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长 安B:2018年年度报告(英文版)2019-04-23  

						Chongqing Changan Automobile
      Company Limited


     2018 Annual Report

         April, 2019
                                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




         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

Zhou zhiping                       Directors                    Business trip                 Zhang Dongjun

Tan Xiaogang                       Directors                    Business trip                 Zhang Deyong

Liu Jipeng                         Independent Directors        Business trip                 Wei Xinjiang

Li Qingwen                         Independent Directors        Business trip                 Pang Yong

     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:
taking the total shares 4,802,648,511 as of Dec. 31, 2018 as the radix, sending cash dividends of
RMB 0.18 Yuan (tax included) per every 10 shares to all shareholders, and not converting capital
reserve into share capital.




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                                                          Chongqing Changan Automobile Company Limited 2018 Annual Report




                                                     CONTENTS


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

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

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

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

Chapter 5 Important Matters .................................................................................... 32

Chapter 6 Changes in the shareholding of the company and shareholders.............. 45

Chapter 7           Information about Directors, Supervisors, Senior Management and

Employees ................................................................................................................... 52

Chapter 8 Corporate Governance ............................................................................. 66

Chapter 9 Corporate Bonds ...................................................................................... 72

Chapter 10 Auditor’s Report .................................................................................... 73

Chapter 11 Documents for Future Reference ......................................................... 208




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                                                Chongqing Changan Automobile Company Limited 2018 Annual Report



                                               Definitions
           Items                                                   Definitions
Changan Auto., the
                        Refers to Chongqing Changan Automobile Company Limited
Company
South Industries        Refers to China South Industries Group Co., Ltd., the Company’s actual controller
                                    China Changan Automobile Group Co., Ltd., old name: China South
China Changan           Refers to
                                    Industries automobile Co., Ltd., a subsidiary company of South Industries
                                  Chongqing Changan Industry (Group) Co., Ltd., old name: Changan
                                  Automobile Co., Ltd., Changan Automobile (Group) Co., Ltd., a
Changan Industry        Refers to
                                  subsidiary company of South Industries, the controlling shareholder of the
                                  Company before December, 2005
                                    Nanjing Changan Automobile Co., Ltd., a subsidiary company of the
Nanjing Changan         Refers to
                                    Company

                                    Hebei Changan Automobile Co., Ltd., a subsidiary company of the
Hebei Changan           Refers to
                                    Company

                                    Hefei Changan Automobile Co., Ltd., a subsidiary company of the
Hefei Changan           Refers to
                                    Company
Changan Bus             Refers to Baoding Changan Bus Co., Ltd. , a subsidiary company of the Company
                                    Chongqing Changan Automobile International Sale Service Co., Ltd. , a
International Company   Refers to
                                    subsidiary company of the Company
                                    Chongqing Changan Suzuki Auto. Co.Ltd., a subsidiary company of the
Changan Suzuki          Refers to
                                    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
CAPSA                   Refers to Changan PSA Automobiles Co., Ltd,a JV of the Company
Jiangling Holding       Refers to Jiangling Holding Co., a JV of the Company
Changan Finance         Refers to Changan Auto Finance Co.Ltd Company's Joint Stock Company
Financial Co. of CSGC   Refers to Financial Co. of China South Industries Group Co., Ltd. ,
                                    United Prosperity (Hong Kong)Investment Co., Ltd,a subsidiary company
UPI                     Refers to
                                    of China Changan
                                    Harbin Hafei Automobile Industry Group Co., Ltd., a subsidiary company
Hafei Group             Refers to
                                    of China Changan
                                    Chongqing Changan Minsheng APLL Logistics Co., Ltd, a Joint Stock
CMAL                    Refers to
                                    Company of China Changan.



                                                     3
                                                       Chongqing Changan Automobile Company Limited 2018 Annual Report




            Chapter 2        Company Profile & Main Financial Indexes

I. Basic Information


Stock abbreviation        Changan Automobile 、Changan B          Stock Code                   000625、200625


Listed on                 Shenzhen Stock Exchange

Company in Chinese
                          重庆长安汽车股份有限公司
name
Company abbreviation in
                        长安汽车
Chinese name
Company name in
                          Chongqing Changan Automobile Company Limited
English
Legal representative      Zhang Baolin

Registered address        No. 260, East Jianxin Road Jiangbei District, Chongqing

Post code of the
                          400023
registered address
Office address            No. 260, East Jianxin Road, Jiangbei District, Chongqing

Post code of the office
                          400023
address
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

                                      No. 260, East Jianxin Road, Jiangbei
Contact address
                                      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
                                               China Securities Journal, Securities Daily and Hong Kong Commercial Daily
information disclosure
                                                            4
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


Website selected by CSRC for publishing
                                                     www.cninfo.com.cn
this annual report
The place where this annual report is
                                                     Secretary's Office of Board of Directors
prepared and kept


IV. Changes of Registration Information

Organization Code                            9150000020286320X6

Changes in the main business since the
                                             Not applicable
company's listing

                                             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.
All previous changes of dominant
                                             China South Industries Automobile Company Limited became the majority shareholder
stockholders
                                             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)

                                     Level 16, Ernst & Young Tower, Oriental Plaza, No. 1 East Chang An Avenue, Dong Cheng
Address of the accounting firm
                                     District, Beijing, China

Name of the certified public
                                     Qiao Chun, Hu Yan
accountant for signature

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

                                     Address of financial
    Financial Consultant                                          Name of financial consultant        Supervision duration
                                            consultant

Shanghai Realize Investment      No.639,Xinhua Road,                                              September 2016 - September
                                                                  Ye Suqin
Consulting Co., Ltd.             Shanghai                                                         2020



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                                                        Chongqing Changan Automobile Company Limited 2018 Annual Report


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

                                                                         Increase/decrease
                                 2018                  2017              on a y-o-y basis             2016
                                                                         (%)

 Operating revenue
                            66,298,270,389.77       80,012,205,182.37                -17.14%       78,542,441,757.19
 (Yuan)

 Net profit belonging
 to shareholders of the
                               680,728,392.03        7,137,234,723.47                -90.46%       10,285,284,120.57
 listed company
 (Yuan)

 Net profit belonging
 to shareholders of the
 listed company after
                            -3,165,070,272.21        5,716,114,648.34               -155.37%        9,448,723,644.17
 deduction of
 non-recurring profit
 and loss (Yuan)

 Net cash flow arising
 from operating             -3,887,475,302.44       -1,123,470,776.83               -246.02%        2,286,551,305.20
 activities (Yuan)

 Basic earnings per
                                            0.14                  1.49               -90.60%                     2.19
 share (Yuan/Share)

 Diluted earnings per
                               Not applicable          Not applicable          Not applicable         Not applicable
 share (Yuan/Share)

 Return on equity                                                              Down 14.20
                                        1.45%                 15.65%                                         26.81%
 (ROE) (%)                                                                               Points

                                                                         Increase/decrease of
                                                                         the end of current
                              End of 2018           End of 2017          year compared with        End of 2016
                                                                         that of   the
                                                                         previous year (%)

 Total assets (Yuan)        93,488,854,098.95      106,125,114,622.69                -11.91%      106,510,473,733.93

 Net assets belonging
 to shareholders of the
                            46,244,958,676.52       47,598,690,942.28                    -2.84%    43,573,812,403.87
 listed company
 (Yuan)




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                                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


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                                           20,010,746,940.77      15,632,085,249.27 14,208,826,200.12 16,446,611,999.61

Net profit attributable to shareholders of listing
                                                            1,391,793,407.67        217,813,171.17      -446,525,102.83    -482,353,083.98
Corporation

Net profit attributable to shareholders of the listing
Corporation after deducting non-recurring gains and           896,758,297.55        -201,041,609.14     -711,470,154.01 -3,149,316,806.61
losses

Net cash flows from operating activities                    2,636,312,735.66       1,765,089,024.49 -3,477,552,441.10 -4,811,324,621.49

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                                        2018                   2017                 2016

Non-recurring items and amounts(including accrued reversal assets
                                                                                 8,561,074.73         41,774,452.23       -26,176,073.44
impairment part)

Government subsidies included in the profit and loss of the current
period (Except closely related to business operations, in accordance
                                                                             2,873,192,102.56    1,613,343,216.59         864,258,952.35
with the national unified standard quota or quantitative enjoyment
of government subsidies)

The investment cost of the enterprise to obtain subsidiaries and
joint ventures which is less than the fair value of the identifiable net     1,020,821,274.01                     -                    -
assets of the investee when the investment is obtained

Except the above other operating income and expenses                           48,285,737.46          29,262,070.84        53,570,410.76



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                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


Interest on deferred payment of funds received by non financial
                                                                         29,303,167.73       33,408,866.16      41,300,590.86
enterprises

Reduction: the impact of income tax                                      82,007,701.31     188,136,520.19       94,404,693.21

     Impact of minority shareholders' equity (after tax)                 52,356,990.94     108,532,010.50        1,988,710.92

Total                                                                  3,845,798,664.24   1,421,120,075.13     836,560,476.40

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 disclosure
announcement No. 1 – non-recurring gains and losses” defined non-recurring items ,and Public offering of securities information
disclosure of the company's information disclosure announcement No. 1 - non-recurring gains and losses “The items listed in the
non-recurring items defined as recurring items shall be explained .
□ Applicable   √ Not applicable
The company in the reporting period does not base on the definition and listing of “Public offering of securities information
disclosure 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.




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                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report




                             Chapter 3                Analysis of Main Business
     I.The main business of the Company in the reporting period
   Does the Company need to comply with the disclosure requirements of special industry
      □ Yes √ No
     During the reporting period, the company's main business is the R&D, manufacturing and sale of cars (including sedan and
commercial vehicles), the R&D and production of automobile engine products. Besides, the company integrates advantageous
resources to actively develop travel services, new retail and so on 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 products cover low & middle class, wide range
and various series such as sedans, mini cars, buses, trucks, SUV, MPV, including the traditional fuel and new energy models, and the
engine platforms from 1.5L to 2.0L. The company owns many famous brands such as Changan passenger car, Oushang automobile,
Kaicheng automobile, Changan Ford, Changan Mazda, Changan SUZUKI, Changan PSA and so on. Up to now, the Company has
successfully launched a series of classic brands such as Raeton CC, Eado series, Alsvin series, CS series SUV, COS1° Oushang and
Honor; a series of famous JV products such as all new Focus, new Mondeo, Kuga, Edge, Axela, CX-5, CX-8, Vitara, Alivio, DS7 and
so on. At the same time, we have launched new energy vehicles such as Eado EV, new Benben EV and CS75 PHEV, 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 2018, Chang'an Automobile set off by "zero in" and officially released the "Third Entrepreneurship-Innovation and
Entrepreneurship Plan", which is driven by innovation and renders efficiency into the core competitiveness of the organization, and is
committed to transforming into a smart travel technology company. In 2018, Chang'an Automobile invested 3.823 billion yuan in the
development of products and technology projects, and continued to build leading R&D capabilities in the industry.
     Speed up R&D, and new products delivery released on schedule. The new products such as the second-generation Eado,
Eado DT, second-generation Eado XT, CS35PLUS, new CS75, new CS55, Keshang, CS75PHEV, and Eado EV 460 were put into
production on time. In 2018, the sales number of CS55 reached 165,000; the sales number of CS75 reached 140,000; the sales
number of CS35 reached 130,000; the sales number of Eado series reached 126,000; the sales number of new energy vehicles
reached 87,000, an year-on-year increase of 42.9 %.
     R&D technology is progressing steadily, and create the "3 + N" technology label. New energy core technology has made
great breakthroughs. Changan made breakthroughs in five key technologies such as energy flow optimization, and the new pure
electric products have a low power consumption of 100 kilometers to 10 degrees; The EV 460 was used to complete the 80 km/h
rear-end test in a live state to achieve the industry's starting point. The Intelligent technology took the lead in the industry. L2 level
integrated adaptive cruise and fully automatic parking technology were applied into the first mass production of Chinese brands. The
L3 limited automatic driving technology completed the engineering and entered the phase of mass production. The L4 unmanned

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                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


implementation of the first domestic demonstration operation is in the leading position in the industry. We will create three technical
labels: "Fashion, Intelligence, and Green", improve collision safety, NVH(noise, vibration and acoustic roughness),
CAE(computer-aided engineering), testing, body, chassis, electrical appliances, interior and exterior decoration, lightweight and other
new technology capabilities. In the evaluation results of the National Enterprise Technology Center 2017-2018 announced by the
National Development and Reform Commission, Chang 'an Automobile ranked third in the country and first in the industry with 96.4
points, and its R&D strength ranked first in China's automotive industry for 5 consecutive years.
     The R&D system is continuously improved and the management process is continuously optimized. We will optimize the
design of top-level structures, push forward the matrix transformation in research and development, and set up the "7 institutes and 2
departments". We will focus on breakthroughs in intelligent technology, new energy technology, and product experience design, and
innovate and enhance R&D capabilities. The first phase of the Changan Automobile Global R&D Center, which is the global R&D
hub of Changan Automobile, basically completed with admissions of The R&D department in 2019. The R&D process system
gradually extends and covers business processes such as pre-products, pre-technologies, product platforms, and pre-modeling.
Changan automobile was granted as Chongqing Outstanding Innovative Enterprise in 2018 and Chongqing Smart Network United
Automobile Technology Innovation Center.
     R&D and innovations are fruitful. There were 1,093 patent applications throughout the year, of which 401 were filed for
invention patents. As of 2018, Changan automobile had 1,225 valid invention patents. The "Key Technologies and Industrialization
of Auto Double Clutch Automatic Transmission (DCT)" and "Development and Application of New Energy Vehicle Functional
Safety Technology" won 9 awards in the Automotive Engineering Society Science and Technology Progress Award. The total number
of winners ranked first in the automobile industry. The H15TG-AA engine won the 2018 China Top Ten Engine Award; the new
CS75 has won four + + + +(excellent) highest rated models in the evaluation of China's smart car index; Raeton CC won the "Red
Point Design Award" with "high color value" and "warm enough" product design. Raeton CC won the new five-star performance
under the C-NCAP standard of the 2018 edition and became the first safety practitioner under the new standard.; The new CS75, the
new CS35PLUS, Raeton CC, and the second-generation Eado were assembled to defeat 39 autonomous and joint venture brands with
a strong performance of 23 crowns in the China Mass Production Performance Competition (CCPC), which demonstrates the
strength and style of Chang 'an Automobile as the leader of Chinese automobile brand industry. Supported by advanced technology,
Chang 'an Automobile successfully challenged the Guinness World Record TM honor- the largest auto-driving vehicle parade and
became the world's first car brand to successfully create this record.
     The brand is advancing steadily and the brand structure is clear. Chang'an Automobile implemented a multi-brand strategy,
formally released the four major business brands of Chang 'an Passenger Car, Middle-end Passenger Car, Oushang Automobile, and
Kaicheng Automobile, carried out brand structure landing projects, clarified market segmentation and development paths, and
accelerated collaborative development; Chang'an Automobile accelerated the promotion of Chang'an passenger car "brand upward",
focus on building brand positioning, brand constitution, enterprise identification system and business processes and other brand
planning and management systematization work; We will deepen brand research, strengthen data-driven operations, and enhance
brand asset management and management capabilities. In the "2018 China Brand Value Evaluation Information" issued by the State
Administration of Market Supervision and Administration, Chang 'an Automobile ranked second in the Chinese brand value
automobile industry with 35.835 billion yuan.




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                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report




                    Chapter 4                Business Discussion and Analysis

I、Overview

      The year 2018 coincided with the 40th anniversary of China's reform and opening up. During the period, China achieved the
largest economic transformation and social development. As an important pillar industry of the country, the automobile industry has
become the world's largest automobile market for 10 consecutive years and has achieved remarkable achievements. In 2018, the
automobile industry carried out the decisions of the Communist Party Central Committee and the State Council, insisted on the
overall key tone of the steady progress, regarded the supply side structural reform as the main line, actively promoted the industrial
transformation and upgrading, pushed forward the strategy of innovation driven development and promoted the high quality
development of the industry. In 2018, China's economy has shifted from a high-speed growth phase to a high-quality development
phase, while facing a complex and severe external situation. Affected by policy factors and macroeconomics, the Chinese auto
market has ended its growth momentum of the past 28 years. The cumulative sales volume of the whole year was 28.081 million
units, down 2.8% year-on-year, and the growth rate was 5.8 percentage points lower than the previous year. 23.71 million units of
Passenger cars were sold, down by 4.1% year-on-year. Among them, the SUV fell by 2.5% year-on-year, a sharp drop from 2017
growth; MPV sales fell by 16.2% year-on-year; due to the impact of joint venture product prices, the Chinese brand market share fell
year-on-year. Among the new energy passenger vehicles, the sales of pure electric passenger vehicles reached 788,000 units, a
year-on-year increase of 68.4%, and continued to maintain a high-speed growth momentum. As the automobile industry entered a
transition period, the industry concentration continued to increase, and the top ten group sales of automobile sales totaled 25.036
million units, accounting for 89.2% of total vehicle sales (88.5% in the same period of last year). The above data comes from "China
automobile industry production and sales express" (China Automobile Industry Association) and its industry information release.




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                                                                Chongqing Changan Automobile Company Limited 2018 Annual Report




                                       Production and sales of China's auto industry in 2018
                                           2018 Accumulative                               2017 Accumulative
                                                                     y-o-y increase                                  y-o-y increase
                                                production                                     production
                                                                         (%)                                           (%)
                                            (ten thousand)                                (ten thousand)
    Automobile                                    2780.9                  -4.2                   2808.1                   -2.8
        Passenger cars                            2352.9                  -5.2                   2371.0                   -4.1
        Sedan                                     1146.6                  -4.0                   1152.8                   -2.7
        MPV                                       168.5                   -17.9                   173.5                   -16.2
        SUV                                       995.9                   -3.2                    999.5                   -2.5
        Cross-passenger car                        42.0                   -20.8                    45.3                   -17.3
    New energy cars                                127                    59.9                    125.6                   61.7
        New energy Passenger cars                  107                    80.5                    105.3                    82
        EV                                         79.2                   65.5                     78.8                   68.4

      During the reporting period, Changan earnestly studied and implemented Xi Jinping’s thought on socialism with Chinese
characteristics for a new era and the spirit of the 19th Party Congress. With the key of "strengthening efficiency, promoting brand,
experience orientation and innovation breakthrough", Changan overcame various difficulties, withstood various pressures and
worked hard together to promote high quality development. In 2018, Changan Automobile (Group) achieved sales of 2,137,800 units,
with a market share of 7.6% and sold 1,479,700 units of Chinese brand cars. The main work in the reporting period is as follows:
      (1) The third-time entrepreneurship starting, strongly promoting strategic execution
      Changan Automobile was guided by the innovation and entrepreneurship plan and focused on the “1143” strategy to promote
the company's key business strategy decomposition, promote strategic measures such as improving efficiency, operating customers,
branding, marketing innovation, new energy, integrating resource development, jointing venture and cooperation. Changan conducted
strategic discussions on four areas of innovation and entrepreneurship, capital operation, brand building and forward-looking
technology to further clarify strategic thinking and initiatives.
      (2) Closely focusing on efficiency, promoting reform and innovation
      Since 2018, Changan Automobile has continued to deepen its reforms and implemented a series of vigorous and wide-ranging
reforms with efficiency as its core. The matrix transformation of R&D field has begun to take effect. CA-PDS 4.0 was officially
released, and the product development cycle was shortened from 36 months to 24 months. The matrix transformation of the power
sector was completed, and the full-time power project director was set up. The matrix operation mode was initially formed. The “1/2
Project” was rapidly advanced, the process optimization results were remarkable, and the management efficiency was greatly
improved. With the initial effect of the reform of the marketing field of “customer-centered, product and service as the main line”, the
new marketing business department was established to realize the integration of online and offline resources. The reform of the light
vehicle hybrid ownership system has steadily advanced. Changan has innovated incentive and restraint mechanisms, promoted the
matching of people and posts, optimized the organizational position system, promoted R&D projects and investment mechanisms,
fully implemented the deferred bonus plan, implemented the compensation reform project, and established a position system and
compensation system that is in line with the market to motivate employees.
      (3) Completing management weaknesses and improving development quality
      Changan Automobile regards efficiency as the vitality of the company, and strives to improve the quality of its operations. It
has established a matrix of project quality improvement projects and promoted 20 upgrading projects. Changan Automobile strongly
promoted the increase of revenue, cost reduction, control of investment, and reduction of the library, built system capabilities, and
solved the painful and difficult problems that affect the current efficiency improvement. The project team promoted the company's
operation quality by adopting precise resources to open source and increase income, focusing on product structure to optimize
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                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


product mix, optimizing logistics structure to reduce logistics costs.
      (4) Key product updating iterations, the results of technological innovations being significant
      CS35PLUS, new CS75, second-generation Eado, second-generation Eado XT, Eado DT, COS1° and many other new or
replacement products entered the market on schedule. CS85 COUPE made a stunning appearance at the Guangzhou Auto Show.
National Science and Technology Support Project-S10TGDI and H15TGDI two high-efficiency clean engines passed the national
acceptance. In the evaluation of the National Enterprise Technology Center issued by the National Development and Reform
Commission, Changan Automobile ranked first in the Chinese automotive industry for 10 consecutive years. Reaton CC won the
German Red Dot Design Award and successfully challenged the most severe crash test in the history of C-NCAP. .

                                                  List of products listed in 2018
    Date of listing           Model name                                             Model features
                                                  A compact family car that is stylish and safe. It is equipped with 1.6GDI and
                                                  1.4TGDI engine as a new generation of Eado.
                                                  The product model incorporates fashionable and dynamic elements to highlight the
                                                  youthfulness. The product is better than the previous generation in terms of styling,
                         Second-generation
     March 2018                                   interior and exterior jewelry texture, active and passive safety and driving comfort.
                         Eado
                                                  The new car adopts the 18th version of the collision five-star safety design, equipped
                                                  with 6 airbags, automatic emergency braking system, adaptive endurance, tire
                                                  pressure monitoring system, LED headlights and other safety and technology
                                                  configurations.
                                                  Stylish design, family-style dynamic grille, LED low beam with lens, light-guided
                                                  daytime running light, optical LED taillight, more than 45% skin-friendly microfiber
                                                  leather wrapping, two-color stitching process.
                                                  Equipped with a floating 10.25-inch LCD screen, in Call3.0 intelligent car
     March 2018          Eado DT                  interconnect system, intelligent driving computer, keyless entry, one-button start,
                                                  intelligent light control.
                                                  It is equipped with Blue Core 1.6L DVVT aluminum engine, advanced chassis
                                                  adjustment, EPS electronic steering assist system, ESP body electronic stability
                                                  system, HHC ramp assist system.
                                                  We introduce the international pioneering elements into the exterior design to create
                                                  a new urban SUV with a strong sense of the times. The overall shape is
                                                  domineering, the body is extremely powerful, and the tension is full and
                                                  coordinated.
     April 2018          New CS75                 The product is equipped with high-strength steel energy-absorbing frame body, with
                                                  new five-star safety standard, equipped with APA automatic parking system, AEB
                                                  emergency braking system, ACC full-speed adaptive cruise system, LCDA parallel
                                                  line auxiliary system, LDW lane departure warning system and AVM360 °
                                                  Panoramic parking assist system.
                                                  The new car continues the product positioning of the XT fashion sports, and
                                                  integrates with the international popular elements to further enhance the appearance
                         Second-generation        of the fashion sports, the quality of the interior, and create a domestic first-class
    August 2018
                         Eado XT                  compact hatchback boutique sedan.
                                                  The new car is equipped with safety features, 6 airbags, automatic emergency
                                                  braking system, adaptive endurance, tire pressure monitoring and other security


                                                                    13
                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                configurations, and equipped with 10.25-inch large screen, inCall3.0s and other
                                                smart technology configurations.
                                                Using the latest Changan family design, it creates a visually impactful product
                                                appearance. The overall style is stylish and dynamic, with detailed design to shape
                                                the aesthetic benchmark of small cars. It is equipped with two engines, EA14 and
                         Third-generation       EA15, and is matched with 5MT and DCT transmissions respectively. Equipped
    August 2018
                         Alsvin                 with a variety of fuel-saving technologies, the fuel consumption is as low as
                                                5.2L/100km. At the same time, it provides users with a high-quality experience
                                                through practical space and practical configuration, and fully interprets the new
                                                concept of fashion and practical sedan.
                                                CS35PLUS is characterized by styling, intelligence and quality. The overall shape
                                                technology, fashion, tough, interior technology, luxury, exquisite, equipped with
                                                ESP/ESC, tire pressure monitoring, panoramic sunroof, EPB electronic parking,
    October 2018         CS35PLUS
                                                ACC adaptive battery life, PAB active brakes and other technology configurations.
                                                The price range is 69,900-104,900 yuan, setting a new benchmark for the small SUV
                                                market of 70,000-100,000 yuan.

      (5) The new energy industry developing smoothly and "Shangri-La" plan gradually taking form
      The "Shangri-La" plan is accelerating. Chongqing Changan New Energy Automobile Technology Co., Ltd. was incorporated
and prepared for independent operation and capital introduction. Changan layout battery, IGBT, entry-level electric vehicles, and
promote cooperation with BYD, China Railway (IGBT). We have strategic cooperation with BYD, Weilai and other auto companies,
and deep integration with high-tech and Huawei technology companies, and the future integration of the national grid and special
calls to coordinate the future charging ecology, and signed a framework agreement with Chongqing to build a new energy industrial
park. "Shangri-La" plan has begun to take shape. New energy core technologies have made progress and many key technologies have
achieved breakthroughs. The new energy product line has been further enriched, and the cruising range has continued to improve. It
has successfully developed and launched Eado EV460, New Benben EV360, CS75PHEV and other products.
      (6) Intelligent innovation speeding up and industrial cooperation achievements appearing
      The intelligent strategy is solidly advanced. In August 2018, Changan Automobile released its intelligent strategy, “Beidou
Tianshu”, which aims to transform from a traditional automobile manufacturing enterprise to a smart travel technology company.
Changan cooperated with Tencent, Huawei, and Keda Xunfei to build a smart car industry alliance. The new CS75 is equipped with
APA 4.0, which realizes the L2-class intelligent driving mass production in China. The L3-class limited auto-driving technology has
been completed and entered into mass production development. 55 new CS55s are equipped with L3-class automatic driving
technology, which has completed the world's largest scale. The autopilot parade successfully challenged the Guinness World Record.
The L4-class unmanned driver achieved the first domestic demonstration operation and was in the leading position in the industry.
During the Zhibo Conference, 17,500 users registered to experience the Changan intelligent function. The intelligent manufacturing
construction has achieved initial success. The Liangjiang 2 factory was rated as the intelligent factory in Chongqing, and its welding
and stamping workshop was rated as the digital workshop in Chongqing. The intelligent manufacturing special project “Intelligent
Flexible High-speed Stamping New Mode Application” undertaken by Changan Automobile passed the municipal acceptance. .
    (7) Integrating industry's superior resources and creating a new development model
    Changan strengthens cooperation with advantageous resources inside and outside the industry, cooperates with BYD to develop
new energy battery technology, cooperates with FAW and Dongfeng, and deploys forward-looking technology. It has established a
joint venture with Weilai to concentrate on resources to build a pure electric platform. In addition, the cooperation with the
benchmarking companies in the Internet/communication industry has also made progress. Together with Tencent, the company has
established the Wutong Chelian, and the product technology development has progressed in an orderly manner. It has formed

                                                                 14
                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


strategic alliances with China Mobile and Baidu, and established a joint innovation center with Huawei to promote strategic
cooperation.
    “T3 Travel” was carried out in an orderly manner, and “Changan Travel” completed the layout of 7 major cities and operated
nearly 10,000 vehicles. Changan established a new energy “car to travel” technology company, and quickly transformed into a “trip
+ sales” model. Changan actively explored a new marketing model, and Chongqing's three new retail-operated stores, Chehemei
Auto Mall, were put into operation, and the nationwide 10 store pilots are advancing. The e-commerce platform sold 21,000 vehicles,
with a network maintenance of 465,000 orders and a financial sales of 16,000 units.
    (8) The brand moving steadily upwards with the clearer brand positioning and structure
    Changan officially released four major business brands of Changan passenger vehicle, middle and advanced passenger vehicle,
Oushang automobile and Kaicheng automobile, and launched a brand architecture project to accelerate coordinated development.
From the brand level of Changan automobile business, we will strengthen the brand system construction work, enhance the image of
the company's external communication, and vigorously promote the brand.
    (9) Overseas markets actively expanding, and overseas sales growing rapidly
    Changan optimizes its overseas development strategy, focuses on strategic cooperation projects in key markets, and develops
high-quality in America, Central and Eastern Africa, and Asia-Pacific markets. The annual export volume was 61,000 vehicles, a
year-on-year increase of 34.6%, which was historically high.
    (10) Introducing big data platform management, improving quality, reducing costs and increasing efficiency
    Changan fully promotes cost reduction and quality control, carries out full value chain cost management, grasps data and uses
the principle of “unified platform, unified data, and unified operation” to promote CA-DDM construction and builds a
comprehensive, real, transparent and shared big data platform, achieving over 90% of the core system coverage. The company
promotes the efficiency of the “Cheetah Program” by significantly improving management efficiency, and the process mobility rate
is nearly 100%.


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

                                        2018                                          2017
                                                                                                            Increase/decrease
                                                   Share of                                   Share of
                                                                                                             on a y-o-y basis
                               Sum                operating               Sum                operating
                                                                                                                   (%)
                                                income(%)                                  income(%)
 Operating revenue        66,298,270,389.77           100.00%         80,012,205,182.37         100.00%               -17.14%

 Industry
 Automobile               66,298,270,389.77           100.00%         80,012,205,182.37         100.00%               -17.14%


                                                                 15
                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


 Products
 Vehicles                   66,276,054,153.09            99.97%            79,980,063,484.58             99.96%               -17.13%

 Outsourcing                     22,216,236.68              0.03%              32,141,697.79              0.04%               -30.88%

 Area
 China                      63,892,840,365.38            96.37%            78,348,298,046.00             97.92%               -18.45%

 Overseas                     2,405,430,024.39              3.63%            1,663,907,136.37             2.08%                44.57%


(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

                                                                                                    Increase/decre
                                                                               Increase/decrease
                                                                                                         ase on a       Increase/decrease
                                                                   Gross       on a year-on-year
                      Operating Revenue    Operating Cost                                              year-on-year on a year-on-year
                                                                  margin        basis Operating
                                                                                                    basis Operating basis gross margin
                                                                                  Revenue (%)
                                                                                                         Cost (%)

Industry

automobile            66,298,270,389.77 56,583,468,369.14           14.65%                -17.14%            -18.42%        Up 1.34 points

Products

Sales of products     66,276,054,153.09 56,564,408,454.35           14.65%                -17.13%            -18.42%         Up 1.34 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

                                                                                                                   Increase/decrease on a
           Industry                   Item                          2018                        2017
                                                                                                                   year-on-year basis (%)

                            Sales volume                                   2,137,785                   2,872,456                 -25.58%

                            Production volume                              2,062,396                   2,814,792                 -26.73%
Automobile Industry
                            Stock volume                                     46,937                      46,660                    0.59%

                            Market share(%)                                 7.60%                       9.95%        Down 2.35 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.
Notes to the year-on-year change of the relevant data by over 30%
□ Applicable    √ Not applicable


                                                                     16
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


(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

                                                   2018                                    2017
                                                                                                                  Increase/decrease on a
 Industry                                                 Ratio in                                Ratio in
                         Item                                                                                       year-on-year basis
 classification                           Amount       operation cost        Amount          operation cost
                                                                                                                           (%)
                                                            (%)                                     (%)

 Automobile          Product Sale          5,656,441          99.97%         6,933,589                99.96%                     -18.42%
 Production          Outsourcing              1,906               0.03%            2,714                  0.04%                  -29.77%

 Total                                     5,658,347         100.00%         6,936,303                    100%                   -18.42%


(6)Notes to the change of the consolidated scope in the reporting year

√ Applicable       □ Not applicable
During the reporting period, Changan Automobile has added Chongqing Changan New Energy Automobile Technology Co., Ltd.,
Fuzhou Fuqing Changan New Energy Automobile Sales Co., Ltd., Guangzhou Changan New Energy Automobile Sales and Service
Co., Ltd., Xiamen Changan New Energy Automobile Sales and Service Co., Ltd. and Nanjing Changan New Energy Automobile
Sales and Service Co., Ltd. Changan has acquired Chongqing Changan Suzuki Automobile Co., Ltd. and Zhenjiang Demao Hairun
Equity Investment Fund Partnership (Limited Partnership). A total of seven companies were included in the consolidated statements.
Changan has liquidated Heilongjiang Changan Automobile Sales Co., Ltd., Xinjiang Changan Automobile Sales Co., Ltd., Harbin
Changan Automobile Technology Research Co., Ltd. and Shanghai Changan Automobile Engineering Technology Co., Ltd., and a
total of four companies are no longer 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)                                                                             5,374,405,160.90

Proportion of sales to top 5 customers in the annual sales (%)                                                                     8.11%

Proportion of sales amount of the related party in the top 5 customers(%)                                                        4.68%

Top 5 customers
                                                                                                                             Unit : Yuan

 Serial No.                     company                              Sales value                     proportion in total sales(%)

      1                          First                                      1,459,155,094.78                                     2.20%

                                                                     17
                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


        2                      Second                                    1,335,816,637.76                                2.01%

        3                      Third                                       958,757,083.78                                1.45%

        4                      Fourth                                      811,959,547.62                                1.22%

        5                       Fifth                                      808,716,796.96                                1.22%

                       total                                             5,374,405,160.90                                8.11%

Other descriptions of major customers
□ Applicable      √ Not applicable
Principal suppliers

Total purchase amount to top 5 suppliers (RMB)                                                                 7,961,460,531.71

Proportion of purchase to top 5 suppliers in the annual purchase (%)                                                     14.07%

Proportion of purchase amount of the related party in the top 5 suppliers(%)                                               6.05%

Top 5 suppliers
                                                                                                                       Unit : Yuan

                                                                                                   Proportion in the total
 Serial No.             Company name                           Purchase value
                                                                                                       purchase(%)

 1                              First                                    3,521,735,458.18                                6.22%

 2                             Second                                    1,389,088,291.94                                2.45%

 3                             Third                                     1,284,085,746.55                                2.27%

 4                             Fourth                                    1,018,878,772.01                                1.80%

 5                              Fifth                                      747,672,263.03                                1.32%

                       Total                                             7,961,460,531.71                               14.07%

Other descriptions of major suppliers
□ Applicable      √ Not applicable


3、Expenses

                                                                                                           Unit: Ten Thousand Yuan

                                                                       increase/decrease
            Item                2018                 2017                                        Description of major changes
                                                                            (%)

                                                                                             Mainly due to the increase in business
     Selling expense    5,283,255,346.48         3,978,124,859.65                32.81%     resources and promotion expenses during
                                                                                             the reporting period to promote sales.

      Management
                        2,782,755,531.47         2,663,645,058.45                 4.47%
        expense

 Financial expense       -427,062,035.06          -524,973,961.02                18.65%

     R&D expense        2,543,265,379.12         2,616,651,435.07                -2.80%



                                                                 18
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


4、Research and Development Expenditure

√Applicable     □ Not applicable
       In 2018, Changan Automobile invested 3.823 billion yuan in product and technology project development, and continued to
build industry-leading research and development strength.


R&D investment Table


                                                      2018                      2017                   Changes in ratio

Labor Number                                                   7,722                    7,177                              7.59%

Proportion of labor in the Company                           21.43%                    18.34%                 Up 3.09 pionts

Investment value (yuan)                           3,823,210,086.54           3,631,454,231.54                              5.28%

Proportion of investment in the
                                                              5.77%                    4.54%                  Up 1.23 pionts
revenue

Capitalization (yuan)                             1,279,944,707.42           1,014,802,796.47                             26.13%

Proportion of capitalization in R&D
                                                             33.48%                    27.94%                   Up 5.54 pionts
investment

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                                        2018                 2017            Increase/decrease(%)

 Subtotal of cash inflows from operating activities             81,996,970,246.85      88,973,892,693.73                    -7.84%

 Subtotal of cash outflows from operating activities            85,884,445,549.29      90,097,363,470.56                    -4.68%

 Net cash flows from operating activities                       -3,887,475,302.44      -1,123,470,776.83                  -246.02%

 Subtotal of cash inflows from investing activities              2,488,521,707.35       8,760,050,883.48                   -71.59%

 Subtotal of cash outflows from investing activities             9,057,241,752.33       4,578,162,255.41                   97.84%

 Net cash flows from investing activities                       -6,568,720,044.98       4,181,888,628.07                  -257.08%

 Subtotal of cash inflows from financing activities              1,195,280,377.20       1,163,689,175.66                    2.71%

 Subtotal of cash outflows from financing activities             2,547,968,288.91       5,738,660,114.27                   -55.60%

 Net cash flows from financing activities                       -1,352,687,911.71      -4,574,970,938.61                   70.43%

 Net increase in cash and cash equivalents                     -11,803,151,475.73      -1,542,126,976.52                  -665.38%

Notes to the year-on-year change of the relevant data by over 30%
√ Applicable   □ Not applicable

                                                                  19
                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


        In 2018, “net cash flow from operating activities” decreased by RMB 2,764.01 million compared with the previous year,
mainly due to the significant decrease in “cash received from sales of goods and services” compared with the previous year; “net
cash flow from investing activities” "The decrease of RMB 10,750.61 million compared with the previous year was mainly due to the
sharp decline in the "cash received from investment income" compared with the previous year, and the "cash for the purchase and
construction of fixed assets and intangible assets" increased significantly from the previous year; Net cash flow increased by RMB
3,222.28 million compared with the previous year, mainly due to the decrease in “payment of cash paid for debts” compared with the
previous year (the payment of corporate bonds due in the previous year) and “cash for dividends distributed” 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

                                Dec.31,2018                      Dec.31,2017

                                             Ratio in                        Ratio in     Increase/
         Item                                                                                                    instructions
                            Amount          total assets     Amount         total assets decrease (%)
                                              (%)                           (%)

                                                                                                        Reduction in cash received
                                                                                                        from sales of goods, reduction
                                                                                                        in    cash    received        from
                                                                                                        investment income, increase
Cash                    9,980,544,526.14       10.68% 22,631,536,496.53        21.33%     -10.65%       in cash paid for purchase and
                                                                                                        construction of fixed assets
                                                                                                        and intangible assets, and
                                                                                                        increase in cash paid for
                                                                                                        investment.

Notes receivable        1,409,419,600.50        1.51% 1,806,807,193.04           1.70%     -0.19%

Inventory               4,917,420,457.19        5.26% 4,666,183,421.80           4.40%     0.86%

Investment property          7,329,561.28       0.01%        7,556,272.84        0.01%     0.00%

Long-term equity
                       13,275,170,118.83       14.20% 14,098,523,896.97        13.28%      0.92%
investments

Fixed assets           22,161,054,058.31       23.70% 19,044,533,667.68        17.95%      5.75%

Construction in         5,383,844,030.75        5.76% 3,234,173,155.52           3.05%     2.71%        New    investment       in    NE1

                                                                    20
                                                                      Chongqing Changan Automobile Company Limited 2018 Annual Report


progress                                                                                                          project, global R&D phase I
                                                                                                                  project, automobile product
                                                                                                                  structure adjustment project,
                                                                                                                  H fifth phase project and
                                                                                                                  V301 project.

Short-term loans              190,000,000.00           0.20%      185,000,000.00            0.17%      0.03%

Long-term loans                               -        0.00%        6,575,973.33            0.01%      -0.01%


2、Assets and liabilities measured by fair value

                                                                                                                                         Unit: Yuan

                                                             Cumulative fair       Impairment            Amount         Amount
                                    Comprehensive
                 Amount at year                               value change         provisions in      purchased in the sold in the Amount at year
                                    income     in      the
    Item              beginning                               recorded into        the reporting       current period    current         end
                                    reporting period
                                                                 equity               period                             period

Financial assets

Financial
assets
                 164,365,000.00                          -   208,339,952.31                        - 1,157,616,359.00              1,530,321,311.31
available
for sales

Subtotal of
financial        164,365,000.00                          -   208,339,952.31                        - 1,157,616,359.00              1,530,321,311.31
assets

Others

Total            164,365,000.00                          -   208,339,952.31                        - 1,157,616,359.00              1,530,321,311.31

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                                                         332,390,911.34        Used to open the acceptance deposit

Notes          receivable         and
                                                             469,622,570.00        Notes receivable pledge to issue notes payable
accounts receivable

                                                                                   Obtain    liquidity    borrowings    and   obtain   commercial
Intangible assets                                              18,499,267.20
                                                                                   acceptance bills

                                                                              21
                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


            Total                                    820,512,748.54

V. Analysis of Investment

1、General information

√ Applicable    □ Not applicable

                                                         External investment

  Investment Amount in the report period
                                                   Investment Amount in 2017(RMB)                            Variance rate
                  (RMB)

                          2,933,579,617.67                                     1,217,743,029.48                                  140.90%

                                                        Particulars of investees

                Company Name                                Principal business                     Proportion in the investees’ equity (%

                                             Design, manufacture and sale of Peugeot,
Changan Peugeot Citroen Automobile Co.,
                                             Citroen and DS brand cars and light                                                      50%
Ltd.
                                             commercial vehicles.

                                             Engineering and technology research and
                                             experimental development; product design,
                                             industrial design; technology development,
Guoqi (Beijing) Intelligent Network          consulting, promotion, service, transfer; sales
Association Automotive Research Institute of mechanical equipment, hardware, electrical,                                            8.33%
Co., Ltd.                                    electronic products, electronic components;
                                             import and export of goods, technology import
                                             and export, agent Export; technical testing,
                                             property management.

                                             Technology         development,           technical
                                             consultation, technical services, technology
Beijing Wutong Chelian Technology Co.,       transfer; economic and trade consultation;
                                                                                                                                      49%
Ltd.                                         design, production, agency, advertising; import
                                             and export of goods, technology import and
                                             export; sales of self-developed products.
                                             Automobile and parts import and export,
Changan Automobile Russia Co., Ltd.                                                                                                 100%
                                             automobile distribution and other services.
                                             Production and sales of self-produced cars,
                                             engines and their parts and components, sales
Chongqing Changan Suzuki Automobile
                                             of    self-produced     products,    provision   of                                    100%
Co., Ltd.
                                             relevant after-sales services, and engaged in
                                             research and development work.
                                             (1)    Handling       financial     and   financing
Weapon Equipment Group Finance Co.,          consultants, credit certificates and related
                                                                                                                                    3.83%
Ltd.                                         consulting and agency services for member
                                             units; (2) assisting member units in realizing

                                                                     22
                                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                        the payment and payment of transaction funds;
                                                        (3) approved insurance agency business; (4)
                                                        for members The unit provides guarantees; (5)
                                                        handles         entrusted        loans        and     entrusted
                                                        investments        between         member           units;        (6)
                                                        handles bill acceptance and discounting for
                                                        member units; (7) handles internal transfer
                                                        settlement        between         member            units       and
                                                        corresponding settlement and liquidation plans
                                                        (8) absorbing the deposits of member units; (9)
                                                        handling loans and financing leases for
                                                        member units; (10) engaging in interbank
                                                        lending; (11) issuing financial company bonds
                                                        upon approval; (12) underwriting corporate
                                                        bonds of member units; (13) Equity investment
                                                        in financial institutions; (14) Investment in
                                                        securities; (15) Consumer credit, buyer credit
                                                        and financial leasing of member units.

                                                        Technology development, technical consulting,
                                                        technical services, technology transfer in the
                                                        field   of        power      semiconductors;             design,
Hunan Guoxin Semiconductor Technology
                                                        research and development, testing, sales of                                                                           25%
Co., Ltd.
                                                        power semiconductors; import and export of
                                                        goods      and      technology;          conference             and
                                                        exhibition services.


2、Major equity investment in the reporting period

                                                                                                                                                                     Unit: Yuan

                                                                                                                            Progress on
  Company      Principal     Investment    Investment       Share-holding      Capital                      Investment                         Any        Disclosure     Disclosure
                                                                                             Partner                       book closing
     name       business       mode          amount               ratio        source                         period                        litigations   date(in case) index(in case)
                                                                                                                                 date


             Design,                                                                                                                                                    Announcement
                                                                                                                                Capital
             manufacture                                                                                                                                                  on Related
                                                                                                                                increase
Changan      and sale of                                                                                                                                                Transactions of
                                                                                                                            completed,
Peugeot      Peugeot,                                                                        Peugeot                                                                    Capital Increase
                             Increasing                                        Its own                       Indefinite    industrial and
Citroen      Citroen and                  1,800,000,000           50%                        Citroen                                           No         2018-01-13      of Changan
                               capital                                         capital                       duration       commercial
Automobile   DS brand cars                                                                   Group                                                                      Peugeot Citroen
                                                                                                                            registration
Co., Ltd.    and light                                                                                                                                                  Automobile Co.,
                                                                                                                            procedures
             commercial                                                                                                                                                  Ltd. (Bulletin
                                                                                                                            completed
             vehicles.                                                                                                                                                   No: 2018-03)


Total              --            --       1,800,000,000            --               --           --              --                --           --             --             --




                                                                                     23
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


3、Major non-equity investment in the reporting period

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


4、Investment of Financial Assets

(1)Equity-holdings in financial enterprises


√ Applicable     □ Not applicable

                                                   Opening
                             Initial   Opening                  Closing     Closing                 Gain/loss in
                                                    equity                              Closing
 Company Company investment             equity                   equity      equity                 the reporting Accounting    Equity
                                                    holding                            book value
   name         variety   cost (RMB    Holdings                holdings    Holdings                 period (RMB      title       source
                                                     ratio                             (RMB Yuan)
                             Yuan)      (share)                 (share)     (%)                      Yuan)
                                                      (%)

                                                                                                                   Tradable
Southwest Securities                                                                                                             Initial
                           50,000,000 35,500,000       0.63% 35,500,000        0.63% 123,540,000     1,775,001.20 financial
 Securities Firm                                                                                                               investment
                                                                                                                    assets

(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 Equity

□Applicable      √ Not applicable
There is no selling of major equity.


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



                                                                  24
                                                                  Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                                                                                             Main
                                                Registered      Equity                                            Total
                    Name                                                           Main businesses                         operating     Net profit
                                                 capital         held                                            assets
                                                                                                                            income

Nanjing Changan Automobile Co., Ltd.             60,181        84.73%         Produce and sell auto and parts   125,443     243,106       25,854

Chongqing         Changan       Automobile
                                                  3,000         100%          Produce and sell auto and parts    74,959     162,391       25,679
Customer Service Co., Ltd.
Chongqing           Changan           Chelian
                                                  8,850         100%          Produce and sell auto and parts   105,352     36,328        -15,139
Technology Co., Ltd.
Chongqing       Changan     New       Energy
                                                  9,900         100%          Produce and sell auto and parts   117,997      8,306        -24,380
Automobile Technology Co., Ltd.

Changan Mazda Engine Co., Ltd.                  20,996USD        50%          Produce and sell auto and parts   212,264     195,640        7,654

Jiangling Holdings Co., Ltd.                     200,000         50%          Produce and sell auto and parts   930,108     412,282       -81,874

Changan Ford Automobile         Co., Ltd        24,100USD        50%          Produce and sell auto and parts   4,217,594 4,975,428       -80,399

Changan Mazda Automobile Co. Ltd                11,097USD        50%          Produce and sell auto and parts   1,337,457 2,004,878      252,640

Changan Peugeot Citroen Automobile
                                                 760,000         50%          Produce and sell auto and parts   669,644     91,513        -87,408
Co., Ltd.

Subsidiaries acquired and sold in the reporting period

√ Applicable     □ Not applicable
During the reporting period, Changan Automobile has added Chongqing Changan New Energy Automobile Technology Co., Ltd.,
Fuzhou Fuqing Changan New Energy Automobile Sales Co., Ltd., Guangzhou Changan New Energy Automobile Sales and Service
Co., Ltd., Xiamen Changan New Energy Automobile Sales and Service Co., Ltd. and Nanjing Changan New Energy Automobile
Sales and Service Co., Ltd. Changan has acquired Chongqing Changan Suzuki Automobile Co., Ltd. and Zhenjiang Demao Hairun
Equity Investment Fund Partnership (Limited Partnership). A total of seven companies were included in the consolidated statements.
Changan has liquidated Heilongjiang Changan Automobile Sales Co., Ltd., Xinjiang Changan Automobile Sales Co., Ltd., Harbin
Changan Automobile Technology Research Co., Ltd. and Shanghai Changan Automobile Engineering Technology Co., Ltd., and a
total of four companies are no longer included in the consolidated statements.

                                                             Acquisition and disposal of
                                                                                                       On the overall production and operation
                         Name                              subsidiaries during the reporting
                                                                                                                and performance impact
                                                                         period

Chongqing Changan New Energy Automobile
                                                                  Newly established                               No major influence
Technology Co., Ltd.

Fuzhou Fuqing Changan New Energy Automobile
                                                                  Newly established                                       None
Sales Co., Ltd.

Guangzhou Changan New Energy Automobile
                                                                  Newly established                                       None
Sales and Service Co., Ltd.

Xiamen Changan New Energy Automobile Sales
                                                                  Newly established                                       None
and Service Co., Ltd.

Nanjing Changan New Energy Automobile Sales                       Newly established                                       None

                                                                         25
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


and Service Co., Ltd.

Chongqing Changan Suzuki Automobile Co., Ltd.                     Acquisition                         Major influence

Zhenjiang Demao Hairun Equity Investment Fund
                                                                  Acquisition                       No major influence
Partnership (Limited Partnership)

Heilongjiang Changan Automobile Sales Co., Ltd.                   Liquidation                              None

Xinjiang Changan Automobile Sales Co., Ltd.                       Liquidation                              None

Harbin Changan Automobile Technology
                                                                  Liquidation                              None
Research Co., Ltd.

Shanghai Changan Automobile Engineering
                                                                  Liquidation                              None
Technology Co., Ltd.


VIII. Structural main business under the company control

□Applicable   √Not applicable


IX. The company's future development prospect

     1、Industry competition pattern and trend of development
     Due to uncertainties such as trade frictions, the global GDP growth will face downside risks. IMF forecasts that global GDP
growth will keep around 3.5-3.6% in 2019 and 2020, and even slow down to 2.9% in 2020.
     China's external environment is undergoing significant changes, and the transformation and upgrading of China's economy is
climbing the slope and overcoming the difficulties. China's economy is generally stable with variations and worries. The GDP growth
is expected to be 6.0-6.5% for 2019. The automobile industry is an important component of consumption, ranking first and
accounting for more than 10% of the total social retail sales, but there is a downward trend.
     Policy Trend: China strengthens the sustained reform, promotes consumption, reduces taxes and fees, and encourages the
innovation, further supports the excellent and strong enterprises, intensifies the supervision, and stimulates the development of the
automobile industry. However, under the background of environment-protection acceleration, subsidy recession, acceleration of
opening up, the automobile industry is facing a test.
     Consumption trend: The consumption upgrade trend is obvious. The proportion of sales from over 100,000 -yuan vehicles is
increasing year by year. The distinct regional differences in China bring about diversification and gradient development of
automobile demand. Internet Aborigines have gradually become the main consumer of automobiles with strong demand for
personalization and fashion. We can occupy consumers' minds only by strengthening high-quality and diversified products and
services.
     Technology Trend: The breakthroughs in big data, chips, artificial intelligence and communication technology (5G) will bring
subversive changes to the social, industrial and business models. Cross-border integration, mutual benefit and win-win situation, and
fulfillment of commitments will be the general trend of intelligent development. At the same time, 2025 will be the key turning point
for the return of electronics to market, demand and technology.
     Competition situation: The competition pattern of automobile industry is further chaotic with the differentiated competitions. It
mainly manifests that the multinational automobile enterprises regard China as their main battlefield; the prices of joint venture
brands are exploring downward with continuous price wars and shrinking product gross profit; Chinese brands continue to integrate
resources to develop electrification and intellectualization; new forces of automobile manufacturing enter the stage of mass
production.
                                                                   26
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


     2、Development strategy of the Company
     Faced with the new normal status of "low growth, micro profit" in the automobile market, Chang'an automobile will conduct the
reform and innovation, stimulate vitality, focus on the core part, integrate resources, strengthen efficiency and enhance profitability
with "2025 vision planning" as the traction. Driven by innovation, the "efficiency" will become the core competitiveness of the
company. Four strategic measures should be taken as the starting point to achieve the third entrepreneurship - innovative
entrepreneurship plan.
     We should adhere to the two legs of independence and joint venture, insist on the coordination of traditional business and new
business, build a world-class automobile enterprise, transform from serving customers to operating customers, from operating
products to brand, from traditional products to intelligent + new energy products, and from traditional enterprises providing products
to intelligent travel technology companies.
     3、Business plan
     The business objective of the board of directors of the company in 2019 is: work hard to produce and sell more than 2.15 million
vehicles. In order to achieve the above objectives, the company focuses on the six quality improvement requirements of
"development, reform, party building, scientific and technological innovation, management and three key battles". With the four
strategic measures of upgrading brand, integrating resources, innovative marketing and opening up overseas as the grab, the company
deepens reform, improves efficiency, vigorously grasps marketing, achieves the quality leadership and makes every effort to promote
the third entrepreneurship-innovative entrepreneurship plan of Chang'an Automobile. The key work of the company is as follows:
firstly, make a painful determination to improve the quality of operation; secondly, persevere and unswervingly build efficiency as
the core competitiveness of the organization; thirdly, optimize the system and unswervingly achieve marketing breakthroughs;
fourthly, focus on the core business, and unswervingly create classic products; fifthly, go straight to the front, and unswervingly
transform to operating customers; sixthly, persevere in promoting brand development; seventhly, deepen the strategy and firmly
implement the Shangri-La plan; eighthly, promote the Beidou Tianshu plan down-to-earth and unswervingly; ninthly, break through
the key points and unswervingly develop overseas business; tenthly, integrate resources and unswervingly break through new
business; Eleventhly, deepen reform and unswervingly stimulate organizational innovation vitality; twelfthly, improve cooperation of
joint ventures and promote the strategic adjustment. Thirteenthly, utilize the culture of Party building to guide production and
operation.
     4、Capital requirement and use plan of 2019
     In order to achieve the company's strategic objectives, it is expected that in 2019 the investment in fixed assets will mainly
guarantee the investment of new product projects, encourage the improvement of core competence, focus on resources to build core
R&D and brand publicity capabilities such as intellectualization, new energy, shape-creating, and so on. Equity investment is mainly
used for intellectualization, new energy, brand promotion, core competence construction and overseas development. According to the
progress of the projects and the operation and financing environment, the company will study and formulate a variety of financing
plans and plans for the use of funds to improve the efficiency of the use of funds and reduce the cost of funds.
     5、Possible risks
     Firstly, the macroeconomic downside risks. China's development is still in and will remain in an important period of strategic
opportunities for a long time. The world is facing unprecedented changes in a century, in which opportunities coexist with danger.
Economic operation is stable and changing, the external environment is complex and severe, the economy is facing downward
pressure, the consumer confidence of residents is insufficient, the car market is seriously declining, and the growth target of
expanding domestic demand is under pressure.
     Measures: We should strengthen the sense of suffering, seize the main contradictions and solve them pertinently; strengthen the
macro-situation research and judgment, and increase policy efforts, take the initiative to seize the opportunity; strengthen the
communication of local policies in key regions, and adjust the promotional plans properly.
     Secondly, the risk of profit reduction of joint ventures: the future automobile market is featured with more new products and
                                                                  27
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


faster price reduction. Taking 2018 as an example, according to incomplete statistics, 578 new products (including 154 brand-new
models) are on the market and 920 products are on sale. Over the next three years, multinational automobile companies will
accelerate their localization, and Chinese brands and new automobile manufacturers will continue to brand up, which compelled joint
venture brands to cut sales price under competitive pressure, and the product profit margins will shrink fast.
     Measures: Focus on products, accelerate product replacement and new product introduction, and accelerate the localization of
components.
     Thirdly, the efficiency risk of corporate organizational mechanism. The current organizational mechanism is difficult to fully
stimulate the vitality and efficiency of personnel, and does not meet the strategic needs of state-owned enterprise reform in the new
era; the process efficiency is not improved significantly, and the organizational ability to support the strategic landing is facing great
challenges.
     Measures: Explore the overall reform plan of the organizational system, establish an incentive mechanism with external
competitiveness, and attract external talents.


X. Registration form for reception, research, communication, interview,etc. during the
reporting period

                                       Type of
       Date            Manner         Reception                                              Index
                                        Object

                                                     For details, see the January 5, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.4                           Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: January 4, 2018 investor
                    Survey
                                                     relations activities record sheet

                                                     For details, see the January 15, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.11                          Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: January 11, 2018 investor
                    Survey
                                                     relations activities record sheet

                                                     For details, see the January 19, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.17                          Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: January 17, 2018
                    Survey
                                                     investor relations activities record sheet

                                                     For details, see the January 19, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.18                          Institution       (http://irm.cninfo.com.cn) on the Changan automobile: January 18, 2018 investor
                    Survey
                                                     relations activities record sheet

                                                     For details, see the January 25, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.24                          Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: January 24, 2018
                    Survey
                                                     investor relations activities record sheet

                                                     For details, see the January 30, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.1.26                          Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: January 26, 2018
                    Survey
                                                     investor relations activities record sheet

                                                     For details, see the February 13, 2018 Shenzhen stock exchange interactive
                    On-Site
2018.2.12                          Institution       (http://irm.cninfo.com.cn) on the Changan Automobile: February 12, 2018
                    Survey
                                                     investor relations activities record sheet

2018.3.6            On-Site        Institution       For details, see the March 8, 2018 Shenzhen stock exchange interactive

                                                                   28
                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


            Survey                  (http://irm.cninfo.com.cn) on the Changan Automobile: March 6, 2018 investor
                                    relations activities record sheet

                                    For details, see the March 12, 2018 Shenzhen stock exchange interactive
            On-Site
2018.3.8              Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: March 8, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the March 16, 2018 Shenzhen stock exchange interactive
            On-Site
2018.3.13             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: March 13, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the March 19, 2018 Shenzhen stock exchange interactive
            On-Site
2018.3.15             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: March 15, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the July 23, 2018 Shenzhen stock exchange interactive
            On-Site
2018.7.19             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: July 19, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the July 26, 2018 Shenzhen stock exchange interactive
            On-Site
2018.7.24             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: July 24, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the September 3, 2018 Shenzhen stock exchange interactive
            On-Site
2018.8.31             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: August 31, 2018 investor
            Survey
                                    relations activities record sheet

                                    For details, see the September 6, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.5              Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 5, 2018
            Survey
                                    investor relations activities record sheet

                                    For details, see the September 11, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.10             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 10, 2018
            Survey
                                    investor relations activities record sheet

                                    For details, see the September 14, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.13             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 13, 2018
            Survey
                                    investor relations activities record sheet

                                    For details, see the September 17, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.14             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 14, 2018
            Survey
                                    investor relations activities record sheet

                                    For details, see the September 19, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.18             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 18, 2018
            Survey
                                    investor relations activities record sheet

                                    For details, see the September 21, 2018 Shenzhen stock exchange interactive
            On-Site
2018.9.19             Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 19, 2018
            Survey
                                    investor relations activities record sheet

            On-Site                 For details, see the September 27, 2018 Shenzhen stock exchange interactive
2018.9.25             Institution
            Survey                  (http://irm.cninfo.com.cn) on the Changan Automobile: September 25, 2018

                                                  29
                                                   Chongqing Changan Automobile Company Limited 2018 Annual Report


                                          investor relations activities record sheet(1)

                                          For details, see the September 27, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.9.25                   Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 25, 2018
                  Survey
                                          investor relations activities record sheet(2)

                                          For details, see the September 28, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.9.26                   Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 26, 2018
                  Survey
                                          investor relations activities record sheet(1)

                                          For details, see the September 28, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.9.26                   Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 26, 2018
                  Survey
                                          investor relations activities record sheet(2)

                                          For details, see the September 28, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.9.27                   Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: September 27, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the October 12, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.10.10                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: October 10, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the October 22, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.10.18                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: October 18, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the October 26, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.10.26                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: October 26, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the November 23, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.11.21                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: November 21, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the November 26, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.11.23                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: November 23, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the November 29, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.11.27                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: November 27, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the December 18, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.12.14                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: December 14, 2018
                  Survey
                                          investor relations activities record sheet

                                          For details, see the December 20, 2018 Shenzhen stock exchange interactive
                  On-Site
2018.12.18                  Institution   (http://irm.cninfo.com.cn) on the Changan Automobile: December 18, 2018
                  Survey
                                          investor relations activities record sheet

Reception Times                                                                                                   33

Number of Agencies                                                                                                85



                                                        30
                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


Number of Individuals                                                                                   0

Number of other entities                                                                                0

Whether to disclose undisclosed important
                                                                                                        No
information




                                                31
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report




                                     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. Company’s reported profit distribution plan and equity shares in line with the relevant provisions of the Articles of
Association and relevant provisions.
     During the reporting period, profit distribution plan and capital reserves converting into share capital plans conforming to the
relevant provisions of the company's articles of association, etc.

                                             Special Statement for Cash Dividend Policy

Whether comply with the company's articles of association or requirements of
                                                                                            Yes
resolutions of the shareholders' general meeting:

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
                                                                                            Yes
their views and demands, whether the legitimate rights and interests get fully protected:

Whether cash dividend policy is adjusted or changed, whether the conditions and
                                                                                            Not Applicable
procedures are compliant and transparent:

     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
     2016 annual profit distribution plan is: Based on the existing total shares of 4,662,886,108, distribute cash of RMB 6.42 yuan
(including tax) to all the shareholders every 10 shares.
     2017 annual profit distribution plan is: Based on the existing total shares of 4,802,648,511, 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 4,802,648,511, distribute cash of RMB 0.18 yuan
(including tax) to all the shareholders every 10 shares.




                                                                     32
                                                                Chongqing Changan Automobile Company Limited 2018 Annual Report




Share out Cash Bonus Table for last three years
                                                                                                                               Unit: Yuan

                                                                         Net profit attributable to        The net profit ratio (%)
                                      Cash dividend amount (tax            shareholders of listed       attributable to shareholders of
              Year
                                               included)              companies in dividends annual          listed companies in
                                                                         consolidated statements           consolidated statements

              2018                                    86,447,673.20                   680,728,392.03                             12.70%

              2017                                2,141,981,235.91                  7,137,234,723.47                             30.01%

              2016                                3,083,300,344.06                 10,285,284,120.57                             29.98%


Ⅱ. Preplan of profit allocation and capital reserve converting into share equity during the
reporting period

For every 10 shares to send bonus shares                                                                                              0

For every 10 shares dividend number (RMB) (tax included)                                                                            0.18

The equity base of distribution plan(shares)                                                                               4,802,648,511

Total cash dividends (yuan) (tax included)                                                                                86,447,673.20

Distributable profits (yuan)                                                                                           34,682,279,143.32

Proportion (%) of cash dividends to total profit distribution                                                                     100%

                                                        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 2018 is RMB199,107,092.93 yuan, added with early undistributed profit of RMB36,640,962,334.05 yuan, minus the
allocated cash dividend of RMB2,157,790,283.66 yuan during the reporting period, so at the end of 2018 the undistributed profits
can be used for distribution is RMB 34,682,279,143.32 yuan. At the end of 2018, monetary fund balance of the parent company is
RMB 7,310,973,018.99 yuan.
     2018 annual profit distribution plan is: Based on the existing total shares of 4,802,648,511, send cash of RMB 0.18 yuan
(including tax) to all the shareholders every 10 shares with total cash of RMB 86,447,673.20 yuan (including tax).


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.
                  Commit
                                                                   Commitme        period for
 Commitments         ment            Commitment content                                                       Performance
                                                                      nt time     commitment
                     entity

                                                                    33
                                                                  Chongqing Changan Automobile Company Limited 2018 Annual Report


                              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
Share      limited China                                                                        China Changan did not sell company
                              months since the listing, but can be    Oct., 2017   36 months
commitment          Changan                                                                     shares during the reporting period
                              transferred after 36 months
                              according to relevant provisions of
                              China Securities Regulatory
                              Commission and Shenzhen Stock
                              Exchange.

                              In order to avoid and eventually
                              solve the possible competition or
                              potential competitors, better
                              maintain the interests of investors,
                              the company controlling shareholder
                                                                                                The Harbin Hefei Automobile
                              China Changan made the
Other small                                                                                     Industry Group Co at present is still
                   China      commitment: In two consecutive         September,
shareholders                                                                                    running at a loss, The conditions have
                   Changan years profit of Harbin Hf                 2010
commitment                                                                                      not yet reached the profitable for two
                              Automobile Industry Group Co,
                                                                                                consecutive years.
                              With the continuous development
                              ability and management level is
                              improved significantly. Under such
                              condition, the enterprise will be
                              affiliated into the company.

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.



                                                                      34
                                                             Chongqing Changan Automobile Company Limited 2018 Annual 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 “32. 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 has added Chongqing Changan New Energy Automobile Technology Co., Ltd.,
Fuzhou Fuqing Changan New Energy Automobile Sales Co., Ltd., Guangzhou Changan New Energy Automobile Sales and Service
Co., Ltd., Xiamen Changan New Energy Automobile Sales and Service Co., Ltd. and Nanjing Changan New Energy Automobile
Sales and Service Co., Ltd. Changan has acquired Chongqing Changan Suzuki Automobile Co., Ltd. and Zhenjiang Demao Hairun
Equity Investment Fund Partnership (Limited Partnership). A total of seven companies were included in the consolidated statements.
Changan has liquidated Heilongjiang Changan Automobile Sales Co., Ltd., Xinjiang Changan Automobile Sales Co., Ltd., Harbin
Changan Automobile Technology Research Co., Ltd. and Shanghai Changan Automobile Engineering Technology Co., Ltd., and a
total of four companies are no longer 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
                                                                                                                             395
Yuan)

A continuous years of domestic accounting firms
                                                                                                                              12
audit service

Domestic accounting firm of Certified Public
                                                                                                              Qiao Chun, Hu Yan
Accountants name

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 2017 annual shareholders' meeting, the company hired Ernst &Young Huaming
certified public accountants (special ordinary partnership) as the company's 2018 annual internal control audit certified public
                                                                35
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


accountants. In 2018 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 1.27 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 30th meeting of the 7th board of directors, A bill to cancel some stock options of the Company was deliberated and passed
on Apr 17th, 2018, and 10,826,600 stock options would be cancelled. For details, please refer to The announcement of cancellation
about some stock options of the company (Announcement Number: 2018-23) on Apr 18th, 2018. On May 24th, 2018, the company
disclosed Notice on the completion of cancellation about some stock options (Announcement Number: 2018-35), 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.




                                                                  36
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


2、Assets or equity acquisition, sales related transactions

     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
      □Applicable √ Not-applicable
     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

                                                                             Temporary
                    Name of temporary announcement                         announcement         Temporary announcement site name
                                                                                  date

Announcement about related transaction of replenishment chang 'an
                                                                           Jan, 13th, 2018           http://www.cninfo.com.cn
Peugeot Citroen automobile co., LTD

Related transactions announcement about renewing 《Daily
Framework Agreement For Related Transactions》、《Property Leasing         Apr, 4th, 2018            http://www.cninfo.com.cn
Framework Agreement》、《Integrated Service Agreement》

Announcement about increasing estimated amount of 2018 daily
                                                                          Apr, 18th, 2018            http://www.cninfo.com.cn
related transaction

Related Transactions Announcement that China South Industries
                                                                           May, 7th, 2018            http://www.cninfo.com.cn
Group Co., Ltd. provides financial service for the company (Note 1)

Related transaction announcement thet Chongqing Automobile
                                                                           May, 7th, 2018            http://www.cninfo.com.cn
Finance Co., Ltd. provides financial services (Note 2)

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., 1st 2019)
In 2019, China South Industry Group Finance Co.,Ltd will provide the following services for the company:

                                                                   37
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


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., 1st 2019)
In 2019, Changan auto Finance will provide 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


                                                                    38
                                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


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
There’s no entrusted loan during the reporting period.


4、Other major contract

□Applicable   √ Not-applicable
There’s no other major contract during the reporting period.


XVIII. Social responsibility

Fulfill social responsibility of targeted poverty alleviation
√ applicable □ not applicable

       In 2018, Changan Automobile positively responded to the "poverty alleviation plan for the 13th Five-Year-Plan period ", and
fully implemented the guiding principles of the Eighteenth National Congress of the CPC , the third , fourth, fifth, sixth plenums of
the 18th CPC Central Committee, poverty alleviation and development meeting of the central government. Changan Automobile
promoted the poverty alleviation through society and education, public welfare and public utilities construction, etc in full
compliance with the decisions and arrangements of the Party Central Committee and the State Council based on the enterprise actual
situation to push forward the better and faster economic and social development of poverty-stricken area such as Luxi and Yanshan
Counties of Yunan Province and Pengshui and Youyang Counties of Chongqing Municipality.
1、In 2018, precise poverty alleviation in "two counties" of Yunnan
      (1) The company donated RMB 11 million to Luxi County.
      a. On education poverty alleviation projects: firstly, invest 2 million yuan to improve the teaching facilities of Santang Town
Junior Middle School; secondly, invest 1.77 million yuan to build Changan Automobile (Luxi) Training Base Project (Phase II).
Thirdly, the Company issues the Circular on Priority Employment of Graduates from Luxi Branch and Yanshan Branch of Yunnan
Institute of Technicians (No. 2016), requiring relevant departments to implement it conscientiously. Under the same conditions,
students from Luxi and Inkshan Branches should be recruited first, and within their abilities, they should actively promote the goal of
precise poverty alleviation and poverty alleviation in the two counties. The Institute has set up two "Chang'an Automobile Classes"

                                                                    39
                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


for Yubei factories and Oshang Automobiles, recruiting 62 students and continuously promoting the precise poverty alleviation.
Fifthly, Changan arranged company experts to teach the courses of "Introduction to World Skills of Automobile Event Competition",
"Diagnosis and Maintenance of Automobile Electrical Appliances" and "Enterprise Culture" for school teachers and students.
     b. On the poverty alleviation project of people's livelihood: invest 7.23 million yuan to build a rural domestic garbage
collection and transportation facility project in Luxi County.
     (2) The company donated RMB 11 million to Yanshan County.
     a. On the industrial poverty alleviation project: firstly, invest 2.5 million yuan to build an apple planting project in Ashe
Township; secondly, invest 2 million yuan to build SanQi planting project in Panlong Township; thirdly, invest 1 million yuan for the
commercial cattle breeding project in Weimo Township; fourthly, invest 1 million yuan in the pepper planting project in Ganhe
Township; fifthly, Changan intensifies its support to the industrial development of Yanshan County, and actively explores the
feasibility of incorporating Yanshan-related enterprises into the Chang'an Automobile Purchasing Supply Chain.
     b. On education poverty alleviation projects: firstly, invest 2 million yuan for the construction of the student dormitory
building in Awenzhai Primary School; secondly, invest 1.4 million yuan for the student loan program. Thirdly, the Company issues
the Circular on Priority Employment of Graduates from Luxi Branch and Yanshan Branch of Yunnan Institute of Technicians (No.
2016), requiring relevant departments to implement it conscientiously. Under the same conditions, students from Luxi and Inkshan
Branches should be recruited first, and within their abilities, they should actively promote the goal of precise poverty alleviation and
poverty alleviation in the two counties; fourthly, sign strategic agreements with Yanshan Branch on school-enterprise cooperation and
establish school-enterprise cooperation relations; The Institute has set up two "Chang'an Automobile Classes" for Yubei factories and
Oshang Automobiles, recruiting 40 students and continuously promoting the precise poverty alleviation. Fifthly, Changan arranged
company experts to teach the courses of "Introduction to World Skills of Automobile Event Competition", "Diagnosis and
Maintenance of Automobile Electrical Appliances" and "Enterprise Culture" for school teachers and students.
      c. On the poverty alleviation project of people's livelihood: firstly, invest 1 million yuan in township hospitals equipment
configuration project to equip some township hospitals with basic equipments such as ventilator, electrocardiograph and
electro-acupuncture apparatus to improve the medical environment and medical conditions; Secondly, implement relief and poverty
alleviation projects and donate 100,000 yuan to solve the difficulties of the affected people in a timely manner to ensure social
harmony and stability; Thirdly, implement the "Summary on Organizing the National Day of Poverty Alleviation and submitting the
annual work of poverty alleviation notice"      (Armament Reform [2018] 422), launch a series of activities called "China South
Industries Group Poverty Alleviation Week" and call on all units to publicize and actively mobilize their employees to involve in "
Yanshan Material Donation" and "Yanshan Purchase" consumption poverty alleviation work on the premise of voluntary and
market-oriented transactions, and Changan received a total of 2723 clothes, 281 books and arranged direct transportation of these
donations to Yanshan County.
2、Precise poverty alleviation in tow Counties of Chongqing in 2018
     (1) 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 [2018] Document No. 2), Changan Automobile donated 300,000 yuan to
Pengshui County for improving infrastructure, public services and so on.
     (2) 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 2018 (No. 92 of Jiangbei Prefecture Office), Changan Automobile donated 200,000 yuan to
Youyang County for the construction of school educational facilities.




                                                                     40
                                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


                        Changan Automobile Statistics on Poverty Alleviation in 2018

                            Indicator                                     Unit                      Quantity / Details

Ⅰ. Total                                                                 ——                            ——

  1.funds                                                           10 thousand RMB                       2250

  2. Material                                                       10 thousand RMB                       ——

Ⅱ. Subdivision                                                           ——                            ——

  1. Industrial poverty alleviation                                       ——                            ——

                                                                                      1) Apple Planting Project in Ashe Township;
                                                                                      2) Sanqi Planting Project in Panlong Township;
     1.1 Industrial poverty alleviation project   type                    ——
                                                                                      3) Cattle Breeding Project in Weimo Township;
                                                                                      4) Pepper Planting Project in Ganhe Township.

     1.2 Industrial poverty alleviation project investment funds    10 thousand RMB                        650

  2. Education poverty alleviation                                        ——                            ——

     2.1 Funding for poor students                                  10 thousand RMB                        140

     2.2 Improve educational resources in poor areas                10 thousand RMB                        597

  3. Medical and health poverty alleviation                               ——                            ——

     3.1 Medical and health resources invested in poverty areas 10 thousand RMB                            823

  4. Other projects - people's livelihood poverty alleviation             ——                            ——

     4.1 Amount of investment                                       10 thousand RMB                         40

3、Follow-up precision poverty alleviation plan
    Changan Automobile will actively implement poverty alleviation work, continue to carry out targeted poverty alleviation work
in Luxi County and Yanshan County of Yunnan Province, Pengshui County and Youyang County of Chongqing Municipality, and
effectively promote accurate poverty alleviation work.


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 hydrocarbon,etc. 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
    During the reporting period, there were 309 pollutant outlets and 18 water pollutant outlets. The emission standards were strictly
implemented according to the national sewage comprehensive discharge standard, the water pollutant discharge standard in Beijing,

                                                                    41
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


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: 383.26 tons of chemical oxygen, 27.02 tons
of ammonia nitrogen, 212.63 tons of sulfur dioxide and 255.14 tons of nitrogen oxides. 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.
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.
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.
     In 2018, the Company obtained "New Energy Electric Drive Assembly System Project EIA Approval",and completed the EIA
acceptance about Dianjiang Test Site Project(Phase II)、PDC Project(Phase I)、Passenger Car Project.
Emergency preparedness and exercise of emergency environmental events
     Continue to carry out environmental protection emergency drills to enhance the response capacity to environmental emergencies.
In 2018, all bases made environmental risk assessment reports and emergency plans for environmental emergencies. The Company
carried out 3 drills of a company-level environmental emergency, more than 14 emergency drills at the factory and 314 drills at
workshop.
Programming and implementation of self-monitoring of the environment
     In 2018, Key sewage units of Changan Automobile: Yuzui Base of OuShang Automotive Division, Yuzui Base of 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, Yubei Factory, Oushang Automobile Business Department, Jiangbei Engine Factory and Mold
Business Department were included in Chongqing Environmental Credit Evaluation in 2017, and were all evaluated as Chongqing
Environmental Credit Enterprises.




                                                                   42
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


Whether to publish a report on social responsibility
√Yes     □No

                                               Corporate Social Responsibility Report

                          Whether it                              Whether it                   Reporting Disclosure Criteria
                                              Whether it
 The nature of the         contains                            contains corporate
                                            contains social                                                                    Foreign
        enterprise      environmental                             governance                Domestic standards
                                             information                                                                       standards
                          information                             information

                                                                                     "Guidelines for the Shenzhen Stock
                                                                                    Exchange Main Board", "Main Board
                                                                                      Information Disclosure Business
                                                                                    Memorandum No. 1 - Periodic Report
                                                                                        Disclosure Relevant Issues",
   State - owned
                              Yes                Yes                    Yes         "Contents and Formats of Information
    enterprises
                                                                                     Disclosure of Companies for Public
                                                                                     Offering No. 2 - Contents and Form
                                                                                     of Annual Report ","Guidelines for
                                                                                    the Social Responsibility of Shenzhen
                                                                                             Stock Exchange "

Specific description

1. Whether the company has passed the environmental
                                                                                                                                     Yes
management system certification(ISO14001)

2. Company "waste gas, waste water, waste residue" three-waste Beijing Changan reused 38,891 tons wastewater and 87,401.96
reduction performance                                               tons of solid waste.

3. Amount of annual environmental protection investment in
                                                                                                                                  21,335
2018 (10 thousand)

4. The company invests in upgrading the ability of employees to
improve their personal knowledge and skills to enhance their                                                                    4,039.59
career development (10 thousand)

5. The amount of corporate social donations (funds, materials,
                                                                                                                                3,171.99
free professional services) (10 thousand)


XIX. Other important events

√Applicable     □Not-applicable
        On Mar. 16th, 2018, the company disclosed 《Chongqing Changan Automobile Co., Ltd. announcement on the free transfer of
state-owned shares of controlling shareholders》(Announcement Number: 2018-11). The controlling shareholder of the company——
China Changan Automobile Group Co., Ltd. intends to transfer about 1,035,312,673 shares of Changan Automobile (accounting for
21.56% of the total share capital) to China South Industries Group Co., Ltd. without charge.
        On May 31st, 2018, the company disclosed《Announcement of Chongqing Changan Automobile Co., Ltd. on the free transfer of
the controlling shareholder's state-owned shares approved by the SASAC》(Announcement Number: 2018-39). On Jun 21st, 2018, the
company disclosed《Announcement on the completion free transfer of controlling shareholders' state-owned shares》(Announcement

                                                                   43
                                                           Chongqing Changan Automobile Company Limited 2018 Annual Report


Number: 2018-42) and confirmed the transfer registration process of the above-mentioned free transfer of shares on Jun 15th, 2018.


 XX. Important matters of the Company's subsidiary

□Applicable   √Not-applicable




                                                                44
                                                               Chongqing Changan Automobile Company Limited 2018 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                                                        Balance after current
                                                            Addition and deduction(+,-) during change
                                          change                                                                     change

                                                   Ratio    Additional     Stock     Provident fund                            Ratio
                                     Quantity                                                         other    Quantity
                                                   (%)        issued      dividend      transfer                               (%)

Non-circulated shares                139,781,303    2.91%                                                      139,781,303      2.91%

1、State-owned legal person
                                     139,762,403    2.91%                                                      139,762,403      2.91%
shares

2、Senior management
                                          18,900    0.00%                                                            18,900     0.00%
personnel shares

Circulated shares               4,662,867,208      97.09%                                                     4,662,867,208    97.09%

1、Domestic listed RMB
                                3,760,881,066      78.31%                                                     3,760,881,066    78.31%
shares

2、Domestic listed foreign
                                     901,986,142   18.78%                                                      901,986,142     18.78%
shares

Total shares                    4,802,648,511 100.00%                                                         4,802,648,511 100.00%

 Reason of stock changes

 □ applicable   √ not applicable

 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

                                                                   45
                                                                         Chongqing Changan Automobile Company Limited 2018 Annual Report


□ 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

                          Non-circulated                                                          Non-circulated
       Name of                                 Decrease during the     Increase during the                                     Reason for             Date for the
                         shares held at the                                                      shares held at the
    shareholders                                reporting period        reporting period                                  non-circulated shares     circulated shares
                          year-beginning                                                             year-end

                                                                                                                      Non         -      public
China Changan
                                                                                                                      offering shares of
Automobile Co.,              139,762,403                           -                         -       139,762,403                                   2019-10-14
                                                                                                                      139,762,403             in
Ltd.
                                                                                                                      2017

                                                                                                                      Executive lock               6 months after
Zhu Huarong                         18,900                         -                         -              18,900
                                                                                                                      stocks                       the retirement

        Total                139,781,303                           -                         -       139,781,303                   --                      --


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                189,472          Number of                203,311        Number of                       0            Number of                     0

                                                                               46
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


ordinary                           ordinary                               preferred                              preferred
shareholders at                    shareholders                           shareholders                           shareholders
the period-end                     at the                                 with resumed                           with resumed
                                   month-end                              voting       rights                    voting     rights
                                   prior        to                        at the                                 at the
                                   the disclosure                         period-end                             month-end
                                   of this Report                                                                prior to the
                                                                                                                 disclosure of
                                                                                                                 this Report

                              Holding more than 5% of the shareholders, or top 10 shareholders situation

                                            Percentage                    increases and Non-circulat                              Pledged/ Frozen
                                                                                                               Circulated
                           Nature of         of total    Shares held at     decreases           ed shares                                cases
Name of shareholders                                                                                          shares held at
                         Shareholders         shares     the year-end       during the          held at the
                                                                                                              the year-end      Share status amount
                                             (%)                         report period        year-end

China South Industries State-owned legal                                                                                        No pledge or
                                             21.56%      1,035,312,673 1,035,312,673                 -        1,035,312,673
Group Co., Ltd.           person shares                                                                                              freeze

China Changan           State-owned legal                                                                                       No pledge or
                                             19.32%      928,044,946 -1,035,312,673 139,762,403 788,282,543
Automobile Co., Ltd.      person shares                                                                                              freeze

                        domestic general
China securities                                                                                                                No pledge or
                           legal person       4.88%      234,265,333        32,220,512               -        234,265,333
finance Co, Ltd                                                                                                                      freeze
                             shares

United Prosperity
(Hongkong)                foreign legal                                                                                         No pledge or
                                              3.21%      154,120,237        46,852,509               -        154,120,237
Investment Co.,           person shares                                                                                              freeze
Limited

                        domestic general
Central Huijin                                                                                                                  No pledge or
                           legal person       1.15%       55,393,100               -                 -         55,393,100
Investment Ltd.                                                                                                                      freeze
                             shares

GIC PRIVATE               foreign legal                                                                                         No pledge or
                                              0.93%       44,803,223       -36,090,349               -         44,803,223
LIMITED                   person shares                                                                                              freeze

DRAGON BILLION
                          foreign legal                                                                                         No pledge or
SELECT MASTER                                 0.85%       40,597,114        39,250,619               -         40,597,114
                          person shares                                                                                              freeze
FUND

China Merchants Bank
Co., Ltd.-Boss CSI
Central Enterprise
                          fund, finance                                                                                         No pledge or
Structure Adjustment                          0.75%       36,010,722        36,010,722               -         36,010,722
                          products, etc.                                                                                             freeze
Transaction Open
Index Securities
Investment Fund



                                                                  47
                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


Hong Kong Central
                             foreign legal                                                                                        No pledge or
Clearing Company                                0.49%        23,648,047         5,477,959              -          23,648,047
                            person shares                                                                                              freeze
Limited

Industrial and
Commercial Bank of
China Co., Ltd. -
Yinhua CSI Central
                            fund, finance                                                                                         No pledge or
Enterprise Structure                            0.39%        18,676,200        18,676,200              -          18,676,200
                            products, etc.                                                                                             freeze
Adjustment
Transaction Open
Index Securities
Investment Fund

                                             Among the top 10 shareholders, China South Industries Group Co., Ltd., the actual controller; China Changan

Explanation on the relationship and          Automobile Group Co., Ltd., the controlling shareholder, and its wholly owned subsidiary United Prosperity

the action alike of above shareholders (Hong Kong) Investment Co., Limited. belong to the concerted actor regulated by “Disclosure Administration of
                                             Shares Change Information of The Listed Company”.

                                                      The ten largest circulated shareholders

                                                                                                                        Shares type
                    Name of shareholders                             Shares at the year end
                                                                                                            Type                       Amount

China South Industries Group Co., Ltd.                                           1,035,312,673 RMB ordinary shares                        1,035,312,673

China Changan Automobile Co., Ltd.                                                 788,282,543 RMB ordinary shares                           788,282,543

China securities finance Co, Ltd                                                   234,265,333 RMB ordinary shares                           234,265,333

                                                                                                  Domestic listed foreign
United Prosperity (Hongkong) Investment Co., Limited                               154,120,237                                               154,120,237
                                                                                                  shares

Central Huijin Investment Ltd.                                                      55,393,100 RMB ordinary shares                              55,393,100

                                                                                                  Domestic listed foreign
GIC PRIVATE LIMITED                                                                 44,803,223                                                  44,803,223
                                                                                                  shares

                                                                                                  Domestic listed foreign
DRAGON BILLION SELECT MASTER FUND                                                   40,597,114                                                  40,597,114
                                                                                                  shares

China Merchants Bank Co., Ltd.-Boss CSI Central
Enterprise Structure Adjustment Transaction Open Index                              36,010,722 RMB ordinary shares                              36,010,722
Securities Investment Fund

Hong Kong Central Clearing Company Limited                                          23,648,047 RMB ordinary shares                              23,648,047

Industrial and Commercial Bank of China Co., Ltd. -
Yinhua CSI Central Enterprise Structure Adjustment                                  18,676,200 RMB ordinary shares                              18,676,200
Transaction Open Index Securities Investment Fund

The top 10 shareholders to sell circulated shares, and the Among the top 10 shareholders, China South Industries Group Co., Ltd., the actual
infinite tradable relationship between shareholders and controller; China Changan Automobile Group Co., Ltd., the controlling shareholder, and its
top 10 shareholders or concerted action                          wholly owned subsidiary United Prosperity (Hong Kong) Investment Co., Limited. belong


                                                                       48
                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                               to the concerted actor regulated by “Disclosure Administration of Shares Change

                                                               Information 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

                                   Legal            Date of
            Name                                                 Organization code             Business scope and major products:
                               /Representative establishment

                                                                                     Design, development, manufacture and sales of
                                                                                     automobile &motorcycle, automobile &motorcycle
                                                                                     engine, automotive and motor cycle components&
                                                                                     parts; sales of optical products, electronic and
CHINA CHANGAN                                                                        photoelectron products, night-time vision device,
                                                 Dec 26th,     911100007109339
AUTOMOBILE                    Liu Weidong                                            information      and   communication        equipment;
                                                2005           484
GROUP CO., LTD                                                                       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 To the reporting period, the holding companies: Harbin Dongan Auto Engine Co., Ltd. (stock code
controlling shareholder 600178); Hunan Tianyan Machinery Co., Ltd. (stock code 600698), Chongqing Changan Minsheng APLL
of listed companies in Logistics Co., Ltd(stock code 01292.HK)
other    domestic       and
foreign markets

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            Date of          Organization              Business scope and major products:


                                                                     49
                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


                               /Representative     establishment          code

                                                                                    investment and management of state-owned assets;
                                                                                    manufacturing of guns and firearms; engineering
China South Industries                                             91110000710926
                              Xu Ping             29 Jun.,1999                      prospecting, designing, construction, contracting,
Group Corp.                                                        043F
                                                                                    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
                              code 600178); Baoding Tianwei Electric Co., Ltd. (stock code 600550); Jiangling Motors Co., Ltd. (stock
reporting     period,   the
                              code 000550); Hunan Tianyan Machinery Co., Ltd. (stock code 600698); China Jialing Industrial Co., Ltd.
controlling shareholder
                              (stock code 600877); Chongqing Jianshe Automotive Systems Co., Ltd. (stock code 200054); Lida Optical
of listed companies in
                              Co., Ltd. (stock code 002189); Yunnan West Instrument industrial Co., Ltd. (stock code 002265);
other    domestic       and
                              Chongqing Changan Minsheng logistics Limited (stock code 01292.HK).
foreign markets

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




                                                                     50
                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


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

□Available   √ Not available




                                                    51
                                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




      Chapter 7                Information about Directors, Supervisors, Senior

                                      Management and Employees

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

                                                                                                                   decrease
                                                                                                      increased               share
                                                                                        Shares held                 d share
                                                                             Term                       share                 number
                                                                                            at                     number
      Name          Position        As state Gender   Age Term start date Termination                 number in               at the
                                                                                        beginning                   in this
                                                                             date                     this issue               end
                                                                                        (stock)                    issue
                                                                                                      (stock)             (stock)
                                                                                                                   (stock)

Zhang
               Chairman             present   M       56     2017-09-22   2019-03-23
Baolin

Zhu Huarong Director, President present       M       53     2016-03-23   2019-03-23      25,200          -            -      25,200

Zhou
               Director             present   M       48     2016-03-23   2019-03-23
Zhiping

Tan
               Director             present   M       55     2016-03-23   2019-03-23
Xiaogang

Zhang          Director,   Deputy
                                    present   M       52     2018-05-18   2019-03-23
Dongjun        Vice Director

Zhang
               Director             present   M       44     2018-05-18   2019-03-23
Deyong

               independent
Liu Jipeng                          present   M       62     2016-03-23   2019-03-23
               director

               independent
Li Qingwen                          present   M       63     2016-03-23   2019-03-23
               director

Tan            independent
                                    present   M       48     2016-03-23   2019-03-23
Xiaosheng      director

               independent
Pang Yong                           present   M       49     2016-03-23   2019-03-23
               director

Chen           independent
                                    present   M       73     2016-03-23   2019-03-23
Quanshi        director

Ren            independent
                                    present   M       62     2017-09-20   2019-03-23
Xiaochang      director

               independent
Wei Xinjiang                        present   M       49     2017-09-20   2019-03-23
               director

                                                               52
                                                           Chongqing Changan Automobile Company Limited 2018 Annual Report


Cao           independent
                                       present    M   47     2018-05-18   2019-03-23
Xingquan      director

              Chairman of the
Yan Ming                               present    M   53     2019-01-03   2019-03-23
              supervisory

Sun Dahong Supervisor                  present    M   52     2016-03-23   2019-03-23

Zhao Huixia Supervisor                 present    M   58     2016-03-23   2019-03-23

Zhang         Employee
                                       present    M   59     2016-03-23   2019-03-23
Anguo         Supervisor

              Employee
Luo Yan                                present    F   44     2016-03-23   2019-03-23
              Supervisor

Yuan          Executive        Vice
                                       present    M   50     2016-03-23   2019-03-23
Mingxue       President

              Deputy           Vice
Liu Bo                                 present    M   52     2016-03-23   2019-03-23
              Director

              Deputy           Vice
He Chaobing                            present    M   51     2016-03-23   2019-03-23
              Director

Zhang         Deputy           Vice
                                       present    F   52     2016-03-23   2019-03-23
Jingjing      Director

              Deputy           Vice
Li Wei                                 present    M   52     2016-03-23   2019-03-23
              Director

              Deputy           Vice
Tan Benhong                            present    M   43     2017-08-31   2019-03-23
              Director

Liu           Deputy           Vice
                                       present    M   53     2017-11-24   2019-03-23
Zhengjun      Director

Ye Pei        Vice President           present    M   43     2018-09-21   2019-03-23

Zhao Fei      Vice President           present    M   44     2018-09-21   2019-03-23

Chen Wei      Vice President           present    M   46     2018-09-21   2019-03-23

Li Mingcai Vice President              present    M   37     2018-09-21   2019-03-23

Li Jun        Board Sectary            present    F   49     2016-03-23   2019-03-23

Huang         Vice President
                                      departure   M   50     2016-03-23   2018-05-21
Zhongqiang

Luo           Vice President
                                      departure   M   55     2016-03-23   2018-05-21
Minggang

Dong          Chairman of the
                                      departure   M   54     2017-12-16   2018-08-27
Qihong        supervisory

Gong Bing     Vice President          departure   M   49     2016-03-23   2018-05-21

Wang          Director                departure   M   45     2016-03-23   2018-05-14


                                                               53
                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


Xiaoxiang

             Deputy          Vice
Wang Jun                            departure   M         46     2016-03-23   2018-09-21
             Director

             Director/Vice
Wang Kun                            departure   M         43     2016-03-23   2018-01-27
             president

    Total                                                                                  25,200       -         -      25,200


Ⅱ. Personnel Changes of directors, supervisors and senior management

      Name                   Position               Type                      Term                          Reason

                  Chairman of the
Yan Ming                                        elected                   2019-01-03            recruitment for work needs
                  supervisory

Zhang Dongjun     Director                      elected                   2018-05-18            recruitment for work needs

Cao Xingquan      independent director          elected                   2018-05-18            recruitment for work needs

Zhang Deyong      Director                      elected                   2018-05-18            recruitment for work needs

Zhang Deyong      Deputy Vice Director          engaged                   2018-01-26            recruitment for work needs

Ye Pei            Vice President                engaged                   2018-09-21            recruitment for work needs

Zhao Fei          Vice President                engaged                   2018-09-21            recruitment for work needs

Chen Wei          Vice President                engaged                   2018-09-21            recruitment for work needs

Li Mingcai        Vice President                engaged                   2018-09-21            recruitment for work needs

Wang Jun          Deputy Vice Director          departure                 2018-09-21            Work change

Huang
                  Vice President                departure                 2018-05-21            Work change
Zhongqiang

Luo Minggang      Vice President                departure                 2018-05-21            Work change

                  Chairman of the
Dong Qihong                                     departure                 2018-08-27            Work change
                  supervisory

Gong Bing         Vice president                departure                 2018-05-21            Work change

Wang Kun          Director/Vice president       departure                 2018-01-27            Work change

Wang Xiaoxiang Director                         departure                 2018-05-14            Work change


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

                                                                   54
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


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. He was born in 1965, master graduate student, researcher-level 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. 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 general manager of the southern industrial asset management Ltd, the deputy
director of Capital operation Department of China South Industries Group, the deputy general manager of China South Industries
Automobile Co., Ltd, the Deputy Director of Capital Operations Department of Weapons and Equipment Group, Director of
Technical Management Department of Science and Technology Quality Department, Director of Integrated Technology Office, and
Deputy Director.
    Mr. Zhang Deyong, director, vice president, born in 1974, MPAcc, senior accountant. He is vice president of the Company and
the head of the capital operation Department of the Company. He was the director, the chief accountant, and a committee member of
the Party committee of the Chongqing Changan Industry Group. The deputy director (registered) of finance department in South
Industries, the director, the chief accountant, the committee member of the Party committee of Chongqing Changjiang Electrician Co.,
Ltd., the deputy director (registered) of the Finance Department of South Industries Group, the deputy director, director of finance
department and the assistant president in the Institute of Automation of South Industries Group.
     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

                                                                  55
                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


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 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 nearly 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 Cyber Hero 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. He used to be the manager of Liaoning Industry Group, and director of Raytheon Co. China. “I
Flow Smart Terminal- Smart Decision Management Platform” is under his leading design, and he acquires the copyright from
National Copyright Administration; meanwhile, he is the developer of China AD-CAS, Competitiveness Model of Channel System,
and Standardized Database Resources. He is also the Chief expert in lean marketing of automobile dealers certified by Ministry of
Human Resources and Social Security of the People’s Republic of China.
     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 award. The main social part-time jobs include the
deputy director of the China Automobile Engineering Society, the deputy director of the academic committee of the State Key


                                                                    56
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


Laboratory for automobile body advanced design and manufacture of Hunan University, the deputy director of the technical
committee of the State Engineering Laboratory of electric vehicles, and the state key experiment on automobile safety and energy
saving of the Tsinghua University, and the 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 a senior commissioner of China Life Financial Insurance Research
Center. 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
Inspector of the Audit and Risk Department of China South Industries Co., Ltd., Chairman of the Supervisory Board of China South
Industries Co., Ltd., Chairman of the Supervisory Board of Chongqing Chang'an Automobile 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 China Chang 'an Automobile Group Co., Ltd., Baoding Tianwei Group Co.,
Ltd., Zhonghui Fortis(Shenzhen) Co., Ltd., Southern Industrial Assets Management Co., Ltd..
     Mr. Sun Dahong, Supervisor. He was born in 1966, master degree, senior economist. Currently, he is the vice director of general
office. He used to be the vice director of legal division under the general office in China South Industries Group, vice director and


                                                                 57
                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


director of Legal Advisor Division in China South Industries Group, and director of Legal Affairs Division 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.
     Mr. Zhang Anguo, staff supervisor. He was born in 1959, master degree, senior political & ideological worker. Currently, he is
the officer of Management Section under Party organization of Party Work Department. He used to be the chief of quality section of
quality Department, section chief and chief of Labor Union, chief of organization division of Party Work Department, director of
Party Construction division of Party Work Department (Corporate Culture Center).
     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, Executive Vice President and Director of Operations Management Committee, born in 1967, master's degree,
Professor level 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. 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, research senior engineer. The former president of
the 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.
     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
                                                                  58
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


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 once was the Chairman of Haifei Automobile, and the chief
economist of China Changan. He was 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 and general
manager of Hafei automobile.
     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.
     Chen Wei, Vice President and Director of Safety Production of the company, Deputy Director of the European Business
Management Committee, born in 1972, undergraduate. 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.
     Li Ming, 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.
     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

                                                                    59
                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


Department, Director of the BOD Office, Vice director of the finance department of the Company.
Employment in shareholders’ work unit
√Applicable   □ Not applicable



                                                                                                                             Whether get
                  Name of shareholders’     Position in shareholders’ work                                                 allowance in
     Name                                                                               Term start date Term end date
                         work unit                             unit                                                       shareholders’ work
                                                                                                                                 unit

                 China South Industries secretary           of        the      party
Zhangbaolin                                                                                                                       Y
                 Group Corp.                committee, vice president

                 China South Industries the Assistant President of China
Zhu Huarong      Group     Corp 、 China South Industries Group Corp,                                                             N
                 Changan                    the director of China Changan

                                            the director of China South
                 China South Industries Industries         Group       Corp,     the                                       Y, Receiving the
Zhou Zhiping     Group     Corp 、 China general         manager        and      the                                      Payment allowance
                 Changan                    secretary of party committee of                                               in China Changan
                                            China Changan

                 China South Industries Director          of     the        Strategic
Tan Xiaogang                                                                                                                      Y
                 Group Corp                 Development

                                            vice        president,           general
Zhang Dongjun China Changan                                                                                                       Y
                                            accountant

                 China South Industries Audit and Risk Department
Yan Ming                                                                                                                          Y
                 Group Corp                 Inspector

                 China South Industries
Sun Dahong                                  vice director of general office                                                       Y
                 Group Corp

Zhao Huixia      China Changan              the professional senior staff                                                         Y

                                            the chief economist of China
Liu Zhengjun     China Changan                                                                                                    N
                                            Changan

Employment in other work unit
√Applicable   □ Not applicable

                                                                                                                              Whether get
     Name        Name of other work units      Position in other work units             Term start date   Term end date    allowance in other
                                                                                                                               work unit

                                            the dean, professor, and PhD

                                            supervisor of Capital Finance Institute
                 China University of
                                            in China University of Political
Liu Jipeng       Political Science and                                                                                             Y
                                            Science and Law; Legal adviser to the
                 Law
                                            State-owned Assets Supervision and

                                            Administration Commission of the

                                                                       60
                                                                     Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                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.

                                                the dean of the Automobile Evaluation
                      China Energy&
                                                Institute and vice chairman of the
Li Qingwen            Automobile Media                                                                                   Y
                                                China Automobile Talent Research
                      Group
                                                Association

                                                The founder of Cyber Hero、senior
Tan Xiaosheng Cyber Hero                                                                                                 Y
                                                engineering

                                                Chairman and CEO of IDEO , adjunct
Pang Yong             IDEO                                                                                               Y
                                                professor of Jilin University

                                                assistant general manager of China
                      China Life Insurance
Wei Xinjiang                                    Life Insurance (Group) company                                           Y
                      (Group)
                                                strategic planning department

                                                a professor and director of the

                                                Department of Automotive

                                                Engineering of Tsinghua University,

                                                director of the Electric Vehicle
Chen Quanshi Tsinghua University                                                                                         Y
                                                Research Office, and honorary director

                                                of the Electric Vehicle Branch of the

                                                China Automobile Engineering

                                                Society.

                                                a professor at the School of Civil and

                                                Commercial Law of Southwest

Cao Xingquan Southwest University               University of Political Science and                                      Y
                                                Law, and a doctoral tutor in the

                                                direction of civil and commercial law

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

                                                                           61
                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


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 2018, the remuneration the directors, supervisors and senior
managers receiving from the company is 10.7489 million yuan in total.
Payment of directors, supervisors and senior managers got from the company during the reporting period

                                                                                                         Total earning from the
       Name                      Position                 Gender        age            status
                                                                                                            company(yuan)

 Zhang Baolin            Chairman of the board              M           56            Present                       -

                   Director and President, Secretary of
 Zhu Huarong                                                M           53            Present                 880,341.90
                            Party Committee

 Zhou Zhiping                    Director                   M           48           Present                  660,256.42

 Tan Xiaogang                    Director                   M           55            Present                       -

 Zhang
                                 Director                   M           52            Present                       -
 Dongjun

 Zhang
                   Director, Executive Vice President       M           44            Present                 362,273.00
 Deyong

 Liu Jipeng               Independent Director              M           62            Present                 120,000.00

 Li Qingwen               Independent Director              M           63            Present                 120,000.00

 Tan
                          Independent Director              M           48            Present                 120,000.00
 Xiaosheng

 Pang Yong                Independent Director              M           49            Present                 120,000.00

 Chen Quanshi             Independent Director              M           73            Present                 120,000.00

 Ren
                          Independent Director              M           62            Present                 120,000.00
 Xiaochang

 Wei Xinjiang             Independent Director              M           49            Present                 120,000.00


                                                                   62
                                                       Chongqing Changan Automobile Company Limited 2018 Annual Report


 Cao Xingquan              Independent Director        M          47           Present                70,000.00

 Yan Ming              Chairman of the supervisory     M          53           Present                    -

 Sun Dahong                     Supervisor             M          52           Present                    -

 Zhao Huixia                    Supervisor             M          58           Present                    -

 Zhang Anguo               Employee Supervisor         M          59           Present               187,640.00

 Luo Yan                   Employee Supervisor          F         44           Present               180,458.77

 Yuan
                      Major Executive vice president   M          50           Present               709,866.16
 Mingxue

 Liu Bo                  Executive vice president      M          52           Present               733,837.09

 He Chaobing             Executive vice president      M          51           Present               731,662.61

 Zhang
                         Executive vice president       F         52           Present               709,109.76
 Jingjing

 Li Wei                  Executive vice president      M          52           Present               710,703.55

 Tan Benhong             Executive vice president      M          43           Present               700,023.43

 Liu Zhengjun            Executive vice president      M          53           Present               470,712.72

 Ye Pei                        vice president          M          43           Present                98,802.00

 Zhao Fei                      vice president          M          44           Present                98,802.00

 Chen Wei                      vice president          M          46           Present                98,802.00

 Li Mingcai                    vice president          M          37           Present                98,802.00

 Li Jun                    the Secretary of BOD         F         49           Present               654,427.69

 Wang Jun                Executive vice president      M          46          Departure              548,692.00

 Huang
                               vice president          M          50          Departure              360,042.88
 Zongqiang

 Luo
                               vice president          M          55          Departure              359,941.85
 Minggang

 Dong Qihong           Chairman of the supervisory     M          54          Departure                   -

 Gong Bing                     vice president          M          49          Departure              423,926.17

 Wang                                                                         Departure
                                    Director           M          45                                      -
 Xiaoxiang

                       Director, Vice President, the                          Departure
 Wang Kun                                              M          43                                  59,754.64
                            Secretary of BOD

       Total                           --              --         --              --                10,748,878.64



Stock-ownership incentive awarded to directors, supervisors and senior managers during the reporting period
□ Applicable   √ Not applicable



                                                            63
                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


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)                                                                         27,764
Number of employees in major subsidiaries(persons)                                                                          8,265
Total number of active employees(persons)                                                                                  36,029
Total number of current salaried employees(persons)                                                                        36,029
Number of retired employees whose parent company and major
                                                                                                                            6,280
subsidiary bear the costs(persons)
                                                  Professional composition
                  Professional component categories                                Professional Composition(persons)
Production personnel                                                                                                       20,440
Sales staff                                                                                                                 1,160
Technicians                                                                                                                 9,888
Finance staff                                                                                                                  385
Administrators                                                                                                                 471
Managers                                                                                                                    3,685
Total                                                                                                                      36,029
                                                  Educational Background
Type of education                                                                           Number(persons)
PHD                                                                                                                            120
Postgraduate                                                                                                                2,341
Bachelor degree                                                                                                            11,831
University specialty                                                                                                        7,424
Secondary school, high school and corresponding education                                                                  12,000
Secondary and below                                                                                                         2,313
Total                                                                                                                      36,029
2. Compensation policy
        The company actively deepens the adjustment of the distribution mechanism, continuously optimizes and improves the
compensation system, adheres to the principle of benefit orientation, improves the mechanism of linkage between wages and benefits,
improves the efficiency of distribution, and pays employees for job creation and value creation. Salary goes along with profit of the


                                                                 64
                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report


company. The Company guides the departments to transform from "fighting for people", "fighting for money" to "earning people",
"making money" , and drastically streamlines remuneration items, simplifies calculation rules, improves employee recognition and
management efficiency. Based on the combing and evaluation of jobs, combined with market benchmarks, the company has
established salary and broadband standards, and set a reasonable salary gap. At the same time,              the company insists on a
compensation strategy that combines follow and lead, and implements differentiated distribution. The focus of compensation
resources is on key and core positions to support   the company strategy.

3. Training plan
      With the "third entrepreneurship-innovative entrepreneurship plan" and customer needs as the guide, with the goal of building
efficiency as the core competitiveness of the organization, the Company comprehensively empowers organizations and employees,
and continuously builds a learning organizational culture. The Company will focus on leadership, brand and customer management,
management awareness, and core competency training, and work hard to promote special promotion and certification projects at all
levels and in various fields. The Company will create new models for training, make full use of social resources, pay close attention
to the adjustment of the talent structure and the capability structure, increase the training of new frontier knowledge and skills such as
smart manufacturing, big data, new energy sources, and artificial intelligence, and face up to the challenges of the market and talents
in the transformation of innovation to effectively support the company strategy.

4. Outsourcing of services
□ Applicable   √ Not applicable




                                                                   65
                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




                       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 text of the internal control self-assessment report in 2018 April 18 was published in the
huge influx of information network http://www.cninfo.com.cn.
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 "Hafei group") into the company's controlling shareholder China Changan Automobile Group Co.,



                                                          66
                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


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. The Harbin Hafei Automobile Industry Group Co at present is still at a
status of loss, and could not reached the profitable status for two consecutive years.


IV、Annual shareholders meeting and interim shareholders meeting during the
reporting period

1、Shareholders meeting during the reporting period

                          Investors'
   Meeting                                Opening Disclosure
                Type     participation                                                       Disclosure Index
   Session                                 Time     Time
                             ratio
2018     First
Interim                                  Jan.   30, Jan.   31, http//www.cninfo.com.cn 2018 First Interim Shareholders Meeting Resolution
               Interim 44.44%
Shareholders                             2018       2018       Announcement(Announcement Number: 2018-07)
Meeting
2017 Annual
                                          May. 18th, May. 19th, http//www.cninfo.com.cn 2017 Annual Shareholders Meeting Resolution
Shareholders        57.32%
             Annual                      2018        2018       Announcement(Announcement Number: 2018-34)
Meeting


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
                                                                  Times of                                 Whether absent
                       Times of attending                                         Times of
    Names of                                    Times of       attendance by                   Times of from the meeting
                           the board of                                            entrust
   independent
                         directors during       presence       communication                   absence          for two
     directors                                                                   attendance
                        the report period
                                                                   mode                                   consecutive times

Liu Jipeng                     20                  2                 18                                           N
Li Qingwen                     20                  2                 18                                           N
Tan Xiaosheng                  20                                    18               2                           N
Pang Yong                      20                  2                 18                                           N
Chen Quanshi                   20                  2                 18                                           N
Ren Xiaochang                  20                  2                 18                                           N




                                                             67
                                              Chongqing Changan Automobile Company Limited 2018 Annual Report



Wei Xinjiang                   20                1                  18          1                        N
Cao Xingquan                   13                1                  12                                   N
Times for independent directors
                                                                                                                  2
attending the shareholders meeting


        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 3 people. 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)Carefully reviewed the 2017 annual financial accounting report and 2018 action plan of audit supervision
department compiled by the company, and agree to the above matters; Reviewed the proposal on Recruitment of
2018 Annual Financial Report Auditor and Recruitment of 2018 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 2018 annual financial report auditor and 2018 Annual internal control report auditor.

        2)After the Ernst & Young Hua Ming issued 2017 annual audit report, the audit committee reviewed the 2017
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 2017 annual audit task on
time. The audit committee voted and made resolutions on company's annual financial report, and agreed to submit
the 2017 financial report to the board of directors for approval.

        3)Carefully reviewed the company's 2018 annual audit plan and related materials, and approved the audit
plan and audit requirements of 2018 annual financial report proposed by the Ernst & Young Hua Ming.




                                                          68
                                          Chongqing Changan Automobile Company Limited 2018 Annual Report



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 2017


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 5 meetings and performed the following duties:
     1) Review and agree to the "Proposal on the Transfer of Assets Related to the Company's New Energy Vehicle
Business to a wholly-owned subsidiary";
    2) Review and agree to the "Proposal on the Acquisition of 50 % Equity in Chongqing Changan Suzuki
Automobile Co., Ltd.";
    3) Examine and agree to the "Proposal on Replenishment of the Finance Co., Ltd. of the Weapons and
Equipment Group";
    4) Review and agree to the "Proposal for the Establishment of a Power Semiconductor(IGBT) Innovation
Center Project for Changan Automobile Shares";
    5) Review and agree to the "Proposal on the Acquisition of 35 % Equity in Chongqing Changan New Energy
Automobile Co., Ltd".

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 has no disagreement on the supervision during the report 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




                                                         69
                                             Chongqing Changan Automobile Company Limited 2018 Annual Report



2、Self-assessment report of internal control


Disclosure date of self-assessment report of internal control                                                            Apr. 23, 2019

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                         91.13%
proportion of revenue in the assessment accounting for the revenue in the financial statement                                 95.23%
                                                    Deficiency Definition Standard

           Type                                Financial Report                                   Non Financial Report

                                                                                  1.Lack democratic decision-making procedure or
                               1. Fraud behavior of the directors, supervisors
                                                                                  violation of democratic decision-making procedure
                               and senior management.
                               2. The company has corrected the published 2.Violate national laws and regulations and get
                               financial report, the significant wrong report punished
                               due to fraud and mistakes, the significant 3.Great loss of middle and senior management and
   qualitative standard        mistakes in the financial report found by senior technical personnel
                               certified public accountants, but not found by 4.Frequent media negative news with a large range
                               the company’s internal control.                   5.Signifant business lacks regulation control or
                               3. The supervision of audit committee on the regulation system becomes ineffective
                               company’s external financial report and internal
                                                                                 6.The significant deficiencies of internal control is
                               control of financial report is not effective.
                                                                                 not corrected

                               The amount of misstatement of the financial Determine the internal control deficiencies in
   quantitative standard       statements falls within the following ranges: financial reporting by reference to the quantitative
                               Wrong report ≥ 1% of total asset             criteria.
Financial Report Major                                                                                                              0
Defects
Non-financial  reporting
significant number of                                                                                                               0
defects
Financial Reporting Key                                                                                                             0
Number of defects
Non-financial      reporting
Number of         important                                                                                                         0
defects



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,2018, according to “Basic Norms of Enterprise Internal Control” and other related regulations.
Disclosure date of audit report of
                                             Apr.23, 2019
internal control
Disclosure index of audit report of          Internal control audit report will be published on
internal control                             http://www.cninfo.com.cn on Apr.23, 2019



                                                            70
                                           Chongqing Changan Automobile Company Limited 2018 Annual Report



type of opinion on internal control audit
                                          standard and unqualified opinion
report
Whether there is huge deficiency in the
                                        No
non-financial report
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




                                                       71
                              Chongqing Changan Automobile Company Limited 2018 Annual Report




                    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




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                                    Chongqing Changan Automobile Company Limited 2018 Annual Report



                        Chapter 10            Auditor’s Report



                                 Ernst & Young Hua Ming Shen Zi (2019) 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 2018, 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
financial position as at 31 December 2018, and the consolidated and the Company’s financial
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 Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the financial statements section of our report. We are independent of the Company
in accordance with China Code of Ethics for Certified Public Accountants (the “Code”), and
we have fulfilled our other ethical responsibilities in accordance with the Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most
significance 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 description of how our audit addressed the matter is provided in that
context.




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




                                       Auditor’s Report (continued)

                                        Ernst & Young Hua Ming Shen Zi (2019) No. 60662431_D01
                                                 Chongqing Changan Automobile Company Limited

Key audit matters (continued)

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit
of the financial statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to 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 warranties
According to after-sales maintenance contracts or related          With regard to the warranty provisions
national laws and regulations, Chongqing Changan                   audited by us:
Automobile Company Limited provides warranties on
automobile and undertakes to repair or replace items that fail
to perform satisfactorily based on certain pre-determined
                                                                      We understood and evaluated
conditions. In addition, in order to improve customer                 the process of the warranty
satisfaction and to maintain the quality and safety of the sold       provisions. In addition, we tested
vehicle, Chongqing Changan Automobile Company Limited                 the key controls and application
also provides extra free repairing service or promotes a recall       controls over the process of the
based on needs. Chongqing Changan Automobile Company                  warranty provisions.
Limited should estimate and recognize the warranty costs and
the corresponding liabilities.
                                                                      We assessed the reasonableness and
Provisions for warranties granted by Chongqing Changan                evaluated the major assumptions of
Automobile Company Limited for the vehicles sold are                  management’s warranty provision
recognized based on sales volume and past experience of the           models. We tested the samples of
cost of repair and replacement, and labor cost, which                 payment of the warranty provisions
involves a number of assumptions and judgments.                       and tested the mathematical
Provision for extra free repairing service program or recalls
are recognized based on the vehicles involved and the
                                                                      accuracy of calculations therein by
estimated average cost of repair and replacement, and labor           re-performing    the    calculations
cost, which involves a number of assumptions and                      regarding the balance of the
judgments. Any increase or decrease in the provision would            provisions.
have a significant impact on the financial statements.
                                                                      We reviewed the adequacy of
 Refer to Note III 22, 31 and Note V 24 of the consolidated           disclosures in the  financial
 financial statements for the disclosures of the provision for
 warranties.
                                                                      statements.

                                       Auditor’s Report (continued)

                                        Ernst & Young Hua Ming Shen Zi (2019) No. 60662431_D01
                                                 Chongqing Changan Automobile Company Limited




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                                            Chongqing Changan Automobile Company Limited 2018 Annual Report



Key audit matters (continued)

Key audit matter                                                How our audit addressed the key audit matter
Capitalization of internal development costs
 The research and development activities launched by            With regard to the capitalization of internal
 Chongqing Changan Automobile Company Limited                   development costs audited by us:
 mainly include technology development, product process
 design and product manufacturing process design.
 Management capitalized the costs on development
                                                                     We understood, evaluated and
 projects met the criteria set out in the accounting                 validated the key controls over the
 standard for capitalization.                                        capitalization of internal development
                                                                     costs.
 The expenditures in development stage are capitalized
 that should meet all the conditions including technically           We assessed the criterias set by the
 feasible, use or sale intention, market, finance, resources,        management         related     to     the
 and etc. The judgment should be made according to
 every project and agreed by all related departments. In
                                                                     capitalization of the costs under
 addition, for projects that have been capitalized in the            development stage. We assessed the
 past, the judgment whether the expenditures in                      accuracy of the start point and the stop
 development can be continuing capitalized should be                 point for capitalization of internal
 made according the latest progress and future                       development costs. We also tested
 expectations of the project. The judgment made by the               samples of projects to review the
 management would have a significant impact on the
 financial statements.
                                                                     feasibility reports and other reports for
                                                                     important stages.
 Refer to Note III 18, 31 and Note V 13 of the
 consolidated financial statements for the disclosures of            We reviewed the adequacy of
 capitalization of internal development costs.                       disclosures in the financial statements.




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




                                       Auditor’s Report (continued)

                                        Ernst & Young Hua Ming Shen Zi (2019) No. 60662431_D01
                                                 Chongqing Changan Automobile Company Limited



Key audit matters (continued)

Key audit matter                                              How our audit addressed the key audit matter
Business combination involving entities not under common control
 Chongqing Chang'an Automobile Co., Ltd. purchased            With regard to the capitalization of internal
 50% equity of Chongqing Chang'an Suzuki Automobile           development costs audited by us:
 Co., Ltd. (hereinafter referred to as "Chang'an Suzuki", a
 joint venture with 50% equity held by Chongqing
 Chang'an Automobile Co., Ltd.) and 51% equity of
                                                                    Obtained and checked the relevant
 Zhenjiang Demao Hairun Equity Investment Fund                      transaction information such as equity
 Partnership (Limited Partnership) (hereinafter referred to         transfer agreement, board resolution
 as "Zhenjiang Demao", formerly Chongqing Changan                   and government approval, checked the
 Automo A joint venture with 49% equity held by a joint             implementation of relevant legal
 stock limited company). After the acquisition, Chang'an            procedures, and discussed with the
 Suzuki and Zhenjiang Demao became the wholly-owned
 subsidiaries of Chongqing Chang'an Automobile Co.,
                                                                    management on the determination of
 Ltd. As at the acquisition day, Chongqing Chang'an                 the purchase date.
 Automobile Co., Ltd. recognised the investment income
 of RMB 209,443,337.73 on the basis of the fair value of            Obtained and reviewed the evaluation
 its original equity holdings, and recognized the                   reports of Suzuki Chang'an and
 non-operating income of RMB811,377,936.28 on                       Zhenjiang Demao on the purchase
 account of the merger cost less than the fair value of the
 identifiable net assets obtained. The determination of the
                                                                    date, and reviewed the qualification,
 fair value of identifiable assets and original                     professional     competence       and
 shareholdings on the acquisition date in the merger of             independence of third-party evaluation
 enterprises under different control involves important             agencies.
 judgments and assumptions.
                                                                    Our internal evaluation experts
 Refer to Note III 4 and Note Ⅵ of the consolidated                reviewed the methods and key
 financial statements for the disclosures of business               assumptions used in fair value
 combinations.
                                                                    assessment.

                                                                    Reviewed the accounting treatment of
                                                                    the merger by management and the
                                                                    adequacy of the relevant disclosure of
                                                                    the transaction in the notes to the
                                                                    financial statements.




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                                   Chongqing Changan Automobile Company Limited 2018 Annual Report




                                Auditor’s Report (continued)

                                 Ernst & Young Hua Ming Shen Zi (2019) 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 preparation and fair presentation 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 preparation of
financial 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 continue 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 operations or has no realistic alternative but to
do so.

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




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                                   Chongqing Changan Automobile Company Limited 2018 Annual Report




                                Auditor’s Report (continued)

                                 Ernst & Young Hua Ming Shen Zi (2019) No. 60662431_D01
                                          Chongqing Changan Automobile Company Limited


Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial 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 scepticism 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.




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                                  Chongqing Changan Automobile Company Limited 2018 Annual Report




                               Auditor’s Report (continued)

                                Ernst & Young Hua Ming Shen Zi (2019) 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 timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify 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
relationships 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 regulation 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 communication.




                                                                                    Qiao Chun

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




                                                                                        Hu Yan

                                                          Chinese Certified Public Accountant

Beijing, the People’s Republic of China                                         19 April 2019




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                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED BALANCE SHEET
31 December 2018
(Expressed in Renminbi Yuan)




                                          Notes V                         2018                  2017

Current assets
  Cash                                       1                 9,980,544,526.14    22,631,536,496.53
  Notes receivable
   and accounts receivable                   2             21,971,045,405.74       30,963,288,278.24
  Prepayments                                3                866,249,749.51        1,102,239,931.33
  Interest receivable                        4              3,250,452,923.70        1,687,460,718.92
   and other receivables
  Inventories                                5                 4,917,420,457.19     4,666,183,421.80
  Other current assets                       6                 2,227,565,353.23     1,705,910,530.43

Total current assets                                       43,213,278,415.51       62,756,619,377.25

Non-current assets
  Available-for-sale financial assets       7               1,957,873,311.31          541,917,000.00
  Long-term equity investments              8              13,275,170,118.83       14,098,523,896.97
  Investment property                       9                   7,329,561.28            7,556,272.84
  Fixed assets                              10             22,161,054,058.31       19,044,533,667.68
  Construction in progress                  11              5,383,844,030.75        3,234,173,155.52
  Intangible assets                         12              5,018,243,552.80        4,047,945,129.67
  Development expenditure                   13                789,597,615.60          836,638,328.10
  Goodwill                                  14                  9,804,394.00            9,804,394.00
  Long-term deferred expenses               15                 17,104,601.67           13,545,589.39
  Deferred tax assets                       16              1,655,554,438.89        1,533,857,811.27

Total non-current assets                                   50,275,575,683.44       43,368,495,245.44

TOTAL ASSETS                                               93,488,854,098.95      106,125,114,622.69




The notes form an integral part of the financial statements.



                                                    80
                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED BALANCE SHEET (continued)
31 December 2018
(Expressed in Renminbi Yuan)




                                         Notes V                          2018                  2017

Current liabilities
  Short-term loans                          18                190,000,000.00          185,000,000.00
  Notes payable                             19             28,724,063,539.34       39,905,752,773.96
   and accounts payable
  Advances from customers                   20                 1,556,482,278.92     3,878,382,556.43
  Payroll payable                           21                 1,362,995,277.56     1,640,885,322.33
  Taxes payable                             22                   669,316,487.25       394,321,397.14
  Other payables                            23                 3,079,749,015.81     2,599,093,153.78
  Contingent liabilities                    24                 3,245,322,744.12     2,423,958,274.70
  Other current liabilities                 25                 4,325,441,152.61     3,562,154,645.82
  Current portion of
    non-current liabilities                 26                    6,594,120.00         13,151,946.67

Total current liabilities                                  43,159,964,615.61       54,602,700,070.83
Non-current liabilities
  Long-term loans                           27                                -         6,575,973.33
  Special payable                           28                   303,590,824.69       290,607,151.02
  Long term payroll payable                 29                    53,837,000.00       113,012,000.00
  Deferred income                           30                 3,683,308,534.73     3,627,817,419.05
  Deferred tax liabilities                  16                   135,231,170.59        21,222,750.00

Total non-current liabilities                                  4,175,967,530.01     4,059,235,293.40

Total liabilities                                          47,335,932,145.62       58,661,935,364.23




The notes form an integral part of the financial statements.


                                                    81
                                        Chongqing Changan Automobile Company Limited 2018 Annual Report


Chongqing Changan Automobile Company Limited
CONSOLIDATED BALANCE SHEET (continued)
31 December 2018
(Expressed in Renminbi Yuan)



                                         Notes V                        2018                      2017

Owners’ equity
 Share capital                              31              4,802,648,511.00         4,802,648,511.00
 Capital reserves                           32              5,057,242,440.17         5,099,405,956.94
 Other Comprehensive Income                 33                235,509,930.44            82,959,423.84
 Special reserves                           34                 41,222,369.10            28,279,733.06
 Surplus reserves                           35              2,401,324,255.50         2,401,324,255.50
 Retained earnings                          36             33,707,011,170.31        35,184,073,061.94

Equity attributable to owners                              46,244,958,676.52        47,598,690,942.28

Minority interests                                             (92,036,723.19)          (135,511,683.82)

Total equity                                               46,152,921,953.33        47,463,179,258.46

TOTAL LIABILITIES
 AND OWNERS’ EQUITY                                       93,488,854,098.95       106,125,114,622.69




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:




                                                    82
                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2018
(Expressed in Renminbi Yuan)



                                            Notes V                      2018                   2017

Operating revenue                             37           66,298,270,389.77       80,012,205,182.37
Less: Operating cost                          37           56,583,468,369.14       69,363,032,740.85
      Tax and surcharges                      38            2,305,917,984.34        3,074,023,009.42
      Operating expenses                      39            5,283,255,346.48        3,978,124,859.65
      General and administrative
          expenses                            40            2,782,755,531.47        2,663,645,058.45
      Research and development                41            2,543,265,379.12        2,616,651,435.07
          expenses
      Financial income                        42             (427,062,035.06)        (524,973,961.02)
          Interest expense                                     11,700,010.25           48,334,684.86
          Interest income                                     476,922,766.94          609,804,833.96
      Impairment loss on assets               43              238,554,564.69          251,517,154.60
Add: Other incomes                            44            2,873,192,102.56        1,613,343,216.59
      Investment income or loss               45              (71,306,776.79)       6,906,324,932.20
      Including: Investment income
        from associates and joint
        venture                                              (331,883,560.67)        6,854,896,911.97
      Gain on disposal of assets              46                8,561,074.73            41,774,452.23



Operating profit/ (loss)                                     (201,438,349.91)       7,151,627,486.37
Add: Non-operating income                     51              916,219,224.68          104,330,128.12
Less: Non-operating expenses                  52               56,555,550.94           75,068,057.28

Total profit/ (loss)                                           658,225,323.83        7,180,889,557.21
Less: Income tax expense                      53               (65,134,058.04)         (27,547,712.85)

Net profit                                                     723,359,381.87        7,208,437,270.06

Classification by going concern
        Net profit from continuing
         operations                                            723,359,381.87        7,208,437,270.06
        Net profit from discontinued
         operations                                                         -                           -

Classification by ownership attribution
        Net profit attributable to owners                      680,728,392.03        7,137,234,723.47
        Minority interests                                      42,630,989.84           71,202,546.59




The notes form an integral part of the financial statements.


                                                      83
                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED INCOME STATEMENT (continued)
Year ended 31 December 2018
(Expressed in Renminbi Yuan)



                                         Notes V                         2018                     2017

Other comprehensive income,
       net of tax                                               152,550,506.60          (58,521,484.39)

Total comprehensive income
        attributable to owners,
        net of tax                           33                 152,550,506.60       (58,521,484.39)

Other comprehensive income
      not to be reclassified to
       profit or loss in
       subsequent periods:
      Change in net liability or
        assest from defined
        benefit plan                                           (13,214,000.00)            6,201,000.00
      Other comprehensive income
        not to be recalssfied
        to profit or loss
        under equity method                                         (706,228.88)            (248,641.80)
        under equity method                                      (13,920,228.88)           5,952,358.20

Other comprehensive income
      to be reclassified to profit
      or loss in subsequent periods:
        Changes in fair value from
        available-for-sale financial
        assest                                                  177,088,959.46          (75,437,500.00)
        Foreign currency reserve                                (10,618,223.98)          10,963,657.41
                                                                166,470,735.48          (64,473,842.59)
Total comprehensive income
        attributable to minority
        interests, net of tax                                                 -                      -
Total comprehensive income                                      875,909,888.47        7,149,915,785.67
Total comprehensive income
        attributable to owners                                  833,278,898.63        7,078,713,239.08
Total comprehensive income
         attributable to minority
          interest                                               42,630,989.84           71,202,546.59
Earnings per share                           50
Basic earnings per share                                                  0.14                    1.49
Diluted earnings per share                                       Not Applicable         Not Applicable

The notes form an integral part of the financial statements.



                                                    84
                                                                                                                                           Chongqing Changan Automobile Company Limited 2018 Annual Report

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


                                                                                        Equity attributable to owners
                                                                                   Other
                                                               Captial                                Special                  Surplus                   Retained
                                      Share capital                         comprehensive                                                                                      Subtotal      Mionrity interest         Total equity
                                                              reserves                               reserves                  reserves                  earnings
                                                                                  income


At 31 December 2017                 4,802,648,511.00   5,099,405,956.94      82,959,423.84      28,279,733.06           2,401,324,255.50         35,184,073,061.94     47,598,690,942.28       (135,511,683.82 )   47,463,179,258.46


Changes during the year
Total comprehensive income                         -                   -    152,550,506.60                    -                        -           680,728,392.03        833,278,898.63          42,630,989.84       875,909,888.47
Capital contributed by owners and
    capital decreases
          1.The amount of share-
          based payments recorded
          in owners’ equity                       -      (8,735,100.00 )                -                    -                        -                          -        (8,735,100.00 )                             (8,735,100.00
          2.Others                                 -     (33,428,416.77 )                -                    -                        -                          -       (33,428,416.77 )          544,858.43        (32,883,558.34
Distribition of profit

1.Distribution to owners                           -                   -                 -                    -                        -         (2,157,790,283.66 )   (2,157,790,283.66 )                    -    (2,157,790,283.66
Special reserves

          1.Provided                               -                   -                 -      83,826,318.58                          -                          -       83,826,318.58           1,218,813.93        85,045,132.51
          2.Ultilized                              -                   -                 -      (69,587,419.73 )                       -                          -       (69,587,419.73 )         (919,701.57 )      (70,507,121.30
          3.Effective portion
          of changes in
          special reserves
          from joint venture                       -                   -                 -       (1,296,262.81 )                       -                          -        (1,296,262.81 )                    -        (1,296,262.81


At 31 December 2018                 4,802,648,511.00   5,057,242,440.17     235,509,930.44      41,222,369.10           2,401,324,255.50         33,707,011,170.31     46,244,958,676.52        (92,036,723.19 )   46,152,921,953.33




The notes form an integral part of the financial statements.


                                                                                                         85
                                                                                                                                                       Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
Year ended 31 December 2017
(Expressed in Renminbi Yuan)



                                                                                                    Equity attributable to owners
                                                                                             Other
                                                                         Captial                                  Special                 Surplus                   Retained
                                               Share capital                          comprehensive                                                                                       Subtotal       Mionrity interest         Total equity
                                                                        reserves                                 reserves                 reserves                  earnings
                                                                                            income


At 31 December 2016                           4,802,648,511.00   5,085,301,532.55      141,480,908.23        16,349,485.65          2,401,324,255.50         31,126,707,710.94     43,573,812,403.87        (220,652,853.81 )   43,353,159,550.06


Changes during the year
Total comprehensive income                                   -                   -      (58,521,484.39 )                  -                        -          7,137,234,723.47      7,078,713,239.08          71,202,546.59      7,149,915,785.67
Capital contributed by owners and capital
   decreases
          1. The amount of
          share-based payments recorded in
          owners’ equity                                    -     18,981,100.00                      -                   -                        -                          -       18,981,100.00                        -       18,981,100.00
          2.Others                                           -      (4,876,675.61 )                   -                   -                        -                          -        (4,876,675.61 )        13,612,629.45          8,735,953.84

Distribition of profit

          1.Distribution to owners                           -                   -                    -                   -                        -         (3,079,869,372.47 )   (3,079,869,372.47 )                     -    (3,079,869,372.47 )

Special reserves

          1.Provided                                         -                   -                    -      63,595,469.61                         -                          -       63,595,469.61            1,485,155.93        65,080,625.54

          2.Ultilized                                        -                   -                    -     (57,200,673.85 )                       -                          -       (57,200,673.85 )        (1,159,161.98 )      (58,359,835.83 )
          3.Effective portion of changes in
          special reserves from joint
          venture                                            -                   -                    -       5,535,451.65                         -                          -         5,535,451.65                       -         5,535,451.65



At 31 December 2017                           4,802,648,511.00   5,099,405,956.94       82,959,423.84        28,279,733.06          2,401,324,255.50         35,184,073,061.94     47,598,690,942.28        (135,511,683.82 )   47,463,179,258.46




The notes form an integral part of the financial statements.



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                                     Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2018
(Expressed in Renminbi Yuan)



                                            Notes V                   2018                     2017

CASH FLOWS FROM
  OPERATING ACTIVITIES
    Cash received from sale of goods
      or rendering of services                          76,764,633,238.29        84,929,650,617.50
    Refunds of taxes                                       464,242,119.33           293,750,000.42
    Cash received relating to other
      operating activities                    51         4,768,094,889.23          3,750,492,075.81

Subtotal of cash inflows                                81,996,970,246.85        88,973,892,693.73

    Cash paid for goods and services                    70,504,737,377.42         72,950,596,502.56
    Cash paid to and on behalf of
      employees                                          6,114,219,565.04          5,705,682,329.28
    Cash paid for all types of taxes                     2,496,007,225.13          5,152,004,084.25
    Cash paid relating to other
      operating activities                    51         6,769,481,381.70          6,289,080,554.47

Subtotal of cash outflows                               85,884,445,549.29         90,097,363,470.56

Net cash flows from operating
    activities                                52         (3,887,475,302.44)       (1,123,470,776.83)

CASH FLOWS FROM
   INVESTING ACTIVITIES
    Cash received from recovery
       of investment                                                      -             7,069,600.00
    Cash received from return
      on investment                                      1,409,353,446.15          8,727,115,553.76
    Net cash received from disposal
      of fixed assets, intangible assets
      and other long-term assets                             42,904,511.29            25,865,729.72
    Cash received relating to other
      investing activites                     55          1,036,263,749.91                             -

Subtotal of cash inflows                                 2,488,521,707.35          8,760,050,883.48

    Cash paid for acquisition of
      fixed assets,intangible assests
      and other long-term assets                         6,488,329,782.76          3,308,579,224.93
    Cash paid for acquisition of
      investments                                         2,034,743,750.00          1,269,583,030.48
    Acquisition of net cash payments
      from subsidiaries and other


                                                   87
                                      Chongqing Changan Automobile Company Limited 2018 Annual Report

       business units                                           534,168,219.57                          -

Subtotal of cash outflows                                      9,057,241,752.33     4,578,162,255.41

Net cash flows from investing activities                       (6,568,720,044.98)   4,181,888,628.07

The notes form an integral part of the financial statements.




                                                   88
                                      Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CONSOLIDATED CASH FLOW STATEMENT (continued)
Year ended 31 December 2018
(Expressed in Renminbi Yuan)




                                              Notes V                      2018                   2017

CASH FLOWS FROM
 FINANCING ACTIVITIES:

Cash received from investors                                                  -                      -
Cash received from borrowings                                    340,000,000.00         185,000,000.00
Cash received relating to
  other financing activities                       51            855,280,377.20         978,689,175.66

Sub-total of cash inflows                                       1,195,280,377.20      1,163,689,175.66

Cash repayments of borrowings                                    348,133,800.00       2,168,573,600.00
Cash paid for distribution of dividends
  or profits and interest expenses                              2,169,490,293.91      3,200,128,271.95
Cash paid relating to
  other financing activities                       51             30,344,195.00         369,958,242.32

Sub-total of cash outflows                                      2,547,968,288.91       5,738,660,114.27

Net cash flows from financing activities                       (1,352,687,911.71)   (4,574,970,938.61)

EFFECT OF CHANGES IN EXCHANGE
  RATE ON CASH                                                     5,731,783.40          (25,573,889.15)

NET INCREASE IN CASH
  AND CASH EQUIVALENTS                                     (11,803,151,475.73)       (1,542,126,976.52)
Add: Opening balance of
        cash and cash equivalents                              21,451,305,090.53    22,993,432,067.05

CLOSING BALANCE OF
 CASH AND CASH EQUIVLANT                           52           9,648,153,614.80    21,451,305,090.53




The notes form an integral part of the financial statements.



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                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
BALANCE SHEET
31 December 2018
(Expressed in Renminbi Yuan)




                                         Notes XIV                        2018                    2017

Current assets
  Cash                                                         7,310,973,018.99      20,634,514,487.95
  Notes receivable
   and accounts receivable                    1            25,070,320,963.39         34,002,845,071.70
  Prepayments                                                 671,849,711.04            960,555,695.17
  Other receivables                           2             2,344,318,158.83          1,765,907,866.77
  Inventories                                               3,851,783,233.12          4,005,921,440.85
  Other current assets                                      1,355,155,749.21          1,178,094,749.84

Total current assets                                       40,604,400,834.58         62,547,839,312.28

Non-current assets
  Available-for-sale financial assets                         541,182,000.00            532,007,000.00
  Long-term equity investments                3            18,017,137,600.72         15,786,743,636.55
  Fixed assets                                             16,795,537,563.35         15,582,899,632.64
  Construction in progress                                  4,114,409,774.13          2,763,521,275.98
  Intangible assets                                         4,054,893,372.88          3,341,218,169.73
  Development expenditure                                     559,309,970.45            733,947,670.46
  Long-term deferred expenses                                  12,555,353.69             12,821,802.39
  Deferred tax assets                                       1,533,057,523.95          1,421,165,907.17
  Other non-current assets                                    250,000,000.00                         -



Total non-current assets                                   45,878,083,159.17         40,174,325,094.92

TOTAL ASSETS                                               86,482,483,993.75       102,722,164,407.20




The notes form an integral part of the financial statements.



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                                      Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
BALANCE SHEET (continued)
31 December 2018
(Expressed in Renminbi Yuan)




                                                                          2018                  2017

Current liabilities
  Notes payable
   and accounts payable                                    24,263,743,505.87       36,351,223,966.94
  Advances from customers                                   1,208,631,011.05        3,724,183,178.58
  Payroll payable                                           1,001,765,362.99        1,377,250,229.66
  Taxes payable                                               604,525,457.30          320,050,382.91
  Other payables                                            3,219,909,047.22        3,181,207,281.30
  Contingent liabilities                                    2,372,512,543.49        2,380,971,255.26
  Other current liabilities                                 3,923,419,042.37        3,453,269,881.59

Total current liabilities                                  36,594,505,970.29       50,788,156,176.24

Non-current liabilities
  Long term payable                                              248,240,115.29       235,256,441.62
  Long term payroll payable                                       24,315,000.00        91,263,000.00
  Deferred income                                              2,827,208,446.74     2,879,604,719.46
  Deferred tax liabilities                                        26,683,742.04        21,222,750.00

Total non-current liabilities                                  3,126,447,304.07     3,227,346,911.08

Total liabilities                                          39,720,953,274.36       54,015,503,087.32

Owner’s equity
 Share capital                                              4,802,648,511.00        4,802,648,511.00
 Capital reserves                                           4,705,917,638.38        4,717,192,101.72
 Other comprehensive income                                   149,525,803.58          132,520,410.88
 Special reserves                                              19,835,367.61           12,013,706.73
 Surplus reserves                                           2,401,324,255.50        2,401,324,255.50
 Retained earnings                                         34,682,279,143.32       36,640,962,334.05

Total owner’s equity                                      46,761,530,719.39       48,706,661,319.88

TOTAL LIABILITIES
 AND OWNERS’ EQUITY                                       86,482,483,993.75      102,722,164,407.20




The notes form an integral part of the financial statements.



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                                      Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
INCOME STATEMENT
Year ended 31 December 2018
(Expressed in Renminbi Yuan)




                                         Notes XIV                        2018                  2017

Operating revenue                            4             63,379,464,762.20       77,758,476,387.51
Less: Operating cost                         4             54,508,948,244.13       68,732,561,860.05
       Tax and surcharges                                   1,897,849,791.26        2,565,747,398.92
       Operating expenses                                   4,763,764,952.42        3,590,671,641.50
       General and administrative
         expenses                                              2,154,621,063.20     2,657,767,379.36
       Research and development                                2,468,444,658.83     1,821,994,878.30
         expenses
       Financial income                                         (449,471,788.18)     (547,613,808.85)
         Interest income                                                      -        32,461,480.19
         Interest expense                                        464,373,610.97       598,920,267.51
       Impairment loss on assets                                 166,593,138.09       270,436,351.89
Add: Other income                                              1,799,031,976.58       534,853,603.29
       Investment income                      5                  383,123,214.36     6,908,063,504.35
       Including: Investment income
         from associates and from
            joint venture                                       (320,199,939.11)    6,854,896,911.97
       Gain on disposal of assets                                 15,582,497.02        24,198,022.49

Operating profit                                                 66,452,390.41      6,134,025,816.47
Add: Non-operating income                                        64,148,620.50         54,345,488.88
Less: Non-operating expenses                                     43,385,534.76         61,733,222.91

Total profit                                                      87,215,476.15     6,126,638,082.44
Less: Income tax expense                                        (111,891,616.78)     (105,709,086.46)

Net profit                                                      199,107,092.93      6,232,347,168.90

Classification by going concern
        Net profit from continuing
         operations                                            199,107,092.93      6,232,347,168.90




The notes form an integral part of the financial statements.


                                                   92
                                       Chongqing Changan Automobile Company Limited 2018 Annual Report



Chongqing Changan Automobile Company Limited
INCOME STATEMENT
Year ended 31 December 2018
(Expressed in Renminbi Yuan)




                                         Notes XIV                      2018                     2017

Other comprehensive income,
 net of tax

Other comprehensive income
   not tobe reclassified to
      profit or loss in
      subsequent periods:
   Change in net liability or
       assest from defined
       benefit plan                                      (13,234,000.00)              5,912,000.00
    Other Comprehensive income
      not to berecalssfied
      to profit or loss
      under equity method                                        (706,228.88)             (248,641.80)

Other comprehensive income
      to be reclassified to profit
      or loss in subsequent periods:
        Changes in fair value from
        available-for-sale financial
         assest                                                 30,945,621.58          (75,437,500.00)

Total comprehensive income                                     216,112,485.63        6,162,573,027.10




The notes form an integral part of the financial statements.




                                                   93
                                                                                                                                             Chongqing Changan Automobile Company Limited 2018 Annual Report

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



                                                                                                             Other
                                                         Share capital   Captial reserves                             Special reserves         Surplus reserves    Retained earnings     Total onwer’s equity
                                                                                              comprehensive income


At 31 December 2017                                   4,802,648,511.00   4,717,192,101.72            132,520,410.88      12,013,706.73          2,401,324,255.50    36,640,962,334.05       48,706,661,319.88


Changes during the year
Total comprehensive income                                           -                   -            17,005,392.70                      -                     -      199,107,092.93           216,112,485.63
Capital contributed by owners and capital decreases
        1.The amount of share-based                                  -      (8,735,100.00 )                       -                      -                     -                    -            (8,735,100.00)
        payments recorded in owners’ equity
        2.Others                                                     -      (2,539,363.34 )                       -                      -                     -                    -            (2,539,363.34)
Distribition of profit
1.Distribution to owners                                             -                   -                        -                      -                     -    (2,157,790,283.66)      (2,157,790,283.66)
Special reserves
        1.Provided                                                   -                   -                        -      58,994,940.74                         -                    -           58,994,940.74
        2.Ultilized                                                  -                   -                        -     (49,877,017.05)                        -                    -          (49,877,017.05)
        3.Effective portion of changes in
        special reserves from joint venture                          -                   -                        -      (1,296,262.81 )                       -                    -            (1,296,262.81)


At 31 December 2018                                   4,802,648,511.00   4,705,917,638.38            149,525,803.58      19,835,367.61          2,401,324,255.50    34,682,279,143.32       46,761,530,719.39




The notes form an integral part of the financial statements.



                                                                                                           94
                                                                                                                                      Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
STATMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
Year ended 31 December 2017
(Expressed in Renminbi Yuan)


                                                                                                   Other
                                                         Share capital   Captial reserves   Comprehensive      Special reserves          Surplus reserves   Retained earnings      Total onwer’s equity
                                                                                                  income


At 31 December 2016                                   4,802,648,511.00   4,689,475,046.88   202,294,552.68         7,555,003.10          2,401,324,255.50    33,488,484,537.62       45,591,781,906.78


Changes during the year
Total comprehensive income                                           -                  -    (69,774,141.80)                      -                     -     6,232,347,168.90         6,162,573,027.10
Capital contributed by owners and capital decreases
        1.The amount of share-based                                  -     18,981,100.00                  -                       -                     -                     -           18,981,100.00
        payments recorded in owners’ equity
        2.Others                                                     -       8,735,954.84                 -                       -                     -                     -            8,735,954.84
Distribition of profit
1.Distribution to owners                                             -                  -                 -                       -                     -    (3,079,869,372.47 )      (3,079,869,372.47
Special reserves
        1.Provided                                                   -                  -                 -       43,664,824.34                         -                     -           43,664,824.34
        2.Ultilized                                                  -                  -                 -      (44,741,572.36)                        -                     -          (44,741,572.36
        3.Effective portion of changes in
        special reserves from joint venture                          -                  -                 -        5,535,451.65                         -                     -            5,535,451.65

At 31 December 2017                                   4,802,648,511.00   4,717,192,101.72   132,520,410.88        12,013,706.73          2,401,324,255.50    36,640,962,334.05       48,706,661,319.88




The notes form an integral part of the financial statements.


                                                                                                   95
                                        Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CASH FLOW STATEMENT
Year ended 31 December 2018
(Expressed in Renminbi Yuan)


                                                                         2018                     2017

CASH FLOWS FROM
  OPERATING ACTIVITIES
   Cash received from sale of goods
      or rendering of services                              73,237,084,046.94        79,675,129,781.26
   Cash received relating to other
      operating activities                                   3,836,274,126.52         2,919,431,256.19

Subtotal of cash inflows                                    77,073,358,173.46        82,594,561,037.45

    Cash paid for goods and services                        67,590,149,087.20        70,300,504,407.78
    Cash paid to and on behalf of
      employees                                              4,715,386,170.77         4,379,640,973.36
    Cash paid for all types of taxes                         1,723,167,770.46         4,229,906,573.05
    Cash paid relating to other
      operating activities                                   6,515,146,136.99         6,383,379,710.17

Subtotal of cash outflows                                80,543,849,165.42        85,293,431,664.36

Net cash flows from operating
    activities                                              (3,470,490,991.96)       (2,698,870,626.91)

CASH FLOWS FROM
   INVESTING ACTIVITIES

    Cash received from recovery
      of investment                                              2,937,256.01             7,069,600.00
    Cash received from return
      on investment                                          1,422,371,071.18         8,737,204,497.46
    Net cash received from disposal
      of fixed assets, intangible assets
      and other long-term assets                                60,014,623.13           106,245,076.64
    Cash received relating to other
      investing activites                                      124,782,800.00           166,000,000.00

Subtotal of cash inflows                                     1,610,105,750.32         9,016,519,174.10

    Cash paid for acquisition of
      fixed assets,intangible assests
      and other long-term assets                             5,973,170,360.48         2,916,256,030.54
    Cash paid for acquisition of
      investments                                            3,132,195,583.18         1,269,180,419.98
    Cash paid relating to other
      investing activities                                     200,000,000.00           100,000,000.00

Subtotal of cash outflows                                    9,305,365,943.66         4,285,436,450.52

Net cash flows from investing activities                     (7,695,260,193.34)       4,731,082,723.58
The notes form an integral part of the financial statements.


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                                       Chongqing Changan Automobile Company Limited 2018 Annual Report

Chongqing Changan Automobile Company Limited
CASH FLOW STATEMENT (continued)
Year ended 31 December 2018
(Expressed in Renminbi Yuan)




                                                                           2018                         2017

CASH FLOWS FROM
  FINANCING ACTIVITIES
Cash receipts relating to other
  financing activities                                           461,856,503.42               978,689,175.66

Sub-total of cash inflows                                        461,856,503.42               978,689,175.66

Repayment of debts                                                                -          1,980,000,000.00
Cash paid for distribution of dividends
  or profits and for interest expenses                         2,157,790,283.66              3,184,699,226.42
Cash paid relating to other financing activities         -                            110,146.05

Sub-total of cash outflows                                      2,157,790,283.66             5,164,809,372.47

Net cash flows from financing activities                     (1,695,933,780.24)             (4,186,120,196.81)

NET INCREASE IN CASH
  AND CASH EQUIVALENTS                                   (12,861,684,965.54)               (2,153,908,100.14)
Add: Cash and cash equivalents at
      beginning of year                                        20,172,657,984.53          22,326,566,084.67

CASH AND CASH EQUIVLANT
AT END OF YEAR                                                  7,310,973,018.99            20,172,657,984.53




The notes form an integral part of the financial statements.



                                                    97
                                          Chongqing Changan Automobile Company Limited 2018 Annual Report



I      CORPORATE INFORMATION


Chongqing Changan Automobile Company Limited (hereafter referred to as the “Company”) was established by
China Changan Automobile Group (hereafter referred to as the “Changan Group”) as the individual originator on
31 October 1996. The company was set up using the group’s net asset relating to the operation of mini cars and
engine, the shares it owned in Chongqing Changan Suzuki company limited (equal to 506,190,000 shares of the
Company) and the fund raised from the issuance of 250,000,000 foreign capital stock (B shares), with total share
capital of RMB756,190,000.

With the approval of China Securities Regulatory Commission, the company initially floated on share market on
19 May 1997 by issuing 120,000,000 common shares (A share) to the public. The offering increased the total
share capital to RMB 876,190,000.

On 26 June 1998, the Company issued 4 shares for each 10 shares to existing shareholders of the original
876,190,000 shares. The issuance was made from capital reserve and increased the total share capital to RMB
1,226,666,000.

On 26 May 2004, the Company offered 2 bonus shares for each 10 shares held by existing shareholders, which
increased the total share capital from RMB 1,226,666,000 to RMB 1,471,999,200.

On 26 August 2004, with the approval of China Securities Regulatory Commission, the Company offered
148,850,000 common shares (A share) to the market, which increased the total share capital to RMB
1,620,849,200.

In December 2005, China South Industries Group Corporation (hereafter referred to as the “South Group”), the
ultimate parent company, used the common share (850,399,200 shares) owned by its subsidiary, Changan Group,
as part of the investment to establish China South Industries Motor Company (hereafter referred to as” South
Industries Motor”). The share occupied 52.466% of the Company’s total share capital. Therefore, South industries
Motor became the parent company of the Company. On 30 March 2006, the transfer of share was registered by
Shenzhen branch of China Securities Depository and Clearing Corporation limited.

In May 2006, South Industries Motor issued 3.2 bonus shares for each 10 shares to the shareholders at the
implementation date of reformation of non-tradable shares for their non-tradable shares according to the” Reply of
the problems related to the reformation of non-tradable shares of Chongqing Changan Automobile Co., Ltd.”
(2006[442] Guo Zi Chan Quan) issued by the State-owned Assets Supervision and Administration Commission of
State Council and the related shareholder’s meeting. After the reformation of non-tradable shares, South Industries
Motor occupied 45.548% of equity through 738,255,200 common shares.

On 15 May 2007, the Company issued 2 bonus shares for each 10 shares to existing shareholders, which increased
the total share capital from RMB 1,620,849,200 to RMB 1,945,019,040.

On 30 May 2008, the Company issued 2 shares for each 10 shares owned by existing shareholders. The issuance
was made from capital reserve and increased the total share capital to RMB 2,334,022,848.

On 3 March 2009, the secondary temporary shareholder meeting was held. The board resolution about ‘the
reacquisition of foreign capital stock listed in China’ was approved in the meeting. For the buyback period ended
on 3 March 2010, the company repurchased 8,365,233 shares in total, equal to 0.3584% of total capital.

On 1 July 2009, with the approval of State Administration for Industry and Commercial, South industries Motor,
the parent company changed its name to China Changan Automobile Industry (Group) Co., Ltd. (hereafter referred
to as the “China Changan”).

With the approval of China Securities Regulatory Commission on 14 January 2011, the Company issued
360,166,022 common shares (A share), which increased the total share capital to RMB 2,685,823,637. After the
completion of the issuance, China Changan holds 1,163,787,489 shares of the Company's common stock, and the
held equity interest decreased to 43.33%.

On 18 May 2011, the Company issued 4 bonus shares for each 10 shares and issued 4 shares to 10 shares from
capital reserve to existing shareholders. After this issuance, the total share capital has been increased to RMB



                                                        98
                                          Chongqing Changan Automobile Company Limited 2018 Annual Report


4,834,482,546.

On 21 December 2011, the first temporary shareholder meeting was held. The board resolution about ‘the
reacquisition of foreign capital stock listed in China’ was approved in the meeting. For the buyback period ended
on 20 March 2012, the company repurchased 171,596,438 shares in total, equal to 3.55% of total capital. On 30
March 2012, the company cancelled the share and the share capital decreased to RMB 4,662,886,108.

During 2013 and 2014, China Changan, the parent company of the Company, continuously sold 181,260,000 and
89,962,264 shares in total in secondary market. As at 31 December 2014, China Changan holds 1,823,595,216
shares of the Company’s ordinary shares, with shares proportion decreasing to 39.11%.

With the approval of China Securities Regulatory Commission on 14 September 2016, the Company issued
139,762,403 non-public common shares (A share) to China Changan Automobile Industry (Group) Co., Ltd.,
which caused the total share capital increased to RMB 4,802,648,511. After the completion of the issuance, China
Changan holds 1,963,357,619 shares of the Company's common stock, with shares proportion increasing to
40.88%.

On June 15, 2018, with the approval of the state-owned assets supervision and administration commission of the
state council, China Changan, the controlling shareholder of the company, transfers the 1,035,312,673 a-share
shares held by the company to the ultimate holding company of the company, South Group and equipment group
co., ltd. free of charge.

On December 31, 2018, the controlling shareholder of the company, China Changan and its wholly-owned
subsidiary, Zhonghui futong (Hong Kong) investment co., LTD., together held 1,082,165,183 ordinary shares of
the company, with an equity ratio of 22.53%. The ultimate controlling company of the company is China South
Industries Group Co., Ltd.

The Group's main business activities are: the manufacture and sales of automobiles, automobile engine series
products and accessory parts.

According to the Articles of Association, the financial statements, which has been approved by the board of
directors on 19 April 2019, was submitted to general meeting of shareholders for approval.

The scope of consolidation in the consolidated financial statement is determined based on control. There has been
no change of the consolidation scope of 2018.



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 characteristics, the group formulated the specific accounting
policies and accounting estimates, mainly reflected in provision of accounts receivables (note 3 (10)), inventory
valuation (Note 3 (11)), depreciation of fixed assets, intangible assets amortization (Note 3 (14) (17)), condition of
capitalization of research and development expense (Note 3 (18)) and revenue recognition and measurement (Note
3 (24)).



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1.      Statement of compliance with Accounting Standards for Business Enterprises

The financial statements present fairly and fully, the financial position of the Company as at 31 December 2018
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 reporting period, the foreign currency financial statements are
translated into the reporting currency of the Company of RMB.


4.      Business combination

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

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

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

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

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

Goodwill is initially recognised and measured at cost, being the excess of the aggregate of the fair value of the
consideration transferred (or the fair value of the equity securities issued) and any fair value of the Group’s
previously held equity interest in the acquiree over the Group’s interest in the fair value of the acquiree’s net
identifiable assets. After initial recognition, goodwill is measured at cost less any accumulated impairment
losses. Where the aggregate of the fair value of the consideration transferred (or the fair value of the equity
securities issued) and any fair value of the Group’s previously held equity interest in the acquiree is lower than the
Group’s interest in the fair value of the acquiree’s net identifiable assets, the Group reassesses the measurement of
the fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities and the fair value of the
consideration transferred (or the fair value of the equity securities issued), together with the fair value of the
Group’s previously held equity interest in the acquiree. If after that reassessment, the aggregate of the fair value



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of the consideration transferred (or the fair value of the equity securities issued) and the Group’s previously held
equity interest in the acquiree is still lower than the Group’s interest in the fair value of the acquiree’s net
identifiable assets, the Group recognises the remaining difference in profit or loss.

If a business combination not under the same control is realized step by step through multiple transactions, the
equity of the purchased party held before the purchase date shall be re-measured according to the fair value of the
equity on the purchase date, and the difference between the fair value and the book value shall be included in the
calculation. Current profit and loss; if the equity of the purchased party held before the purchase date involves
other comprehensive income under the equity method, it shall be accounted for on the same basis as the investee
directly disposes the relevant assets or liabilities, except for net profit or loss, other comprehensive income.
Changes in other shareholders' equity other than the profit distribution are transferred to the current profit and loss
of the purchase date.


5.      Consolidated financial statements

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

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

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

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

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

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


6       Joint venture arrangement classification and joint operation

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

Any joint venturer shall recognize the following items related to its share of benefits in the joint operation and
conduct accounting treatment in accordance with relevant accounting standards for business enterprises: assets it
solely holds and its share of jointly-held assets based on its percentage; liabilities it solely assumes and its share of
jointly-assumed liabilities based on its percentage; incomes from sale of output enjoyed by it from the joint
operation; incomes from sale of output from the joint operation based on its percentage; and separate costs and
costs for the joint operation based on its percentage.
7.      Cash and cash equivalents

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




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8.      Foreign currency translation

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

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

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

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


9.      Financial instruments

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

Recognition and derecognition

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

The Group derecognizes a financial asset (or part of a financial asset, or part of a group of similar financial assets),
be written off from the account and balance sheet , when the following conditions are met:

(1)   the rights to receive cash flows from the asset have expired;
(2)   the Group transferred the rights to receive cash flows from the asset, or has assumed an obligation to pay the
      received cash flows in full without material delay to a third party under a “pass-through” arrangement; and
      either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
      retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

If the underlying obligation of a financial liability has been discharged or cancelled or has expired, the financial
liability is derecognized. If an existing financial liability is replaced by the same creditor, with a new financial
liability that has substantially different terms, or if the terms of an existing financial liability are substantially
revised, such replacement or revision is accounted for as the derecognition of the original liability and the
recognition of a new liability, and the difference thus resulted is recognized in profit or loss for the current period.

When buy or sell financial instruments under a normal way, financial instruments are recognized or derecognized
according to the transaction date accounting. A normal way to buy or sell financial instruments refers to, according
to the contract terms, receive or deliver financial instruments within the period as required by legal regulation or
generally accepted guidelines. Transaction date refers to the date when the Group committed to buy or sell



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financial instruments.

Classification and measurement of financial assets

Financial assets are, on initial recognition, classified into the following categories: financial assets at fair value
through profit or loss, held-to-maturity investments, loans and receivables, available-for-sale financial assets, and
the derivatives designated as effective hedging instrument. A financial asset is recognized initially at fair value.
In the case of financial assets at fair value through profit or loss, relevant transaction costs are directly charged to
the profit and loss of the current period; transaction costs relating to financial assets of other categories are
included in the amount initially recognized.

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

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and those designated
upon initial recognition as at fair value through profit or loss. A financial asset held for trading is the financial
asset that meets one of the following conditions: the financial asset is acquired for the purpose of selling it in a
short term; the financial asset is a part of a group of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this group for the purpose
of short-term profits; the financial asset is a derivative, except for a derivative that is designated as effective
hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot
be reliably measured. For such kind of financial assets, fair values are adopted for subsequent measurement. All
the realized or unrealized gains or losses on these financial assets are recognized in profit or loss for the current
period. Dividend or interest income related to financial assets at fair value through profit or loss is recognized in
profit or loss for the current period.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are
subsequently measured at amortized cost using the effective interest method. Gains or losses arising from
derecognition, impairment or amortization are recognized in profit or loss for the current period.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such kind of financial assets are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or
loss for the current period.

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available for sale
or are not classified as the above financial assets. After initial recognition, available-for-sale financial assets are
measured at fair value. The premium/discount is amortized using effective interest method and recognized as
interest income or expense. A gain or loss arising from a change in the fair value of an available-for-sale financial
asset is recognized in other comprehensive income as a component of capital reserve, except for impairment
losses and foreign exchange gains and losses resulted from monetary financial assets, until the financial asset is
derecognized or determined to be impaired, at which time the accumulated gain or loss previously recognized in
capital reserve is removed from capital reserve and recognized in profit or loss for the current period. Interests and
dividends relating to an available-for-sale financial asset are recognized in profit or loss for the current period.

The equity investment instruments, for which there is no quoted price in active market and whose fair value
cannot be reliably measured, shall be measured at cost.

Classification and measurement of financial liabilities

The Group’s financial liabilities are, on initial recognition, classified into the following categories: financial
liabilities at fair value through profit or loss, other financial liabilities, and the derivatives designated as effective
hedging instrument. For financial liabilities at fair value through profit or loss, relevant transaction costs are


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directly recognized in profit or loss for the current period, and transaction costs relating to other financial
liabilities are included in the initial recognition amounts.

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

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and those
designated as at fair value through profit or loss. A financial liability held for trading is the financial liability that
meets one of the following conditions: the financial liability is assumed for the purpose of repurchasing it in a
short term; the financial liability is a part of a group of identifiable financial instruments that are collectively
managed, and there is objective evidence indicating that the enterprise recently manages this group for the purpose
of short-term profits; the financial liability is a derivative, except for a derivative that is designated and effective
hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price form an active market) whose fair value cannot
be reliably measured. For such kind of financial liabilities, fair values are adopted for subsequent measurement.
All the realized or unrealized gains or losses on these financial liabilities are recognized in profit or loss for the
current period.

Other financial liabilities

After initial recognition, these financial liabilities are measured at amortized cost using the effective interest
method.

Offsetting of financial instruments

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

Impairment of financial assets

The Group assesses the carrying amount of a financial asset, at the balance sheet date. If there is objective
evidence that the financial asset is impaired, the Group makes provision for the impairment loss. Objective
evidence that a financial asset is impaired is evidence arising from one or more events that occurred after the
initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset
which can be reliably estimated.

Financial assets carried at amortized cost

When the financial assets carried at amortized cost are impaired, the carrying amount of the financial asset shall
be reduced to the present value of the estimated future cash flow (excluding future credit losses that have not been
incurred). The amount of reduction is recognized as an impairment loss in the income statement. Present value of
estimated future cash flow is discounted at the financial asset’s original effective interest rate and includes the
value of any related collateral.

If a financial asset is individually significant, the Group assesses the asset individually for impairment, and
recognizes the amount of impairment in the income statement if there is objective evidence of impairment. For a
financial asset that is not individually significant, the Group can include the asset in a group of financial assets
with similar credit risk characteristics and collectively assess them for impairment. Assets for which an
impairment loss is individually recognized will not be included in a collective assessment of impairment.

If, subsequent to the recognition of an impairment loss on a financial asset carried at amortized cost, there is
objective evidence of a recovery in value of the financial asset which can be related objectively to an event
occurring after the impairment was recognized, the previously recognized impairment loss is reversed and
recognized in the income statement. However, the reversal shall not result in a carrying amount of the financial
asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date
the impairment is reversed.

Impairment of financial assets (continued)




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Available-for-sale financial assets
When there is objective evidence that the asset is impaired, the cumulative loss from declines in fair value that had
been recognized directly in capital reserve are removed from equity and recognized in the income statement. The
amount of the cumulative loss that is removed from capital reserves and recognized in the income statement (net
of any principal repayment and amortization) and current fair value, less any impairment loss on that financial
asset previously recognized in the income statement.

Impairment of financial assets In the case of equity investments classified as available for sale, objective evidence
would include a significant or prolonged decline in the fair value of an investment below its cost. The
determination of what is “significant” or ''prolonged” requires judgement. “Significant” is evaluated against the
original cost of the investment and “prolonged” against the period in which the fair value has been below its
original cost. Impairment losses on equity instruments classified as available for sale are not reversed through the
income statement. Increases in their fair value after impairment are recognised directly in other comprehensive
income.

The determination of what is “significant” or “prolonged” requires judgement. In making this judgement, the
Group evaluates, among other factors, the duration or extent to which the fair value of an investment is less than
its cost.

Financial assets carried at cost
If objective evidence shows that the financial assets carried at cost are impaired, the difference between the
present value discounted at the prevailing rate of return of similar financial assets and the book value of the
financial asset are provided as a provision and recognized in the current income statement. The impairment loss
recognized cannot be reversed.

Transfer of financial assets

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

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


10.     Accounts receivable

(1)     Accounts receivable which is individually significant and analyzed individually for provision:


                                                      Accounts receivable balance greater than RMB15 million due
Criterion for individually significant items
                                                      from non-related parties
                                                      A provision of the difference between recoverable amount
Method for provision
                                                      and book value is recognized based on individually analysis


(2)     Accounts receivable analyzed by credit risk charactristics group for provision:


Criterion for group
                       Accounts receivable due from non-related parties other than individually significant items
Group 1
                       or insignificantly but analyzed individually for provision
Group 2                Accounts receivable due from related parties
Method for the provision of group
Group 1                Making provision according to aging analysis
                       A provision of the difference between recoverable amount and book value is recognized
Group 2
                       based on individually analysis.




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Group 1, the provision analyzed according to aging analysis:


Aging                                                 Accounts receivable                             Other receivables
                                                  Provision percentage (%)                    Provision percentage (%)
Within 1 year
  Within 6 months                                                           0                                          0
  6 to 12 months                                                            5                                          5
1 to 2 years                                                              10                                          10
2 to 3 years                                                              30                                          30
3 to 4 years                                                              50                                          50
4 to 5 years                                                              80                                          80
Above 5 years                                                            100                                         100


(3)     Accounts receivable which is individually insignificant but analyzed individually for provision


                                            There is objective evidence that the accounts receivable due from
Criterion for individually analysis for
                                            non-related parties is impaired and the future recoverable possibility is
provision
                                            little.
                                            A provision of the difference between recoverable amount and book
Method for provision
                                            value is recognized individually.


11.     Inventories


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

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

The Group applies a perpetual counting method of inventory.

At the balance sheet date, the inventory is stated at the lower of cost and net realizable value. If the cost is higher
than the net realizable value, provision for the inventory should be made through profit or loss. If factors that
resulted in the provision for the inventory have disappeared and made the net realizable value higher than their
book value, the amount of the write-down should be reversed, to the extent of the amount of the provision for the
inventory, and the reversed amount should be recognized in the income statement for the current period.

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


12.     Long-term equity investments

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

The long-term investments are initially recorded at costs on acquisition. Long-term investments acquired from
business combination under common control shall be initially measured at the carrying value of the held interest
of the party being acquired; The difference between the initial measured amounts and the book value of
consideration, adjust the capital reserves (if the capital reserve is insufficient to be offset, retained earnings should
be adjusted); Long-term investments acquired from business combination not under common control shall be



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initially measured at the cost (or, the sum of the cost and the carrying value of the previously held equity interest
in the acquire for the business combination achieved by stages), which include the fair value of the consideration
paid, the liabilities beard and the fair value of issued equity instrument; the other comprehensive income produced
from the investment before the acquisition should be transferred into the current year investment income on
disposal.

Long-term investments acquired not from business combination are initially measured at 1)the consideration
together with the cost necessary incurred; 2) the fair value of the equity instruments; and 3) the consideration
agreed in the investment agreement by the investors, otherwise the agreed consideration were not fair

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

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

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

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

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


13.     Investment property


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

The initial measurement of the investment property shall be measured at its actual cost. The follow-up expenses
pertinent to an investment property shall be included in the cost of the investment property, if the economic



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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.


14.      Fixed assets


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

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


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


                                                                                             Yearly deprecation rate
           Category               Deprecation period             Residual rate (%)
                                                                                                      (%)
Buildings                            20 to 35 years                      3%                       2.77%-4.85%
Machinery (Note)                     5 to 20 years                       3%                      4.85%-19.40%
Vehicles                             4 to 10 years                       3%                      9.70%-24.25%
Others                               3 to 21 years                       3%                      4.62%-32.33%
Note: the molds in machinery should be depreciated in units-of-production method.



The Group reviews the useful life and estimated net residual value of a fixed asset and the depreciation method
applied at least at the end of each year and makes adjustments if necessary.


15.      Construction in progress


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

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


16.      Borrowing costs


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

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



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

1)      expenditure for the asset is being incurred;
2)      borrowing costs are being incurred; and
3)      activities that are necessary to prepare the asset for its intended use or sale are in progress.

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

During the capitalization period, the amount of interest to be capitalized for each accounting period shall be
determined as follows:
1) where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual
interest expense incurred on that borrowing for the period less any bank interest earned form depositing the
borrowed funds before being used on the asset or any investment income on the temporary investment of those
funds;
2) where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings
is determined by applying a weighted average interest rate to the weighted average of the excess amounts of
cumulative expenditure on the asset over and above the amounts of specific-purpose borrowings.

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


17.     Intangible assets


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

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

The useful lives of the intangible assets are as follow:
                                                                                                                            Useful life

Land use right                                                                                             43 to 50 years
Software                                                                                                          2 years
Trademark                                                                                                        10 years
Non-patent technology                                                                                             5 years

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

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




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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.


18.     Research and development expenditures


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

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

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

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


19.     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, irrespective of whether there is any
indication that the asset may be impaired. An intangible asset which is not ready for its intended use is tested for
impairment at least at the end of every year.

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

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

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

When an impairment test is conducted on an asset group or a set of asset groups that contains goodwill, if there is
any indication of impairment, the Group firstly tests the asset group or the set of asset groups excluding the


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amount of goodwill allocated for impairment, i.e., it determines and compares the recoverable amount with the
related carrying amount and then recognize impairment loss if any. Thereafter, the Group tests the asset group or
set of asset groups including goodwill for impairment, the carrying amount (including the portion of the carrying
amount of goodwill allocated) of the related asset group or set of asset groups is compared to its recoverable
amount. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the
amount of the impairment loss is firstly eliminated by and amortized to the book value of the goodwill included in
the asset group or set of asset groups, and then eliminated by the book value of other assets according to the
proportion of the book values of assets other than the goodwill in the asset group or set of asset groups.

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


20.     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.


21.     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 relation. Employee compensation
includes short-term compensation and post-employment benefits. The benefits offered by enterprises to the
spouse, children, the dependents of the employee, the family member of deceased employee and other
beneficiaries are also employee compensation.

Short-term employee salaries

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

Post-employment benefits (Defined contribution plans)

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

Post-employment benefits (Defined benefit plan)

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

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

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

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




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Termination benefits

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


22.     Provisions


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

1)      the obligation is a present obligation of the Group;
2)      it is probable that an outflow of economic benefits from the Group will be required to settle the obligation;
3)      a reliable estimate can be made of the amount of the obligation.

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


23.     Share-based payments


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

The equity-settled share-based payment in return for employee services shall be measured at the fair value of the
equity instruments granted to the employees. As to an equity-settled share-based payment in return for services of
employees, if the right may be exercised immediately after the grant, the fair value of the equity instruments shall,
on the date of the grant, be included in the relevant cost or expense and the capital reserves shall be increased
accordingly. As to a equity-settled share-based payment in return for employee services, if the right cannot be
exercised until the vesting period comes to an end or until the prescribed performance conditions are met, then on
each balance sheet date within the vesting period, the services obtained in the current period shall, based on the
best estimate of the number of vested equity instruments, be included in the relevant costs or expenses and the
capital reserves at the fair value of the equities instruments on the date of the grant. The fair value is determined
using Black-Scholes model (Note 10).

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

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

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

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



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previous paragraph.


24.     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 conditions are qualified.

Revenue from the sale of goods

The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the Group
retains neither continuing management involvement to the degree usually associated with ownership nor effective
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 stipulated in the contract or agreement,
otherwise the amount is not fair; If the amount received or receivable as stipulated in the contract or agreement is
collected in a defer method, it includes the financing elements and should be determined according to the fair
value of the amount received or receivable as stipulated in the contract or agreement.

Revenue from the rendering of services

When the outcome of a transaction involving the rendering of services can be estimated 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 estimated reliably when all of the following
conditions are satisfied: 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 stipulated in the contract or agreement, otherwise
the amount is not fair.

Interest income

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

Royalty income

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

Rental income

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


25.     Government grants

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

A government grant which is specified by the government documents to be used to purchase and construct the
long-term assets shall be recognized as the government grant related to assets. A government grant which is not
specified by the government documents shall be judged based on the basic conditions to obtain the government
grant. The one whose basic condition was to purchase and construct the long-term assets shall be recognized as
the government grant related to assets.



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

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

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


26.     Income taxes

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

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

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

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

(1)     to the extent that the deferred tax liability arises from the initial recognition of goodwill or the initial
        recognition of an asset or liability in a transaction which contains both of the following characteristics: the
        transaction is not a business combination and at the time of the transaction, it affects neither the
        accounting profit nor taxable profit or loss.

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

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

(1)     where the deferred tax asset relating to the deductible temporary differences arises from the initial
        recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
        transaction, affects neither the accounting profit nor taxable profit or loss; and

(2)     in respect of deductible temporary differences associated with investments in subsidiaries, associates and
        interests in joint ventures, deferred tax assets are only recognized to the extent that it is probable that the
        temporary differences will reverse in the foreseeable future and taxable profit will be available against
        which the temporary differences can be utilized.

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

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



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        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.


27.     Leases


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

The Group recording the operating lease as a lessee

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

The Group recording the operating lease as a lessor

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



28.     Profit distribution


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


29.     Safety fund


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


30.     Fair value measurement


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


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


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




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unobservable inputs.

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

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


31.     Significant accounting judgments and estimates


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

Judgments

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

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

Uncertainty of accounting estimates

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

Impairment of available-for-sale
The Group classifies certain assets as available for sale and recognises movements of their fair values in equity.
When the fair value declines, management makes assumptions about the decline in value to determine whether
there is an impairment that should be recognized in the income statement

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

Bad debt provisions
Provisions are made under the allowance method. For each individually significant receivable, the impairment test
should be conducted individually. Where there is evidence that indicates impairment, the loss should be



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recognized with the respective provision accrued, equaling to the difference between the present value of the
future cash flows and the book value of receivables. For other receivables concerned, management should accrue
the general provisions, along with the receivables individually tested while no impairment incurred, taking in
account the collectability.

Inventory impairment based on the net realizable value
According to accounting policy, inventories shall be measured at the lower of cost and the net realizable value.
Provision for inventories is recognized in the income statement when the cost is higher than the net realizable
value and when the inventories are obsolete and slow-moving. The Group will reassess whether a single inventory
is obsolete, slow-moving or whether the net realizable value is lower than the inventories’ cost at end of each year.

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 existing unutilized tax deficits and
deductible temporary differences to the extent of the amount of the taxable income which it is most likely to
obtain and which can be deducted from the deductible temporary differences. Enormous accounting judgments, as
well as the tax planning are compulsory for management to estimate the time and amount of prospective taxable
profits and thus determine the appropriate amount of the deferred tax assets concerned.

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

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


32.     Changes in accounting policies and estimates


Changes in accounting policies

Changes in presentation of financial statements
To meet the requirements of the Notice on Revising and Issuing Format of 2018 Annual Financial Statements for
General Business Enterprises (Cai Kuai [2018] No.15), in the balance sheet, the amounts previously presented in
“notes receivable” and “accounts receivable” separately shall be presented in the new item “notes receivable and
accounts receivable”; the amounts previously presented in “interest receivable” and “dividends receivable” shall
be presented in “other receivables”; the amounts previously presented in “fixed assets pending for disposal” shall
be presented in “fixed assets”; the amounts previously presented in “construction materials” shall be presented in
“construction in progress”; the amounts previously presented in “notes payable” and “accounts payable”
separately shall be presented in “notes payable and accounts payable”; and the amounts previously presented in
“grants payables” shall be presented in “long-term payables”. In the income statement, the new item “research
and development expenses” is added to present the expensed expenditures incurred during the research and
development process, and the new items of “interest expenses” and “interest income” are added under “finance
expenses”. The Group has retrospectively adjusted the comparative amounts correspondingly. The changes in
accounting policies have had no impact on the net profit and equity in the consolidated and company financial
statements.

Changes in the item to be presented for cash flows of government grants related to assets




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According to the MOF's Interpretation of Related Issues on Format of 2018 Annual Financial Statements for
General Business Enterprises, when preparing the statement of cash flows, the cash flows originally classified as
cash flows from [investing] and [financing] activities are classified as cash flows from operating activities. The
Group adjusted the comparative amounts retrospectively. These changes in accounting policies reduced the net
cash flows from [investing/financing] activities in the consolidated and company statements of cash flows and
increased the net cash flows from operating activities by the same amount, but had no effects on the net increase
in cash and cash equivalents.


The cumulative effect of retrospective adjustments caused by the above changes in accounting policies are stated
as follows:


                                                                       31 December 2017
Consolidated balance sheet                                              Before                               After
  Notes receivable                                        29,156,481,085.20                                          -
  Accounts receivable                                        1,806,807,193.04                                        -
  Notes receivable and accounts Receivable                                    -                 30,963,288,278.24
  Interest receivable                                          42,184,263.88                                         -
  Other receivables                                          1,645,276,455.04                    1,687,460,718.92
  Fixed assets disposal                                              4,716.98                                        -
  Fixed assets                                            19,044,528,950.70                     19,044,533,667.68
  Notes payable                                           18,002,926,579.81                                          -
  Accounts payable                                        21,902,826,194.15                                          -
  Notes receivable and accounts receivable                                    -                 39,905,752,773.96
  Dividend payables                                                 79,742.80                                        -
  Other payables                                             2,599,013,410.98                    2,599,093,153.78
  Special payable                                             290,607,151.02                                         -
  Long-term prepaid expenses                                                  -                  290,607,151.02




                                                                              2017
Consolidated profit sheet                                               Before                               After
  General and administrative                                  5,280,296,493.52                   2,663,645,058.45
    expenses
  Research and development                                                    -                  2,616,651,435.07
    expenses


                                                                              2017
Consolidated cash flow                                                  Before                               After
  Cash received relating to other                             3,504,386,075.81                   3,750,492,075.81
  operating activities
  Cash received relating to other                               246,106,000.00                                       -
  investing activities




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IV TAXES

1.     The major categories of taxes and surcharges

Categories      of    taxes     and                       Basis of tax                             Tax rate
surcharges
Value added tax (“VAT”)                Levy on the taxable sales and rendering of               5%, 6% ,
                                        services, deducted the deductible input VAT.            10%(11%)or
                                                                                                 16%(17%)
Consumption tax                                          Taxable sales                          1%,3% or 5%
City maintenance and                                The turnover taxes paid                       5% or 7%
construction tax
Educational surcharge                               The turnover taxes paid                           3%
Local educational surcharge                         The turnover taxes paid                           2%
Corporate income tax                                    Taxable income                           15% or 25%


2.     Tax benefits


In accordance to Circular for Further Implementation of Tax Incentives In the Development of Western Regions
(Cai Shui [2011] No. 58) collectively issued by the ministry of Finance, the Customs General Administration and
the National Taxation Bureau of PRC, from 1 January 2011 to 31 December 2020, enterprises located in the
Western Region and engaged in encouraged business would be entitled to a preferential CIT rate of 15%. For the
year ended 2017, the Company, Changan Special Sales and Chongqing Changan Automobile Supporting are
qualified to the requirement and acquired permission of the preferential tax rate of 15% from Chongqing Jiangbei
National Tax Bureau (refer to Jiang Fa Gai Ti[2015] No. 135).

In accordance to Circular of the Administrative Measures for the Certification of New and High Technology
Enterprises (Guo Ke Fa Huo [2016] No. 32) and Circular of the Working Guidance on the Recognition of Hi-tech
Enterprises (Guo Ke Fa Huo [2016] No. 195), the subsidiary of Hefei Changan Automobile Co., Ltd. obtained the
certificate of new and high technology enterprise on 21 October 2016 and is subjected to the preferential tax rate
of 15% from 2016 to 2018.

In accordance to Circular of the Administrative Measures for the Certification of New and High Technology
Enterprises (Guo Ke Fa Huo [2016] No. 32) and Circular of the Working Guidance on the Recognition of Hi-tech
Enterprises (Guo Ke Fa Huo [2016] No. 195), the subsidiaries of Hebei Changan Automobile Co., Ltd. and Hebei
Baoding Changan Bus Co., Ltd. obtained the certificate of new and high technology enterprise on 21 July 2017
and on 27 October 2017, and are subjected to the preferential tax rate of 15% from 2017 to 2019.




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V NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS

1.        Cash

              Item                                   2018                                  2017
Cash                                                               14,374.84                        33,089.31
Cash at bank                                              9,648,139,239.96                21,451,272,001.22
Other cash                                                    332,390,911.34                1,180,231,406.00
Total                                                     9,980,544,526.14                22,631,536,496.53

As at 31 December 2018, the book value of restricted cash and cash equivalents is RMB332,390,911.34 (As at 31
December 2017: RMB1,180,231,406.00), which was mainly restricted for the issuance of acceptance bill.

As at 31 December 2017, the cash at bank oversea is equivalent to RMB329,881,255.11 (As at 31 December 2017:
RMB82,961,261.21).

Cash at banks earns interest at floating rates based on daily bank deposit rates. Notice 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 respective deposit rates.

2.        Notes receivable and accounts receivable

                                                            2018                           2017
Notes receivable                                         20,561,625,805.24                29,156,481,085.20
Accounts receivable                                         1,409,419,600.50                1,806,807,193.04
Total                                                    21,971,045,405.74                30,963,288,278.24

Notes receivable

(1)     Classification of notes receivable


                   Type                                  2018                            2017
Commercial acceptance bill                               6,687,321,419.20                9,142,240,884.70
Bank acceptance bill                                    13,874,304,386.04               20,014,240,200.50
Total                                                   20,561,625,805.24               29,156,481,085.20

(2)       Pledged notes receivable


                     Type                                   2018                           2017
Commercial acceptance bill                                    384,462,570.00                                  -
Bank acceptance bill                                           85,160,000.00                  287,427,970.00
Total                                                         469,622,570.00                  287,427,970.00

As at 31 December 2018 and 2017, notes receivable with above carrying amount were pledged to issue notes
payable.




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(3)         Endorsed or discounted but unexpired notes receivable as at the end of reporting period are as follow:
                                                                2018                                                         2017
                                          Derecognition                Un-derecognition                     Derecognition           Un-derecognition
Commercial acceptance                         147,853,740.00                                  -                  70,962,210.00                          -
bill
Bank acceptance bill                        1,498,687,956.97                                  -               1,198,514,460.00                          -
Total                                       1,646,541,696.97                                  -               1,269,476,670.00                          -


(4)        As at 31 December 2018,notes transferred to accounts receivable due to the non-acceptance was
           RMB29,079,401.00. (As at 31 December 2017: Nil)


Accounts receivable

(1)         Aging analysis of the accounts receivable as at 31 December 2018 is as follows:


                         Aging                                                  2018                                                2017
Within 1 year                                                                       1,147,795,158.16                                   1,375,775,524.93
1 to 2 years                                                                          96,258,167.82                                      320,269,522.88
2 to 3 years                                                                         112,117,946.39                                      106,193,915.65
Over 3 years                                                                         143,862,648.03                                        40,598,751.89
Total                                                                               1,500,033,920.40                                   1,842,837,715.35


Provision                                                                            (90,614,319.90)                                       (36,030,522.31)
                                                                                    1,409,419,600.50                                   1,806,807,193.04


The movements in provision for impairment of accounts receivable are as follows:


                      Beginning                          Addition                                   Deduction
                                                                                                                                    Ending balance
                       balance              Provision                  Other             Reversal               Write-off
2018                   36,030,522.31          13,490,022.81         42,008,512.00             832,031.73            82,705.49               90,614,319.90

2017                   30,946,126.28           8,587,659.49                     -            3,058,543.46          444,720.00               36,030,522.31



  (2)       Analysis of accounts receivable by category as at 31 December 2018 is as follows:

                                                       2018                                                                 2017
      Item                        Balance                          Provision                            Balance                         Provision
                            Amount                     %          Amount             %             Amount                   %        Amount             %
Individually
significant items
and analyzed                 858,892,602.36            57.26      44,226,423.35      5.15           734,064,982.48          39.83                  -           -
individually for
provision

Accounts receivable analyzed as groups for provision

Group 1. Accounts
receivable
analyzed for
provision                    427,323,980.23            28.48      29,225,702.47      6.84           811,522,470.21          44.04    22,765,588.74          2.81
according to aging
analysis
Group 2. Accounts
receivable from              185,492,616.70            12.37                    -        -          283,985,329.09          15.41                  -           -
related parties

Group subtotal               612,816,596.93            40.85      29,225,702.47      4.77         1,095,507,799.30          59.45    22,765,588.74          2.08
Individually
insignificant items           28,324,721.11             1.89      17,162,194.08 60.59                 13,264,933.57          0.72    13,264,933.57          100
but analyzed
individually for




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                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


provision


Total                 1,500,033,920.40     100          90,614,319.90   6.04       1,842,837,715.35      100          36,030,522.31     1.96


In groups, accounts receivable were analyzed for provision by aging:


                                           2018                                                          2017
      Aging                  Balance                         Provision                       Balance                        Provision
                        Amount                %                                         Amount             %
Within 6
                        355,306,650.92       83.15                             -        753,965,095.69     92.91                          -
months
6 to 12
                           1,374,930.80          0.32             68,746.54              18,262,202.43         2.25             913,110.11
months
Within 1 year
                        356,681,581.72       83.47                68,746.54             772,227,298.12     95.16                913,110.11
subtotal
1 to 2 years              34,680,938.03          8.12          3,468,093.80              12,198,268.67         1.50           1,219,826.87

2 to 3 years              11,214,542.66          2.62          3,364,362.80               1,451,653.80         0.18             435,496.14

3 to 4 years               1,106,688.03          0.26            553,344.02              10,368,508.00         1.28           5,184,254.00

4 to 5 years               9,345,372.38          2.19          7,476,297.90               1,319,200.00         0.16           1,055,360.00

Over 5 years              14,294,857.41          3.34         14,294,857.41              13,957,541.62         1.72          13,957,541.62

Total                   427,323,980.23           100          29,225,702.47             811,522,470.21         100           22,765,588.74


In groups, accounts receivable was analyzed for provision by other methods:


                                                          2018                                                 2017
              Group
                                          Balance                   Provision                   Balance                     Provision
Accounts receivable from
 related parities
                                          185,492,616.70                            -           283,985,329.09                            -


As at 31 December 2018 and 2017, there are no individually significant items analyzed individually for provision.

(3)         In 2018, provision for accounts receivable amounted to RMB13,490,022.81 has been accrued (2017:
            RMB8,587,659.49). Provision for accounts receivable amounted to RMB832,031.73 has been reversed
            (2017: RMB3,058,543.46). Due to the acquisition of Changan Suzuki, the provision for bad debts
            increased by RMB 42,008,512.00 (Note VI, changes in the scope of consolidation)

(4)         As at 31 December 2018, Provision for accounts receivable amounted to RMB82,705.49 has been
            write-off (2017: RMB444,720.00).

(5)         As at 31 December 2018, accounts receivable from Top 5 clients amounted to RMB564,688,036.12,
            accounted for 37.65% of the total accounts receivable (2017:RMB553,166,995.66,accounted for 30.02%
            of the total amount).

(6)         There was no accounts receivable derecognized due to transfer of financial assets during 2018 (2017: Nil).




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                                              Chongqing Changan Automobile Company Limited 2018 Annual Report




3.      Prepayments

(1)     Aging analysis of the prepayments is as follows:
                                              2018                                                 2017
       Aging                   Amount                 Percentage (%)                    Amount                Percentage
                                                                                                                  (%)
Within 1 year                  781,698,728.24                     90.25               1,099,772,284.11                 99.78
1 to 2 years                    77,209,604.94                         8.91                   447,067.45                 0.04
2 to 3 years                      5,320,836.56                        0.61                  1,485,647.87                0.13
Over 3 years                      2,020,579.77                        0.23                   534,931.90                 0.05
Total                          866,249,749.51                         100             1,102,239,931.33                   100

(2)     As at 31 December 2018, prepayments to Top 5 suppliers amounted to RMB692,025,641.94, which
        accounted for 79.89% of the total prepayments (2017: RMB993,006,069.80, which accounted for 90.09%
        of the total amount ).

4.      Other receivables
            Item                                     2018                                            2017
Interest Receivable                                         17,432,805.54                                    42,184,263.88
Other Receivables                                      3,233,020,118.16                                   1,645,276,455.04
Total                                                  3,250,452,923.70                                   1,687,460,718.92


Interest Receivables

As of December 31, 2018, the Group's interest receivable for time deposits was RMB 17,432,805.54 (December
31, 2017: RMB 42,184,263.88)

Other receivables

(1)     Aging analysis of other receivables as at 31 December 2018 is as follows:


                                                       2018                                          2017
Within 1 year                                           1,959,280,906.55                                  1,414,935,792.12
1 to 2 years                                            1,185,294,003.76                                    212,077,835.97
2 to 3 years                                                73,740,285.90                                     6,624,999.32
Over 3 years                                                22,553,085.53                                    15,794,423.31
Total                                                   3,240,868,281.74                                  1,649,433,050.72


Provision                                                   (7,848,163.58)                                  (4,156,595.68)
                                                        3,233,020,118.16                                  1,645,276,455.04

Movements of provisions for other receivables are as follows:


            Beginning                     Addition                               Deduction                   Ending
             balance          Provision        Other addition            Reversal           Write-off        balance
2018           4,156,595.68     576,587.36             4,348,209.00          1,176,673.66     56,554.80       7,848,163.58
2017           4,120,282.27    1,231,570.84                       -          1,109,854.82     85,402.61       4,156,595.68




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(2)         Analysis of other receivables by category as at 31 December 2017 is as follows:


                                                     2018                                                        2017
      Item                        Balance                         Provision                      Balance                            Provision
                             Amount                  %          Amount            %           Amount             %            Amount                %
Individually
significant items
and analyzed                  2,780,889,774.62       85.80                  -         -       1,404,077,945.42   85.12                    -              -
individually for
provision

Other receivables analyzed as groups for provision

Group 1. Other
receivables
analyzed for
                                323,279,832.19        9.98       1,212,982.16      0.38        201,199,672.08    12.20          1,177,852.02          0.59
provision
according to aging
analysis
Group 2. Other
receivables from                126,128,653.39        3.89                  -         -         41,176,689.56        2.50                     -          -
related parties

Group subtotal                  449,408,485.58       13.87       1,212,982.16      0.27        242,376,361.64    14.70          1,177,852.02          0.49

individually
insignificant items
but analyzed                     10,570,021.54        0.33       6,635,181.42     62.77           2,978,743.66       0.18       2,978,743.66          100
individually for
provision

Total                         3,240,868,281.74        100        7,848,163.58      0.24       1,649,433,050.72       100        4,156,595.68          0.25



In groups, other receivables were analyzed for provision by aging:


                                                         2018                                                          2017
        Aging                               Balance                                                      Balance
                                                                         Provision                                                      Provision
                                     Amount                     %                                 Amount                    %
Within 6 months                      311,733,721.34           96.42                       -        194,289,589.40           96.57                            -

6 to 12 months                          5,807,829.40           1.80             290,391.47            5,512,392.58           2.74             275,619.62

Within 1 year
                                     317,541,550.74           98.22             290,391.47         199,801,981.98           99.31             275,619.62
subtotal
1 to 2 years                            5,113,633.10           1.58             511,363.31              405,884.15           0.20                 40,588.42

2 to 3 years                               253,452.00          0.08              76,035.60               48,000.00           0.02                 14,400.00

3 to 4 years                                34,672.34          0.01              17,336.17              193,123.94           0.10                 96,561.97

4 to 5 years                                93,342.00          0.03              74,673.60                       -              -                            -

Over 5 years                               243,182.01          0.08             243,182.01              750,682.01           0.37             750,682.01

Total                                323,279,832.19            100         1,212,982.16            201,199,672.08            100         1,177,852.02


As at 31 December 2018, there are no individually significant items analyzed individually for provision (2017:
Nil).

(3)         For the year ended 31 December 2018, provision for other receivables amounted to RMB576,587.36 have
            been accrued (2017: RMB1,231,570.84). Provision for other receivables amounted to RMB1,176,673.66
            has been reversed (2017: RMB1,109,854.82). Due to the acquisition of Changan Suzuki, the provision for
            bad debts increased by RMB 4,348,209.00 (Note VI, changes in scope of consolidation)

(4)         For the year ended 31 December 2018, provision for impairment of other receivables amounted to
            RMB56,554.80 has been written off (2017: RMB85,402.61).

(5)         An analysis of the other receivables by nature is as follows:




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report



                  Nature                                            2018                                       2017
Energy-saving and new energy
                                                                    2,847,788,412.50                           1,356,575,528.00
subsidy
Petty Cash                                                              85,243,135.73                                 93,960,780.74
Security Deposit                                                        16,370,802.38                                 12,526,804.36
Export rebates                                                          11,523,570.20                                 19,865,767.18
Others                                                                 272,094,197.35                            162,347,574.76
Total                                                               3,233,020,118.16                           1,645,276,455.04

(6)      As at 31 December 2018, top five debtors of other receivables are as follows:

                                                                                                     Proportion of
                                                                                                       total other
Debtors                  Amount                             Nature                  Aging             receivables
                                                                                                                          Provision
                                                                                                           (%)
                                                                                  Within four
First                     1,667,483,759.60        New energy subsidy                                          51.45                     -
                                                                                     years
                                                                                  Within four
Second                       538,567,705.00        New energy subsidy                                         16.62                     -
                                                                                     years
                                                                                 Within three
Third                        414,492,285.00        New energy subsidy                                         12.79                     -
                                                                                     years
                                                          Commission
Fourth                       124,312,677.94                                     Within one year                  3.84                   -
                                                           processing
Fifth                        107,479,260.00        New energy subsidy Within one year                            3.32                   -
Total                     2,852,335,687.54                                                                    88.02                     -

As at 31 December 2017, top five debtors of other receivables are as follows:

                                                                                                     Proportion of
                                                                                                       total other
Debtors                  Amount                             Nature                  Aging             receivables
                                                                                                                          Provision
                                                                                                           (%)
                                                   Energy-saving and             Within three
First                     1,080,007,000.00                                                                    65.48                     -
                                                   new energy subsidy                years
                                                                                 Within three
Second                       230,157,128.00        New energy subsidy                                         13.95                     -
                                                                                     years
                                                                                 two to three
Third                         40,784,896.53          Disposal of assets                                          2.47                   -
                                                                                     year
Fourth                        25,358,400.00        New energy subsidy one to two year                            1.54                   -
Fifth                         21,053,000.00        New energy subsidy Within one year                            1.28                   -
Total                     1,397,360,424.53                                                                    84.72                     -

(7) For the year ended 2018, there is no accounts receivable derecognized due to transfer of financial assets.
(2017: Nil).

5.       Inventories

(1)      Classification of inventories


                                          2018                                                        2017
      Item
                    Balance            Provision            Net value              Balance           Provision           Net value
Raw materials       2,029,706,541.33     181,897,353.27      1,847,809,188.06       461,911,233.10    33,713,007.05        428,198,226.05




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                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report


Material in
                       318,420,244.84                 -         318,420,244.84        511,912,371.36                  -         511,912,371.36
transit
Work in
                     1,413,892,484.38     35,473,526.73        1,378,418,957.65       633,181,546.29    32,329,369.55           600,852,176.74
progress
Finish goods         1,292,509,122.51     76,519,657.33        1,215,989,465.18     3,154,147,791.47   103,902,330.06         3,050,245,461.41

Consigned
processing             110,310,364.86                 -         110,310,364.86         26,530,300.45                  -          26,530,300.45
material
Consumables              46,472,236.60                -          46,472,236.60         48,444,885.79                  -          48,444,885.79

Total                5,211,310,994.52    293,890,537.33        4,917,420,457.19     4,836,128,128.46   169,944,706.66         4,666,183,421.80



(2)        Provision for inventories

2018

                                                          Additions                          Deduction
                     Beginning                                                                                            Ending
      Type                                                                                  Reversal Or
                      balance                 Provision                 Other                                             balance
                                                                                            Written off
Raw
                      33,713,007.05           163,124,568.33         161,591,998.30          176,532,220.41           181,897,353.27
materials
Work in
                      32,329,369.55             6,303,861.08            1,985,609.60            5,145,313.50              35,473,526.73
progress
Finish
                     103,902,330.06            68,184,792.87           17,456,727.63         113,024,193.23               76,519,657.33
goods
Total                169,944,706.66           237,613,222.28         181,034,335.53          294,701,727.14           293,890,537.33



2017

                                                                                       Deduction
                           Beginning
        Type                                          Provision                   Reversal Or Written            Ending balance
                            balance
                                                                                          off
Raw materials                 57,482,949.30                 17,808,606.07                   41,578,548.32                    33,713,007.05
Work in
                              53,155,331.21                  7,166,686.01                   27,992,647.67                    32,329,369.55
progress
Finish goods                  91,631,171.89                 76,579,038.73                   64,307,880.56                   103,902,330.06
Total                       202,269,452.40                 101,554,330.81                 133,879,076.55                    169,944,706.66


Note for the inventory

(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 estimated by selling price in the ordinary course of business deduct
estimated costs in further production to sell and estimated necessary distribution expense and tax expense. The
reversal of inventory provisions is due to price rebound of previous impaired inventories by net realizable value
test, while written off of inventory provisions are due to selling off of previous impaired inventories in current
year. Other additions in the year were due to the acquisition of Changan Suzuki (Note 6) Changes in the scope of
consolidation.


6.         Other current assets

                  Item                                          2018                                           2017
Input VAT to be deducted                                           2,227,386,063.11                              1,699,621,114.17
Others                                                                     179,290.12                                     6,289,416.26




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report



Total                                                           2,227,565,353.23                            1,705,910,530.43


7.         Available-for-sale financial assets

                                            2018                                                     2017
        Item
                      Book value          Provision        Net value            Book value         Provision               Net value
Available-for-sale
equity instrument
Measured at fair       1,557,441,311.31    27,120,000.00   1,530,321,311.31       191,485,000.00    27,120,000.00           164,365,000.00
value
Measured at             429,361,274.00      1,809,274.00       427,552,000.00     379,361,274.00     1,809,274.00           377,552,000.00
historical cost
Total                  1,986,802,585.31    28,929,274.00   1,957,873,311.31       570,846,274.00    28,929,274.00           541,917,000.00



Available-for-sale financial assets measured at fair value:

As at 31 December 2018, the available-for-sale equity securities instrument measured at fair value is 35.50 million
ordinary shares of Southwest Securities Co., Ltd. (31 December 2017: 35.50 million ordinary shares of Southwest
Securities Co., Ltd.), and 23 million restricted shares of Contemporary Amperex Technology Co., Ltd.(31
December 2017: Nil).

                               Item                                              2018                               2017
Cost of equity instrument                                                       1,050,000,821.00                     50,000,000.00
Fair value                                                                      1,530,321,311.31                    164,365,000.00
Accumulated amount of change in fair value recorded in other
                                                                                 349,824,952.31                     141,485,000.00
   comprehensive income
Provision                                                                         27,120,000.00                      27,120,000.00




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7.      Available-for-sale financial assets (continued)

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

2018
                                                                                                                                                                                                                                                             Shareholding          Cash dividend in
                                                                                                Book value                                                                                        Provision
                          Item                                                                                                                                                                                                                                Ratio (%)              current year

                                                             Beginning balance            Addition                   Disposal            Ending balance         Beginning balance           Addition             Disposal           Ending balance
China South Industry Group Finance Co., Ltd.                      80,000,000.00                              -                   -         80,000,000.00                            -                    -                  -                        -               3.83            48,909,006.75
Chongqing Ante trading Co., Ltd                                    3,000,000.00                              -                   -          3,000,000.00                            -                    -                  -                        -              10.00                             -
Sichuan Glass Co., Ltd.                                            1,809,274.00                              -                   -          1,809,274.00             1,809,274.00                        -                  -         1,809,274.00                   0.64                             -
Zhong Fa Lian Investment Co., Ltd.                                21,000,000.00                              -                   -         21,000,000.00                            -                    -                  -                        -              10.00                             -
CAERI(Beijing) automobile Lightweight          Technology          3,000,000.00                              -                   -          3,000,000.00                            -                    -                  -                        -               6.89                             -
  Research Institution Co., Ltd.
Guoqi Automobile Power Cell Research Co., Ltd.                    40,000,000.00                              -                   -         40,000,000.00                            -                    -                  -                        -               7.41                449,438.20
United Prosperity Investment (ShenZhen) Co., Ltd                  30,552,000.00                              -                   -         30,552,000.00                            -                    -                  -                        -               5.00                             -
Corun Hybrid Power Technology Co. Ltd                            200,000,000.00                          -                       -        200,000,000.00                            -                    -                  -                        -               9.24                             -
Guoqi (Beijing) Intelligent Network            Association                        -       50,000,000.00                          -         50,000,000.00                            -                    -                  -                        -               5.56                             -
  Automotive Research Institute Co., Ltd.
                          Total                                  379,361,274.00           50,000,000.00                          -        429,361,274.00             1,809,274.00                        -                  -         1,809,274.00                                   49,358,444.95



2017
                                                                                                                                                                                                                                                                Shareholding           Cash dividend in
                                                                                                     Book value                                                                                        Provision
                          Item                                                                                                                                                                                                                                   Ratio (%)               current year

                                                              Beginning balance            Addition                   Disposal             Ending balance         Beginning balance           Addition              Disposal           Ending balance
China South Industry Group Finance Co., Ltd.                        80,000,000.00                                -                   -          80,000,000.00                           -                    -                  -                        -                  3.83         46,814,239.43
Chongqing Ante trading Co., Ltd                                      3,000,000.00                                -                   -           3,000,000.00                           -                    -                  -                        -             10.00                              -

Sichuan Glass Co., Ltd.                                              1,809,274.00                                -                   -           1,809,274.00                           -      1,809,274.00                                1,809,274.00                     0.64                          -

Zhong Fa Lian Investment Co., Ltd.                                  21,000,000.00                                -                   -          21,000,000.00                           -                    -                  -                        -             10.00                              -

CAERI(Beijing) automobile Lightweight          Technology
  Research Institution Co., Ltd.
                                                                     3,000,000.00                                -                   -           3,000,000.00                           -                    -                  -                        -                  6.89                          -

Guoqi Automobile Power Cell Research Co., Ltd.                      40,000,000.00                                -                   -          40,000,000.00                           -                    -                  -                        -                  7.41                          -

United Prosperity Investment (ShenZhen) Co., Ltd                    30,552,000.00                                -                   -          30,552,000.00                           -                    -                  -                        -                  5.00                          -

Corun Hybrid Power Technology Co. Ltd                                                 -    200,000,000.00                            -         200,000,000.00                                                -                  -                        -                  9.24                          -

                          Total                                    179,361,274.00          200,000,000.00                                      379,361,274.00                           -      1,809,274.00                     -          1,809,274.00                        -           46,814,239.43




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The impairment provision for available-for-sale financial assets is as follows:
2018
                  Provision for available-for-sale financial assets               Beginning balance         Addition                  Disposal               Ending balance
Available-for-sale financial assets measured at fair value                                  27,120,000.00                        -                      -            27,120,000.00
Available-for-sale financial assets measured at historical cost                              1,809,274.00                        -                      -             1,809,274.00
                                        Total                                               28,929,274.00                    -                      -                28,929,274.00


2017
                  Provision for available-for-sale financial assets               Beginning balance         Addition                  Disposal               Ending balance
Available-for-sale financial assets measured at fair value                                  27,120,000.00                    -                      -                27,120,000.00
Available-for-sale financial assets measured at historical cost                                         -         1,809,274.00                      -                 1,809,274.00
                                        Total                                               27,120,000.00         1,809,274.00                      -                28,929,274.00




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        8.          Long-term equity investments

        2018

                                                                                        Investment income          Other
                                                                                                                                     Other equity          Cash dividends                                                    Book value                Provision
                  Investee                   Beginning balance        Addition              under equity        comprehensive                                                    Other Deduction        Provision
                                                                                                                                      variation               declared                                                      ending balance           ending balance
                                                                                              method               income
Joint Venture
Chongqing Changan Suzuki Automobile
                                                 1,190,705,710.43                   -       (595,756,652.13)                     -                  -                        -       (594,949,058.30)                   -                        -                    -
  Co., Ltd.
Jiangling Holding Co., Ltd.                      2,907,749,943.37                   -       (409,453,173.08)      (706,228.88)        (3,835,625.88)                         -                      -                   -         2,493,754,915.53                    -
Changan Ford Automobile Co., Ltd.                4,125,426,104.20                   -       (415,641,597.09)                 -                      -                        -                      -                   -         3,709,784,507.11                    -
Changan Mazda Automobile Co., Ltd.               2,439,429,811.02                   -       1,263,196,852.39                 -                      -       (1,230,000,000.00)                      -                   -         2,472,626,663.41                    -
Changan Ford Mazda Engine Co., Ltd.               903,838,395.08                    -          38,465,362.88                 -                      -         (114,500,000.00)                      -                   -          827,803,757.96                     -
Changan PSA Automobiles Co., Ltd.                  93,561,126.76     1,800,000,000.00       (437,042,058.02)                 -                      -                        -                      -                   -         1,456,519,068.74                    -
Changan Weilai New Energy
                                                                 -     49,000,000.00          (4,934,486.09)                 -                      -                        -                                                      44,065,513.91
 Automobile Technology Co., Ltd.

Subtotal                                        11,660,711,090.86    1,849,000,000.00       (561,165,751.14)      (706,228.88)        (3,835,625.88)        (1,344,500,000.00)       (594,949,058.30)               -            11,004,554,426.66                -

Associates
Chongqing Changan Kuayue Automobile
                                                  101,399,892.43                    -          28,908,342.54                 -                      -          (13,720,000.00)                      -               -              116,588,234.97                 -
  Co., Ltd.
Chongqing Changan Kuayue Automobile
                                                                 -                  -                       -                -                      -                        -                      -               -                            -                -
  Sales Co., Ltd. (note1)
Beijing Fang’an cresent taxi Co., Ltd.
                                                                 -                  -                       -                -                      -                        -                      -               -                            -                -
  (note1)
Changan Automobile Financing Co.,Ltd             1,817,669,991.73                   -         212,947,165.68                 -                      -                        -                      -               -             2,030,617,157.41                -
Zhenjiang Demao Hairun equity investment
  fund partnership (limited                       518,742,921.95                    -           (239,867.54)    77,231,613.62                       -                        -       (595,734,668.03)               -                            -                -
  partnership)(note2)
Hainan Anxinxing Information Technology
                                                                 -      6,000,000.00            (463,444.79)                 -                      -                        -                      -               -                 5,536,555.21                -
  Co., Ltd.
Nanjing Chelai Travel Technology Co., Ltd.                       -      2,000,000.00            (186,383.86)                 -                      -                        -                      -                                 1,813,616.14                -
Hunan Guoxin Semiconductor Technology
                                                                 -     25,000,000.00                        -                -                      -                        -                      -                               25,000,000.00                 -
  Co., Ltd.
Beijing Wutong Chelian Technology Co.,
                                                                 -     98,000,000.00         (12,143,147.43)                 -                      -                        -                      -                               85,856,852.57                 -
  Ltd.
Anhe (Chongqing) Equity Investment Fund
                                                                 -      2,500,000.00                        -                -                      -                        -                      -                                 2,500,000.00                -
  Management Co., Ltd.
Hangzhou Chelizi Intelligent Technology
                                                                 -      2,243,750.00             459,525.87                  -                                                                      -                                 2,703,275.87                -
  Co., Ltd.

Subtotal                                         2,437,812,806.11     135,743,750.00          229,282,190.47    77,231,613.62                       -          (13,720,000.00)       (595,734,668.03)               -             2,270,615,692.17                -

Total                                           14,098,523,896.97    1,984,743,750.00       (331,883,560.67)    76,525,384.74         (3,835,625.88)        (1,358,220,000.00)     (1,190,683,726.33)               -            13,275,170,118.83                -




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        8.          Long-term equity investments(continued)

        Note1: As at 31 December 2018, the Group is not responsible for extra loss from Chongqing Changan Kuayue Automobile Sales Co., Ltd. and Beijing Fang’an cresent taxi Co., Ltd.
                 Therefore, when excess losses of these two associates occurred, the Group just reduced its correspondent long-term equity investment to zero, and did not recognize contingent
                 liabilities accordingly.

        Note2: In 2018, Chongqing Changan Suzuki Automobile Co., Ltd. and Zhenjiang Demao Hairun Equity Investment Fund Partnership (Limited Partnership) were changed to be
                 subsidiaries of the Company. For details, please refer to Note VI. Changes in Consolidation Scope.

        2017

                                                                                                        Investment income          Other
                                                                                                                                                   Other equity       Cash dividends                          Book value                Provision
                  Investee                 Beginning balance        Addition          Deduction             under equity        comprehensive                                                Provision
                                                                                                                                                    variation            declared                            ending balance           ending balance
                                                                                                              method               income
Joint Venture
Chongqing Changan Suzuki Automobile
                                               1,230,836,876.85                   -                 -         (42,413,558.40)                -        2,282,391.98                      -                -         1,190,705,710.43                    -
  Co., Ltd.
Jiangling Holding Co., Ltd.                    2,991,207,303.06                   -                 -         (86,461,777.56)     (248,641.80)        3,253,059.67                      -                -         2,907,749,943.37                    -
Changan Ford Automobile Co., Ltd.              5,663,808,819.68                   -                 -       6,039,117,284.52                 -                    -    (7,577,500,000.00)                -         4,125,426,104.20                    -
Changan Mazda Automobile Co., Ltd.             2,146,340,500.42                   -                 -       1,268,089,310.60                 -                    -      (975,000,000.00)                -         2,439,429,811.02                    -
Changan Ford Mazda Engine Co., Ltd.             908,715,700.67                    -                 -        119,122,694.41                  -                    -      (124,000,000.00)                -          903,838,395.08                     -
Changan PSA Automobiles Co., Ltd.               647,839,655.26                    -                 -        (554,278,528.50)                -                    -                     -                -           93,561,126.76                     -

Subtotal                                      13,588,748,855.94                   -                 -       6,743,175,425.07      (248,641.80)        5,535,451.65     (8,676,500,000.00)                -        11,660,711,090.86                -

Associates
Chongqing Xiyi Automobile Linkage Rod
                                                   7,556,448.42                   -    (6,005,819.20)          (1,550,629.22)                -                    -                     -                -                        -                -
  Co., Ltd.(note1)

Chongqing Changan Kuayue Automobile
                                                 83,406,464.16                    -                 -         17,993,428.27                  -                    -                     -                -          101,399,892.43                 -
  Co., Ltd.
Chongqing Changan Kuayue Automobile
                                                               -                  -                 -                       -                -                    -                     -                -                        -                -
  Sales Co., Ltd. (note2)
Beijing Fang’an cresent taxi Co., Ltd.
                                                               -                  -                 -                       -                -                    -                     -                -                        -                -
  (note2)
Changan Automobile Financing Co.,Ltd           1,063,655,241.51     650,000,000.00                  -         95,278,795.38                  -        8,735,954.84                      -                -         1,817,669,991.73                -
Zhenjiang Demao Hairun equity investment
                                                               -    518,743,029.48                  -                (107.53)                -                    -                     -                -          518,742,921.95                 -
  fund partnership (limited partnership)

Subtotal                                       1,154,618,154.09    1,168,743,029.48    (6,005,819.20)         111,721,486.90                 -        8,735,954.84                      -                -         2,437,812,806.11                -

Total                                         14,743,367,010.03    1,168,743,029.48    (6,005,819.20)       6,854,896,911.97      (248,641.80)      14,271,406.49       (8,676,500,000.00)               -        14,098,523,896.97                -




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9.         Investment property

Cost Model

2017


                  Item                                                              Builidings
                                                            2018                                                   2017
Original cost
      Beginning and Ending                                             10,050,100.00                                    10,050,100.00
Accumulated depreciation
and amortization
      Beginning                                                         2,493,827.16                                      2,267,115.60
      Accrual                                                              226,711.56                                       226,711.56
      Ending                                                            2,720,538.72                                      2,493,827.16
Impairment Provision
      Beginning and Ending                                                                -                                                  -


Carrying amount
      Ending                                                            7,329,561.28                                      7,556,272.84
      Beginning                                                         7,556,272.84                                      7,782,984.40

The investment property is rented to third parties in the form of operating lease.

As at 31 December 2018, there is no investment property without property certificate (As at 31 December 2017:
Nil).


10.        Fixed assets

                                                         2018                                                    2017
Fixed assets                                                    22,161,054,058.31                                   19,044,528,950.70
fixed assets disposal                                                                 -                                         4,716.98
Total                                                           22,161,054,058.31                                   19,044,533,667.68



(1) Details of fixed assets

2018

      Item                Buildings          Machinery                   Vehicles             Other Equipments              Total
Original cost
Beginning                7,588,350,429.43   17,780,317,915.84           758,168,041.39          4,965,243,303.05        31,092,079,689.71
Purchase                   23,926,779.57        23,571,882.60              3,099,101.17            26,846,795.56            77,444,558.90
Transfer from
Construction in          1,327,900,008.98     756,278,671.99            432,279,275.46          1,379,046,064.13          3,895,504,020.56
progress
Other addition            954,716,283.23     3,602,516,085.77            24,428,654.75          1,329,694,549.68          5,911,355,573.43
Disposal                     5,313,985.87     235,304,285.38               4,751,373.21            56,765,383.96           302,135,028.42
Ending                   9,889,579,515.34   21,927,380,270.82          1,213,223,699.56         7,644,065,328.46        40,674,248,814.18
Accumulated
depreciation




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Beginning             1,585,639,930.24        7,183,157,682.85         207,356,765.94           2,190,616,451.00       11,166,770,830.03
Accrual                293,956,868.75         1,410,740,403.02         181,011,982.63            448,572,044.96         2,334,281,299.36
Other addition         269,696,084.63         2,650,379,521.25          20,023,995.95           1,165,493,091.83        4,105,592,693.66
Disposal                  2,086,226.30         218,149,664.89            2,872,163.13             30,936,659.24          254,044,713.56
Ending                2,147,206,657.32       11,026,127,942.23         405,520,581.39           3,773,744,928.55       17,352,600,109.49
Impairment
provision
Beginning               83,371,676.72          673,609,726.30             223,852.23             123,574,653.73          880,779,908.98
Accrual                    400,000.00            87,862,065.28          36,048,119.83             17,301,545.17          141,611,730.28
Other addition             708,576.48          149,779,328.80                         -             6,351,188.48         156,839,093.76
Disposal                  2,028,003.69           15,333,552.42                        -             1,274,530.53           18,636,086.64
Ending                  82,452,249.51          895,917,567.96           36,271,972.06            145,952,856.85         1,160,594,646.38
Carrying
amount
Ending                7,659,920,608.51       10,005,334,760.63         771,431,146.11           3,724,367,543.06       22,161,054,058.31
Beginning             5,919,338,822.47        9,923,550,506.69         550,587,423.22           2,651,052,198.32       19,044,528,950.70


2017

       Item               Buildings               Machinery                Vehicles               Other Equipments              Total
Original cost
Beginning                6,585,025,213.48        14,656,950,077.02        635,870,396.01            4,254,426,806.07         26,132,272,492.58
Purchase                    93,109,589.36           229,213,269.80         18,636,091.12               53,700,062.46           394,659,012.74
Transfer from             914,913,063.52          3,335,754,582.56        112,909,603.35              876,084,376.68          5,239,661,626.11
Construction in
progress
Disposal                     4,697,436.93           441,600,013.54          9,248,049.09              218,967,942.16           674,513,441.72
Ending                   7,588,350,429.43        17,780,317,915.84        758,168,041.39            4,965,243,303.05         31,092,079,689.71


Accumulated
depreciation
Beginning                1,333,083,905.82         6,198,699,998.91         93,947,322.89            2,017,878,519.69          9,643,609,747.31
Accrual                   254,351,666.72          1,209,909,941.02        120,844,400.33              329,677,458.08          1,914,783,466.15
Disposal                     1,795,642.30           225,452,257.08          7,434,957.28              156,939,526.77           391,622,383.43
Ending                   1,585,639,930.24         7,183,157,682.85        207,356,765.94            2,190,616,451.00         11,166,770,830.03


Impairment
provision
Beginning                   84,183,751.00           793,157,069.89              268,506.89            130,568,903.50          1,008,178,231.28
Accrual                                  -           64,328,680.40                        -            15,651,081.91             79,979,762.31
Disposal                      812,074.28            183,876,023.99               44,654.66             22,645,331.68           207,378,084.61
Ending                      83,371,676.72           673,609,726.30              223,852.23            123,574,653.73           880,779,908.98


Carrying amount
Ending                   5,919,338,822.47         9,923,550,506.69        550,587,423.22            2,651,052,198.32         19,044,528,950.70
Beginning                5,167,757,556.66         7,665,093,008.22        541,654,566.23            2,105,979,382.88         15,480,484,513.99




(2)        Fixed assets that are temporarily unused

2018
      Item               Original cost         Accumulated depreciation            Impairment provision            Carrying amount
Buildings                 224,485,202.11                      125,177,360.10                   77,423,503.00           21,884,339.01
Machinery               1,976,159,790.51                   1,347,119,942.38                   615,716,084.44           13,323,763.69
Vehicles                     1,879,595.78                        1,578,167.36                    275,067.08                26,361.34




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Other
                            434,967,988.89                312,070,125.63             119,315,817.56             3,582,045.70
Equipments
Total                      2,637,492,577.29              1,785,945,595.47            812,730,472.08            38,816,509.74


2017

        Item                Original cost        Accumulated depreciation        Impairment provision         Carrying amount
Buildings                      150,631,017.32                    76,892,209.89             52,199,841.54             21,538,965.89
Machinery                     1,826,830,449.60               1,259,936,903.19             555,048,275.37             11,845,271.04
Vehicles                           110,256.41                       32,307.39                  77,949.02                         -
Other
                               155,250,949.58                 100,552,513.98               54,387,445.40               310,990.20
Equipments
Total                         2,132,822,672.91               1,437,413,934.45             661,713,511.33             33,695,227.13


(3)        The book value of fixed assets which are rented out under operating leases is as follow:

                    Item                                  2018                                              2017
Machinery                                                     1,908,531.51                                       10,288,642.35



(4)        Fixed assets without property certificate as at 31 December 2018 are as follow:

                   Item                             Carrying amount              Reason for incomplete certificate of title
Painting plant                                           419,331,763.92                                            In process
Assemble plant                                           322,045,403.28                                            In process
Welding workshop                                         225,139,093.22                                            In process
Yu Zui Auto City                                         181,989,820.09                                            In process
H plant Phase IV                                         152,185,927.80                                            In process
Stamping Workshop                                        113,216,645.84                                            In process
Other facilities                                          70,383,604.89                                            In process
S Engine plant                                            63,312,939.19                                            In process
Second foundry plant                                      45,000,481.79                                            In process
Other plant                                               39,454,029.99                                            In process
EA Casting workshop Phase I                               36,396,378.71                                            In process
Second plant and public building                          35,794,778.68                                            In process
Office building                                           10,512,738.16                                            In process
Engine workshop                                             9,603,986.86                                           In process
Staff cafeteria                                             8,139,861.57                                           In process
Technology center workshop                                  7,047,659.65                                           In process
Buildings in testing projects of                                                                                   In process
                                                            4,795,691.00
Dianjiang




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11.      Construction in progress

(1)      Details of construction in progress


                                                                  2018                                                                2017
             Item
                                        Balance               Provision        Carrying amount                 Balance               Provision       Carrying amount
Mini-bus production                                                        -                                                                     -
                                          815,889,070.57                              815,889,070.57               997,340,616.73                           997,340,616.73
   equipment
Yuzui motor city project                   51,962,876.25                   -           51,962,876.25               247,220,662.88                -          247,220,662.88
Car production equipment                  181,137,313.03                   -          181,137,313.03               165,767,240.81                -          165,767,240.81
Engine plant                             1,458,726,257.58                  -         1,458,726,257.58              341,191,269.61                -          341,191,269.61
Vehicle research institution              854,570,879.08                   -          854,570,879.08               401,869,572.35                -          401,869,572.35
Vehicle moulds                            420,284,566.37                   -          420,284,566.37               365,419,879.40                -          365,419,879.40
Light vehicle technical                                                    -                                                                     -
   transformation project of               83,207,252.58                               83,207,252.58                28,393,497.74                            28,393,497.74
   Baoding Changan bus
Plant for vehicle test project                 6,643,182.68                -              6,643,182.68                6,052,888.00               -            6,052,888.00
Beijing vehicle construction                                               -                                                                     -
                                           98,585,664.59                               98,585,664.59               163,600,842.58                           163,600,842.58
  project
Engine Base of Nanjing                          499,150.94                 -               499,150.94                 3,201,929.85               -            3,201,929.85
Yuzui Refitting factory                    12,276,085.40                   -           12,276,085.40                30,880,135.49                -           30,880,135.49
Car production Project Of                                                  -                                                                     -
                                          872,832,482.14                              872,832,482.14               156,409,567.96                           156,409,567.96
    Hefei Changan
Others                                    576,544,644.42       49,315,394.88          527,229,249.54               326,825,052.12                -          326,825,052.12
Total                                    5,433,159,425.63      49,315,394.88         5,383,844,030.75             3,234,173,155.52               -        3,234,173,155.52




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(2)         Significant movements of construction in progress in 2018

                                   Budget                                                                                    The project investments’    Progress of
            Project                               Beginning balance          Addition         Transfer to fixed assets                                                      Source of funds   Ending balance
                                 (RMB0,000)                                                                                   proportion of budget       construction

Mini-bus production
  equipment
                                     523,977.00   997,340,616.73           822,003,529.66        1,003,455,075.82                               67%                 67%        Raised          815,889,070.57

Yuzui motor city project             564,027.00   247,220,662.88           284,256,842.83           479,514,629.46                              78%                 78%        Raised            51,962,876.25
Car production equipment             735,202.00   165,767,240.81           525,824,999.59           510,454,927.37                              28%                 28%        Raised          181,137,313.03
Engine plant                         827,789.00   341,191,269.61          1,350,482,008.58          232,947,020.61                              92%                 92%        Raised         1,458,726,257.58
Vehicle research institution         226,830.00   401,869,572.35           637,783,509.21           185,082,202.48                              86%                 86%         raised         854,570,879.08
Vehicle moulds                       225,550.00   365,419,879.40           365,375,476.56           310,510,789.59                              92%                 92%         raised         420,284,566.37
Light vehicle technical
    transformation project of         92,867.00     28,393,497.74           99,638,888.18            44,825,133.34                              57%                 57%         raised           83,207,252.58
    Baoding Changan Bus
Plant for vehicle test project       157,122.00      6,052,888.00              738,615.94                148,321.26                             85%                 85%         raised            6,643,182.68
Beijing vehicle construction
    project
                                     513,262.53   163,600,842.58           177,445,536.24           242,460,714.23                              72%                 72%         raised           98,585,664.59

Engine Base of Nanjing                19,699.00      3,201,929.85                29,209.40             2,731,988.31                             37%                 37%         raised              499,150.94
Yuzui Refitting factory               29,977.00     30,880,135.49              649,930.99            19,253,981.08                              27%                 27%         raised           12,276,085.40
Car production project of
Hefei Changan
                                     412,108.00   156,409,567.96           920,575,058.27           204,152,144.09                              48%                 48%         raised         872,832,482.14

Changan Suzuki Factory
                                                                  -          31,744,997.89                               -                           -                  -       raised            31,744,997.89
Reconstruction Project

Others                                              326,825,052.12          828,626,292.45           659,967,092.92                                  -                  -       raised          495,484,251.65
Total                                             3,234,173,155.52         6,045,174,895.79        3,895,504,020.56                                                                            5,383,844,030.75



Note: The original value of construction in progress increased by RMB81,060,392.77 was due to the acquisition of Changan Suzuki this year, and the impairment provision for
construction in progress increased by RMB49,315,394.88 (Note VI, changes in scope of consolidation).




(2)         Significant movements of construction in progress in 2017:



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                                     Budget                                                                           The project investments’    Progress of
            Project                                 Beginning balance      Addition        Transfer to fixed assets                                                Source of funds     Ending balance
                                   (RMB0,000)                                                                          proportion of budget       construction

Mini-bus              production
  equipment
                                       469,453.00    332,011,471.05      904,259,078.63          238,929,932.95                          58%                 58%        Raised          997,340,616.73

Yuzui motor city project               550,852.00   1,670,075,876.73     921,385,775.94       2,344,240,989.79                           75%                 75%   Raised and issued    247,220,662.88
Car production equipment               720,457.00     68,289,153.08      557,341,566.08          459,863,478.35                          21%                 21%        Raised          165,767,240.81
Engine plant                           819,089.00    749,552,604.51      694,207,595.61       1,102,568,930.51                           77%                 77%   Raised and issued    341,191,269.61
Vehicle research institution           213,052.00    119,918,357.19      353,047,362.80           71,096,147.64                          62%                 62%        Raised          401,869,572.35
Vehicle moulds                         180,742.00    446,423,242.75      196,116,894.76          277,120,258.11                          95%                 95%        Raised          365,419,879.40
Plant for vehicle test project         157,122.00     16,109,878.08       22,263,068.71           32,320,058.79                          85%                 85%        Raised             6,052,888.00
Yubei Factory                           56,223.00    107,961,718.09       47,568,382.24          155,384,927.15                          28%                 28%        Raised               145,173.18
Beijing vehicle construction
    project
                                       524,466.53     47,364,971.59      213,262,827.72           97,026,956.73                          67%                 67%        Raised          163,600,842.58

Light    vehicle  technical
transformation project of               80,403.00     39,361,192.09       55,351,921.20           66,319,615.55                          54%                 54%        Raised            28,393,497.74
Baoding Changan Bus
Engine Base of Nanjing                  19,699.00        809,483.55         4,100,655.47            1,708,209.17                         37%                 37%        Raised             3,201,929.85
Yuzui Refitting factory                 29,977.00     29,200,422.80         5,775,934.52            4,096,221.83                         27%                 27%        Raised            30,880,135.49
Car production project of
Hefei Changan
                                       389,601.00       2,414,375.90     164,546,124.65           10,550,932.59                          27%                 27%        Raised          156,409,567.96

Others                                               192,211,083.37      512,903,762.52          378,434,966.95                                                                         326,679,878.94
Total                                               3,821,703,830.78    4,652,130,950.85      5,239,661,626.11                                                                         3,234,173,155.52




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12.        Intangible assets

Details of intangible assets

2018

                                           Software use          Trademark use           Non-patent
      Item         Land use rights                                                                                Total
                                              rights                 rights              technology
Original cost
Beginning           2,384,260,724.00        440,803,454.31         211,784,400.00        4,120,145,819.00      7,156,994,397.31
Purchase                              -     123,109,392.52                         -                       -    123,109,392.52
Internal
research and                          -                     -                      -     1,297,212,770.58      1,297,212,770.58
development
Other additions       368,821,666.28         68,505,763.43                         -       211,578,548.29       648,905,978.00
Ending              2,753,082,390.28        632,418,610.26         211,784,400.00        5,628,937,137.87      9,226,222,538.41


Accumulated
amortization
Beginning             280,991,802.54        396,959,100.18        153,453,466.62         2,054,012,177.29      2,885,416,546.63
Accrual                49,968,327.29         56,772,368.14            17,500,000.00        641,523,542.56       765,764,237.99
Other additions        72,494,154.20         56,771,593.55                         -       198,187,446.75       327,453,194.50
Ending                403,454,284.03        510,503,061.87        170,953,466.62         2,893,723,166.60      3,978,633,979.12


Impairment
provision
Beginning                             -      21,319,804.81                         -       202,312,916.20       223,632,721.01
Accrual                               -                     -                      -         3,414,167.12          3,414,167.12
Other additions          2,298,118.36                       -                      -                       -       2,298,118.36
Ending                   2,298,118.36        21,319,804.81                         -       205,727,083.32       229,345,006.49
                                      -                     -                      -
Carrying
amount
Ending              2,347,329,987.89        100,595,743.58            40,830,933.38      2,529,486,887.95      5,018,243,552.80
Beginning           2,103,268,921.46         22,524,549.32            58,330,933.38      1,863,820,725.51      4,047,945,129.67


2017

      Item          Land use rights       Software use rights   Trademark use rights   Non-patent technology         Total
Original cost
Beginning          2,355,850,569.93        400,653,507.92         211,784,400.00         2,857,526,071.81      5,825,814,549.66
Purchase            28,410,154.07           40,149,946.39                  -                838,679.23          69,398,779.69
Internal                   -                       -                       -             1,261,781,067.96      1,261,781,067.96
research and
development
Ending             2,384,260,724.00        440,803,454.31         211,784,400.00         4,120,145,819.00      7,156,994,397.31


Accumulated
amortization
Beginning           232,965,494.61         364,220,086.22         135,950,586.62         1,504,959,094.21      2,238,095,261.66
Accrual             48,026,307.93           32,739,013.96          17,502,880.00          549,053,083.08        647,321,284.97
Ending              280,991,802.54         396,959,100.18         153,453,466.62         2,054,012,177.29      2,885,416,546.63


Impairment
provision
Beginning                  -                21,319,804.81                  -              121,448,808.16        142,768,612.97




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Accrual                      -                         -                      -                 80,864,108.04            80,864,108.04
Ending                       -                  21,319,804.81                 -                202,312,916.20            223,632,721.01


Carrying
amount
Ending                2,103,268,921.46          22,524,549.32         58,330,933.38           1,863,820,725.51          4,047,945,129.67
Beginning             2,122,885,075.32           15,113,616.89        75,833,813.38            1,231,118,169.44         3,444,950,675.03


Other additions were due to the acquisition of Changan Suzuki this year (Note 6, Changes in the scope of
consolidation).

As at 31 December 2018, the intangible assets from internal research and development account for 50.41% of total
intangible assets (as at 31 December 2017: 46.04%).

As at 31 December 2018, there is no land use right with no certificate (As at 31 December 2016: Nil).

13.        Development expenditure

2018

                                                   Addition                           Deduction

       Item           Beginning balance                                                      Charged to income         Ending balance
                                            Internal research and     Recognized as
                                                                                              Statement of the
                                                 development         intangible assets
                                                                                                current year
Automobile
                          836,638,328.10         1,279,944,707.42         1,297,212,770.58          29,772,649.34        789,597,615.60
Development


2017

                                                   Addition                           Deduction

       Item           Beginning balance                                                      Charged to income         Ending balance
                                            Internal research and     Recognized as
                                                                                              Statement of the
                                                 development         intangible assets
                                                                                                current year
Automobile
                         1,111,176,453.49        1,014,802,796.47         1,261,781,067.96          27,559,853.90        836,638,328.10
Development


14.        Goodwill

2018 and 2017


                                                                     Addition                   Deduction
                                         Beginning                   Business
           Investee                                                                                                   Ending balance
                                          balance                combination under                Disposal
                                                                  common control
Hebei Changan
                                          9,804,394.00                                   -                        -      9,804,394.00
Automobile Co., Ltd.
Nanjing Changan
                                                           -                             -                        -                        -
Automobile Co., Ltd.
Total                                     9,804,394.00                                   -                        -      9,804,394.00

Movement of provision for goodwill is as follow:

2018 and 2017

           Investee                      Beginning                  Addition                  Deduction               Ending balance



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                                          Chongqing Changan Automobile Company Limited 2018 Annual Report


                                  balance                   Accrual                 Disposal
 Nanjing Changan
 Automobile Co.,                 73,465,335.00                               -                   -        73,465,335.00
 Ltd.

Due to the accumulated losses of Nanjing Changan Automobile Co., Ltd., provision for related goodwill has been
fully accrued amounted to RMB73,465,335.00.


15.     Long-term deferred expenses

2018

        Item             Beginning                  Addition                 Amortization                Ending
                          balance                                                                        balance
Long-term
deferred                 13,545,589.39               7,475,597.77                3,916,585.49          17,104,601.67
expenses

During the year, the long-term deferred expenses increased by RMB 4,118,573.15 due to the acquisition of
Changan Suzuki. (Note 6, Changes in the scope of consolidation)
2017

        Item             Beginning                  Addition                 Amortization                Ending
                          balance                                                                        balance
Long-term
deferred                 13,448,409.63                 662,532.39                 565,352.63           13,545,589.39
expenses

16.     Deferred tax assets and liabilities

         Item                                 2018                                               2017
                                                                                   Deductible
                         Deductible temporary
Deferred tax assets:                                Deferred tax assets           temporary           Deferred tax assets
                             differences
                                                                                   differences
Assets provision                 1,192,875,928.31           178,931,389.28          1,125,450,484.06         168,817,572.61

Accrued expenses and
                                 5,755,288,762.17           863,293,314.33          5,127,444,400.38         769,116,660.06
contingent liabilities
Unpaid tech
development expense
                                  477,578,425.86             71,636,763.88           519,329,094.71           77,899,364.21
and advertisement
expense
Deferred income                  3,116,680,509.64           467,502,076.45          3,195,940,607.31         479,391,091.10

Unpaid salary and
                                  494,605,966.69             74,190,894.95           257,554,155.44           38,633,123.29
bonus and others
Total                         11,037,029,592.67          1,655,554,438.89          10,225,718,741.90       1,533,857,811.27



               Item                                  2018                                        2017
                                       Taxable                                      Taxable
                                                            Deferred tax                                 Deferred tax
Deferred tax liabilities:            temporary                                    temporary
                                                             liabilities                                  liabilities
                                      differences                                  differences
Available-for-sale   financial
 assets on the changes in fair        507,440,490.31          76,116,073.54          141,485,000.00        21,222,750.00
 value recorded in capital



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   reserve
Fair value adjustment of
  business combination not                              394,100,647.03              59,115,097.05                                -                               -
  under common control
Total                                                   901,541,137.34            135,231,170.59                  141,485,000.00             21,222,750.00


Unrecognized deductible temporary differences and tax losses of unrecognized are as follows:


                    Item                                               2018                                                      2017
The deductible temporary
                                                                             2,438,545,953.61                                            908,825,383.95
 difference
The deductible tax loss                                                      4,871,204,656.42                                         2,128,637,423.38
Total                                                                        7,309,750,610.03                                         3,037,462,807.33

Note: Due to the uncertainty of whether there will be enough taxable profit in future to utilize the above
       deductible loss, no deferred tax assets have been recognized accordingly.

Maturity period for unrecognized deductible tax losses:


                    Year                                               2018                                                      2017
2018                                                                                                   -                                 149,359,690.13
2019                                                                           659,281,850.63                                            699,253,694.79
2020                                                                           348,563,349.93                                            292,774,189.16
2021                                                                           103,219,695.88                                            104,062,642.15
2022                                                                           898,588,459.22                                            883,187,207.15
2023                                                                         2,861,551,300.76                                                                        -
Total                                                                        4,871,204,656.42                                         2,128,637,423.38


17.         Provision for the impairment of assets

2018

                                                                                            Addition                                 Deduction                              Ending
                         Item                              Beginning
                                                                              provision           Other addition          Reversal               Write-off

I. Bad debt provision                                        40,187,117.99        14,066,610.17         46,356,721.00       2,008,705.39           139,260.29              98,462,483.48

II. Provision for inventory                                169,944,706.66        237,613,222.28        181,034,335.53     156,142,459.77     138,559,267.37               293,890,537.33

III. Provision for fixed assets                            880,779,908.98        141,611,730.28        156,839,093.76                   -        18,636,086.64           1,160,594,646.38

IV. Provision for construction in progress                               -                    -         49,315,394.88                   -                    -             49,315,394.88

V. Provision for intangible assets                         223,632,721.01          3,414,167.12            2,298,118.36                 -                    -            229,345,006.49

Ⅵ. Provision for goodwill                                  73,465,335.00                     -                       -                 -                    -             73,465,335.00

Ⅶ. Provision for available-for-sale financial assets       28,929,274.00                     -                       -                 -                    -             28,929,274.00

Total                                                     1,416,939,063.64       396,705,729.85        435,843,663.53     158,151,165.16     157,334,614.30              1,934,002,677.56



Note: Accrued provision for inventory is mainly due to the cost of some types of vehicles and engines is lower
       than the net realizable value.

            Accrued provision for fixed assets is mainly due to the abandoned factory and impairment of machinery
            and moulds 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.



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          Accrued provision for available-for-sales assets is due to the impairment of the Sichuan Glass Co., Ltd.,
          which went bankrupt.

          Other increases were due to the acquisition of Changan Suzuki this year (Note 6, Changes in the scope of
          consolidation).

2017

                                                                                           Deduction                 Ending
                   Item                  Beginning             Addition
                                                                                Reversal          Write-off
I. Bad debt provision                       35,066,408.55        9,819,230.33     4,168,398.28         530,122.61      40,187,117.99

II. Provision for inventory                202,269,452.40      101,554,330.81    18,341,152.61     115,537,923.94     169,944,706.66

III. Provision for fixed assets           1,008,178,231.28      79,979,762.31                -     207,378,084.61     880,779,908.98

IV. Provision for intangible assets        142,768,612.97       80,864,108.04                -                  -     223,632,721.01

V. Provision for goodwill                   73,465,335.00                   -                -                  -      73,465,335.00

VI. Provision for available-for-sale        27,120,000.00        1,809,274.00                -                  -      28,929,274.00
    financial assets
Total                                     1,488,868,040.20     274,026,705.49    22,509,550.89     323,446,131.16    1,416,939,063.64



18.       Short-term loans

Classification of short-term loans:


                 Item                             2018                                             2017
Mortgage loans                                     40,000,000.00                                            175,000,000.00
guaranteed loan                                                       -                                       10,000,000.00
Credit loans                                     150,000,000.00                                                              -
Total                                            190,000,000.00                                             185,000,000.00

As at 31 December 2018, the interest rates of the above loans were 4.35%-5.20% (as at 31 December 2017:
4.35%-5.22%).

As at 31 December 2018, there is no overdued short-term loan (as at 31 December 2017: Nil).

For the year ended 31 December 2018, the Group obtained short-term loan of RMB40,000,000.00 from China
South Industry Group Finance Co., Ltd. The credit was secured by the land use rights amounted to
RMB18,499,267.20.

For the year ended 31 December 2017, the Group obtained short-term loan of RMB175,000,000.00 from China
South Industry Group Finance Co., Ltd. The credit was secured by the land use rights amounted to
RMB45,862,242.27.

19.       Notes payable and Accounts payable

                                                               2018                                           2017
Notes payable                                                14,807,862,262.39                            18,002,926,579.81
Accounts payable                                             13,916,201,276.95                            21,902,826,194.15
Total                                                        28,724,063,539.34                            39,905,752,773.96

Notes payable




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                                            Chongqing Changan Automobile Company Limited 2018 Annual Report



                 Item                                  2018                                   2017
Commercial acceptance bill                             2,946,482,019.96                       1,585,249,372.80
Bank acceptance bill                                 11,861,380,242.43                       16,417,677,207.01
Total                                                14,807,862,262.39                       18,002,926,579.81

As at 31 December 2018, there is no overdued unpaid notes payable (as at 31 December 2017: Nil)

Accounts payable

As at 31 December 2018, there is no significant accounts payable aged over one year (as at 31 December 2017:
Nil).


20.     Advances from customers

(1)     Advances from customers


                 Item                                  2018                                   2017
Advances from customers                                1,556,482,278.92                       3,878,382,556.43

(2)     As at 31 December 2018, advances from customers of RMB216,726,918.21 aged over one year is mainly
        credit guarantee charged to dealers (as at 31 December 2017: RMB182,862,326.57).

21.     Payroll payable

2018


        Item               Beginning                Addition              Deduction                  Ending
Short term salary
                          1,567,656,287.03         5,281,251,280.32       5,577,445,725.00        1,271,461,842.35
benefits
Defined
                                68,156,035.30        566,571,969.66        550,317,569.75            84,410,435.21
contribution plans
Early retirement
                                 5,073,000.00         10,387,769.63           8,337,769.63            7,123,000.00
benefits
Total                     1,640,885,322.33         5,858,211,019.61       6,136,101,064.38        1,362,995,277.56


2017


        Item               Beginning                Addition              Deduction                  Ending
Short term salary
                          1,778,345,189.08         5,013,582,936.94       5,224,271,838.99        1,567,656,287.03
benefits
Defined
                                59,207,286.15        515,800,516.74        506,851,767.59            68,156,035.30
contribution plans
Early retirement
                                 2,395,000.00          5,609,000.00           2,931,000.00            5,073,000.00
benefits
Total                     1,839,947,475.23         5,534,992,453.68       5,734,054,606.58        1,640,885,322.33


Short term salary benefits:

2018

        Item                   Beginning             Addition              Deduction                  Ending
Salary, bonus,                 1,207,501,206.86      4,488,234,330.21      4,618,287,959.38          1,077,447,577.69




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report


allowance
and subsidy
Employee benefit               207,402,348.95         88,951,550.95      250,742,309.29        45,611,590.61
Social insurance                  (174,158.92)       307,202,837.90      303,649,309.32         3,379,369.66
 Medical insurance                  559,230.30       272,234,008.27      272,260,383.69          532,854.88
 Industrial injury
                                 (3,096,589.29)       32,563,345.54       28,029,010.20          1,437,746.05
 insurance
 Maternity
                                 2,363,200.07           2,405,484.09        3,359,915.43        1,408,768.73
 insurance
Housing
                                59,222,161.27        258,334,142.47      308,133,626.16         9,422,677.58
accumulation fund
Labor fund and
employee                        93,704,728.87        138,528,418.79       96,632,520.85       135,600,626.81
education fund
Total                      1,567,656,287.03         5,281,251,280.32    5,577,445,725.00    1,271,461,842.35

2017


        Item               Beginning                Addition            Deduction             Ending
Salary, bonus,
allowance                  1,422,437,552.40         4,027,904,589.37    4,242,840,934.91    1,207,501,206.86
and subsidy
Employee benefit               199,134,921.94        324,516,943.52      316,249,516.51       207,402,348.95
Social insurance                    911,790.47       272,656,058.22      273,742,007.61         (174,158.92)
 Medical insurance                   80,386.21       234,753,565.07      234,274,720.98          559,230.30
 Industrial injury
                                  (514,009.35)        25,238,863.73       27,821,443.67        (3,096,589.29)
 insurance
 Maternity
                                 1,345,413.61         12,663,629.42       11,645,842.96         2,363,200.07
 insurance
Housing
                                82,224,632.32        272,664,886.79      295,667,357.84        59,222,161.27
accumulation fund
Labor fund and
employee                        73,636,291.95        115,840,459.04       95,772,022.12        93,704,728.87
education fund
Total                      1,778,345,189.08         5,013,582,936.94    5,224,271,838.99    1,567,656,287.03


21.     Payroll payable (continued)

Defined contribution plans:

2018

        Item               Beginning               Addition            Deduction            Ending
Basic retirement
                           60,088,662.53          551,646,640.84       535,218,133.47      76,517,169.90
security
Unemployment
                               8,067,372.77        14,925,328.82        15,099,436.28       7,893,265.31
insurance
Total                      68,156,035.30          566,571,969.66       550,317,569.75      84,410,435.21


2017


        Item               Beginning               Addition            Deduction            Ending




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Basic retirement
                          51,342,643.25          501,577,268.72           492,831,249.44         60,088,662.53
security
Unemployment
                           7,864,642.90           14,223,248.02            14,020,518.15          8,067,372.77
insurance
Total                     59,207,286.15          515,800,516.74           506,851,767.59         68,156,035.30

The salary, bonus, allowance and subsidy, employee benefits and other social insurances mentioned above are
paid in time according to related laws and regulations and sets of the Group.

22.      Taxes payable

            Item                                 2018                                      201
Value-added tax                                          9,641,450.47                         20,724,979.91
Consumption tax                                      658,869,177.63                         315,331,520.62
Corporate income tax                                    (19,968,952.37)                      (5,866,525.85)
Individual Income tax                                      655,007.28                            3,496,728.45
City maintenance and
construction tax and
Education surcharge                                      9,333,772.54                        48,364,770.61
Others                                                  10,786,031.70                        12,269,923.40
Total                                                669,316,487.25                         394,321,397.14


23.      Other payables

                                                         2018                               2017
Dividend payable                                                 79,742.80                          79,742.80
Other payables                                           3,079,669,273.01                  2,599,013,410.98
合计                                                     3,079,749,015.81                  2,599,093,153.78

Dividend payable

                   Item                                   2018                               2017
Dividend payable – Hebei Changan
                                                                 79,742.80                           79,742.80
  minority interests


Other payables

                   Item                                  2018                              2017
Deposits of dealer and supplier                           133,434,563.54                     64,938,552.00
Maintenance fees                                          205,714,188.51                    166,703,421.92
Advertisement fees                                        750,771,372.18                    345,922,021.86
Warehousing and transport fees                            123,222,758.15                    169,100,711.73
Integrated service charges          and
                                                          110,960,485.47                    140,284,047.51
miscellaneous expenses
Project funds                                           1,271,262,272.32                   1,499,489,207.73
Others                                                    484,303,632.84                    212,575,448.23
Total                                                   3,079,669,273.01                   2,599,013,410.98




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24.      Contingent liabilities

2018


        Item            Beginning               Addition                Deduction                   Ending
Warranty                2,423,958,274.70         712,598,648.92           525,776,105.50           2,610,780,818.12

Supplier                               -         634,541,926.00                         -              634,541,926.00
compensation
Total                   2,423,958,274.70        1,347,140,574.92          525,776,105.50           3,245,322,744.12


2017


   Item               Beginning                Addition               Deduction                    Ending
Warranty            2,010,153,951.87           941,896,851.28          528,092,528.45            2,423,958,274.70


Note: Warranty is the estimated repair expenses for the sold vehicles within warranty period.

25.      Other current liabilities

               Item                                    2018                                 2017
Accrued utilities                                          36,910,207.22                          59,634,137.49
Accrued transportation fee                                537,462,389.91                         540,328,536.56
Accrued labor service fee                                  37,723,105.48                          55,133,842.44
Accrued technology royalty                                128,055,835.93                         164,331,878.15
Accrued commercial discount
                                                        2,883,344,577.38                        1,928,754,888.23
payable
Accrued market development
                                                          443,397,362.38                         578,090,324.55
expense
Accrued lease fee                                          98,306,892.29                          96,417,863.95
Accrued consulting fee                                     43,982,256.70                          45,510,193.20
Others                                                    116,258,525.32                          93,952,981.25
Total                                                   4,325,441,152.61                        3,562,154,645.82


26.      Current portion of non-current liabilities

                        Item                                       2018                             2017
Long-term loan within 1 year(NoteV.27)                                6,594,120.00                 13,151,946.67


27.      Long-term Loan

               Item                                    2018                                     2017
Credit loan                                                   6,594,120.00                       19,727,920.00
Deduction: Loan within 1 year                              (6,594,120.00)                        (13,151,946.67)
Total                                                                      -                      6,575,973.33

As at 31 December 2018, the interest rates of the above loans were 3.044% (as at 31 December 2017: 3.044%).

As at 31 December 2018, there is no overdued long-term loans (as at 31 December 2017: Nil).



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28.      Long-term payables

                                                 2018                                    2017
Special payables                                  303,590,824.69                              290,607,151.02


Special payables:

2018

               Item                 Beginning                Addition        Deduction             Ending
New vehicle product                   7,808,326.58           22,360,900.00     9,484,306.29        20,684,920.29
Changan automobile E class           67,480,246.95                       -    44,495,551.31        22,984,695.64
Gasoline engine cylinder block,
cylinder head production line
project
Land relocation compensation         55,350,709.40                       -                -        55,350,709.40
Development and
 industrialization of C206 pure      14,582,280.58                       -    11,136,000.00         3,446,280.58
 electric cars
Intelligent manufacturing
                                     45,455,157.40           79,908,937.74    20,580,469.16       104,783,625.98
 project
Lightweight design of
                                     63,564,705.20            1,300,829.00    11,974,695.49        52,890,838.71
 automobile structure
Others                               36,365,724.91           28,760,473.84    21,676,444.66        43,449,754.09
合计                                290,607,151.02       132,331,140.58      119,347,466.91       303,590,824.69


2017

               Item                 Beginning                Addition        Deduction              Ending
New vehicle product                   5,821,883.01            6,820,000.00     4,833,556.43         7,808,326.58
Changan automobile E class           60,347,217.64            8,190,000.00     1,056,970.69        67,480,246.95
Gasoline engine cylinder block,
cylinder head production line
project
Land relocation compensation         55,350,709.40                       -                -        55,350,709.40
Development and industrialization
                                     (32,666,228.71)     120,000,000.00       72,751,490.71        14,582,280.58
of C206 pure electric cars
Intelligent manufacturing project    61,526,291.76            1,683,000.00    17,754,134.36        45,455,157.40
Lightweight design of automobile
                                     30,075,234.45           54,150,000.00    20,660,529.25        63,564,705.20
structure
Others                               37,042,433.25           16,930,780.00    17,607,488.34        36,365,724.91
合计                                217,497,540.80       207,773,780.00      134,664,169.78       290,607,151.02



29.      Long-term payroll payable

             Item                               2018                                     2017
Net obligation of defined
                                                     33,534,000.00                            100,782,000.00
benefit plan
Early retirement                                     20,303,000.00                             12,230,000.00
Total                                                53,837,000.00                            113,012,000.00




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In addition to basic retirement 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 retired personnel. The group also offered early-retired salary, social insurances
and housing accumulation fund with different standards until their formal retirement (Male: Age 60; Female: Age
50 or 55). These amounts of social insurances and housing accumulation fund are based 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 2018.

As at balance sheet day, key actuarial assumptions are as follows:


                                                                         2018                                  2017
Discount rate
Retirement Staff                                                        3.25%                           4.1%-4.2%
Early retirement staff                                                  3.00%                           3.8%-3.9%
Retirement age
Male                                                                       60                                       60
Female                                                                  50/55                                  50/55
Increase rate of key benefits
Retired employees                                               0.0%-6.0%                               0.0%-6.0%
Early retired 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 statistic in PRC.

The sensitive analyses of key assumption are as follows:

2018
                               Increase        Increase/(Decrease) in      Decrease        Increase/(Decrease) in
                                  %               the obligation of           %               the obligation of
                                                defined benefits plan                       defined benefits plan
Discount rate                        0.5%              (1,907,000.00)           0.5%               2,061,000.00
Increase rate of key
                                     0.5%               2,101,000.00            0.5%              (1,922,000.00)
benefits
Mortality rate                          5%               (476,000.00)            5%                  501,000.00

2017
                             Increase          Increase/(Decrease) in      Decrease         Increase/(Decrease) in
                             %                 the obligation of defined   %                the obligation of defined
                                               benefits plan                                benefits plan
Discount rate                           0.5%           (6,270,000.00)             0.5%                6,672,000.00
Increase rate of                        0.5%               6,615,000.00           0.5%              (6,281,000.00)
key benefits
Mortality rate                            5%           (1,955,000.00)                 5%              1,839,000.00

The sensitive analysis above is based on the deduction to reasonable change of key assumption as at the balance
sheet date. Sensitive analysis is resulted from fluctuation of main assumptions with other assumptions unchanged.
As all assumptions are not isolated from each other, sensitive analysis shall not represent actual result of
obligation of defined benefits plan.

The related costs of the defined benefit plan charged to income statement are as follows:



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                                                                                                         2018                             2017
Service costs- current period                                                           (79,656,000.00)                            41,000.00
Net interest                                                                                  4,110,000.00                       3,266,000.00
Post employment benefits, net                                                           (75,546,000.00)                          3,307,000.00
Recorded in general administrative expenses                                             (75,546,000.00)                          3,307,000.00

Movement of present value of defined benefits plan is as follows:
                                                                                             Defined Benefit Plan Obligation
                                                                                                         2018                             2017
Beginning balance                                                                        100,782,000.00                      96,591,000.00
Charged to income Statement of the current period
   Service costs- current period                                                         (79,656,000.00)                           41,000.00
   Interest expense, net                                                                       4,110,000.00                      3,266,000.00
Actuarial losses charged to other comprehensive
                                                                                             13,214,000.00                       6,201,000.00
income
Benefits Payment                                                                             (4,916,000.00)                  (5,317,000.00)
Ending balance                                                                               33,534,000.00                 100,782,000.00

30.       Deferred income

2018
         Item                        Beginning                         Addition                 Deduction                        Ending
Government grants
                                     2,825,085,486.08                  258,126,338.83           211,279,599.54              2,871,932,225.37
related to assets
Government grants
                                          754,048,245.36               302,298,761.19           382,592,006.71                673,754,999.84
related to gains
Others                                     48,683,687.61               142,238,902.00             53,301,280.09               137,621,309.52
Total                                3,627,817,419.05                  702,664,002.02           647,172,886.34              3,683,308,534.73


2017
           Item                            Beginning                     Addition                   Deduction                       Ending
Government grants
                                           2,762,931,782.46              246,106,000.00             183,952,296.38                2,825,085,486.08
related to assets
Government grants
                                                             -           900,000,000.00             145,951,754.64                  754,048,245.36
related to gains
Others                                        22,953,843.91               25,729,843.70                            -                 48,683,687.61
          Total                            2,785,885,626.37             1,171,835,843.70            329,904,051.02                3,627,817,419.05


As at 31 December 2018, details of liabilities related to government grants are as follows:
                                                                                                Recorded to
                                                                                                                                             Relates to
                  Item                             Beginning               Addition            non-operating            Ending
                                                                                                                                             asset/gain
                                                                                                  income
Funds for Beijing Changan project                  1,202,042,715.17                      -         35,654,140.96       1,166,388,574.21      Relates to asset
Subsidies for the automobile
                                                    487,903,583.27                       -         28,199,166.67        459,704,416.60       Relates to asset
   comprehensive testing ground project
Subsidies for the construction of Hefei
                                                    328,769,680.06           44,876,000.00         46,757,429.50        326,888,250.56       Relates to asset
   new plants
Funds for Yuzui motor city project                  238,714,285.60                       -          5,683,673.52        233,030,612.08       Relates to asset
New energy subsidy                                     27,738,250.00        134,157,000.00         28,986,933.47        132,908,316.53       Relates to asset
Light vehicle technical transformation
                                                    135,160,610.02                       -          6,820,018.48        128,340,591.54       Relates to asset
   project of Baoding Changan Bus
Engine production restructure program               100,000,000.00                       -          9,022,556.49         90,977,443.51       Relates to asset




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 Industry upgrading project for small
    displacement engine and technological
                                                 92,654,027.88                         -      15,965,833.29           76,688,194.59     Relates to asset
    transformation project for CB type
    engine production line
 Changan automobile E class Gasoline
   engine cylinder block, cylinder head                         -      45,344,600.00                           -      45,344,600.00     Relates to asset
   production line project
 Expansion of production capacity project        42,133,118.34                         -       4,686,606.83            37,446,511.51    Relates to asset
 Funds for H series engine                       37,333,333.40                         -       5,333,333.32           32,000,000.08     Relates to asset
 Changan service platform project of Whole
                                                 25,000,000.00                         -       2,343,750.00           22,656,250.00     Relates to asset
   industry chain
 Funds for technology innovation                 16,150,000.00                         -                       -      16,150,000.00     Relates to asset
 Funds for expansion of production
                                                 16,258,666.64                         -         580,666.68           15,677,999.96     Relates to asset
   capacity of auto mold
 Subsidies for the construction of Hebei
                                                 14,485,000.00                         -       2,740,000.00            11,745,000.00    Relates to asset
    new plant
 Premium rebate from Dingzhou local
                                                 10,464,785.71                         -         218,016.36           10,246,769.35     Relates to asset
    bureau of finance
 Others                                          50,277,429.99         33,748,738.83          18,287,473.97           65,738,694.85     Relates to asset
 Subtotal                                     2,825,085,486.08        258,126,338.83         211,279,599.54         2,871,932,225.37
 Subsidy of Nanjing new energy research
                                               600,000,000.00                          -                       -     600,000,000.00     Relates to gains
    and development
 Research and development fund subsidy
                                               154,048,245.36         300,000,000.00         382,592,006.71           71,456,238.65     Relates to gains
   of Hefei Changan
 New energy power system research and
                                                                -        2,298,761.19                          -        2,298,761.19    Relates to gains
   development subsidy
 Subtotal                                      754,048,245.36         302,298,761.19         382,592,006.71          673,754,999.84
 Total                                        3,579,133,731.44        560,425,100.02         593,871,606.25         3,545,687,225.21



 As at 31 December 2017, details of liability related to government grants are as follows:
                   Item                                                                     Recorded to
                                                                                                                                        Relates to
                                             Beginning               Addition              non-operating             Ending
                                                                                                                                        asset/gain
                                                                                              income
 Funds for Beijing Changan project           1,082,156,856.13        155,540,000.00          35,654,140.96         1,202,042,715.17    Relates to asset
 Subsidies for the automobile
                                              516,102,750.02                       -         28,199,166.75          487,903,583.27     Relates to asset
    comprehensive testing ground project
 Subsidies for the construction of Hefei
                                              375,527,109.56                       -         46,757,429.50          328,769,680.06     Relates to asset
    new plants
 Funds for Yuzui motor city project           244,397,959.12                       -           5,683,673.52         238,714,285.60     Relates to asset
 Light vehicle technical transformation
                                              141,980,628.51                       -           6,820,018.49         135,160,610.02     Relates to asset
    project of Baoding Changan Bus
 Engine production restructure program        100,000,000.00                       -                       -        100,000,000.00     Relates to asset
 Industry upgrading project for small
    displacement engine and technological
                                              108,619,861.17                       -         15,965,833.29           92,654,027.88     Relates to asset
    transformation project for CB type
    engine production line
 Expansion of production capacity project      46,819,725.17                       -           4,686,606.83          42,133,118.34     Relates to asset
 Funds for H series engine                     42,666,666.72                       -           5,333,333.32          37,333,333.40     Relates to asset
 New energy subsidy                                         -         40,845,000.00          13,106,750.00           27,738,250.00     Relates to asset
 Changan service platform project of
                                                            -         25,000,000.00                        -         25,000,000.00     Relates to asset
   Whole industry chain
 Funds for expansion of production
                                               16,839,333.32                       -            580,666.68           16,258,666.64     Relates to asset
   capacity of auto mold
 Funds for technology innovation               16,150,000.00                       -                       -         16,150,000.00     Relates to asset
 Subsidies for the construction of Hebei
                                               17,220,000.00                       -           2,735,000.00          14,485,000.00     Relates to asset
    new plant
 Premium rebate from Dingzhou local
                                               10,682,802.07                       -            218,016.36           10,464,785.71     Relates to asset
    bureau of finance
 New industrialization subsidy funds           16,282,876.64                       -           7,245,839.60            9,037,037.04    Relates to asset
 Others                                        27,485,214.03          24,721,000.00          10,965,821.08           41,240,392.95     Relates to asset
Subtotal                                     2,762,931,782.46        246,106,000.00         183,952,296.38         2,825,085,486.08
 Subsidy of Nanjing new energy research
                                                            -        600,000,000.00                        -        600,000,000.00     Relates to gains
    and development
 Research and development fund subsidy
                                                            -        300,000,000.00         145,951,754.64          154,048,245.36     Relates to gains
   of Hefei Changan
Subtotal                                                    -        900,000,000.00         145,951,754.64          754,048,245.36
Total                                        2,762,931,782.46       1,146,106,000.00        329,904,051.02         3,579,133,731.44




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 31.         Share capital

 2018


                                                                                                    movement
                                                  31 December     Issuance of      Stock   Transfer of reserve to
                                                                                                                           Others         Sub-total   31 December 2018
                                                         2017          shares   dividend        common shares
 I.        Restricted shares
           Shares held by state-owned legal                                 -          -                        -                -                -
       1                                           139,762,403                                                                                               139,762,403
           persons
           Shares held by domestic natural              18,900              -          -                        -                -                -               18,900
       2
           person
 Total of restricted shares                        139,781,303              -          -                        -                -                -          139,781,303


 II.       Unrestricted shares
       1   RMB ordinary shares                    3,760,881,066             -          -                        -                -                -         3,760,881,066
           Foreign-funded       shares   listed    901,986,142              -          -                        -                -                -          901,986,142
       2
           domestically
 Total of unrestricted shares                     4,662,867,208             -          -                        -                -                -         4,662,867,208


III.       Total shares                           4,802,648,511             -          -                        -                -                -         4,802,648,511




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 2017

                                                                                                      Movement

                                                 31 December     Issuance of      Stock   Transfer of reserve to
                                                                                                                           Others            Sub-total       31 December 2017
                                                        2016          shares   dividend        common shares
 I.     Restricted shares
        Shares held by state-owned legal                                   -          -                        -                 -                   -
   1                                              139,762,403                                                                                                      139,762,403
        persons
   2    Shares held by domestic natural person         18,900              -          -                        -                 -                   -                  18,900
 Total of restricted shares                       139,781,303              -          -                        -                 -                       -         139,781,303


 II.    Unrestricted shares
   1    RMB ordinary shares                      3,760,881,066             -          -                        -                 -                   -            3,760,881,066
        Foreign-funded shares listed                                       -          -                        -                 -                   -
   2                                              901,986,142                                                                                                      901,986,142
        domestically
 Total of unrestricted shares                    4,662,867,208                                                                                                    4,662,867,208


III.    Total shares                             4,802,648,511                                                                                                    4,802,648,511




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32.      Capital reserves

2018

           Item                Beginning               Addition            Deduction             Ending
Share premium                 4,969,218,884.37                         -   30,889,053.43       4,938,329,830.94
Share-based payment              32,697,000.00             11,014,600.00   19,749,700.00         23,961,900.00
Capital reserve transferred
arising from the old             44,496,899.00                         -               -         44,496,899.00
standards
Restricted capital reserve
                                 17,015,985.20                         -               -         17,015,985.20
of equity investments
Others(Note)                     35,977,188.37                         -    2,539,363.34         33,437,825.03
Total                         5,099,405,956.94             11,014,600.00   53,178,116.77       5,057,242,440.17


2017

           Item                Beginning               Addition            Deduction             Ending
Share premium                 4,969,218,884.37                         -               -       4,969,218,884.37
Share-based payment              13,715,900.00             18,981,100.00               -         32,697,000.00
Capital reserve transferred
arising from the old             44,496,899.00                         -               -         44,496,899.00
standards
Restricted capital reserve
                                 17,015,985.20                         -               -         17,015,985.20
of equity investments
Others(Note)                     40,853,863.98              8,735,954.84   13,612,630.45         35,977,188.37
Total                         5,085,301,532.55             27,717,054.84   13,612,630.45       5,099,405,956.94


Note1: The change in the share premium of 2018 is the acquisition of 35% of the minority shareholder of
        Chongqing Changan New Energy Automobile Co., Ltd., a subsidiary of the Company, which is included
        in RMB 30,889,053.43.

Note2: The decrease in other capital reserve in 2018 is the change in the capital reserve of the joint venture
        Jiangling Holdings Co., Ltd., which is included in RMB 2,539,363.34.




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33.        Other comprehensive income

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

                                         1 January 2017            Movement       31 December 2017                             Movement       31 December 2018
Change in net liability or assets
                                             8,188,000.00         6,201,000.00                  14,389,000.00             (13,214,000.00)             1,175,000.00
  from defined benefit plan
Comprehensive income which
  can not be reclassified into
                                            (1,133,197.32)         (248,641.80)                  (1,381,839.12)               (706,228.88)          (2,088,068.00)
  profit and loss under equity
  method
Fair value change generated from
  available for sale financial            195,699,749.99        (75,437,500.00)             120,262,249.99                177,088,959.46            297,351,209.45
  assets
Foreign currency        translation
                                           (61,273,644.44)       10,963,657.41                  (50,309,987.03)           (10,618,223.98)           (60,928,211.01)
  difference
Total                                     141,480,908.23        (58,521,484.39)                 82,959,423.84             152,550,506.60            235,509,930.44


Current occurrence amount of other comprehensive income in income statement attributable to parent company:

2018

                                         Amount before tax         Deduct: amounts               Deduct: Income tax           Amount attributable       Amount
                                                                transferred to income                                            to owners            attributable
                                                                statement which were                                                                  to minority
                                                                 recognized in other                                                                    interests
                                                               comprehensive income
                                                                    in prior period
Other comprehensive income not
  to be reclassified to profit or
  loss in subsequent period
Change in net liability or assets          (13,214,000.00)                              -                             -           (13,214,000.00)                    -
  from defined benefit plan
Comprehensive income which can                (706,228.88)                              -                             -              (706,228.88)                    -
  not be reclassified into profit
  and loss under equity method
Subtotal                                   (13,920,228.88)                              -                             -          (13,920,228.88)                     -
Other comprehensive income will
  be reclassified to profit or loss
  in subsequent period
Fair value change of available for          208,339,952.31                          -                  31,250,992.85              177,088,959.46                     -
  sale financial assets
Foreign    currency      translation       (10,618,223.98)                              -                             -           (10,618,223.98)                    -
  difference
Subtotal                                    197,721,728.33                              -              31,250,992.85              166,470,735.48                     -
Total                                       183,801,499.45                              -              31,250,992.85              152,550,506.60                     -


2017

                                                                    Deduct: amounts
                                                                 transferred to income                                                                     Amount
                                                                statement which were                                            Amount attributable     attributable to
                                         Amount before tax                                         Deduct: Income tax
                                                                  recognized in other                                              to owners               minority
                                                                     comprehensive                                                                         interests
                                                                income in prior period
Other comprehensive income not to
  be reclassified to profit or loss in
  subsequent period
Change in net liability or assets
                                                6,201,000.00                                -                             -            6,201,000.00                      -
  from defined benefit plan
Comprehensive income which can
  not be reclassified into profit and           (248,641.80)                                -                             -            (248,641.80)                      -
  loss under equity method
Subtotal                                        5,952,358.20                                -                             -            5,952,358.20                      -




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                                                     Chongqing Changan Automobile Company Limited 2018 Annual Report


Other comprehensive income will
  be reclassified to profit or loss in
  subsequent period
Fair value change of available for
                                            (88,750,000.00)                           -      (13,312,500.00)         (75,437,500.00)       -
  sale financial assets
Foreign     currency      translation
  difference
                                              10,963,657.41                           -                    -          10,963,657.41        -

Subtotal                                    (77,786,342.59)                           -      (13,312,500.00)         (64,473,842.59)       -
Total                                       (71,833,984.39)                           -      (13,312,500.00)         (58,521,484.39)       -


34.        Special reserves

2018


        Item                   Beginning                      Addition                    Deduction                    Ending
Safety fund                      28,279,733.06                83,826,318.58                70,883,682.54              41,222,369.10


2017


        Item                   Beginning                      Addition                    Deduction                    Ending
Safety fund                      16,349,485.65                69,130,921.26                57,200,673.85              28,279,733.06


The Group accrued safety fund according to the circular of  (Cai
Qi [2012] No. 16) issued by the Ministry of Finance and the State Administration of work safety on 14 February
2012.

35.        Surplus reserves

2018


           Item                          Beginning                  Addition                Deduction                    Ending
Statutory surplus                        2,401,324,255.50                         -                        -          2,401,324,255.50


2017


           Item                          Beginning                  Addition                 Deduction                   Ending
Statutory surplus                        2,401,324,255.50                             -                        -      2,401,324,255.50


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.

36.        Retained earnings

                            Item                                           2018                                     2017
Retained earnings at beginning of the year                                35,184,073,061.94                        31,126,707,710.94
Add: Profits attributable to parent company
                                                                            680,728,392.03                          7,137,234,723.47
for the current year
Less: Appropriation to statutory surplus
                                                                                               -                                       -
reserves
Less: Ordinary share dividend of cash                                      2,157,790,283.66                        (3,079,869,372.47)
Retained earnings at the end of year                                      33,707,011,170.31                        35,184,073,061.94


According to the resolution of the 49th meeting of the seventh session of the Board of Directors, the profit
distribution plan of 2018 is as follows: on the base of the existing share capital of 4,802,648,511 shares, the Group



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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report


will issue cash dividends of RMB0.18 per 10 shares, RMB 86,447,673.20 in total (tax included). This profit
distribution plan should be approved by the annual general meeting.


37.       Operating revenue and cost

(1)       Operating revenue and cost

        Item                               2018                                               2017
                             Revenue                   Cost                     Revenue                     Cost
Main business              64,490,487,252.71       55,116,734,739.05          78,501,538,830.04        68,427,473,075.45
Other business              1,807,783,137.06        1,466,733,630.09           1,510,666,352.33          935,559,665.40
Total                      66,298,270,389.77       56,583,468,369.14          80,012,205,182.37        69,363,032,740.85


(2)       Operating revenue listed as follows:

                    Item                                        2018                                   2017
Sale of goods                                                       66,276,054,153.09                       79,980,063,484.58
Outsourcing processing                                                  22,216,236.68                          32,141,697.79
Total                                                               66,298,270,389.77                       80,012,205,182.37


38.       Tax and surcharges

                   Item                                       2018                                   2017
Consumption tax                                               1,887,596,418.76                       2,408,112,724.61
City maintenance and construction
                                                                121,084,067.02                        264,492,830.21
tax
Educational surcharge                                           107,471,391.03                        201,515,531.59
Others                                                          189,766,107.53                        199,901,923.01
Total                                                         2,305,917,984.34                       3,074,023,009.42

39.       Operating expenses

                     Item                                           2018                               2017
Payroll and welfare                                                  326,700,194.59                      306,321,124.09
Promotion, advertising fee
                                                                    2,981,253,072.70                   1,252,184,595.24
 and Sales service fee
Transportation expenses                                             1,728,743,073.33                   2,093,762,247.10
Travelling expenses                                                    82,924,351.46                        87,609,625.71
Package expenses                                                       18,172,933.96                        22,441,698.92
Consulting fee                                                         20,414,125.10                        66,038,123.17
Training fee                                                           58,950,405.11                        77,532,792.04
Others                                                                 66,097,190.23                        72,234,653.38
Total                                                               5,283,255,346.48                   3,978,124,859.65


40.       General and administrative expenses

                   Item                                       2018                                   2017




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                                      Chongqing Changan Automobile Company Limited 2018 Annual Report



Payroll and welfare                               1,230,385,974.33               1,211,108,800.21
Administrative expenses                            378,467,226.08                  237,923,264.06
Depreciation and amortization                      885,825,775.24                  747,392,544.90
Miscellaneous service charges                          53,961,042.11               178,864,213.05
Traffic expenses                                       65,664,475.92                68,944,235.42
Travelling expenses                                    54,238,378.61                44,956,439.22
Others                                              114,212,659.18                 174,455,561.59
Total                                             2,782,755,531.47               2,663,645,058.45


41.      Research and development expenses

                   Item                           2018                           2017
Payroll and welfare                               1,432,753,634.55               1,543,773,391.52
Material fee                                       241,258,297.80                  153,279,883.54
Subcontract fee                                    201,398,428.01                  294,019,866.67
Survey and traffic expenses                        128,375,837.23                  105,647,858.39
Test fee                                           146,093,293.23                  186,021,484.40
Depreciation and amortization                      179,382,713.42                  131,473,043.75
Others                                             214,003,174.88                  202,435,906.80
Total                                             2,543,265,379.12               2,616,651,435.07

42.      Financial income

                   Item                           2018                           2017
Interest income                                    476,922,766.94                  609,804,833.96
Less: Foreign exchange gain or
                                                       14,802,579.62                  7,812,127.89
      loss
        Interest expense                               11,700,010.25                48,334,684.86
        Others                                         23,358,142.01                28,684,060.19
Total                                              427,062,035.06                  524,973,961.02

43.      Impairment loss on assets

                   Item                           2018                           2017
I. Bad debt loss                                    12,057,904.78                   5,650,832.05
II. Impairment of inventory                         81,470,762.51                  83,213,178.20
III. Impairment of fixed assets                    141,611,730.28                  79,979,762.31
IV. Impairment of intangible assets                    3,414,167.12                80,864,108.04
V.Impairment of available-for-sale
                                                                  -                 1,809,274.00
   financial assets
Total                                              238,554,564.69                 251,517,154.60

44.      Other income

        Item                  2018                       2017            Amount recognized in 2018



                                                 157
                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


                                                                                          as non-recurring profit and
                                                                                                     loss
Other income                    2,873,192,102.56                1,613,343,216.59                     2,873,192,102.56


Government grants recognized as current income are as follows:

                      Item                                   2018                  2017              Relates to asset/gain
Subsidies for the construction of Hefei new
                                                             46,757,429.50         46,757,429.50          Relates to asset
plants
Funds for Beijing Changan project                            35,654,140.96         35,654,140.96          Relates to asset
New energy subsidy                                           28,986,933.47         13,106,750.00          Relates to asset
Comprehensive testing field   program                        28,199,166.67         28,199,166.75          Relates to asset
Industry upgrading project for small
displacement engine and technological
                                                             15,965,833.29         15,965,833.29          Relates to asset
transformation project for CB type engine
production line
Engine capacity structure adjustment project                  9,022,556.49                       -        Relates to asset
Light vehicle technical transformation project of
                                                              6,820,018.48            6,820,018.49        Relates to asset
Baoding Changan Bus
Funds for Yuzui motor city project                            5,683,673.52            5,683,673.52        Relates to asset
Funds for H series engine                                     5,333,333.32            5,333,333.32        Relates to asset
Expansion of production capacity project                      4,686,606.83            4,686,606.83        Relates to asset
Subsidies for the construction of Hebei new plant             2,740,000.00            2,735,000.00        Relates to asset
Fund for Changan Automobile Industry Chain
                                                              2,343,750.00                       -        Relates to asset
Service Platform Project
Finance fund for Automobile mold expansion
                                                               580,666.68              580,666.68         Relates to asset
technology project
Premium rebate from Dingzhou local bureau of
                                                               218,016.36              218,016.36         Relates to asset
finance
Others                                                       18,287,473.97         18,211,660.68          Relates to asset
Subtotal                                                    211,279,599.54        183,952,296.38
Hefei Changan R & D funding subsidies                       382,592,006.71        325,951,754.63          Relates to gain
Energy saving subsidies                                      11,080,000.00         43,889,509.96          Relates to gain
Subsidies and rewards for career training                    32,571,452.85         28,645,153.77          Relates to gain
Nanjing Changan R & D funding subsidies                     151,000,000.00        500,000,000.00          Relates to gain
Enterprise development fund                                 478,596,700.00        131,864,400.00          Relates to gain
New product subsidy                                         150,000,000.00        128,049,000.00          Relates to gain
Government grants for technology research
                                                        1,426,333,900.00          208,010,700.00          Relates to gain
expenses
Others                                                       29,738,443.46         62,980,401.85          Relates to gain
Subtotal                                                2,661,912,503.02        1,429,390,920.21          Relates to gain
Total                                                   2,873,192,102.56        1,613,343,216.59


45.        Investment income

                                                                                                 Amount recognized in 2018
                  Item                               2018                      2017              as non-recurring profit and
                                                                                                            loss
Long-term equity investment income                                                                                           -
                                                    (331,883,560.67)         6,854,896,911.97
under equity method
Investment income generated by
disposition of long-term equity                                     -           1,063,780.80                                 -
investment
Gains generated by business                           209,443,337.73                         -               209,443,337.73
combinations not under common



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                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


control(note)
Investment income during holding                                                                                           -
period from available-for-sale financial            51,133,446.15               50,364,239.43
assets
Total                                              (71,306,776.79)            6,906,324,932.20                209,443,337.73


Note: Gains generated by business combinations not under common contro ,please refer to Note VI. Changes in
Consolidation Scope.

46.      Gain on disposal of assets

                                                                                             Amount recognized in 2018
                Item                       2018                        2017                  as non-recurring profit and
                                                                                                        loss
Gain on disposal of
                                           8,561,074.73               (42,423,660.98)                           8,561,074.73
fixed-assets (losses”-“)
Gain on disposal of
                                                      -                84,198,113.21                                       -
Intangible assets
Total                                      8,561,074.73                41,774,452.23                            8,561,074.73


47.      Non-operating income

                                                                                                 Amount recognized in 2018
                 Item                          2018                        2017                  as non-recurring profit and
                                                                                                            loss
Gains generated by business
combinations not under common                811,377,936.28                              -                  811,377,936.28
control
Fines, penalties and others                  104,841,288.40              104,330,128.12                     104,841,288.40
Total                                        916,219,224.68              104,330,128.12                     916,219,224.68


48.      Non-operating expenses

                                                                                      Amount recognized in 2017
        Item                        2018                        2017                  as non-recurring profit and
                                                                                                 loss
Donation                          27,582,524.12                 31,310,130.00                           27,582,524.12
Vehicle
                                    5,098,810.00                     214,986.42                          5,098,810.00
premium
Fines and
                                    3,860,473.32                 9,370,376.77                            3,860,473.32
penalties
Others                            20,013,743.50                 34,172,564.09                           20,013,743.50
Total                             56,555,550.94                 75,068,057.28                           56,555,550.94

49.      Income tax expense

                        Item                                     2018                                    2017
Current income tax expense                                            59,356,673.11                         58,702,819.44
Deferred income tax expense                                      (124,490,731.15)                         (86,250,532.29)
Total                                                             (65,134,058.04)                         (27,547,712.85)




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                                                Chongqing Changan Automobile Company Limited 2018 Annual Report




The relationship between income tax expense and profit before tax is as follows:


                      Item                                        2018                            2017
Profit before tax                                                  658,225,323.83                 7,180,889,557.21
Tax at the applicable tax rate                                      98,733,798.57                 1,077,133,433.58
Impact of different tax rates of subsidiaries                      (21,467,247.81)                  404,092,024.03
Adjustments to current income tax of
previous period
                                                                    (4,629,283.01)                  (13,742,364.78)
Profit or loss attributable to joint ventures
and associates
                                                                    66,960,893.21                (1,370,979,382.39)

Non-taxable income                                                (163,680,879.95)                  (15,239,846.00)
Non-deductible tax expense                                           3,836,286.40                    15,026,313.78
Usage previous deductible losses                                   (19,645,340.05)                 (123,846,927.16)
Unrecognized deductible temporary
differences and deductible losses
                                                                   317,040,456.24                   154,597,285.95
Additional deduction arising from research
and development expense
                                                                  (342,288,741.64)                 (154,588,249.86)

Tax expense under actual tax rate of the
Group
                                                                   (65,134,058.04)                 (27,547,712.85)


50.      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. In accordance with the specific
terms and clauses of the issuance contract, the number of newly issued ordinary shares shall be calculated and
determined as of the date of receiving the consideration (generally the date of issuance).

The Company has no dilutive potential ordinary shares.


                                                                         2018                        2017
Earnings
Net profit attributable to ordinary shareholders                         680,728,392.03           7,137,234,723.47
Shares
Weighted average ordinary shares                                     4,802,648,511.00             4,802,648,511.00

Note:    In 2018, no change in the number of ordinary shares or potential common shares has occurred. Therefore,
         the total share capital is 4,802,648,511 shares. The EPS for reporting period is calculated based on this
         number of shares.

From the balance sheet day and to the approval date of reporting, there is no event that may causes changes in
ordinary shares or potential ordinary shares.

51.      Notes to cash flow statement

(1)      Items of cash received relating to other operating activities are as follows:


                  Item                                       2018                                 2017
Interest income                                                   476,922,766.94                    586,938,708.97
Government grants            related    to
                                                                 2,972,076,736.91                 2,637,318,945.57
operating activities



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                                             Chongqing Changan Automobile Company Limited 2018 Annual Report



Others                                                           1,319,095,385.38            526,234,421.27
Total                                                            4,768,094,889.23          3,750,492,075.81

(2)      Items of cash paid relating to other operating activities are as follows:


                  Item                                       2018                          2017
Selling expense                                                  4,309,012,845.31          4,204,915,189.82
Administrative expense                                            666,543,781.90             814,466,183.05
Research and development
                                                                  689,870,733.35             788,125,116.26
expenses
Others                                                           1,104,054,021.14            481,574,065.34
Total                                                            6,769,481,381.70          6,289,080,554.47

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


                  Item                                       2018                          2017
Net cash received from business
                                                                 1,036,263,749.91                            -
combinations

(4)      Items of cash received relating to other financing activities are as follows:


                   Item                                       2018                          2017
Withdraw for deposit of bill                                       855,280,377.20            978,689,175.66

(5)      Items of cash paid relating to other financing activities are as follows:


                  Item                                      2018                         2017
Payment for deposit of bill                                                      -        369,848,096.27
Acquisition of minority
                                                                   30,344,195.00                         -
shareholders' equity
Others                                                                           -              110,146.05
Total                                                              30,344,195.00          369,958,242.32

52.      Supplementary information of cash flow statement

(1)      Supplementary information of cash flow statement


      Supplementary information                            2018                          2017
1.Cash flows from operating
activities calculated by adjusting the
net profit
Net profit                                                    723,359,381.87             7,208,437,270.06
Add: impairment provision for assets                          238,554,564.69              251,517,154.60
Depreciation of fixed assets                               2,334,281,299.36              1,914,783,466.15
Depreciation and amortization of
investment property
                                                                   226,711.56                   226,711.56

Amortization of intangible assets                             765,764,237.99              647,321,284.97
Amortization of long-term deferred                                3,916,585.49                  565,352.63



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                                            Chongqing Changan Automobile Company Limited 2018 Annual Report


expense
Amortization of deferred income                                52,824,676.85                       (83,798,051.02)
Disposal loss on fixed assets,
intangible assets and others long-term                       (8,561,074.73)                        (41,774,452.23)
assets
Financial expense                                              11,700,010.25                       48,334,684.86
Investment income                                              71,306,776.79                  (6,906,324,932.20)
Increase in deferred tax assets                            (121,696,627.62)                        (86,250,532.29)
Decrease(Increase) in inventory                             162,147,313.89                     2,554,710,222.61
Deferred income tax liabilities
increased
                                                             (2,794,103.52)                                          -

Increase in operating receivables                          7,012,744,770.54                  (2,178,353,076.04)
Increase in operating payables                        (14,321,540,062.30)                    (4,478,567,770.20)
Others                                                     (809,709,763.55)                         25,701,889.71
Net cash flows from operating
activities
                                                        (3,887,475,302.44)                    (1,123,470,776.83)

2.Movement of cash and cash
equivalents
Ending balance of cash                                     9,648,153,614.80                  21,451,305,090.53
Less: beginning balance of cash                         21,451,305,090.53                    22,993,432,067.05
Increase in cash and cash equivalents                  (11,803,151,475.73)                    (1,542,126,976.52)

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


                  Item                                   2018                                 2017
Endorsed bank acceptance
received by sales and providing                            3,032,518,773.00                    4,385,282,036.50
service

(3)       Cash and cash equivalents

                  Item                                     2018                                2017
I. Cash
Including: Cash on hand                                             14,374.84                          33,089.31
Bank deposits that can be readily used                      9,648,139,239.96                 21,451,272,001.22
II. Cash equivalents                                                           -                                 -
III. Ending balance of cash and cash
equivalents
                                                            9,648,153,614.80                 21,451,305,090.53


Note: The restricted cash and cash equivalents of the Group are not included in the cash and cash equivalents.


53.       The assets with ownership or right restricted

                  Item                              2018                           2017                 Notes
 Cash and cash equivalents                        332,390,911.34           1,180,231,406.00                 Note 1
 Notes receivable and Accounts
                                                  469,622,570.00               287,427,970.00               Note 2
 receivable
 Intangible assets                                 18,499,267.20                   45,862,242.27            Note 3




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                                                  Chongqing Changan Automobile Company Limited 2018 Annual Report


Note 1: As at 31 December 2018, the Group has restricted cash at banks for the issuance of bank acceptance bill.

Note 2:       As at 31 December 2018, notes receivable with a book value of RMB469,622,570.00 (31 December
              2017: RMB287,427,970.00) has been pledged to issue bank acceptance bills.

Note 3:       As at 31 December 2018, land use right with book value of RMB18,499,267.20 has been pledged to
              obtain RMB40,000,000.00 short-term loan from China South Industry Group Finance Co., Ltd. The
              amortization of the land use right in 2018 is RMB418,851.36.



54.        Foreign Monetary Item

    Item                                  2018                                                         2017
                Original Currency       Exchang      Translated to RMB       Original Currency       Exchange     Translated to RMB
                                         e Rate                                                        Rate
Cash
   USD               8,751,966.06        6.8632           60,066,493.46           4,420,601.04         6.5342          28,885,091.32
   GBP               2,373,542.00        8.6762           20,593,325.10           5,214,513.52         8.7792          45,779,257.09
   EUR               4,048,438.85        7.8023           31,587,134.44             873,368.30         7.8023           6,814,281.49
   JPY              64,912,028.43        0.0619            4,018,054.56          99,652,227.00         0.0579           5,769,863.94
   SUR             239,651,676.87        0.0990           23,725,516.01         148,035,845.87         0.1135          16,802,068.51
   BRL                 553,990.20        1.8287            1,013,081.88             534,493.53         1.9650           1,050,279.79
Accounts
receivable
  USD               14,372,769.49        6.8632           98,643,191.56          42,208,456.93         6.5342        275,798,499.27
  GBP                               -    8.6762                          -        7,044,658.64         8.7792          61,846,467.13
  EUR                               -    7.8023                          -        6,354,896.12         7.8023          49,582,806.00
Other
receivables
    USD              2,876,923.86        6.8632           19,744,903.84             193,596.84         6.5342           1,265,000.47
    JPY             16,387,327.63        0.0619            1,014,375.58          16,317,989.00         0.0579            944,811.56
    EUR              3,514,473.56        7.8023           27,420,977.06           2,840,750.58         7.8023          22,164,388.25
    SUR              1,243,071.00        8.6762           10,785,132.61                          -            -                    -
    BRL                 14,146.87        1.8287               25,870.38                          -            -                    -
Accounts
Payable
   USD                 868,583.12        6.8632            5,961,259.67          31,190,199.07         6.5342        203,802,998.76
   JPY              20,635,052.40        0.0619            1,277,309.74          22,631,013.00         0.0579           1,310,335.65
   EUR               2,451,927.12        7.8023           19,130,670.97           1,628,974.37         7.8023          12,709,746.73
   GBP                 965,218.00        8.6762            8,374,424.41           3,087,973.61         8.7792          27,109,937.92
Other
Payables
       USD             777,462.07        6.8632            5,335,877.68              40,116.00         6.5342            262,125.97
       EUR                          -    7.8023                          -           40,966.63         7.8023            319,633.94
       GBP           1,760,110.00        8.6762           15,271,066.38             145,431.19         8.7792           1,276,769.50




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                                            Chongqing Changan Automobile Company Limited 2018 Annual Report




VI Business combinations not under common control in the current
period
Acquisition of 50% equity interest in Changan Suzuki

The company originally held a 50% stake in Chongqing Changan Suzuki Automobile Co., Ltd. (hereinafter
referred to as “Changan Suzuki”), which can be jointly controlled and accounted for using the equity method.
According to the agreement reached between the Company and Changan Suzuki's foreign shareholder, Japan
Suzuki Co., Ltd. in 2018, the company acquired 50% of its shares in Changan Suzuki in cash of RMB1, and the
purchase date was determined to be November 2018. 1st. After the completion of the acquisition, the company
holds a 100% equity interest in Changan Suzuki.

(1)   The recognition of the combination cost and goodwill is as follows:
                                                                                                      currency: RMB
                                                                                                    Changan Suzuki
The fair value of the identifiable net assets of Changan Suzuki obtained                           1,534,967,578.99
Less: acquisition consideration                                                                                1.00
The fair value of the original 50% equity of Changan Suzuki on the purchase                          767,483,789.49
date prior to the purchase date
The merger cost is less than the fair value of the identifiable net assets acquired                  767,483,788.50
(operating income)


 (2) The re-measurement of 50% equity of Changan Suzuki originally held by the Company at fair value is as
follows
                                                                                          currency: RMB
                                                                                                        Changan Suzuki
Book value of the original 50% equity interest in Changan Suzuki before the                              594,949,058.30
purchase date
The fair value of the original 50% equity of Changan Suzuki on the purchase date                         767,483,789.49
prior to the purchase date
The gain from re-measurement is recognized as investment income                                          172,534,731.19


Acquisition of 50% equity interest in Changan Suzuki(continued)

(3) The fair value and book value of Changan Suzuki's identifiable assets and liabilities at the date of purchase
are as follows:
                                                                                                  currency: RMB
                                                              Fair value on           Book value on consolidated date
                                                          consolidated date
Assets:
  Current assets                                          1,036,263,750.91                          1,036,263,750.91
  Notes receivable and
   accounts Receivable                                      535,228,159.28                            535,228,159.28
  Other receivables                                             3,592,183.18                            3,592,183.18
  Prepayments                                                55,061,469.01                             55,061,469.01
  Inventories                                               494,855,111.78                            453,950,664.34
  Other current assets                                          9,246,498.92                            9,246,498.92
  Fixed assets                                            1,648,923,786.01                          1,472,003,200.28
  Construction in
   progress                                                  31,706,835.38                              8,799,566.27
  Intangible assets                                         319,154,665.14                            162,246,628.12



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                                          Chongqing Changan Automobile Company Limited 2018 Annual Report



  Long-term prepaid
   expenses                                                   4,118,573.15                         4,140,728.63
Total assets                                            4,138,151,032.76                       3,740,532,848.94


Liabilities:
  Notes payable and
   accounts payable                                       902,711,773.50                         902,711,773.50
  Receipts in advance                                      79,840,143.45                          79,840,143.45
  Employee benefits
   payable                                                154,353,926.99                         154,353,926.99
  Taxes and surcharges
   payable                                                    9,736,342.00                         9,736,342.00
  Other payables                                          490,347,322.71                         490,347,322.71
  Long-term payables                                       58,390,577.00                          58,390,577.00
  Provisions                                              843,227,728.71                         843,227,728.71
  Deferred income                                             2,666,438.83                        17,776,258.87
  Other non-current
   liabilities                                                           -                        30,452,416.72
  Deferred tax liabilities                                 61,909,200.58                                        -
Total liabilities                                       2,603,183,453.77                       2,586,836,489.95


Net assets                                              1,534,967,578.99                       1,153,696,358.99


Acquisition of 50% equity interest in Changan Suzuki(continued)

(4) The operating results and cash flows of Changan Suzuki from the date of purchase to the end of the year are
as follows:
                                                Between November 1 and December 31, 2018
Operating income                                                                                 301,710,895.07
Net profit                                                                                         5,786,113.17
Net cash flow                                                                                    (31,706,679.89)


Acquisition of 51% shares of Zhenjiang Demao

The company used to hold 49% of the equity of Zhenjiang Demao hairun equity investment fund partnership
(limited partnership)(hereinafter referred to as "Zhenjiang Demao"), which can have a significant impact on its
operation and shall be calculated according to the equity method. According to the agreement reached between the
company and Zhenjiang Demao's other shareholder Suzhou Jin sheng shuo zhang investment center (limited
partnership) in 2018, the company has obtained 51% of its shareholding with cash of RMB 534,187,376.88, and
the purchase date is set as September 3, 2018. After the completion of the acquisition, the company holds a total of
Zhenjiang Demao 100% equity.

(1)   The recognition of the combined cost and goodwill is as follows:
                                                                                                    currency: RMB
                                                                                               Zhenjiang Demao
The fair value of the identifiable net assets of Zhenjiang Demao
                                                                                               1,133,493,185.61
 obtained
Less: acquisition consideration                                                                  534,187,376.88
The fair value of the original 49% equity of Zhenjiang Demao on the purchase date
                                                                                                 555,411,660.95
prior to the purchase date
The merger cost is less than the fair value of the identifiable net assets acquired
                                                                                                   43,894,147.78
(operating income)



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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




Acquisition of 51% shares of Zhenjiang Demao(continued)

(2) The re-measurement of 49% equity of Zhenjiang Demao originally held by the Company at fair value is as
follows:
                                                                                         currency: RMB
                                                                                             Zhenjiang Demao
Book value of the original 49% equity interest in Zhenjiang Demao before the
                                                                                                595,734,668.03
purchase date
Before the purchase date, the fair value of the 49% equity interest in Zhenjiang
                                                                                                555,411,660.95
Demao on the purchase date
The difference arising from the re-measurement is recognized as investment loss                 (40,323,007.08)
Changes in the fair value of available-for-sale financial assets that were originally
                                                                                                 77,231,613.62
included in other comprehensive income are transferred to investment income
Investment income (net)                                                                          36,908,606.54


(3) The fair value and book value of Zhenjiang Demao's identifiable assets and liabilities at the date of purchase
are as follows:
                                                                                                   currency: RMB
                                                               Fair value on                    Book value on
                                                           consolidated date                  consolidated date
Assets:
  Current assets                                                  19,157.31                          19,157.31
  Available-for-sale financial                             1,157,616,359.00                   1,157,616,359.00
   assets
Total assets                                               1,157,635,516.31                   1,157,635,516.31


Liabilities:
  Other payables                                                 500,000.00                         500,000.00
  Deferred tax liabilities                                    23,642,330.70                                   -
Total liabilities                                             24,142,330.70                         500,000.00


Net assets                                                 1,133,493,185.61                   1,157,135,516.31


(4) The operating results and cash flows of Zhenjiang Demao from the date of purchase to the end of the year
have no significant impact on the Group's consolidated financial statements.




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report




VII Shares in other entities
1.       Shares in subsidaries

The subsidiaries of the Company are as follows:

          Company name                     Main operating        Registered place     Nature of       Registered    Total proportion of
                                                    place                              business   capital (0,000)     shareholders (%)
                                                                                                                      direct    indirect
I.   The subsidiary formed by establish or investment
Hebei Changan Automobile Co.,                                                         Manufact                                        -
                                                 Dingzhou               Dingzhou                         46,469       94.22
 Ltd. (note 1)                                                                           uring
Chongqing Changan International                                                                                                       -
 Automobile Sales Co., Ltd.(note               Chongqing               Chongqing          sales            1,376     100.00
 2)
Chongqing Changan Connected Car                                                                                                       -
                                               Chongqing               Chongqing          lease            8,850     100.00
 Technology Co., Ltd.
Chongqing Changan Special                                                                                                             -
                                               Chongqing               Chongqing          sales              500      50.00
 Automobile Co., Ltd (note 3)
Chongqing Changan Automobile
                                               Chongqing               Chongqing          sales            3,000      99.00       1.00
 Supporting Service Co., Ltd.
Chongqing Changan New Energy                                                                                                          -
                                               Chongqing               Chongqing         R&D               2,900     100.00
 Automobile Co. Ltd.
Chongqing Changan Europe Design                                                                                                       -
                                               Turin, Italy            Turin, Italy      R&D      EUR1,738.36        100.00
 Academy Co., Ltd.
Changan United Kingdom R&D                    Nottingham,            Nottingham,                                                      -
                                                                                         R&D          GBP2,482       100.00
 Center Co., Ltd.                         United Kingdom         United Kingdom
Beijing Changan R&D Center Co.,                                                                                                       -
                                                   Beijing                 Beijing       R&D                 100     100.00
 Ltd.
Changan Japan Designing Center                                                                                                        -
                                         Yokohama, Japan         Yokohama, Japan         R&D          JPY2,000       100.00
 Co.,Ltd.
Changan United States R&D Center                                   Detriot, United                                                    -
                                        Troy, United states                              R&D            USD154       100.00
 Co., Ltd.                                                                   states
Changan Automobile Russia Co.,                                                                                                        -
                                          Moscow, Russia         Moscow, Russia           Sales          USD20       100.00
 Ltd.
Changan Brazil Holdings Limited            St. Paul, Brazil        St. Paul, Brazil       Sales         BRL100       100.00           -
Shenzhen Changan New energy                                                                                                           -
                                                 Shenzhen               Shenzhen          Sales            5,000     100.00
  automobile service Co., Ltd.
Hangzhou Changan Yixing                                                                                                               -
                                                Hangzhou                Hangzhou         Lease               500     100.00
 Technology Co., Ltd.
Hefei Changan Yixing Technology                                                                                                       -
                                                        Hefei                Hefei       Lease               500     100.00
 Co., Ltd.
Nanjing Changan Connected Car                                                                                                         -
                                                  Nanjing                 Nanjing        Lease               500     100.00
 Technology Co., Ltd.
Beijing Changan Connected Car                                                                                                         -
                                                   Beijing                 Beijing       Lease               500     100.00
 Technology Co., Ltd.
Haikou Changan Connected Car                                                                                                          -
                                                   Haikou                  Haikou        Lease               500     100.00
 Technology Co., Ltd.
Changan Connected Car                                                                                                                 -
                                                 Shanghai                Shanghai        Lease               500     100.00
 (Shanghai)Technology Co., Ltd
Tianjin Changan Connected Car                                                                                                         -
                                                   Tianjin                 Tianjin       Lease               500     100.00
  Technology Co., Ltd.
Nanjing Changan New Energy                                                                                                            -
 Automobile Sales & Service Co.,                  Nanjing                 Nanjing         Sales            5,000     100.00
 Ltd.
Fuzhou Fuqing Changan New                          Fuzhou                  Fuzhou         Sales              200     100.00           -
  Energy Automobile Sales Co.,



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                                                Chongqing Changan Automobile Company Limited 2018 Annual Report


     Ltd.

1.          Shares in subsidiaries (continued)
            Company name                    Main operating        Registered place   Nature of       Registered    Total proportion of
                                                     place                            business   capital (0,000)     shareholders (%)
                                                                                                                     direct    indirect
I.    The subsidiary formed by establish or investment
Xiamen Changan New Energy                                                                                                            -
  Automobile Sales & Service Co.,                  Xiamen                 Xiamen         Sales              200     100.00
  Ltd.
Guangzhou Changan New Energy                                                                                                         -
 Automobile Sales & Service Co.,                Guangzhou              Guangzhou         Sales              400     100.00
 Ltd.
Chongqing Changan New Energy                                                                                                         -
                                                Chongqing              Chongqing         Sales            9,900     100.00
 Automobile Technology Co., Ltd.
II. The subsidiary formed by business combination not under common control
Nanjing Changan Automobile Co.,                                                      Manufact                                        -
                                                   Nanjing                Nanjing                       60,181       84.73
 Ltd.(note1)                                                                            uring
Chongqing Changan Suzuki                                                             Manufact          133,764      100.00           -
                                                Chongqing              Chongqing
 Automobile Co., Ltd.                                                                   uring
Zhenjiang Demao Hairun Equity                                                                          150,001      100.00           -
  Investment Fund Partnership                    Zhenjiang              Zhenjiang      finance
  (Limited Partnership)
III. The subsidiary formed by business combination under common control
Hebei Baoding Changan Bus Co.,                                                       Manufact                                        -
                                                  Dingzhou              Dingzhou                          3,000     100.00
 Ltd.                                                                                   uring
                                                                                     Manufact                                        -
Hefei Changan Automobile Co.,Ltd.                        Hefei              Hefei                       77,500      100.00
                                                                                        uring


Note 1: The Company's voting rights for Nanjing Changan Automobile Co., Ltd. and Hebei Changan Automobile
          Co., Ltd. are 93.79% and 95.70% 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: On May 17, 2018, the Company acquired a 35% equity interest in Chongqing Changan New Energy
          Automobile Co., Ltd. from the company controlled by the same ultimate holding company, Southern
          Industrial Asset Management Co., Ltd. After the completion of the acquisition, the company's
          shareholding ratio was changed from 65% to 100%.

Note 3: 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.

Note 4: Shenzhen Changan New Energy Automobile Service Co., Ltd. was renamed Changan Automobile
          Investment (Shenzhen) Co., Ltd. in 2018.

As at 31 December 2018, the Group has no subsidiaries with important minority interests.




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report




2.         Shares in joint ventures and associates

     Company name                 Main    Registered           Nature of business         Registered    Total     proportion        of   Accounting
                              operating        place                                  capital (0,000)   shareholders (%)                 treatment
                                  place
                                                                                                        direct           indirect
I. Joint ventures
                                                         Manufacture and sale of
Jiangling Holding Co.,
                              Nanchang    Nanchang            automobiles, and             200,000               50.00               -         Equity
Ltd.
                                                                    components
                                                         Manufacture and sale of
Changan Ford
                             Chongqing    Chongqing           automobiles, and         USD24,100                 50.00               -         Equity
Automobile Co., Ltd.
                                                                   components
                                                         Manufacture and sale of
Changan Mazda
                               Nanjing      Nanjing           automobiles, and         USD11,097                 50.00               -         Equity
Automobile Co., Ltd.
                                                                   components
                                                         Manufacture and sale of
Changan Ford Mazda
                               Nanjing      Nanjing           automobiles, and         USD20,996                 50.00               -         Equity
Engine Co., Ltd.(Note)
                                                                   components
                                                         Manufacture and sale of
Changan PSA
                              Shenzhen     Shenzhen           automobiles, and             760,000               50.00               -         Equity
Automobiles Co., Ltd.
                                                                   components
Changan Weilai New                                       Manufacture and sale of
Energy Automobile              Nanjing      Nanjing           automobiles, and                9,800              50.00               -         Equity
Technology Co., Ltd.                                               components
II. Associates
                                                       Develop, product and sale
Chongqing Changan
                                                              of automobile and
Kuayue Automobile Co.,       Chongqing    Chongqing                                            6,533             34.30               -         Equity
                                                        components; import and
Ltd.
                                                                   export goods.
                                                       Sale of Changan Kuayue’
                                                                s automobile and
Chongqing Changan
                                                          agricultural cars and
Kuayue Automobile Sales      Chongqing    Chongqing                                              300             34.30               -         Equity
                                                         components. Technical
Co., Ltd.
                                                            advisory services for
                                                                      automobile
Beijing Fang’an cresent
                                Beijing      Beijing      Regional taxi operation          2,897.96              20.70               -         Equity
taxi Co., Ltd.
                                                        Provide car loan; provide
                                                                vehicle loans and
                                                       operating equipment loans
Changan Automobile                                       to car dealers, including
                             Chongqing    Chongqing                                      476,843.10              28.66               -         Equity
Finacing Co., Ltd.                                      the construction loans of
                                                       exhibition hall,spare parts
                                                          loans and maintenance
                                                            equipment loans, etc.
                                                          Software and hardware
Hainan Anxinxing
                                                        technology development,
Information Technology        Chengmai    Chengmai                                             3,000             30.00               -         Equity
                                                       technical consulting, auto
Co., Ltd.
                                                                      parts sales
                                                               Car sales, leasing,
Nanjing Chelai Travel                                       software technology
                               Nanjing      Nanjing                                          10,000              10.00               -         Equity
Technology Co., Ltd.                                      development, technical
                                                                         services
                                                        Technology development
Hunan Guoxin                                                 consulting, technical
Semiconductor                  Zhuzhou     Zhuzhou           services, technology            50,000              25.00               -         Equity
Technology Co., Ltd.                                       transfer in the field of
                                                          power semiconductors
                                                       Technology development,
Beijing Wutong Chelian                                     technical consulting,
                                Beijing      Beijing                                         20,000                  -         49.00           Equity
Technology Co., Ltd.                                          technical services,
                                                             technology transfer
Anhe (Chongqing) Equity
                                                               Equity investment
Investment Fund              Chongqing    Chongqing                                            1,000                 -         25.00           Equity
                                                                    management
Management Co., Ltd.
Hangzhou Chelizi
Intelligent Technology        Hangzhou    Hangzhou              Car travel service               630                 -         20.00           Equity
Co., Ltd.


Note1:           Changan Ford Mazda Engine Co., Ltd. was renamed Changan Mazda Engine Co., Ltd. in January 2019
                 and remains a joint venture of the company.




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report


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.


                                                     2018                                         2017
Current assets                                         13,008,234,449.00                          18,809,741,660.00
    Of which: cash and cash
                                                        2,276,585,106.00                           8,711,501,769.00
    equivalent
Non-current assets                                     29,167,707,557.00                          26,516,644,244.00
Total assets                                           42,175,942,006.00                          45,326,385,904.00


Current liabilities                                    29,971,079,402.00                          34,485,401,852.00
Non-current liabilities                                 4,587,988,735.00                           2,402,328,204.00
Total liabilities                                      34,559,068,137.00                          36,887,730,056.00


Minority interests                                          78,302,490.00                            66,800,070.00
Equity attributable to
                                                        7,538,571,379.00                           8,371,855,778.00
owners
Net asset owned according
                                                        3,769,285,689.50                           4,185,927,889.00
to share proportion
Adjustment                                                (59,501,182.39)                            (60,501,784.80)
Book value of investment                                3,709,784,507.11                           4,125,426,104.20


Operating revenue                                      49,754,282,303.00                      106,027,523,250.00
Financial expenses- interest
                                                            65,983,748.00                           175,167,770.00
income
Financial expenses- interest
                                                          243,439,266.00                                 9,284,431.00
expense
Income tax expense                                      (185,229,789.00)                           2,480,443,915.00
Net profit                                              (792,490,479.00)                          12,171,169,510.00
Net profit attributable to
                                                        (803,992,899.00)                          12,159,242,595.00
owners
Net profit owned according
                                                        (401,996,449.50)                           6,079,621,297.50
to share proportion
Adjustment                                                (13,645,147.59)                            (40,504,012.98)
Book value of investment
                                                        (415,641,597.09)                           6,039,117,284.52
income


Dividend                                                                   -                       7,577,500,000.00

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


                                                       2018                                        2017
Joint venture
Total book value of the                                     7,294,769,919.55                       7,535,284,986.66



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                                        Chongqing Changan Automobile Company Limited 2018 Annual Report


investment
Total amount calculated by
shareholding proportion
   Net profit                                           (145,524,154.05)                     704,058,140.55
   Other comprehensive
                                                             (706,228.88)                        (248,641.80)
   income
   Total comprehensive
                                                        (146,230,382.93)                     703,809,498.75
   income



Total book value of the
                                                        2,270,615,692.17                   2,437,812,806.11
investment
Total amount calculated by
shareholding proportion
   Net profit                                              229,282,190.47                    111,721,486.90
   Other comprehensive
                                                            77,231,613.62                                    -
   income
   Total comprehensive
                                                           306,513,804.09                    111,721,486.90
   income

As at 31 December 2018, 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.




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                                          Chongqing Changan Automobile Company Limited 2018 Annual Report



VIII Risks associated with financial instruments
1.      Classification of financial instruments

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

Financial assets


                                   Loans and accounts                Available-for-sale
             2018                                                                                          Total
                                       receivable                     financial assets

Cash                                      9,980,544,526.14                                   -           9,980,544,526.14
Notes receivable and Accounts
receivable
                                         21,971,045,405.74                                   -          21,971,045,405.74

Other receivables                         3,250,452,923.70                                   -           3,250,452,923.70
Available-for-sale financial
assets
                                                           -             1,957,873,311.31                1,957,873,311.31

                          Total          35,202,042,855.58               1,957,873,311.31               37,159,916,166.89


                                   Loans and accounts                Available-for-sale
             2017                                                                                          Total
                                       receivable                     financial assets

Cash                                     22,631,536,496.53                                   -          22,631,536,496.53
Notes receivable and Accounts
receivable
                                         30,963,288,278.24                                   -          30,963,288,278.24

Other receivables                         1,687,460,718.92                                   -           1,687,460,718.92
Available-for-sale financial
assets
                                                           -               541,917,000.00                 541,917,000.00

                          Total          55,282,285,493.69                 541,917,000.00               55,824,202,493.69

Financial liabilities


                                                               Other financial liabilities
                                             2018                                                2017
Short-term loans                                 190,000,000.00                                           185,000,000.00
Notes payable and
                                              28,724,063,539.34                                         39,905,752,773.96
Accounts payable
Other payables                                 3,079,749,015.81                                          2,599,093,153.78
  Long-term loan                                    6,594,120.00                                           19,727,920.00
Total                                         32,000,406,675.15                                         42,709,573,847.74




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                                             Chongqing Changan Automobile Company Limited 2018 Annual Report



2.         Transfer of financial assets

The transferred financial assets that entirely derecognized but continuing involved

As at 31 December 2018, the Group has endorsed bank acceptance bill with a carrying amount of
RMB1,473,189,956.97(2017: RMB1,050,643,090.00) to suppliers to settle the accounts payable. The maturities 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
continuing involvement is not significant.

In 2018, 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’s principal financial instruments, except for derivatives, include bank loans, bonds payable, cash, etc.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has
various other financial assets and liabilities such as accounts receivable and accounts payable, which arise directly
from its operations.

The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and market risk. The
Group’s risk management policies are summarized below:

Credit risk

The Group trades only with recognized, creditworthy third parties. It is the Group’s policy that all customers who
wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are
monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. For
transactions that do not occur in the country of the relevant operating unit, the Group does not offer credit terms
without the approval of the special department of credit control.

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash
equivalents, available-for-sale financial assets, other receivables, dividend receivables and certain derivatives
financial instruments, the Group’s exposure to credit risk arising from default of the counterparty, with a maximum
exposure equal to the carrying amount of these instruments, listed as book value of financial assets in consolidated
financial statements. In 2018, there was no credit risk arising from financial guarantee.

No gage is required since the Group trades only with recognized, creditworthy third parties. Credit risks are
managed by clients and industries collectively. As at 31 December 2018, among the Group’s collections with
specific credit risk, 37.65% (2017: 30.02%) 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.

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

2018


                                                  Neither overdue nor                      Overdue but not impaired
                                 Total
                                                       impaired          Within 3 months   3 months to 1 year         Over 1 year
Cash                           9,980,544,526.14       9,980,544,526.14                 -                    -                       -
Notes receivable and
                              21,971,045,405.74      21,928,253,778.90        389,425.26        24,957,342.82           17,444,858.76
accounts Receivable
Other receivables              3,250,452,923.70       3,240,119,795.01        336,474.29         6,170,515.96            3,826,138.44
     Available for sale
                               1,957,873,311.31       1,957,873,311.31                 -                    -                       -
     financial assets


2017




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report



                                                        Neither overdue nor                               Overdue but not impaired
                                    Total
                                                             impaired               Within 3 months        3 months to 1 year           Over 1 year
Cash                           22,631,536,496.53             22,631,536,496.53                        -                      -                          -
Notes receivable and
                               30,963,288,278.24             30,928,496,492.46          7,479,861.25           18,392,420.88                 8,919,503.65
accounts Receivable
Other receivables                1,687,460,718.92             1,681,728,488.26          4,478,714.96              833,762.70                  419,753.00
   Available for sale
                                  541,917,000.00               541,917,000.00                         -                      -                          -
   financial assets



As at 31 December 2018 and 2017, the balance of accounts receivable which is neither overdued nor impaired is
mainly due to the customers who have no default records recently.

As at 31 December 2018 and 2017, 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.

Liquidity risk

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

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

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

2018

                        Within 1 month          1 to 3 months             3 months to 1 year              1 to 5 years               Total
Short-term loans                730,835.62                1,367,369.86             195,641,035.62                        -           197,739,241.10

Notes payable and           8,340,360,709.93          11,658,516,886.83            8,725,185,942.58                      -         28,724,063,539.34
Accounts payable
Other payable               1,835,725,519.62           1,003,480,426.18              240,543,070.01                      -           3,079,749,015.81

Long-term loan                    25,605.43                6,601,553.83                           -                      -              6,627,159.26

Total                      10,176,842,670.60          12,669,966,236.70            9,161,370,048.21                      -         32,008,178,955.51



2017

                        Within 1 month          1 to 3 months             3 months to 1 year              1 to 5 years               Total
Short-term loans             10,681,519.86             156,059,552.74               20,503,408.22                        -           187,244,480.82

Notes payable and         12,383,468,835.37          17,270,085,556.46           10,252,198,382.13                       -        39,905,752,773.96
Accounts payable
        Other payable      1,546,734,431.45            721,527,064.67              330,831,657.66                        -         2,599,093,153.78

Long-term loan                    49,649.96               6,648,538.66                6,800,216.57            6,597,797.49            20,096,202.68

Total                    13,940,934,436.64          18,154,320,712.53         10,610,333,664.58              6,597,797.49        42,712,186,611.24



Market risk


Interest rate risk

The Group’s revenue and operating cash flows are seldomly influenced by the interest fluctuation. As at 31
December 2018, the Group’s loans are bearing fixed interest rate and the Group is not hedging the risk currently.

Foreign currency risk



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The Group’s exposures to fluctuation in foreign currency exchange rate mainly arise from operating activities
where transactions are settled in currencies other than the units' functional currency and net investment to offshore
subsidiary.

In 2018, the Group only has transactional currency exposures of 3.55% (2017: 2.08%) of its total revenue that is
valued in currencies other than the units' functional currency. Since most of the Group’s businesses are operated in
China mainland, the estimated influence of fluctuation of foreign currency is insignificant; therefore, the Group
hasn’t carried out large amount of hedging to reduce the risk.

Equity instruments investment price risk

The Group is exposed to equity price risk arising from individual equity investments classified as available-for-sale
investments (Note V 7) as at 31 December 2018. The Group’s listed investments are listed on the Shanghai and
Shenzhen stock exchanges and valued at quoted market prices at the end of the reporting period. The following
table demonstrates the sensitivity to every 5% change (based on the carrying amount as at the end of reporting
period) in the Group’s net profit and fair value of the equity investments, with all other variables held constant,
based on their carrying amounts at the end of the reporting period.

                                                                                Increase/
                              Carrying amount of       Change in fair                            Increase/(decrease) in
                              equity investments          value             (decrease) in net            equity
                                                                                  profit
2018
Shanghai- Available for              123,540,000.00               5%             5,250,450.00              5,250,450.00
sale
Shanghai- Available for              123,540,000.00             (5%)            (5,250,450.00)            (5,250,450.00)
sale
Shenzhen- Available for            1,406,781,311.31               5%            59,788,205.73              59,788,205.73
sale
Shenzhen- Available for            1,406,781,311.31             (5%)          (59,788,205.73)            (59,788,205.73)
sale
2017
Shanghai- Available for              164,365,000.00               5%             6,985,512.50              6,985,512.50
sale
Shanghai- Available for              164,365,000.00             (5%)            (6,985,512.50)            (6,985,512.50)
sale


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 2017 and 2018.

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

                                                                        31 December 2018            31 December 2017

Leverage ratio                                                                   50.63%                          55.28%




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report



IX Disclosure of fair value
1.     Assets and liabilities measured at fair value

2018


                                                               Input measured at fair value
                               Quoted price in active                              Important but
                                                        Important and observable   unobservable
                                     market                                                                Total
                                                        input(The second level)     input(The
                                 (The first level)                                  third level)
Available-for-sale
 financial assets- equity            123,540,000.00            1,406,781,311.31                    -    1,530,321,311.31
 instruments


2017


                                                               Input measured at fair value
                               Quoted price in active                              Important but
                                                        Important and observable   unobservable
                                     market                                                                Total
                                                        input(The second level)     input(The
                                 (The first level)                                  third level)
Available-for-sale
 financial assets- equity            164,365,000.00                            -                   -      164,365,000.00
 instruments


2.     Fair value estimation

Fair value of financial instruments

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 and long-term loans within 1 year 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 2018, the default risk of long-term loans and long-term loans within
1 year was considered immaterial.

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 believes that the fair value
and its changes estimated by valuation techniques are reasonable and are also the most appropriate value on the
balance sheet date.




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                                            Chongqing Changan Automobile Company Limited 2018 Annual Report



X       Related party relationships and transactions
1.    Parent company

                                                                                    Proportion
                                                                                                    Proportion of
                       Place of                                  Nature of the      of shares in
     Parent                            Registered capital                                          voting rights in
                     registration                                  business             the
                                                                                                    the company
                                                                                     Company
                                                                 Manufacture and
China Changan                                                             sale of
Automobile             Beijing          4,582,373,700.00            automobiles,        22.53%             22.53%
Group Co ,Ltd.                                                       engine, and
                                                                     components


The ultimate holding company is China South Industries Group Corporation.

The registered capital and paid-up capital of the parent company was unchanged in 2018.

2.    Subsidiaries

Refer to Note VII 1 for details of the Group’s subsidiaries.

3.    Joint ventures and associates

Refer to Note VII 2 for details of the Group’s joint ventures and associates.




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                                                                                                            Chongqing Changan Automobile Company Limited 2018 Annual Report




4.   Other related parties

Related parties                                                                                                                                                   Relationship
China Changan Automobile Co., Ltd. – Chongqing Tsingshan Transmission Branch (hereafter referred to as
                                                                                                                               Controlled by the same ultimate holding company
“CSIA-Chongqing Tsingshan Transmission Branch”)
Sichuan Jian'an Industrial Co.,Ltd. – Chengdu Jian'an Automobile Bridge Branch (hereafter referred to as
                                                                                                                               Controlled by the same ultimate holding company
“Sichuan Jian’an Industrial Chengdu Jian'an Automobile Bridge Branch)
Sichuan Jian'an Industrial Co., Ltd                                                                                            Controlled by the same ultimate holding company
Chengdu Huachuan Electric Equipment Co., Ltd.                                                                                  Controlled by the same ultimate holding company
Harbin Dongan Auto Engine Co., Ltd.                                                                                            Controlled by the same ultimate holding company
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.                                                                        Controlled by the same ultimate holding company
Harbin Hafei Automobile Industry Group Co.,Ltd.                                                                                Controlled by the same ultimate holding company
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.                                                                                 Controlled by the same ultimate holding company
Longchang Shanchuan Shock-absorbing Vehicles Parts Co., Ltd.                                                                   Controlled by the same ultimate holding company
Wanyou Automobile Investment Co., Ltd.                                                                                         Controlled by the same ultimate holding company
China Changan Automobile Group Tianjin Sales Co., Ltd.                                                                         Controlled by the same ultimate holding company
Chongqing Anfu Automobile Co., Ltd.                                                                                            Controlled by the same ultimate holding company
Chongqing Automobile Air-conditioner Co., Ltd.                                                                                 Controlled by the same ultimate holding company
The Automobile Trade Service Co. Ltd.(changed from Chengdu Wanyou Economic Technological
                                                                                                                               Controlled by the same ultimate holding company
Development Co., Ltd.)
Chengdu Wanyou Xiangyu Auto Sales and 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
Guizhou Wanyou Auto Sales and 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
Yunnan Wanyou Auto Sales and Service Co., Ltd.                                                                                 Controlled by the same ultimate holding company
Chongqing Wanyou Economic Development Co., Ltd.                                                                                Controlled by the same ultimate holding company
Chengdu Wanyou Trading Co., Ltd.                                                                                               Controlled by the same ultimate holding company
Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd.                                                                    Controlled by the same ultimate holding company
Panzhihua Wanyou Automobile Sales & Service Co., Ltd.                                                                          Controlled by the same ultimate holding company
Ya'an Wanyou Automobile Sales & Service Co., Ltd.                                                                              Controlled by the same ultimate holding company



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                                                                                 Chongqing Changan Automobile Company Limited 2018 Annual Report



Related parties                                                                                                                        Relationship
Chongqing Wanyou Ducheng Automobile Sales 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
Luzhou Wanyou Automobile Service Co., Ltd.                                                          Controlled by the same ultimate holding company
Dali Wanling Auto Sales & Service Co., Ltd.                                                         Controlled by the same ultimate holding company
Kunming Wanling Automobile Sales & Service Co., Ltd.                                                Controlled by the same ultimate holding company
Bazhong Wanyou Automobile Sales & Service Co., Ltd.                                                 Controlled by the same ultimate holding company
Liangshan Wanyou Automobile Sales & Service Co., Ltd.                                               Controlled by the same ultimate holding company
Chongqing Changfeng Jiquan Machinery Co., Ltd.                                                      Controlled by the same ultimate holding company
Beijing Beiji Mechanical and Electrical Industry Co., Ltd.                                          Controlled by the same ultimate holding company
China South Industry Group Finance Co., Ltd;                                                        Controlled by the same ultimate holding company
Chengdu Guangming Tianzhong Environmental Protection Technology Co., Ltd                            Controlled by the same ultimate holding company
Chengdu Jialing Huaxi Optical & Precision Machinery Co., Ltd.                                       Controlled by the same ultimate holding company
Chengdu Lingchuan Vehicle Oil Tank Co., Ltd.                                                        Controlled by the same ultimate holding company
Chengdu Lingchuan Special Industry 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
Sichuan Hongguang Machinery and Electrics Co., Ltd.                                                 Controlled by the same ultimate holding company
Yunnan Xiyi Industries Co., Ltd.                                                                    Controlled by the same ultimate holding company
Yunnan Xiangyu Auto Sales and Service Co., Ltd.                                                     Controlled by the same ultimate holding company
Chongqing Dajiang Jiexin Forging Co., Ltd.                                                          Controlled by the same ultimate holding company
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.                                                   Controlled by the same ultimate holding company
Chongqing Dajiang Yuqiang Plastic Co., Ltd.                                                         Controlled by the same ultimate holding company
Chongqing Jialing Yimin Special Equipment Co., Ltd.                                                 Controlled by the same ultimate holding company
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.                                              Controlled by the same ultimate holding company
Chongqing Shangfang Automobile Fittings Co., Ltd.                                                   Controlled by the same ultimate holding company
Chongqing Qingshan Transmission Sales Co., Ltd.                                                     Controlled by the same ultimate holding company
Chongqing Changan Property Management Co., Ltd.                                                     Controlled by the same ultimate holding company
Chongqing Yihong Engineering Plastic Products Co., Ltd.                                             Controlled by the same ultimate holding company
Chongqing Changan Real Estate Development Co., Ltd.                                                 Controlled by the same ultimate holding company



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                                                                                                   Chongqing Changan Automobile Company Limited 2018 Annual Report



Related parties                                                                                                                                          Relationship
Chongqing Changan Industries Group Co. Ltd.                                                                           Controlled by the same ultimate holding company
Chongqing Changan Construction Co., Ltd.                                                                              Controlled by the same ultimate holding company
Chongqing Changrong Machinery Co., Ltd.                                                                               Controlled by the same ultimate holding company
Harbin Botong Auto Parts Co.,LTD.                                                                                     Controlled by the same ultimate holding company
Southwest Ordnance Industry Corporation                                                                               Controlled by the same ultimate holding company
Chongqing Xiyi Automobile Connecting Rod Co., Ltd.                                                                    Controlled by the same ultimate holding company
Chengdu Ningxing Automobile Spring Co., Ltd.                                                                          Controlled by the same ultimate holding company
Chongqing Wanyou Construction Co., Ltd.                                                                               Controlled by the same ultimate holding company
Southern Industrial Asset Management Co., Ltd.                                                                        Controlled by the same ultimate holding company
South Tianhe Chassis System 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
Southern Fojiya Auto Parts Co., Ltd.                                                                                      Participated by the Ultimate holding company
Chongqing Changan Min Sheng Logistics Co., Ltd.                                                                           Participated by the Ultimate holding company
Chongqing Nexteer Steering System Co., Ltd.                                                                               Participated by the Ultimate holding company


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                        2018                          2017
Chongqing Changan Min Sheng Logistics Co., Ltd.            Purchase of spare parts and transportation fee              1,389,088,291.94              1,351,597,111.16
CSIA-Chongqing Tsingshan Transmission Branch               Purchase of spare parts                                     1,284,085,746.55              1,920,824,540.34
Sichuan Jian'an Industrial Co., Ltd                        Purchase of spare parts                                       747,672,263.03                952,596,664.63
Harbin Dongan Auto Engine Co., Ltd.                        Purchase of spare parts                                       729,821,616.79              1,043,649,785.91
South Tianhe Chassis System Co., Ltd.                      Purchase of spare parts                                       601,959,455.32                722,807,300.20
Chongqing Nexteer Steering System Co.,Ltd.                 Purchase of spare parts                                       579,242,368.51                324,469,905.26
South Inter Air-conditioner Co, .Ltd.                      Purchase of spare parts                                       490,615,574.48                572,728,698.23
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.    Purchase of spare parts and accept service                    382,752,767.69              1,685,162,025.13



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                                                                                                        Chongqing Changan Automobile Company Limited 2018 Annual Report



                         Related parties                                   Nature of the transaction                        2018                        2017
Chongqing Wanyou Economic Development Co., Ltd.                 Purchase of spare parts                                       329,624,797.32             180,138,574.78
Chengdu Huachuan Electric Equipment Co., Ltd.                   Purchase of spare parts                                       279,083,119.39             275,908,197.18
Chongqing Dajiang Yuqiang Plastic Co., Ltd.                     Purchase of spare parts                                       276,123,847.99              74,700,158.09
Southern Fojiya Auto Parts Co., Ltd.                            Purchase of spare parts                                       251,772,521.47                          -
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.               Purchase of spare parts                                       175,538,307.43              56,922,952.53
Chengdu Wanyou Filter Co., Ltd.                                 Purchase of spare parts                                       142,276,990.69             145,873,367.68
Jiangling Holding Co., Ltd.                                     Purchase of cars and spare parts                              114,120,282.00             548,265,973.00
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.          Purchase of spare parts                                       110,293,645.11             138,880,769.27
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.                  Purchase of spare parts                                       105,758,408.84             165,599,788.86
Yunnan Xiyi Industries Co., Ltd.                                Purchase of spare parts                                        88,997,586.25              88,056,763.21
Hubei Xiaogan Huazhong Automobile Light Co., Ltd.               Purchase of spare parts                                        87,329,310.10              90,534,101.05
Chengdu Ningjiang Zhaohe Automobile Components Co., Ltd.        Purchase of spare parts                                        75,867,551.80              30,603,270.36
Chengdu Lingchuan Vehicle Oil Tank Co., Ltd.                    Purchase of spare parts                                        74,135,330.06              62,073,927.72
Chongqing Changan Kuayue Automobile Co., Ltd.                   Accept service                                                 67,598,856.98              66,952,800.00
                                                                Purchase of spare parts and accept processing
Changan Ford Automobile Co., Ltd.                                                                                              57,461,801.63             101,320,721.57
                                                                services
Chongqing Shangfang Automobile Fittings Co., Ltd.               Purchase of spare parts                                        47,857,427.57              71,513,288.68
Changan Industries Group Co. Ltd.                               Purchase of spare parts and accept service                     46,447,919.42              58,803,886.18
Longchang Shanchuan Shock-absorbing Vehicles Parts Co., Ltd.    Purchase of spare parts                                        37,353,791.80              52,955,838.01
Chengdu Lingchuan Special Industry Co., Ltd.                    Purchase of spare parts                                        24,507,845.13              20,759,869.43
Chongqing Changfeng Jiquan Machinery Co., Ltd.                  Purchase of spare parts                                        22,462,283.98              38,663,332.17
Chongqing Yihong Engineering Plastic Products Co., Ltd.         Purchase of spare parts                                        20,730,680.31              44,957,884.97
                                                                Purchase of spare parts and accept processing
Chongqing Changan Suzuki Automobile Co., Ltd.                                                                                  19,420,028.65             156,019,997.92
                                                                services
Chongqing Changrong Machinery Co., Ltd.                         Purchase of spare parts                                        18,795,175.93              31,920,181.87
Chengdu Jialing Huaxi Optical & Precision Machinery Co., Ltd.   Purchase of spare parts                                        14,592,213.03              14,759,612.09
Sichuan Hongguang Machinery and Electrics Co., Ltd.             Purchase of spare parts                                         8,969,159.75               8,847,938.92
Changan PSA Automobiles Co., Ltd.                               Accept service                                                  6,309,145.00                          -
Chongqing Qingshan Transmission Sales Co., Ltd.                 Purchase of spare parts                                         5,943,733.67               6,687,785.88




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                                                                                                               Chongqing Changan Automobile Company Limited 2018 Annual Report



                          Related parties                                          Nature of the transaction                       2018                        2017
Chongqing Changan Property Management Co., Ltd.                        Accept service                                                  5,410,948.67               4,644,858.72
Harbin Botong Auto Parts Co.,LTD.                                      Accept service                                                  4,908,486.65              11,639,993.11
Chongqing Changan Construction Co., Ltd.                               Accept service                                                  2,849,308.36               1,392,469.91
Chongqing Dajiang Jiexin Forging Co., Ltd.                             Accept service                                                  2,392,326.57               4,303,952.13
Yunnan Wanyou Auto Sales and Service Co., Ltd.                         Accept service                                                  1,610,572.58                            -
Beijing Beiji Mechanical and Electrical Industry Co., Ltd.             Accept service                                                  1,496,100.00                   153,855.09
Guizhou Wanyou Auto Sales and Service Co., Ltd.                        Accept service                                                  1,158,331.89                            -
Chongqing Wanyou Xingjian Auto Sales & Service Co., Ltd.               Accept service                                                     729,801.70                           -
The Automobile Trade Service Co. Ltd.                                  Accept service                                                     675,086.70                           -
Chongqing Wanyou Ducheng Automobile Sales Service Co., Ltd.            Accept service                                                     472,699.15                           -
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.                Accept service                                                     406,387.74                           -
Ya'an Wanyou Automobile Sales & Service Co., Ltd.                      Accept service                                                     211,018.21                           -
Yunnan Xiangyu Auto Sales and Service Co., Ltd.                        Accept service                                                     205,055.66                           -
Nanning Wanyou Auto Sales and Service Co., Ltd.                        Accept service                                                     167,618.87                           -
Guangxi Wanyou Auto Sales and Service Co., Ltd.                        Accept service                                                     134,307.83                           -
Chengdu Wanyou Trading Co., Ltd.                                       Accept service                                                      37,072.74                           -
Panzhihua Wanyou Automobile Sales & Service Co., Ltd.                  Accept service                                                      34,680.85                           -
China Changan Automobile Group Tianjin Sales Co., Ltd.                 Accept service                                                      34,151.89                           -
Luzhou Wanyou Automobile Service Co., Ltd.                             Accept service                                                      32,522.83                           -
Bazhong Wanyou Automobile Sales & Service Co., Ltd.                    Accept service                                                      28,253.30                           -
Liangshan Wanyou Automobile Sales & Service Co., Ltd.                  Accept service                                                      15,943.40                           -
Chongqing Changan Real Estate Development Co., Ltd.                    Accept service                                                       8,962.26                           -
China Changan Automobile Group Co ,Ltd.                                Accept service                                                              -                  310,385.23
Chongqing Xiyi Automobile Connecting Rod Co., Ltd.                     Accept service                                                              -                  116,398.24
Chengdu Ningxing Automobile Spring Co., Ltd.                           Purchase of spare parts                                                     -             17,404,696.45
Chongqing Wanyou Construction Co., Ltd.                                Accept service                                                              -                  257,144.54
Total                                                                                                                              8,737,629,483.46          11,145,780,765.70


The price of the Group’s purchase from related parties is based on contracts agreed by both parties.



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                                                                                                        Chongqing Changan Automobile Company Limited 2018 Annual Report


Sales of goods and services to related parties


                          Related parties                                 Nature of the transaction                         2018                        2017
Chongqing Wanyou Economic Development Co., Ltd.               Sales of cars and spare parts                                 1,335,816,637.76           1,561,916,357.55
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.       Sales of cars                                                   958,757,083.78             975,719,318.04
Guizhou Wanyou Auto Sales and Service Co., Ltd.               Sales of cars and spare parts                                   808,716,796.96           1,003,042,141.84
Yunnan Wanyou Auto Sales and Service Co., Ltd.                Sales of cars and spare parts                                   675,259,160.22             841,434,091.94
Wanyou Automobile Investment Co., Ltd.                        Sales of cars                                                   507,090,525.03             614,678,667.25
The Automobile Trade Service Co. Ltd.                         Sales of cars and spare parts                                   479,559,227.33             824,993,835.42
Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd.   Sale of spare parts                                             383,849,283.30                          -
Changan Ford Automobile Co., Ltd.                             Sale of spare parts and providing service                       165,787,061.88              15,775,360.36
China Changan Automobile Group Tianjin Sales Co., Ltd.        Sales of cars                                                   157,624,228.55             142,472,640.19
Guangxi Wanyou Auto Sales and Service Co., Ltd.               Sales of cars and spare parts                                   129,352,559.19             238,569,478.33
Yunnan Xiangyu Auto Sales and Service Co., Ltd.               Sales of cars                                                   125,126,513.10             108,897,440.96
                                                              Sale of spare parts and providing service
Jiangling Holding Co., Ltd.                                                                                                   108,745,038.01              95,243,193.28
                                                              technical service
Chongqing Changan Min Sheng Logistics Co., Ltd.               Sale of spare parts and providing service                        82,883,629.96               1,843,499.57
Chongqing Changan Suzuki Automobile Co., Ltd.                 Sales of spare parts and providing service                       31,641,044.87              15,123,607.10
Nanning Wanyou Auto Sales and Service Co., Ltd.               Sales of cars                                                    32,422,600.95              61,999,048.73
Chongqing Anfu Automobile Co., Ltd.                           Sales of cars                                                    20,526,466.23              37,806,005.09
Hangzhou Chelizi Intelligent Technology Co., Ltd.             Providing service                                                16,714,615.80
China South Industry Group Finance Co., Ltd.                  Providing service                                                 9,335,874.00              57,440,875.44
Harbin Dongan Auto Engine Co., Ltd.                           Sale of spare parts and provind service                           7,754,379.22              35,076,218.15
Yunnan Xiyi Industries Co., Ltd.                              Sale of spare parts                                               6,605,219.44               7,277,992.45
Chongqing Changan Kuayue Automobile Co., Ltd.                 Sales of cars and spare parts                                     6,483,396.23               4,377,088.40
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.       Sales of cars, spare parts and providing service                  2,295,518.58              30,161,181.98
Sichuan Hongguang Machinery and Electrics Co., Ltd.           Sale of spare parts                                               2,151,388.40               2,738,185.98
Changan Mazda Automobile Co., Ltd.                            Sale of spare parts and provind service                           1,095,230.99                          -
Kunming Wanling Automobile Sales & Service Co., Ltd.          Sales of cars                                                     1,754,335.49                          -
Chengdu Lingchuan Special Industry Co., Ltd.                  Sale of spare parts                                                  311,546.13              4,708,798.64




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                          Related parties                                 Nature of the transaction                        2018                        2017
Chongqing Wanyou Ducheng Automobile Sales Service Co., Ltd.   Sales of cars                                                       196,879.96                           -
Chongqing Wanyou Xingjian Auto Sales & Service Co., Ltd.      Sales of cars                                                       177,344.51                           -
CSIA-Chongqing Tsingshan Transmission Branch                  Providing service                                                    95,988.68                  292,252.09
Chongqing Changan Real Estate Development Co., Ltd.           Providing service                                                    62,735.85                           -
Luzhou Wanyou Automobile Service Co., Ltd.                    Sales of cars                                                        58,264.92                           -
Chongqing Nexteer Steering System Co.,Ltd.                    Providing service                                                    53,411.32                           -
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.        Providing service                                                    49,056.61                           -
Chongqing Shangfang Automobile Fittings Co., Ltd.             Sale of spare parts                                                  47,075.48                   21,667.92
Chongqing Changan Construction Co., Ltd.                      Providing service                                                    33,018.87                           -
Changan Ford Mazda Engine Co., Ltd.                           Providing service                                                    30,132.08                           -
Ya'an Wanyou Automobile Sales & Service Co., Ltd.             Sales of cars                                                        16,589.56                           -
Panzhihua Wanyou Automobile Sales & Service Co., Ltd.         Sales of cars                                                        11,045.54                           -
South Inter Air-conditioner Co, .Ltd.                         Providing service                                                     4,708.49                   11,931.13
South Tianhe Chassis System Co., Ltd.                         Providing service                                                     3,754.72                   72,181.13
Chengdu Wanyou Filter Co., Ltd.                               Sale of spare parts                                                   3,754.72                   48,120.75
Sichuan Jian'an Industrial Co., Ltd                           Providing service                                                     3,754.72                           -
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.                Providing service                                                     3,754.72                           -
Chongqing Changrong Machinery Co., Ltd.                       Providing service                                                     3,754.72                           -
Harbin Hafei Automobile Industry Group Co.,Ltd.               Providing technical service                                                  -              7,058,479.96
Chengdu Huachuan Electric Equipment Co., Ltd.                 Providing service and provding service                                       -                  140,610.18
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.             Sale of spare parts                                                          -                   50,513.21
Hubei Xiaogan Huazhong Automobile Light Co., Ltd              Sale of spare parts                                                          -                    4,722.22
Chongqing Changfeng Jiquan Machinery Co., Ltd.                Providing service                                                            -                    1,240.17
Total                                                                                                                      6,058,514,386.87           6,688,996,745.45




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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


                                                      Nature of the
             Related parties                                                     2018                  2017
                                                       transaction
Changan Industries Group Co. Ltd.                Payment of utilities          93,054,489.94        108,837,168.01
                                                 Payment of land rental
Changan Industries Group Co. Ltd.                                              28,534,520.71         26,975,981.43
                                                 fees
                                                 Payment of building
Changan Industries Group Co. Ltd.                                               4,640,196.56         11,056,294.32
                                                 rental fees
Changan Industries Group Co. Ltd.                Others                        12,063,769.15         10,364,865.24
                                                 Payment of
Changan Industries Group Co. Ltd.                                                               -     2,740,000.00
                                                 firefighting fees
Harbin Hafei Automobile Industry
                                                 Intergrated service                            -    79,555,300.00
Group Co.,Ltd.
Total                                                                         138,292,976.36        239,529,609.00


Purchase of project materials


                          Related parties                                       2018                  2017
Chongqing Changan Construction Co., Ltd.                                     559,607,524.21         429,275,229.02
Chongqing Wanyou Construction Co., Ltd.                                       49,273,687.28          68,047,748.98
Total                                                                        608,881,211.49         497,322,978.00


Staff expenses for technical supporting


                              Related parties                                   2018                  2017
Changan Ford Automobile Co., Ltd.                                             46,422,643.97          42,372,915.44
Changan Mazda Automobile Co., Ltd.                                            21,299,423.79          21,187,776.74
Changan Ford Mazda Engine Co., Ltd.                                           16,698,952.77          16,318,922.12
Chongqing Changan Kuayue Automobile Co., Ltd.                                  4,592,281.32           2,784,811.32
Chongqing Changan Suzuki Automobile Co., Ltd.                                  3,944,312.91          46,491,980.31
Jiangling Holding Co., Ltd.                                                      640,737.47           1,497,727.68
Changan PSA Automobiles Co., Ltd.                                                           -       (1,424,129.38)
Chongqing Xiyi Automobile Linkage Rod Co., Ltd.                                             -           281,990.59
Total                                                                         93,598,352.23         129,511,994.82


Capital occupied income


                               Related parties                                    2018                   2017
Chongqing Wanyou Economic Development Co., Ltd.                                     894,864.11             501,588.89
Guizhou Wanyou Auto Sales and Service Co., Ltd.                                     559,068.24                81,722.22
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.                             414,834.46             659,937.61
The Automobile Trade Service Co. Ltd.                                               369,869.50           1,544,802.57




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Yunnan Wanyou Auto Sales and Service Co., Ltd.                                   353,401.43         1,118,742.73
Wanyou Automobile Investment Co., Ltd.                                           337,044.19           705,979.48
Guangxi Wanyou Auto Sales and Service Co., Ltd.                                  127,362.28           128,670.08
Yunnan Xiangyu Auto Sales and Service Co., Ltd.                                   46,192.24              14,478.64
Nanning Wanyou Auto Sales and Service Co., Ltd.                                   32,994.83               1,392.31
China Changan Automobile Group Tianjin Sales Co., Ltd.                            32,328.30                      -
Total                                                                           3,167,959.58        4,757,314.53


Equity trading between related parties


               Related parties                   Type of transaction            2018                2017
                                                 Purchase of minority
Southern Industrial Asset Management
                                                 interests in subsidiaries     30,344,195.00                     -
Co., Ltd.
                                                 (Note VII, 1)
                                                 Disposal the shares of
Yunnan Xiyi Industries Co., Ltd.                                                           -        7,069,600.00
                                                 joint venture
                                                 Acquisition subsidiary’s
Changan Industries Group Co. Ltd.                                                          -                  1.00
                                                 minority stake


(2)     Lease between related parties

Rent assets to related parties


                   Lessees                         Type of leased assets        2018                2017
Jiangling Holding Co., Ltd.                      Equipment                      8,799,965.67        1,889,756.41
Changan Industries Group Co. Ltd.                Building                       6,566,747.42                     -
Chongqing Changan              Min      Sheng    Building
                                                                                2,283,720.00        1,903,400.00
Logistics Co., Ltd.
Total                                                                          17,650,433.09        3,793,156.41


Rent assets from related parties


                   Lessors                         Type of leased assets        2018                2017
Chongqing Changan              Min      Sheng    Storage
                                                                               12,081,172.58                     -
Logistics Co., Ltd.
Chongqing Changan              Real     Estate   Office building and
                                                                                2,824,308.00        2,766,244.60
Development Co., Ltd.                            storage
Changan Industries Group Co. Ltd.                Land                           2,320,669.33             68,571.44
Chongqing     Changan                 Property   Building
                                                                                 164,505.72           518,193.00
Management Co., Ltd.
Chongqing       Changan                Suzuki    Storage
                                                                                           -          734,293.28
Automobile Co., Ltd.
Harbin Hafei Automobile               Industry   Land
                                                                                           -          435,600.00
Group Co., Ltd.
           Total                                                               17,390,655.63        4,522,902.32


(3)     Deposits and loan interest from related parties


Deposits interest income


               Related party                      Type of transaction         2018                2017



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China South Industry Group Finance
                                          Interest income             74,940,739.77       76,630,292.88
Co., Ltd.
Changan Automobile Financing
                                          Interest income             62,300,000.00       39,150,000.00
Co.,Ltd
Total                                                                137,240,739.77      115,780,292.88


Loan interest expense


               Related party                Type of transaction          2018               2017
China South Industry Group Finance
                                          Interest expense               9,008,290.98      6,950,091.68
Co., Ltd.


(4)     Other related party transaction


Item                                                              2018                      2017
Compensation of key management personal                             10,748,878.64            13,599,300.00


6.        Amounts due from/to related parties

Notes receivable


Related parties                                                      2018                  2017
Wanyou Automobile Investment Co., Ltd.                            1,588,720,000.00      2,676,220,000.00
Chongqing Wanyou Economic Development Co., Ltd.                      9,050,000.00          2,000,000.00
Yunnan Wanyou Auto Sales and Service Co., Ltd.                       5,000,000.00         17,000,000.00
Changan Ford Automobile Co., Ltd.                                     2,128,658.11
China Changan Automobile Group Tianjin Sales Co., Ltd.                            -       37,824,480.00
The Automobile Trade Service Co. Ltd.                                             -       16,900,000.00
Guizhou Wanyou Auto Sales and Service Co., Ltd.                                   -        2,000,000.00
Guangxi Wanyou Auto Sales and Service Co., Ltd.                                   -        1,500,000.00
Total                                                             1,604,898,658.11      2,753,444,480.00


Accounts receivable


Related parties                                                      2018                  2017
Jiangling Holding Co., Ltd.                                         54,670,170.21         30,661,901.66
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.             32,628,379.07         43,541,400.14
Changan Ford Automobile Co., Ltd.                                   26,562,801.86         22,529,864.32
Chongqing Changan Min Sheng Logistics Co., Ltd.                     24,295,732.61                      -
Chongqing Changan Kuayue Automobile Co., Ltd.                       13,567,425.09         10,887,572.26
Changan PSA Automobiles Co., Ltd.                                     9,377,634.60        22,926,567.86
Yunnan Wanyou Auto Sales and Service Co., Ltd.                        8,494,704.49         4,700,833.08
The Automobile Trade Service Co. Ltd.                                 5,610,252.52         1,311,647.66
Hangzhou Chelizi Intelligent Technology Co., Ltd.                     5,564,800.00                     -
Changan Mazda Automobile Co., Ltd.                                    4,228,792.00        10,185,773.13
Changan Automobile Financing Co.,Ltd.                                    426,120.00                    -
Chongqing Wanyou Zunda Automobile Sales & Service Co.,
                                                                          65,804.25                    -
Ltd.
Chongqing Changan Suzuki Automobile Co., Ltd.                                     -      135,914,168.09



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Related parties                                                    2018                 2017
Changan Industries Group Co. Ltd.                                             -         1,325,600.89
Total                                                            185,492,616.70       283,985,329.09


Prepayments


Related parties                                                    2018                 2017
Changan PSA Automobiles Co., Ltd.                                  8,826,473.38                    -
Guangxi Wanyou Auto Sales and Service Co., Ltd.                      124,497.13                    -
Chongqing Changan Suzuki Automobile Co., Ltd.                                 -           295,474.25
Total                                                              8,950,970.51           295,474.25


Other recievables


Related party                                                      2018                 2017
Changan Ford Automobile Co., Ltd.                                124,312,677.99                    -
Harbin Hafei Automobile Industry Group Co., Ltd.                   1,500,000.00                    -
Harbin Dongan Auto Engine Co., Ltd.                                  268,000.00           268,000.00
Chongqing Changan Min Sheng Logistics Co., Ltd.                       47,975.40           123,793.03
Chongqing Changan Suzuki Automobile Co., Ltd.                                 -        40,784,896.53
Total                                                            126,128,653.39        41,176,689.56


Notes payable


Related parties                                                    2018                 2017
Harbin Dongan Auto Engine Co., Ltd.                              460,430,000.00       617,420,000.00
Chongqing Changan Construction Co., Ltd.                         298,387,280.00       332,992,262.00
Chongqing Changan Min Sheng Logistics Co., Ltd.                  221,925,743.41       198,023,651.37
South Inter Air-conditioner Co, .Ltd.                            149,430,000.00       182,640,000.00
CSIA-Chongqing Tsingshan Transmission Branch                     130,270,000.00       214,270,000.00
Chongqing Dajiang Yuqiang Plastic Co., Ltd.                      127,940,000.00                    -
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.          112,940,000.00       479,180,000.00
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.            50,060,000.00        27,120,000.00
Chengdu Wanyou Filter Co., Ltd.                                   23,950,000.00        14,960,000.00
Southern Fojiya Auto Parts Co., Ltd.                              22,090,000.00
Hubei Xiaogan Huazhong Automobile Light Co., Ltd.                 13,860,000.00         9,950,000.00
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.                     9,160,000.00        20,580,000.00
Sichuan Jian'an Industrial Co., Ltd                                8,650,000.00         5,910,000.00
Chengdu Lingchuan Special Industry Co., Ltd.                       8,000,000.00           170,000.00
Chongqing Changfeng Jiquan Machinery Co., Ltd.                     7,900,000.00         5,510,000.00
Chengdu Jialing Huaxi Optical & Precision Machinery Co.,
                                                                   7,270,000.00         7,690,000.00
Ltd.
Chongqing Yihong Engineering Plastic Products Co., Ltd.            4,500,000.00         5,310,000.00
Chengdu Huachuan Electric Equipment Co., Ltd.                      2,490,000.00         2,190,000.00
Sichuan Hongguang Machinery and Electrics Co., Ltd.                2,240,000.00         2,030,000.00
Changan Ford Automobile Co., Ltd.                                  1,749,094.40        65,536,197.82
Longchang Shanchuan Shock-absorbing Vehicles Parts Co.,
                                                                   1,370,000.00                    -
Ltd.




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Related parties                                                    2018                 2017
Chongqing Shangfang Automobile Fittings Co., Ltd.                  1,150,000.00                     -
Chongqing Dajiang Jiexin Forging Co., Ltd.                         1,120,000.00                     -
Chongqing Changan Suzuki Automobile Co., Ltd.                                  -      189,532,516.13
South Tianhe Chassis System Co., Ltd.                                          -        1,370,000.00
Chongqing Wanyou Construction Co., Ltd.                                        -       52,786,747.00
Chengdu Ningxing Automobile Spring Co., Ltd.                                   -         1,110,000.00
Total                                                           1,666,882,117.81     2,436,281,374.32


Accounts payable


Related parties                                                    2018                 2017
Chongqing Nexteer Steering System Co.,Ltd.                       249,837,358.48       176,288,268.39
Harbin Dongan Auto Engine Co., Ltd.                              161,417,419.68       345,797,944.98
South Tianhe Chassis System Co., Ltd.                            106,558,182.07       199,363,707.33
CSIA-Chongqing Tsingshan Transmission Branch                     104,125,292.03       207,968,397.78
Sichuan Jian'an Industrial Co., Ltd                               80,657,220.16       117,078,608.55
South Inter Air-conditioner Co, .Ltd.                             76,175,712.19       171,872,351.49
Chongqing Wanyou Economic Development Co., Ltd.                   66,540,872.82        54,096,010.02
Jiangling Holding Co., Ltd.                                       53,715,373.73       191,084,011.75
Chongqing Dajiang Yuqiang Plastic Co., Ltd.                       46,084,064.75        26,019,486.15
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.                 45,780,498.50        30,253,807.17
Harbin Dongan Automotive Engine Manufacturing Co., Ltd.           44,767,814.32       155,247,645.33
Southern Fojiya Auto Parts Co., Ltd.                              41,239,427.48
Chengdu Huachuan Electric Equipment Co., Ltd.                     33,208,038.95         4,332,585.36
Chongqing Changan Min Sheng Logistics Co., Ltd.                   27,674,139.19        37,085,168.07
Chongqing Jianshe Automobile Air-conditioner Co., Ltd.            27,597,844.39        21,933,236.63
Chengdu Ningjiang Zhaohe Automobile Components Co.,
                                                                  24,826,794.96         2,976,243.85
Ltd.
Hubei Xiaogan Huazhong Automobile Light Co., Ltd.                 21,513,647.99        18,068,182.67
Chengdu Wanyou Filter Co., Ltd.                                   21,426,685.22        42,372,755.39
Chengdu Lingchuan Vehicle Oil Tank Co., Ltd.                      17,663,383.80        25,415,872.54
Sichuan Ningjiang Shanchuan Machinery Co, Ltd.                    17,161,138.52         5,527,769.06
Chongqing Changfeng Jiquan Machinery Co., Ltd.                     9,917,256.01        14,806,992.88
Longchang Shanchuan Shock-absorbing Vehicles Parts Co.,            9,586,665.78
                                                                                        4,093,547.21
Ltd.
Chongqing Shangfang Automobile Fittings Co., Ltd.                  9,100,420.32        12,633,188.89
Chengdu Lingchuan Special Industry Co., Ltd.                       8,664,902.18         3,626,071.14
Yunnan Xiyi Industries Co., Ltd.                                   6,535,900.15         5,574,383.25
Chongqing Qingshan Transmission Sales Co., Ltd.                    5,262,876.71                548.02
Changan Ford Automobile Co., Ltd.                                  4,085,436.29        89,646,556.61
Chengdu Jialing Huaxi Optical & Precision Machinery Co.,           2,709,675.36
                                                                                        5,431,628.68
Ltd.
Chongqing Changrong Machinery Co., Ltd.                            2,686,306.64         3,524,818.39
Chongqing Yihong Engineering Plastic Products Co., Ltd.            2,524,005.52         8,669,550.54
Chongqing Changan Industries Group Co. Ltd.                        2,215,125.47        10,548,846.45
Chongqing Changan Kuayue Automobile Co., Ltd.                      1,263,841.59        93,727,399.68
Sichuan Hongguang Machinery and Electrics Co., Ltd.                1,187,095.50         1,939,534.94



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Related parties                                                      2018                 2017
Harbin Hafei Automobile Industry Group Co.,Ltd.                        661,117.68           661,117.68
Chongqing Dajiang Jiexing Forging Co., Ltd.                            282,878.46           605,591.85
Chongqing Automobile Air-conditioner Co., Ltd.                         177,312.15           205,041.51
Chongqing Changan Construction Co., Ltd.                               119,514.45           271,400.31
Chongqing Jialing Yimin Special Equipment Co., Ltd.                    104,496.50           104,496.50
Chengdu Guangming Tianzhong Environmental Protection                    85,473.47
                                                                                             88,689.65
Technology Co., Ltd.
Chongqing Xiyi Automobile Connecting Rod Co., Ltd.                      67,466.78            70,136.39
Chongqing Changan Suzuki Automobile Co., Ltd.                                   -        77,082,367.50
Beijing Beiji Mechanical and Electrical Industry Co., Ltd.                      -            26,382.70
Sichuan Jian'an Industrial Co., Ltd – Chengdu Jian'an                          -
                                                                                             20,257.22
Automobile Bridge Branch
Chengdu Ningxing Automobile Spring Co., Ltd.                                    -         8,808,787.49
Total                                                            1,335,208,676.24      2,174,949,387.99


Advances from customers


Related parties                                                     2018                    2017
Chongqing Wanyou Economic Development Co., Ltd.                     30,602,220.89           147,992,787.85
Guizhou Wanyou Auto Sales and Service Co., Ltd.                     24,770,462.88            93,966,433.63
Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd.             23,961,768.86           149,605,982.46
Chongqing Changan Kuayue Automobile Co.,Ltd.                         9,833,525.00                        -
China Changan Automobile Group Tianjin Sales Co., Ltd.               7,694,948.94             8,262,589.55
Yunnan Wanyou Auto Sales and Service Co., Ltd.                       6,741,068.88            56,027,446.21
Chongqing Changan Industries Group Co. Ltd.                          5,289,712.91                        -
Changan Ford Mazda Engine Co., Ltd.                                  3,347,884.03             3,202,789.69
Chongqing Wanyou Zunda Automobile Sales & Service Co.,               2,874,902.88                        -
Ltd.
Guangxi Wanyou Auto Sales and Service Co., Ltd.                      2,031,019.64            10,218,258.22
Chongqing Anfu Automobile Co., Ltd.                                  1,764,144.00               119,144.00
The Automobile Trade Service Co. Ltd.(changed from                   1,031,647.35            28,665,986.30
Nanning Wanyou Economic and Service
Chengdu Wanyou Auto Sales TechnologicalCo.,Development
                                             Ltd.                    1,000,769.87             3,049,999.16
Co., Ltd.)
Yunnan Xiangyu Auto Sales and Service Co., Ltd.                        820,739.67            13,152,733.90
Harbin Hafei Automobile Industry Group Co., Ltd.                       670,500.00               670,500.00
Wanyou Automobile Investment Co., Ltd.                                 394,254.00            33,392,271.43
Kunming Wanling Automobile Sales & Service Co., Ltd.                    36,548.04                        -
Chongqing Shangfang Automobile Fittings Co., Ltd.                        3,980.00                        -
Dali Wanling Auto Sales & Service Co., Ltd.                              2,037.62                        -
Luzhou Wanyou Automobile Service Co., Ltd.                                 121.00                        -
Chongqing Changan Min Sheng Logistics Co., Ltd.                                 -               361,998.32
Southwest Ordnance Industry Corporation                                         -               113,420.00
South Inter Air-conditioner Co, .Ltd.                                           -                 4,991.00
Total                                                              122,872,256.46           548,807,331.72

Other payables


Related parties                                                    2018                     2017
Chongqing Changan Min Sheng Logistics Co., Ltd.                    105,930,160.43          159,507,227.79
China South Industries Group Corporation                            29,580,000.00                       -
Changan PSA Automobiles Co., Ltd.                                   26,007,857.90                       -
Chongqing Changan Construction Co., Ltd.                            13,471,837.97           23,746,341.39
Chongqing Changan Industries Group Co. Ltd.                          8,784,882.05            4,841,997.36



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Related parties                                                              2018                     2017
Chongqing Changan Property Management Co., Ltd.                                2,252,567.36            2,470,202.68
Chongqing Wanyou Zunda Automobile Sales & Service                                550,000.00                       -
Co., Ltd.
CSIA-Chongqing Tsingshan Transmission Branch                                     439,120.00                       -
Chongqing Changan Real Estate Development Co., Ltd.                              277,907.42                       -
Guizhou Wanyou Auto Sales and Service Co., Ltd.                                  218,604.28              159,500.00
Chongqing Anfu Automobile Co., Ltd.                                              200,000.00              100,000.00
Changan Ford Mazda Engine Co., Ltd.                                              144,115.79              144,115.79
Chengdu Wanyou Filter Co., Ltd.                                                  120,000.00              120,000.00
Chongqing Wanyou Economic Development Co., Ltd.                                  111,551.22              450,057.20
Chengdu Wanyou Xiangyu Auto Sales and Service Co.,                                75,330.00                       -
Ltd.
Chongqing Dajiang Xinda Vehicles Shares Co., Ltd.                                 50,000.00                       -
South Inter Air-conditioner Co, .Ltd.                                             35,844.50                       -
Yunnan Wanyou Auto Sales and Service Co., Ltd.                                    26,100.00              182,607.80
Harbin Hafei Automobile Industry Group Co., Ltd.                                          -              640,668.85
Chongqing Changan Suzuki Automobile Co., Ltd.                                             -              330,432.00
The Automobile Trade Service Co. Ltd.(changed from                                        -              191,979.64
Guangxi Wanyou Economic and Service
Chengdu Wanyou Auto Sales TechnologicalCo.,Development
                                             Ltd.                                         -              150,000.00
Co., Ltd.)
Chongqing Wanyou Construction Co., Ltd.                                                   -            2,278,297.00
Total                                                                        188,275,878.92          195,313,427.50


7.      Cash deposited in related party

                         Related party                                       2018                  2017
China South Industry Group Finance Co., Ltd.                            3,312,617,903.21       4,449,345,493.13
Changan Automobile Financing Co.,Ltd                                    1,000,000,000.00       1,500,000,000.00
Total                                                                   4,312,617,903.21       5,949,345,493.13


In 2018, deposit rates in related party are 0.35% to 3.915%, deposit terms are 0 to 12 months. (in 2017, deposit rate
was 0.35% to 3.915%, terms are 0 to 12 months.)


X        Related party relationships and transactions
8.      Loans from related parties

Short-term loans


Related parties                                                       2018                       2017
China South Industry Group Finance Co., Ltd.                           190,000,000.00            175,000,000.00

Refer to Note V 18 for the details of the interest rates of the short-term loan.




XI Share-based payments
1.       General information

                                                             2018                             2017
The total amount of the employee
services as a result of the share-based                         23,961,900.00                    32,697,000.00
payments



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The equity settled share based payments are as follows:
                                                          2018                               2017
The accumulated amount of equity
settled share-based payments                                  23,961,900.00                     32,697,000.00
included in capital reserve
The amount of equity settled
share-based payments included in                              (8,735,100.00)                    18,981,100.00
current year expense

2.      Share-based payment scheme

On 23 September 2016, the share option was approved to be granted on 23 September 2016 by the 12th meeting of
the seventh session of the Board of Directors and the 8th meeting of the seventh session of Board of Supervisors.
According to the share option scheme, the Company granted 29,140,000 options to 202 employees, conferring
rights to purchase 1 A share of Changan Automobile for each option before the expiration date. Share options are
granted to directors, chief executive officers and key technical and management personnel.

The share option will expire in 5 years. After the vesting period of 24 month since the grant date, the option shall
be exercised in three periods. In each exercise period, 1/3 of the total options could be exercised when the
prescribed performance conditions are met. The exercise price is RMB13.478 per share. The options granted shall
be exercised before the expiration date. The share should not be exercised unless the prescribed conditions are met.
The exercisable shares not exercised in above periods will be written off by the Company.

The performance indicators of the share option includes:
(1) Return on equity (ROE)
(2) Net profit growth rate attributable to owners
(3) Economic value added (EVA), and
(4) The ratio of prime operating revenue to operating revenue

The above net profit and ROE are based on net profit and weighted average net assets attributable to owners
deducting non-recurring gains and losses.

The exercise terms of share options:


     Exercise       Exercise
                                         Exercise Time                                 Exercise Terms
      Period         Ratio
                                                                  2017 net profit growth rate based on 2015 average
                                                                  growth rate ≥3.2%(growth amount equivalent to
                                   The 1st trading day sin        RMB10,182,000,000);
The 1st                            ce 24 month after the          ROE≥15%
exercise           1/3             grant date to the last tr      The above indicators≥benchmark average, and ≥
period                             ading day since 36 mo          75 quartile
                                   nth after the grant date       △EVA>0;
                                                                  The ratio of prime operating revenue to operati
                                                                  ng revenue≥95%
                                                                  2018 net profit growth rate based on 2015 aver
                                                                  age growth rate ≥3.2%(growth amount equivale
                                   The 1st trading day sin        nt to RMB10,507,000,000);
The 2nd                            ce 36 month after the          ROE≥15%
exercise           1/3             grant date to the last tr      The above indicators≥benchmark average, and ≥
period                             ading day since 48 mo          75 quartile
                                   nth after the grant date       △EVA>0;
                                                                  The ratio of prime operating revenue to operati
                                                                  ng revenue≥95%



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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report




                                                                   2019 net profit growth rate based on 2015 aver
                                                                   age growth rate ≥3.2%(growth amount equivale
                                                                   nt to RMB10,844,000,000);
                                   The 1st trading day sin         ROE≥15%
The 3rd                            ce 48 month after the
                                                                   The above indicators≥benchmark average, and ≥
exercise           1/3             grant date to the last tr
                                                                   75 quartile
period                             ading day since 60 mo
                                   nth after the grant date        △EVA>0;
                                                                   The ratio of prime operating revenue to operati
                                                                   ng revenue≥95%




2.      Share-based payment scheme (continued)

The fair value of the equity-settled share option is determined using Black-Scholes model based on the estimate in
accordance with the terms and conditions of the share options. The input variables are as follows:


                     Valuation factors                                         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 volatility is based on the assumption that the historical volatility
reflects the future trend, but not necessarily the actual results.

On the date of granting, the fair value of share options granted amounted to RMB139,527,600. Due the fact that
the first and second prescribed performance conditions of the share option is not achieved and 19 employees have
terminated the labor contract with the company and were no longer granted the options, the Board of Directors of
the Company approved to cancel 20,330,000 shares of the share option. After cancellation, the number of the stock
option issued by the company under the plan is 8,810,000 with the fair value of RMB42,183,885.90.


XII Contingencies and commitments

1.      Commitments

Contracted, but not provided for

              Item                                    2018                                     2017
Capital commitments                                   18,178,474,088.33                        16,723,740,000.00
Investment commitments                                  1,600,000,000.00                            49,000,000.00

2.      Contingencies

As at 31 December 2018, no material contingencies needed to be disclosed.




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                                           Chongqing Changan Automobile Company Limited 2018 Annual Report



XIII Events after the balance sheet date

1.    The dividends after balance sheet date

Profits or dividends to be allocated                 Refer to Note V 36.

2.    Other events after the balance sheet date


On 15 March 2019, according to the resolution of the 48th meeting of the seventh board of directors, the board of
directors approved the proposal for the establishment of Nanjing Leadership Equity Investment Partnership
(Limited Partnership). The company intends to invest RMB 1.6 billion, accounting for 16.39%, as a limited
partner. As of the approval date of the financial statement, the above investment has not been completed.

As of the approval date of financial statement, no other significant event after balance sheet date was noted.



XIV Other important event
1.    Leasing arrangements

According to the lease contracts signed with the lessor, the minimum leases payments under non-cancellable leases
are as follows:


                       Item                                       2018                           2017
Less than 1 year (including 1 year)                                21,731,575.60                 15,795,702.31
1 to 2 years (including 2 years)                                   18,988,604.18                   5,067,570.60
2 to 3 years (including 3 years)                                   14,221,234.39                   7,038,573.12
Over 3 years                                                         3,844,972.29                  2,583,750.00
Total                                                              58,786,386.46                 30,485,596.03

2.    Segment report


The Group identifies operating segments based on the internal organization structure, managerial requirements and
internal reporting 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 conditions:

(1)     it engages in business activities 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 is able to obtain relevant accounting information such as its financial position, operating results
        and cash flows.

If two or more segments have similar economic characteristics and meet certain conditions, 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.




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                                             Chongqing Changan Automobile Company Limited 2018 Annual Report



3.    Comparative Data
As stated in Note III 32, according to the Notice on Revising and Issuing Format of 2018 Annual Financial
Statements for General Business Enterprises (Cai Kuai [2018] No.15) and the MOF's Interpretation of Related
Issues on Format of 2018 Annual Financial Statements for General Business Enterprises, 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 2017 have been adjusted, and the comparative data for 2017 have been
re-classified and restated to ensure the presentation and accounting treatments are in conformity with the
requirements for current year.


XV Notes to the Company’s financial statements
1.    Notes Receivable and Accounts Receivable

                                                  2018                                         2017
Notes Receivable                                    19,391,160,283.70                            29,010,848,480.70
Accounts Receivable                                    5,679,160,679.69                            4,991,996,591.00
Total                                               25,070,320,963.39                            34,002,845,071.70



(1)     Classification of Notes Receivable


                                                        2018                                   2017
Commercial Acceptance Bill                               6,045,651,669.20                          8,797,054,230.70
Bank Acceptance Bill                                   13,345,508,614.50                         20,213,794,250.00
Total                                                  19,391,160,283.70                         29,010,848,480.70

(2)     On December 31, 2018, no bank pledges were issued for the issuance of bills payable.( December 31, 2017,
        Nil)

(3)     The notes receivable that have been endorsed or discounted but have not expired on the balance sheet date
        are as follows:

                                                2018                                      2017
                                 Termination            Not confirmed           Termination              Not
                                 confirmation                                   confirmation          confirmed
Bank acceptance bill               685,573,750.00                       -       1,012,669,140.00                  -

(4)      On December 31, 2018, the amount of notes converted into accounts receivable due to the inability of the
         drawer to perform was RMB 22,574,581 (December 31, 2017: Nil).

Accounts Receivable

(1) Aging analysis of accounts receivable as at 31 December 2018 is as follows:

               Aging                                    2018                                   2017
            Within 1 year                                  3,595,148,552.67                        3,184,481,577.60
             1 to 2 years                                  1,225,896,003.03                        1,508,834,126.68
             2 to 3 years                                      616,246,477.50                         201,227,844.24
            Over 3 years                                       257,429,428.54                         110,700,935.91
                Total                                      5,694,720,461.74                        5,005,244,484.43




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                                                                   Chongqing Changan Automobile Company Limited 2018 Annual Report



                  Provision                                                             (15,559,782.05)                                           (13,247,893.43)
                                                                                       5,679,160,679.69                                        4,991,996,591.00


Movements of provision for accounts receivable are as follows:


                                                                                                    Reduction
                        Beginning                             Addition                                                                      Ending Balance
                                                                                        Reversal                Write-off
2018                     13,247,893.43                         2,311,888.62                         -                           -             15,559,782.05
2017                     11,776,256.96                         1,471,636.47                         -                           -             13,247,893.43


(2) Analysis of the accounts receivable by category as at 31 December 2018 is as follows:

                                                        2018                                                                    2017

        Item                      Balance                                 Provision                            Balance                              Provision

                            Amount                  %                 Amount                %            Amount               %                Amount           %

Individually
  significant
  items and
                              74,433,396.10            1.31                       -             -                        -          -                      -           -
  analyzed
  individually
  for provision

Accounts receivable analyzed as groups for provision

Group 1.
 Accounts
 receivable
 analyzed for                 50,150,446.67            0.88           15,559,782.05      31.03            336,704,741.88        6.73           13,247,893.43        3.93
 provision
 according to
 aging analysis
Group 2.
 Accounts
 receivable                5,570,136,618.97         97.81                         -             -       4,668,539,742.55       93.27                       -           -
 from related
 parties

Group subtotal             5,620,287,065.64         98.69             15,559,782.05         0.28        5,005,244,484.43          100          13,247,893.43        0.26

Individually
  insignificant
  items but
                                            -             -                       -             -                        -          -                      -           -
  analyzed
  individually
  for provision

Total                      5,694,720,461.74            100            15,559,782.05         0.27        5,005,244,484.43          100          13,247,893.43        0.26




In groups, accounts receivable were analyzed for provision by aging:


                                                    2018                                                                     2017
    Aging                          Balance                                                                    Balance
                                                                         Provision                                                               Provision
                           Amount                       %                                            Amount                    %
Within 6
                           13,595,739.51                27.11                               -       308,058,891.27             91.50                            -
months
6 to 12
                                      26.00              0.00                          1.30             11,052,418.43             3.28              552,620.92
months
Within 1
year                       13,595,765.51                27.11                          1.30         319,111,309.70             94.78                552,620.92
subtotal
1 to 2 years               19,562,282.40                39.00             1,956,228.24                   5,432,400.00             1.61              543,240.00

2 to 3 years                4,838,400.00                 9.65             1,451,520.00                       2,836.67             0.00                    851.00

3 to 4 years                                    -              -                            -               14,028.00             0.00                  7,014.00

4 to 5 years                      9,831.25               0.02                  7,865.00                                  -              -                       -




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                                             Chongqing Changan Automobile Company Limited 2018 Annual Report


Over 5
                    12,144,167.51    24.22        12,144,167.51              12,144,167.51       3.61       12,144,167.51
years
Total               50,150,446.67   100.00        15,559,782.05          336,704,741.88      100.00         13,247,893.43


In groups, accounts receivable were analyzed for provision with other methods:


                                                   2018                                           2017
            Group
                                        Balance                  Provision             Balance               Provision
Accounts receivable from
                                        5,570,136,618.97                     -        4,668,539,742.55                   -
 related parities


As at 31 December 2018, there was no individually significant items but analyzed individually for provision (2017:
Nil).

(3) For the year ended 2018, no provision for accounts receivable has been reversed (2017: RMB
     Nil).

(4) For the year ended 2018, no write-offs for accounts receivable provision (2017: RMB Nil ).

(5) As at 31 December 2018, accounts receivable from top 5 clients amounted to
     RMB4,575,962,128.25, accounted for 80.35% of the total amount (2017 :
     RMB3,973,737,026.11, accounted for 79.39% of the total amount).

(6) There is no accounts receivable derecognized due to transference of financial assets during
     2018 (2017: Nil).

2.       Other receivables

                                                     2018                                          2017
Interest Receivable                                           17,432,805.54                                42,184,263.88
Other Receivables                                          2,326,885,353.29                              1,723,723,602.89
Total                                                      2,344,318,158.83                              1,765,907,866.77


Interest Receivable


                                                     2018                                          2017
Interest on deposits                                          17,432,805.54                                42,184,263.88


Other receivables

(1)      Aging analysis of other receivables as at 31 December 2018 is as follows:

              Aging                                    2018                                        2017
          Within 1 year                                    1,924,149,413.17                             1,683,813,894.71
           1 to 2 years                                     377,568,132.71                                26,899,001.97
           2 to 3 years                                       14,030,436.00                                6,170,910.10
           Over 3 years                                       11,740,802.81                                7,928,129.93
               Total                                       2,327,488,784.69                             1,724,811,936.71


            Provision                                            (603,431.40)                              (1,088,333.82)



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                                                                  Chongqing Changan Automobile Company Limited 2018 Annual Report



                   Net Value                                                            2,326,885,353.29                                             1,723,723,602.89


Movements of provisions for other receivables are as follows:


                                                                                                      Deduction
                   Opening Balance                       Addition                                                                                Ending Balance
                                                                                         Reversal                 Write-off
2018                       1,088,333.82                                       -          484,902.42                                   -                      603,431.40
2017                         995,559.54                         92,774.28                              -                              -                   1,088,333.82


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

                                                         2018                                                                      2017

        Item                      Balance                                   Provision                              Balance                                 Provision

                            Amount                   %              Amount                    %             Amount                %                   Amount            %

Individually               1,720,350,524.62          73.91                         -              -        1,127,509,417.42       65.37                          -              -
  significant
  items and
  analyzed
  individually
  for provision
Other receivables analyzed as groups for provision
Group 1. Other               118,981,025.65           5.12               603,431.40           0.51          125,520,423.39         7.28                1,088,333.82     0.87
 receivables
 analyzed for
 provision
 according to
 aging
 analysis
Group 2. Other               488,157,234.42          20.97                         -              -         471,782,095.90        27.35                           -         -
 receivables
 from related
 parties
Group subtotal               607,138,260.07          26.09               603,431.40           0.10          597,302,519.29        34.63                1,088,333.82     0.18

Individually                                -             -                        -              -                       -               -                       -         -
insignificant
items        but
analyzed
individually
for provision

Total                      2,327,488,784.69           100                603,431.40           0.03         1,724,811,936.71        100                 1,088,333.82     0.06




In groups, other receivables were analyzed for provision by aging:


                                                         2018                                                                     2017

      Aging                             Balance                                                                     Balance
                                                                                  Provision                                                                 Provision
                              Amount                          %                                              Amount                   %
Within 6
                             113,310,739.93                     95.23                             -        119,053,084.31             94.85                                 -
months
6 to 12
                                5,233,386.34                      4.40                 261,669.32             5,512,392.58                    4.39             275,619.62
months
Within 1 year
                             118,544,126.27                     99.63                  261,669.32          124,565,476.89             99.24                    275,619.62
subtotal
1 to 2 years                        65,703.03                     0.06                   6,570.30                 76,250.15                   0.06                7,625.02

2 to 3 years                                    -                    -                            -               48,000.00                   0.04              14,400.00

3 to 4 years                        34,672.34                     0.03                  17,336.17                 80,014.34                   0.06              40,007.17

4 to 5 years                        93,342.00                     0.08                  74,673.60                             -                  -                          -

Over 5 years                       243,182.01                     0.20                 243,182.01               750,682.01                    0.60             750,682.01

Total                        118,981,025.65                       100                  603,431.40          125,520,423.39                     100            1,088,333.82




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                                               Chongqing Changan Automobile Company Limited 2018 Annual Report




(3)       For the year ended 2018, the amount of other receivables transferred back to the provision
          for bad debts was RMB484,902.42 (2017: Nil).

(4)       For the year ended 2018, there was no write-off for other receivable provision (2017:Nil ).

(5)       Analysis of other receivables by nature is as follows:

               Nature                                  2018                                   2017
Energy-saving           and     new
                                                         1,667,483,759.60                       1,080,007,000.00
energy subsidy
Technical royalties                                           3,935,124.21                        179,848,570.43
Disposal income of assets                                  119,142,595.23                         137,053,901.49
Loans to third parties                                     200,000,000.00                         124,782,800.00
Pretty cash                                                  83,196,870.08                         92,067,567.52
Others                                                     253,127,004.17                         109,963,763.45
Total                                                    2,326,885,353.29                       1,723,723,602.89

(6)       As at 31 December 2018, top five debtors of other receivables are as follows:

                                                                        Proportion of total
                                                                                                   Ending balance of
Debtors                       Amount                      Aging          other receivables
                                                                                                           provision
                                                                                       (%)
First                             1,667,483,759.60     Within 4years                 71.64                         -

Second                             200,000,000.00      Within 1 year                  8.59                         -

Third                              124,312,677.99      Within 1 year                  5.34                         -

Forth                                  68,155,043.85   Within 1 year                  2.93                         -

Fifth                                  21,593,411.66    1 to 2 year                   0.93                         -

Total                             2,081,544,893.10                                   89.43                         -


(7)      There is no other receivables derecognized due to transfer of financial assets during 2018 (2017: Nil).




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3.      Long-term investments

2018

                                                                                       Investment              Other               Other                                         Other deduction    Provi                            Ending
                                                                                                                                                       Dividend of cash                                     Ending Balance of
Investee                            Opening Balance            Addition    Deduction   income/loss nder        comprehensive       movements of                                                       sio                            Balance of
                                                                                                                                                       declared                                             book value
                                                                                       equity method           income              equity                                                               n                            provision
Joint ventures
Chongqing Changan Suzuki             1,190,705,710.43                  -           -       (595,756,652.13)                    -                   -                         -   (594,949,058.30)       -                        -            -
  Automobile Co., Ltd.
Jiangling Holding Co., Ltd.          2,907,749,943.37                  -           -       (409,453,173.08)        (706,228.88)       (3,835,625.88)                         -                  -       -         2,493,754,915.53            -

Changan Ford Automobile Co., Ltd.    4,125,426,104.20                  -           -       (415,641,597.09)                    -                   -                         -                  -       -         3,709,784,507.11            -

Changan Mazda Automobile Co.,        2,439,429,811.02                  -           -       1,263,196,852.39                    -                   -        (1,230,000,000.00)                  -       -         2,472,626,663.41            -
  Ltd.
Changan Ford Mazda Engine Co.,        903,838,395.08                   -           -          38,465,362.88                    -                   -          (114,500,000.00)                  -       -          827,803,757.96             -
  Ltd.
Changan PSA                            93,561,126.76    1,800,000,000.00           -       (437,042,058.02)                    -                   -                         -                  -       -         1,456,519,068.74            -
Automobiles Co., Ltd.
Changan Weilai New Energy                           -     49,000,000.00            -          (4,934,486.09)                   -                   -                         -                  -       -            44,065,513.91            -
  Automobile Technology Co., Ltd.
Subtotal                            11,660,711,090.86   1,849,000,000.00           -       (561,165,751.14)        (706,228.88)       (3,835,625.88)        (1,344,500,000.00)   (594,949,058.30)       -        11,004,554,426.66                -

Associates
Chongqing Changan Kuayue              101,399,892.43                   -           -          28,908,342.54                    -                   -          (13,720,000.00)                   -       -           116,588,234.97            -
  Automobile Co., Ltd.
Chongqing Changan Kuayue                            -                  -           -                      -                    -                   -                         -                  -       -                        -            -
  Automobile Sales Co., Ltd.
Beijing Fang’an taxi Co., Ltd.                     -                  -           -                      -                    -                   -                         -                  -       -                        -            -

Changan Automobile Financing         1,817,669,991.73                  -           -        212,947,165.68                     -                   -                         -                  -       -         2,030,617,157.41            -
  Co.,Ltd
Zhenjiang Demao Hairun equity         518,742,921.95                   -           -           (239,867.54)       77,231,613.62                    -                         -   (595,734,668.03)       -                        -            -
  investment Co., Ltd.
Hainan Anxinxing Information                        -      6,000,000.00            -           (463,444.79)                    -                   -                         -                  -       -             5,536,555.21            -
  Technology Co., Ltd.
Nanjing Chelai Travel Technology                    -      2,000,000.00            -            (186,383.86)                   -                   -                         -                  -       -             1,813,616.14            -
  Co., Ltd.
Hunan Guoxin Semiconductor                          -     25,000,000.00            -                      -                    -                   -                         -                  -       -            25,000,000.00            -
  Technology Co., Ltd.
Subtotal                             2,437,812,806.11     33,000,000.00            -        240,965,812.03        77,231,613.62                    -          (13,720,000.00)    (595,734,668.03)       -         2,179,555,563.73            -

Subsidiaries




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                                                                                                                                         Chongqing Changan Automobile Company Limited 2018 Annual Report




                                                                                           Investment             Other               Other                                     Other deduction   Provi                             Ending
                                                                                                                                                         Dividend of cash                                 Ending Balance of
Investee                           Opening Balance        Addition           Deduction     income/loss nder       comprehensive       movements of                                                  sio                             Balance of
                                                                                                                                                         declared                                         book value
                                                                                           equity method          income              equity                                                          n                             provision
Nanjing Changan Automobile Co.,
                                     422,533,259.00               -                    -                      -                   -                  -                      -                 -       -          422,533,259.00              -
  Ltd.
Hebei Changan Automobile Co.,
                                     438,223,236.00               -                    -                      -                   -                  -                      -                 -       -          438,223,236.00              -
  Ltd.
Chongqing Changan International
                                      13,068,581.00               -                    -                      -                   -                  -                      -                 -       -            13,068,581.00             -
  Automobile Sales Co., Ltd.
Chongqing Changan Automobile
                                      29,700,000.00               -                    -                      -                   -                  -                      -                 -       -            29,700,000.00             -
  supporting service Co., Ltd.
Chongqing Changan Connected Car
                                      88,500,000.00               -                    -                      -                   -                  -                      -                 -       -            88,500,000.00             -
  Technology Co., Ltd.
Chongqing Changan Automobile
                                       3,150,000.00               -       (3,150,000.00)                      -                   -                  -                      -                 -       -                        -             -
  sales subsidiaries
Chongqing Changan Special
                                       2,500,000.00               -                    -                      -                   -                  -                      -                 -       -             2,500,000.00             -
  Automobile sales Co., Ltd.
Chongqing Changan Europe Design
                                     155,469,913.50                   -                -                      -                   -                  -                      -                 -       -            155,469,913.50            -
  Academy Co., Ltd.
Chongqing Changan new Engergy
                                      18,850,000.00   30,344,195.00                    -                      -                   -                  -                      -                 -       -            49,194,195.00             -
  Automobile Co. Ltd.
Changan United Kingdom R&D
                                     236,387,395.40               -                    -                      -                   -                  -                      -                 -       -          236,387,395.40              -
  Center Co., Ltd.
Beijing Changan R&D Center Co.,
                                       1,000,000.00               -                    -                      -                   -                  -                      -                 -       -             1,000,000.00             -
  Ltd.
Harbin Changan R&D Center Co.,
                                       1,000,000.00               -       (1,000,000.00)                      -                   -                  -                      -                 -       -                        -             -
  Ltd.
Shanghai Changan R&D Center
                                       1,000,000.00               -       (1,000,000.00)                      -                   -                  -                      -                 -       -                        -             -
  Co., Ltd.
Changan Japan Designing Center
                                       1,396,370.15               -                    -                      -                   -                  -                      -                 -       -             1,396,370.15             -
  Co., Ltd.
Changan United States R&D Center
                                      10,243,460.00               -                    -                      -                   -                  -                      -                 -       -            10,243,460.00             -
  Co., Ltd.
Hebei Baoding Changan Bus Co.,
                                     176,002,613.18               -                    -                      -                   -                  -                      -                 -       -          176,002,613.18              -
  Ltd.
Hefei Changan Automobile
                                      35,367,765.23               -                    -                      -                   -                  -                      -                 -       -            35,367,765.23             -
  Company Ltd.
Changan Automobile Russia Co.,
                                       1,242,589.15               -                    -                      -                   -                  -                      -                 -       -             1,242,589.15             -
  Ltd.
Changan Brazil Holdings Limited        2,584,556.97               -                    -                      -                   -                  -                      -                 -       -             2,584,556.97             -

Changan Automobile Investment
                                      50,000,000.00   98,000,000.00                    -                      -                   -                  -                      -                 -       -          148,000,000.00              -
  (Shenzhen) Co., Ltd.




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                                                                                            Investment             Other               Other                                          Other deduction     Provi                            Ending
                                                                                                                                                           Dividend of cash                                       Ending Balance of
Investee                            Opening Balance            Addition       Deduction     income/loss nder       comprehensive       movements of                                                         sio                            Balance of
                                                                                                                                                           declared                                               book value
                                                                                            equity method          income              equity                                                                 n                            provision
Nanjing Changan New Energy
  Automobile Sales & Service Co.,                   -     50,000,000.00                 -                      -                   -                   -                        -                     -       -            50,000,000.00            -
  Ltd.
Fuzhou Fuqing Changan New
  Energy Automobile Sales Co.,                      -      2,000,000.00                 -                      -                   -                   -                        -                     -       -             2,000,000.00            -
  Ltd.
Xiamen Changan New Energy
  Automobile Sales & Service Co.,                   -      2,000,000.00                 -                      -                   -                   -                        -                     -       -             2,000,000.00            -
  Ltd.
Guangzhou Changan New Energy
  Automobile Sales & Service Co.,                   -      4,000,000.00                 -                      -                   -                   -                        -                     -       -             4,000,000.00            -
  Ltd.
Chongqing Changan New Energy
                                                    -   1,238,742,571.54                -                      -                   -                   -                        -                     -       -         1,238,742,571.54            -
  Automobile Technology Co., Ltd.
Changan Suzuki Automobile Co.,
                                                    -    594,949,059.30                 -                      -                   -                   -                        -                     -       -          594,949,059.30             -
  Ltd.
Zhenjiang Demao Hairun Equity
  Investment Fund Partnership                       -   1,129,922,044.91                -                      -                   -                   -                        -                     -       -         1,129,922,044.91            -
  (Limited Partnership)
Subtotal                             1,688,219,739.58   3,149,957,870.75   (5,150,000.00)                      -                   -                   -                        -                     -       -         4,833,027,610.33            -

Total                               15,786,743,636.55   5,031,957,870.75   (5,150,000.00)       (320,199,939.11)       76,525,384.74      (3,835,625.88)        (1,358,220,000.00)   (1,190,683,726.33)       -        18,017,137,600.72            -




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2017
                                                                                                      Investment                 Other               Other                                                                                  Ending
                                                                                                                                                                         Dividend of cash             Provis   Ending Balance of book
Investee                      Opening Balance           Addition                Deduction             income/loss nder           comprehensive       movements of                                                                           Balance of
                                                                                                                                                                         declared                     ion      value
                                                                                                      equity method              income              equity                                                                                 provision
Joint ventures
Chongqing Changan Suzuki
                                     1,230,836,876.85                                                          (42,413,558.40)                   -        2,282,391.98                            -                     1,190,705,710.43                 -
Automobile Co., Ltd.
Jiangling Holding Co., Ltd.          2,991,207,303.06                                                          (86,461,777.56)        (248,641.80)        3,253,059.67                            -                     2,907,749,943.37                 -

Changan Ford Automobile
                                     5,663,808,819.68                                                        6,039,117,284.52                    -                   -           (7,577,500,000.00)                     4,125,426,104.20                 -
Co., Ltd.
Changan Mazda Automobile
                                     2,146,340,500.42                                                        1,268,089,310.60                    -                   -             (975,000,000.00)                      2,439,429,811.02                -
Co., Ltd.
Changan Ford Mazda
                                       908,715,700.67                                                          119,122,694.41                    -                   -             (124,000,000.00)                       903,838,395.08                 -
Engine Co., Ltd.
Changan PSA
                                       647,839,655.26                                                         (554,278,528.50)                   -                   -                            -                        93,561,126.76                 -
Automobiles Co., Ltd.
Subtotal                           13,588,748,855.94                        -                     -         6,743,175,425.07         (248,641.80)        5,535,451.65           (8,676,500,000.00)         -          11,660,711,090.86                  -

Associates
Chongqing Xiyi Automobile
                                         7,556,448.42                       -        (6,005,819.20)             (1,550,629.22)                   -                   -                            -        -                            -                -
Linkage Rod Co., Ltd.
Chongqing Changan Kuayue
                                        83,406,464.16                       -                     -             17,993,428.27                    -                   -                            -        -              101,399,892.43                 -
Automobile Co., Ltd.
Chongqing Changan Kuayue
                                                    -                       -                     -                          -                   -                   -                            -        -                            -                -
Automobile Sales Co., Ltd.
Beijing Fang’an taxi Co.,
                                                    -                       -                     -                          -                   -                   -                            -        -                            -                -
Ltd.
Changan Automobile
                                     1,063,655,241.51          650,000,000.00                     -             95,278,795.38                    -        8,735,954.84                            -        -            1,817,669,991.73                 -
Financing Co.,Ltd
Zhenjiang Demao Hairun
equity investment fund
                                                    -          518,743,029.48                     -                   (107.53)                   -                   -                            -        -              518,742,921.95                 -
partnership (limited
partnership)
Subtotal                            1,154,618,154.09        1,168,743,029.48        (6,005,819.20)            111,721,486.90                     -       8,735,954.84                             -        -           2,437,812,806.11                  -

Subsidiaries
Nanjing Changan
                                       422,533,259.00                       -                     -                          -                   -                   -                            -        -              422,533,259.00                 -
Automobile Co., Ltd.
Hebei Changan Automobile
                                       438,223,236.00                       -                     -                          -                   -                   -                            -        -              438,223,236.00                 -
Co., Ltd.
Chongqing Changan                       13,068,580.00                    1.00                     -                          -                   -                   -                            -        -               13,068,581.00                 -
International Automobile




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Sales Co., Ltd.
Chongqing Changan
Automobile supporting           29,700,000.00                   -                 -                  -                -               -                     -   -      29,700,000.00    -
service Co., Ltd.
Chongqing Changan
Connected Car Technology        88,500,000.00                   -                 -                  -                -               -                     -   -      88,500,000.00    -
Co., Ltd.
Chongqing Changan
Automobile sales                  5,600,000.00                  -    (2,450,000.00)                  -                -               -                     -   -        3,150,000.00   -
subsidiaries
Chongqing Changan Special
                                  2,500,000.00                  -                 -                  -                -               -                     -   -        2,500,000.00   -
Automobile sales Co., Ltd.
Chongqing Changan Europe
                               155,872,524.00        (402,610.50)                 -                  -                -               -                     -   -     155,469,913.50    -
Design Academy Co., Ltd.
Chongqing Changan new
Engergy Automobile Co.          18,850,000.00                   -                 -                  -                -               -                     -   -      18,850,000.00    -
Ltd.
Changan United Kingdom
                               236,387,395.40                   -                 -                  -                -               -                     -   -     236,387,395.40    -
R&D Center Co., Ltd.
Beijing Changan R&D
                                  1,000,000.00                  -                 -                  -                -               -                     -   -        1,000,000.00   -
Center Co., Ltd.
Harbin Changan R&D
                                  1,000,000.00                  -                 -                  -                -               -                     -   -        1,000,000.00   -
Center Co., Ltd.
Shanghai Changan R&D
                                  1,000,000.00                  -                 -                  -                -               -                     -   -        1,000,000.00   -
Center Co., Ltd.
Changan Japan Designing
                                  1,396,370.15                  -                 -                  -                -               -                     -   -        1,396,370.15   -
Center Co., Ltd.
Changan United States R&D
                                  1,317,720.00      8,925,740.00                  -                  -                -               -                     -   -      10,243,460.00    -
Center Co., Ltd.
Hebei Baoding Changan Bus
                               176,002,613.18                   -                 -                  -                -               -                     -   -     176,002,613.18    -
Co., Ltd.
Hefei Changan Automobile
                                35,367,765.23                   -                 -                  -                -               -                     -   -      35,367,765.23    -
Company Ltd.
Changan Automobile Russia
                                  1,242,589.15                  -                 -                  -                -               -                     -   -        1,242,589.15   -
Co., Ltd.
Changan Brazil Holdings
                                  2,584,556.97                  -                 -                  -                -               -                     -   -        2,584,556.97   -
Limited
Shenzhen Changan New
Energy Automobile Service       50,000,000.00                   -                 -                  -                -               -                     -   -      50,000,000.00    -
Co., Ltd.
Subtotal                     1,682,146,609.08      8,523,130.50     (2,450,000.00)                   -                -               -                     -   -   1,688,219,739.58    -

Total                        16,425,513,619.11   1,177,266,159.98    (8,455,819.20)   6,854,896,911.97     (248,641.80)   14,271,406.49    (8,676,500,000.00)   -   15,786,743,636.55   -




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4.      Operating revenue and cost

(1) Operating revenue, operating cost

                                         2018                                               2017
        Item
                           Revenue                     Cost                   Revenue                    Cost
Primary
                        60,779,233,113.82           53,517,880,999.83        75,808,523,264.79        68,132,068,016.71
 Operation
Other Operation            2,600,231,648.38           991,067,244.30          1,949,953,122.72          600,493,843.34
Total                   63,379,464,762.20           54,508,948,244.13        77,758,476,387.51        68,732,561,860.05


(2) Revenue listed by products are as follows:

                                          2018                                               2017
        Item
                           Revenue                     Cost                   Revenue                      Cost
Sales of goods          63,173,489,211.84           54,268,833,774.82        77,539,745,872.67        68,427,035,082.82
Outsourcing
                             205,975,550.36           240,114,469.31           218,730,514.84           305,526,777.23
 processing
Total                   63,379,464,762.20           54,508,948,244.13        77,758,476,387.51        68,732,561,860.05


5.      Investment income

(1) Details of investment income

                    Item                                         2018                               2017
Long-term equity investment income
                                                                  628,650,000.00                                      -
 under cost method
Long-term equity investment income
                                                                (320,199,939.11)                    6,854,896,911.97
 under equity method
Investment income during holding
  period of available-for-sale financial                           51,133,446.15                      50,364,239.43
  assets
Others                                                             23,539,707.32                        2,802,352.95
Total                                                             383,123,214.36                    6,908,063,504.35

(2) Available-for-sale financial assets under cost method

                  Investee                                      2018                             2017
Cash dividend received from China
 South Industry Group Finance Co.,                               48,909,006.75                      46,814,239.43
 Ltd.
Guolian Automotive Power Battery
                                                                       449,438.20                                 -
 Research Institute Co., Ltd.
Total                                                            49,358,444.95                      46,814,239.43




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(3) Long-term equity investment income under equity method

                                                                               Reason for the
         Investee                 2018                    2017
                                                                                fluctuation
Changan Ford Automobile                                                     Decrease in profit due
                              (415,641,597.09)        6,039,117,284.52
 Co., Ltd.                                                                        to sales derease
Changan Mazda
                              1,263,196,852.39        1,268,089,310.60
 Automobile Co., Ltd.
Chongqing Changan Suzuki                                                    Decrease in profit due
                              (595,756,652.13)          (42,413,558.40)
 Automobile Co., Ltd.                                                             to sales derease
Changan Ford Mazda                                                          Decrease in profit due
                                 38,465,362.88          119,122,694.41
 Engine Co., Ltd.                                                                 to sales derease
                                                                            Decrease in profit due
Jiangling Holding Co., Ltd.   (409,453,173.08)          (86,461,777.56)
                                                                                  to sales derease
Chongqing Xiyi
                                                                            Decrease in profit due
 Automobile Linkage Rod                       -          (1,550,629.22)
                                                                                  to sales derease
 Co., Ltd.
Changan PSA Automobiles                                                     Decrease in profit due
                              (437,042,058.02)         (554,278,528.50)
 Co., Ltd.                                                                            to low sales
Chongqing Changan
                                                                            Increase in profit due
 Kuayue Automobile               28,908,342.54           17,993,428.27
                                                                               to sales expansion
 Co.,Ltd.
Changan Automobile                                                          Increase in profit due
                                212,947,165.68            95,278,795.38
 Financing Co.,Ltd                                                             to sales expansion
Zhenjiang Demao Hairun
 equity investment fund
                                  (239,867.54)                   (107.53)
 partnership (limited
 partnership)
Changan Weilai New                                                           Early establishment,
 Energy Automobile              (4,934,486.09)                          -          operating loss
 Technology Co., Ltd.
Hainan Anxinxing                                                             Early establishment,
 Information Technology           (463,444.79)                          -          operating loss
 Co., Ltd.
Nanjing Chelai Travel                                                        Early establishment,
                                  (186,383.86)                          -
 Technology Co., Ltd.                                                              operating loss
Total                         (320,199,939.11)         6,854,896,911.97




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                                                              Chongqing Changan Automobile Company Limited 2018 Annual Report

1.      Schedule of non-recurring profit and loss

                             Item                                                                              2018
Gain and loss arising from disposal of non-current assets (including writing-off of accrued
impairment loss on assets)                                                                                         8,561,074.73

Government grants (excluding the grants closely related to enterprise business, which the
                                                                                                               2,873,192,102.56
Group enjoyed according to the allotment standards or quantitative criteria of the country)
The investment cost of the enterprise to obtain subsidiaries, joint ventures and joint ventures is
less than the gain from the fair value of the identifiable net assets of the investee when the                 1,020,821,274.01
investment is obtained.
Other non-operating income and expenses                                                                           29,303,167.73
Capital occupied income from non-financial entities                                                               48,285,737.46
Effect on income tax                                                                                             (82,007,701.31)
Effect on minority shareholders (after tax)                                                                      (52,356,990.94)
Total                                                                                                          3,845,798,664.24


Note: the non-recurring profit and loss were presented with amount before tax.

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

2018


                                                             Weighted         average                Earnings per share
Profit                                                       return on equity (%)              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 deducting non-recurring profit and                            (6.75)              (0.66)              N/A
 loss


2017


                                                             Weighted         average                Earnings per share
Profit                                                       return on equity (%)              Basic EPS        Diluted EPS
Net profit attributable to the Company’s ordinary
 shareholders
                                                                                  15.65                 1.49              N/A
Net profit attributable to the Company’s ordinary
 shareholders after deducting non-recurring profit and                            12.53                 1.19              N/A
 loss


In accordance with the regulations issued by China Security Regulation Commission, Regulation of Information Disclosure of Public
Companies—the Calculation 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.




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                                                      Chongqing Changan Automobile Company Limited 2018 Annual Report




                 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.
                                                                                    23 April, 2019




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