments (continued) Credit risk (continued) 2019 (continued) As at the end of the year the maturity analysis for the Group’s f inancial assets not impaired is as follows: Book balance Expected credit loss in 12 months Expected credit loss for the ent ire duration Stage I Stage 2 Stage 3 Simplified measurement Cash 10066171353.48 - - - Financial assets for trading 2419476200.00 - - - Notes receivable 26805635587.19 - - - Accounts Receivable - - - 922466550.83 Other receivables 2205778389.26 1637955311.33 13616375.98 - Other current assets 317546789.66 - - - Investment in other equity instrument 734506100.00 - - - 2018 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Total Neither overdue nor impaired Overdue but not impaired Within 3 months 3 months to 1 year Over 1 year Cash 9980544526.14 9980544526.14 - - - Notes receivable 20561625805.24 20518834178.40 389425.26 24957342.82 17444858.76 Account receivable 1409419600.50 1409419600.50 - - - Other receivables 3233020118.16 3222686989.47 336474.29 6170515.96 3826138.44 Other current assets 17432805.54 17432805.54 - - - Available for sale financial assets 1957873311.31 1957873311.31 - - - As at 31 December2018 the balance of accounts receivable which is neither overdued nor impaired is mainly due to the customers who have no default records recently. overdued but not impaired accounts receivable are related to independent clients with satisfactory transaction records with the Group. Based on previous experience since credit quality has no significant changes and the receivables can be fully recovered the Group considers no impairment provision should be made to them. The Group does not hold any gage from or enhance credit limit to these clients. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 3. Risks of financial instruments (continued) Liquidity risk The Group adopts cycle liquidity planning instrument to manage capital shortage risks. The instrument takes into considerat ion the maturity date of f inancial instruments plus est imated cash flow from the Group’s operations.The Group’s object ive 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.The table below summarizes the maturity profile of the Group’s f inancial liabilit ies based on the non-discounted cash flow of the contracts: 2019 Within 1 month 1 to 3 months 3 months to 1 year 1 to 5 years Total Short-term loans 10873355.54 11662192.77 225320407.33 - 247855955.64 Notes payable 2199933553.00 4009043006.46 7221566734.77 - 13430543294.23 Accounts payable 5035073542.16 2771766385.97 11098885343.37 - 18905725271.50 Other payable 2617278106.27 863614813.37 1329025221.81 - 4809918141.45 Long-term loan 46967.12 90904.11 415128.77 56915063.01 57468063.01 Total 9863205524.09 7656177302.68 19875212836.05 56915063.01 37451510725.83 2018 Within 1 month 1 to 3 months 3 months to 1 year 1 to 5 years Total Short-term loans 730835.62 1367369.86 195641035.62 - 197739241.10 Notes payable 2345913865.20 5169707846.86 7292240550.33 - 14807862262.39 Accounts payable 5994446844.73 6488809039.97 1432945392.25 - 13916201276.95 Other payable 1835725519.62 1003480426.18 240543070.01 - 3079749015.81 Long-term loan 25605.43 6601553.83 - - 6627159.26 Total 10176842670.60 12669966236.70 9161370048.21 - 32008178955.51 Market risk Interest rate risk The Group’s revenue and operating cash flows are seldomly influenced by the interest fluctuation. As at 31 December 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 act ivit ies where transactions are settled in currencies other than the units' functional currency and net investment to offshore subsidiary. In 2019 the Group only has transactional currency exposures of 4.97% (2018: 3.55%) 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 est imated influence of fluctuation of foreign currency is insignificant; therefore the Group hasn’t carried out large amount of hedging to reduce the risk. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 3. Risks of financial instruments (continued) Equity instruments investment price risk Equity price risk is the risk that the fair values of equity securit ies decrease as a result of changes in the levels of equity indices and the value of individual securit ies. The Group’s listed investments (note V. 21) are listed on the Shenzhen and Shanghai stock exchanges and are valued at quoted market prices at the end of the report ing period. The following table demonstrates the sensit ivity to every 5% change (based on the carrying amount as at the end of report ing period) in the Group’s net profit and fair value of the equity investments with all other variables held constant. Carrying amount of equity investments Change in fair value Increase/ (decrease) in net profit Increase/(decrease) in equity 2019 Shanghai- Equity investment included in financial assets at fair value through profit or loss 184245000.00 5% 7830412.50 7830412.50 Shanghai- Equity investment included in financial assets at fair value through profit or loss 184245000.00 (5%) (7830412.50) (7830412.50) Shenzhen- Equity investment included in financial assets at fair value through profit or loss 2235231200.00 5% 94997326.00 94997326.00 Shenzhen- Equity investment included in financial assets at fair value through profit or loss 2235231200.00 (5%) (94997326.00) (94997326.00) 2018 Shanghai- Available for sale 123540000.00 5% 5250450.00 5250450.00 Shanghai- Available for sale 123540000.00 (5%) (5250450.00) (5250450.00) Shenzhen- Available for sale 1406781311.31 5% 59788205.73 59788205.73 Shenzhen- Available for sale 1406781311.31 (5%) (59788205.73) (59788205.73) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 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 2018 and 2019.The Group’s leverage ratio on the balance sheet date is as follows: 31 December 2019 31 December 2018 Leverage ratio 54.99% 50.63% Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) IX Disclosure of fair value 1. Assets and liabilities measured at fair value 2019 Input measured at fair value Quoted price in active market (The first level) Important and observable input(Thesecond level） Important but unobservable input (The third level) Total Financial asset held for trading 184245000.00 2235231200.00 - 2419476200.00 Investment in other equity instrument - - 734506100.00 734506100.00 Total 184245000.00 2235231200.00 734506100.00 3153982300.00 2018 Input measured at fair value Quoted price in active market (The first level) Important and observable input(Thesecond level） Important but unobservable input (The third level) Total Available-for-sale financial assets- equity instruments 123540000.00 1406781311.31 - 1530321311.31 2. Fair value estimation Management has assessed and concluded accounts including cash notes receivableandaccounts receivable other receivables short-term loans other payables notes payable and accounts payable and so on whose fair value equals to book value because of its short term to overdue. Financial assets and financial liabilities are measured at the amount that an asset could be exchanged for or by which a liability could be incurred or settled by knowledged willing parties in a current arm’s-length transaction other than liquidation or unwilling sales. Methods and hypothesis followed are used for determining fair value.Long-term loans use discounted cash flow method to determine its fair value with discount rate in accordance with market return of other financial instruments based on similar terms credit risks and remaining terms. As at 31 December 2019 the default risk of long-term loans was considered immaterial. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 2. Fair value estimation (continued) 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. The Group's unlisted equity instrument USES the listed company comparison method to estimate the fair value. The assumptions adopted are not supported by observable market prices or interest rates. The group believes that the fair value and its variation as estimated by valuation techniques are reasonable and the most appropriate value at the balance sheet date. 3． Unobservable input The following is an overview of the important unobservable input value of the third level fair value measurement: Fair value Valuation techniques Non-observable input value Investment in other equity instrument Dec 31 2019 734506100.00 Market approach/ Income approach Comparable transaction value multiplier / Post-tax discount rate Fair value Valuation techniques Non-observable input value Investment in other equity instrument Dec 31 2019 734506100.00 Comparison of listed company Liquidity discount Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) X Related party relationships and transactions 1. The holding company Holding company Place of registration Registered capital Nature of the business Proportion of shares in the Company Proportion of voting rights in the company Changan Automobile Company Limited Beijing 6092273400.00 Automobile and its engines spare parts manufacturing marketing 22.53% 22.53% The ultimate holding company is China South Industries Group Corporation.The registered capital of the holding company changed from RMB 4582373700.00 to RMB 6092273400.00 in 2019. 2. Subsidiaries Refer to Note VI 1 for details of the Group’s subsidiaries. 3. Joint ventures and associates Refer to Note VI 2 for details of the Group’s joint ventures and associates. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 4. Other related parties Related parties Relationship China Changan Automobile Group. – Chongqing Tsingshan Transmission Branch (hereafter referred to as “CSIA-Chongqing Tsingshan Transmission Branch”) Controlled by the same ultimate holding company Harbin Dongan Automotive Engine Manufacturing Co. Ltd. Controlled by the same ultimate holding company Harbin Dongan Auto Engine Co. Ltd. Controlled by the same ultimate holding company Sichuan Jian'an Industrial Co.Ltd. Controlled by the same ultimate holding company Chongqing Wanyou Economic Development Co. Ltd Controlled by the same ultimate holding company Hubei Huazhong Marelli Automobile Lighting Co. Controlled by the same ultimate holding company Chengdu Huachuan Electric Equipment Co. Ltd. Controlled by the same ultimate holding company Chongqing Dajiang Yuqiang Plastic Co. Ltd. Controlled by the same ultimate holding company Chongqing Jianshe Automobile Air-conditioner Co. Ltd. Controlled by the same ultimate holding company Chengdu Wanyou Filter Co. Ltd. Controlled by the same ultimate holding company Hubei Xiaogan Huazhong Automobile Light Co. Ltd. Controlled by the same ultimate holding company Yunnan Xiyi Industries Co. Ltd. Controlled by the same ultimate holding company Sichuan Ningjiang Shanchuan Machinery Co Ltd. Controlled by the same ultimate holding company Chongqing Changrong Machinery Co. Ltd. Controlled by the same ultimate holding company Chengdu Lingchuan Special Industry Co. Ltd. Controlled by the same ultimate holding company Chongqing Shangfang Automobile Fittings Co. Ltd. Controlled by the same ultimate holding company Sichuan Ningjiang Shanchuan Machinery Co. Ltd Longchang shock absorber branch Controlled by the same ultimate holding company Chongqing Construction Tongda Industrial Co. Ltd. Controlled by the same ultimate holding company Chengdu Lingchuan Vehicle Oil Tank Co. Ltd. Controlled by the same ultimate holding company Chongqing Dajiang Xinda Vehicles Shares Co. Ltd. Controlled by the same ultimate holding company Chengdu Jialing Huaxi Optical & Precision Machinery Co. Ltd. Controlled by the same ultimate holding company Chongqing Qingshan Transmission Sales Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties Relationship Chongqing Yihong Engineering Plastic Products Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Property Management Co. Ltd. Controlled by the same ultimate holding company Chongqing Dajiang Jiexin Forging Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Industries Group Co. Ltd. Controlled by the same ultimate holding company Yunnan Wanyou Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Guizhou Wanyou Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Chongqing Changfeng Jiquan Machinery Co. Ltd. Controlled by the same ultimate holding company Chengdu Wanyou Auto Trade Service Co. Ltd Controlled by the same ultimate holding company Beijing Beiji Mechanical and Electrical Industry Co. Ltd. Controlled by the same ultimate holding company Chongqing Wanyou Ducheng Auto Sales Service Co. Ltd. Controlled by the same ultimate holding company Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Chongqing Wanyou Xingjian Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company Ya'an Wanyou Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Yunnan Xiangyu Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Harbin Botong Auto Parts Co.Ltd. Controlled by the same ultimate holding company Liangshan Wanyou Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company Panzhihua Wanyou Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company Nanning Wanyou Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Luzhou Wanyou Automobile Service Co. Ltd. Controlled by the same ultimate holding company Guangxi Wanyou Auto Sales and Service Co. Ltd. Controlled by the same ultimate holding company Chengdu Wanyou Trading Co. Ltd. Controlled by the same ultimate holding company China Changan Automobile Group Tianjin Sales Co. Ltd. Controlled by the same ultimate holding company Bazhong Wanyou Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Construction Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Real Estate Development Co. Ltd. Controlled by the same ultimate holding company Wanyou Automobile Investment Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties Relationship Chongqing Wanyou Zunda Automobile Sales & Service Co. Ltd. Controlled by the same ultimate holding company China Changan Automobile Group Hefei Investment Co. Ltd. Controlled by the same ultimate holding company Chongqing Anfu Automobile Co. Ltd. Controlled by the same ultimate holding company China South Industry Group Finance Co. Ltd; Controlled by the same ultimate holding company Chengdu wanyou auto Sales and service co.Ltd Controlled by the same ultimate holding company Kunming Wanling Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company China South Industry Assets Management Co.' Ltd. Controlled by the same ultimate holding company Harbin Hafei Automobile Industry Group Co.Ltd. Controlled by the same ultimate holding company Chongqing Automobile Air-condit ioner Co. Ltd. Controlled by the same ultimate holding company Chongqing Jialing Yimin Special Equipment Co. Ltd. Controlled by the same ultimate holding company Chengdu Guangming Tianzhong Environmental Protection Technology Co. Ltd Controlled by the same ultimate holding company Chongqing Xiyi Automobile Connecting Rod Co. Ltd. Controlled by the same ultimate holding company Dali Wanling Auto Sales & Service Co. Ltd. Controlled by the same ultimate holding company Chongqing Changan Minsheng Logist ics Co. Ltd Participated by the Ultimate holding company Chongqing Nexteer Steering System Co.Ltd. Participated by the Ultimate holding company South Tianhe Chassis System Co. Ltd. Participated by the Ultimate holding company Southern Fojiya Auto Parts Co. Ltd. Participated by the Ultimate holding company South Inter Air-conditioner Co.Ltd. Participated by the Ultimate holding company Chengdu Ningjiang Zhaohe Automobile Components Co. Ltd. Participated by the Ultimate holding company Chongqing Lingxing Yuexiang Auto Service Co.Ltd. Companies in which the company participates Nanjing Lingxing Yuexiang Auto Service Co.Ltd. Companies in which the company participates Hangzhou Lingxing Yuexiang Auto Service Co.Ltd. Companies in which the company participates Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 5. Major transactions between the Group and its related parties (1) Transactions of goods and services Purchases of goods and services from related parties Related parties Nature of the transaction 2019 2018 Chongqing Changan Min Sheng Logist ics Co. Ltd. Purchase of spare parts and transportation fee 1842826345.72 1389088291.94 CSIA-Chongqing Tsingshan Transmission Branch Purchase of spare parts 1445693679.11 1284085746.55 Harbin Dongan Auto Engine Co. Ltd. Purchase of spare parts 863253483.29 729821616.79 Harbin Dongan Automotive Engine Manufacturing Co. Ltd. Purchase of spare parts and accept service 855905264.99 382752767.69 Sichuan Jian'an Industrial Co. Ltd Purchase of spare parts 669897166.50 747672263.03 Chongqing Nexteer Steering System Co.Ltd. Purchase of spare parts 645365956.45 579242368.51 Chongqing Wanyou Economic Development Co. Ltd. Purchase of spare parts 449900979.95 329624797.32 South Tianhe Chassis System Co. Ltd. Purchase of spare parts 423553043.17 601959455.32 Southern Fojiya Auto Parts Co. Ltd. Accept service 362451567.62 251772521.47 South Inter Air-condit ioner Co .Ltd. Purchase of spare parts 343160145.30 490615574.48 Hubei Huazhong Marelli Automobile Lighting Co. Ltd Purchase of spare parts 342062024.70 - Chengdu Huachuan Electric Equipment Co. Ltd. Purchase of spare parts 285653390.76 279083119.39 Chongqing Dajiang Yuqiang Plast ic Co. Ltd. Purchase of spare parts 151818323.38 276123847.99 Chongqing Jianshe Automobile Air-condit ioner Co. Ltd. Purchase of spare parts 104933521.74 110293645.11 Chengdu Ningjiang Zhaohe Automobile Components Co. Ltd. Purchase of spare parts 104848894.36 75867551.80 Chengdu Wanyou Filter Co. Ltd. Purchase of spare parts 102999118.76 142276990.69 Hubei Xiaogan Huazhong Automobile Light Co. Ltd. Purchase of spare parts 88918096.09 87329310.10 Changan PSA Automobiles Co. Ltd. Accept service 79147833.93 6309145.00 Yunnan Xiyi Industries Co. Ltd. Purchase of spare parts 74537241.94 88997586.25 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties Nature of the transaction 2019 2018 Sichuan Ningjiang Shanchuan Machinery Co Ltd. Purchase of spare parts 73268453.17 105758408.84 Chongqing Changrong Machinery Co. Ltd. Purchase of spare parts 52501322.75 18795175.93 Chengdu Lingchuan Special Industry Co. Ltd. Purchase of spare parts 37573006.18 24507845.13 Chongqing Shangfang Automobile Fitt ings Co. Ltd. Purchase of spare parts 31151137.10 47857427.57 Sichuan Ningjiang Shanchuan Machinery Co. Ltd Longchang shock absorber branch Purchase of spare parts 30386872.74 37353791.80 Chongqing Construct ion Tongda Industrial Co. Ltd. Purchase of spare parts 25843605.06 - Chengdu Lingchuan Vehicle Oil Tank Co. Ltd. Purchase of spare parts 23453388.49 74135330.06 Chengdu Jialing Huaxi Opt ical & Precision Machinery Co. Ltd. Purchase of spare parts 11994195.12 14592213.03 Chongqing Qingshan Transmission Sales Co. Ltd. Purchase of spare parts 8394479.56 5943733.67 Chongqing Yihong Engineering Plast ic Products Co. Ltd. Purchase of spare parts 6403252.19 20730680.31 Chongqing Changan Property Management Co. Ltd. Accept service 3768639.91 5410948.67 Chongqing Dajiang Jiexin Forging Co. Ltd. Accept service 2962328.84 2392326.57 Changan Ford Automobile Co. Ltd. Purchase of spare parts and accept processing services 2590337.26 57461801.63 Chongqing Changan Industries Group Co. Ltd. Purchase of spare parts and accept service 1684045.48 46447919.42 Yunnan Wanyou Auto Sales and Service Co. Ltd. Accept service 1333771.44 1610572.58 Guizhou Wanyou Auto Sales and Service Co. Ltd. Accept service 1152962.38 1158331.89 Chongqing Changfeng Jiquan Machinery Co. Ltd. Purchase of spare parts 784396.13 22462283.98 Chengdu Wanyou Auto Trade Service Co. Ltd. Accept service 758199.25 675086.70 Beijing Beiji Mechanical and Electrical Industry Co. Ltd. Accept service 708967.98 1496100.00 Chongqing Wanyou Ducheng Auto Sales Service Co. Ltd. Accept service 465125.25 472699.15 Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. Accept service 406108.89 406387.74 Chongqing Wanyou Xingjian Auto Sales & Service Co. Ltd. Accept service 291142.59 729801.70 Ya'an Wanyou Auto Sales & Service Co. Ltd. Accept service 169973.58 211018.21 Yunnan Xiangyu Auto Sales and Service Co. Ltd. Accept service 162564.53 205055.66 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties Nature of the transaction 2019 2018 Harbin Botong Auto Parts Co.Ltd. Accept service 110662.34 4908486.65 Liangshan Wanyou Auto Sales & Service Co. Ltd. Accept service 106207.55 15943.40 Panzhihua Wanyou Auto Sales & Service Co. Ltd. Accept service 103757.84 34680.85 Nanning Wanyou Auto Sales and Service Co. Ltd. Accept service 77083.32 167618.87 Luzhou Wanyou Automobile Service Co. Ltd. Accept service 75239.09 32522.83 Guangxi Wanyou Auto Sales and Service Co. Ltd. Accept service 45265.47 134307.83 Chengdu Wanyou Trading Co. Ltd. Accept service 39638.09 37072.74 China Changan Automobile Group Tianjin Sales Co. Ltd. Accept service 29492.96 34151.89 Bazhong Wanyou Auto Sales & Service Co. Ltd. Accept service 23222.34 28253.30 Chongqing Dajiang Xinda vVehicle Co. Ltd. Purchase of spare parts - 175538307.43 Jiangling Holding Co. Ltd. Procurement of complete vehicles and spare parts - 114120282.00 Chongqing Changan Kuayue Automobile Co. Ltd. Accept service - 67598856.98 Chongqing Changan Suzuki Automobile Co. Ltd. Purchase of spare parts and accept processing services - 19420028.65 Sichuan Hongguang Machinery and Electrics Co. Ltd. Purchase of spare parts - 8969159.75 Chongqing Changan Construct ion Co. Ltd. Accept service - 2849308.36 Chongqing Changan Real Estate Development Co. Ltd. Accept service - 8962.26 Total 9555744922.63 8737629483.46 The price of the Group’s purchase from related parties is based on contracts agreed by both parties. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Sales of goods and services to related parties Relate parties Nature of the transaction 2019 2018 Chongqing Wanyou Economic Development Co. Ltd. Sales of vehicles and parts 1294526146.64 1335816637.76 Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. Sales of the vehicle 1020942159.56 958757083.78 Yunnan Wanyou Auto Sales and Service Co. Ltd. Sales of vehicles and parts 857858507.32 675259160.22 Guizhou Wanyou Auto Sales and Service Co. Ltd. Sales of vehicles and parts 705328475.27 808716796.96 Chongqing Lingxing Yuexiang Automobile Service Co.Ltd. Sales of vehicles and parts 639500000.00 - Wanyou automobile investment co. LTD Sales of the vehicle 402904992.87 507090525.03 Chengdu Wanyou Auto Trade Service Co. Ltd. Sales of vehicles and parts 368874409.70 479559227.33 Nanjing Lingxing yuexiang automobile service co. LTD Sales of the vehicle 337067431.56 - Chongqing Wanyou Zunda Automobile Sales & Service Co. Ltd. Selling parts 327870483.51 383849283.30 Hangzhou Lingxing yuexiang automobile service co. LTD Sales of vehicles and parts 255800000.00 - China changan automobile group t ianjin sales co. LTD Sales of the vehicle 134375668.38 157624228.55 China Changan Automobile Group Hefei Investment Co. Ltd. Sales of the vehicle 123295447.31 - Yunnan xiangyu automobile sales and service co. LTD Sales of the vehicle 103061523.82 125126513.10 Chongqing anfu automobile marketing co. LTD Sales of the vehicle 52601392.41 20526466.23 Changan ford motor co. LTD Selling parts and services 46055323.95 165787061.88 Harbin dong 'an automobile engine manufacturing co. LTD Sales of vehicle parts and services 39397590.22 2295518.58 Guangxi wanyou automobile sales and service co. LTD Sales of vehicles and parts 35978961.30 129352559.19 Nanning wanyou automobile sales service co. LTD Sales of the vehicle 22459166.57 32422600.95 Changan weilai new energy automobile technology co. LTD Provide labor services 16395084.70 - Chongqing Changan minsheng logist ics Co. Ltd Selling parts and services 14366909.02 82883629.96 Chongqing changan crossing vehicle co. LTD Sales of vehicles and parts 8689641.51 6483396.23 Hangzhou cherry intelligent technology co. LTD Provide labor services 6861386.18 16714615.80 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Relate parties Nature of the transaction 2019 2018 Harbin dong 'an automobile power co. LTD Selling parts and services 6787846.16 7754379.22 Changan Mazda automobile co. LTD Sales parts 6202916.90 1095230.99 Chengdu lingchuan vehicle fuel tank co. LTD Selling parts and services 3670059.16 - China changan automobile group co. LTD chongqing qingshan transmission branch Provide labor services 1689138.05 95988.68 China South Industries Group Financing Co. Ltd. Provide labor services 1260010.87 9335874.00 Jiangling holdings LTD Selling parts and services 1178613.60 108745038.01 Chongqing dajiang yuqiang plast ic products co. LTD Selling parts and services 1133135.13 - Chengdu wanyou auto sales and service co.LTD Sales of vehicles and parts 954788.63 - Chengdu ningjiang zhaohe auto parts co. LTD Selling parts and services 897104.41 - Changan Mazda Engine Co. Ltd. Provide labor services 495283.02 30132.08 Chongqing changan industry (group) co. LTD Selling parts and services 368958.17 - Chongqing Wanyou Ducheng Auto Sales Service Co. Ltd. Sales of the vehicle 267771.57 196879.96 Chongqing wanyou xingjian automobile sales and service co. LTD Sales of the vehicle 263101.81 177344.51 South Tianhe Chassis System Co. Ltd. Provide labor services 246184.37 3754.72 Chongqing dajiang xinda vehicle co. LTD Selling parts 244592.80 - Chongqing construct ion vehicle air condit ioner co. LTD Provide labor services 217873.93 49056.61 Chengdu Huachuan Electric Equipment Co. Ltd. Selling parts and services 175702.23 - Chongqing changan construct ion engineering co. LTD Provide labor services 169692.36 33018.87 Ya’an Wanyou Auto Sales and Service Co. Ltd. Sales of the vehicle 150981.02 16589.56 Yunnan Xiyi Industrial Co. Ltd. Selling parts 142800.00 6605219.44 Chongqing changrong machinery co. LTD Provide labor services 124339.62 3754.72 Chongqing construct ion tongda industrial co. LTD Selling parts and services 124302.65 - South Intel air condit ioning co. LTD Provide labor services 123160.99 4708.49 Bazhong Wanyou Auto Sales & Service Co. Ltd. Selling parts and services 98333.88 - Chengdu wanyou filter co. LTD Provide labor services 76460.18 3754.72 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Relate parties Nature of the transaction 2019 2018 Nanjing car to travel technology co. LTD Sales of the vehicle 50442.48 - Luzhou Wanyou Automobile Service Co. Ltd. Sales of the vehicle 42972.66 58264.92 Panzhihua Wanyou Auto Sales & Service Co. Ltd. Sales of the vehicle 28976.04 11045.54 Chongqing upper auto parts co. LTD Selling parts 20037.74 47075.48 Chengdu wanyou trading co. LTD Selling parts and services 7079.65 - Sichuan ningjiang shanchuan machinery co. LTD Provide labor services - 3754.72 Sichuan Jian'an Industrial Co. Ltd Provide labor services - 3754.72 Chengdu lingchuan special industry co. LTD Selling parts - 311546.13 Chongqing changan real estate development co. LTD Provide labor services - 62735.85 Chongqing nester steering system co. LTD Provide labor services - 53411.32 Chongqing changan suzuki motor co. LTD Sales of vehicle parts and services - 31641044.87 Sichuan hongguang automobile electromechanical co. LTD Selling parts - 2151388.40 Kunming Wanling Auto Sales & Service Co. Ltd. Sales of the vehicle - 1754335.49 total 6841423361.88 6058514386.87 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 5. Major transactions between the Group and its related parties (continued) (1) Transactions of goods and services (continued) The price of the Group’s sales to related parties is based on contracts agreed by all parties.Other major related-party transactions The price of the Group’s other major related-party transactions is based on contracts agreed by all parties. Expenses of integrated service charges Related parties Nature of the transaction 2019 2018 Chongqing Changan Industries Group Co. Ltd. Payment of ut ilit ies 84695582.89 93054489.94 Chongqin Changan Industries Group Co. Ltd.Others 19935138.85 12063769.15 Chongqin Changan Industries Group Co. Ltd.Payment of land rental fees 27920383.52 28534520.71 Chongqin Changan Industries Group Co. Ltd.Payment of building rental fees 4640196.56 4640196.56 Total 137191301.82 138292976.36 Purchase of project materials Related parties 2019 2018 Chongqing Changan Construct ion Co. Ltd. 279388409.46 559607524.21 Chongqing Wanyou Construct ion Co. Ltd. - 49273687.28 Total 279388409.46 608881211.49 Staff expenses for technical support ing Related parties 2019 2018 Changan Ford Automobile Co. Ltd. 37143811.11 46422643.97 Changan Mazda Automobile Co. Ltd. 25699005.55 21299423.79 Changan Mazda Engine Co. Ltd. 17126423.37 16698952.77 Hainan Anxinxing Information Technology Co. Ltd 1894649.63 - Chongqing Changan Kuayue Automobile Co. Ltd. 1840505.42 4592281.32 Jiangling Holding Co. Ltd. 1484296.87 640737.47 Changan PSA Automobiles Co. Ltd. 242271.06 - Chongqing Weilai New Energy Tech Co. Ltd. 201715.20 - Chongqing Changan Suzuki Automobile Co. Ltd. - 3944312.91 Total 85632678.21 93598352.23 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Deferred interest income from funds Related parties 2019 2018 Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. 1200347.55 414834.46 Guizhou Wanyou Auto Sales and Service Co. Ltd. 788602.82 559068.24 Chongqing Wanyou Economic Development Co. Ltd. 685932.17 894864.11 Yunnan Wanyou Auto Sales and Service Co. Ltd. 510690.26 353401.43 Chengdu Wanyou Auto Trade Service Co. Ltd. 224380.52 369869.50 Wanyou Automobile Investment Co. Ltd. 207022.94 337044.19 Guangxi Wanyou Auto Sales and Service Co. Ltd. 191681.80 127362.28 Yunnan Xiangyu Auto Sales and Service Co. Ltd. 76081.41 46192.24 China Changan Automobile Group Tianjin Sales Co. Ltd. 56330.02 32328.30 Nanning Wanyou Auto Sales and Service Co. Ltd. 41829.76 32994.83 Total 3982899.25 3167959.58 5. Major transactions between the Group and its related parties (continued) (1) Transactions of goods and services (continued) Equity trading between related parties Related parties Type of transaction 2019 2018 China South Industry Assets Management Co.' Ltd.Purchase of minority interests in subsidiaries - 30344195.00 (2) Lease between related part ies Rent assets to related parties Lessees Type of leased assets 2019 2018 Chongqing Changan Industries Group Co. Ltd. Building 6566747.42 6566747.42 Jiangling Holding Co. Ltd. Equipment 1889756.40 8799965.67 Chongqing Changan MinSheng Logist ics Co. Ltd. Building 1760438.60 2283720.00 Total 10216942.42 17650433.09 Lease to related parties Lessor Category of assets 2019 2018 Chongqing Changan Minsheng Logist ics Co. Ltd.Warehouse 7887394.19 12081172.58 Chongqing Changan Real Estate Office building and garage 1152601.90 2824308.00 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Development Co. Ltd. Chongqing Changan Industry (Group) Co. Ltd. Warehouse - 2320669.33 Chongqing Changan Property Management Co. Ltd.houses - 164505.72 Total 9039996.09 17390655.63 (3) Deposits and loan interest from related parties Interest income Related party Type of transaction 2019 2018 China South Industry Group Finance Co. Ltd. Deposit interest income 68795616.81 74940739.77 Changan Automobile Financing Co.Ltd Deposit Interest income 31600000.00 62300000.00 Jiangling Holding Co. Ltd. Entrusted loan interest income 6771226.43 - Total 107166843.24 137240739.77 Interest expense Related party Type of transaction 2019 2018 China South Industry Group Finance Co. Ltd. Loan interest expense 9425222.23 9008290.98 (4) Other related party transaction Item 2019 2018 Compensation of key management personal 10460906.41 10748878.64 6. Amounts due from/to related parties Notes receivable Related parties 2019 2018 Wanyou Automobile Investment Co. Ltd. 2602280000.00 1588720000.00 Chengdu Wanyou Auto Trade Service Co. Ltd. 9500000.00 - Harbin Dongan Auto Engine Co. Ltd. 9190280.17 - Chongqing Wanyou Economic Development Co. Ltd. 8000000.00 9050000.00 Guizhou Wanyou Auto Sales and Service Co. Ltd. 3500000.00 - Yunnan Wanyou Auto Sales and Service Co. Ltd. - 5000000.00 Changan Ford Automobile Co. Ltd. - 2128658.11 Total 2632470280.17 1604898658.11 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Accounts receivable Related parties 2019 2018 Jiangling Holding Co. Ltd. 40768788.17 54670170.21 Chongqing Changan Min Sheng Logist ics Co. Ltd. 31516680.23 24295732.61 Changan Ford Automobile Co. Ltd. 19811465.27 26562801.86 Chongqing New Energy Weilai Co. Ltd. 16596799.90 - Chongqing Changan Kuayue Automobile Co. Ltd. 11194267.89 13567425.09 Harbin Dongan Automotive Engine Manufacturing Co. Ltd. 9855355.88 32628379.07 Changan Mazda Automobile Co. Ltd. 5775176.73 4228792.00 Changan Mazda Engine Co. Ltd. 5042050.65 - Chongqing Qingshan Transmission Sales Co. Ltd. 1737782.37 - Chongqing Changan Industries Group Co. Ltd. 719539.69 - Hainan Anxinxing Information Technology Co. Ltd.- 555058.16 - Nanning Wanyou Auto Sales and Service Co. Ltd. 13398.00 - Guangxi Wanyou Auto Sales and Service Co. Ltd. 997.60 - Chongqing Wanyou Auto Sales and Service Co. Ltd. 50.00 - Changan PSA Automobiles Co. Ltd. - 9377634.60 Yunnan Wanyou Auto Sales and Service Co. Ltd. - 8494704.49 Chengdu Wanyou Auto Trade Service Co. Ltd. - 5610252.52 Hangzhou Chelizi Intelligent Technology Co. Ltd. - 5564800.00 Changan Automobile Financing Co.Ltd. - 426120.00 Chongqing Wanyou Zunda Automobile Sales & Service Co. Ltd. - 65804.25 Total 143587410.54 185492616.70 Prepayments Related parties 2019 2018 Changan PSA Automobiles Co. Ltd. 8826473.38 8826473.38 Guangxi Wanyou Auto Sales and Service Co. Ltd. - 124497.13 Total 8826473.38 8950970.51 Other recievables Related party 2019 2018 Changan Ford Automobile Co. Ltd. 124312677.99 124312677.99 Changan Weilai New Energy Automobile Technology Co. Ltd. 28480000.00 - Changan Mazda Engine Co. Ltd. 8505710.03 - Harbin Hafei Automobile Industry Group Co. Ltd. 1500000.00 1500000.00 Chongqing Changan Industries Group Co. Ltd. 1157446.69 - Chongqing Changan MinSheng Logist ics Co. Ltd. 2000.00 47975.40 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Harbin Dongan Auto Engine Co. Ltd. - 268000.00 Total 163957834.71 126128653.39 Other current assets Related parties 2019 2018 Jiangling Holding Co. Ltd. 300000000.00 - Notes payable Related parties 2019 2018 Harbin Dongan Automotive Power Co. Ltd. 456350000.00 460430000.00 Harbin Dongan Automobile Engine Manufacturing Co. Ltd. 215280000.00 112940000.00 Chongqing Changan Minsheng Logist ics Co. Ltd. 208474669.94 221925743.41 Chongqing Changan Construct ion Engineering Co. Ltd. 121867838.20 298387280.00 Chongqing Wanyou Economic Development Co. Ltd. 85000000.00 - Chongqing Nexte Steering System Co. Ltd. 74380000.00 - Chongqing Dajiang Yuqiang Plast ic Products Co. Ltd. 53810000.00 127940000.00 Chengdu Ningjiang Zhaohe Auto Parts Co. Ltd. 33410000.00 - Chongqing Jianshe Vehicle Air Condit ioner Co. Ltd. 33330000.00 50060000.00 South Inte Air Condit ioning Co. Ltd. 23620000.00 149430000.00 Chengdu Wanyou Filter Co. Ltd. 21280000.00 23950000.00 Hubei Huazhong Marelli Auto Lighting Co. Ltd. 20220000.00 - Sichuan Ningjiang Mountain Machinery Co. Ltd. 17910000.00 9160000.00 Chengdu Lingchuan Special Industry Co. Ltd. 11750000.00 8000000.00 Hubei Xiaogan Huazhong Auto Lamp Co. Ltd. 10780000.00 13860000.00 Southern Fojiya Auto Parts Co. Ltd. 10430000.00 22090000.00 Sichuan Jian'an Industry Co. Ltd. 9040000.00 8650000.00 Chongqing Changfeng Jiquan Machinery Co. Ltd. 6530000.00 7900000.00 Chengdu Jialing Huaxi Optical Precision Machinery Co. Ltd. 5990000.00 7270000.00 Chengdu Huachuan Electric Equipment Co. Ltd. 5250000.00 2490000.00 Chongqing Shangfang Automobile Fitt ings Co. Ltd. 4290000.00 1150000.00 China Changan Automobile Group Co. Ltd. Chongqing Qingshan Transmission Branch 2340000.00 130270000.00 Sichuan Ningjiang Shanchuan Machinery Co. Ltd Longchang shock absorber branch 2220000.00 1370000.00 Chongqing Construct ion Tongda Industrial Co. Ltd. 1830000.00 - Chongqing Dajiang Jiexin Forging Co. Ltd. 990000.00 1120000.00 Chongqing Yihong Engineering Plast ic Products Co. Ltd. - 4500000.00 Sichuan Hongguang Automobile Electromechanical Co. Ltd. - 2240000.00 Changan Ford Motor Co. Ltd. - 1749094.40 Total 1436372508.14 1666882117.81 Accounts payable Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties 2019 2018 CSIA-Chongqing Tsingshan Transmission Branch 394961436.10 104125292.03 Chongqing Nexteer Steering System Co.Ltd. 275441045.49 249837358.48 Harbin Dongan Automotive Engine Manufacturing Co. Ltd. 228154563.74 44767814.32 Harbin Dongan Auto Engine Co. Ltd. 203956811.46 161417419.68 South Inter Air-condit ioner Co .Ltd. 166469317.60 76175712.19 Hubei Huazhong Marelli Auto Lighting Co. Ltd. 124726255.34 - South Tianhe Chassis System Co. Ltd. 113131244.68 106558182.07 Changan PSA Automobiles Co. Ltd 111598972.21 - Sichuan Jian'an Industrial Co. Ltd 92109316.98 80657220.16 South Faurecia Auto Parts Co. Ltd 90040708.53 41239427.48 Chongqing Changan MinSheng Logist ics Co. Ltd. 77014716.44 27674139.19 Chongqing Wanyou Economic Development Co. Ltd. 75873758.78 66540872.82 Jiangling Holding Co. Ltd. 54252872.36 53715373.73 Chengdu Ningjiang Zhaohe Auto Parts Co Ltd. 49157712.35 24826794.96 Chongqing Dajiang Yuqiang Plast ic Co. Ltd. 43490517.76 46084064.75 Chengdu Huachuan Electric Equipment Co. Ltd. 37881398.09 33208038.95 Chongqing Jianshe Automobile Air-condit ioner Co. Ltd. 36717236.76 27597844.39 Chongqing Changrong Machinery Co. Ltd. 34631661.73 2686306.64 Hubei Xiaogan Huazhong Automobile Light Co. Ltd 16125402.98 21513647.99 Chengdu Wanyou Filter Co. Ltd. 14735390.09 21426685.22 Chongqing Construct ion Tongda Co. Ltd 13392905.91 - Chengdu Lingchuan Special Industry Co. Ltd. 11517508.37 8664902.18 Yunnan Xiyi Industries Co. Ltd. 10260364.91 6535900.15 Chongqing Shangfang Automobile Fitt ings Co. Ltd. 9623137.04 9100420.32 Sichuan Ningjiang Shanchuan Machinery Co Ltd. 6519879.37 17161138.52 Chongqing Qingshan Transmission Sales Co. Ltd. 6000654.43 5262876.71 Chongqing Dajiang Xinda Vehicles Shares Co. Ltd. 4267143.49 45780498.50 Sichuan Ningjiang Shanchuan Machinery Co. Ltd.Longchang Shock Absober Branch 3206437.42 9586665.78 Chongqing Yihong Engineering Plast ic Products Co. Ltd 2483796.69 2524005.52 Chengdu Lingchuan Vehicle Fuel Tank Co. Ltd 2314165.15 17663383.80 Chengdu Jialing Huaxi Potical Precision Machinery Co. Ltd 2296210.05 2709675.36 China South Industry Group Finance Co. Ltd. 1091699.47 2215125.47 Chongqing Changfeng Jiquan Machinery Co. Ltd. 771021.74 9917256.01 Harbin Hafei Automobile Industry Group Co. Ltd. 661117.68 661117.68 Chongqing Dajiang Jiexin Forging Co. Ltd. 407750.93 282878.46 Chongqing Automobile Air-condit ioner Co. Ltd. 205041.51 177312.15 Chongqing Jialing Yimin Special Equipment Co. Ltd. 104496.50 104496.50 Chengdu Guangming Tanaka Environmental Protection Co. Ltd. 83175.03 85473.47 Chongqing Changan Kuayue Automobile Co. Ltd. 47749.88 1263841.59 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related parties 2019 2018 Chongqing Changan Xiyi Automobile Connecting Rod Co. Ltd. 44233.62 67466.78 Hangzhou Chelizi Intelligent Technology Co. Ltd. 10300.00 - Beijing Beiji Electromechanical Industry Co. Ltd. 6129.88 - Changan Ford Automobile Co. Ltd. 5890.05 4085436.29 Sichuan Hongguang Machinery and Electrics Co. Ltd. - 1187095.50 Chongqing Changan Construct ion Co. Ltd. - 119514.45 Total 2315791148.59 1335208676.24 Advances from customers Related parties 2019 2018 Chongqing Wanyou Economic Development Co. Ltd. 142137256.41 30602220.89 Wanyou Automobile Investment Co. Ltd. 69383313.74 394254.00 Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. 65138573.75 23961768.86 Guizhou Wanyou Auto Sales and Service Co. Ltd. 52269285.08 24770462.88 Yunnan Wanyou Auto Sales and Service Co. Ltd. 42896658.83 6741068.88 Chengdu Wanyou Auto Trade Service Co. Ltd. 39526387.91 1031647.35 Jiangling Holding Co. Ltd. 6854200.00 - Yunnan Xiangyu Auto Sales and Service Co. Ltd. 5542733.67 820739.67 China Changan Automobile Group Hefei Investment Co. Ltd. 4033352.74 - China Changan Automobile Group Tianjin Sales Co. Ltd. 2144856.26 7694948.94 Chongqing Anfu Automobile Co. Ltd. 1507840.00 1764144.00 Chengdu wanyou auto Sales and Service Co.Ltd 1489422.47 - Guangxi Wanyou Auto Sales and Service Co. Ltd. 1405317.17 2031019.64 Chongqing Wanyou Zunda Automobile Sales & Service Co. Ltd.Service Co. Ltd. 755716.55 2874902.88 Harbin Hafei Automobile Industry Group Co.Ltd. 670500.00 670500.00 Bazhong Wanyou Auto Sales and Service Co. Ltd. 50000.00 - Changan Auto Finance Co. Ltd. 41300.00 - Chongqing Shangfang Automobile Fitt ings Co. Ltd. 3980.00 3980.00 Chongqing Changan MinSheng Logist ics Co. Ltd. 259.00 - Chongqing Changan Kuayue Automobile Co. Ltd. - 9833525.00 Chongqing Chang'an industry (Group) Co. Ltd Ltd. - 5289712.91 Changan Mazda Engine Co. Ltd. - 3347884.03 Nanning Wanyou Auto Sales and Service Co. Ltd. - 1000769.87 Kunming Wanling Auto Sales & Service Co. Ltd. - 36548.04 Dali Wanling Auto Sales & Service Co. Ltd. - 2037.62 Luzhou Wanyou Automobile Service Co. Ltd. - 121.00 Total 435850953.58 122872256.46 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Other payables Related parties 2019 2018 Chongqing Changan MinSheng Logist ics Co. Ltd. 191519531.45 105930160.43 Chongqing Changan Kuayue Automobile Co. Ltd. 64412855.00 - Chongqing Changan Industries Group Co. Ltd. 4770656.96 8784882.05 Chongqing Changan Construct ion Co. Ltd. 2356505.24 13471837.97 Chongqing Changan Property Management Co. Ltd. 1655478.59 2252567.36 Changan Ford Automobile Co. Ltd. 1461694.00 - Sichuan Jianan Industry Co. Ltd. 579179.33 - Chongqing Wanyou Economic Development Co. Ltd. 415466.55 111551.22 Hubei Huazhong Marelli Automobile Lighting Co. 389785.41 - Chongqing Nexteer Steering System Co.Ltd. 307910.00 - Harbin Dongan Engine Co. Ltd. 304924.09 - Chongqing Anfu Automobile Co. Ltd. 300000.00 200000.00 Chongqing Changrong Machinery Co. Ltd. 299999.63 - South Inter Air-condit ioner Co .Ltd. 190324.96 35844.50 Changan Ford Mazda Engine Co . Ltd . 144115.79 144115.79 Chengdu Wanyou Filter Co. Ltd. 121303.84 120000.00 Nanning Wanyou Sales and Service Co. Ltd. 120520.60 - Yunnan Wanyou Auto Sales and Service Co. Ltd. 108223.30 26100.00 China Changan Automobile Group Tianjin Sales Co. Ltd. 100000.00 - Harbin Dongan Engine Co. Ltd. 67239.90 - South Tianhe Chassis System Co. Ltd 65122.43 - Chengdu Wanyou Auto Trade Service Co. Ltd. 58295.80 - Chengdu Huachuan Electric Equipment Co. Ltd 51037.08 - Chongqing Dajiang Xinda Vehicles Shares Co. Ltd. 50000.00 50000.00 Guangxi Wanyou Auto Sales and Service Co. Ltd. 48424.07 - Chengdu Lingchuan Industry Co. Ltd. 26343.16 - Chengdu Wanyou Xiangyu Auto Sales and Service Co. Ltd. 20493.00 75330.00 Panzhihua Wanyou Auto Sales & Service Co. Ltd. 16219.40 - Ya’an Wanyou Auto Sales and Service Co. Ltd. 12267.46 - Hubei Xiaogan Huazhong Automobile Light Co. Ltd 10951.72 - Sichuan Ningjiang Shanchuan Machinery Co Ltd. 8324.53 - Chongqing Wanyou Sales and Service Co. Ltd. 5889.92 - Guizhou Wanyou Auto Sales and Service Co. Ltd. 5016.48 218604.28 Luzhou Wanyou Automobile Service Co. Ltd. 3770.68 - Bazhong Wanyou Auto Sales and Service Co. Ltd 2683.74 - Chengdu Wanyou Trading Co. Ltd 1176.14 - Chongqing Changfeng Jiquan Machinery Co. Ltd. 800 - China South Industries Group Corporation - 29580000.00 Changan PSA Automobiles Co. Ltd. - 26007857.90 Chongqing Wanyou Zunda Automobile Sales & Service Co. Ltd. - 550000.00 CSIA-Chongqing Tsingshan Transmission Branch - 439120.00 Chongqing Changan Real Estate Development Co. Ltd. - 277907.42 Total 270012530.25 188275878.92 7. Cash deposited in related party Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Related party 2019 2018 China South Industry Group Finance Co. Ltd. 5352685473.98 3312617903.21 Changan Automobile Financing Co.Ltd 1200000000.00 1000000000.00 Total 6552685473.98 4312617903.21 In 2019 deposit rates in related party are 0.35% to 3.915% deposit terms are 0 to 12 months. (in 2018 deposit rate was 0.35% to 3.915% terms are 0 to 12 months.) 8. Loans from related parties Short-term loans Related parties Category 2019 2018 China South Industry Group Finance Co. Ltd. Credit loan 200000000.00 190000000.00 China South Industries Group Corporat ion Entrusted loan 29580000.00 - Total 229580000.00 190000000.00 Refer to Note V 21 for the details of the interest rates of the short-term loan.Long-term loans Related parties Category 2019 2018 China South Industry Group Finance Co. Ltd. Credit loan 55300000.00 - Refer to Note V 31 for the details of the interest rates of the long-term loan . Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) XI Share-based payments 1. General information 2019 2018 The total amount of the employee services as a result of the share-based payments - 23961900.00 The equity settled share-based payments are as follows: 2019 2018 The accumulated amount of equity settled share-based payments included in capital reserve - 23961900.00 The amount of equity settled share-based payments included in current year expense (23961900.00) (8735100.00) 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 expirat ion date. Share options are granted to directors chief executive officers and key technical and management personnel.The share option will expire in 5 years. After the vest ing 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 opt ions could be exercised when the prescribed performance condit ions are met. The exercise price is RMB13.478 per share. The options granted shall be exercised before the expirat ion date. The share should not be exercised unless the prescribed condit ions are met. The exercisable shares not exercised in above periods will be written off 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 rat io of prime operat ing 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 Rat io Exercise Time Exercise Terms The 1st exercise The 1st trading day si nce 24 month after th 2017 net profit growth rate based on 2015 average growth rate ≥3.2%(growth amount equivalent to Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 220 period e grant date to the la st trading day since 3 6 month after the gra nt date RMB10182000000); ROE≥15% The above indicators≥benchmark average and ≥75 quart ile △EVA>0; The rat io of prime operat ing revenue to oper at ing revenue≥95% The 2nd exercise period The 1st trading day si nce 36 month after th e grant date to the la st trading day since 4 8 month after the gra nt date 2018 net profit growth rate based on 2015 av erage growth rate ≥3.2%(growth amount equiv alent to RMB10507000000); ROE≥15% The above indicators≥benchmark average and ≥75 quart ile △EVA>0; The rat io of prime operat ing revenue to oper at ing revenue≥95% The 3rd exercise period The 1st trading day si nce 48 month after th e grant date to the la st trading day since 6 0 month after the gra nt date 2019 net profit growth rate based on 2015 av erage growth rate ≥3.2%(growth amount equiv alent to RMB10844000000); ROE≥15% The above indicators≥benchmark average and ≥75 quart ile △EVA>0; The rat io of prime operat ing revenue to oper at ing revenue≥95% Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 221 2. Share-based payment scheme (continued) The fair value of the equity-settled share option is determined using Black-Scholes model based on the est imate in accordance with the terms and condit ions of the share options. The input variables are as follows: Valuat ion factors 23 September 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 volat ility is based on the assumption that the historical volat ility reflects the future trend but not necessarily the actual results.On the date of granting the fair value of share options granted amounted to RMB139527600. Due the fact that all of the prescribed performance condit ions of the share option is not achieved the Board of Directors of the Company approved to cancel 29.14 million shares of the share option. XII Contingencies and commitments 1. Commitments Contracted but not provided for Item 2019 2018 Capital commitments 10095165498.37 18178474088.33 Investment commitments 500000000.00 1600000000.00 2. Contingencies As at 31 December 2019 no material contingencies needed to be disclosed. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 222 XIII Events after the balance sheet date 1. The dividends after balance sheet date Profits or dividends to be allocated Refer to Note V 40. 2. Other events after the balance sheet date In January 2020 the company's subsidiary Chongqing Changan new energy automobile technology co. LTD. (" new energy technology ") introduced several strategic investors to increase capital upon the approval of the company's f irst extraordinary shareholders' meeting in 2020 and the company waived the right of pre-emptive subscript ion for this capital increase. After the completion of the capital increase the share proportion of the new energy technology held by the company decreased to 48.95% and the company lost its control over the new energy technology. The new energy technology changed from a subsidiary to a joint venture and adopted the equity method for subsequent accounting. The capital increase was completed in January 2020 and its est imated impact on the group's f inancial statements is shown in our notice no. 2019-67 dated 4 December 2019. In January 2020 the company held the 61st meeting of the 7th board of directors and the meet ing passed the proposal on establishing T3 technology platform company (the name shall be determined through separate consultation). The company intends to invest RMB 500 million or 3.125% as a limited partner. As of the date of approval of this f inancial statement the above investment matters have not been completed. In April 2020 the ult imate holding company of the company China South Industries Group Corporat ion intends to transfer 34232588 shares of the company (0.71% of the total issued share capital of the company) to CETC Investment Holding Co. Ltd. with no compensation. After the share transfer China South Industries Group Corporation and its persons act ing in concert will hold 2085790582 shares of the company 43.43% of the total issued share capital of the company which is st ill the ult imate holding company of the company. The share transfer will be implemented after getting the approval from China's State-owned Assets Supervision and Administrat ion Commission. Up to the date of approval and report of the financial statements the share transfer mentioned above has not been completed. In April 2020 the company held the sixty-fourth meet ing of the seventh board of directors which deliberated and passed the motion on the company's plan of non-public issuance of a-shares. This offering non-public private bank stocks for domest ic list ing of the common stock (A shares) the stock value of 1 yuan per share price is not lower than the price sett ing the f irst 20 trading days before the company issued A shares 80% of the average stock trading and not lower than the company's latest audited net assets per share. The total amount of funds raised in this non-public offering is not more than RMB6 billion which will be mainly used for investment in production and construct ion projects and supplementary working capital after deducting the issuance fees. After the company obtains the approval and approval document of China securit ies regulatory commission on this non-public development bank it shall issue the document in accordance with the approval period and relevant regulations. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) XIII Events after the balance sheet date (continued) 2. Other events after the balance sheet date (continued) The outbreak of COVID-19 in China and other countries around the world has created uncertainties in the group's operations and the group is exposed to both epidemic risk and economic downside risk. Given the dynamic nature of the situation the group will do all it can to reduce the impact of the outbreak on its operations. The group will continue to monitor the development of novel coronavirus and evaluate its impact on the group's f inancial posit ion and operating performance. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) XIV Other important event 1. Lease arrangements According to the lease contracts signed with the lessor the minimum lease payments under non-cancellable leases are as follows: Item 2019 2018 Less than 1 year (including 1 year) 19806931.61 21731575.60 1 to 2 years (including 2 years) 1265530.79 18988604.18 2 to 3 years (including 3 years) 219481.62 14221234.39 Over 3 years 18290.13 3844972.29 Total 21310234.15 58786386.46 2. Segment report The Group identifies operating segments based on the internal organization structure managerial requirements and internal report ing system and identifies reportable segments based on operating segments and discloses segment information by operating segment. An operating segment is a component of the Group that meets all the following condit ions: (1) it engages in business act ivit ies from which it may earn revenues and incur expenses; (2) its operating results are regularly reviewed by the Company’s management to make decisions about resources to be allocated to the segment and assess its performance; and (3) the Group can obtain relevant accounting information such as its f inancial posit ion operating results and cash flows.If two or more segments have similar economic characterist ics and meet certain condit ions they can be aggregated into a single operating segment.The revenue and profit of the Group mainly consist of the automobile manufacturing and domestic sales. The Group’s principal assets are in China. The operating performance of the Group has been evaluated as a whole by the management. So the segment report has not been prepared for this year. 3. Comparative Data As stated in Note III 31 according to the and the accounting treatment presentation and amount of a certain number of items in the financial statements have been revised to meet the new requirements. Accordingly the data for 2018 have been adjusted and the comparative data for 2018 have been re-classif ied and restated to ensure the presentation and accounting treatments are in conformity with the requirements for current year. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) XV Notes to the Company’s financial statements 1. Accounts Receivable (1) Aging analysis of accounts receivable as at 31 December 2019 is as follows: Aging 2019 2018 Within 1 year 3555684864.42 3595148552.67 1 to 2 years 822210403.02 1225896003.03 2 to 3 years 482665541.27 616246477.50 Over 3 years 256419059.60 257429428.54 Total 5116979868.31 5694720461.74 Provision (22709502.59) (15559782.05) 5094270365.72 5679160679.69 (2) Movements of provision for accounts receivable are as follows: Beginning Addition Reduction Ending Balance Reversal Resale Write-off 2019 15559782.05 7149720.54 - - - 22709502.59 2018 13247893.43 2311888.62 - - - 15559782.05 (3) Analysis of the accounts receivable by category as at 31 December 2019 is as follows: Item 2019 Balance Provision Amount % Amount % Individually analyzed provision 4991086298.96 97.54 - - Provision for bad debts based on credit risk characterist ics 125893569.35 2.46 22709502.59 18.04 Total 5116979868.31 100.00 22709502.59 0.44 Item 2018 Balance provision Amount % Amount % Accounts receivable with significant single amount and separate provision for bad debts 74433396.10 1.31 - - Provision for bad debts based on credit risk characteristics Group 1. Accounts receivable analyzed for provision according to aging analysis 50150446.67 0.88 15559782.05 31.03 Group 2. Accounts receivable from related parties 5570136618.97 97.81 - - group subtotal 5620287065.64 98.69 15559782.05 0.28 Total 5694720461.74 100.00 15559782.05 0.27 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 1. Accounts Receivable (continued) (4) Accounts receivable was analyzed for provision by expected credit loss model: Aging 2019 2018 Balance Provision Balance Provision Amount % Amount % Within 1 year 90224930.90 2.49 2248850.09 13595765.51 - 1.30 1 to 2 years 26.00 22.04 5.73 19562282.40 10.00 1956228.24 2 to 3 years 18843871.50 32.27 6080101.72 4838400.00 30.00 1451520.00 3 to 4 years 4898440.32 50.10 2454244.41 - 50.00 - 4 to 5 years - - - 9831.25 80.00 7865.00 Over 5 years 11926300.63 100.00 11926300.63 12144167.51 100.00 12144167.51 Total 125893569.35 18.04 22709502.59 50150446.67 31.03 15559782.05 (5) As at 31 December 2019 accounts receivable from top 5 clients amounted to RMB4011467403.94 accounted for 78.40% of the total amount (2018 ： RMB4575962128.25 accounted for 80.35% of the total amount). (6) There are no accounts receivable derecognized due to transference of financial assets during 2019 (2018: Nil). 2. Other receivables (1) Aging analysis of other receivables as at 31 December 2019 is as follows: Aging 2019 2018 Within 1 year 1082612634.77 1924149413.17 1 to 2 years 1239218612.29 377568132.71 2 to 3 years 366133362.21 14030436.00 Over 3 years 24134145.47 11740802.81 Total 2712098754.74 2327488784.69 Provision (114784410.34) (603431.40) 2597314344.40 2326885353.29 (2) Analysis of other receivables by nature is as follows: Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Nature 2019 2018 Energy-saving and new energy subsidy 1659611198.60 1667483759.60 Disposal income of assets 23424046.17 119142595.23 Loans to subsidiaries 640557716.20 200000000.00 Pretty cash 36352884.22 83196870.08 Others 237368499.21 257062128.38 Total 2597314344.40 2326885353.29 (3) In 2019 the changes in the provision for bad debts for other receivables based on the 12-month expected credit loss and the expected credit loss for the entire duration are as follows Stage 1 12-month ECLs Stage 2 Lifetime ECLs Stage 3 Credit-impaired financi al assets (Lifetime ECL s) Total Opening balance 155223.55 348425.91 99781.94 603431.40 - Transfer to Stage 2 - - - - - Transfer to Stage 3 (348425.91) 348425.91 - - Turn back Stage 2 - - - - - Turn back Stage 1 - - - - Provision 135958.46 111643227.46 2501574.96 114280760.88 Reversal - - - - Transfer - - (99781.94) (99781.94) Write-off - - - - Other changes - - - - Closing balance 291182.01 111643227.46 2850000.87 114784410.34 2. Other receivables (continued) As to 2019 the movement of other receivable as follow: Stage 1 12-month ECLs Stage 2 Lifetime ECLs Stage 3 Credit-impaired financial assets (Lifetime ECLs) Total Opening balance 2326952103.37 436899.38 99781.94 2327488784.69 - Transfer to Stage 2 (1664613313.78) 1664613313.78 - - - Transfer to Stage 3 (2413101.49) (436899.38) 2850000.87 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) - Turn back Stage 2 - - - - - Turn back Stage 1 - - - - Provision 706450278.94 516085890.00 1222536168.94 Reversal (271211635.50) (566614781.45) - (837826416.95) Transfer - - (99781.94) (99781.94) Write-off - - - - Closing balance 1095164331.54 1614084422.33 2850000.87 2712098754.74 (4) In 2018 the changes in bad debt provision for other receivables are as follows: Balance at the beginning of 2019 Increase Decrease Balance at the end of 2019 Reversal Resale Write off 2018 1088333.82 - 484902.42 - - 603431.40 in 2018 analysis of other receivable categorized by nature as follow: Category 2018 Book value Provision Amount % Amount % Other receivables with signif icant single amount and separate provision for bad debts 1720350524.62 73.91 - - Combinat ion 1 other receivables withdrawing bad debt provision according to aging analysis method 118981025.65 5.12 603431.40 0.51 Combinat ion 2. Other receivables accruing bad debt provision according to related part ies 488157234.42 20.97 - - Combined subtotal 607138260.07 26.09 603431.40 0.10 Other receivables whose single amount is not signif icant but single provision for bad debt provision - - - - Total 2327488784.69 100 603431.40 0.03 In the portfolio other receivables withdrawing bad debt provision according to the aging analysis method: Aging 2018 Balance provision Amount % Within 1 year 118544126.27 99.63 261669.32 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 1 to 2 years 65703.03 0.06 6570.30 2 to 3 years - - - 3 to 4 years 34672.34 0.03 17336.17 4 to 5 years 93342.00 0.08 74673.60 Over 5 years 243182.01 0.20 243182.01 Total 118981025.65 100 603431.40 (5) In 2019 there were no bad debt provisio of other receivables (2018: RMB 484902.42) reversed. (6) In 2019 the write-off amount of bad debt provision for other receivables was RMB 99781.94. (2018: Nil). (7) As at 31 December 2019 top five debtors of other receivables are as follows: Debtors Amount Aging Proportion of total other receivables (%) Ending balance of provision First 1770677411.60 Within 4years 65.30 111066213.00 Second 446113924.09 Within 1 year 16.45 - Third 200000000.00 1 to 2 year 7.37 - Forth 124312677.99 1 to 2 year 4.58 - Fifth 28480000.00 Within 1 year 1.05 - Total 2569584013.68 94.75 111066213.00 (8) As of December 31 2019 the company had no other receivables that were derecognized as a transfer of financial assets (December 31 2018: Nil). Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 3. Long-term investments 2019 Investee Opening Balance Addition Investment income/loss under equity method Other comprehensive income Dividend of cash declared Other deduction Provision for impairment Ending Balance of book value Ending Balance of provision Joint ventures Jiangling Holding Co. Ltd. 2493754915.53 - (221583996.94) - - (2272170918.59) - - - Changan Ford Automobile Co. Ltd. 3709784507.11 - (1926961179.20) - - - - 1782823327.91 - Changan Mazda Automobile Co. Ltd. 2472626663.41 - 929384241.61 - (1225000000.00) - - 2177010905.02 - Changan Mazda Engine Co. Ltd. 827803757.96 - 39968582.73 - (37500000.00) - - 830272340.69 - Changan PSA Automobiles Co. Ltd. 1456519068.74 - (1110480084.87) - - - - 346038983.87 - Changan Weilai New Energy Automobile Technology Co. Ltd. 44065513.91 - (56937233.33) - - - - (12871719.42) - Nanchang Jiangling Investment Co. Ltd - 2063742852.91 18072312.40 - - - - 2081815165.31 - Subtotal 11004554426.66 2063742852.91 (2328537357.60) - (1262500000.00) (2272170918.59) - 7205089003.38 - Associates Chongqing Changan Kuayue Automobile Co. Ltd. 116588234.97 - 75417039.13 - - - - 192005274.10 - Chongqing Changan Kuayue Automobile Sales Co. Ltd. - - - - - - - - Beijing Fangan Xinyue Taxi Co. Ltd. - - - - - - - - - Changan Auto Finance Co. Ltd. 2030617157.41 - 239321406.72 - (74897909.69) 2195040654.44 - Hainan Anxinxing Information Technology Co. Ltd. 5536555.21 - (1976171.11) - - - - 3560384.10 - Nanjing Chelai Travel Technology Co. Ltd. 1813616.14 - (338671.05) - - - - 1474945.09 - Hunan Guoxin Semiconductor Technology Co. Ltd. 25000000.00 - 152447.20 - - - - 25152447.20 - Nanjing Leading Equity Investment Partnership - 858267717.00 76950606.32 - - - - 935218323.32 - Nenjing Leading Equity Investment Management Co. Ltd - 1500000.00 (54584.31) - - - - 1445415.69 - Jiangling Holding Co. Ltd - 208428065.68 (142252166.55) 332817054.49 - - - 398992953.62 - Subtotal 2179555563.73 1068195782.68 247219906.35 332817054.49 (74897909.69) - - 3752890397.56 - Subsidiaries Nanjing Changan Automobile Co. Ltd. 422533259.00 - - - - - - 422533259.00 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Investee Opening Balance Addition Investment income/loss under equity method Other comprehensive income Dividend of cash declared Other deduction Provision for impairment Ending Balance of book value Ending Balance of provision Hebei Changan Automobile Co. Ltd. 438223236.00 - - - - - - 438223236.00 - Chongqing Changan Automobile International Sales Service Co. Ltd. 13068581.00 - - - - - - 13068581.00 - Chongqing Changan Auto Customer Service Co. Ltd. 29700000.00 - - - - - - 29700000.00 - Chongqing Changan Connected Car Technology Co. Ltd. 88500000.00 - - - - - - 88500000.00 - Chongqing Changan Special Purpose Vehicle Co. Ltd. 2500000.00 - - - - - - 2500000.00 - Chongqing Changan European Design Center Co. Ltd. 155469913.50 - - - - - - 155469913.50 - Chongqing Changan New Energy Automobile Co. Ltd. 49194195.00 - - - - - (49194195.00) - (49194195.00) Changan Automobile UK R & D Center Co. Ltd. 236387395.40 13706455.55 - - - - - 250093850.95 - Beijing Changan Automotive Engineering Technology Research Co. Ltd. 1000000.00 - - - - - - 1000000.00 - Changan Japan Design Center Co. Ltd. 1396370.15 - - - - - - 1396370.15 - Changan American R & D Center Co. Ltd. 10243460.00 - - - - - - 10243460.00 - Baoding Changan Bus Manufacturing Co. Ltd. 176002613.18 - - - - - - 176002613.18 - Hefei Changan Automobile Co. Ltd. 35367765.23 - - - - - - 35367765.23 - Changan Automobile Russia Co. Ltd. 1242589.15 250000000.00 - - - - - 251242589.15 - Changan Brazil Holdings Limited 2584556.97 - - - - - - 2584556.97 - Changan Automobile Investment (Shenzhen) Co. Ltd. 148000000.00 36800000.00 - - - - - 184800000.00 - Nanjing Changan New Energy Automobile Sales Service Co.Ltd. 50000000.00 - - - - - - 50000000.00 - Fuzhou Fuqing Changan New Energy Automobile Sales 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 Service Co.Ltd. 4000000.00 - - - - - - 4000000.00 - Chongqing Changan New Energy Automobile Technology Co. Ltd. 1238742571.54 - - - - - - 1238742571.54 - Changan Suzuki Motor 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 - Subtotal 4833027610.33 310506455.55 - - - - (49194195.00) 5094339870.88 (49194195.00) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Investee Opening Balance Addition Investment income/loss under equity method Other comprehensive income Dividend of cash declared Other deduction Provision for impairment Ending Balance of book value Ending Balance of provision Total 18017137600.72 3442445091.14 (2081317451.25) 332817054.49 (1337397909.69) (2272170918.59) (49194195.00) 16052319271.82 (49194195.00) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 3. Long-term investments (continued) 2018 Investee Opening Balance Addit ion Deduction Investment income/loss nder equity method Other comprehensive income Other movements of equity Dividend of cash declared Other deduction Provis ion Ending Balance of book value Ending Balance of provision Joint ventures Chongqing Changan Suzuki Automobile Co. Ltd. 1190705710.43 - - (595756652.13) - - - (594949058.30) - - - Jiangling Holding Co. Ltd. 2907749943.37 - - (409453173.08) (706228.88) (3835625.88) - - - 2493754915.53 - Changan Ford Automobile Co. Ltd. 4125426104.20 - - (415641597.09) - - - - - 3709784507.11 - Changan Mazda Automobile Co. Ltd. 2439429811.02 - - 1263196852.39 - - (1230000000.00) - - 2472626663.41 - Changan Ford Mazda Engine Co. Ltd. 903838395.08 - - 38465362.88 - - (114500000.00) - - 827803757.96 - Changan PSA Automobiles Co. Ltd. 93561126.76 1800000000.00 - (437042058.02) - - - - - 1456519068.74 - Changan Weilai New Energy Automobile Technology Co. Ltd. - 49000000.00 - (4934486.09) - - - - - 44065513.91 - Subtotal 11660711090.86 1849000000.00 - (561165751.14) (706228.88) (3835625.88) (1344500000.00) (594949058.30) - 11004554426.66 - Associates Chongqing Changan Kuayue Automobile Co. Ltd. 101399892.43 - - 28908342.54 - - (13720000.00) - - 116588234.97 - Chongqing Changan Kuayue Automobile Sales Co. Ltd. - - - - - - - - - - - Beijing Fang’an taxi Co. Ltd. - - - - - - - - - - - Changan Automobile Financing Co.Ltd 1817669991.73 - - 212947165.68 - - - - - 2030617157.41 - Zhenjiang Demao Hairun equity investment Co. Ltd. 518742921.95 - - (239867.54) 77231613.62 - - (595734668.03) - - - Hainan Anxinxing Information - 6000000.00 - (463444.79) - - - - - 5536555.21 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Investee Opening Balance Addit ion Deduction Investment income/loss nder equity method Other comprehensive income Other movements of equity Dividend of cash declared Other deduction Provis ion Ending Balance of book value Ending Balance of provision Technology Co. Ltd.Nanjing Chelai Travel Technology Co. Ltd. - 2000000.00 - (186383.86) - - - - - 1813616.14 - Hunan Guoxin Semiconductor Technology Co. Ltd. - 25000000.00 - - - - - - - 25000000.00 - Subtotal 2437812806.11 33000000.00 - 240965812.03 77231613.62 - (13720000.00) (595734668.03) - 2179555563.73 - Subsidiaries Nanjing Changan Automobile Co.Ltd. 422533259.00 - - - - - - - - 422533259.00 - Hebei Changan Automobile Co.Ltd. 438223236.00 - - - - - - - - 438223236.00 - Chongqing Changan International Automobile Sales Co. Ltd. 13068581.00 - - - - - - - - 13068581.00 - Chongqing Changan Automobile support ing service Co. Ltd. 29700000.00 - - - - - - - - 29700000.00 - Chongqing Changan Connected Car Technology Co. Ltd. 88500000.00 - - - - - - - - 88500000.00 - Chongqing Changan Automobile sales subsidiaries 3150000.00 - (3150000.00) - - - - - - - - Chongqing Changan Special Automobile sales Co. Ltd. 2500000.00 - - - - - - - - 2500000.00 - Chongqing Changan Europe Design Academy Co. Ltd. 155469913.50 - - - - - - - - 155469913.50 - Chongqing Changan new Engergy Automobile Co. Ltd. 18850000.00 30344195.00 - - - - - - - 49194195.00 - Changan United Kingdom R&D Center Co. Ltd. 236387395.40 - - - - - - - - 236387395.40 - Beijing Changan R&D Center Co. Ltd. 1000000.00 - - - - - - - - 1000000.00 - Harbin Changan R&D Center Co.Ltd. 1000000.00 - (1000000.00) - - - - - - - - Shanghai Changan R&D Center Co.Ltd. 1000000.00 - (1000000.00) - - - - - - - - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Investee Opening Balance Addit ion Deduction Investment income/loss nder equity method Other comprehensive income Other movements of equity Dividend of cash declared Other deduction Provis ion Ending Balance of book value Ending Balance of provision Changan Japan Designing Center Co. Ltd. 1396370.15 - - - - - - - - 1396370.15 - Changan United States R&D Center Co. Ltd. 10243460.00 - - - - - - - - 10243460.00 - Hebei Baoding Changan Bus Co.Ltd. 176002613.18 - - - - - - - - 176002613.18 - Hefei Changan Automobile Company Ltd. 35367765.23 - - - - - - - - 35367765.23 - Changan Automobile Russia Co. Ltd. 1242589.15 - - - - - - - - 1242589.15 - Changan Brazil Holdings Limited 2584556.97 - - - - - - - - 2584556.97 - Changan Automobile Investment (Shenzhen) Co. Ltd. 50000000.00 98000000.00 - - - - - - - 148000000.00 - Nanjing Changan New Energy Automobile Sales & Service Co. Ltd. - 50000000.00 - - - - - - - 50000000.00 - Fuzhou Fuqing Changan New Energy Automobile Sales 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 & Service Co. Ltd. - 4000000.00 - - - - - - - 4000000.00 - 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 - Subtotal 1688219739.58 3149957870.75 (5150000.00) - - - - - - 4833027610.33 - Total 15786743636.55 5031957870.75 (5150000.00) (320199939.11) 76525384.74 (3835625.88) (1358220000.00) (1190683726.33) - 18017137600.72 - Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 4. Operating revenue and cost (1) Operating revenue operating cost Item 2019 2018 Revenue Cost Revenue Cost Primary Operation 62405086095.26 55655630963.93 60779233113.82 53517880999.83 Other Operation 2547664111.37 1310738813.90 2600231648.38 991067244.30 Total 64952750206.63 56966369777.83 63379464762.20 54508948244.13 (2) Revenue listed by products are as follows: Item 2019 2018 Revenue Cost Revenue Cost Sales of goods 64819437399.53 56789535212.96 63173489211.84 54268833774.82 Outsourcing processing 133312807.10 176834564.87 205975550.36 240114469.31 Total 64952750206.63 56966369777.83 63379464762.20 54508948244.13 5. Investment income (1) Details of investment income Item 2019 2018 Long-term equity investment income under cost method 3266790.63 628650000.00 Long-term equity investment income under equity method (2081317451.25) (320199939.11) Investment income of financial assets held for trading during the holding period 1065597.53 - Dividend income from investments in other equity instruments st ill held 38343163.30 - Investment income during holding period of available-for-sale financial assets - 51133446.15 Others 15092767.40 23539707.32 Total (2023549132.39) 383123214.36 Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 5. Investment income (continued) (2) Long-term equity investment income under equity method Investee 2019 2018 Reason for the fluctuation Changan Ford Automobile Co. Ltd. (1926961179.20) (415641597.09) Decrease in profit due to sales decrease Changan Mazda Automobile Co. Ltd. 929384241.61 1263196852.39 Decrease in profit due to sales decrease Chongqing Changan Suzuki Automobile Co. Ltd. - (595756652.13) Included in the scope of consolidation from November 2018 Changan Mazda Engine Co. Ltd. 39968582.73 38465362.88 Jiangling Holding Co. Ltd. (363836163.49) (409453173.08) Decrease in investment proportion Changan PSA Automobiles Co. Ltd. (1110480084.87) (437042058.02) Decrease in profit due to low sales Nanchang Jiangling Investment Co. Ltd 18072312.40 - Chongqing Changan Kuayue Automobile Co.Ltd. 75417039.13 28908342.54 Increase in profit due to sales expansion Changan Automobile Financing Co.Ltd 239321406.72 212947165.68 Increase in profit due to sales expansion Zhenjiang Demao Hairun equity investment fund partnership (limited partnership) - (239867.54) Changan Weilai New Energy Automobile Technology Co. Ltd. (56937233.33) (4934486.09) Early establishment operating loss Hainan Anxinxing Information Technology Co. Ltd. (1976171.11) (463444.79) Early establishment operating loss Nanjing Chelai Travel Technology Co. Ltd. (338671.05) (186383.86) Early establishment operating loss Nanjing Leading Equity Investment Partnership 76950606.32 - Nanjing Leading Equity Investment Management Co.Ltd. (54584.31) - Hunan Guoxin Semiconductor Technology Co. Ltd. 152447.20 - Total (2081317451.25) (320199939.11) Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) 1. Schedule of non-recurring profit and loss Item 2019 Non-current asset disposal gains and losses (including the write-off port ion of the asset impairment provision) 56658864.17 Government subsidies included in the current profit and loss (closely related to the business of the enterprise except for government subsidies that are f ixed or quantified according to the national unified standard) 1537625620.93 Interest on late payment of funds charged to non-financial enterprises 28553488.65 In addit ion to the effect ive hedging business related to the company's normal business operat ions the fair value changes in gains and losses arising from holding trading financial assets 889154888.69 Gains and losses from entrusted loans 6771226.43 Other non-operating income and expenses other than the above (135258766.14)Income tax impact (250459302.04） Minority shareholders' equity impact (after tax) (17318779.61) Total 2115727241.08 The Group disclosed non-recurring profit and loss items in accordance with the regulations issued by China Security Regulation Commission No 1 Regulation of Information Disclosure of Public Companies-Non-recurring Profit and Loss 2. Return on equity and earnings per share 2019 Profit Weighted average return on equity (%) Earnings per share Basic EPS Diluted EPS Net profit attributable to the Company’s ordinary shareholders (5.86) (0.55) N/A Net profit attributable to the Company’s ordinary shareholders after deduct ing non-recurring profit and loss (10.54) (0.99) N/A 2018 Profit Weighted average return on equity (%) Earnings per share Basic EPS Diluted EPS Net profit attributable to the Company’s ordinary shareholders 1.45 0.14 N/A Net profit attributable to the Company’s ordinary shareholders after deduct ing non-recurring profit and loss (6.75) (0.66) N/A In accordance with the regulations issued by China Security Regulation Commission Regulation of Information Disclosure of Public Companies—the Calculat ion and Disclosure of Return of Net Assets and Earning per Share (2010 Revision) the Group disclosed the return of net assets and earnings per share in the reporting period. Chongqing Changan Automobile Company Limited Notes to Financial Statement Year ended 31 December 2019 (Expressed in Renminbi Yuan) Chapter 11 Documents for Future Reference 1. Financial reports with signatures and stamps of the legal representative the chief accountant and the chief of accounting organization. 2. The original copy of audit report with the stamp of the CPA firm and the signature and stamp of the Certified Public Accountant. 3. All the original documents and manuscripts of the Company which has been disclosed in the reporting period in the newspapers designated by China Securities Regulatory Commission. Annual reports disclosed in other securities markets. Chairman of the Board: General Manager: Mr.Zhang Baolin Mr. Zhu Huarong Chongqing Changan Automobile Co. Ltd. 30 April 2020