Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chongqing Changan Automobile Company Limited 2018 Semi-annual Report August 2018 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 1 Important Notice, Contents, and Definitions The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Executives of the 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. All the directors attended the board meeting for reviewing the semi-annual report. For the first half of 2018, the Company has no plans of cash dividend, no bonus shares and no share converted from capital reserve. 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. 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 report shall be presented in both Chinese and English, and should there be any conflicting understanding of the text, the Chinese version shall prevail. 1 Chongqing Changan Automobile Company Limited 2018 Semi-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 ........................................................................ 7 Chapter 4 Business Discussion and Analysis ............................................................. 9 Chapter 5 Important Matters .................................................................................... 22 Chapter 6 Changes in the shareholding of the company and shareholders.............. 30 Chapter 7 Information about Directors, Supervisors, Senior Management ............. 34 Chapter 8 Corporate Bonds ...................................................................................... 34 Chapter 9 The Financial Statements......................................................................... 35 Chapter 10 Documents for Future Reference......................................................... 147 2 Chongqing Changan Automobile Company Limited 2018 Semi-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 Corporation, 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 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 CFME Refers to Changan Ford Mazda Engine Co. Ltd, a JV of the Company Changan Suzuki Refers to Chongqing Changan Suzuki Auto. 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 Semi-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 II. Contact Information Secretary of the Board of Directors Securities affairs representative Name Li Jun No. 260, East Jianxin Road, Jiangbei District, Contact address Chongqing Telephone 023-67594008 Fax 023-67866055 E-mail address cazqc@changan.com.cn III. Others 1. Way of contact Whether registration address, office address and its post code as well as website and email of the Company changed in the reporting period or not □ Applicable √ Not applicable The registration address, office address and post code as well as website and email of the Company did not change in the reporting period. See more details in Annual Report 2017. 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable 4 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report The newspaper appointed for information disclosure, the website for the publish of the semi-annual report appointed by CSRC and the preparation place for semi-annual report did not change in the reporting period. See more details in Annual Report 2017. 3. Other relevant information Whether other relevant information changed in the reporting period or not □ Applicable √ Not applicable IV. Summary of Accounting Data and Financial Indexes Does the company conduct the retrospective adjustment or restatement over previous years accounting data due to changes of accounting policies or accounting errors? □ Yes √ No Increase/decrease Report period Same period of last year y-o-y (%) Operating revenue (Yuan) 35,642,832,190.04 33,555,213,109.46 6.22% Net profit belonging to shareholders of 1,609,606,578.84 4,620,545,739.52 -65.16% the listed company (Yuan) Net profit belonging to shareholders of the listed company after deduction of 695,716,688.41 3,556,761,447.08 -80.44% non-recurring profit and loss (Yuan) Net cash flow arising from operating 4,401,401,760.15 4,959,704,724.11 -11.26% activities (Yuan) Basic earnings per share (Yuan/Share) 0.34 0.96 -64.58% Diluted earnings per share (Yuan/Share) 0.34 0.96 -64.58% Return on equity (ROE) (%) 3.39% 10.42% Down 7.03% Increase/decrease Report period Same period of last year y-o-y (%) Total assets (RMB) 100,410,971,452.44 106,125,114,622.69 -5.38% Net assets attributable to shareholder of 47,315,245,829.90 47,598,690,942.28 -0.60% the listed company(RMB) V. 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 5 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √ Not applicable No difference VI. Non-recurring items and amounts √ Applicable □ Not applicable In RMB Yuan Item Amount Illustration Gain/loss of non-current assets 18,771,809.69 The government subsidies included in the current profits and losses (except government subsidies closely related to corporate business, entitled in 1,116,231,219.32 fixed quota or quantity) Current net profit from beginning to combined date of business combination under common control Investment income from disposing available-for-sale equity securities Other non-business income and expenditures other than the above items -23,029,866.17 Interest on deferred payment of funds received by non-financial enterprises 8,091,557.41 Subtract: Influenced amount of income tax 180,608,049.13 Influenced amount of miniority shareholders’ equity (after tax) 25,566,780.69 Total 913,889,890.43 -- According to “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, defined as recurring items, are listed in the announcement No. 1 and 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. 6 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 3 Analysis of Main Business I. The main business of the Company in the reporting period Does the Company need to comply with the disclosure requirements of special industry □ Yes √ No During the reporting period, the company's main business is the R&D, manufacturing and sale of cars, the R&D and production of automobile engine products. Besides, the company integrates advantageous resources to actively develop travel services, new retail, financial investments 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 1.0L 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 Alsvin, CS series, Eado, Raeton, Oushang and Honor series; a series of famous JV products such as new Focus, new Mondeo, Kuga, Edge, CX-5, Axela,Vitara, Alivio, DS7 and so on. At the same time, we have launched new energy vehicles such as Eado EV, new Benben EV, and CS15 EV, which are admired by the market and loved by the consumers. II. Major changes in assets 1. Major changes in assets □ Applicable √ Not applicable No significant changes in major assets during the reporting period 2. Main Overseas Assets □ Applicable √ Not applicable III. Core Competence Analysis Driven by "the third-time entrepreneurship - innovation and entrepreneurship program", Changan Automobile is committed to becoming a technology enterprise that leads smart travel products and services. It aims at building the world's leading car enterprise driven by "innovation" with "efficiency" as the core competitiveness of the organization. Changan focuses on promoting the new energy “Shangri-La” plan, the “Beidou Tianshu” intelligent plan, and the advanced technology promotion plan. It is promoting the creation of three special platforms for new energy, realizing the industrialization of intelligent driving L2 into the market, and rapidly realizing the industrial application of new technologies. In the first half of 2018, the company promoted the development of nearly 400 science and technology projects. Great achievements have been made in the reform and development. The company has promoted a matrix management 7 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report model based on product development and marketing, and released the product development process CA-PDS4.0. The development cycle has been shortened by 17%. "1/2 Project" has steadily went on. Average time of management process has been reduced by 68%, and management efficiency has been greatly improved. A series of new products have been released into the market on schedule. Eight new products, such as the second generation of Eado, Eado DT, new CS75 and COS1° have been released into the market on schedule. H15TG-AA engine has been successfully launched on the new CS75 as scheduled. The application of advanced technology has increased. The L2 self-driving technology has been successfully launched on CS55, and the APA4.0 (auto parking) has been successfully launched on the new CS75. 82 technical research projects such as Icar platform and CA-MPA platform have went on smoothly. 10 major technical breakthroughs such as three-level automatic driving, fuel cell and American standard collision regulations have been progressing smoothly and prepared for subsequent products. Opening and cooperation have made progress. Changan has developed three major vehicle platforms, second-generation power systems and three-in-one electric drive systems, and promoted the building of new energy platform steadily. The company has cooperated with leading Internet companies such as Tencent, Huawei, Keda Xunfei, Horizon and Gaode to build an intelligent automobile industry alliance. In April 2018, the company obtained the license of Chongqing Autopilot Road Test . 8 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 4 Business Discussion and Analysis I. Overview In the first half of 2018, the automobile industry carried out the decisions of the Communist Party Central Committee and the State Council, insisted on the principle of innovation-driven, open and inclusive, and open to the outside world in an all-round way. With the main line of supply-side structural reform to promote mass entrepreneurship and innovation, the automobile industry accelerated the transformation and upgrading of the industry, solidly promoted the strategy of empowering the country through manufacturing, and promoted the transformation of the industry from scale to quality. From January to June 2018, the production and sales of China's automobile market maintained steady growth. The cumulative production and sales reached 14.085 million and 14.066 million, respectively up by 4.2% and 5.6% on a year-on-year basis. The sales growth rate accelerated by 1.8 percentage points over the same period of last year. 11.775 million passenger vehicles were sold, up by 4.6% year-on-year over the same period. Among them, the sales of basic passenger car increased by 5.5% and SUV increased by 9.7% year-on-year. Among the new energy passenger vehicles, the production and sales of pure electric passenger vehicles reached 259,000, increasing by 95.9% year-on-year with strong development momentum. Industry concentration was further intensified. The sales volume of the top ten enterprises in the automobile sales totalled 12.517 million, with the growth rate of 6.0%, which was 0.4 percentage points higher than the industry growth rate, accounting for 89% of the total vehicle sales and 0.3 percentage points higher than that of last year. The above data comes from "China automobile industry production and sales express" (China Automobile Industry Association) and its industry information release. In the first half of 2018, Changan took "Vision 2025" as the guide and "strengthening efficiency, promoting brand, experience orientation and innovation breakthrough" as the key, thoroughly implemented "the third-time entrepreneurship - innovation and entrepreneurship program" and solidly promoted the enterprise transforming and upgrading. Changan held strong confidence, stood up to competition, boldly reformed, generated revenue and reduced costs, and went all out to accomplish various business objectives. In the first half of 2018, Changan sold 1.207 million vehicles, ranking fourth in China's automobile industry. The main achievements during the reporting period are as follows: 1. Strongly promote strategic execution and vigorously promote efficiency "The third-time entrepreneurship - innovation and entrepreneurship program" was promoted in an orderly way. The company was guided by the innovation and entrepreneurship plan and focused on the “1143” strategy to promote the company's key business strategy decomposition, clarify the development ideas and goals of each business segments, accelerate the decomposition of strategic objectives, decompose to form a strategic target system and strengthen the key capabilities of product-oriented and resource matching. The company established a business quality improvement matrix project team, vigorously promoted income increase, cost reduction, waste reduction and built system capabilities to ensure efficiency improvement. Changan vigorously promoted reform and innovation. "1/2 Project" was progressed steadily. The company streamlined process, increased the proportion of authorization, and greatly improved operational efficiency. Organizational model continued to be optimized. Business unit reform was promoted in an orderly manner. Online and offline resources were integrated. Emerging business was actively explored. The matrix transformation in the R&D field achieved initial results and effectively shortened the development cycle. The reform of marketing field achieved initial success and operating efficiency was improved. The company innovated the incentive and restraint mechanism, implemented the whole staff and post matching, and gradually established the position and salary system which was in line with the market. 2. Accelerate brand planning and enrich brand promotion channels Changan completed the brand architecture design. Based on the upgrading of consumption, Changan optimized its existing brand structure under the overall strategy of brand upwards and would form four independent business brands, such as mid-to 9 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report high-end passenger cars, Changan Automobile, Oushang Automobile and Kaicheng Automobile. Under the combined effect of the matrix, Changan will comprehensively promote the brand upwards, meet different needs to deepen the market segments, provide users with more focused and perfect products and services, and realize the experience upgrade of users and brands. Changan innovated diversified brand activities, kept up with the trend of the times, focused on technology fashion and innovated brand activities. The company exclusive titled Chongqing International Marathon, combined the enterprising corporate image with the spirit of marathon and delivered brand concept of "driving forward with you". The company entered the field of automobile event marketing. These series of competitions not only verified the excellent product quality, but also injected passion, vitality and enterprising brand elements into Changan Automobile. 3. The application of intelligent technology is accelerated and the R&D strength continues to be in the lead Advanced technology was accelerated for application. Intelligent technologies such as APA4.0 have been successfully launched on the new CS75. L2 self-driving technology has been successfully launched on CS55, and various intelligent technology research projects and major technical research projects have been rapidly advanced. In addition, Changan Automobile obtained the license of Chongqing Autopilot Road Test in April 2018 after obtaining the license of California Road Driverless Vehicle Test in November 2017, indicating the speed up of Changan in the field of intelligence. In the field of intelligent manufacturing, the stamping and welding workshop of Changan Automobile Liangjiang No. 2 Factory was recognized as the annual digital workshop and intelligent factory in Chongqing in 2018. The welding automation rate reached 90%, which was 20% higher than the traditional factory's production efficiency. The product defect rate was reduced by 20%. The delivery cycle was shortened by 15%. The operating cost was reduced by 21% and the intelligent manufacturing capability was in the lead in China. The intelligent strategy was upgraded. The company formulated the “Beidou Tianshu” plan and build intelligent car platforms in stages with the support of automatic driving, intelligent network and intelligent interaction. The mass production vehicles will reach L3 in 2020 and L4 in 2025. The R&D strength continues to be in the lead. In the 2017-2018 evaluation of the national-recognized enterprise technology center announced by the National Development and Reform Commission, Changan Automobile ranked third in the country and first in the industry with 96.4 points. The R&D strength ranked first in the China's automobile industry for 10 consecutive years. 4. The new energy industry developing smoothly and "Shangri-La" plan gradually taking form The company established a new energy technology company, integrated relevant functions, built an operation system of new energy industry chain and built a platform for independent operation and introduction of social capital. At the same time, the company will continue to explore innovative business models and strive to explore new energy profit paths. The company improved product planning. Changan defined the development plan for new energy products for passenger cars, and formulated a two-step strategy of entering the industry's first echelon (350,000 units) in 2020 and achieving one of the top two brands (1.16 million units) in China in 2025. The company will promote key technology development, enhance core technology capabilities and complete the three new energy vehicle platform by 2020. 5. Accelerate the integration of global resources and continue to explore emerging businesses The company has reached strategic cooperation with more than ten industry leaders such as Tencent, Huawei, Baidu, Weilai Automobile, Keda Xunfei, Intel, NXP and Alibaba, and launched a new model of integrated innovation to create a new highland for technological innovation. Changan Automobile's "Changan trip" Internet + intelligent travel platform has invested more than 6000 vehicles in Chongqing, Nanjing, Hefei, Hangzhou, Xiamen and Quanzhou. At present, the platform is running on time-based leasing, long-term and short-term rental business. It plans to complete the operation of 10,000 vehicles in 2018. It is expected to reach 40 cities and 50,000 vehicles in 2020. The company accelerated the integration of new energy resources and industrial chain layout, cooperated with BYD to develop new energy battery technology, established a joint venture with Zhidou to produce low-speed electric vehicles, built a pure electric platform with Weilai, and jointly promoted T3 with FAW and Dongfeng. 6. Increase marketing reform efforts to help Changan transform and upgrade Changan Automobile has experienced the rapid growth in the past two decades. Under the background of complex changes in 10 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report the automobile industry, the company faces the challenges of the new industry transformation period of Internet, intelligence and new energy. Changan is currently in a painful period of strategic transformation in terms of product structure, enterprise structure and new business model adjustment. In face of increasingly fierce competition in the automobile market, on the one hand, Changan Automobile takes efficiency as the core to further optimize the management system and reform and innovation, enhances the ability and vitality to cope with the changes of the industry and market competition. On the other hand, it launches an all-round marketing battle, adheres to market-oriented and customer-centered, accurately grasps the customer pain points, and continuously optimizes marketing mode around customers and value creation. Changan carried out marketing promotion actions to increase market response speed, increased investment in sales resources to promote sale, strengthened efforts in channel construction and formulated differentiated channel development strategies. The customer operating efficiency was gradually improved, and complaint satisfaction rate reached industry's leading level. It sped up the development of new marketing businesses and innovated models for profit opportunities. Changan Automobile will take the four strategic measures of "Changan brand promotion and development, integration of resources development, construction of marketing innovation model, overseas market exploitation" as the grasp to comprehensively promote "The third-time entrepreneurship - innovation and entrepreneurship program". Changan formed a clear brand structure to achieve brand upward and transform from “operating products” to “operating brands”. Focusing on fast, accurate, interactive and direct, Changan upgrades its customer service capabilities in full value chain and transforms from “serving users” to “operating customers”. Changan builds an innovative marketing model, operating a new business model such as operating the ecosystem, operating customers, developing e-commerce, sharing travel, time-sharing lease, and used cars, to transform from "providing products + services" to "providing products + service products + travel solutions". Changan promotes the intelligent strategy of "Beidou Tianshu" to become a leader of smart cars, accelerates the development of new energy resources with "Shangri-La" plan as its guide, cooperates with cross-border enterprises strategically to form a new energy ecosphere, creating the safest, most convenient and most intelligent experience, and transforms from "traditional products" to "intelligent + new energy products". II. Analysis of Main Business 1. Overview Are they identical with those disclosed in the "I. Overview" in the Chapter of Business Discussion and Analysis? √ Yes □ No Please refer to the content of "I. Overview" in the Chapter of Business Discussion and Analysis. 2. Y-o-y changes of main financial data In RMB Yuan Same period of last Y-o-y Current period Reasons for changes year(restated) increase/decrease Operating 35,642,832,190.04 33,555,213,109.46 6.22% revenue Operating cost 30,614,845,704.45 28,792,755,690.32 6.33% Operating 2,543,462,428.51 2,004,176,042.01 26.91% expenses General and 2,155,401,262.05 1,785,734,071.11 20.70% administrative 11 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report expenses Financial -225,518,842.31 -246,821,602.15 8.63% expenses Income tax Increase in deferred income tax assets and decrease in 15,288,317.83 40,996,104.66 -62.71% expense current income tax expenses Subtotal of cash inflow from 4,401,401,760.15 4,959,704,724.11 -11.26% operating activities Subtotal of cash Mainly due to the decrease in cash received from the inflow from investment income, the decrease in cash received from -2,973,370,521.87 3,237,426,642.84 -191.84% investment other investment activities and the increase in cash for activities the acquisition of long-term assets Subtotal of cash Mainly due to the decrease in cash paid for repayment inflow from 869,502,774.20 -4,406,635,181.43 119.73% of debts and the decrease in cash paid for dividend financing activity distribution Net increase in Mainly due to the decrease in cash inflow from cash and cash 2,316,338,311.36 3,815,834,313.15 -39.30% operating activities and investment activities equivalents Major changes on profit composition or profit resources in reporting period □ Applicable √ Not applicable 3. Composition of Main Business In RMB Yuan Increase or Increase or decrease of Gross decrease of Increase or decrease Operating revenue Operating cost operating profit operating of gross profit y-o-y revenue cost y-o-y y-o-y According to industries Automobile 34,440,982,013.45 30,172,410,492.58 12.39% 5.59% 5.77% Down 0.16% Production According to products Vehicles 34,368,280,256.20 30,082,686,676.78 12.47% 5.61% 5.87% Down 0.22% According to region China 33,128,902,612.24 28,783,568,072.99 13.12% 3.72% 3.44% Down 0.24% 12 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report III. Analysis of non principal business □ Applicable √ Not applicable IV. Assets and liability 1. The significant changes of the assets and liability In RMB Yuan Current period Same period of last year Increase/ Ratio in Ratio in Item decrease YoY change (%) Amount total Amount total (%) assets(%) assets(%) Monetary capital 24,067,745,140.49 23.97% 27,882,391,375.71 25.99% -2.02% Accounts 1,925,729,920.41 1.92% 1,900,029,553.88 1.77% 0.15% receivable The ending balance of inventory and its proportion of total assets decreased year-on-year mainly attributed Inventory 4,726,421,476.59 4.71% 10,765,993,986.86 10.04% -5.33% to the optimization of auto sales finance mode and the reduction of the inventory from cooperative financial institutions Investment 7,442,917.06 0.01% 7,669,628.62 0.01% 0.00% property Long-term equity 15,638,035,950.97 15.57% 14,116,985,988.70 13.16% 2.41% investment Fixed assets 18,456,584,832.13 18.38% 15,652,944,713.96 14.59% 3.79% Construction in 4,728,241,031.94 4.71% 4,054,053,618.83 3.78% 0.93% progress Short-term loan 186,000,000.00 0.19% 188,810,327.67 0.18% 0.01% Long-term loan 0.00 0.00% 19,980,912.00 0.02% -0.02% 2. Assets and liabilities measured by fair value Unit: Ten Thousand Yuan Comprehensive Cumulative Impairment Purchasing Selling Amount at year Item income in the fair value provisions amount in the amount in Amount at year end beginning reporting period change in the reporting the 13 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report recorded into reporting period reporting equity period period Financial assets Financial assets 16,436.50 -2,353.65 9,672.57 13,667.50 available for sales Subtotal of 16,436.50 -2,353.65 9,672.57 13,667.50 financial assets Total 16,436.50 -2,353.65 9,672.57 13,667.50 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 In RMB Yuan book value at the end of this Item Limited Reason year Monetary fund 300,101,738.60 Acceptance bond Notes receivable 545,823,326.93 Pledge for issuing bills payable Mortgage loans and obtain the amount of commercial Fixed assets 239,422,583.95 acceptance Mortgage loans and obtain the amount of commercial Intangible assets 45,835,735.69 acceptance Total 1,131,183,385.17 V. Analysis of Investment 1. General information √ Applicable □ Not applicable External investment Investment Amount in the report Investment Amount in the same period of last Variance rate period(Yuan) year(Yuan) 2,198,000,000 - Particulars of investees Company Name Principal business Proportion in the investees’ equity (% Design, manufacture and sale of Peugeot, Changan PSA Automobiles Co., Ltd Citroen and DS brand cars and light 50% commercial vehicles 14 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Engineering and technical research and experimental development; product design, industrial design; technical development, consultation, promotion, services, transfer; China Automotive (Beijing) intelligent sales of machinery and equipment, hardware network union Automotive Research 8.33% and electrical, electronic products, electronic Institute Co., Ltd. components; import and export of goods, technology import and export, import and export agent; technical testing, property management Technical development, technical consultation, technical services, technology transfer; Beijing Wutong Chelian Technology Co., economic and trade consultation; design, 49% Ltd. 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 2. Major equity investment in the reporting period √ Applicable □ Not applicable 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 not and sale of Transactions of completed, Changan PSA Peugeot, Capital Increase Increasing Its own PSA Peugeot Indefinite industrial and Automobiles Citroen and 1,800,000,000 50% No 2018-01-13 to Changan capital capital Citron duration commercial Co., Ltd DS brand cars Peugeot Citroen registration and light Automobile Co., procedures not commercial Ltd. (Bulletin completed vehicles No: 2018-03) China Engineering China First Announcement Establishment Automotive and technical Automobile of the 29th completed, (Beijing) research and Co., Ltd., Meeting of the industrial and intelligent experimental Newly Its own Dongfeng Indefinite 7th Board of 50,000,000 8.33% commercial No 2018-04-04 network union development; established capital Motor Group duration Directors of registration Automotive product Co., Ltd., Chongqing procedures Research design, Guangzhou Changan completed Institute Co., industrial Automobile Automobile 15 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Ltd. design; Group Co., Company technical Ltd., Beijing Limited development, Automotive (Bulletin No: consultation, Research 2018-13) promotion, Institute Co., services, Ltd., transfer; sales Zhengzhou of machinery Yutong Bus and Co., Ltd., equipment, Jiangling hardware and Motors electrical, Corporation, electronic Zhejiang Asia products, Pacific electronic Mechanical components; and Electrical import and Co., Shanghai export of Baolong goods, Automobile technology Technology import and Co., Ltd., export, import Huizhou and export Desai Xiwei agent; Automotive technical Electronics testing, Co., Ltd., property China management Automotive Technology Research Center Co., Ltd., Enlighten Cloud Control (Beijing) Technology Co., Ltd. Technical Announcement Establishment Beijing development, Tencent of the 31st completed, Wutong technical Landway Meeting of the Newly Its own Indefinite industrial and Chelian consultation, 98,000,000 49% (Shenzhen) No 2018-04-12 7th Board of established capital duration commercial Technology technical Technology Directors of registration Co., Ltd. services, Co., Ltd. Chongqing procedures technology Changan 16 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report transfer; completed Automobile economic and Company trade Limited consultation; (Bulletin No: design, 2018-18) production, agency, advertising; import and export of goods, technology import and export; sales of self-develope d products Announcement of the 33st Automobile Meeting of the and parts 7th Board of The approval Changan import and Directors of of the Automobile export, Increasing Its own Indefinite Chongqing 250,000,000 100% - Ministry of No 2018-05-07 Russia Co., automobile capital capital duration Changan commerce is Ltd. distribution Automobile required and other Company services Limited (Bulletin No: 2018-27) Total -- -- 2,198,000,000 -- -- -- -- -- -- -- -- 3. Major non-equity investment in the reporting period Please refer to Notes 7 Item 13 “Construction in progress” in the Financial Statement. 4. Investment of Financial Assets (1)Equity-holdings in financial enterprises √ Applicable □ Not applicable Opening Opening Closing Closing Initial Closing Gain/loss in Company Company equity equity equity equity Accounting Equity investment book value the reporting name variety Holdings holding holdings Holdings title source cost (Yuan) (Yuan) period (Yuan) (share) ratio (share) (%) 17 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report (%) Tradable Southwest Securities Initial 50,000,000 35,500,000 0.63% 35,500,000 0.63% 136,675,000 - 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 Main Registered Equity Name Main businesses Total assets operating Net profit capital held income Hebei Changan Automobile Co., Ltd. 46,469 RMB 94.22% Produce and sell auto and parts 186,259 211,401 3,405 Nanjing Changan Automobile Co., Ltd. 60,181 RMB 84.73% Produce and sell auto and parts 168,548 101,652 9,840 Hefei Changan Automobile Co., Ltd. 77,500 RMB 100% Produce and sell auto and parts 261,293 200,943 -3,933 Baoding Changan Bus Manufacture 3,000 RMB 100% Produce and sell auto and parts 346,553 175,808 1,125 Co., Ltd. Changan PSA Automobiles Co., Ltd 400,000 RMB 50% Produce and sell auto and parts 747,028 45,749 -34,346 Changan Ford Automobile Co., Ltd 24,100 USD 50% Produce and sell auto and parts 4,317,868 3,064,316 174,711 Changan Mazda Automobile Co., Ltd 11,097 USD 50% Produce and sell auto and parts 1,503,100 1,106,517 127,090 18 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Subsidiaries acquired and sold in the reporting period √ Applicable □ Not applicable During the reporting period, Changan newly established four wholly owned subsidiaries, Xiamen Changan New Energy Automobile Sales & Service Co., Ltd., Guangzhou Changan New Energy Automobile Sales & Service Co., Ltd., Fuzhou Fuqing Changan New Energy Automobile Sales & Service Co., Ltd. and Chongqing Changan New Energy Automobile Technology Co., Ltd.. Therefore, they are included in the consolidated statements in 2018. Shanghai Changan Automobile Engineering Technology Co., Ltd. was liquidated during the reporting period. Therefore, it is no longer included in the consolidated statements in 2018. Acquisition and disposal of subsidiaries On the overall production and operation Name during the reporting period and performance impact Xiamen Changan New Energy Automobile Newly established None Sales & Service Co., Ltd. Guangzhou Changan New Energy Automobile Newly established None Sales & Service Co., Ltd. Fuzhou Fuqing Changan New Energy Newly established None Automobile Sales & Service Co., Ltd. Chongqing Changan New Energy Automobile Newly established None Technology Co., Ltd. Shanghai Changan Automobile Engineering Liquidation None Technology Co., Ltd. VIII. Structural main business under the company control □ Applicable √ Not applicable IX. Forecast for the operating performance of Jan.-Sep. 2018 The accumulated net profit forecast for the beginning of the year to the end of the next reporting period may be a loss or a warning and explanation of a significant change compared with the same period of the previous year □ Applicable √ Not applicable X. Possible risks and coresponding measures 1. Policy and regulatory risks: the implementation of emission laws and regulations, the relaxation of share ratio, tariff adjustment and the tightening of control over the excessive pollutants have a great impact on the development and pattern of the automobile industry. Actions: keep up with policy trends, strengthen policy research, and make good response plans. 2. Increasing market competition: China's auto market has entered a low-speed growth trend. Regardless of joint ventures or independent products, they are seriously homogenized, especially for cars and SUVs of 70-150 thousand yuan, with a product concentration of 45%. Actions: accelerate the speed of product replacement, highlight the individualization and differentiation of products, rapidly increase the market scale of independent products, and grasp the strategic opportunities of "the Belt and Road", actively expand overseas 19 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report markets, and enhance the competitiveness of the international market. 3. Business model risks: with the rapid development of technologies such as smart interconnection and big data, various capitals such as speculative capital, non-industrial capital, and cross-border capital have flooded into the industry, disrupted the industry, caused disorder competition in the market and changed the traditional business model. Actions: Changan Automobile will seize the strategic opportunity and realize the transformation from a traditional automobile manufacturing enterprise to a modern technology service enterprise and become an internationally competitive Chinese brand. XI. Interviews and visits in the reporting period √ Applicable □ Not applicable Date Manner Object Content discussed and material offered For details, see the January 5, 2018 Shenzhen stock exchange interactive 2018.1.4 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: January 4, 2018 investor relations activities record sheet For details, see the January 15, 2018 Shenzhen stock exchange interactive 2018.1.11 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: January 11, 2018 investor relations activities record sheet For details, see the January 19, 2018 Shenzhen stock exchange interactive 2018.1.17 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: January 17, 2018 investor relations activities record sheet For details, see the January 19, 2018 Shenzhen stock exchange interactive 2018.1.18 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan automobile: February 18, 2018 investor relations activities record sheet For details, see the January 25, 2018 Shenzhen stock exchange interactive 2018.1.24 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: January 24, 2018 investor relations activities record sheet For details, see the January 30, 2018 Shenzhen stock exchange interactive 2018.1.26 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: January 26, 2018 investor relations activities record sheet For details, see the February 13, 2018 Shenzhen stock exchange interactive 2018.2.12 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: February 12, 2018 investor relations activities record sheet For details, see the March 8, 2018 Shenzhen stock exchange interactive 2018.3.6 On-Site Survey Institution (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 2018.3.8 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: March 8, 2018 investor relations activities record sheet For details, see the March 16, 2018 Shenzhen stock exchange interactive 2018.3.13 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: March 13, 2018 investor 20 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report relations activities record sheet For details, see the March 19, 2018 Shenzhen stock exchange interactive 2018.3.15 On-Site Survey Institution (http://irm.cninfo.com.cn) on the Changan Automobile: March 15, 2018 investor relations activities record sheet 21 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 5 Important Matters I. Annual shareholders meeting and interim shareholders meeting during the reporting period 1. Shareholders meeting during the reporting period Investors' Meeting Type participatio Holding Date Disclosure Date Disclosure Index Session n ratio http//www.cninfo.com.cn 2017 Annual 2017Annual Shareholders Meeting Resolution Shareholders Annual 57.32% May, 18th, 2018 May, 19th, 2018 Announcement(Announcement Number: Meeting 2018-34) http//www.cninfo.com.cn 2018 The First 2018 The First Interim Shareholders Interim Interim 44.44% Jan, 30th, 2018 Jan, 31th, 2018 Meeting Resolution Shareholders Announcement(Announcement Number: Meeting 2018-07) 2. Preferred shareholders’ request to hold the interim shareholders meeting with restoration of voting rights □ Applicable √ Non-applicable II. Preplan for Company common stock profit distribution and capital reserves converting into share capital in the reporting period □ Applicable √ Non-applicable III. 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. period Commitment Commitment for commitments Commitment content Performance entity time commitm ent Share limited When the company 36 China Changan did not sell company shares China Changan Oct., 2016 commitment non-publicly subscribes for months during the reporting period 22 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report new shares of listed companies in 2016, the newly acquired shares of listed company can not be transferred within 36 months since the listing, but can be 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 China Changan made the commitment: In The Harbin Hafei Automobile Industry Other small two consecutive years profit September, Group Co at present is still running at a shareholders China Changan of Harbin Hafei Automobile 2010 loss, The conditions have not yet reached commitment Industry Group Co, With the the profitable for two consecutive years. continuous development ability and management level is improved significantly.Under such condition, the enterprise will be affiliated into the company. IV. The appointment and dismissal of accounting firms Is the semi-annual financial report audited? □ Yes √ No V. The board of directors, and supervisors explaining the "non standard audit report" from the accounting firm during the reporting period □ Applicable √ Not-applicable VI. The board of directors explaining the "non standard audit report" of last year □ Applicable √ Not-applicable 23 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report VII. Bankruptcy restructuring related matters □ Applicable √ Not-applicable During the report period, no bankruptcy restructuring related matters occur. VIII. Crucial litigation events Crucial litigation and arbitration events □ Applicable √ Not-applicable Other litigation events □ Applicable √ Not-applicable IX. Punishment and rectification □ Applicable √ Not-applicable During the reporting period, there’s no punishment and rectification. X. The integrity of company and its controlling shareholder, actual controller □ Applicable √ Not-applicable XI. 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. XII. Significant related party transactions 1. Related transactions related to day-to-day operation For details, please refer to Note 12 "Related Party Relationships and Transactions" in the Financial Statements. 2. Assets or equity acquisition, sales related transactions □ Applicable √ Not-applicable No related transaction of the acquisition or sale of assets or shares occurred during the reporting period. 24 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 3. Related transactions of common investment □ Applicable √ Not-applicable During the reporting period, the company has no related transactions of common investment 4. Related rights and debt relations √ Applicable □ Not-applicable For details, please refer to Note 12 "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 temporary announcement of related transactions Temporary Name of temporary announcements Temporary announcement site name announcement 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 approving of United Apr, 4th, 2018 http://www.cninfo.com.cn Prosperity (Hong Kong)Investment Co., Ltd trade financing Related transactions announcement about renewing 《Daily Framework Agreement For Related Transactions》、《Property Apr, 4th, 2018 http://www.cninfo.com.cn Leasing 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 Related transaction announcement thet Chongqing Automobile May, 7th, 2018 http://www.cninfo.com.cn Finance Co., Ltd. provides financial services XIII. The non-operating occupation for the capital by the controlling shareholder of the listed company and its related parties □ Applicable √ Not-applicable 25 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report XIV. 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 12 of financial statements 4 (3) related party relationships and transactions. Projects whose profit and loss to the company during the reporting period is more than 10% of total profits □ Applicable √ Not-applicable Projects whose profit and loss to the company during the reporting period can’t be more than 10% of total profits 2. Major guarantee □ Applicable √ Not-applicable There’s no major guarantee during the report period. 3. Other major contract □ Applicable √ Not-applicable There’s no other major contract during the reporting period. XV. Social responsibility 1. Significant environmental protection Whether the listed companies and their subsidiaries belong to the key pollutant discharge units announced by the environmental protection department √ Yes □ No 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. All departments put pollution control facilities as well as production equipment into preventive maintenance management of equipment with normal operation, pollutant discharge up to normal standard, and the total amount of discharged key pollutant is confined with the total amount of indicators. Solid wastes are separately collected and stored. Main dangerous wastes are wastewater and sludge treatment, paint slag, phosphated residue and 26 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. (1) Strictly implement Disclosure System of Information In the first half of 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, Nanjing Changan. The original national control units(Yuzui Base of OuShang Automotive Division, Yuzui Base of Jiangbei Engine Factory, Yubei Factory) strictly carry out self-monitoring in accordance with the "National Key Monitoring Enterprise Self-monitoring and Information Disclosure Approach (Trial)". Self-monitoring program, monitoring results, pollution monitoring annual reports are disclosed on the "National Key Monitoring Enterprise Self-monitoring and Information Disclosure Platform". Other key sewage units disclosed the information according to the requirements of environmental protection departments of local governments. (2) Strictly implement "EIA system" and environmental protection "three simultaneous" systems of the construction project Carry out the company's environmental impact assessment of “newly established, rectified, expanded projects” and implement"EIA system" of the construction project according to the regulations. Strengthen the review on pollutant factors, the total amount of emission and pollution control facilities during the environmental impact assessment. Strictly supervise the implementation of “simultaneous design, simultaneous construction, and simultaneous acceptance” of project environmental protection facilities to ensure full compliance between project construction and environmental impact assessment approval. In the first half of 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. (3) Carry out environmental protection risk management, and enhance emergency response capacity Continue to carry out environmental protection emergency drills to enhance the response capacity to environmental emergencies. In the first half of 2018, the Company carried out a company-level environmental emergency drills(emergency drill for passenger vehicle wastewater discharge exceeding standard in Yuzui), more than 80 emergency drills at the factory and workshop. The scene settings, emergency handling, impact range, exercise script, evaluation and other aspects have been greatly improved. Strengthen control of company's environmental risk units to prevent sudden environmental incidents. (4) Detailed pollutant discharge of the company: During the reporting period, the Company had 216 air pollutant discharge ports and 14 water pollutant discharge ports. The implemented emission standards include the national "Integrated Wastewater Discharge Standard", Beijing "Water Pollutant Discharge Standard", the national "Air Pollutant Integrated Emission Standard", Chongqing "automobile vehicle manufacturing surface coating air pollutant discharge standards" "Air Pollutant Integrated Emission Standard", Beijing "automobile vehicle manufacturing industry (coating process) air pollutant discharge standards", the national "industrial enterprises boundary environmental noise emission standards" and so on. The total amount of pollutants approved: COD170 tons, 28 tons of ammonia. The company's pollutants can meet the corresponding emission standards with no extral emissions, no major environmental problems and no rectification. In 2018, the company intended to implement the emission reduction measures with the investment of 145 million yuan. The main projects include: Nanjing Changan, Changan Bus Light Vehicle VOC Project; Changan Ford Chongqing Factory CAF2/3 VOC Governance Project(Phase II); Yubei Factory, Oushang Automotive Division, Beijing Changan Sludge Drying Project. 2. Fulfill social responsibility of targeted poverty alleviation √ Applicable □ Not applicable 27 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report In the first half of 2018, Changan Automobile actively responded to the "13th Five-Year Plan for Poverty Alleviation" and fully implemented the spirit of the 19th Party Congress and the Central Poverty Alleviation Work Conference. In accordance with the arrangements of the Party Central Committee and the State Council, and in light of the actual situation of enterprises, we will earnestly promote donations such as precise poverty alleviation, public welfare relief, and public utility construction, and strive to promote economic and social development in poverty-stricken areas. (1) In the first half of 2018, precise poverty alleviation in "two counties" of Yunnan The company donated RMB 11 million to Luxi County. 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). 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. The company donated RMB 11 million to Yanshan County. 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; finally, invest 1 million yuan in the pepper planting project in Ganhe Township. 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. On the poverty alleviation project of people's livelihood: firstly, invest 1 million yuan in township hospitals equipment configuration project; secondly, invest 100,000 yuan in disaster relief projects. (2) In the first half of 2018, precise poverty alleviation in Pengshui County, Chongqing. 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. Chang'an Automobile Statistics on Poverty Alleviation in the first half of 2018 Index Unit Quantity / Details Ⅰ. Total —— —— 1.funds 10 thousand RMB 2230 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 577 28 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 3. Medical and health poverty alleviation —— —— 3.1 Medical and health resources invested in poverty areas 10 thousand RMB 110 4. Other projects - people's livelihood poverty alleviation —— —— 4.1 Amount of investment 10 thousand RMB 753 (3) Follow-up precision poverty alleviation plan According to the "Notice of the Jiangbei Agricultural Committee of Chongqing on Applying the 2018 Counterpartment Assistance Project" (Jiangbei Agricultural Committee [2018] No. 128) , the company will carry out poverty alleviation donations for Youyang County in the second half of 2018. XVI. Other important matters √ 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 31th, 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 21th, 2018, the company disclosed 《 Announcement on the completion free transfer of controlling shareholders' state-owned shares 》 (Announcement Number: 2018-42) and confirmed the transfer registration process of the above-mentioned free transfer of shares on Jun 15th, 2018. XVII. Important matters of company subsidiaries □ Applicable √ Not-applicable 29 Chongqing Changan Automobile Company Limited 2018 Semi-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 Provident Ratio Additional Stock Ratio Quantity fund other Quantity Quantity (%) issued dividend (%) transfer Non-circulated shares 139,781,303 2.91% 139,781,303 2.91% 1. State-owned legal 139,762,403 2.91% 139,762,403 2.91% person 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 3,760,881,066 78.31% 3,760,881,066 78.31% RMB shares 2. Domestic listed 901,986,142 18.78% 901,986,142 18.78% foreign 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 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 30 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report □ 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 non-circulated Date for the shares held at the shares held at the shareholders reporting period reporting period shares circulated shares year-beginning year-end China Changan Non-public offering Automobile Co., 139,762,403 - - 139,762,403 shares of 139,762,403 2019-10-14 Ltd. in 2016 6 months after Zhu Huarong 18,900 - - 18,900 Executive lock stocks the retirement Total 139,781,303 - - 139,781,303 -- -- II. Issuing and listing of securities □ Applicable √ Not-applicable III. Shareholding and shareholders of the company Unit: one share At the end of the report period, the total number of 196,868. A shareholders: 168,019. B shareholders: 28,849. shareholders 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 Share the year-end amount (%) report period year-end status China South Industries State-owned legal No pledge 21.56% 1,035,312,673 1,035,312,673 Group Co., Ltd. person shares or freeze China Changan State-owned legal No pledge 19.33% 928,044,946 -1,035,312,673 139,762,403 788,282,543 Automobile Co., Ltd. person shares or freeze domestic general China securities No pledge legal person 4.55% 218,580,149 16,535,328 finance Co, Ltd or freeze shares United Prosperity foreign legal No pledge 2.23% 107,267,728 (Hongkong) person shares or freeze 31 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Investment Co., Limited GIC PRIVATE foreign legal No pledge 1.84% 88,270,713 7,377,141 LIMITED person shares or freeze domestic general Central Huijin No pledge legal person 1.15% 55,393,100 Investment Ltd. or freeze shares DRAGON BILLION foreign legal No pledge SELECT MASTER 0.85% 40,597,114 34,577,045 person shares or freeze FUND Anbang Asset Mgmt-China fund, finance No pledge 0.67% 32,070,942 - Merchants Bank- products, etc. or freeze Anbang Asset-China Anbang Asset Mgmt- fund, finance No pledge China Minsheng Bank 0.65% 31,082,094 products, etc. or freeze -Anbang Asset-China MONETARY foreign legal No pledge AUTHORITY OF 0.56% 26,917,178 1,008,881 person shares or freeze SINGAPORE Among the top 10 shareholders, China South Industries Group Co., Ltd., the actual controller; China Changan Explanation on the relationship and the Automobile Group Co., Ltd., the controlling shareholder, and its wholly owned subsidiary United Prosperity 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 218,580,149 RMB ordinary shares 218,580,149 Domestic listed foreign United Prosperity (Hongkong) Investment Co., Limited 107,267,728 107,267,728 shares Domestic listed foreign GIC PRIVATE LIMITED 88,270,713 88,270,713 shares Central Huijin Investment Ltd. 55,393,100 RMB ordinary shares 55,393,100 Domestic listed foreign DRAGON BILLION SELECT MASTER FUND 40,597,114 40,597,114 shares Anbang Asset Mgmt-China Merchants Bank- Anbang 32,070,942 RMB ordinary shares 32,070,942 32 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Asset-China Anbang Asset Mgmt-China Minsheng Bank-Anbang 31,082,094 RMB ordinary shares 31,082,094 Asset-China Domestic listed foreign MONETARY AUTHORITY OF SINGAPORE 26,917,178 26,917,178 shares Among the top 10 shareholders, China South Industries Group Co., Ltd., the actual The top 10 shareholders to sell circulated shares, and the controller; China Changan Automobile Group Co., Ltd., the controlling shareholder, and infinite tradable relationship between shareholders and its wholly owned subsidiary United Prosperity (Hong Kong)Investment Co., Limited top 10 shareholders or concerted action belong 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 IV. The change of the controlling shareholders and theactual controllers During the reporting period the change of controlling shareholders □ Available √ Not- available No changes in controlling shareholders during the reporting period. The change of the actual controllers during the reporting period □ Available √ Not- available No changes in the actual controllers during the reporting period. 33 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 7 Information about Directors, Supervisors, Senior Management I. Share ownership of directors, supervisors and senior managers □ Available √ Not- available The share ownership of the directors, supervisors and senior managers has no change during the reporting period. For details, plaese refer to 2017 annual report. II. Departure and Hiring information of the directors, supervisors and senior manager Name Duties Type Date Reason Director, Vice President, Departure Jan 27th, 2018 Job arrangement Wang Kun Secretary of the board of directors Cao Xingquan Independent director Election May 19th, 2018 Appointment due to work Zhang Deyong Director Election May 19th, 2018 Appointment due to work Zhang Dongjun Director Election May 19th, 2018 Appointment due to work Wang Xiaoxiang Director Departure May 26th, 2018 Job arrangement Gong Bin Vice President Departure May 29th, 2018 Job arrangement Huang Zhongqiang Vice President Departure May 29th, 2018 Job arrangement Luo Minggang Vice President Departure May 29th, 2018 Job arrangement Chapter 8 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 semi-annual report □ Yes √ No 34 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 9 The Financial Statements I. Auditing Report Semi-annual report is audited □ Yes √ No No audit on the semi-annual financial report. II. Financial statement Financial in notes to the statements of the unit is: RMB yuan 1. Consolidated Balance Sheet In RMB Yuan Account Ending Balance Opening Balance Current assets: Cash 24,067,745,140.49 22,631,536,496.53 Notes receivable 18,390,476,412.74 29,156,481,085.20 Accounts receivable 1,925,729,920.41 1,806,807,193.04 Prepayments 1,004,033,538.79 1,102,239,931.33 Interest receivable 55,081,274.30 42,184,263.88 Other receivables 2,096,542,096.16 1,645,276,455.04 Inventories 4,726,421,476.59 4,666,183,421.80 Other current assets 2,195,054,890.51 1,705,910,530.43 Total current assets 54,461,084,749.99 62,756,619,377.25 Non-current assets: Available-for-sale financial assets 564,227,000.00 541,917,000.00 Long-term receivables Long-term equity investments 15,638,035,950.97 14,098,523,896.97 Investment properties 7,442,917.06 7,556,272.84 Fixed assets 18,456,584,832.13 19,044,528,950.70 Construction in progress 4,728,241,031.94 3,234,173,155.52 Construction materials Liquidation of fixed assets 1,342,869.14 4,716.98 Intangible assets 4,011,477,965.19 4,047,945,129.67 35 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Devlopment expenditure 956,013,379.97 836,638,328.10 Goodwill 9,804,394.00 9,804,394.00 Long-term deferred expenses 14,569,071.92 13,545,589.39 Deferred tax assets 1,562,147,290.13 1,533,857,811.27 Total non-current assets 45,949,886,702.45 43,368,495,245.44 Total assets 100,410,971,452.44 106,125,114,622.69 Current liabilities: Short-term loans 186,000,000.00 185,000,000.00 Notes payable 20,222,535,762.78 18,002,926,579.81 Accounts payable 15,501,582,938.54 21,902,826,194.15 Advances from customers 1,935,292,614.32 3,878,382,556.43 Payroll payable 775,438,321.46 1,640,885,322.33 Taxes payable 206,628,829.13 394,321,397.14 Interest payables Dividend payables 2,157,870,026.46 79,742.80 Other payables 1,820,125,863.40 2,599,013,410.98 Non-current liabilities due within one 13,423,420.00 13,151,946.67 year Other current liabilities 3,792,413,587.50 3,562,154,645.82 Total current liabilities 46,611,311,363.59 52,178,741,796.13 Non-current liabilities: Long-term loans - 6,575,973.33 Bonds payable Long-term payable Long term payroll payable 105,773,348.51 113,012,000.00 Special payable 216,541,226.77 290,607,151.02 Contingent liabilities 2,542,043,126.47 2,423,958,274.70 Deferred earnings 3,730,623,896.39 3,627,817,419.05 Deferred tax liabilities 17,069,250.00 21,222,750.00 Total non-current liabilities 6,612,050,848.14 6,483,193,568.10 Total liabilities 53,223,362,211.73 58,661,935,364.23 Owners’ equity: Share capital 4,802,648,511.00 4,802,648,511.00 Capital reserves 5,099,405,956.94 5,099,405,956.94 Less: Treasury shares 36 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Other Comprehensive Income 329,988,957.43 82,959,423.84 Special reserves 45,988,791.91 28,279,733.06 Surplus reserves 2,401,324,255.50 2,401,324,255.50 Retained earnings 34,635,889,357.12 35,184,073,061.94 Equity attributable to owners 47,315,245,829.90 47,598,690,942.28 Minority interests -127,636,589.19 -135,511,683.82 Total equity 47,187,609,240.71 47,463,179,258.46 Total liabilities and owener’s equity 100,410,971,452.44 106,125,114,622.69 2. Balance sheet In RMB Yuan Account Ending Balance Opening Balance Current assets: Cash 22,689,732,804.05 20,634,514,487.95 Notes receivable 17,701,785,367.98 29,010,848,480.70 Accounts receivable 5,540,094,852.90 4,991,996,591.00 Prepayments 871,316,636.66 960,555,695.17 Interest receivable 55,081,274.30 42,184,263.88 Other receivables 2,216,333,615.11 1,723,723,602.89 Inventories 3,717,205,618.67 4,005,921,440.85 Other current assets 1,548,207,146.93 1,178,094,749.84 Total current assets 54,339,757,316.60 62,547,839,312.28 Non-current assets: Available-for-sale financial assets 554,317,000.00 532,007,000.00 Long-term receivables Long-term equity investments 17,430,011,940.55 15,786,743,636.55 Investment properties Fixed assets 15,087,534,046.27 15,582,899,632.64 Construction in progress 3,936,119,637.89 2,763,521,275.98 Construction materials Liquidation of fixed assets Intangible assets 3,320,233,576.20 3,341,218,169.73 Development expenditure 813,831,574.70 733,947,670.46 Goodwill 37 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Long-term deferred expenses 12,851,515.57 12,821,802.39 Deferred tax assets 1,453,005,738.60 1,421,165,907.17 Total non-current assets 42,607,905,029.78 40,174,325,094.92 Total assets 96,947,662,346.38 102,722,164,407.20 Current liabilities: Short-term loans Notes payable 19,101,504,842.78 16,874,603,207.01 Accounts payable 13,141,085,740.88 19,476,620,759.93 Advances from customers 1,676,549,768.68 3,724,183,178.58 Payroll payable 578,717,128.59 1,377,250,229.66 Taxes payable 189,476,624.87 320,050,382.91 Interest payables Dividend payables 2,157,790,283.66 - Other payables 1,892,869,657.20 3,181,207,281.30 Non-current liabilities within one year Other current liabilities 3,659,654,941.31 3,453,269,881.59 Total current liabilities 42,397,648,987.97 48,407,184,920.98 Non-current liabilities: Long-term loans Bonds payable Long-term payable Long term payroll payable 84,404,887.09 91,263,000.00 Special payable 161,190,517.37 235,256,441.62 Contingent liabilities 2,400,416,383.94 2,380,971,255.26 Deferred earnings 2,848,820,379.02 2,879,604,719.46 Deferred tax liabilities 17,069,250.00 21,222,750.00 Total non-current liabilities 5,511,901,417.42 5,608,318,166.34 Total liabilities 47,909,550,405.39 54,015,503,087.32 Owners' equity: Share capital 4,802,648,511.00 4,802,648,511.00 Capital reserves 4,717,192,101.72 4,717,192,101.72 Less: Treasury shares Other comprehensive income 398,740,399.77 132,520,410.88 Special reserves 22,783,308.91 12,013,706.73 38 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Surplus reserves 2,401,324,255.50 2,401,324,255.50 Retained earnings 36,695,423,364.09 36,640,962,334.05 Total owners' equity 49,038,111,940.99 48,706,661,319.88 Total liabilities and owners’ equity 96,947,662,346.38 102,722,164,407.20 3. Consolidated Income Statement In RMB Yuan Account Current Period Prior Period Operating revenue 35,642,832,190.04 33,555,213,109.46 Less: Operating cost 30,614,845,704.45 28,792,755,690.32 Tax and surcharges 1,286,915,201.57 1,443,786,480.14 Operating expenses 2,543,462,428.51 2,004,176,042.01 General and administrative expenses 2,155,401,262.05 1,785,734,071.11 Financial expenses -225,518,842.31 -246,821,602.15 Impairment loss on assets 108,941,422.42 92,122,720.46 Add: Investment income 1,362,011,815.11 3,831,618,978.64 Including: Investment income from 1,362,011,815.11 3,831,618,978.64 associates and joint venture Gain on disposal of assets 18,771,809.69 8,914,486.07 Other incomes 1,116,231,219.32 1,153,834,905.86 Operating profit 1,655,799,857.47 4,677,828,078.14 Add: Non-operating income 29,318,896.76 43,495,774.09 Less: Non-operating expenses 52,348,762.93 12,865,146.02 Total profit 1,632,769,991.30 4,708,458,706.21 Less: Income tax expense 15,288,317.83 40,996,104.66 Net profit 1,617,481,673.47 4,667,462,601.55 Classification by going concern Net profit from continuing operations 1,617,481,673.47 4,667,462,601.55 Net profit from discontinued operations Classification by ownership attribution Net profit attributable to owners 1,609,606,578.84 4,620,545,739.52 Minority interests 7,875,094.63 46,916,862.03 Other comprehensive income, net of tax 247,029,533.59 -49,271,529.86 Total comprehensive income 1,864,511,207.06 4,618,191,071.69 39 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Total comprehensive income 1,856,636,112.43 4,571,274,209.66 attributable to owners Total comprehensive income 7,875,094.63 46,916,862.03 attributable to minority interest Earnings per share Basic earnings per share 0.34 0.96 Diluted earnings per share 0.34 0.96 4. Income Statement In RMB Yuan Account Current Period Prior Perid Operating revenue 34,209,065,716.02 32,839,522,229.70 Less: Operating cost 29,726,487,573.72 28,904,081,124.37 Tax and surcharges 1,092,437,739.80 1,135,041,753.22 Operating expenses 2,298,436,366.37 1,803,479,171.45 General and administrative 1,804,533,573.37 1,436,070,738.53 expenses Financial expenses -248,434,734.69 -256,888,513.32 Impairment loss on assets 114,014,999.44 133,639,836.86 Add: Investment income 1,995,138,886.45 3,830,647,885.91 Including: Investment income from 1,362,011,815.11 3,831,618,978.64 associates and from joint venture Gain on disposal of assets 23,972,983.02 -736,556.03 Other income 761,820,507.26 289,212,455.26 Operating profit 2,202,522,574.74 3,803,221,903.73 Add: Non-operating income 22,601,200.00 33,242,956.33 Less: Non-operating expenses 44,712,292.46 13,025,800.35 Total profit 2,180,411,482.28 3,823,439,059.71 Less: Income tax expense -31,839,831.42 -8,032,861.72 Net profit 2,212,251,313.70 3,831,471,921.43 Classification by going concern Net profit from continuing 2,212,251,313.70 3,831,471,921.43 operations Net profit from discontinued operations 40 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Other comprehensive income, net of tax 266,219,988.89 -45,866,000.00 Total comprehensive income 2,478,471,302.59 3,785,605,921.43 5. Consolidated cash flow statement In RMB Yuan Account Current Period Prior Perid Cash flows from operating activities: Cash received from sale of goods 47,598,885,985.36 46,780,300,361.41 or rendering of services Refunds of taxes 196,358,525.83 140,895,941.36 Cash received relating to other 1,720,885,871.60 2,518,058,023.51 operating activities Subtotal of cash inflows 49,516,130,382.79 49,439,254,326.28 Cash paid for goods and services 36,479,347,621.36 34,870,252,065.09 Cash paid to and on behalf of 3,423,077,482.78 3,158,460,344.22 employees Cash paid for all types of taxes 1,795,067,722.02 3,357,708,868.23 Cash paid relating to other 3,417,235,796.48 3,093,128,324.63 operating activities Subtotal of cash outflows 45,114,728,622.64 44,479,549,602.17 Net cash flows from operating activities 4,401,401,760.15 4,959,704,724.11 Cashflows from investing activities: Cash received from return on 114,500,000.00 4,458,000,000.00 investments Net cash received from disposal of fixed assets, intangible assets and other 18,444,059.30 12,051,601.04 long-term assets Cash received relating to other 17,358,750.00 629,600,000.00 investing activities Subtotal of cash inflows 150,302,809.30 5,099,651,601.04 Cash paid for acquisition of fixed assets, intangible assets and other 3,071,429,581.17 1,761,384,957.20 long-term assets Cash paid for acquisition of 52,243,750.00 100,840,001.00 investments Cash paid relating to other investing activities 41 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Subtotal of cash outflows 3,123,673,331.17 1,862,224,958.20 Net cash flows from investing activities -2,973,370,521.87 3,237,426,642.84 Cash flows from financing activities: Cash received from borrowings 166,000,000.00 185,569,008.83 Cash received relating to other 880,129,667.40 749,802,481.32 financing activities Subtotal of cash inflows 1,046,129,667.40 935,371,490.15 Cash repayments of borrowings 171,300,000.00 2,140,000,000.00 Cash paid for distribution of dividends or profits and interest 5,326,893.20 3,168,151,086.02 expenses Cash paid relating to other - 33,855,585.56 financing activities Subtotal of cash outflows 176,626,893.20 5,342,006,671.58 Net cash flows from financing activities 869,502,774.20 -4,406,635,181.43 Effect of changes in exchange rate on 18,804,298.88 25,338,127.63 cash Net increase in cash and cash 2,316,338,311.36 3,815,834,313.15 equivalents Add: Opening balance of cash and cash 21,451,305,090.53 22,993,432,067.05 equivalents Closing balance of cash and cash 23,767,643,401.89 26,809,266,380.20 equivalents 6. Cash flow statement In RMB Yuan Account Current Period Prior Perid Cash flows from operating activities: Cash received from sale of goods 45,723,211,451.95 44,484,189,667.84 or rendering of services Refunds of taxes Cash received relating to other 1,227,875,965.34 1,206,879,552.91 operating activities Subtotal of cash inflows 46,951,087,417.29 45,691,069,220.75 Cash paid for goods and services 34,485,733,663.71 33,584,162,667.42 Cash paid to and on behalf of 2,753,479,395.91 2,480,880,221.05 42 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report employees Cash paid for all types of taxes 1,308,603,097.31 2,696,116,766.30 Cash paid relating to other 3,359,852,336.20 2,881,114,513.51 operating activities Subtotal of cash outflows 41,907,668,493.13 41,642,274,168.28 Net cash flows from operating activities 5,043,418,924.16 4,048,795,052.47 Cashflows from investing activities: Cash received from disposal of 839,201.56 - investments Cash received from return on 119,200,416.67 4,464,991,013.22 investments Net cash received from disposal of fixed assets, intangible assets and other 18,417,859.30 403,878.24 long-term assets Cash received relating to other 100,000,000.00 791,000,000.00 investing activities Subtotal of cash inflows 238,457,477.53 5,256,394,891.46 Cash paid for acquisition of fixed assets, intangible assets and other 2,869,658,085.59 1,602,304,152.01 long-term assets Cash paid for acquisition of 157,000,000.00 100,437,390.50 investments Cash paid relating to other 200,000,000.00 100,000,000.00 investing activities Subtotal of cash outflows 3,226,658,085.59 1,802,741,542.51 Net cash flows from investing activities -2,988,200,608.06 3,453,653,348.95 Cash flows from financing activities: Cash received from borrowings Cash received relating to other 461,856,503.42 707,928,498.17 financing activities Subtotal of cash inflows 461,856,503.42 707,928,498.17 Cash repayments of borrowings - 1,980,000,000.00 Cash paid for distribution of dividends or profits and interest - 3,147,923,019.82 expenses Cash paid relating to other financing activities 43 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Subtotal of cash outflows - 5,127,923,019.82 Net cash flows from financing activities 461,856,503.42 -4,419,994,521.65 Effect of changes in exchange rate on cash Net increase in cash and cash 2,517,074,819.52 3,082,453,879.77 equivalents Add: Opening balance of cash and cash 20,172,657,984.53 22,326,566,084.67 equivalents Closing balance of cash and cash 22,689,732,804.05 25,409,019,964.44 equivalents 44 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 7. Consolidated statement of changes in shareholders’ equity In RMB Yuan Current period Equity attributable to owners Items Less: Other Special General Minority interest Total equity Share capital Capital reserves Treasury Surplus reserves Retained earnings comprehensive reserves reserves shares income I. At end of last year 4,802,648,511.00 5,099,405,956.94 - 28,279,733.062,401,324,255.50 - 35,184,073,061.94 82,959,423.84 -135,511,683.82 47,463,179,258.46 II. At beginning of year 4,802,648,511.00 5,099,405,956.94 - 28,279,733.062,401,324,255.50 - 35,184,073,061.94 82,959,423.84 -135,511,683.82 47,463,179,258.46 III. Changes during the year - - - 17,709,058.85 - - -548,183,704.82 247,029,533.59 7,875,094.63 -275,570,017.75 1.Total comprehensive - - - - - - 1,609,606,578.84 247,029,533.59 7,875,094.63 1,864,511,207.06 income 2. Capital contributed by owners and capital decreases 3. Distribution of profit - - - - - - -2,157,790,283.66 - - -2,157,790,283.66 Distribution to owners - - - - - - -2,157,790,283.66 - - -2,157,790,283.66 4. Special reserves - - - 17,709,058.85 - - - - - 17,709,058.85 (1) Pick-up in current - - - 40,997,574.06 - - - - - 40,997,574.06 period (2) Used in current period - - - -23,288,515.21 - - - - - -23,288,515.21 IV. At end of current period 4,802,648,511.00 5,099,405,956.94 - 45,988,791.91 2,401,324,255.50 - 34,635,889,357.12 329,988,957.43 -127,636,589.19 47,187,609,240.71 45 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Prior period In RMB Yuan Prior period Equity attributable to owners Items Less: Other Special General Minority interest Total equity Share capital Capital reserves Treasury Surplus reserves Retained earnings comprehensive reserves reserves shares income I. At end of last year 4,802,648,511.00 5,085,301,532.55 - 16,349,485.65 2,401,324,255.50 - 31,126,707,710.94 141,480,908.23 -220,652,853.81 43,353,159,550.06 31,126,707,710. II. At beginning of year 4,802,648,511.00 5,085,301,532.55 - 16,349,485.65 2,401,324,255.50 - 141,480,908.23 -220,652,853.81 43,353,159,550.06 94 III. Changes during the year - 25,192,500.00 - 9,591,966.43 - - 1,540,676,367.05 -49,271,529.86 46,916,862.03 1,573,106,165.65 1.Total comprehensive - - - - - - 4,620,545,739.52 -49,271,529.86 46,916,862.03 4,618,191,071.69 income 2. Capital contributed by - 25,192,500.00 - - - - - - - 25,192,500.00 owners and capital decreases 3. Distribution of profit - - - - - - -3,079,869,372.47 - - -3,079,869,372.47 Distribution to owners - - - - - - -3,079,869,372.47 - - -3,079,869,372.47 4. Special reserves - - - 9,591,966.43 - - - - - 9,591,966.43 (1) Pick-up in current - - - 34,781,156.92 - - - - - 34,781,156.92 period (2) Used in current period - - - -25,189,190.49 - - - - - -25,189,190.49 IV. At end of current period 4,802,648,511.00 5,110,494,032.55 - 25,941,452.08 2,401,324,255.50 - 32,667,384,077.99 92,209,378.37 -173,735,991.78 44,926,265,715.71 46 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 8. Statement of changes in shareholders’ equity In RMB Yuan Current period Less: Other Items Special Share capital Capital reserves Treasury Surplus reserves comprehensive Retained earnings Total equity reserves shares income I. At end of last year 4,802,648,511.00 4,717,192,101.72 - 12,013,706.73 2,401,324,255.50 132,520,410.88 36,640,962,334.05 48,706,661,319.88 II. At beginning of year 4,802,648,511.00 4,717,192,101.72 - 12,013,706.73 2,401,324,255.50 132,520,410.88 36,640,962,334.05 48,706,661,319.88 III. Changes during the year - - - 10,769,602.18 - 266,219,988.89 54,461,030.04 331,450,621.11 1.Total comprehensive income - - - - - 266,219,988.89 2,212,251,313.70 2,478,471,302.59 2. Capital contributed by owners and capital decreases The amount of shares paid into the owner's equity 3. Distribution of profit - - - - - - -2,157,790,283.66 -2,157,790,283.66 Distribution to owners - - - - - - -2,157,790,283.66 -2,157,790,283.66 4. Special reserves - - - 10,769,602.18 - - - 10,769,602.18 (1) Pick-up in current period - - - 28,985,079.84 - - - 28,985,079.84 (2) Used in current period - - - -18,215,477.66 - - - -18,215,477.66 IV. At end of current period 4,802,648,511.00 4,717,192,101.72 - 22,783,308.91 2,401,324,255.50 398,740,399.77 36,695,423,364.09 49,038,111,940.99 47 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Prior period In RMB Yuan Prior period Less: Other Items Special Share capital Capital reserves Treasury Surplus reserves comprehensive Retained earnings Total equity reserves shares income I. At end of last year 4,802,648,511.00 4,689,475,046.88 - 7,555,003.10 2,401,324,255.50 202,294,552.68 33,488,484,537.62 45,591,781,906.78 II. At beginning of year 4,802,648,511.00 4,689,475,046.88 - 7,555,003.10 2,401,324,255.50 202,294,552.68 33,488,484,537.62 45,591,781,906.78 III. Changes during the year - 25,192,500.00 - 6,058,696.89 - -45,866,000.00 751,602,548.96 736,987,745.85 1.Total comprehensive income - - - - - -45,866,000.00 3,831,471,921.43 3,785,605,921.43 2. Capital contributed by owners and - 25,192,500.00 - - - - - 25,192,500.00 capital decreases The amount of shares paid into the owner's - 25,192,500.00 - - - - - 25,192,500.00 equity 3. Distribution of profit - - - - - - -3,079,869,372.47 -3,079,869,372.47 Distribution to owners - - - - - - -3,079,869,372.47 -3,079,869,372.47 4. Special reserves - - - 6,058,696.89 - - - 6,058,696.89 (1) Pick-up in current period - - - 21,295,002.00 - - - 21,295,002.00 (2) Used in current period - - - -15,236,305.11 - - - -15,236,305.11 IV. At end of current period 4,802,648,511.00 4,714,667,546.88 - 13,613,699.99 2,401,324,255.50 156,428,552.68 34,240,087,086.58 46,328,769,652.63 48 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report III. 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. 49 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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 proporation 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 proporation increasing to 40.88%. As at 30 June 2018, the Company’s parent company and ultimate controlling company is China Changan and South Group respectively. The Company and its subsidiaries (hereafter referred to as the “Group”) mainly focus on the manufacturing and sales of automobile (include cars), automobile engine, spare parts. The consolidated scope of the consolidated financial statements is based on the control. For details, please refer to Note 8 for the changes in the scope of the consolidated financial statements for the current year. IV. BASIS OF PREPERATION The financial statements have been prepared in accordance with Accounting Standards for Business 50 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 listed 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. The assets are recorded at assessed value by State-owned Assets Supervision and Administration Commission of the State Council, which are invested into the Group in the reforming period. V. Significant accounting policies and accounting estimates The group has formulated specific accounting policies and accounting estimates based on the characteristics of actualdaily operations, mainly reflected in the provision method for uncollectible accounts receivable [Note 5 ( 10 ) ], the valuation method of inventories [Note 5 ( 11 ) ], depreciation of fixed assets and amortization of intangible assets [ Note 5 ( 14 ) ( 17 ) ], the capitalization conditions for r & d expenses [Note 5 ( 18 ) ], revenue recognition and measurement [Note 5 ( 22 ) ]. 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 June 30, 2018 and the financial results and the cash flows for 1-6 month 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 A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. 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 51 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. Where the sum of the fair value of the consideration transferred (or the fair value of the issued equity securities) and the fair value of the acquirer’s previously held equity interest in the acquiree exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be recognized as goodwill and measured at cost less any accumulated impairment losses. Where the sum of the fair value of the consideration transferred (or the fair value of the issued equity securities) and the fair value of the acquirer’s previously held equity interest in the acquiree is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the fair value of the consideration transferred (or the fair value of the issued equity securities) and the fair value of the acquirer’s previously held equity interest in the acquiree; (ii) if after that reassessment, the sum of the fair value of the consideration transferred (or the fair value of the issued equity securities) and the fair value of the acquirer’s previously held equity interest in the acquiree is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets, the acquirer shall recognize the remaining difference immediately in the income statement for the current period. 5. Consolidated financial statements The scope of consolidation of consolidated financial statements is determined based on control, and includes the financial statements of the Company and its subsidiaries as at June 30, 2018. A subsidiary is an enterprise or entity that is controlled by the Group (including an enterprise, seperable part of the investee and a structured entity 52 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report controlled by the Company). 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 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. 53 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 54 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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 55 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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 56 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 instrumentsts 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. For financial assets that are not impaired upon individual tests (including financial assets that are individually significant or insignificant), impairment testsshould be conducted on them again by including them in the group of financial assets. 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 57 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report the impairment is reversed. 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. 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: 58 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Criterion for individually significant items Accounts receivable balance greater than RMB15 million due from non-related parties Method for provision A provision of the difference between recoverable amount 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 Group 1 significant items or insignificatntly 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 Group 2 recognized based on individually analysis. 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 Criterion for individually analysis for provision from non-related parties is impaired and the future recoverable possibility is little. A provision of the difference between recoverable amount and Method for provision book value is recognized individually. 11. Inventory Inventory includes raw materials, goods in transit, work in progress, finished goods, consigned processing materials, low-value consumables and spare parts. 59 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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 meassued amounts and the book value of consideration, adjust the capital reserves (if the capital reserve is insufficient to be offset, retained earnings should be adjusted); Long-term investments acquired from business combination not under common control shall be initially measured at the cost (or, the sum of the cost and the carrying value of the previously held equity interest in the acquire for the business combination achieved by stages), which include the fair value of the consideration paid, the liabilities beard and the fair value of issued equity instrument; the other comprehensive income produced from the investment before the acquisition should be transferred into the current year investment income on disposal. Long-term investments acquired not from business combination are initially measured at 1)the consideration together with the cost necessary incurred; 2) the fair value of the equity instruments; and 3) the consideration agreed in the investment agreement by the investors, otherwise the agreed consideration were not fair. The Company adopted cost method to account for long-term investments in the subsidiaries in the separate financial statements of the Company. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Under cost method, the long-term equity investment is valued at the cost of the initial investment. The cost of long-term equity investment should be adjusted in case of additional investment or disinvestments. When cash dividends or profits are declared by the invested enterprise is recognized as investment income in current period. The equity method is applied to account for long-term equity investments, when the Group has jointly control, or 60 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report significant influence on the investee enterprise. Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the venturers). Significant influence is the power to participate in the financial and operating policy decisions of an economic activity but is not control or joint control over those policies. Under equity method, when the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, the difference is accounted for as an initial cost. As to the initial investment cost is less than the investing enterprise’s interest in the fair values of the investee’s identifiable net assets at the acquisition date, the difference shall be charged to the income statement for the current period, and the cost of the long-term equity investment shall be adjusted accordingly. Under equity method, the Group recognizes its share of post-acquisition equity in the investee enterprise for the current period as a gain or loss on investment, and also increases or decreases the carrying amount of the investment. When recognizing its share in the net profit or loss of the investee entities, the Group should, based on the fair values of the identifiable assets of the investee entity when the investment is acquired, in accordance with the Group’s accounting policies and periods, after eliminating the portion of the profits or losses, arising from internal transactions with joint ventures and associates, attributable to the investing entity according to the share ratio (but losses arising from internal transactions that belong to losses on the impairment of assets, should be recognized in full), recognize the net profit of the investee entity after making appropriate adjustments. The book value of the investment is reduced to the extent that the Group’s share of the profit or cash dividend declared to be distributed by the investee enterprise. However, the share of net loss is only recognized to the extent that the book value of the investment is reduced to zero, except to the extent that the Group has incurred obligations to assume additional losses. The Group shall adjust the carrying amount of the long-term equity investment for other changes in owners’ equity of the investee enterprise (other than net profits or losses), and include the corresponding adjustments in equity, which should be realized through profit or loss in subsequent settlement of the respective long-term investment. On settlement of a long-term equity investment, the difference between the proceeds actually received and the carrying amount shall be recognized in the income statement for the current period. As to other comprehensive income recognized based on measurement of the original equity investment by employing the equity method, accounting treatment shall be made on the same basis as would be required if the invested entity had directly disposed of the assets or liabilities related thereto when measurement by employing the equity method is terminated. As to any change in owners' equity of the invested entity other than net profit or loss, other comprehensive income and profit distribution, the investing party shall be transferred to the income statement for the current period. If the remaining equities still be measured under the equity method, accumulative change previously recorded in other comprehensive income shall be transferred to current profit or loss, in measurement on the same basis as the invested entity had directly disposed of the assets or liabilities related thereto. The income or loss recorded in the equity directly should been transferred to the current income statement on settlement of the equity investment on the disposal proportion. 61 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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 asset (1) Recognition of 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. (2) Depreciation method of fixed assets 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 12 years 3% 8.08%-24.25% Others 3 to 21 years 3% 4.62%-32.33% Note: the moulds in machinery should be depreciated in units-of-production method. (3) Others 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. 62 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. The capitalization of borrowing costs are 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 63 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 asset 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. 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. 64 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. Long-term deferred expenses The long-term deferred expenses represent the payment for the improvement on buildings and other expenses, which have been paid and should be deferred in the following years. Long-term deferred expenses are amortized on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortization. 20. Contingent liabilities Except contingent liability recognized in a business combination, the Group recognizes an contingent liability when the obligation arising from a contingency meets the following conditions: 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. 21. 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. 65 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report The equity-settled share-based payment in return for employee services shall be measured at the fair value of the equity instruments granted to the employees. As to an equity-settled share-based payment in return for services of employees, if the right may be exercised immediately after the grant, the fair value of the equity instruments shall, on the date of the grant, be included in the relevant cost or expense and the capital reserves shall be increased accordingly. As to a equity-settled share-based payment in return for employee services, if the right cannot be exercised until the vesting period comes to an end or until the prescribed performance conditions are met, then on each balance sheet date within the vesting period, the services obtained in the current period shall, based on the best estimate of the number of vested equity instruments, be included in the relevant costs or expenses and the capital reserves at the fair value of the equities instruments on the date of the grant. The fair value is determined using Black-Scholes model (Note 13). Within the vesting period or before the prescribed performance conditons are met, the relevant costs or expenses and capital reserves shall be determined and increased based on the best estimate of the number of vested equity instruments on each balance sheet date. For awards that do not ultimately vest because non-market performance and/or service conditions have not been met, no expense is recognised. Where awards include a market or non-vesting condition, the transactions are treated as vesting irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified, if the original terms of the award are met. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payments, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. 22. 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 66 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. 23. 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 at nominal amount. A government grant which is specified by the government documents to be used to purchase and construct the long-term assets shall be recognized as the government grant related to assets. A government grant which is not specified by the government documents shall be judged based on the basic conditions to obtain the government grant. The one whose basic condition was to purchase and construct the long-term assets shall be recognized as the government grant related to assets. The other government grant shall be recognized as the government grant related to gain. A grant relating to income, which as compensation for future costs, is recognized as deferred income initially, and as income when the related cost incurs. The grant as compensation for costs already incurred should be recognized as income for 67 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report the current period. A grant relating to assets is recognized as deferred income initially, and as income evenly among the useful life of the related assets. The grant accounted for at nominal amount is recognized as income for the current period. 24. 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 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. 25. 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 dependants 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 68 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report statement of financial position with a corresponding debit or credit to retained profits through other comprehensive income in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised in profit or loss at the earlier of: the date of the plan amendment or curtailment; and the date that the Group recognises restructuring-related costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation under administrative expenses in the consolidated statement of profit or loss by function:service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements;net interest expense or income Termination benefits Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises restructuring costs involving the payment of termination benefits. 26. Income tax 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 69 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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, 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. 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. 70 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination is allocated, on a reasonable basis, to related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to each of the related sets of asset groups. Each of the related asset groups or related sets of asset groups is a group or set of asset group that is able to benefit from the synergies of the business combination and shall not be larger than a reportable segment determined by the Group. When an impairment test is conducted on an asset group or a set of asset groups that contains goodwill, if there is any indication of impairment, the Group firstly tests the asset group or the set of asset groups excluding the amount of goodwill allocated for impairment, i.e., it determines and compares the recoverable amount with the related carrying amount and then recognize impairment loss if any. Thereafter, the Group tests the asset group or set of asset groups including goodwill for impairment, the carrying amount (including the portion of the carrying amount of goodwill allocated) of the related asset group or set of asset groups is compared to its recoverable amount. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss is firstly eliminated by and amortized to the book value of the goodwill included in the asset group or set of asset groups, and then eliminated by the book value of other assets according to the proportion of the book values of assets other than the goodwill in the asset group or set of asset groups. Once the above impairment loss is recognized, it cannot be reversed in subsequent periods. 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 71 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, either directly or indirectly; Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. 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. 72 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 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. Management estimates the related warranty claims based on historical warranty claim information including level of repairs and returns as well as recent trends that might suggest that past cost information may differ from future claims. Factors that could impact the estimated claim information include the success of the Group’s quality controls, as well as parts and labour costs. Any increase or decrease in the provision would affect profit or loss in future years. 73 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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. The change of major accounting policies and estimates During the reporting period, the company did not have any changes about accounting policies and estimates. VI. Taxes 1. The major categories of taxes and surcharges Categories of taxes and surcharges Basis of tax Tax rate Levy on the taxable sales and rendering of services, Value added tax (“VAT”) 5%, 6% or17% deducted the deductible input VAT. Consumption tax Taxable sales 1%, 3% or5% Business tax Taxable sales 5% City maintenance and construction tax The turnover taxes paid 5% or7% Educational surcharge The turnover taxes paid 3% Local educational surcharge The turnover taxes paid 2% Corporate income tax Taxable income 15% or25% 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 2015, 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). 74 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report As at 4 November 2011, in accordance to Circular of the Administrative Measures for the Certification of New and High Technology Enterprises (Guo Ke Fa Huo [2008] No. 172) and Circular of the Working Guidance on the Recognition of Hi-tech Enterprises (Guo Ke Fa Huo [2008] No. 362), and ratification of Hebei High-Tech Enterprise Recognition Office (Ji Gao Ban [2014] No. 7), the subsidiaries, Hebei Baoding Changan Bus Co., Ltd. and Hebei Changan Automobile Co., Ltd. were recognized as Hi-tech enterprises and subjected to the preferential tax rate of 15%. VII. Notes to the consolidated financial statements 1. Cash and cash equivalents In RMB Yuan Item Ending Beginning Cash 11,825.00 33,089.31 Cash at bank 23,767,631,576.89 21,451,272,001.22 Other cash 300,101,738.60 1,180,231,406.00 Total 24,067,745,140.49 22,631,536,496.53 As at 30 June 2018, the book value of restricted cash and cash equivalents is RMB 300,101,738.60, which was mainly restricted for the issuance of acceptance bill. As at 30 June 2018, the cash at bank oversea is equivalent to RMB 114,365,678.53. 2. Notes receivable (1) Classification of notes receivable In RMB Yuan Type Ending Beginning Commercial acceptance bill 2,821,052,830.00 9,142,240,884.70 Bank acceptance bill 15,569,423,582.74 20,014,240,200.50 Total 18,390,476,412.74 29,156,481,085.20 (2) The notes receivable pledged as follows: Type 30 June 2018 31 December 2017 Bank acceptance bill 545,823,326.93 287,427,970.00 The bank acceptance bill of the above amount has been pledged for the notereceivable on 30 June 2018 and 31 December 2017. (3) Endorsed or discounted but unexpired notes receivable as at the end of reporting period are as follows: In RMB Yuan Ending Beginning Type Derecognition Un-derecognition Derecognition Un-derecognition Commercial acceptance bill - - 70,962,210.00 - Bank acceptance bill 961,310,940.00 - 1,198,514,460.00 - 75 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Total 961,310,940.00 - 1,269,476,670.00 - 3. Accounts receivable (1) An analysis of the accounts receivable by category as at the end of the reporting period is as follows: In RMB Yuan Ending Beginning Item Balance Provision Balance Provision Amount % Amount % Amount % Amount % Individually significant items and analyzed 527,010,174.73 26.84 - - 734,064,982.48 39.83 - - individually for provision Accounts receivable analyzed as groups for provision Group 1. Accounts receivable analyzed for 1,036,772,648.35 52.81 24,283,177.36 2.34 811,522,470.21 44.04 22,765,588.74 2.81 provision according to aging analysis Group 2. Accounts receivable from 386,230,274.69 19.67 - - 283,985,329.09 15.41 - - related parties Group subtotal 1,423,002,923.04 72.48 24,283,177.36 1.71 1,095,507,799.30 59.45 22,765,588.74 2.08 Individually insignificant items but analyzed 13,264,933.57 0.68 13,264,933.57 100 13,264,933.57 0.72 13,264,933.57 100 individually for provision Total 1,963,278,031.34 100 37,548,110.93 1.91 1,842,837,715.35 100 36,030,522.31 1.96 Within groups, accounts receivable analyzed for provision according to aging analysis: √ Applicable □ Not applicable In RMB Yuan Ending Beginning Aging Balance Balance Provision Provision Amount % Amount % Within 1 year Including: Within 6 months 955,406,533.48 92.15 - 753,965,095.69 92.91 - 6 to 12 months 29,378,417.75 2.83 1,468,920.88 18,262,202.43 2.25 913,110.11 76 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Within 1 year 984,784,951.23 94.98 1,468,920.88 772,227,298.12 95.16 913,110.11 subtotal 1 to 2 years 24,457,498.59 2.36 2,445,749.86 12,198,268.67 1.50 1,219,826.87 2 to 3 years 2,514,884.50 0.24 754,465.35 1,451,653.80 0.18 435,496.14 3 to 4 years 10,530,865.52 1.02 5,265,432.76 10,368,508.00 1.28 5,184,254.00 4 to 5 years 679,200.00 0.07 543,360.00 1,319,200.00 0.16 1,055,360.00 Over 5 years 13,805,248.51 1.33 13,805,248.51 13,957,541.62 1.72 13,957,541.62 Total 1,036,772,648.35 100 24,283,177.36 811,522,470.21 100 22,765,588.74 Within groups, accounts receivable analyzed for provision according to other analysis: In RMB Yuan Ending Beginning Name Balance Provision Balance Provision Accounts receivable provision 386,230,274.69 - 283,985,329.09 - for bad debts with related party On 30 June 2018, there is no accounts receivable with separate amounts and separate provision for bad debts (31 December 2017: none). (2) As for June 30, 2018, provision for impairment of accounts receivable amounting to RMB 2,398,816.90 has been accrued (2017: RMB 8,587,659.49). Provision for impairment of accounts receivable amounting to RMB 798,522.79 has been reversed (2017: RMB 3,058,543.46). (3) As at 30 June 2018, provision for impairment of accounts receivable amounting to RMB 82,705.49 is written off (2017: RMB 444,720.00). (4) As at 30 June 2018, the top five debtors of accounts receivables totalled RMB 717,217,296.14, accounting for 36.53% of total receivables (2017: RMB 553,166,995.66, accounting for 30.02% of total receivables). (5) As at 30 June 2018, the group has no accounts receivable as a termination of financial assets transfer (2017: none). 4. Prepayments (1) An aged analysis of the prepayments is as follows: In RMB Yuan Ending Beginning Aging Amount % Amount % Within 1 year 992,356,992.65 98.84 1,099,772,284.11 99.78 1 to 2 years 10,141,614.24 1.01 447,067.45 0.04 2 to 3 years 1,000,000.00 0.10 1,485,647.87 0.13 77 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Over 3 years 534,931.90 0.05 534,931.90 0.05 Total 1,004,033,538.79 100 1,102,239,931.33 100 As at 30 June 2018, the total amount of the top five prepayments was RMB 888,386,086.76, accounting for 88.48% of the total amount of prepayments (2017: RMB 993,006,069.80, accounting for 90.09%). 5. Interest receivable In RMB Yuan Item Ending Beginning Fixed deposits 55,081,274.30 42,184,263.88 6. Other receivables (1) An analysis of the other receivables by category as at the end of reporting period is as follows: In RMB Yuan Ending Beginning Item Balance Provision Balance Provision Amount % Amount % Amount % Amount % Individually significant items and analyzed 1,883,637,827.35 89.65 - - 1,404,077,945.42 85.12 - - individually for provision Other receivables analyzed as groups for provision Group 1: Other receivables analyzed for 186,364,915.47 8.87 1,625,933.46 0.87 201,199,672.08 12.20 1,177,852.02 0.59 provision according to aging analysis Group 2:Other receivables from related 28,165,286.80 1.34 - - 41,176,689.56 2.50 - - parties Group subtotal 214,530,202.27 10.21 1,625,933.46 0.76 242,376,361.64 14.70 1,177,852.02 0.49 individually insignificant items but analyzed 2,976,813.22 0.14 2,976,813.22 100 2,978,743.66 0.18 2,978,743.66 100 individually for provision Total 2,101,144,842.84 100.00 4,602,746.68 0.22 1,649,433,050.72 100.00 4,156,595.68 0.25 Within groups, other receivables analyzed for provision according to aging analysis √ Applicable □ Not applicable In RMB Yuan Aging Ending Beginning 78 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Balance Balance Provision Provision Amount % Amount % Within 1 year Including: Within 6 months 171,786,449.50 92.17 - 194,289,589.40 96.57 - 6 to 12 months 12,336,442.40 6.62 616,822.12 5,512,392.58 2.74 275,619.62 Within 1 year subtotal 184,122,891.90 98.79 616,822.12 199,801,981.98 99.31 275,619.62 1 to 2 years 1,072,883.60 0.58 107,288.36 405,884.15 0.20 40,588.42 2 to 3 years 290,443.07 0.16 87,132.92 48,000.00 0.02 14,400.00 3 to 4 years 128,014.34 0.07 64,007.61 193,123.94 0.10 96,561.97 4 to 5 years 0.55 - 0.44 - - - Over 5 years 750,682.01 0.40 750,682.01 750,682.01 0.37 750,682.01 Total 186,364,915.47 100 1,625,933.46 201,199,672.08 100 1,177,852.02 Within groups, other receivable analyzed for provision according to other analysis: In RMB Yuan Ending Beginning Name Balance Provision Balance Provision Other receivable provision for 28,165,286.80 - 41,176,689.56 - bad debts with related party On 30 June 2018, there is no other receivable with separate amounts and separate provision for bad debts (31 December 2017: none). (2) As for June 30, 2018, provision for impairment of other receivable amounting to RMB 520,778.00 has been accrued (2017: RMB 1,231,570.84). Provision for impairment of other receivable amounting to RMB 18,072.20 has been reversed (2017: RMB 1,109,854.82). (3) As at 30 June 2018, provision for impairment of other receivable amounting to RMB 56,554.8 is written off (2017: RMB 85,402.61). (4) As at 30 June 2018, the group has no other receivables as a termination of financial assets transfer (2017: none). (5) As at 30 June 2018, top five debtors of other receivables are as follows: Proportion of total other Debtors Ending balance Years receivables (%) First 1,544,178,640.00 Within 3 years 73.49 Second 229,198,886.11 Within 3 years 10.91 Third 28,823,310.00 1 to 2 years 1.37 79 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Fourth 27,431,572.54 Within 6 months 1.31 Fifth 21,053,000.00 Within 1 year 1.00 Total 1,850,685,408.65 - 88.08 7. Inventory (1) Classification of inventory In RMB Yuan Ending Beginning Item Balance Provision Net value Balance Provision Net value Raw materials 608,090,995.26 53,440,961.77 554,650,033.49 461,911,233.10 33,713,007.05 428,198,226.05 Work in transit 448,120,820.40 - 448,120,820.40 511,912,371.36 - 511,912,371.36 Work in progress 856,411,506.90 20,963,970.65 835,447,536.25 633,181,546.29 32,329,369.55 600,852,176.74 Commodity stock 2,934,264,568.28 101,360,370.90 2,832,904,197.38 3,154,147,791.47 103,902,330.06 3,050,245,461.41 Revolving materials - - - 26,530,300.45 - 26,530,300.45 Spare parts 55,298,889.07 - 55,298,889.07 48,444,885.79 - 48,444,885.79 Total 4,902,186,779.91 175,765,303.32 4,726,421,476.59 4,836,128,128.46 169,944,706.66 4,666,183,421.80 (2) Provision for inventory In RMB Yuan Deduction Type Beginning Provision Ending Reversal Write-off Raw materials 33,713,007.05 21,959,954.84 636,470.54 1,595,529.58 53,440,961.77 Work in progress 32,329,369.55 2,861,402.11 13,237,201.09 989,599.92 20,963,970.65 Commodity stock 103,902,330.06 96,089,591.05 198,853.86 98,432,696.35 101,360,370.90 Total 169,944,706.66 120,910,948.00 14,072,525.49 101,017,825.85 175,765,303.32 8. Other current assets In RMB Yuan Item Ending Beginning Accrual input tax 2,162,944,222.31 1,699,621,114.17 Others 32,110,668.20 6,289,416.26 Total 2,195,054,890.51 1,705,910,530.43 9. Available-for-sale financial assets In RMB Yuan 80 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Item Ending Beginning Available-for-sale equity securites 136,675,000.00 164,365,000.00 Other 427,552,000.00 377,552,000.00 Total 564,227,000.00 541,917,000.00 1. The available-for-sale equity securites are the 35.50 million shares of Southwest Securities Co., Ltd as of June 30, 2018. 2. Others: On June 30, 2018 the group’s ownership,measured by the cost of the investment, does not have control, joint control or significant influenceand there is no offer in the active market, the fair value can not be reliably measured by the equity investment. 81 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 10. Long-term equity investment In RMB Yuan Explanation for the difference Voting between Accounting Addition/ Shareholding Current Current cash Investee Initial amount Beginning Ending percentage shareholding Impairment method (deduction) percentage (%) provision dividends (%) percentage and voting percentage Joint ventures Chongqing Changan Suzuki Equity 237,719,933.33 1,190,705,710.43 -80,032,104.09 1,110,673,606.34 50 50 None - - - Automobile Co., Ltd Jiangling Holding Co., Ltd Equity 1,008,511,522.00 2,907,749,943.37 -83,707,141.74 2,824,042,801.63 50 50 None - - - Changan Ford Automobile Co., Ltd(former name: Changan Ford Equity 975,232,926.29 4,125,426,104.20 866,427,723.13 4,991,853,827.33 50 50 None - - - Mazda Automobile Co., Ltd) Changan Mazda Automobile Equity 1,097,839,635.00 2,439,429,811.02 635,451,737.12 3,074,881,548.14 50 50 None - - - Co., Ltd Changan Ford Mazda Engine Equity 786,734,634.10 903,838,395.08 -73,187,649.79 830,650,745.29 50 50 None - - 114,500,000.00 Co., Ltd Changan PSA Automobiles Co., Equity 2,007,841,700.00 93,561,126.76 -171,729,822.06 -78,168,695.30 50 50 None - - - Ltd,a JV of the Company Associates - Chongqing Changan Kuayue Equity 61,800,885.00 101,399,892.43 17,458,524.85 118,858,417.28 34.3 34.3 None - - - 82 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Automobile Co., Ltd Chongqing Changan Kuayue Equity 1.00 - - - 34.3 34.3 None - - - Automobile Sales Co., Ltd Beijing Fangan Taxi LLC Equity 6,000,000.00 - - - 20.7 20.7 None - - - Chongqing Auto Finance Co.Ltd Equity 1,805,000,000.00 1,817,669,991.73 137,070,317.23 1,954,740,308.96 28.66 28.66 None - - - Zhenjiang Demao Hairun Equity Investment Fund Partnership Equity 518,743,029.48 518,742,921.95 289,516,719.35 808,259,641.30 32.67 32.67 None - - - (Limited Partnership) Hangzhou Chelizi Intelligent Equity 2,243,750.00 - 2,243,750.00 2,243,750.00 20 20 None - - - Technology Co., Ltd. Total -- 8,507,668,016.20 14,098,523,896.97 1,539,512,054.00 15,638,035,950.97 -- -- -- - - 114,500,000.00 83 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 11. Investment property According to the cost of the investment real estate In RMB Yuan Item Beginning Addition Deduction Ending I. Original cost 10,050,100.00 - - 10,050,100.00 Buildings 10,050,100.00 - - 10,050,100.00 II. Accumulated depreciationand 2,493,827.16 113,355.78 - 2,607,182.94 amortization Buildings 2,493,827.16 113,355.78 - 2,607,182.94 III. Net Value 7,556,272.84 -113,355.78 - 7,442,917.06 Buildings 7,556,272.84 -113,355.78 - 7,442,917.06 IV. Impairment Provision 7,556,272.84 -113,355.78 - 7,442,917.06 Buildings 7,556,272.84 -113,355.78 - 7,442,917.06 12. Fixed assets In RMB Yuan Item Beginning Addition Deduction Ending I. Original cost 31,092,079,689.71 518,376,227.55 359,069,765.75 31,251,386,151.51 Buildings 7,588,350,429.43 6,957,485.61 4,967,723.31 7,590,340,191.73 Machinery 17,780,317,915.84 101,696,094.53 179,543,314.95 17,702,470,695.42 Vehicles 758,168,041.39 39,022,979.13 2,186,906.73 795,004,113.79 Other Equipments 4,965,243,303.05 370,699,668.28 172,371,820.76 5,163,571,150.57 II. Accumulated 11,166,770,830.03 1,045,654,724.17 264,765,212.09 11,947,660,342.11 depreciation Buildings 1,585,639,930.24 127,192,502.26 - 1,712,832,432.50 Machinery 7,183,157,682.85 521,677,710.87 94,478,028.29 7,610,357,365.43 Vehicles 207,356,765.94 70,246,042.36 1,431,464.77 276,171,343.53 Other Equipments 2,190,616,451.00 326,538,468.68 168,855,719.03 2,348,299,200.65 III. Net Value 19,925,308,859.68 -527,278,496.62 94,304,553.66 19,303,725,809.40 Buildings 6,002,710,499.19 -120,235,016.65 4,967,723.31 5,877,507,759.23 Machinery 10,597,160,232.99 -419,981,616.34 85,065,286.66 10,092,113,329.99 84 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Vehicles 550,811,275.45 -31,223,063.23 755,441.96 518,832,770.26 Other Equipments 2,774,626,852.05 44,161,199.60 3,516,101.73 2,815,271,949.92 IV.Impairment Provision 880,779,908.98 - 33,638,931.71 847,140,977.27 Buildings 83,371,676.72 - - 83,371,676.72 Machinery 673,609,726.30 - 32,024,837.06 641,584,889.24 Vehicles 223,852.23 - - 223,852.23 Other Equipments 123,574,653.73 - 1,614,094.65 121,960,559.08 V. Book Value 19,044,528,950.70 -527,278,496.62 60,665,621.95 18,456,584,832.13 Buildings 5,919,338,822.47 -120,235,016.65 4,967,723.31 5,794,136,082.51 Machinery 9,923,550,506.69 -419,981,616.34 53,040,449.60 9,450,528,440.75 Vehicles 550,587,423.22 -31,223,063.23 755,441.96 518,608,918.03 Other Equipments 2,651,052,198.32 44,161,199.60 1,902,007.08 2,693,311,390.84 The depreciation during the reporting period is RMB 1,045,654,724.17. During the period the construction in progress amounting to RMB 462,849,859.01 is transferred to the fixed asset. 13. Construction in progress (1) Details of construction in progress In RMB Yuan Closing balance Openning balance Item Balance Provision Book value Balance Provision Book value Mini-bus production 1,123,638,327.96 - 1,123,638,327.96 997,340,616.73 - 997,340,616.73 equipment Yuzui motor city project 602,342,467.90 - 602,342,467.90 247,220,662.88 - 247,220,662.88 Car production equipment 253,282,390.98 - 253,282,390.98 165,767,240.81 - 165,767,240.81 Engine plant 496,911,181.63 - 496,911,181.63 341,191,269.61 - 341,191,269.61 Vehicle research institution 665,267,271.81 - 665,267,271.81 401,869,572.35 - 401,869,572.35 Vehicle moulds 461,248,201.97 - 461,248,201.97 365,419,879.40 - 365,419,879.40 Light vehicle technical transformation project of 52,602,943.34 - 52,602,943.34 28,393,497.74 - 28,393,497.74 Baoding Changan bus Plant for vehicle test project 6,413,634.95 - 6,413,634.95 6,052,888.00 - 6,052,888.00 Beijing vehicle construction 156,149,317.24 - 156,149,317.24 163,600,842.58 - 163,600,842.58 project Engine Base of Nanjing 5,126,636.04 - 5,126,636.04 3,201,929.85 - 3,201,929.85 Yuzui Refitting factory 31,385,789.99 - 31,385,789.99 30,880,135.49 - 30,880,135.49 Car production Project Of 502,844,386.55 - 502,844,386.55 156,409,567.96 - 156,409,567.96 85 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Hefei Changan Nanjing Welding Technological - - - 3,351,229.28 - 3,351,229.28 transformation project Yubei Factory 156,977.90 - 156,977.90 145,173.18 - 145,173.18 Others 370,871,503.68 - 370,871,503.68 323,328,649.66 - 323,328,649.66 Total 4,728,241,031.94 - 4,728,241,031.94 3,234,173,155.52 - 3,234,173,155.52 (2) Movement of major construction in progress projects In RMB Yuan Transferred to fixed Item Beginning Addition Deduction Ending assets Mini-bus production 997,340,616.73 144,371,711.76 18,074,000.53 - 1,123,638,327.96 equipment Yuzui motor city project 247,220,662.88 425,202,343.66 70,080,538.64 - 602,342,467.90 Car production equipment 165,767,240.81 102,294,839.15 14,779,688.98 - 253,282,390.98 Engine plant 341,191,269.61 201,304,112.54 45,584,200.52 - 496,911,181.63 Vehicle research institution 401,869,572.35 270,459,262.14 7,061,562.68 - 665,267,271.81 Vehicle moulds 365,419,879.40 174,022,790.49 78,194,467.92 - 461,248,201.97 Light vehicle technical transformation project of 28,393,497.74 24,209,445.60 - - 52,602,943.34 Baoding Changan bus Plant for vehicle test project 6,052,888.00 428,123.01 67,376.06 - 6,413,634.95 Beijing vehicle construction 163,600,842.58 63,733,108.34 71,184,633.68 - 156,149,317.24 project Engine Base of Nanjing 3,201,929.85 2,273,762.79 349,056.60 - 5,126,636.04 Yuzui Refitting factory 30,880,135.49 2,199,007.15 1,693,352.65 - 31,385,789.99 Car production Project Of 156,409,567.96 346,434,818.59 - - 502,844,386.55 Hefei Changan Nanjing Welding Technological 3,351,229.28 - 3,351,229.28 - - transformation project Yubei Factory 145,173.18 11,804.72 - - 156,977.90 Others 323,328,649.66 199,972,605.49 152,429,751.47 - 370,871,503.68 Total 3,234,173,155.52 1,956,917,735.43 462,849,859.01 - 4,728,241,031.94 (3) Impairment for construction in progress None 86 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 14. Liquidation of fixed assets In RMB Yuan Item Beginning Ending Reason machinery equipment 4,716.98 1,342,869.14 Asset retirement Total 4,716.98 1,342,869.14 15. Intangible assets Details of intangible assets In RMB Yuan Item Beginning Addition Deduction Ending I. Original cost 7,156,994,397.31 309,555,465.10 - 7,466,549,862.41 Land use rights 2,384,260,724.00 74,140,024.32 - 2,458,400,748.32 Software use rights 440,803,454.31 4,276,291.77 - 445,079,746.08 Trademark use rights 211,784,400.00 10,306.61 - 211,794,706.61 Non-patent technology 4,120,145,819.00 231,128,842.40 - 4,351,274,661.40 II. Accumulated amortization 2,885,416,546.63 349,623,578.41 - 3,235,040,125.04 Land use rights 280,991,802.54 25,278,204.72 - 306,270,007.26 Software use rights 396,959,100.18 17,108,763.10 - 414,067,863.28 Trademark use rights 153,453,466.62 8,749,999.98 - 162,203,466.60 Non-patent technology 2,054,012,177.29 298,486,610.61 - 2,352,498,787.90 III. Net value 4,271,577,850.68 -40,068,113.31 - 4,231,509,737.37 Land use rights 2,103,268,921.46 48,861,819.60 - 2,152,130,741.06 Software use rights 43,844,354.13 -12,832,471.33 - 31,011,882.80 Trademark use rights 58,330,933.38 -8,739,693.37 - 49,591,240.01 Non-patent technology 2,066,133,641.71 -67,357,768.21 - 1,998,775,873.50 IV. Impairment provision 223,632,721.01 - 3,600,948.83 220,031,772.18 Software use rights 21,319,804.81 - - 21,319,804.81 Non-patent technology 202,312,916.20 - 3,600,948.83 198,711,967.37 V. Book value 4,047,945,129.67 -40,068,113.31 -3,600,948.83 4,011,477,965.19 Land use rights 2,103,268,921.46 48,861,819.60 - 2,152,130,741.06 Software use rights 22,524,549.32 -12,832,471.33 - 9,692,077.99 Trademark use rights 58,330,933.38 -8,739,693.37 - 49,591,240.01 Non-patent technology 1,863,820,725.51 -67,357,768.21 -3,600,948.83 1,800,063,906.13 As at 30 June 2018, the intangible assets from internal research and development account for 44.87% of total 87 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report intangible assets. 16. Development expenditure In RMB Yuan Deduction Charged to income Charged to income Ending Item Beginning Addition Statement of the Statement of the Current Current period period Automobile 836,638,328.10 485,401,483.77 61,739,089.55 304,287,342.35 956,013,379.97 Development Total 836,638,328.10 485,401,483.77 61,739,089.55 304,287,342.35 956,013,379.97 17. Goodwill In RMB Yuan Impairment Investee Beginning Addition Deduction Ending provision Hebei Changan Automobile Co., Ltd 9,804,394.00 - - 9,804,394.00 - Nanjing Changan Automobile Co., Ltd - - - - 73,465,335.00 Total 9,804,394.00 - - 9,804,394.00 73,465,335.00 18. Long-term deferred expenses In RMB Yuan Item Beginning Addition Amortization Other deduction Ending Long-term deferred expenses 13,545,589.39 1,246,951.68 223,469.15 - 14,569,071.92 Total 13,545,589.39 1,246,951.68 223,469.15 - 14,569,071.92 19. Deferred tax assets and liabilities Recognized deferred tax assets and liabilities: In RMB Yuan Item Ending Beginning Deferred tax assets: Provision for the impairment of assets 208,635,488.68 168,817,572.61 Accrued expenses and contingent liabilities 786,960,665.17 769,116,660.06 Unpaid tech development expense and 76,787,383.53 77,899,364.21 advertisement expense 88 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Deferred income 446,396,210.91 479,391,091.10 Unpaid salary and bonus and others 43,367,541.84 38,633,123.29 Subtotal 1,562,147,290.13 1,533,857,811.27 Deferred tax liabilities: Available-for-sale financial assets on the changes 17,069,250.00 21,222,750.00 in fair value Others Subtotal 17,069,250.00 21,222,750.00 20. Provision for the impairment of assets In RMB Yuan Deduction Item Beginning Addition Ending Reversal Write-off I. Bad debt provision 40,187,117.99 2,919,594.90 816,594.99 139,260.29 42,150,857.61 II. Provision for obsolete 169,944,706.66 120,910,948.00 14,072,525.49 101,017,825.85 175,765,303.32 inventory III. Provision for the impairment 880,779,908.98 - - 33,638,931.71 847,140,977.27 of fixed assets IV. Provision for the impairment 223,632,721.01 - - 3,600,948.83 220,031,772.18 of intangible assets V. Provision for the impairment 73,465,335.00 - - - 73,465,335.00 of goodwill VI. Provision for the impairment of available-for-sale financial 1,809,274.00 - - - 1,809,274.00 assets Total 1,389,819,063.64 123,830,542.90 14,889,120.48 138,396,966.68 1,360,363,519.38 21. Short-term loans In RMB Yuan Item Ending Beginning Pledge loans 186,000,000.00 175,000,000.00 Guaranteed loans - 10,000,000.00 Credit loans Total 186,000,000.00 185,000,000.00 89 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 22. Notes payable In RMB Yuan Item Ending Beginning Commercial acceptance bill - 1,585,249,372.80 Bank acceptance bill 20,222,535,762.78 16,417,677,207.01 Total 20,222,535,762.78 18,002,926,579.81 23. Accounts payable In RMB Yuan Item Ending Beginning Accounts payable 15,501,582,938.54 21,902,826,194.15 total 15,501,582,938.54 21,902,826,194.15 24. Advances from customers In RMB Yuan Item Ending Beginning Advances from customers 1,935,292,614.32 3,878,382,556.43 total 1,935,292,614.32 3,878,382,556.43 25. Payroll payable 30 June 2018 In RMB Yuan Item Beginning Addition Deduction Ending Short term salary benefits 1,567,656,287.03 2,454,600,682.62 3,336,139,763.96 686,117,205.69 Defined contribution plans 68,156,035.30 272,419,202.68 256,353,067.81 84,222,170.17 Early retirement benefits 5,073,000.00 981,065.47 955,119.87 5,098,945.60 Total 1,640,885,322.33 2,728,000,950.77 3,593,447,951.64 775,438,321.46 Short term salary benefits as follows: 30 June 2018 In RMB Yuan Item Beginning Addition Deduction Ending Salary, bonus, allowance 1,207,501,206.86 1,949,500,550.62 2,841,138,372.75 315,863,384.73 and subsidy 90 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Employee benefit 207,402,348.95 111,906,449.19 109,943,371.44 209,365,426.70 Social insurance -174,158.92 166,910,544.15 164,398,082.31 2,338,302.92 Housing accumulation fund 59,222,161.27 156,439,370.15 155,442,121.89 60,219,409.53 Labor fund and employee 93,704,728.87 69,843,768.51 65,217,815.57 98,330,681.81 education fund Total 1,567,656,287.03 2,454,600,682.62 3,336,139,763.96 686,117,205.69 Defined contribution plans as follows: 30 June 2018 In RMB Yuan Item Beginning Addition Deduction Ending Basic retirement 60,088,662.53 265,417,650.40 248,719,236.73 76,787,076.20 security Unemployment 8,067,372.77 7,001,552.28 7,633,831.08 7,435,093.97 insurance Total 68,156,035.30 272,419,202.68 256,353,067.81 84,222,170.17 26. Taxes payable In RMB Yuan Item Ending Beginning Value-added tax 6,751,596.16 20,724,979.91 Consumption tax 215,617,720.51 315,331,520.62 Corporate income tax -34,319,675.86 -5,866,525.85 Individual Income tax 1,475,832.48 3,496,728.45 City maintenance and construction tax 1,563,752.49 27,566,226.75 Education additional expenses 1,058,841.54 20,798,543.86 Others 14,480,761.81 12,269,923.40 Total 206,628,829.13 394,321,397.14 27. Dividend payable In RMB Yuan Item Ending Beginning Dividend payable – A share dividend 2,157,790,283.66 - Dividend payable – Hebei Changan Minority 79,742.80 79,742.80 interests Total 2,157,870,026.46 79,742.80 91 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 28. Other payables In RMB Yuan Item Ending Beginning Deposits of dealer and supplier 48,038,638.84 64,938,552.00 Maintenance fees 193,799,878.35 166,703,421.92 Sales incentive fees - 23,159,476.00 Advertising fees 231,462,027.04 322,762,545.86 Warehousing and transport fees 273,094,120.79 169,100,711.73 Integrated service charges and miscellaneous 190,772,430.73 140,284,047.51 expenses Purchase and construction of fixed assets, 591,860,696.22 1,499,489,207.73 intangible assets and project deposits Others 291,098,071.43 212,575,448.23 Total 1,820,125,863.40 2,599,013,410.98 29. Contingent liabilities In RMB Yuan Item Beginning Addition Deduction Ending Warranty 2,423,958,274.70 481,330,044.04 363,245,192.27 2,542,043,126.47 Total 2,423,958,274.70 481,330,044.04 363,245,192.27 2,542,043,126.47 Note: Warranty is the estimated repair expenses for the sold vehicles within warranty period. 30. Other current liabilities In RMB Yuan Item Ending Beginning Accrued utilities 12,037,428.18 59,634,137.49 Accrued transportation fee 626,565,018.81 540,328,536.56 Accrued maintenance fee 68,247,641.79 55,133,842.44 Accrued technology transfer and development 293,074,345.01 164,331,878.15 fee Accrued commercial discount payable 2,018,529,715.36 1,928,754,888.23 Accrued market development expense 556,882,954.98 578,090,324.55 Accrued rental fee 93,753,857.96 96,417,863.95 Accrued consultancy fee 36,724,136.50 45,510,193.20 92 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Others 86,598,488.91 93,952,981.25 Total 3,792,413,587.50 3,562,154,645.82 31. Non-current liabilities due within one year In RMB Yuan Item Ending Beginning Non-current liabilities due within one year 13,423,420.00 13,151,946.67 Total 13,423,420.00 13,151,946.67 32. Long-term loans In RMB Yuan Item Ending Beginning Credit loan 13,423,420.00 19,727,920.00 Deduction of loans due within one year -13,423,420.00 -13,151,946.67 Total - 6,575,973.33 33. Special payables In RMB Yuan Item Beginning Addition Deduction Ending Project 863 2,603,472.95 - 151,423.33 2,452,049.62 Test on key technology of hybrid 1,346,665.57 - 4,200.00 1,342,465.57 electric vehicles New vehicle product 7,808,326.58 - 1,879,277.00 5,929,049.58 Automobile product chain sharing 4,550,973.75 - 3,513,440.44 1,037,533.31 platform Gasoline Engine Development 1,453,543.15 - 214,506.15 1,239,037.00 Changan Automobile E-type gasoline engine cylinder block, cylinder head 67,480,246.95 - 67,412,924.31 67,322.64 machine plus production line demonstration project Land relocation compensation 55,350,709.40 - - 55,350,709.40 Automotive order to delivery system 1,450,263.11 - - 1,450,263.11 project Industrialization of patented 662,296.98 - 462,296.98 200,000.00 technologies 93 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Vehicle network intelligent information terminal middleware key technologies 1,460,052.95 100,000.00 675,662.40 884,390.55 research and application Development and industrialization of 14,582,280.58 - 11,136,000.00 3,446,280.58 C206 pure electric cars System development of electromagnetic compatibility of key 1,334,037.55 - 288,323.56 1,045,713.99 accessories on electric cars Intalligent manufacturIng project 45,455,157.40 - 9,693,416.91 35,761,740.49 Lightweight design of automobile 63,564,705.20 - 786,375.01 62,778,330.19 structure All-region platform development 1,000,000.00 - 1,000,000.00 - technology LTE-V wireless transmission technology standardization and 2,586,540.75 - 500,019.24 2,086,521.51 prototype development verification Development and demonstration application of high performance 1,501,158.52 - 22,074.65 1,479,083.87 magnesium alloy Research and application of IoT control integration technology in intelligent 3,145,200.00 - 453,530.49 2,691,669.51 cabin system of automobile industry Others 13,271,519.63 27,398,400.00 3,370,853.78 37,299,065.85 Total 290,607,151.02 27,498,400.00 101,564,324.25 216,541,226.77 34. Deferred income 30 June, 2018 In RMB Yuan Item Beginning Addition Deduction Ending Government grants related to 2,825,085,486.08 17,358,750.00 77,441,797.78 2,765,002,438.30 assets Government grants related to 754,048,245.36 300,000,000.00 152,034,541.70 902,013,703.66 income Others 48,683,687.61 14,924,066.82 - 63,607,754.43 Total 3,627,817,419.05 332,282,816.82 229,476,339.48 3,730,623,896.39 2017 Item Beginning Addition Deduction Ending 94 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Government grants related to 2,762,931,782.46 246,106,000.00 183,952,296.38 2,825,085,486.08 assets Government grants related to - 900,000,000.00 145,951,754.64 754,048,245.36 income 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 30 June 2018, details of liabilities related to government grants are as follows: Recorded to Relates to Item Beginning Addition Ending other income asset/gain Project subsidy funds 2,393,683,325.86 - 52,423,241.54 2,341,260,084.32 Related to asset Subsidies for plant 343,254,680.06 - 24,748,714.76 318,505,965.30 Related to asset construction Technical innovation funds 16,150,000.00 - - 16,150,000.00 Related to asset Other asset - related subsidies 71,997,480.16 17,358,750.00 269,841.48 89,086,388.68 Related to asset Other income - related 754,048,245.36 300,000,000.00 152,034,541.70 902,013,703.66 Related to income subsidies Total 3,579,133,731.44 317,358,750.00 229,476,339.48 3,667,016,141.96 As at 31 December 2017, details of liabilities related to government grants are as follows: Recorded to Relates to Item Beginning Addition Ending non-operating income asset/gain Project subsidy funds 2,338,351,870.83 176,401,000.00 121,069,544.97 2,393,683,325.86 Related to asset Subsidies for plant 392,747,109.56 - 49,492,429.50 343,254,680.06 Related to asset construction Technical innovation 16,150,000.00 - - 16,150,000.00 Related to asset funds Other asset - related 15,682,802.07 69,705,000.00 13,390,321.91 71,997,480.16 Related to asset subsidies Other income - related Related to - 900,000,000.00 145,951,754.64 754,048,245.36 subsidies income Total 2,762,931,782.46 1,146,106,000.00 329,904,051.02 3,579,133,731.44 35. Share capital In RMB Yuan Current movement Beginning Issuance of Transfer of Ending Stock dividend others Subtotal shares reserve to 95 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report common shares The sum of 4,802,648,511.00 - - - - - 4,802,648,511.00 shares 36. Capital reserves In RMB Yuan Item Beginning Addition Deduction Ending Share premium 4,969,218,884.37 - - 4,969,218,884.37 Share-based payment 32,697,000.00 - - 32,697,000.00 Capital reserve transferred 44,496,899.00 - - 44,496,899.00 arising from the old standards Restricted capital reserve of 17,015,985.20 - - 17,015,985.20 equity investments Others 35,977,188.37 - - 35,977,188.37 Total 5,099,405,956.94 - - 5,099,405,956.94 37. Other comprehensive income In RMB Yuan Item Report period Same period of last year 1. Profits (loss) generated from available for sale financial -27,690,000.00 -53,960,000.00 assets Less: Available for sale financial assets arising from income tax -4,153,500.00 -8,094,000.00 effect Net - through other comprehensive income into the profits and losses of the current Subtotal -23,536,500.00 -45,866,000.00 2. Translation differences of foreign currency financial -19,190,455.30 -3,405,529.86 statements 3. Shares in the other comprehensive income of the investee 289,756,488.89 - accounted for according to the equity method Total 247,029,533.59 -49,271,529.86 38. Surplus reserves In RMB Yuan Item Beginning Addition Deduction Ending Statutory surplus 2,401,324,255.50 - - 2,401,324,255.50 96 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Total 2,401,324,255.50 - - 2,401,324,255.50 39. Retained earnings In RMB Yuan Item Sum Retained earnings at beginning of year before adjustments 35,184,073,061.94 Adjust the early undistributed profits total Retained earnings at beginning of year after adjustments 35,184,073,061.94 Add: Net profit belong to parent company 1,609,606,578.84 Less: the statutory surplus reserves Extract discretionary surplus reserve Extract general risk preparation Common stock dividends payable 2,157,790,283.66 Retained earnings at the end 34,635,889,357.12 40. Operating revenue and cost (1) Operating revenue and operating cost In RMB Yuan Item Report period Same period of last year Operating revenue 34,440,982,013.45 32,617,521,902.09 Other operating revenue 1,201,850,176.59 937,691,207.37 Operating cost 30,614,845,704.45 28,792,755,690.32 (2) Main business (divisions) In RMB Yuan Report period Same period of last year Item Operating revenue Operating cost Operating revenue Operating cost Motor industry 34,440,982,013.45 30,172,410,492.58 32,617,521,902.09 28,525,190,993.69 Total 34,440,982,013.45 30,172,410,492.58 32,617,521,902.09 28,525,190,993.69 (3) Main business (product) In RMB Yuan Report period Same period of last year Item Operating revenue Operating cost Operating revenue Operating cost Sale of goods 34,368,280,256.20 30,082,686,676.78 32,543,856,637.89 28,413,429,812.27 Outsourcing processing 72,701,757.25 89,723,815.80 73,665,264.20 111,761,181.42 97 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Total 34,440,982,013.45 30,172,410,492.58 32,617,521,902.09 28,525,190,993.69 (4) Main business areas (points) In RMB Yuan Report period Same period of last year Item Operating revenue Operating cost Operating revenue Operating cost Domestic 33,128,902,612.24 28,783,568,072.99 31,939,968,925.48 27,825,290,643.34 Overseas 1,312,079,401.21 1,388,842,419.59 677,552,976.61 699,900,350.35 Total 34,440,982,013.45 30,172,410,492.58 32,617,521,902.09 28,525,190,993.69 41. Tax and surcharges In RMB Yuan Item Report period Same period of last year Consumption tax 1,046,865,578.31 1,176,447,268.05 City maintenance and construction tax 81,462,766.85 94,761,334.23 Education additional expenses 60,907,556.48 76,037,881.67 Others 97,679,299.93 96,539,996.19 Total 1,286,915,201.57 1,443,786,480.14 42. Operating expenses In RMB Yuan Item Report period Same period of last year Payroll and welfare 179,109,833.87 167,605,237.83 Promotional fee and advertising fee 903,062,133.99 172,192,621.54 Transportation expenses 1,045,016,389.46 1,060,691,210.71 Travelling expenses 30,138,418.47 35,699,649.99 Package expenses 30,646,835.90 10,580,395.13 Administrative expenses 2,271,915.34 7,627,254.67 Selling service fee 309,623,568.29 478,091,205.25 Consulting fee 2,347,166.50 - Training fee 15,475,414.33 - Others 25,770,752.36 71,688,466.89 Total 2,543,462,428.51 2,004,176,042.01 98 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 43. General and administrative expenses In RMB Yuan Item Report period Same period of last year Payroll and welfare 1,033,979,823.22 753,919,030.38 Technology research expenses 481,875,764.34 496,834,118.06 Administrative expenses 6,553,837.65 10,389,794.81 Depreciation and amortization 482,901,113.09 439,047,564.15 Miscellaneous service charges 1,189,374.05 1,977,124.68 Tax fee - 2,222,681.88 Traffic expenses 26,145,159.06 25,708,114.03 Travelling expenses 56,659,448.61 13,619,514.39 Entertainment expenses 1,536,025.02 1,584,377.47 Others 64,560,717.01 40,431,751.26 Total 2,155,401,262.05 1,785,734,071.11 44. Financial expenses In RMB Yuan Item Report period Same period of last year Interest expense 13,996,367.31 40,703,286.60 Less: interest income 263,722,875.78 303,510,275.41 Exchange gain or loss 16,320,129.48 1,961,950.68 Others 7,887,536.68 14,023,435.98 Total -225,518,842.31 -246,821,602.15 45. Assets disposal income In RMB Yuan Included in 2018 non-recurring Item Report period Same period of last year gains and losses Fixed assets disposal income 18,771,809.69 8,914,486.07 18,771,809.69 Total 18,771,809.69 8,914,486.07 18,771,809.69 46. Impairment loss on assets In RMB Yuan 99 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Item Report period Same period of last year 1. Bad debt loss 2,102,999.91 -623,835.34 2. Impairment provision of obsolete inventory 106,838,422.51 87,591,687.47 3. Impairment provision of fixed assets - 5,154,868.33 Total 108,941,422.42 92,122,720.46 47. Investment income In RMB Yuan Item Report period Same period of last year Long-term equity investment income under equity 1,362,011,815.11 3,831,618,978.64 method Investment income obtained during the period of holding available-for-sale financial assets Total 1,362,011,815.11 3,831,618,978.64 48. Other income In RMB Yuan Item Report period Same period of last year Explain R&D special funds 526,000,000.00 500,000,000.00 Vehicle development project support 331,454,741.70 390,790,754.64 Research and development grants for 100,000,000.00 158,190,000.00 power and intelligent technology Deferred revenue amortization 78,888,221.15 79,980,008.84 Other government subsidies 79,888,256.47 24,874,142.38 Total 1,116,231,219.32 1,153,834,905.86 49. Non-operating income In RMB Yuan Item Report period Same period of last year Fines and others 29,318,896.76 43,495,774.09 Total 29,318,896.76 43,495,774.09 50. Non-operating expenses In RMB Yuan 100 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Item Report period Same period of last year Donation 22,300,000.00 1,584,000.00 Vehicle reward 4,080,100.00 - Fines and late fees 2,968,836.54 - Others 22,999,826.39 11,281,146.02 Total 52,348,762.93 12,865,146.02 51. Income tax expenses In RMB Yuan Item Report period Same period of last year Current income tax expense 43,577,796.68 145,560,653.05 Deferred income tax adjustment -28,289,478.85 -104,564,548.39 Total 15,288,317.83 40,996,104.66 52. Notes to cash flow statement (1) The major cash received relating to other operating activities In RMB Yuan Item Amount Interest income 238,562,155.21 Government grants related to operating activities 1,162,743,710.07 Others 319,580,006.32 Total 1,720,885,871.60 (2) The major cash paid relating to other operating activities In RMB Yuan Item Amount Selling expenses 2,054,729,026.35 Administrative expenses 638,520,325.74 Others 723,986,444.39 Total 3,417,235,796.48 (3) The major cash received relating to other investing activities In RMB Yuan Item Amount Government grants related to assets 17,358,750.00 Total 17,358,750.00 101 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report (4) The major cash received relating to other financing activities In RMB Yuan Item Amount Redemption of the deposit for acceptance 880,129,667.40 Total 880,129,667.40 (5) The major cash paid relating to other financing activities: None 53. Supplementary information of cash flow statement (1) Supplementary information of cash flow statement In RMB Yuan Supplementary information Current Amount Prior-period Amount 1. Cash flow relating to operating activities calculated by adjusting the net profit Net profit 1,617,481,673.47 4,667,462,601.55 Add: provision for assets impairment 108,941,422.42 92,122,720.46 Depreciation of fixed assets, oil and gas assets, productive 1,045,654,724.17 1,085,730,618.57 biological assets Amortization of intangible assets 349,623,578.41 307,724,434.91 Amortization of long-term deferred expense 113,355.78 154,198.52 Disposal loss/(income) on fixed assets, intangible assets and 41,953,319.31 -8,972,014.55 others long-term assets(with “-” for gains) Financial expense(with “-” for gains) -225,518,842.31 -246,821,602.15 Investment loss(with “-” for gains) -1,362,011,815.11 -3,831,618,978.64 Decrease in deferred tax assets(with “-” for gains) -28,289,478.86 -69,564,793.22 Decrease in inventory(with “-” for gains) -60,238,054.79 -3,461,887,164.25 Decrease in operating receivables(with “-” for gains) 9,804,878,336.43 6,028,658,163.96 Increase in operating payables(with “-” for gains) -6,933,248,936.62 403,223,316.88 Others 42,062,477.85 -6,506,777.93 Net cash flows from operating activities 4,401,401,760.15 4,959,704,724.11 2. Investment and financing activities involving no cash incomings / outgoings 3. Movement of cash and cash equivalents Ending balance of cash equivalents 23,767,643,401.89 26,809,266,380.20 Less: beginning balance of cash equivalents 21,451,305,090.53 22,993,432,067.05 Net increase in cash and cash equivalents 2,316,338,311.36 3,815,834,313.15 102 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report (2) Cash and cash equivalents In RMB Yuan Item Ending balance Beginning balance I. Cash Including: Cash on hand 11,825.00 33,089.31 Bank deposits that can be readily used 23,767,631,576.89 21,451,272,001.22 II. Ending balance of cash and cash equivalents 23,767,643,401.89 21,451,305,090.53 VIII. The change of consolidation scope 1. Business combination not under the Same Control □ Applicable √ Not Applicable 2. Combination under the same control □ Applicable √ Not Applicable 3. Counter purchase □ Applicable √ Not Applicable 4. Disposing subsidiary Whether there is a single disposal of the subsidiary company investment that is the loss of control of the situation □ Applicable √ Not Applicable Whether there is a situation of the loss of control over the period of the investment and the loss of control of the subsidiary company through multiple transactions □ Applicable √ Not Applicable 5. Change of consolidation scope due to other reasons (1) Newly established subsidiary companies during the reporting period Registered Type of Registered Capital(Ten Proportion of shares enjoyed Name Address business Thousand Yuan) by the group Xiamen Changan New Energy Fujian Province, Automobile Sales & Service Co., Sales 200 100.00 Xiamen Ltd. Guangzhou Changan New Guangdong Sales 400 100.00 103 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Energy Automobile Sales & Province, Service Co., Ltd. Guangzhou Fuzhou Fuqing Changan New Fujian Province, Energy Automobile Sales & Sales 200 100.00 Fuzhou Service Co., Ltd. Chongqing Changan New Energy Chongqing R&D 9900 100.00 Automobile Technology Co., Ltd. (2) Subsidiary clearing during the reporting period Registered Type of Registered Capital(Ten Proportion of shares enjoyed Name Address business Thousand Yuan) by the group Shanghai Changan Automobile Engineering Technology Co., Shanghai R&D 100 100.00 Ltd. IX. Stake in other entities 1. Rights in subsidaries The subsidiaries of the Company are as follows: Total proportion Main Registered Registered Nature of of shareholders Company name operating capital (ten place business (%) place thousand) Direct Indirect I. The subsidiary formed by establishment or investment Hebei Changan Automobile Co., Ltd. (Note Dingzhou Dingzhou Manufacturing 46,469 94.22 - 1) Chongqing Changan International Chongqing Chongqing Sales 1,376 100.00 - Automobile Sales Co., Ltd. Chongqing Changan Vehicle Networking Chongqing Chongqing Sales 8,850 100.00 - Technology Co., Ltd. Chongqing Changan Special Automobile Chongqing Chongqing Sales 500 50.00 - Sales Co., Ltd (Note 2) Chongqing Changan Automobile Supporting Chongqing Chongqing Sales 3,000 99.00 1.00 Service Co., Ltd. Chongqing Changan New Energy Chongqing Chongqing R&D 2,900 65.00 - Automobile Co. Ltd. Chongqing Changan Europe Design Turin, Italy Turin, Italy R&D EUR1,738.36 100.00 - Academy Co., Ltd. Nottingham, Nottingham, Changan United Kingdom R&D Center Co., United United R&D GBP2,482 100.00 - Ltd. Kingdom Kingdom Beijing Changan R&D Center Co., Ltd. Beijing Beijing R&D 100 100.00 - 104 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Harbin Changan R&D Center Co., Ltd. Habin Habin R&D 100 100.00 - Yokohama, Yokohama, Changan Japan Designing Center Co.,Ltd. R&D JPY2,000 100.00 - Japan Japan Changan United States R&D Center Co., Troy, United Troy, United R&D USD154 100.00 - Ltd. states states Moscow, Moscow, Changan Automobile Russia Co., Ltd. Sales USD20 100.00 - Russia Russia St. Paul, St. Paul, Changan Brazil Holdings Limited Sales BRL100 100.00 - Brazil Brazil Shenzhen Changan New Energy Automobile Shenzhen Shenzhen Sales 5000 100.00 - Service Co., Ltd Hangzhou Changan Yixing Technology Co., Hangzhou Hangzhou Lease 500 100.00 - Ltd. Hefei Changan Yixing Technology Co., Ltd. Hefei Hefei Lease 500 100.00 - Nanjing Changan Connected Car Technology Nanjing Nanjing Lease 500 100.00 - Co., Ltd. Beijing Changan Vehicle Networking Beijing Beijing Lease 500 100.00 - Technology Co., Ltd. Haikou Changan Vehicle Networking Haikou Haikou Lease 500 100.00 - Technology Co., Ltd. Changan Vehicle Networking (Shanghai) Shanghai Shanghai Lease 500 100.00 - Technology Co., Ltd. Tianjin Changan Vehicle Networking Tianjin Tianjin Lease 500 100.00 - Technology Co., Ltd. Xiamen Changan New Energy Automobile Xiamen Xiamen Sales 200 100.00 - Sales & Service Co., Ltd. Guangzhou Changan New Energy Guangzhou Guangzhou Sales 400 100.00 - Automobile Sales & Service Co., Ltd. Fuzhou Fuqing Changan New Energy Fuzhou Fuzhou Sales 200 100.00 - Automobile Sales & Service Co., Ltd. Chongqing Changan New Energy Chongqing Chongqing R&D 9900 100.00 - Automobile Technology Co., Ltd. II. The subsidiary formed by business combination not under common control Nanjing Changan Automobile Co., Nanjing Nanjing Manufacturing 60,181 84.73 - Ltd.(Note1) III. The subsidiary formed by business combination under common control Chongqing Changan Automobile sales China China Sales 350 100.00 - subsidiaries Hebei Baoding Changan Bus Co., Ltd. Dingzhou Dingzhou Manufacturing 3,000 100.00 - Hefei Changan Automobile Co.,Ltd. Hefei Hefei Manufacturing 77,500 100.00 - Note 1: The Company owns 93.79% and 95.70% of voting shares of Nanjing Changan Automobile Co., Ltd. And Hebei Changan Automobile Co., Ltd. respectively, the difference between proportion of voting shares and proportion of shares held is due to the 105 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report voting right consigned from minority shareholders. Note 2: The remaining shareholders of Chongqing Changan Special Automobile Co., Ltd. made an agreement with the Company that the remaining shareholders are to vote in accordance with the Company. The main financial and operating policies have been controlled by the Company, so it is included in the scope of consolidated financial statements. As at June 30, 2018, the Group has no subsidiaries with important minority interests. 2. Transctions result in change of holdingshare proportion but no effect in control of subsidiaries □ Applicable √ Not applicable 3. Stakes in joint ventures and associates Main Registered Total proportion of Registered Accounting Company name operating Nature of business capital (ten shareholders (%) place treatment place thousand) Direct Inderect I. Joint ventures Manufacture and sale Chongqing Changan Suzuki Chongqing Chongqing ofautomobiles, and USD19,000 50.00 - Equity Automobile Co., Ltd. components Manufacture and sale Jiangling Holding Co., Ltd. Nanjing Nanjing ofautomobiles, and 200,000 50.00 - Equity components Manufacture and sale Changan Ford Automobile Chongqing Chongqing ofautomobiles, and USD24,100 50.00 - Equity Co., Ltd. components Manufacture and sale Changan Mazda Automobile Nanjing Nanjing ofautomobiles, and USD11,097 50.00 - Equity Co., Ltd. components Manufacture and sale Changan Ford Mazda Engine Nanjing Nanjing ofautomobiles, and USD20,996 50.00 - Equity Co., Ltd. components Manufacture and sale Changan PSA Automobiles Shenzhen Shenzhen ofautomobiles, and 400,000 50.00 - Equity Co., Ltd. components II. Associates Develop, product and Chongqing Changan Kuayue sale of automobile and Chongqing Chongqing 6,533 34.30 - Equity Automobile Co., Ltd. components; import and export goods. Sale of Changan Chongqing Changan Kuayue Kuayue’ s automobile Chongqing Chongqing 300 34.30 - Equity Automobile Sales Co., Ltd. and agricultural cars and components. 106 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Technical advisory services for automobile For the car loan Beijing Fang’an Taxi Co., Ltd. Beijing Beijing 2,897.96 20.70 - Equity business Provide car loan; provide vehicle loans and operating equipment loans to car Chongqing Auto Finance Co., dealers, including the Chongqing Chongqing 476843.1 28.66 - Equity ltd. construction loans of exhibition hall,spare parts loans and maintenance equipment loans, etc. Zhenjiang Demao Hairun Non-securities equity Equity Investment Fund investment activities Zhenjiang Zhenjiang 150,001 32.67 - Equity Partnership and related consulting Business (limited partnership) services Production and Hangzhou Chelizi Intelligent manufacture of Hangzhou Hangzhou 630 20.00 - Equity Technology Co., Ltd. computer software and automotive electronics X. Risks associated with financial instruments 1. Classification of financial instruments The book values of different classes of financial instruments are as follows: Financial assets In RMB Yuan Loans and accounts Available-for-sale financial June 30,2018 Total receivable assets Cash 24,067,745,140.49 - 24,067,745,140.49 Notes receivable 18,390,476,412.74 - 18,390,476,412.74 Accounts receivable 1,925,729,920.41 - 1,925,729,920.41 Other receivables 2,096,542,096.16 - 2,096,542,096.16 Available-for-sale financial assets - 564,227,000.00 564,227,000.00 Interest receivable 55,081,274.30 - 55,081,274.30 Total 46,535,574,844.10 564,227,000.00 47,099,801,844.10 Financial liabilities 107 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report In RMB Yuan June 30,2018 2017 Short-term loans 186,000,000.00 185,000,000.00 Notes payable 20,222,535,762.78 18,002,926,579.81 Accounts payable 15,501,582,938.54 21,902,826,194.15 Dividend payable 2,157,870,026.46 79,742.80 Other payables 1,820,125,863.40 2,599,013,410.98 Non-current liabilities due within one year 13,423,420.00 13,151,946.67 Long-term loans - 6,575,973.33 Total 39,901,538,011.18 42,709,573,847.74 2. Transfer of financial assets The transferred financial assets that entirely derecognized but continuing involved As of June 30 2018, the Group has endorsed bank acceptance bill with a carrying amount of RMB 961,310,940 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 first half of 2018, the Group didn’t recoganize profit or loss on the transferring date. No revenue or expense should be recogazied 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 2014, 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 30June 2017, among the Group’s collections with specific credit risk, 36.39% of accounts receivables of the Group are due from top five clients respectively. 108 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report An analysis of financial assets of individual impairment: June 30, 2018 In RMB Yuan Total Book value Impairment provision Accounts 1,925,729,920.41 1,963,278,031.34 37,548,110.93 receivable Other receivables 2,096,542,096.16 2,101,144,842.84 4,602,746.68 Notes receivable 18,390,476,412.74 18,390,476,412.74 - Available-for-sale 564,227,000.00 564,227,000.00 - financial assets Interest receivable 55,081,274.30 55,081,274.30 - Although the existence of the company in Part of the accounts receivable impairment due to credit risk, but should be single recognized impairment losses of accounts receivable balance of accounts receivable the ending balance of proportion is very small, and the company has been confirmed according to the situation of credit risk the possibility of credit risk loss. For no signs that need individual recognized impairment losses of accounts receivable, the company according to the history of the credit risk of loss occur aging analysis of the proportion of reasonably estimate the possible loss of credit risk, and the provision for bad debt provision in the balance sheet date. Therefore, the company does not exist because of the occurrence of credit risk and leads to a significant loss. Liquidity risk The Group adopts cycle liquidity planning instrument to manage capital shortage risks. The instrument takes into consideration the maturity date of financial instruments plus estimated cash flow from the Group’s operations. The Group’s objective is to maintain a balance between continuity of funding and flexibility and sufficient cash to support operating capital through financing functions by the use of bank loans, debentures, etc. Market risk Interest rate risk The Group’s revenue and operating cash flows are seldomly influenced by the interest fluctuation. As at June 30, 2018, the Group’s loans are bearing fixed interest rate and the Group is not hedging the risk currently. Foreign currency risk The Group’s exposures to fluctuation in foreign currency exchange rate mainly arise from operating activities where transactions are settled in currencies other than the units' functional currency and net investment to offshore subsidiary. In 2018, the Group has less transactional currency exposures of its total revenue that is valued in currencies other than the units' functional currency. Since most of the Group’s businesses are opertated 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 VII 9) as at June 30, 2018. The Group’s listed investments are listed on the Shanghai 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. In RMB Yuan Carrying amount of equity investments Change in fair value Increase/ 109 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report (decrease) in net profit June 30, 2018 Shanghai- Available for sale 136,675,000.00 5% 6,833,750.00 Shanghai- Available for sale 136,675,000.00 -5% -6,833,750.00 Dec. 31, 2017 Shanghai- Available for sale 164,365,000.00 5% 8,218,250.00 Shanghai- Available-for-sale 164,365,000.00 -5% -8,218,250.00 4. Capital management The main goal of the Group’s capital management is to ensure that the ability of continuous operation, and maintain a healthy capital ratios in order to support business development, and to maximize shareholder value. The Group manages the capital structure and adjusts it with the change of economy trend and the risk feature of the assets. To maintain or adjust the capital structure, the Group can rectify dividend distribution, return capital to shareholders or issue new shares. The Group is not subject to external mandatory capital requirements constraints. The goal, principle and procedure of capital management stay the same in First half of 2018. On June 30, 2018 and December 31, 2017, the Group’s leverage ratio on the balance sheet date is as follows: June 30, 2018 December 31, 2017 Leverage ratio 53.01% 55.28% XI. Disclosure of fair value 1. Assets and liabilities measured at fair value June 30, 2018 In RMB Yuan Input measured at fair value Quoted price in Important and Important but active market observable input unobservable input Total (The first level) (The second level) (The third level) Available-for-sale financial assets- equtiy 136,675,000.00 - - 136,675,000.00 instruments December 31, 2017 In RMB Yuan Input measured at fair value Quoted price in Important and observable Important but active market input unobservable input Total (The first level) (The second level) (The third level) Available-for-sale 164,365,000.00 - - 164,365,000.00 110 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report financial assets- equtiy instruments 2. Assets and liabilities disclosed in fair value Up to June 30, 2018, there is neither transference of financial assets and liabilities between first and second level, nor transference to or from third level. Fair value of financial instruments Following are book value and fair value of financial instruments of the group except for equity instruments whose fair value is similar with book value and those neither have quoted market price in active market nor be reliably measured. In RMB Yuan Book value Fair value Beginning Ending Beginning Ending Finacial assets Financial assets available for sale- equtiy instruments 136,675,000.00 164,365,000.00 136,675,000.00 164,365,000.00 Finacial liabilities Bonds payable Non current liabilitiesdue within one year Management has assessed and concluded that the fair value of the accounts, including cash, notes receivable, accounts receivable, other receivables, short-term loans, intrest payable, dividend payables, other payables, notes payable, accounts payable and so on, equal to book value because of their 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. Bonds payable are carried at armotized cost and thoses fair value are determined by the settlement price on 30 June 2018 and 31 December 2017, which are traded in open and active market. XII. Related parties and related party transactions 1. Parent company of the Company Proportion Proportion Related of shares in of voting Final Parent Company Place of Legal Nature of Registered Organization parties’ the rights in the controlling company type registration representative the business capital Code relationship Company company party (%) (%) China Manufacture China South Changan and sale of controlling Liability 4,582,373,7 Industries 9111000-0710 Automobile Beijing Xu Liuping automobiles, 19.33% 19.33% shareholder limited 00.00 Group 93-39484 Group engine, and corporation Co ,Ltd. components Main business and products: design, development, manufacturing and marketing of automobiles, motorcycles, automobile motorcycle engines, automobile motorcycle parts and components; Sales of optical products, electronic and optoelectronic 111 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report products,night vision equipments, information and communications equipment; technology development, technology transfer, technical consulting, technical training, technical services related to the above mentioned business; Import and export business; Asset acquisitions, recapitalization. 2. Subsidiaries See subsidiaries in IX. Stake in other entities. 3. Other related parties Other related parties Relationship Changan Ford Automobile Co.,Ltd. Joint venture Changan Ford Automobile Co., Ltd. - Harbin branch Joint venture Changan Mazda Automobile Co.,Ltd. Joint venture Changan Ford Mazda Engine Co., Ltd. Joint venture Chongqing Changan Suzuki Automobile Co., Ltd. Joint venture Jiangling Holding Co., Ltd. Joint venture Jiangling Holding Landwind Plant Joint venture Changan PSA Automobiles Co., Ltd. Joint venture Chongqing Changan Kuayue Automobile Co., Ltd. Associated enterprise Chongqing Changan Industrial (Group) Co., Ltd. Subordinate company of South Industries Chongqing Changan Real Estate Development Co., Ltd. Subordinate company of Changan Industries Chongqing Changan Construction Engineering Co., Ltd. Subordinate company of Changan Industries Sichuan Hongguang Machinery and Electrics Co., Ltd. Subordinate company of Changan Industries Chongqing Changan Property Management Co., Ltd. Subordinate company of Changan Industries China Changan Automobile Co., Ltd. Parent company China Changan Automobile Co., Ltd. – Chongqing Qingshan Transmission Branch of China Changan Branch Sichuan Jianan Industrial Co., Ltd. Subordinate company of China Changan Sichuan Jian'an Industrial Co., Ltd. - Chengdu Jianan Axle Branch Subordinate company of China Changan South Air International Co.,Ltd. Subordinate company of China Changan Sichuan Ningjiang Shanchuan Machinery Co, Ltd. Subordinate company of China Changan Sichuan Ningjiang Shanchuan Machinery Co, Ltd. - Longchang Shock Subordinate company of China Changan Absorber Branch Chengdu Huachuan Electric Equipment Co., Ltd. Subordinate company of China Changan Chongqing Automobile Air-Conditioning Co., Ltd. Subordinate company of China Changan Csgc Trw Chassis Systems Co.,Ltd. Subordinate company of China Changan Chongqing Changan Min Sheng Logistics Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Auto Sales and Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Longrui Auto Sales and Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Longxing Auto Sales and Service Co., Ltd. Subordinate company of China Changan Guangxi Wanyou Auto Sales and Service Co., Ltd. Subordinate company of China Changan Nanning Wanyou Auto Sales and Service Co., Ltd. Subordinate company of China Changan 112 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chengdu Wanyou Xiangyu Auto Sales and Service Co., Ltd. Subordinate company of China Changan Chengdu Wanyou Trading Co., Ltd. Subordinate company of China Changan Hafei Motor Co., Ltd. Subordinate company of China Changan Chongqing Anfu Automobile Marketing Co., Ltd. Subordinate company of China Changan China Changan Automobile Group Tianjin Sales Co., Ltd. Subordinate company of China Changan Chengdu Ningjiang Zhaohe Automobile Components Co., Ltd. Subordinate company of China Changan Harbin Dongan Auto Engine Co., Ltd. Subordinate company of China Changan Harbin Dongan Automotive Engine Manufacturing Co., Ltd. Subordinate company of China Changan United Prosperity Investment Co., Ltd (Hongkong) Subordinate company of China Changan United Prosperity Investment Co., Ltd (Shenzhen) Subordinate company of China Changan Wanyou Automobile Investment Co., Ltd. Subordinate company of China Changan Chengdu Wanyou Auto Trade Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Economic Development Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Economic Development Co., Ltd. - Jiangnan Branch Subordinate company of China Changan Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. – Guangxi Subordinate company of China Changan Branch Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. – Guizhou Subordinate company of China Changan Branch Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. – Parts Subordinate company of China Changan Branch Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. – Sichuan Subordinate company of China Changan Branch Chongqing Wanyou Zunda Automobile Sales & Service Co., Ltd. –Yunnan Subordinate company of China Changan Branch Yunnan Wanyou Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Guizhou Wanyou Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Yunnan Xiangyu Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Chongqing Fuji Supply Chain Management Co., Ltd. Subordinate company of China Changan Panzhihua Wanyou Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Ya'an Wanyou Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Ducheng Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Chongqing Wanyou Xingjian Automobile Sales & Service Co., Ltd. Subordinate company of China Changan Luzhou Wanyou Automobile Service Co., Ltd. Subordinate company of China Changan Luzhou Wanyou Automobile Service Co., Ltd. – Naxi Branch Subordinate company of China Changan Chongqing Qingshan Transmission Sales Co., Ltd. Subordinate company of South Group Hubei Xiaogan Huazhong Automobile Light Co., Ltd. Subordinate company of South Group Chongqing Changrong Machinery Co., Ltd. Subordinate company of South Group Chengdu Lingchuan Special Industry Co., Ltd. Subordinate company of South Group Chengdu Lingchuan Vehicle Oil Tank Co., Ltd. Subordinate company of South Group Chongqing Changfeng Jiquan Machinery Co., Ltd. Subordinate company of South Group Yunnan Xiyi Industries Co., Ltd. Subordinate company of South Group Chongqing Shangfang Automobile Fittings Co., Ltd. Subordinate company of South Group 113 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chongqing Dajiang Xinda Vehicles Shares Co., Ltd. Subordinate company of South Group Chongqing Dajiang Yuqiang Plastic Co., Ltd. Subordinate company of South Group Chongqing Jianshe Automobile Air-conditioner Co., Ltd. Subordinate company of South Group China South Industries Group Finance Co., Ltd. Subordinate company of South Group Southwest Ordnance Industry Corporation Subordinate company of South Group Chongqing Wanyou Engineering Installation Co., Ltd. Subordinate company of South Group Chengdu Wanyou Filter Co., Ltd. Subordinate company of South Group Chongqing Yihong Engineering Plastic Products Co., Ltd. Subordinate company of South Group Beijing Beiji Mechanical and Electrical Industry Co., Ltd. Subordinate company of South Group Chengdu Jialing Huaxi Optical & Precision Machinery Co., Ltd. Subordinate company of South Group Chongqing Nexteer steering system co., Ltd Subordinate company of South Group Chongqing Dajiang Jiexing Forging Co., Ltd. Subordinate company of South Group Chongqing Jialing Yimin Special Equipment Co., Ltd. Subordinate company of South Group Chengdu Guangming Tianzhong Environmental Protection Technology Co., Subordinate company of South Group Ltd. Chongqing Xiyi Automobile Connecting Rod Co., Ltd. Subordinate company of South Group 4. Related-party transaction (1) Goods purchased and services received In RMB Yuan Whether it Nature of the Approved exceeds the Related parties Current amount Prior-period amount transaction transaction amount transaction amount Changan Ford Automobile Purchase of spare 50,528,796.32 134,632,100.00 No 75,369,099.10 Co.,Ltd. parts Chongqing Changan Suzuki Purchase of spare 40,015,153.39 148,209,400.00 No 91,610,674.73 Automobile Co., Ltd. parts Changan Peugeot Citroen Purchase of spare - 270,394,300.00 No - Automobile Co., Ltd. parts Chongqing Xiyi Automobile Purchase of spare -4,295.93 - No 147,693.40 Linkage Rod Co., Ltd. parts Chongqing Changan Kuayue Accept service 2,185,200.00 22,000,000.00 No 53,411,400.00 Automobile Co., Ltd. Purchase of spare Changan Industries Group Co. parts and accept 35,491,790.41 29,081,000.00 Yes 22,284,149.38 Ltd. service Chongqing Changan Transportation fee 669,938,773.76 2,683,286,600.00 No 768,217,130.41 Minsheng Logistics Co., Ltd Sichuan Hongguang Purchase of spare 5,247,314.70 18,211,100.00 No 3,742,906.54 114 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Whether it Nature of the Approved exceeds the Related parties Current amount Prior-period amount transaction transaction amount transaction amount Machinery and Electrics Co., parts Ltd. Chongqing Changan Property Accept service 1,880,756.31 4,576,100.00 No 3,119,331.42 Management Co., Ltd. Chongqing Changan Purchase of spare Construction Engineering Co., 767,688.60 296,575,200.00 No - parts Ltd. China Changan Automobile Purchase of spare - - No 310,385.23 Co., Ltd. parts China Changan Automobile Co., Ltd. –Chongqing Purchase of spare 790,009,094.86 2,215,145,600.00 No 947,612,141.41 Qingshan Transmission parts Branch Sichuan Jian'an Industry Co., Purchase of spare 396,002,416.92 1,048,424,200.00 No 470,981,559.71 Ltd. parts Sichuan Jian'an Industrial Co., Purchase of spare Ltd.–Chengdu Jian'an -20,068.28 7,573,100.00 No - parts Automobile Bridge Branch Southern Inte Air Purchase of spare 278,286,144.78 745,430,600.00 No 227,232,590.96 Conditioning Co., Ltd. parts Sichuan Ningjiang Shanchuan Purchase of spare 68,700,314.53 208,112,800.00 No 105,119,671.81 Machinery Co, Ltd. parts Sichuan Ningjiang Shanchuan Machinery Co, Purchase of spare 14,571,788.09 66,717,300.00 No 55,686,449.39 Ltd.-Longchang Shock parts Absorber Branch Chengdu Huachuan Electric Purchase of spare 147,010,890.28 358,368,300.00 No 172,671,760.20 Equipment Co., Ltd. parts Chongqing Changfeng Jiquan Purchase of spare 11,501,147.75 44,057,400.00 No 20,665,043.14 Machinery Co., Ltd. parts Southern Tianhe Chassis Purchase of spare 302,296,647.64 925,778,600.00 No 255,910,955.40 System Co., Ltd. parts Chengdu Ningjiang Zhaohe Purchase of spare Automobile Components Co., 11,369,508.22 37,672,400.00 No 23,211,614.17 parts Ltd. 115 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Whether it Nature of the Approved exceeds the Related parties Current amount Prior-period amount transaction transaction amount transaction amount Harbin Dongan Auto Engine Purchase of spare 407,727,748.76 1,057,646,400.00 No 470,425,124.49 Co., Ltd. parts Harbin Dongan Automotive Purchase of spare Engine Manufacturing Co., 232,165,111.94 789,592,900.00 No 885,672,904.03 parts Ltd. Hubei Xiaogan Huazhong Purchase of spare 41,165,671.16 92,815,200.00 No 41,495,725.39 Automobile Light Co., Ltd. parts Chongqing Changrong Purchase of spare 12,476,284.96 71,831,400.00 No 11,785,659.17 Machinery Co., Ltd. parts Chengdu Lingchuan Special Purchase of spare 16,648,659.65 80,733,900.00 No 13,228,609.04 Industry Co., Ltd. parts Chengdu Lingchuan Vehicle Purchase of spare 36,629,643.10 68,885,600.00 No 23,549,781.40 Oil Tank Co., Ltd. parts Yunnan Xiyi Industries Co., Purchase of spare 50,426,409.01 122,033,400.00 No 44,919,506.45 Ltd. parts Chongqing Shangfang Purchase of spare 25,730,159.90 77,385,800.00 No 37,750,754.20 Automobile Fittings Co., Ltd. parts Chongqing Dajiang Xinda Purchase of spare 81,105,898.94 88,924,300.00 No 13,876,784.01 Vehicles Shares Co., Ltd. parts Chongqing Dajiang Yuqiang Purchase of spare 161,444,150.25 213,901,300.00 No 1,683,008.98 Plastic Co., Ltd. parts Chongqing Jianshe Purchase of spare Automobile Air-conditioner 44,409,783.45 95,165,000.00 No 95,402,778.55 parts Co., Ltd. Chongqing Wanyou Zunda Purchase of spare Automobile Sales & Service - - No 57,762,014.69 parts Co., Ltd. Chengdu Wanyou Filter Co., Purchase of spare 93,328,718.59 165,183,400.00 No 99,629,474.41 Ltd. parts Chongqing Yihong Purchase of spare Engineering Plastic Products 14,426,634.47 27,087,300.00 No 20,476,902.56 parts Co., Ltd. Chengdu Ningxing Purchase of spare - 24,882,700.00 No 5,857,317.24 Automobile Spring Co., Ltd parts Chengdu Jialing Huaxi Optical Purchase of spare 7,735,029.09 25,721,400.00 No 5,426,840.77 116 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Whether it Nature of the Approved exceeds the Related parties Current amount Prior-period amount transaction transaction amount transaction amount & Precision Machinery Co., parts Ltd. Chongqing Qingshan Purchase of spare 3,372,342.00 6,989,800.00 No 2,765,777.75 Transmission Sales Co., Ltd. parts Chongqing Dajiang Jiexing Purchase of spare 778,239.55 14,895,800.00 No 2,152,623.81 Forging Co., Ltd. parts Beijing Beiji Purchase of spare Mechanical&Electric 41,364.74 201,300.00 No 69,412.93 parts Induustry Co., Ltd Chongqing Jialing Yimin Purchase of spare No Special Equipment Co., Ltd. parts Chengdu Guangming Tianzhong Environmental Purchase of spare -1,771.14 - No - Protection Technology Co., parts Ltd. United Prosperity Investment Accept service No Co., Ltd(Note 1) Chongqing Nexteer steering Purchase of spare 307,967,283.63 869,956,300.00 No 51,877,949.09 system co., ltd parts Chongqing Wanyou Economic Purchase of spare 191,811,118.53 368,667,200.00 No - Development Co., Ltd. parts Chongqing Wanyou Engineering Installation Co., Engineer material - 32,025,000.00 No - Ltd. Purchasing Jiangling Holdings Co., Ltd. complete vehicles 211,813,380.00 1,034,052,800.00 No - and parts Total 4,766,980,922.93 14,592,824,300.00 5,183,113,505.36 The price of the Group’s purchase from related parties is based on contracts agreed by both parties. Note1: During the reporting period, United Prosperity Investment Co., Ltd did not provide trade financing services to the company for the overseas procurement of machine equipments. (2) Goods sold and services offered In RMB Yuan Related parties Nature of the transaction Current amount Prior-period Amount 117 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Changan Ford Automobile Sales of raw materials and 959,683.96 15,719,208.35 Co.,Ltd. components Chongqing Changan Suzuki Sales of raw materials and 9,470,279.42 8,890,992.31 Automobile Co., Ltd. components Sales of raw materials and Jiangling holdings co., ltd 92,466,850.38 29,782,109.60 components Chongqing Changan Sales of raw materials and 49,034,525.61 - Minsheng Logistics Co., Ltd components Sichuan Hongguang Sales of raw materials and Machinery and Electrics 965,831.85 1,074,846.49 components Co., Ltd. China Changan Automobile Co., Ltd. –Chongqing Sales of raw materials and 3,754.72 52,935.85 Qingshan Transmission components Branch Chengdu Huachuan Electric Sales of raw materials and - 24,075.47 Equipment Co., Ltd. components Southern Tianhe Chassis Sales of raw materials and 3,754.72 72,181.13 System Co., Ltd. components Chongqing Anfu Sales of vehicles,spare 4,504,052.51 22,148,398.28 Automobile Co., Ltd. parts China Changan Automobile Sales of vehicles,spare Group Tianjin Sales Co., 96,595,781.73 74,515,797.49 parts Ltd. Harbin Dongan Automotive Engine Manufacturing Co., Technical service 541,580.93 18,944,981.56 Ltd. Harbin Dongan Auto Engine Sales of spare parts 5,807,864.29 27,764,630.20 Co., Ltd. Wanyou Automobile Sales of vehicles, spare 278,840,354.88 437,016,833.02 Investment Co.,Ltd parts Chengdu Lingchuan Special Sales of spare parts 10,007.55 4,082,092.31 Industry Co., Ltd. Yunnan Xiyi Industries Co., Sales of spare parts 4,070,438.35 2,645,320.52 Ltd. ChongqingChangan Kuayue Sales of spare parts 26,078.68 632,918.59 Automobile Co., Ltd. Southern Inte Air Sales of spare parts 4,708.49 4,708.49 Conditioning Co., Ltd. Chongqing Wanyou Zunda Sales of vehicles, spare Automobile Sales & Service - 731,784,709.20 parts Co., Ltd. 118 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chongqing Wanyou Zunda Automobile Sales and Sales of vehicles, spare 12,136,503.95 154,535,311.08 Service Co., Ltd. Guangxi parts Branch Nanning Wanyou Sales of vehicles, spare Automobile Sales & Service 18,660,666.94 32,281,963.18 parts Co., Ltd. Chongqing Wanyou Zunda Automobile Sales and Sales of vehicles, spare 57,749,959.33 542,474,119.33 Service Co., Ltd. Sichuan parts Branch Chengdu Wanyou Xiangyu Sales of vehicles, spare Auto Sales and Service Co., 564,089,962.66 471,785,083.17 parts Ltd. Chongqing Shangfang Sales of vehicles, spare Automobile Fittings Co., 35,037.74 14,445.28 parts Ltd. Chongqing Dajiang Xinda Sales of vehicles, spare - 50,513.21 Vehicles Shares Co., Ltd. parts Chongqing Wanyou Zunda Automobile Sales and Sales of vehicles, spare 41,553,601.57 401,384,549.34 Service Co., Ltd. Yunnan parts Branch Chongqing Wanyou Zunda Automobile Sales and Sales of vehicles, spare 27,679,119.48 539,172,575.27 Service Co., Ltd. Guizhou parts Branch Yunnan Xiangyu Auto Sales Sales of vehicles, spare 67,497,061.87 38,598,636.78 and Service Co., Ltd. parts Chengdu Wanyou Filter Co., Sales of vehicles, spare 3,754.72 48,120.75 Ltd. parts China South Industries Regulatory charges 5,333,618.49 53,011,538.65 Group Finance Co.,Ltd Changan Mazda Automobile Sales of vehicles, spare 1,064,339.48 - Co., Ltd. parts Sichuan Jian'an Industry Other service fees 3,754.72 - Co., Ltd. Sichuan Ningjiang Shanchuan Machinery Co., Other service fees 3,754.72 - Ltd. Guangxi Wanyou Sales of vehicles, spare Automobile Sales & Service 79,266,636.74 - parts Co., Ltd. 119 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chengdu Wanyou Auto Sales of vehicles, spare 307,793,749.81 - Trade Service Co., Ltd. parts Chongqing Changrong Other service fees 3,754.72 - Machinery Co., Ltd. Chongqing Construction Vehicle Air Conditioner Other service fees 3,754.72 - Co., Ltd. Chongqing Wanyou Sales of vehicles, spare Economic Development Co., 466,874,730.20 - parts Ltd. Chongqing Wanyou Sales of vehicles, spare Economic Development Co., 318,109,175.14 - parts Ltd. Jiangnan Branch Chongqing Wanyou Zunda Automobile Sales and Sales of spare parts 58,340,829.40 - Service Co., Ltd. Parts Branch Yunnan Wanyou Sales of vehicles, spare Automobile Sales & Service 350,671,270.23 - parts Co., Ltd. Guizhou Wanyou Sales of vehicles, spare Automobile Sales & Service 452,909,126.31 - parts Co., Ltd. Panzhihua Wanyou Automobile Sales & Service Sales of spare parts 11,045.54 - Co., Ltd. Ya'an Wanyou Automobile Sales of spare parts 16,589.56 - Sales & Service Co., Ltd. Chongqing Wanyou Ducheng Automobile Sales Sales of spare parts 72,903.23 - & Service Co., Ltd. Chongqing Wanyou Xingjian Automobile Sales Sales of spare parts 71,605.18 - & Service Co., Ltd. Zhangzhou Wanyou Automobile Service Co., Sales of spare parts 53,390.03 - Ltd. Total 3,373,315,244.55 3,608,513,594.90 The price of the Group’s purchase from related parties is based on contracts agreed by both parties. (3) Related-party leasing In RMB Yuan Lessee Type of leased Starting date Expiring date Report period recognized 120 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report assets rental Jiangling Holdings Co., Ltd. Equipment 2017.04.01 2019.03.03 4,422,030.00 Chongqing Changan Min Sheng Building 2016.09.01 2019.08.31 951,550.00 Logistics Co., Ltd. Chongqing Changan Industrial Building 2018.01.01 2032.12.31 3,283,373.71 Co., Ltd. Rent assets from related parties In RMB Yuan Type of leased Report period recognized Lessor Starting date Expiring date assets rental Chongqing Changan Min Sheng Storeroom 2017.12.17 2018.12.31 714,065.94 Logistics Co., Ltd. Chongqing Changan Min Sheng Storeroom 2017.06.08 2017.11.30 470,058.49 Logistics Co., Ltd. Chongqing Changan Suzuki Site 2017.03.01 2018.02.28 104,899.04 Automobile Co., Ltd. Chongqing Changan Real Estate Site 2018.01.01 2018.12.31 764,274.28 Development Co., Ltd. Chongqing Changan Property Building 2017.04.01 2018.03.31 129,548.25 Management Co., Ltd. Chongqing Changan Property Building 2018.04.01 2018.04.30 43,182.75 Management Co., Ltd. Chongqing Changan Real Estate Building 2018.01.01 2018.12.31 304,833.00 Development Co., Ltd. 121 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report (4) Other related transactions Integrated service charges In RMB Yuan Same period of last period Related parties Nature of the transaction Report period Amount Amount Payment of land rental fees 15,738,619.47 122,460.45 Payment of building rental fees 2320098.28 - Changan Industries Payment of utilities 41,238,737.71 45,214,566.89 Group Co. Ltd Payment of fire fighting fees - 685,000.00 Others 2,604,188.16 3,127,196.57 Total 61,901,643.62 49,149,223.91 Purchase of project materials In RMB Yuan Related parties Report period Amount Same period of last period Amount Chongqing Changan Construction Co., Ltd 285,684,556.02 101,429,877.83 Chongqing Changan Min Sheng Logistics Co., Ltd. 362,735.93 5,493,075.52 Chongqing wanyou engineering installation co., ltd 49,273,687.28 20,944,360.81 Total 335,320,979.23 127,867,314.16 Staff expenses for technical supporting In RMB Yuan Related parties Report period Amount Same period of last period Amount Changan Mazda Automobile Co.,Ltd. 5,113,134.48 5,132,075.47 Chongqing Changan Suzuki Automobile Co., Ltd. 1,539,750.64 - Changan Ford Automobile Co.,Ltd. 10,500,543.45 10,762,414.02 Total 17,153,428.57 15,894,489.49 Techonology development service charges In RMB Yuan Related parties Report period Amount Same period of last period Amount Jiangling Holdings Co., Ltd. 1,886,792.45 - Total 1,886,792.45 - Collection of trademark use rights fees In RMB Yuan 122 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Related parties Report period Amount Same period of last period Amount Chongqing Changan Kuayue Automobile Co., Ltd. 6,483,396.23 3,744,169.81 Related party monetary funds In RMB Yuan Related parties Ending Amount Beginning Amount China South Industries Group Finance Co., Ltd 4,570,371,194.59 4,449,345,493.13 Changan Automobile Finance Co., Ltd 1,500,000,000.00 1,500,000,000.00 In the first half of 2018, the annual rate of return of the company in the financial limited liability company of China South Industries Group Finance Co., Ltd and Changan automobile finance co., ltd is 1.9 % and 3.915 % respectively. Borrowing Short-term borrowing In RMB Yuan Related parties Ending Amount Beginning Amount China South Industries Group Finance Co., Ltd 186,000,000.00 175,000,000.00 Interest income of deferred payment In RMB Yuan Related parties Report period Amount Same period of last period Amount Chongqing Wanyou Zunda Automobile Sales & - 131,052.14 Service Co., Ltd. Wanyou Automobile Investment Co., Ltd. 2,186.32 705,979.48 Chongqing Wanyou Zunda Automobile Sales and - 19,045.30 Service Co., Ltd. Guangxi Branch Chongqing Wanyou Zunda Automobile Sales and - 81,722.22 Service Co., Ltd. Guizhou Branch Yunan Xiangyu Auto Sales and Service Co., Ltd. - 12,622.23 Chongqing Wanyou Zunda Automobile Sales and - 816,674.36 Service Co., Ltd. Sichuan Branch Chengdu Wanyou Xiangyu Auto Sales and Service 116,762.05 520,312.83 Co., Ltd. Wanyou Zunda Automobile Sales and - 1,115,457.26 Service Co., Ltd. Yunan Branch China Changan Automobile Group Tianjin Sales 8,617.09 - Co., Ltd. Chengdu Wanyou Auto Trade Service Co., Ltd. 48,452.99 - Yunnan Wanyou Automobile Sales & Service Co., 64,533.33 - Ltd. 123 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Guizhou Wanyou Automobile Sales & Service Co., 28,282.91 - Ltd. Total 268,834.69 3,402,865.82 124 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 5. Payment and receivables of related parties Payment receivables of related listed companies In RMB Yuan Ending balance Beginning balance Items Related parties Provision for Provision for Book balance Book balance bad-debts bad-debts Notes Tianjin Sales Co., Ltd.CCAG 39,526,490.00 - 37,824,480.00 - receivable Notes Wanyou Automobile Investment 207,400,000.00 - 2,676,220,000.00 - receivable Co., Ltd. Notes Yunnan Wanyou Automobile 124,380,000.00 - 17,000,000.00 - receivable Sales and Service Co., Ltd Notes Chengdu Wanyou Auto Trade 145,000,000.00 - 16,900,000.00 - receivable Service Co., Ltd. Notes Chongqing Wanyou Economic 194,140,000.00 - 2,000,000.00 - receivable Development Co., Ltd. Notes Guizhou Wanyou Automobile 171,900,000.00 - 2,000,000.00 - receivable Sales & Service Co., Ltd. Notes Guangxi Wanyou Automobile 2,800,000.00 - 1,500,000.00 - receivable Sales & Service Co., Ltd. Notes Yunnan Xiangyu Automobile 34,620,000.00 - - - receivable Sales & Service Co., Ltd. Notes Nanning Wanyou Automobile 6,420,000.00 - - - receivable Sales & Service Co., Ltd. Chengdu Wanyou Xiangyu Notes Automobile Sales & Service Co., 149,000,000.00 - - - receivable Ltd. Subtotal 1,075,186,490.00 - 2,753,444,480.00 - Account Changan Ford Automobile - - 22,529,864.32 - receivable Co.,Ltd. Account Chongqing Changan Suzuki 103,186,219.74 - 135,914,168.09 - receivable Automobile Co., Ltd. Account Jiangling Holding Co., Ltd 113,423,244.94 - 30,661,901.66 - receivable Account Changan Peugeot Citroen 22,758,165.00 - 22,926,567.86 - receivable Automobile Co., Ltd. Account Chongqing Changan Kuayue 26,509,633.04 - 10,887,572.26 - receivable Automobile Co., Ltd 125 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Account Changan Mazda Automobile Co., - - 10,185,773.13 - receivable Ltd. Account Chongqing Changan Min Sheng 56,586,500.25 - - - receivable Logistics Co., Ltd. Account Harbin Dongan Automotive 44,554,740.12 - 43,541,400.14 - receivable Engine Manufacturing Co., Ltd. Account Yunnan Wanyou Automobile - - 4,700,833.08 - receivable Sales and Service Co., Ltd Account Chengdu Wanyou Auto Trade - - 1,311,647.66 - receivable Service Co., Ltd. Account Chongqing Changan Industries - 1,325,600.89 - receivable Group Co. Ltd 4,773,143.29 Subtotal 386,230,274.69 - 283,985,329.09 - Other Chongqing Changan Suzuki 27,374,260.16 - 40,784,896.53 - receivable Automobile Co., Ltd. Other China South Industries Group 241,878.39 - - - receivable Finance Co., Ltd Other Chongqing Changan Min Sheng 281,148.25 - 123,793.03 - receivable Logistics Co., Ltd. Other Harbin Dongan Auto Engine Co., 268,000.00 - 268,000.00 - receivable Ltd. Subtotal 28,165,286.80 41,176,689.56 Advanced Chongqing Changan Suzuki 295,474.25 - 295,474.25 - payment Automobile Co., Ltd. Subtotal 295,474.25 - 295,474.25 - Accounts payable to related parties of listed companies In RMB Yuan Items Related parties Ending balance Beginning balance Notes Harbin Dongan Automobile Power Co., Ltd. 538,815,000.00 617,420,000.00 payable Notes Harbin Dongan Automobile Engine 216,487,900.00 479,180,000.00 payable Manufacturing Co., Ltd. Notes Chongqing Changan Construction Engineering 299,405,493.00 332,992,262.00 payable Co., Ltd. Notes China Changan Automobile Co., Ltd. 299,870,000.00 214,270,000.00 payable –Chongqing Qingshan Transmission Branch Notes Chongqing Changan Min Sheng Logistics Co., 171,002,497.63 198,023,651.37 126 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report payable Ltd. Notes Chongqing Changan Suzuki Automobile Co., Ltd. 120,635,816.08 189,532,516.13 payable Notes South Air International Co.,Ltd. 283,320,000.00 182,640,000.00 payable Notes Changan Ford Automobile Co.,Ltd. 126,781,543.38 65,536,197.82 payable Notes Chongqing Wanyou Engineering Installation Co., 51,264,191.75 52,786,747.00 payable Ltd. Notes Chongqing Construction Vehicle Air Conditioner 21,890,000.00 27,120,000.00 payable Co., Ltd. Notes Sichuan Ningjiang Shanchuan Machinery Co., 23,950,000.00 20,580,000.00 payable Ltd. Notes Chengdu Wanyou Filter Co., Ltd. 62,010,000.00 14,960,000.00 payable Notes Hubei Xiaogan Huazhong Auto Lamp Co., Ltd. 19,960,000.00 9,950,000.00 payable Notes Chengdu Jialing Huaxi Optical Precision 12,240,000.00 7,690,000.00 payable Machinery Co., Ltd. Notes Sichuan Jian'an Industry Co., Ltd. 5,000,000.00 5,910,000.00 payable Notes Chongqing Changfeng Jiyu Machinery Co., Ltd. 12,300,000.00 5,510,000.00 payable Notes Chongqing Yihong Engineering Plastics Co., Ltd. 8,840,000.00 5,310,000.00 payable Notes Chengdu Huachuan Denso Co., Ltd. 2,570,000.00 2,190,000.00 payable Notes Sichuan Hongguang Automobile Electrical Co., 2,940,000.00 2,030,000.00 payable Ltd. Notes Southern Tianhe Chassis System Co., Ltd. 190,000.00 1,370,000.00 payable Notes Chengdu Ningxing Automobile Spring Co., Ltd. - 1,110,000.00 payable Notes Chengdu Lingchuan Special Industry Co., Ltd. 11,510,000.00 170,000.00 payable Notes Chongqing Changan Kuayue Automobile Co., Ltd 35,631,901.39 - payable Notes Chongqing Shangfang Auto Parts Co., Ltd. 200,000.00 - 127 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report payable Notes Chongqing Dajiang Yugqiang Plastic Products 142,490,000.00 - payable Co., Ltd. Notes Chongqing Dajiang Jiexin Forging Co., Ltd. 930,000.00 - payable Subtotal 2,470,234,343.23 2,436,281,374.32 Account Harbin Dongan Automobile Power Co., Ltd. 239,912,645.10 345,797,944.98 payable Account China Changan Automobile Co., Ltd. 82,059,537.62 207,968,397.78 payable –Chongqing Qingshan Transmission Branch Account Southern Tianhe Chassis System Co., Ltd. 79,076,167.38 199,363,707.33 payable Account Jiangling Holdings Co., Ltd. 133,102,373.73 191,084,011.75 payable Account Chongqing Nexteer Steering System Co., Ltd. 242,879,683.57 176,288,268.39 payable Account Southern Inte Air Conditioning Co., Ltd. 71,888,114.42 171872351.5 payable Account Harbin Dongan Automobile Engine 70,183,107.51 155,247,645.33 payable Manufacturing Co., Ltd. Account Sichuan Jian'an Industry Co., Ltd. 97,987,282.15 117,078,608.55 payable Account Chongqing Changan Kuayue Automobile Co., Ltd 1,216,091.55 93,727,399.68 payable Account Changan Ford Automobile Co.,Ltd. 11,723,605.16 89,646,556.61 payable Account Chongqing Changan Suzuki Automobile Co., Ltd. 35,098,690.66 77,082,367.50 payable Account Chongqing Wanyou Economic Development Co., 74,064,072.75 54,096,010.02 payable Ltd. Account Chengdu Wanyou Filter Co., Ltd. 50,666,108.25 42,372,755.39 payable Account Chongqing Changan Minsheng Logistics Co., 120,157,503.60 37,085,168.07 payable Ltd. Account Chongqing Dajiang Xinda Automobile Co., Ltd. 56,255,628.27 30,253,807.17 payable Account Chongqing Dajiang Yuqiang Plastic Products Co., 71,814,653.56 26,019,486.15 payable Ltd. 128 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Account Chengdu Lingchuan Vehicle Fuel Tank Co., Ltd. 17,232,048.62 25,415,872.54 payable Account Chongqing Construction Vehicle Air Conditioner 31,598,774.90 21,933,236.63 payable Co., Ltd. Account Hubei Xiaogan Huazhong Auto Lamp Co., Ltd. 17,026,184.06 18,068,182.67 payable Account Chongqing Changfeng Jiyu Machinery Co., Ltd. 10,049,158.17 14,806,992.88 payable Account Chongqing Shangfang Auto Parts Co., Ltd. 9,752,747.74 12,633,188.89 payable Account Chongqing Changan Industries Group Co. Ltd 21,827,532.88 10,548,846.45 payable Account Chengdu Ningxing Automobile Spring Co., Ltd. - 8,808,787.49 payable Account Chongqing Yihong Engineering Plastics Co., Ltd. 3,494,773.28 8,669,550.54 payable Account Yunnan Xiyi Industrial Co., Ltd. 11,933,961.93 5,574,383.25 payable Account Sichuan Ningjiang Shanchuan Machinery Co., 14,231,841.87 5,527,769.06 payable Ltd. Account Chengdu Jialing Huaxi Optical Precision 2,180,536.79 5,431,628.68 payable Machinery Co., Ltd. Account Chengdu Huachuan Denso Co., Ltd. 26,304,851.24 4,332,585.36 payable Account Sichuan Ningjiang Shanchuan Machinery Co., 4,491,581.72 4,093,547.21 payable Ltd. Longchang Shock Absorber Branch Account Chengdu Lingchuan Special Industry Co., Ltd. 6,237,447.98 3,626,071.14 payable Account Chongqing Changrong Machinery Co., Ltd. 3,478,024.59 3,524,818.39 payable Account Chengdu Ningjiang Zhaohe Auto Parts Co., Ltd. 11,644,384.60 2,976,243.85 payable Account Sichuan Hongguang Automobile Electrical Co., 1,406,219.30 1,939,534.94 payable Ltd. Account Hafei Automobile Co., Ltd. 661,117.68 661,117.68 payable Account Chongqing Dajiang Jiexin Forging Co., Ltd. 184,596.76 605,591.85 payable 129 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Account Chongqing Changan Construction Engineering 242,002.64 271,400.31 payable Co., Ltd. Account Chongqing Automobile Air Conditioner Co., Ltd. 205,041.51 205,041.51 payable Account Chongqing Jialing Yimin Special Equipment Co., 104,496.50 104,496.50 payable Ltd. Account Chengdu Guangming Tianzhong Environmental 86,617.41 88,689.65 payable Protection Technology Co., Ltd. Account Chongqing Xiyi Automobile Connecting Rod 65,110.17 70,136.39 payable Co., Ltd. Account Beijing Beiji Electromechanical Industry Co., 48,435.24 26,382.70 payable Ltd. Account Sichuan Jian'an Industrial Chengdu Jianan Axle - 20,257.22 payable Branch Account Chongqing Qingshan Transmission Sales Co., 4,935,786.56 548.02 payable Ltd. Subtotal 1,637,508,539.42 2,174,949,387.99 Advance Chengdu Wanyou Xiangyu Auto Sales and 27,866,189.84 149,605,982.46 receipts Service Co., Ltd. Advance Chongqing Wanyou Economic Development Co., 36,263,741.47 147,992,787.85 receipts Ltd. Advance Guizhou Wanyou Automobile Sales & Service 34,897,988.08 93,966,433.63 receipts Co., Ltd. Advance Yunnan Wanyou Automobile Sales & Service 7,659,187.24 56,027,446.21 receipts Co., Ltd. Advance Wanyou Automobile Investment Co., Ltd. 17,748,734.00 33,392,271.43 receipts Advance Chengdu Wanyou Auto Trade Service Co., Ltd. 3,600,358.61 28,665,986.30 receipts Advance Yunnan Xiangyu Automobile Sales & Service 1,707,858.67 13,152,733.90 receipts Co., Ltd. Advance Guangxi Wanyou Automobile Sales & Service 5,265,173.17 10,218,258.22 receipts Co., Ltd. Advance Tianjin Sales Co., Ltd.CCAG 1,086,718.44 8,262,589.55 receipts Advance Changan Ford Mazda Engine Co., Ltd. 3,288,125.92 3,202,789.69 receipts Advance Nanning Wanyou Automobile Sales & Service 274,641.31 3,049,999.16 130 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report receipts Co., Ltd. Advance Hafei Automobile Co., Ltd. 670,500.00 670,500.00 receipts Advance Chongqing Changan Minsheng Logistics Co., Ltd. - 361,998.32 receipts Advance Chongqing Anfu Automobile Marketing Co., Ltd. 1,155,144.00 119,144.00 receipts Advance Changan Mazda Automobile Co., Ltd 232,800.63 113,420.00 receipts Advance Southern Inte Air Conditioning Co., Ltd. - 4,991.00 receipts Advance Chongqing Shangfang Auto Parts Co., Ltd. 3,980.00 - receipts Advance Chongqing Wanyou Economic Development Co., 17,875,663.79 - receipts Ltd. Jiangnan Branch Advance Chongqing Wanyou Zunda Automobile Sales and 236,049.57 - receipts Service Co., Ltd. Guangxi Branch Advance Chongqing Wanyou Zunda Automobile Sales and 5,821,619.84 - receipts Service Co., Ltd. Guizhou Branch Advance Chongqing Wanyou Zunda Automobile Sales and 9,143,714.05 - receipts Service Co., Ltd. Parts Branch Advance Chongqing Wanyou Zunda Automobile Sales and 2,604,650.10 - receipts Service Co., Ltd. Sichuan Branch Advance Chongqing Wanyou Zunda Automobile Sales and 3,281,320.52 - receipts Service Co., Ltd. Yunan Branch Advance Chongqing Wanyou Longrui Automobile Sales & 659.60 - receipts Service Co., Ltd. Advance Chongqing Wanyou Ducheng Automobile Sales 138,221.72 - receipts & Service Co., Ltd. Advance Chongqing Wanyou Xingjian Automobile Sales & 57,612.00 - receipts Service Co., Ltd. Advance Luzhou Wanyou Automobile Service Co., Ltd. 5,654.88 - receipts Subtotal 180,886,307.45 548,807,331.72 Other Chongqing Changan Minsheng Logistics Co., 305,237,260.47 159,507,227.79 payables Ltd. Other Chongqing Changan Construction Engineering 8,179,765.09 23,746,341.39 payables Co., Ltd. 131 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Other Chongqing Changan Industries Group Co. Ltd. 18,455,573.67 4,841,997.36 payables Other Chongqing Changan Property Management Co., 3,727,132.40 2470202.68 payables Ltd. Other Chongqing Wanyou Engineering Installation Co., 3,510,639.25 2,278,297.00 payables Ltd. Other Hafei Automobile Co., Ltd. 184,804.39 640,668.85 payables Other Chongqing Wanyou Economic Development Co., - 450,057.20 payables Ltd. Other Chongqing Changan Suzuki Automobile Co., Ltd. 110,144.00 330,432.00 payables Other Chengdu Wanyou Auto Trade Service Co., Ltd. - 191,979.64 payables Other Yunnan Wanyou Automobile Sales & Service - 182,607.80 payables Co., Ltd. Other Guizhou Wanyou Automobile Sales & Service - 159,500.00 payables Co., Ltd. Other Guangxi Wanyou Automobile Sales & Service - 150,000.00 payables Co., Ltd. Other Changan Ford Mazda Engine Co., Ltd. - 144,115.79 payables Other Chengdu Wanyou Filter Co., Ltd. - 120,000.00 payables Other Chongqing Anfu Automobile Marketing Co., Ltd. - 100,000.00 payables Other Chongqing Wanyou Zunda Automobile Sales & 100,000.00 - payables Service Co., Ltd. Other Chongqing Wanyou Zunda Automobile Sales and 50,000.00 - payables Service Co., Ltd. Guangxi Branch Other Chongqing Wanyou Zunda Automobile Sales and 150,000.00 - payables Service Co., Ltd. Guizou Branch Other Chongqing Wanyou Zunda Automobile Sales and 150,000.00 - payables Service Co., Ltd. Sichuan Branch Other Chongqing Wanyou Zunda Automobile Sales and 100,000.00 - payables Service Co., Ltd. Yunnan Branch Subtotal 339,955,319.27 195,313,427.50 132 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report XIII. Share-based payments 1. General information 2018.6 The total amount of the employee services as a result of the share-based payments 32,697,000.00 The equity settled share based payments are as follows: 2018.6 The accumulated amount of equity settled share-based payments included in capital 32,697,000.00 reserve The amount of equity settled share-based payments included in expense - 2. Share-based payment scheme On 23 September 2016, the share option was approved to be granted on 23 September 2016 by the 12th meeting of the seventh session of the Board of Directors and the 8th meeting of the seventh session of Board of Supervisors. According to the share option scheme, the Company granted 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 RMB14.12 per share. The options granted shall be exercised before the expiration date. The share should not be exercised unless the prescribed conditions are met. The exercisable shares not exercised in above periods will be written off by the Company. The company has disclosed in June 1, 2017 "The 2016 annual notice of the implementation of equity distribution".According to the company's stock option incentive plan (Revised Draft), the relevant provisions on the stock option price adjustment, if dividends and capital reserve capitalization, stock dividends, stock split delivery, allotment, issuance or reduced matters occur before the stock exercise,the stock option price should be adjusted. The exercise price of the adjusted stock option is 13.478 yuan. The incentive object must be exercised within the validity period of the option exercise. If the exercise conditions are not met, the current stock options may not be exercised. If part of the stock options that meet the exercise conditions but are not exercised in the above exercise period are cancelled by the company. The performance indicators of the share option includes: (1) Return on equity (ROE) (2) Net profit growth rate attributable to owners (3) Economic value added (EVA), and (4) The ratio of prime operating revenue to operating revenue The above net profit and ROE are based on net profit and weighted average net assets attributable to owners deducting non-recurring gains and losses. 133 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 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 since 2 RMB10,182,000,000); st The 1 4 month after the grant date ROE≥15% exercise 1/3 to the last trading day sinc The above indicators≥benchmark average, and ≥7 period e 36 month after the grant 5 quartile date △EVA>0; The ratio of prime operating revenue to operating revenue≥95% 2018 net profit growth rate based on 2015 avera ge growth rate ≥3.2%(growth amount equivalent t o RMB10,507,000,000); The 1st trading day since 3 ROE≥15% The 2nd 6 month after the grant date The above indicators≥benchmark average, and ≥7 exercise 1/3 to the last trading day sinc 5 quartile period e 48 month after the grant △EVA>0; date The ratio of prime operating revenue to operating revenue≥95% 2019 net profit growth rate based on 2015 avera ge growth rate ≥3.2%(growth amount equivalent t o RMB10,844,000,000); The 1st trading day since 4 ROE≥15% The 3rd 8 month after the grant date The above indicators≥benchmark average, and ≥7 exercise 1/3 to the last trading day sinc 5 quartile period e 60 month after the grant △EVA>0; date The ratio of prime operating revenue to operating revenue≥95% The fair value of share options granted amounted to RMB139,527,600. On April 17, 2018, according to the 30th meeting of the seventh board of directors of the Company, due to the failure of the performance evaluation target of the first exercise period of the stock option incentive plan, and 12 incentive targets have been dismiss the labor contract, so they no longer meet the conditions of stock option incentives. The Company has approved the cancellation of 10,826,600 stock options by the board of directors. After the cancellation, the company's stock options issued under the plan are 18.831 million shares, and the corresponding fair value is RMB. 87,721,200 yuan. The share option fee confirmed by the company in June 2018 is RMB 0.00. The fair value of the equity-settled share option is determined using Black-Scholes model based on the estimate in accordance with the terms and conditions of the share options. The input variables are as follows: 134 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Valuation factors 2016 Dividend rate (%) 0% Expected volatility (%) 29.78% Historical volatility (%) 29.78% Risk-free rate (%) 2.4987% Expected duration (year) 4 Share price as at the grant date (Yuan) 15.43 The expected duration of the option is based on the historical data of the past, which is not necessarily reflected in the exercise of the right in future.The expected volatility is based on the assumption that the historical volatility reflects the future trend, but not necessarily the actual results. XIV. Commitments and Contingencies 1. Significant commitments Investment commitment By June 30th 2018, the group has no investment commitment that has been signed but not yet fully fulfilled. 2. Contingencies By June 30th 2018, the company has no significant contingencies that need to be published. XV. Events after the balance sheet date 1. Significant non-adjusting events □ Applicable √ Not Applicable 2. Distribution of profit □ Applicable √ Not Applicable 3. Sales return □ Applicable √ Not Applicable XVI. Other important events 1. Correction of accounting error of earlier stage □ Applicable √ Not Applicable 135 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 2. Debt restructuring □ Applicable √ Not Applicable 3. Asset replacement □ Applicable √ Not Applicable 4. Annuity plan □ Applicable √ Not Applicable 5. Discontinuing operation □ Applicable √ Not Applicable 6. Information on business branch Identify business branch of the group according to internal organization structure, management requirements, internal reporting rules, and identify the report and information disclosed of the brand based on the identified branch. business branch refers to the component of the group that meets the following conditions: (1) the component has income and expenditure incurred in routine activities; (2) the management of the company regularly evaluates the operation performance of the component to decide the company’s resource distribution and evaluate its overall performance (3) The group receives related accounting information on the financial situation, operation performance and cash flow. If two or more components have similar economic features and meet the conditions, they should be consolidated into one branch. Income and profit of the group consists of automobile manufacturing and domestic sales. Main asset of the group is in China. The management of the group evaluates the performance of the group as a whole. Thus, report of the branch is not included in this year’s report. XVII. Notes to the main items of the parent company’s financial statements 1. Account Receivables (1) Account Receivables In RMB Yuan Ending Beginning Items Book balance Provision for bad-debts Book balance Provision for bad-debts Amount (%) Amount (%) Amount (%) Amount (%) Individually significant amount and account receivables of individually provision for bad debts 136 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Account receivables of provision for bad-debts calculated and extracted by groups Group 1: account receivables of provision for bad-debts calculated 610,262,793.76 10.99 14,881,634.65 2.44 336,704,741.88 6.73 13,247,893.43 3.93 and extracted by aging analysis Group 2: Account receivables for related 4,944,713,693.79 89.01 - - 4,668,539,742.55 93.27 - - parties Group subtotal 5,554,976,487.55 100 14,881,634.65 0.27 5,005,244,484.43 100 13,247,893.43 0.26 Notindividually significant amount but other receivables of individually provision for bad debts Total 5,554,976,487.55 100 14,881,634.65 0.27 5,005,244,484.43 100 13,247,893.43 0.26 Types of account receivables Within groups, account receivables of provision for bad-debts are calculated and extracted by aging analysis √ Applicable □ Not Applicable In RMB Yuan Ending Beginning Account Book balance Provision for Book balance Provision for receivable age Amount (%) bad-debts Amount (%) bad-debts Within 1 year Including 0- 6 months 558,051,597.15 91.45 - 308,058,891.27 91.50 - 6 to 12 months 25,508,286.00 4.18 1,275,414.30 11,052,418.43 3.28 552,620.92 Within 1 year 583,559,883.15 95.63 1,275,414.30 319,111,309.70 94.78 552,620.92 subtotal 1 to 2 years 14,541,878.43 2.38 1,454,187.84 5,432,400.00 1.61 543,240.00 2 to 3 years 2,836.67 - 851.00 2,836.67 - 851.00 3 to 4 years 14,028.00 - 7,014.00 14,028.00 - 7,014.00 4 to 5 years Over 5 years 12,144,167.51 1.99 12,144,167.51 12,144,167.51 3.61 12,144,167.51 Total 610,262,793.76 100 14,881,634.65 336,704,741.88 100 13,247,893.43 137 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Within groups, account receivables of provision for bad-debts are calculated and extracted by balance percentage □ Applicable √ Not applicable (2) On June 30, 2018, the top five accounts receivable totalled RMB 4,325,702,550.47, accounting for 77.88% of the total accounts receivable (2017: RMB 3,973,737,026.11, accounting for 82.95% of the total accounts receivable). (3) Account receivables of related parties In RMB Yuan 2018.6 2017.12 Group provision for provision for book balance book balance bad-debts bad-debts Related party accounts receivable provision for bad 4,944,713,693.79 - 4,668,539,742.55 - debts 2. Other receivables (1) Other receivables In RMB Yuan Ending Beginning Provision for Provision for Items Book balance Book balance bad-debts bad-debts Amount (%) Amount (%) Amount (%) Amount (%) Individually significant amount and account 1,544,178,640.00 69.64 - - 1,127,509,417.42 65.37 - - receivables of individually provision for bad debts Account receivables of provision for bad-debts calculated and extracted by groups Group 1: account receivables of provision for bad-debts 121,990,433.54 5.50 1,072,191.62 0.88 125,520,423.39 7.28 1,088,333.82 0.87 calculated and extracted by aging analysis Group 2: Account receivables of provision for bad-debts 551,236,733.19 24.86 - - 471,782,095.90 27.35 - - calculated and extracted by related parties Group subtotal 673,227,166.73 30.36 1,072,191.62 0.16 597,302,519.29 34.63 1,088,333.82 0.18 no Individually significant amount but other receivables of individually provision 138 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report for bad debts Total 2,217,405,806.73 100 1,072,191.62 0.05 1,724,811,936.71 100 1,088,333.82 0.06 Types of the account receivables account receivables of provision for bad-debts are calculated and extracted by aging analysis √ Applicable □ Not Applicable In RMB Yuan Ending Beginning Account Book balance Provision for Book balance Provision for receivable Age Amount (%) bad-debts Amount (%) bad-debts Within 1 year Among: 0-6 months 117,153,597.36 96.03 - 119,053,084.31 94.85 - 6 to 12 months 2,861,451.16 2.35 143,072.56 5,512,392.58 4.39 275,619.62 Within 1 year 120,015,048.52 98.38 143,072.56 124,565,476.89 99.24 275,619.62 subtotal 1 to 2 years 1,072,883.60 0.88 107,288.36 76,250.15 0.06 7,625.02 2 to 3 years 23,805.07 0.02 7,141.52 48,000.00 0.04 14,400.00 3 to 4 years 128,014.34 0.10 64,007.17 80,014.34 0.06 40,007.17 4 to 5 years - - - - - - Over 5 years 750,682.01 0.62 750,682.01 750,682.01 0.60 750,682.01 Total 121,990,433.54 100 1,072,191.62 125,520,423.39 100 1,088,333.82 Within groups, account receivables of provision for bad-debts are calculated and extracted by balance percentage. □ Applicable √ not Applicable (2) Other account receivables of related parties In RMB Yuan 2018 2017 Group Book balance Provision for bad-debts Book balance Provision for bad-debts Related party other accounts receivable 551,236,733.19 - 471,782,095.90 - provision for bad debts 139 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 3. Long-term equity investment In RMB Yuan impair Explanation for the Share Voting ment Accou difference between Impa beginning proportion in proportion in provisi cash bonus in Invested in nting capitalized cost increase/decrease ending amount shareholding irme amount the company the company on in current period method percentage and nt invested (%) invested (%) current voting percentage period 1、Joint ventures Chongqing Changan Suzuki Equity 237,719,933.33 1,190,705,710.43 -80,032,104.09 1,110,673,606.34 50 50 None - - - Automobile Co., Ltd Jiangling Holding Co., Ltd Equity 1,008,511,522.00 2,907,749,943.37 -83,707,141.74 2,824,042,801.63 50 50 None - - - Changan Ford Automobile Equity 975,232,926.29 4,125,426,104.20 866,427,723.13 4,991,853,827.33 50 50 None - - - Co., Ltd Changan Mazda Automobile Equity 1,097,839,635.00 2,439,429,811.02 635,451,737.12 3,074,881,548.14 50 50 None - - - Co., Ltd Changan Ford Mazda Engine Equity 786,734,634.10 903,838,395.08 -73,187,649.79 830,650,745.29 50 50 None - - 114,500,000.00 Co., Ltd Changan PSA Automobile Equity 2,007,841,700.00 93,561,126.76 -171,729,822.06 -78,168,695.30 50 50 None - - - Co., Ltd 2、Associated Enterprises Chongqing Changan Kuayue Equity 61,800,885.00 101,399,892.43 17,458,524.85 118,858,417.28 34.3 34.3 None - - - Automobile Co., Ltd Chongqing Changan Kuayue Equity 1.00 - - 0.00 34.3 34.3 None - - - 140 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Automobile Sales Co., Ltd Beijing Fang’an Xinyue taxi Equity 6,000,000.00 - - 0.00 20.7 20.7 None - - - Co., Ltd Chongqing Auto Finance Equity 1,805,000,000.00 1,817,669,991.73 137,070,317.23 1,954,740,308.96 28.66 28.66 None - - - Co., Ltd. Zhenjiang Demao Hairun Equity Investment Fund Equity 518,743,029.48 518,742,921.95 289,516,719.35 808,259,641.30 32.67 32.67 None - - - Partnership (Limited Partnership) 3、Subsidiaries minority shareholders Nanjing Changan Cost 422,533,259.00 422,533,259.00 - 422,533,259.00 84.73 91.53 authorize the - - - Automobile Co., Ltd company to exercise voting right minority shareholders Hebei Changan Automobile Cost 438,223,236.00 438,223,236.00 - 438,223,236.00 94.22 95.62 authorize the - - - Co., Ltd company to exercise voting right Chongqing Changan International Automobile Cost 13,068,581.00 13,068,581.00 - 13,068,581.00 100 100 None - - - Sales and Service Co., Ltd Chongqing Changan Automobile Customer Cost 29,700,000.00 29,700,000.00 - 29,700,000.00 99 99 None - - 628,650,000.00 Service Co., Ltd. 141 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chongqing Changan Vehicle Networking Technology Co., Cost 88,500,000.00 88,500,000.00 - 88,500,000.00 100 100 None - - - Ltd. Chongqing Changan Cost 3,150,000.00 3,150,000.00 - 3,150,000.00 100 100 None - - - Automobile Sales Co., Ltd Chongqing Changan Special Cost 2,500,000.00 2,500,000.00 - 2,500,000.00 50 50 None - - - Automobile Co., Ltd Chongqing Changan Europe Cost 155,469,913.50 155,469,913.50 - 155,469,913.50 100 100 None - - - Design Center Co., Ltd Chongqing Changan new Cost 18,850,000.00 18,850,000.00 - 18,850,000.00 65 65 None - - - Engergy Automobile Co. Ltd Changan United Kingdom Cost 236,387,395.40 236,387,395.40 - 236,387,395.40 100 100 None - - - R&D Center Co., Ltd. Beijing Changan Automotive engineering and Technology Cost 1,000,000.00 1,000,000.00 - 1,000,000.00 100 100 None - - - Reseach Co., Ltd. Harbin Changan Automotive Technology Reseach Co., Cost 1,000,000.00 1,000,000.00 - 1,000,000.00 100 100 None - - - Ltd. Shanghai Changan Automotive Engineering and Cost - 1,000,000.00 -1,000,000.00 - 100 100 None - - - Technology Co., Ltd. Changan Japan Design Cost 1,396,370.15 1,396,370.15 - 1,396,370.15 100 100 None - - - Center Co., Ltd. Changan United States R&D Cost 10,243,460.00 10,243,460.00 - 10,243,460.00 100 100 None - - - Center Co., Ltd. 142 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Baoding Changan Bus Cost 176,002,613.18 176,002,613.18 - 176,002,613.18 100 100 None - - - Manufacturing Co., Ltd. Hefei Changan Automobile Cost 35,367,765.23 35,367,765.23 - 35,367,765.23 100 100 None - - - Co., Ltd Changan Automobile Russia Cost 1,242,589.15 1,242,589.15 - 1,242,589.15 100 100 None - - - Co., Ltd. Changan Brazil Holding Co., Cost 2,584,556.97 2,584,556.97 - 2,584,556.97 100 100 None - - - Ltd Shenzhen Changan New Engergy Automobile Service Cost 50,000,000.00 50,000,000.00 - 50,000,000.00 100 100 None - - - Co. Ltd Xiamen Changan New Energy Automobile Sales & Cost 2,000,000.00 - 2,000,000.00 2,000,000.00 100 100 None - - - Service Co., Ltd. Guangzhou Changan New Energy Automobile Sales & Cost 4,000,000.00 - 4,000,000.00 4,000,000.00 100 100 None - - - Service Co., Ltd. Fuzhou Fuqing Changan New Energy Automobile Cost 2,000,000.00 - 2,000,000.00 2,000,000.00 100 100 None - - - Sales Co., Ltd. Chongqing Changan New Energy Automobile Cost 99,000,000.00 - 99,000,000.00 99,000,000.00 100 100 None - - - Technology Co., Ltd. 10,299,644,005.7 Total - 15,786,743,636.55 1,643,268,304.00 17,430,011,940.55 - - - - - 743,150,000.00 8 143 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report 4. Operating revenue and cost (1) Operating revenue In RMB Yuan Items Current amount Prior-period amount Main business income 32,840,989,835.15 31,674,932,332.88 Other business income 1,368,075,880.87 1,164,589,896.82 Operating cost 29,726,487,573.72 28,904,081,124.37 (2) Main business (classified by industries) In RMB Yuan Current amount Prior-period amount Industries revenue cost revenue cost Automobile manufacturing 32,840,989,835.15 29,084,851,115.73 31,674,932,332.88 28,528,331,081.30 industry Total 32,840,989,835.15 29,084,851,115.73 31,674,932,332.88 28,528,331,081.30 (3) Main business (classified by products) In RMB Yuan Current amount Prior-period amount Products revenue cost revenue cost Sales of goods 32,768,288,077.90 28,995,127,299.93 31,601,267,068.68 28,416,569,899.88 Outsourcing processing 72,701,757.25 89,723,815.80 73,665,264.20 111,761,181.42 Total 32,840,989,835.15 29,084,851,115.73 31,674,932,332.88 28,528,331,081.30 5. Investment income (1) Details of investment income In RMB Yuan Items Current amount Prior-period amount Long-term equity investment income measured by cost 628,650,000.00 - method Long-term equity investment income measured by equity 1,362,011,815.11 3,831,618,978.64 method investment income from long -term equity investment 42,715.98 -2,000,000.00 disposition others 4,434,355.36 1,028,907.27 Total 1,995,138,886.45 3,830,647,885.91 (2) Long-term equity investment incomemeasured by cost accounting method None (3) Long-term equity investment income measured by equity accounting method In RMB Yuan Invested in company Current amount Prior-period amount Changan Ford Automobile Co., Ltd. 866,427,723.13 3,094,825,993.27 Changan Mazda Automobile Co., Ltd. 635,451,737.12 600,278,338.63 Changan Suzuki Automobile Co., Ltd. -80,032,104.09 -19,611,249.15 Changan Ford Mazda Engine Co., Ltd. 41,312,350.21 55,447,236.74 Jiangling Holding Co., Ltd -83,707,141.74 96,573,362.50 Chongqing Xiyi Automobile Linkage Rod Co., - 127,449.67 Ltd Changan PSA Automobile Co., Ltd. -171,729,822.06 -45,643,059.35 144 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chongqing Changan Kuayue Automobile Co., 17,458,524.85 6,419,549.31 Ltd. Chongqing Auto Finance Co., Ltd. 137,070,317.23 43,201,357.02 Zhenjiang Demao Hairun Equity Investment -239,769.54 - Fund Partnership (Limited Partnership) Total 1,362,011,815.11 3,831,618,978.64 6. Supplementary information of cash flow statement In RMB Yuan Supplementary information Current amount Prior-period amount 1. Cash flow relating to operating activities calculated by adjusting the net profit Net profit 2,212,251,313.70 3,831,471,921.43 Add: provision for assets impairment 114,014,999.44 133,639,836.86 Depreciation of fixed assets, oil and gas assets, productive biological 806,662,201.79 638,817,928.22 assets Amortization of intangible assets 296,811,222.72 267,263,626.81 Amortization of long-term deferred expense Disposal loss/(income) on fixed assets, intangible assets and others 39,045,358.00 684,027.55 long-term assets Financial expense -248,434,734.69 -256,888,513.32 Investment loss -1,995,138,886.45 -3,830,647,885.91 Decrease in deferred tax assets -31,839,831.43 -113,878,150.78 Decrease in inventory 288,715,822.18 -3,660,997,018.33 Decrease of operational receivables 9,987,481,500.02 5,693,325,815.98 Increase of operational payables -6,426,150,041.12 1,346,003,463.96 Net cash flow from operating activities 5,043,418,924.16 4,048,795,052.47 2. Major investment and financing activities involving no cash incomings / outgoings 3. Net change in cash and cash equivalent Ending balance of cash 22,689,732,804.05 25,409,019,964.44 Less: beginning balance of cash 20,172,657,984.53 22,326,566,084.67 Net increase in cash and cash equivalents 2,517,074,819.52 3,082,453,879.77 XVIII. Additional information 1. Non-recurring profit and loss statement of current period In RMB Yuan Items Amount Explanation Profit and loss of non-current assets disposition 18,771,809.69 Government subsidies counted in current profit and loss (except the government subsidies which are closely related with business events, and 1,116,231,219.32 given certain amount according to national standards) Other non-business incomings and outgoings except above-mentioned -23,029,866.17 items Interest on deferred payment of funds received from non - financial 8,091,557.41 enterprises Less: amount influenced by income tax 180,608,049.13 Amount influenced by minority shareholders’ interest (after tax) 25,566,780.69 Total 913,889,890.43 -- 145 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report If the company identifies non-recurring profit and loss defined by Information Disclosure by Companies Offering Securities to the Public No. 1--non-recurring profit and loss and non-recurring profit and loss defined by Information Disclosure by Companies Offering Securities to the Public No. 1--non-recurring profit and loss as recurring profit and loss, explain the reasons. □ Applicable √ Not applicable 2. Return on equity and earnings per share In RMB Yuan Weighted average return Earnings per share Profit in report period on equity Basic EPS Diluted EPS Net profit belonging to the Company’s common stockholders 3.39% 0.34 0.34 Net profit belonging to the Company’s common stockholders 1.47% 0.14 0.14 after deducting non-recurring profit and loss 3. Accounting data difference by domestic and foreign accouting standards (1) Net profit and net asset differences from financial statements by global GAAC and prc GAAC □ Applicable √ Not applicable (2) Net profit and net asset differences from financial statements by GAAC abroad and PRC GAAP □ Applicable √ Not applicable (3) Description on accounting data differences by domestic and foreign accounting standards. If auditing institutions abroad have adjusted the data differences, identify the name of the auditing institution abroad. None 4. Others □ Applicable √ Not applicable 146 Chongqing Changan Automobile Company Limited 2018 Semi-annual Report Chapter 10 Documents for Future Reference Catalogue of Reference Files 1、Semi-annual report with signature of legal representative; 2、Financial statements, with the signatures and seals of legal representative, person in charge of accounting, and person in accounting agency; 3、BOD resolutions and written confirmation documents signed by board members and senior executives; 4、Written auditing opinions in form of resolution by the Board of Supervisors; 5、All original copies of company documents and announcements disclosed in China Securities Journal, Securities Time, and Hong Kong Commercial Daily in reporting period. The company will provide the the abovementioned reference files timely when required by China Securities Regulatory Commission and Shenzhen Stock Exchange, and required by shareholders according to law and corporate regulations. Chairman: Zhang Baolin Submit Date Approved by BOD: August 31, 2018 147