2023 Annual Report
Chongqing Jianshe Vehicle System Co., Ltd.
2023 Annual Report
2024-014
April 30,2024
1
2023 Annual Report
2023 Annual Report
I. Important Prompts, Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and senior executives of the Company
guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and
we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Mr.Fan Aijun, The Company leader, Mr. Tan Mingxian, Chief financial officer and the Ms.Niu Yanli, the person
in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity
and completeness of the financial report enclosed in this Annual report.
Directors other than the followings presented the board meeting at which this report was examined:
Reason foe not
Name of the director absented Position Name of consignee
presenting the meeting
Liu Wei Independent Director On business travel Song Weiwei
Prospective statements carried in this report, such as business plans for future are not constituting any
substantial commitment to the investors. Please be cautious to the risks. This report is prepared both in English
and Chinese. When there is any conflict in understanding, the Chinese version shall prevail.
The company had concretely described the existed factors of risks of the company in the report, of which please
refer to the contents in the Report of directors concerning the possible facing risk factors in the companys
future development. The companys business plan and business goal of the year do not represent the 2023-
annual earnings forecast made by the company, hence whether those can be realized depending on many factors
such as the market circumstance and the extent of hard working of the management team, thus there is a large
extent of uncertainty, please be aware of the investment risks.
The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the
report period.
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2023 Annual Report
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Company Profile & Financial Highlights.
III. Management Discussion & Analysis
IV. Corporate Governance
V. Environmental & Social Responsibility
VI. Important Events
VII. Change of share capital and shareholding of Principal Shareholders
VIII. Situation of the Preferred Shares
IX. Corporate Bond
X. Financial Report
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2023 Annual Report
Documents Available for Inspection
I. Annual Report carrying personal signature and seal of the Chairman of the Board.
II. Financial Statements with signatures of the legal representative, the financial officer, and accounting manager.
III.Auditing Report of Chongqing Jianshe Vehicle System Co., Ltd.(TZYZ[2024]No.34454).
IV. Special explanation (No. 34454-1 [2024]TZYZ)on the capital occupation of the controlling shareholder
and other related parties of Chongqing Jianshe Vehicle System Co., Ltd.
V. Auditing Report on Internal Control for Chongqing Jianshe Vehicle System Co., Ltd.
（TZYZ[2024]No.34785).
VI.Special statement on deposits, loans and other financial businesses involving related transactions of financial c
ompanies of Chongqing Jianshe Automotive Systems Co., Ltd. in 2023 (TZYZ [2024] No. 34454-2).
VII. Special verification opinion on the deduction of operating income of Chongqing Jianshe Vehicle System Co.,
Ltd. ( TZYZ[2024]No.34454-3).
VIII. The original copies of all company documents and the originals of announcements publicly disclosed on
the information disclosure medium designated by the CSRC during the reporting period.
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2023 Annual Report
Definition
Terms to be defined Refers to Definition
Company, the Company, Jianmo Stock,
Refers to Chongqing Jianshe Vehicle System Co., Ltd.
Jianshe Vehicle B
Shenzhen North Jianshe Motorcycle Co., Ltd. (predecessor of the
Shenjianmo Refers to
Company)
Jianmo B Refers to Chongqing Jianshe Motorcycle Co., Ltd. (predecessor of the Company)
Military Equipment Group（Southern China Military Equipment Group Co., Ltd. (China Southern Industry
Refers to
Group） Group Co., Ltd.)
Military Finance Co. Refers to Military Equipment Group Finance Co., Ltd.
Southern Motorcycle Refers to Chongqing Southern Motorcycle Co., Ltd.
Chongqing Jianshe Industry Co., Ltd. – former State-owned Jianshe
Jianshe Industry Refers to
Machinery Factory, Jianshe Industry (Group) Co., Ltd.
Jianshe Industry Refers to Jianshe Industry Group(Yunnan) Co., Ltd.（Stock Code:002265）
Jianshe Group Refers to Jianshe Industrial (Group) Co., Ltd.
Jianshe Mechanical and Electric Refers to Chongqing Jianshe Mechanical and Electric Co., Ltd.
HANON,KOREA HANON Refers to Korea Hanon System Co., Ltd.
Chongqing Jianshe HANON Automobile Termal Management System
Jianshe HANON Refers to
Co., Ltd.
China Jialing Refers to China Jialing Industry Co., Ltd. (Group)
Jinan Qingqi Refers to Jinan Qingqi Motorcycle Co., Ltd.
Changan Auto Refers to Chongqing Changan Automobile Co., Ltd.
Changan Industrial Refers to Chongqing Changan Industrial( Group) Co., Ltd.
Yunnan Xiyi Refers to Yunnan Xiyi Industrial Co., Ltd.
Luoyang Northern Refers to Luoyang Northern Enterprise Group Co., Ltd.
Dajiang Industrial Refers to Chongqing Dajiang Industrial Co., Ltd.
Vehicle air conditioner Refers to Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
Import & Export Co. Refers to Chongqing Northern Jianshe Import & Export Co., Ltd.
Shanghai Jianshe Refers to Shanghai Jianshe Motorcycle Co., Ltd.
Chongqing Jianya Refers to Chongqing Jianshe YAMAHA Motorcycle Co., Ltd.
Zhuzhou Jianya Refers to Zhuzhou Jianshe YAMAHA Motorcycle Co., Ltd.
Pingshan Taikai Refers to Chongqing Pingshan Taikai Carburetor Co., Ltd.
South Air International Refers to South Air International Co., Ltd.
Minsheng Logistics Refers to Chongqing Changan Minsheng APLL Logistics Co., Ltd.
Chongqing Wanyou Refers to Wanyou Automobile Investment Co., Ltd.
In 2015,The company has made an agreement to sale the 100% stake of
Jianshe Mechanical and Electric Company-the companys subsidiary
Major asset restructuring Refers to
funded by the liabilities and the motorcycle business related assets held
by the company to Military Equipment Group.
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2023 Annual Report
II. Company Profile & Financial Highlights.
Ⅰ. Company Information
Stock ID Jianshe Vehicle B Stock Code 200054
Modified stock ID (if any) Jianmo B
Stock Exchange Listed Shenzhen Stock Exchange
Company Name in Chinese 重庆建设汽车系统股份有限公司
Short form of Company Name in
建车Ｂ、建设股份
Chinese (if any)
Company Name in English Chongqing Jianshe Vehicle System Co., Ltd
Short form of Company Name in
JSVS-B
English (if any)
Legal representative Fan Aijun
Registered address No.1 Jianshe Road, Huaxi Industrial Zone, Banan District, Chongqing
Postal code of the Registered
400054
Address
On July 19, 1995, the first registered address was: Room 1802, Electronic Technology
Building, No.30 A, Shennan Middle Road, Shenzhen (office only); On September 29, 2000,
the registered address was changed to: Room 416, Electronic Building, No.2072, Shennan
Middle Road, Futian District, Shenzhen (office only); On July 26, 2002, the registered
Historical change of the
address was changed to: Room 1107, North Building, No.3003 Shennan Middle Road, Futian
company's registered address
District, Shenzhen (office only); On March 11, 2003, the registered address was changed to:
No.47, Xiejiawan Main Street, Jiulongpo District, Chongqing; On April 23,2009, the
registered address was changed to: No.1 Jianshe Road, Huaxi Industrial Zone, Banan
District, Chongqing.
Office Address No.1 Jianshe Road, Huaxi Industrial Zone, Banan District, Chongqing
Postal code of the office address 400054
Internet Web Site http://www.jianshe.com.cn
E-mail cqjsmc@jianshe.com.cn
Ⅱ.Contact person and contact manner
Secretary of the Board Representative of Stock Affairs
Name Zhang Hushan Li Wenling
No.1 Jianshe Road, Huaxi Industrial Zone, No.1 Jianshe Road, Huaxi Industrial Zone,
Address
Banan District, Chongqing Banan District, Chongqing
Tel. 023-66295333 023-66295333
Fax. 023-66295333 023-66295333
E-mail. cqjsmc@jianshe.com.cn cqjsmc@jianshe.com.cn
Ⅲ. Information disclosure and placed
Internet website designated by CSRC for
http://www.szse.cn/
publishing the Annual report of the Company
Newspapers selected by the Company for
Securities Times, Hongkong Commercial daily and htp://www.cninfo.com.cn
information disclosure
The place where the Annual report is
Secretarial office of the Board
prepared and placed
Ⅳ.Changes in Registration
Unified social credit code 915000007474824231
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2023 Annual Report
From 1995 to 2015, the Company was mainly engaged in the production and sales of motorcycles.
Changes in principal In 2015, the company implemented the major asset restructuring, stripped the main assets and
business activities since liabilities involved in the motorcycle business, completed the structural adjustment of the main
listing (if any) business. Since 2015, it has been mainly engaged in the production and sales of automotive air-
conditioning compressors.
(a) The company was set up by Jianshe Group and China North Industries Corp Shenzhen
Company in July 1995, of which the Jianshe Group was the companys controlling shareholder that
holds 71.13% stake of the company.
(b) On August 31, 2005, the 71.13% stake of the company held by Jianshe Group was transferred
to Military Equipment Group in an agreement, thus the Military Equipment Group. has become the
companys controlling shareholder.
Changes is the controlling On March 2, 2016, according to Agreement of Share Transfer in Zero Price signed between
shareholder in the past (is Military Equipment Group and Jianshe Mechanical and Electric, Military Equipment Group shall
any) transfer its 71.13% stake of the company to Jianshe Mechanical and Electric in zero price, thus the
Jianshe Mechanical and Electric will become the companys controlling shareholder.
(d) On December 20, 2018, according to the Stock Rights Transfer Agreement of State-owned
Listed Company signed by Jianshe Mechanical and Electric and Military Equipment Group ,
Jianshe Mechanical and Electric will hold 71.13% of the company's equity, and the agreement will
be transferred to Military Equipment Group , which will become the controlling shareholder of the
company.
Ⅴ. Other Relevant Information
CPAs engaged
Name of the CPAs Baker Tilly China Certified Public Accountants（LLP）
Office address A-1 ，A-5 ，No.68 Building, No.19 Chegongzhuang West Road, Haidian District, Beijing
Names of the Certified Public
Liu Yulei, Liu Taiping
Accountants as the signatories
The sponsor performing persistent supervision duties engaged by the Company in the reporting period.
□ Applicable √ Not applicable
The Financial advisor performing persistent supervision duties engaged by the Company in the reporting period
□ Applicable √ Not applicable
Ⅵ. Summary of Accounting data and Financial index
Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data.
□Yes √No
Changed over
2023 2022 2021
last year（％）
Operating revenue(Yuan) 464,078,962.46 474,114,098.08 -2.12% 680,118,967.08
Net profit attributable to
the shareholders of the -69,331,287.64 -39,733,094.69 -74.49% -25,998,962.72
listed company（Yuan）
Net profit after deducting
of non-recurring gain/loss
attributable to the -70,465,594.16 -82,240,752.84 14.32% -29,668,201.39
shareholders of listed
company（Yuan）
Net Cash flow generated by
business operation 2,538,223.61 12,409,599.09 -79.55% 21,432,367.47
（Yuan）
Basic earning per
-0.581 -0.333 -74.47% -0.22
share(Yuan/Share)
Diluted gains per
-0.581 -0.333 -74.47% -0.22
share(Yuan/Share)
Net asset earning ratio
-89.60% -30.52% -60.20% -16.10%
（%）
Changed over
End of 2023 End of 2022 End of 2021
last year（％）
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2023 Annual Report
Gross assets（Yuan） 872,186,552.37 896,911,569.17 -2.76% 1,041,336,478.97
Net assets attributable to
shareholders of the listed 43,673,039.41 111,091,284.68 -60.69% 149,303,592.84
company（Yuan）
The lower of the companys net profit before and after the deduction of non-recurring gains and losses in the
last three fiscal years is negative, and the auditor's report of the previous year shows that the Companys going
concern ability is uncertain.
□ Yes √No
The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative.
√ Yes □ No
Items 2023 2022 Remarks
RMB 118,660 for sales materials
income; RMB 542,800 for Artificial
Operating income（Yuan) 464,078,962.46 474,114,098.08 support income; RMB 9,900 for
Power energy Income and RMB
2,927,500 for other income.
RMB 118,660 for sales materials
income; RMB 542,800 for Artificial
Amount of operating income
4,666,753.00 3,852,161.44 support income; RMB 9,900 for
deduction (yuan)
Power energy Income and RMB
2,927,500 for other income.
RMB 118,660 for sales materials
income; RMB 542,800 for Artificial
Operating income after
459,412,209.46 470,261,936.64 support income; RMB 9,900 for
deduction(Yuan)
Power energy Income and RMB
2,927,500 for other income.
VII. The differences between domestic and international accounting standards
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable□√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS
(International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the
period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable□√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign
accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 95,871,501.13 120,716,182.63 116,986,662.54 130,504,616.16
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2023 Annual Report
Net profit attributable
to the shareholders of -26,718,192.49 -16,592,485.66 -11,394,368.52 -14,626,240.97
the listed company
Net profit after
deducting of non-
recurring gain/loss
-27,582,654.93 -16,972,159.89 -11,894,368.52 -14,016,410.82
attributable to the
shareholders of listed
company
Net Cash flow
generated by business -16,520,111.28 37,298,889.64 24,162,803.07 -42,403,360.82
operation
Whether significant variances exist between the above financial index or the index with its sum and the
financial index of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
IX. Items and amount of non-current gains and losses
√Applicable □Not applicable
In RMB
Items Amount (2023) Amount (20212 Amount (2021) Note
Non-current asset disposal gain/loss(including
the write-off part for which assets impairment -413,963.91 40,420,431.93 1,566,473.14
provision is made)
Government subsidies recognized in current gain
and loss(excluding those closely related to the
1,104,494.20 205,826.00 1,583,305.16
Companys business and granted under the
states policies)
Switch back of provision for depreciation of
account receivable and contractual assets which 365,922.51 714,393.28 200,000.00
were singly taken depreciation test
Operating income and expenses other than the
77,853.72 167,143.72 319,460.37
aforesaid items
Other gains/losses in compliance with the
999,863.22
definition of non-recurring gain/loss
Total 1,134,306.52 42,507,658.15 3,669,238.67 --
Details of other gains/losses items that meets the definition of non-recurring gains/losses:
□ApplicableNot applicable
There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company.
Explain the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss
in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public -
-- Extraordinary Profit/loss
□ApplicableNot applicable
The Company does not have any non-recurring profit(gain)/loss listed under theQ&A Announcement No.1 on
Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary (non-recurring)
Profit(gain)/lossdefined as recurring profit(gain)/loss
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2023 Annual Report
Section III Management Discussion and Analysis
I. Industry of the Company during the reporting period
The Company shall comply with the disclosure requirement of Jewelry-related industries in the “Shenzhen Stock
Exchange Self-Regulatory Guidelines for Listed Companies No. 3- Industry Disclosure”
1. Overall situation of automobile industry
In 2023, the international political, economic, and security environment continued to be turbulent, and the
challenge brought by external uncertainty and internal development model transformation became more
complex. China has been injected impetus into economic development by deepening reforms, expanding
domestic demand, actively promoting a new round of high-level opening-up, and continuously deepening
structural adjustment and internal and external balance. The government has introduced a series of policies to
stimulate consumption, including policies to stabilize the growth of the automobile industry, support the
expansion of automobile consumption, and promote the high-quality development of the automobile
aftermarket, which have effectively promoted the further improvement of the quality and efficiency of the
development of the automobile industry. According to the statistics of the China Association of Automobile
Manufacturers, the production and sales of automobiles in 2023 was 30.161 million units and 30.094 million
units respectively, an increase of 11.6% and 12% YOY respectively, which was a record high. Among them, the
production and sales of new energy vehicles reached 9.587 million units and 9.495 million units, up 35.8% and
37.9% YOY respectively, with the market share reached 31.6%. Driven by the continuous and substantial
growth of new energy vehicles, the annual production and sales of the passenger car market reached 26.124
million units and 26.063 million units, up 9.6% and 10.6% YOY respectively, yet the market share of traditional
fuel vehicles shrank further.
2. Analysis of automobile air conditioning compressor industry
The automotive air conditioning compressor industry is closely following the development of the
automobile industry. At present, the oversupply of the domestic automobile market is further highlighted, the
pace of traditional car companies to transform old models and launch new models is becoming faster and faster,
the development cycle of new models has been shortened from about 4 to 5 years to 1 to 3 years, the old car
modification cycle has been shortened from 6 to 24 months to 4 to 15 months, the speed and quantity of new
energy products on the market are getting faster and faster, and the window period for the electrification
transformation of vehicle enterprises has been further compressed. The rapid iteration of the vehicle industry
has triggered the incandescent competition in the supply chain, forcing auto parts companies to accelerate
product technology iteration, quality optimization, cost extreme control, and service upgrades.
The automotive air conditioning system is mainly composed of four parts: compressor, condenser, flow
restrictor (expansion device), and evaporator. The compressor is the heart of the automotive air conditioning
system and the power source for the refrigerant to circulate in the system. The air-conditioning system of
traditional fuel vehicles is work by the air-conditioning compressor driven by the automobile engine, and the
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2023 Annual Report
main domestic products are swash plate type, scroll type, rotary vane type and other technologies. The air-
conditioning system of new energy vehicles is work by the air-conditioning compressor driven by the drive
motor. As the scroll compressor has high efficiency, high speed bearing capacity and high-speed motor
matching, it is the most ideal electric drive air-conditioning compressor. With the rapid development of the new
energy vehicle industry, the application of scroll compressor has broad prospects.
3. The development of the Company
The Company's automotive air-conditioning compressor products are mainly rotary vane technology,
which the Company has been introducing, digesting, absorbing and innovating independently for more than 20
years. From the perspective of industry development trends, the rotary blade technology will face a ceiling. In
the face of industry transformation and adjustment, the Company will closely follow the development of the
industry, stabilize the scale of traditional fuel compressor products, and vigorously carry out the research and
development and market expansion of new technology products such as electric scroll products in the meantime.
According to the "14th Five-Year Plan", the Company will focus on the main business, center on the
development of the new energy industry, and fully realize the layout and development arrangement of the new
energy electric compressor industry. From 2022 to 2023, the Company had carried out a total investment of
42,875,700 yuan in fixed assets in the new energy industry, and completed the construction of the electric
compressor dynamic and static plate production line, controller production line, assembly line and experimental
capacity building, laying the foundation for the large-scale breakthrough of electric compressor. At present, the
Company's automotive air conditioning compressor production capacity is 3.5 million units, of which the
electric compressor production capacity is 500,000 units.
II.Main Business the Company is Engaged in During the Report Period
The Company shall comply with the disclosure requirements of automobile manufacturing-related industries in
the Guideline No.3 for Self-regulation of Listed Companies of Shenzhen Stock Exchange-Industry Information
Disclosure.
In 2023, in the face of the complex business environment and development pressure, the Company
continued to increase investment in science and technology development, carried out in-depth market expansion,
adopted multiple measures to make steady progress, achieved the production of 1.187 million units of
automotive air conditioning compressors-a YOY increase of 28.5%, completed the sales of 1.183 million units-
a YOY decrease of 1.25%, and realized the operating income of 464 million yuan-a YOY decrease of 2.08%.
(A) Accelerate scientific and technological innovation and promote the transformation of achievements
First, the research and development of electric compressors has achieved landmark results, the PSW formal
mass production signed for Changan CPA project, the 18CC and 27CC second-generation scroll electric
compressors have completed design optimization, and the 45CC electric compressor research and development
has entered the design freezing stage. Secondly, it continued to carry out the research on the core key
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2023 Annual Report
technologies of electric driven, and the key technologies of the inner flow-path system of the scroll compressor,
the research on the optimization of the pump body foundation and other topics have achieved phased results,
and the research and application project of the key technology of the intelligent and efficient vehicle thermal
management system controller has passed the project performance evaluation by the Chongqing Science and
Technology Bureau. Thirdly, the Company continuously launched scientific and technological innovation
achievements, 3 topics were included in the key core technology research projects of the CSGC, 1 project won
the third prize of the Science and Technology Progress Award of the CSGC, and 2 product achievements were
included in the 2023 Innovation Guidance Catalogue of Chongqing, which was awarded the first batch of
Chongqing modern manufacturing inspection and testing public service platforms.
(B) Strengthen market tackling and consolidate market scale
First, relying on the Changan CPA platform, the electric compressor has obtained 4 mainstream projects
such as Changan C318 and Changan Kaicheng P201RE, and successfully obtained designated projects
including the JAC, Xinyuan and Kaiyi. 18 expansion achievements were obtained throughout the year,
including 2 supply qualifications, and realized the extension for customer group from the low-speed logistics
vehicle market to the new energy mainstream market. Second, 14 achievements were achieved in the fixed-
displacement compressor in respective to fixed-displacement transformed to variable displacement project, the
second supplier project,the continuation project, and the commercial vehicle expansion project, and obtained 3
designated supply qualifications and entered the Nissan platform. Third, the offline market added 7 new dealers
annually, with realized sales of 135,100 units, a YOY increase of 12%. Pingshan Taikai realized the sales of
carburetor of 246,000 sets, and realized the sales of the EFI system of 6,300 sets.
(C) Strengthen management benchmarking and improve management efficiency
First, the 91.7% of the 24 key tasks in the world-class value creation action work list were completed, and
two first prizes and three second prizes were awarded by CSGC and Chongqing Management Innovation
Achievements. Second, the 26 tasks of the special action to improve quality and efficiency were carried out
solidly, and saved the annual value of 20.38 million yuan, of which the procurement cost was reduced by 2.2%
YOY. Thirdly,the Company continued to promote the "quality improvement activities", the key quality
problems of electric compressors have been continuously solved, and the internal quality loss rate and zero-
kilometer failure rate of electric compressors have been controlled within the annual target. Fourth, the core
engineering capacity of electric compressors has been built, and Chang'an CPA general assembly line, the
dynamic and static plate processing line, and the controller assembly line have formed mass production capacity,
and the 27CC product process has been optimized. Fifth, we have promoted lean management, maintained the
lean evaluation of the CSGC to the B-level, and implemented the "N+3" model of production plan to further
improve the efficiency of production organization. Sixth, it strengthened the construction of the electric
compressor supply chain, sought and developed sources through multiple channels, enhanced the quality
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2023 Annual Report
selection, promoted the collaborative development of suppliers, and continuously strengthened the new energy
supply chain system.
(D) Strict risk prevention and control and improvement of security capabilities
Firstly,it improved the emergency plan for major risks, strengthened process supervision, and completed
the internal control self-assessment of all levels of enterprises. Secondly, it promoted the two-way integration of
compliance management and business work, enhanced the management of contract performance and dispute
response, and ensured that the Company's overall legal compliance risks were controllable. Thirdly, it solidly
promoted the Company's safety work plan, vigorously carried out the self-inspection and evaluation of the
standardized management of security and safety, implemented the strengthening plan of safety management for
the year and carried out the 2023 action plan for special investigation and rectification of major accidents and
hidden dangers to ensure safety control, reduce environmental pollution risk points, and prevent environmental
emergencies.
Vehicle manufacturing, production and operation during the reporting period
□ Applicable √Not applicable
Production and operation of auto parts during the reporting period
√ Applicable □ Not applicable
Output Sales volume
Increase or Increase or
This reporting Same period decrease This reporting Same period decrease
period last year compared with period last year compared with
last year last year
By part category
Automotive air
conditioner 1187026 923758 28.50% 1183079 1198092 -1.25%
compressor
According to the vehicle supporting
Automotive air
conditioner 1047945 1077417 -2.74%
compressor
According to after-sales service
Automotive air
conditioner 135134 120675 11.98%
compressor
Other
Domestic 559220 567218 -1.41% 504933 613338 -17.67%
Overseas 627806 356540 76.08% 678146 584754 15.97%
Explanation of the reasons for the year-on-year change of more than 30%
□Applicable Not applicable
Parts sales mode:
The Company is mainly engaged in the production of automotive air conditioning compressors, through
the sale of products to automobile manufacturers or to the after-sales service market to realize the product sales,
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2023 Annual Report
There are no major changes in the Company's sales model or sales channels during the year. The detailed
partition by customer segment is into the three scenarios:
Major customers. The cooperation method is mainly based on the production needs of customers, the
Company ships the goods to the designated or cooperative third-party logistics company, and the third-party
logistics company is responsible for warehousing and distribution services. Every month, the customer issues a
credit notice according to the actual consumption of the production plan, and the salesperson confirms the sales
according to the customer's credit notice and combined with the customer's consumption, contract unit price and
other information.
Customers who pay first and then receive goods. According to the customer's needs, after the customer pays and
the confirmation of receipt of the payment, the sales business personnel will deliver the goods according to the
unit price of the sales contract and the quantity required by the customer, and issue an invoice notice to confirm
the sales.
Aftermarket customers. The sales staff will ship the goods to the customer according to the contract and
customer needs, and after arriving at the time node agreed in the contract, the sales staff will issue an invoice
notice to confirm the sales according to the contract unit price and the shipping quantity agreed with the
customer.
The company conducts auto finance business
□ Applicable √Not applicable
The company conducts new energy vehicle related business
□Applicable√Not applicable
The production and operation information of new energy whole-vehicle and spare parts
In RMB
Product Category Capacity status Production Sales Sales revenue
Electric compressor for
automotive air 350,000 units 27,223 units 11058 9,166,507.00
conditioning
III.Analysis On core Competitiveness
The Company shall comply with the disclosure requirements of automobile manufacturing-related industries in
the Guideline No.3 for Self-regulation of Listed Companies of Shenzhen Stock Exchange-Industry Information
Disclosure.
Product pedigree construction: On the basis of introducing the world's advanced technology, the Company
actively carries out independent innovation. After years of development, the product pedigree and technical
system are becoming increasingly complete; Including rotary vane compressor, swash plate fixed-displacement
and variable-displacement and electric compressor with complete intellectual property rights, forming five
product platforms of "rotary vane iron/aluminum, piston fixed/variable-displacement and electric compressor";
The products cover 18CC to 480CC displacement.
Innovation platform construction: The Company has built a "1+3+1" scientific and technological innovation
platform (national post-doctoral workstation+Chongqing Enterprise Technology Center, Chongqing Automobile
Thermal Management System Engineering Technology Research Center, Chongqing Automobile Air
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2023 Annual Report
Conditioning Compressor Key Laboratory+Chongqing Jiulongpo Innovation Center), which provides a strong
platform support for the transformation and upgrading of automobile thermal management products, the
development of applied basic research and innovative research on key technologies, the cultivation of scientific
and technological talents, and technological industrialization. The Company has established a Industry-University-
Research platform with China Automotive Engineering Research Institute, Shanghai Jiaotong University and
Chongqing Jiaotong University, mainly to study the working mechanism of compressors and noise optimization of
compressors, and to tackle key technical bottlenecks.
R&D capacity building: The Company has the largest and most functional experimental testing center for
automotive air-conditioning compressors in Southwest China. It has imported more than 50 sets of advanced
equipment for reliability test, system test, performance test and NVH test from abroad, and has strong basic
research capabilities, product development and design capabilities, simulation and analysis capabilities and trial
production and processing capabilities. In recent years, the Company has won more than 20 science and
technology awards at or above the provincial and ministerial level, applied for more than 250 patents of various
types, including more than 50 invention patents, and obtained nearly 30 authorized invention patents.
Manufacturing capacity building: it has the domestic first-class high-precision parts manufacturing base and
Chongqing municipal digital workshop. It possesses more than 40 parts machining production lines, more than
260 sets high-precision and high-quality processing equipment, and 9 product assembly lines. The equipment is
with a total value of more than RMB 650 million, and more than 80% of which are imported from Japan, the
United States, Germany, Switzerland, South Korea and other countries. The machining and assembly accuracy are
all micron-level, and MARPOSS online detection is widely used, so its machining accuracy and assembly
automation degree are at the leading level in China.
Quality capacity building: The Company always adheres to the tenet of "Quality first, customer oriented",
and is committed to running quality work through all aspects of the Company, and constantly improving
product quality, service quality and quality-price ratio. The Company has always continuously improved its
management ability, actively assumed social responsibilities, Passed the certification of the IATF16949certified
by the international authoritative certification body DNV, the certifications ofISO45001 and ISO14001
management system, and the Changan Automobile QCA quality certification system, GM QSB+ quality
management standard, and Nissan GK on-site management method have been introduced.
Talent team building: The Company has 66 scientific and technical personnel, including 940 R&D personnel
among 10,000 employees, of which 84.85% have bachelor degree or above, and 14.29% have senior
professional titles. Introduced 9 mature talents of R & D, It has a national postdoctoral workstation with 7
postdoctoral fellows.
15
2023 Annual Report
IV.Main business analysis
1.General
During the year, the Company's main product, automotive air conditioning compressors, completed the
production of 1,187,000 units-a YOY increase of 28.50%, completed the sales of 1,183,100 units-a YOY
decrease of 1.25%, and realized the revenue of 464 million yuan, a decrease of 2.12% over the previous year.
From the perspective of sales area: the domestic sales were 504,900 units, a YOY decrease of 17.67%,
with sales revenue of 242 million yuan-a YOY decrease of 15.32%, and the domestic sales revenue accounted
for 52.20% of the total operating income. The foreign trade sales were 678,100 units, a YOY increase of
15.97%, realized the sales revenue of 222 million yuan, an increase of 17.96% YOY, which accounted for 47.80%
of the total operating income.
From the perspective of sales model: the vehicle supporting model achieved sales of 1,047,900 units, a
YOY decrease of 2.74%, and realized the revenue of 370 million yuan, a YOY decrease of 2.27%, which
accounted for 79.77% of the total operating income. The after-sales service market model achieved sales of
135,100 units, a YOY increase of 11.98%, and achieved the revenue of 36 million yuan, an increase of 22.65%
YOY, which accounted for 7.80% of the total operating income.
From the perspective of customer structure: The total sales to the Company's top five customers was 337
million yuan, accounting for 72.67% of the Company's operating income.
2. Revenue and cost
(1)Component of Business Income
In RMB
2023 2022
Changes
Amount Proportion Amount Proportion
Total operating
464,078,962.46 100% 474,114,098.08 100% -2.12%
revenue
On Industry
Auto and
459,412,209.46 98.99% 470,261,936.64 99.19% -2.31%
Motorcycle parts
Other 4,666,753.00 1.01% 3,852,161.44 0.81% 21.15%
On products
Auto and
459,412,209.46 98.99% 470,261,936.64 99.19% -2.31%
Motorcycle parts
Other 4,666,753.00 1.01% 3,852,161.44 0.81% 21.15%
On Area
Domestic 242,244,364.87 52.20% 286,054,392.55 60.33% -15.32%
Overseas 221,834,597.59 47.80% 188,059,705.53 39.67% 17.96%
Sub-sale model
Vehicle supporting
mode of vehicle
370,177,360.21 79.77% 378,774,852.60 79.89% -2.27%
air conditioning
compressor
Vehicle air
conditioning 36,213,291.50 7.80% 29,526,845.35 6.23% 22.65%
compressor after-
16
2023 Annual Report
sales service
market model
Other business and
product market 57,688,310.75 12.43% 65,812,400.13 13.88% -12.34%
models
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □Not applicable
In RMB
Increase/decrea Increase/decrea
Increase/decrea
se of business se of gross
Gross se of revenue in
cost over the profit rate over
Turnover Operation cost profit the same period
same period of the same period
rate(%) of the previous
previous year of the previous
year(%)
(%) year (%)
On Industry
Auto and
Motorcycle 459,412,209.46 427,333,668.74 6.98% -2.31% -4.74% 2.37%
parts
On products
Auto and
Motorcycle 459,412,209.46 427,333,668.74 6.98% -2.31% -4.74% 2.37%
parts
On Area
Domestic 242,328,765.74 212,916,225.64 12.14% -15.29% -19.56% 4.67%
Overseas 221,750,196.72 214,417,443.10 3.31% 17.91% 15.45% 2.06%
Sub-sale model
Vehicle
supporting
mode of vehicle 370,177,360.21 355,012,235.70 4.10% -2.27% -1.33% -0.91%
air conditioning
compressor
Vehicle air
conditioning
compressor
57,688,310.75 41,293,632.04 28.42% -12.34% -32.38% 21.21%
after-sales
service market
model
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on years scope of period-end.
□ Applicable √Not applicable
(3)Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Classification Items Unit 2023 2022 Changes
Sales Ten thousand sets 118.31 119.81 -1.25%
Vehicle air Production Ten thousand sets 118.70 92.38 28.50%
conditioner
Stock Ten thousand sets 25.59 25.38 0.82%
Explanation for a year-on –year change of over 30%
□ Applicable √Not applicable
17
2023 Annual Report
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable √Not applicable
(5)Component of business cost
Industry Category
In RMB
2023 2022
Proportion in the Proportion in the Increase/Dec
Industry Items
Amount operating costs Amount operating costs rease (%)
(%) (%)
Direct
Industry 309,080,311.27 72.33% 354,704,487.88 78.75% -12.86%
material
Fuel and
Industry 13,027,157.90 3.05% 9,888,828.55 2.20% 31.74%
energy
Industry Staff salary 26,802,488.43 6.27% 27,582,981.67 6.12% -2.83%
Manufacturi
Industry 56,775,515.99 13.29% 53,725,630.15 11.93% 5.68%
ng cost
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□ Yes √No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
□ Applicable √Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main Customers
Total sales amount to top 5 customers (Yuan) 337,265,292.37
Proportion of sales to top 5 customers in the annual sales(%) 72.67%
Proportion of the sales volume to the top five customers in the
12.26%
total sales to the related parties in the year
Information of the Companys top 5 customers
No Name Amount(RMB) Proportion(%)
1 Customers1 212,890,518.36 45.87%
2 Customers 2 56,882,709.47 12.26%
3 Customers 3 30,766,200.92 6.63%
4 Customers 4 24,544,486.17 5.29%
5 Customers 5 12,181,377.45 2.62%
Total -- 337,265,292.37 72.67%
Other explanation :
√ Applicable □Not applicable
Chongqing Changan Automobile Co., Ltd. The company's controlling shareholder, Military Equipment Group,
holds 40.70% of its shares), one of the top five customers, and its affiliated enterprises have an associated
relationship with the Company. The Company and its transactions, as routine related transactions, have been
submitted to the 2023 First provisional General Meeting of Shareholders for review and approval.
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2023 Annual Report
The company's directors, supervisors, senior managers, key technical personnel and shareholders holding more
than 5% (not including the Military Group) do not direct or indirect interests in the major suppliers of the above-
said suppliers.
Principal suppliers
Total purchase of top 5 Suppliers（Yuan） 168,113,743.29
Percentage of total purchase of top 5 suppliers In total annual
43.42%
purchase(%)
Proportion of purchase amount from the top 5 suppliers in the
0.00%
total purchase amount from the related parties in the year
Information about the top 5 suppliers
No Name Amount（Yuan） Proportion
1 Suppliers 1 78,303,481.80 20.22%
2 Suppliers 2 25,516,034.65 6.59%
3 Suppliers 3 22,753,535.65 5.88%
4 Suppliers 4 22,095,216.42 5.71%
5 Suppliers 5 19,445,474.77 5.02%
Total -- 168,113,743.29 43.42%
Other explanation :
√ Applicable □ Not applicable
The company's directors, supervisors, senior managers, key technical personnel and shareholders holding more
than 5% do not direct or indirect interests in the major suppliers of the above-said suppliers.
3.Expenses
In RMB
2023 2022 Increase/Decrease(%) Note
Sale expenses 14,232,724.26 15,239,315.12 -6.61%
Administration
52,350,776.53 47,721,110.67 9.70%
expenses
Financial expenses 18,729,472.71 17,472,245.88 7.20%
R & D expenses 27,227,617.00 30,598,868.69 -11.02%
4.R& D Investment
√Applicable □Not applicable
Expected impact on the
Name of main R&D
Project purpose Project progress Goal to be achieved future development of
project
the Company
Improve product
performance and tackle
with the upgrading and
Continuously carrying Improve the
development of
out technological Improve refrigeration competitiveness of fix-
automobile technology;
Technical direction of upgrades, continuously efficiency; optimize displacement
consolidate the vitality
traditional compressor reducing design costs, noise; and optimize compressors and
of products, deal with manufacturing costs. stabilize the scale
and completing market
the upgrading of position of the industry
projects as planned
automobile
consumption;
consolidate product
19
2023 Annual Report
competitiveness and
solve key technical
problems.
The 27CC products
achieve mass
Independently Enhance product
production targets, the
controllable controller, Improve the product competitiveness and
Technical direction of 36CC products achieve
achieving vertical pedigree of new energy achieve large-scale
electric compressor small batch production,
integration of product compressors breakthroughs in new
and the 45CC products
technology energy compressors
achieve design
finalization.
Construction and
simulation of the
Upgrade the product technical architecture With electric
Establish the technical
Technical direction of horizontal integration, of heat pump air compressors as the
capability of matching
thermal management focusing on system conditioning system, core, build heat pump
system testing of air
matching and heat and establishment of air conditioning system
conditioning systems.
pump technology. enterprise thermal integration capabilities.
management system
enterprise standards.
The EFI system Develop new products
Cultivation and Improve the
Direction of EFI achieve recognition by such as EFI systems
development of EFI competitiveness of the
system market customers and and gasoline pumps to
systems Company.
achieve mass sales. promote scale growth
Company's research and development personnel situation
2023 2022 Increase /decrease
Number of Research and
Development persons 66 70 -5.71%
(persons)
Proportion of Research and
9.40% 9.00% 0.40%
Development persons
Academic structure of R&D personnel
Bachelor 51 52 -1.92%
Master 5 5 0.00%
College 10 13 -30.77%
Age composition of R&D personnel
Under 30 years old 27 23 17.39%
30-40 years old 15 17 -11.76%
Over 40 years old 24 30 -20.00%
The Company's R & D investment situation
2023 2022 Increase /decrease
Amount of Research and
Development Investment 27,227,617.00 30,598,868.69 -11.02%
(Yuan)
Proportion of Research and
Development Investment of 5.87% 6.45% -0.58%
Operation Revenue
Amount of Research and
Development Investment 0.00 0.00 0.00%
Capitalization (Yuan)
Proportion of Capitalization
Research and Development
0.00% 0.00% 0.00%
Investment of Research and
Development Investment
Reasons and influence of significant changes in R&D personnel composition of the Company
√Applicable □Not applicable
20
2023 Annual Report
The change in the educational background and age structure of R&D personnel was due to the fact that in
order to optimize the multi-level talent structure allocation and strengthen the construction of the scientific and
technological team, the Company's Automotive Thermal Management System Research Institute strengthened
the introduction of professional and technical talents in 2023 and continued to recruit college graduates to
promote the technical talent reserve.
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √Not applicable
Reasons for the drastic change of capitalization rate of R&D investment and its rationality explanation
□ Applicable √Not applicable
5.Cash Flow
In RMB
Items 2023 2022 Increase/Decrease(%)
Subtotal of cash inflow received
449,078,096.98 477,842,991.85 -6.02%
from operation activities
Subtotal of cash outflow received
446,539,873.37 465,433,392.76 -4.06%
from operation activities
Net cash flow arising from
2,538,223.61 12,409,599.09 -79.55%
operating activities
Subtotal of cash inflow received
159,773.95 153,543,148.36 -99.90%
from investing activities
Subtotal of cash outflow for
18,995,468.32 26,166,782.57 -27.41%
investment activities
Net cash flow arising from
-18,835,694.37 127,376,365.79 -114.79%
investment activities
Subtotal cash inflow received
781,612,717.55 732,591,828.08 6.69%
from financing activities
Subtotal cash outflow for
807,190,167.73 726,114,182.90 11.17%
financing activities
Net cash flow arising from
-25,577,450.18 6,477,645.18 -494.86%
financing activities
Net increase in cash and cash
-41,878,663.83 146,256,010.86 -128.63%
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □ Not applicable
The decrease in net cash flow from operating activities was due to the lower product sales and lower
revenue during the year.
The decrease in the subtotal cash inflow from investing activities was mainly due to the significant
increase in cash inflow from investing activities due to the transfer of assets such as the 106 plant in the
previous year.
The decrease in the subtotal cash outflow from investment activities was mainly due to the decrease in
investment in fixed assets (the technical transformation project of Pingshan Taikai motorcycle fuel pump
production line was not feasible due to changes in the external market and was not implemented in the current
year).
The decrease in net cash flow from fund-raising activities was due to the structural adjustment of fund-raising.
21
2023 Annual Report
The decrease in net increase in cash and cash equivalents was mainly due to the decrease in net cash flow
from above-said operating activities, the decrease in net cash flow from investing activities and the decrease in
net cash flow from financing activities.
Reasons for the significant difference between the net cash flow generated by the Company's operating
activities during the reporting period and the net profit of this year
□ Applicable √Not applicable
V. Main business analysis
√ Applicable □ Not applicable
In RMB
Proportion in total
Amount Explanation of cause Sustainable (yes or no)
profit
The operating income
of the Company's joint
Investment income 11,095,359.95 15.92% Yes
venture Jianshe
HANON
Change in fair value,
0.00 0.00% No
profit and loss.
Impairment of assets -490,947.61 0.70% No
Non-operating income 79,114.42 0.11% No
Non-operating
1,260.70 0.00% No
expenses
Income from asset
-413,963.91 0.59% No
disposal
Credit impairment
331,504.85 0.48% No
losses
VI. Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
End of 2023 End of 2022 Notes to
Proportion the
Proportion in Proportion in increase/d significa
Amount the total Amount the total ecrease nt
assets(%) assets(%) change
Monetary fund 137,195,899.72 15.73% 179,954,522.99 20.06% -4.33%
Accounts
125,956,261.01 14.44% 113,710,214.72 12.68% 1.76%
receivable
Contract assets 0.00% 0.00%
Inventories 130,309,955.62 14.94% 131,860,572.93 14.70% 0.24%
Real estate
0.00% 0.00%
investment
Long-term
equity 221,207,680.99 25.36% 210,112,321.04 23.43% 1.93%
investment
Fixed assets 188,907,962.58 21.66% 202,039,143.80 22.53% -0.87%
22
2023 Annual Report
Construction in
15,244,362.53 1.75% 989,429.96 0.11% 1.64%
process
Right to use
0.00% 0.00%
assets
Short-term
540,993,500.00 62.03% 546,603,500.00 60.94% 1.09%
loans
Contract
2,058,111.01 0.24% 3,441,205.38 0.38% -0.14%
liabilities
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
2.Asset and Liabilities Measured by Fair Value
□ Applicable √ Not applicable
3. Restricted asset rights as of the end of this Reporting Period
Ending balance
Items
Book balance Book value Restricted type Restricted situation
Monetary fund
Bank acceptance bill
9,080,029.50 9,080,029.50 Pledeg
security deposit
Fixed assets 41,102,080.06 24,295,232.36 Pledeg Loans Mortgage
Total 50,182,109.56 33,375,261.86 -- --
Connect the table：
Beginning balance(
Items
Book balance Book value Restricted type Restricted situation
Monetary fund
Bank acceptance bill
9,959,988.94 9,959,988.94 Pledeg
security deposit
Financing receivable
Bank acceptance bill
7,820,000.00 7,820,000.00 Pledeg
Mortgage
Total
17,779,988.94 17,779,988.94 -- --
VII. Investment situation
1. General
√ Applicable □Not applicable
Investments made in the Reporting Investments made in the prior year
Increase/Decrease(%)
Period（\Yuan） (Yuan)
13,061,400.00 29,867,100.00 -56.27%
2.Condition of Acquiring Significant Share Right Investment during the Report Period
□ Applicable √ Not applicable
23
2023 Annual Report
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
√ Applicable □ Not applicable
In RMB
Accrued
Accrued Actual Reasons for
Industry Realized
Invest Fixed Investment Capita Antici not Reaching
involved Investment Project Income up
ment investm Amount up to l pated the Planned Disclosure Disclosure
Project name in amount in this schedu to the End date Index
meth ents or the End of Sourc incom Schedule and
investmen reporting period le of
od not Reporting e e Anticipated
t projects Reporting
Period Income
Period
The
See on
Automoti construction
Construction www.cninfo.co
ve air of the project
project of dynamic m.cn company
Self- conditione Self 100.00 has been January
and static disk Yes 6,981,800.00 6,981,800.00 0.00 0.00 announcement
built r funds % completed, 17,2023
production line of compresso on
saving
electric compressor r industry Announcement
1,018,200
No.: 2023-001
yuan
The See on
Automoti construction www.cninfo.co
ve air of the project m.cn company
Sporadic fixed Self- conditione Self 100.00 January
Yes 6,079,600.00 6,079,600.00 0.00 0.00 has been announcement
assets investment built r funds % 17,2023
compresso completed, on
r industry saving Announcement
670,400 yuan No.: 2023-001
Total -- -- -- 13,061,400.00 13,061,400.00 -- -- 0.00 0.00 -- -- --
24
2023 Annual Report
4.Investment of Financial Asset
（1）Securities investment
□ Applicable √ Not applicable
No such cases in the Reporting Period
（2）Investment in Derivatives
□ Applicable √ Not applicable
No such cases in the Reporting Period
5.Application of the raised capital
□ Applicable √ Not applicable
No such cases in the Reporting Period
VIII. Sales of major assets and equity
1.Situation of Significant Asset Sale
□ Applicable √ Not applicable
No such cases in the Reporting Period
2.Sales of major equity
□ Applicable √ Not applicable
25
2023 Annual Report
IX. Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Company Company Registered
Sectors engaged in Total assets Net assets Turnover Operating profit Net Profit
Name type capital
Air
Subsidiarie Production and sales of automotive
Conditione 16000 736,446,201.62 136,174,763.65 407,426,284.81 -63,362,878.98 -63,410,056.00
s air conditioners
r Co.
Pingshan Shareholdi Production and sales of
8355 91,871,607.66 84,291,366.13 51,413,680.94 50,465.89 67,686.15
Taikai ng motorcycles and parts
company
Shareholdi Production and sales of
Jianshe
ng Automobile Thermal Energy 42000 519,521,882.39 439,298,643.18 277,217,202.96 24,512,822.23 22,190,719.89
HANON
company Management system
Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable √ Not applicable
Note
The wholly-owned subsidiary Automotive Air Conditioning is mainly engaged in the production and sales of fixed-displacement compressors for automotive air
conditioners. With the increase of market share of new energy vehicles, the fixed-displacement compressor market has further declined. In 2023, 1.1831 million air-
conditioning compressors were sold, with a year-on-year decrease of 1.25%, and the operating income was RMB 407.43 million, with a year-on-year decrease of
0.66%.
The wholly-owned subsidiary Pingshan Taikai is mainly engaged in the production and sales of carburetor and parts for engines. In 2023, In 2023, a number of
247,800 carburetors was sold, a YOY increase of 4.26%, and 7,500 sets of EFI systems were sold. The operating income from that was 51.61 million yuan, a YOY
decrease of 15.39%.
26
2023 Annual Report
The joint venture Jianshe HANON is mainly engaged in the production and sales of variable displacement compressors. In 2023, it sold 557,300 units of
variable displacement compressors, a YOY increase of 14.36%, and achievedthe operating income of 277.22 million yuan, a YOY increase of 8.9%.
27
2023 Annual Report
X．Structured vehicle controlled by the Company
□ Applicable √ Not applicable
XI. Prospect for future development of the Company
(I) Overall development trend of the industry and opportunities and challenges faced by the Company
From the perspective of the development environment of the industry, the internal and external
environment faced by the automotive industry is still complex and severe. Firstly, the international political
disputes and military conflicts have erupted at many points, and the foreign trade market is facing more
uncertainties and large downward pressure. Secondly, the domestic macroeconomic environment still faces
challenges such as insufficient effective demand, intensified competition, and downward prices. However, the
favorable factors supporting the high-quality development of the automotive industry continue to accumulate
and increase, which will effectively improve the development environment of the automotive industry.
From the perspective of the operation trend of the industry, the development opportunities and challenges
coexist in 2024, but the opportunities outweigh the challenges, and the favorable conditions are stronger than
the unfavorable factors. Its expected that the automobile market will continue to maintain a steady and positive
development trend in 2024 and will reach 31 million units, a slight increase of about 3% YOY. The production
and sales of new energy vehicles will be expected to be about 11.5 million units, a YOY increase of about 20%
and the production and sales of traditional fuel vehicles will decrease by 1.1 million units, a YOY decrease of
about 5.3%.
From the perspective of the Company's development, the Company is facing a complex business
environment and development pressure. The traditional automotive air-conditioning compressor products have
been impacted by the transformation of the industry, and the sales scale has continued to shrink. The core
competitiveness of new energy electric compressors is yet not enough, and it has not formed a scale effect in the
mainstream passenger car market. However, with the official mass production of Changan Automobile CPA
project, the market for new energy electric compressors has achieved a breakthrough, laying the foundation for
the Company's transformation and development.
(II) Company development plans
The Company will unswervingly strengthen the construction of scientific and technological innovation
enterprise, strive to build a new energy vehicle thermal management system and a full range of compressor
product layout business structure, and vigorously implement the "three-year revitalization plan" and the three-
step development strategy. Through the products revitalization, the integration of the Company's industrial
layout optimization will be fully completed, and the new energy industry will become a new pillar backbone.
Through market revitalization, the Company's internal resource integration will be fully implemented, and the
market mechanism will achieve new results. Through management revitalization, the operation of the listed
company will be fundamentally improved, and endogenous development will emerge with new vitality.
28
2023 Annual Report
Through talent revitalization, the Company's competitive advantage will be reconstructed, and the value
creation will gather new momentum.
(III) Company's production and operation arrangement in 2024
The year of 2024 is the first year of the implementation of the "three-year revitalization plan", and the
Company will fully implement the business idea of "one rise, one stability and one decline", and vigorously
implement the "271" business strategy, that is to achieve two goals, to carry out resource integration at the
capital level and improve the anti-risk ability of the listed company. It will fully complete the business target in
2024 at the operation level, achieve the operating income of 584 million yuan, and complete the sales of 1.5
million units of automotive air-conditioning compressors, including 200,000 new energy electric compressors.
The Company will vigorously implement the seven special actions of capital operation of the listed company,
product tackling, market tackling, cost reduction, engineering capacity improvement, three systems reform and
in-depth joint venture cooperation, basically forming an enterprise model of new energy industry operation +
joint venture control upon the initial completion of transformation and upgrading.
Make every effort to promote product tackling. The first is to focus on promoting the Company's "266"
scientific and technological transformation action plan, reshaping the scientific and technological innovation
system, and achieve the system efficiency evaluation results ranking in the forefront of the group company. The
second is to fully promoted the solidification, optimization and marketization of electric platform products,
accelerate the solution of outstanding problems in the current period, complete the performance optimization of
27CC and 34CC platform products, and build product technical competitiveness. The third is to solidly promote
lean research and development, optimize the organizational structure, personnel structure, and project
management, further promote the design and cost reduction work, and build product market competitiveness.
The fourth is to coordinate and promote the iterative reserve of product technology, complete the development
of COM-PTC controller integration technology, R1234yf refrigerant scroll electric compressor heat pump
adaptability technology research, and new refrigerant (R290) heat pump electric compressor forward-looking
technology research.
Make every effort to promote the market tackling. First, for the electric compressor, we will grasp the
increment of existing projects such as Chang'an, Ruichi, and Geely, and promote the increase volume of new
projects such as Kaiyi and Xinyuan, so as to obtain increase in existed and strengthen the increment. Second,
for the fixed-displacement compressor, it will consolidate the existing projects such as Peugeot and Great Wall,
continue to stabilize the sales scale, and accelerate the increase volume in new projects such as the conversion
project, the second-supplier project, and the Peugeot project. The third is to reshape the market customer
structure, the electric compressor will take the markets or projects such as Dongfeng Nissan as the main
expansion target, and the fixed displacement compressor will take Chery, offline, overseas and other markets as
the main expansion target. The market concentration will be effectively reduced, and the customer structure will
be significantly improved.
29
2023 Annual Report
Make every effort to improve the engineering capabilities. The first is to improve the technological
capabilities, completely solve the engineering problems such as electric compressor running-in and assembly
operation efficiency, and enable the dynamic and static disc machine processing line, the electric compressor
assembly line, and the controller line will be running stable at full production, and the manufacturing cost of a
single unit will be greatly reduced with the supply chain is stable, reliable and controllable. The second is to
improve the level of product quality, the quality cost rate will decrease by 0.5 percentage points YOY, the FTT
of assembly line of fixed displacement products will be increased to 93.6%, the FTT of the electric 27CC
production line will be increased to 85%, the FTT of the 34CC production line will be increased to 90%, and the
first-time yieldpass rate of electric products will be increased to 95%. The third is to improve the level of
equipment management, strengthen the preventive maintenance of equipment, reduce the average time to repair
failures, and improve the overall OEE level of equipment.
Make every effort to reduce costs and control costs. The first is to adhere to the rigidity of the budget,
decompose the goals layer by layer, implement responsibilities layer by layer, and form a target performance
management system that everyone picks up the heavy burden and everyone has indicators on their heads. The
second is to increase the potential of cost tapping, carry out in-depth value-saving actions, aim at the
weaknesses of cost management, focus on key improvement areas, refine measurement standards, and control
the procurement cost of the whole product line within the annual predetermined target. The third is to strictly
control various expenses, so that "no budget no spending, there is budget but no overspending", increase the
monitoring of costs and expenses, period expenses, etc., to ensure that the "three" expenses will be matched
with the economies of scale. Fourth, we will strictly abide by the boundaries of the two gold controls, strictly
control accounts receivable, determine production by sales, determine the procurement by production, and clean
up the backlog of idle and inefficient and ineffective inventory in a timely manner.
Make every effort to promote the reform of the three systems. The first is to deepen the reform of the
personnel system, implement the competitive employment for the last-grade position in the evaluation of cadres,
strengthen the exit of middle-level leaders, improve the evaluation system of core talents, non-administrative
and post-cadres, and build a positive dynamic adjustment mechanism. The second is to deepen the reform of the
distribution system, build a multi-level income distribution model, optimize the medium and long-term
incentives, strengthen project co-investment management, improve the scientific research team'sincome
dividends of new product achievement transformation and improve the scientific and technological personnel
remuneration cashing system, and the remuneration distribution will be more inclined to the core backbone. The
third is to deepen the reform of the employment system, assess job needs, integrate functions and
responsibilities, flatten the establishment of institutions, and establish a normalized exit mechanism in
accordance with the law.
Focus on preventing and resolving risks and hidden dangers. First, the Company will continue to improve
the internal control system. It will further improve the Company's risk management level, strengthen risk
30
2023 Annual Report
identification and risk control before, during and after the event. It will further consolidate the compliance
management responsibilities to ensure 100% coverage of the "three reviews" of legal compliance, and
effectively prevent the Company's legal compliance risks. The second is to strictly implement safety production
control. It will carry out a three-year difficulties-tackling action to strengthen and consolidate the overall safety
system, continue to promote the rectification of major accidents and hidden dangers, and effectively curb the
occurrence of accidents, promote the standardization of team safety standards, and earnestly implement the
responsibility and measures for safe production to teams and individuals. It will carry out a three-year special
action for ecological and environmental protection to reduce environmental pollution risk points and prevent
environmental emergencies.
The above financial budget, business plan, and business goals do not represent the Company’s profit
forecast for the future years, and whether it can be achieved depends on various factors such as changes in
market conditions and the efforts of the business team. As there is great uncertainty, investors are advised
to pay attention to it.
31
2023 Annual Report
XII.Particulars about researches, visits and interviews received in this reporting period
√ Applicable □ Not applicable
Types of
Place of Way of Visitors Index of Basic Information on
Reception time visitors Main contents discussed and information provided
reception reception received the Investigation and Survey
received
Q: The Company's annual performance forecast shows that the performance is
The Individu declining, in the face of the current performance, does the Company's controlling Register of visitors for investo
February 2,2023 By phone Mr.Zhang
Company al shareholder have a plan to promote the B-share reform? A: The Company does rs of the company
not know the controlling shareholder's plan for the Company's B-share reform.
Q: The State-owned Assets Supervision and Administration Commission
(SASAC) issued the "Work Plan for Improving the Quality of Listed Companies
Controlled by Central Enterprises" to encourage and support central enterprises
to become stronger, better and bigger.As a listed company of central enterprises,
the Company should seize policy opportunities and promote B-share reform. A:
The Individu Register of visitors for investo
March 21,2023 By phone Mr.Chen The Company will conscientiously implement the requirements of the State-
Company al rs of the company
owned Assets Supervision and Administration Commission and the CSGC on the
quality improvement of listed companies, unswervingly promote the "three major
battles" of product innovation, reform and adjustment, and losses turnaround and
profits increase, and strive to promote the high-quality development of the listed
company.
The Individu Q: What is the relationship between the Company and the Construction Register of visitors for investo
March 22,2023 By phone Mr.Chen
Company al company? A: Both are controlled by one party. rs of the company
Jianche B 2022 Annual
Q: After the Company's 4:1 share reduction, the total share capital is too small,
Performance Presentation
Online and many institutional investors are reluctant to participate in the investment,
Investor Activity Record
communic hoping that the Company can increase capital and expand shares. A: At present,
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual the Company is steadily promoting production and operation in accordance with
Company al Stock Exchange Investor
the online the 14th Five-Year Plan, if there is a capital increase and share expansion plan, it
Relations Interactive Platform
platform will be announced in time, please continue to pay attention to the Company's
(Interactive Platform) on May
information disclosure.
15, 2023
Jianche B 2022 Annual
Performance Presentation
Online Q: In recent years, the performance has not been idea, it is recommended that the
Investor Activity Record
communic Company expand new business on the basis of the current main business, and
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual improve the Company's development ability and profitability. A: The company is
Company al Stock Exchange Investor
the online actively expanding new businesses and accelerating transformation and
Relations Interactive Platform
platform upgrading and high-quality development.
(Interactive Platform) on May
15, 2023
32
2023 Annual Report
Jianche B 2022 Annual
Performance Presentation
Online Q: A number of B-share listed companies have achieved B-share reform, why has
Investor Activity Record
communic there been no progress in the Company's B-share reform? We hope that the
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual Company will promote the work of converting B share to A share as soon as
Company al Stock Exchange Investor
the online possible. A: The Company is actively exploring the work of converting B share
Relations Interactive Platform
platform to A share in accordance with the relevant national policies.
(Interactive Platform) on May
15, 2023
Jianche B 2022 Annual
Q: The Company has been losing money for many years, is it expected to turn
Performance Presentation
Online losses into profits this year? If achieve the expected revenue of 570 million yuan
Investor Activity Record
communic in the annual report, what is the expected profit? A: According to the 14th Five
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual Year Plan, the Company vigorously implements the "136" strategy and develops
Company al Stock Exchange Investor
the online in line with expectations during the transformation and upgrading process
Relations Interactive Platform
platform towards the new energy thermal management industry. Please refer to the
(Interactive Platform) on May
Company's regular reports for specific details.
15, 2023
Jianche B 2022 Annual
Performance Presentation
Online Q: Does Hanang Construction currently have the ability to deliver thermal
Investor Activity Record
communic management systems based on its recent business performance and future profit
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual forecast? A: Hanang Construction completed its revenue and profit targetsby
Company al Stock Exchange Investor
the online exceeding the budget in the first quarter of 2023, and its expected to achieve its
Relations Interactive Platform
platform annual profit target according to the budget or beyond the budget this year.
(Interactive Platform) on May
15, 2023
Q: Now that the Company's business situation, financial situation, and survival
Jianche B 2022 Annual
are all problems, how to build a world-class scientific and technological
Performance Presentation
Online innovation company? A: The Company is promoting the "266" scientific and
Investor Activity Record
communic technological innovation action, implementing the product innovation battle, and
The Individu Form, published on Shenzhen
May 12,2023 ation on Individual striving to build a world-class scientific and technological innovation enterprise
Company al Stock Exchange Investor
the online through the construction of scientific and technological innovation ecological
Relations Interactive Platform
platform mechanism, the introduction of high-level talents, the promotion of digital
(Interactive Platform) on May
transformation of R&D, and the continuous improvement of R&D investment
15, 2023
intensity.
Q: Last year, the Company's new energy compressor production and sales were Jianche B 2022 Annual
Online
very low, is it because it has not yet formed its own core competitiveness? Is the Performance Presentation
communic
The Individu bottleneck problem naturally existing? Is it possible for sales to reach 100,000 Investor Activity Record
May 12,2023 ation on Individual
Company al units this year? A: The Company unswervingly transforms and upgrades to the Form, published on Shenzhen
the online
new energy thermal management industry, and has built a new energy product Stock Exchange Investor
platform
series platform through the vigorous implementation of product innovation. The Relations Interactive Platform
33
2023 Annual Report
Company is fully committed to the market boost, and its expected that the sales (Interactive Platform) on May
of new energy electric compressors will exceed 100,000 units. 15, 2023
Jianche B
participated in the Collective
Location Online Reception Day for investors
of communic A total number of 38 of questions raised by investors and the Company's replies of listed companies in
Individu
November 17,2023 collective ation on Individual were disclosed on the investor relations interactive platform of the Shenzhen Chongqing, published on the
al
reception the online Stock Exchange (E-platform) Investor Relations Interactive
activities platform Platform of Shenzhen Stock
Exchange on November 20,
2023 (Interactive Platform)
XIII. The implementation of the action plan of "Double improvement of quality and return".
Whether the Company has disclosed the action plan of "Double improvement of quality and return".
□Yes No
34
2023 Annual Report
IV. Corporate Governance
I.Basic state of corporate governance
In accordance with the Guidelines for the Governance of Listed Companies and other laws and regulations,
the company has continuously improved its governance mechanism and established an effective governance
structure, with clear rights and obligations of shareholders, directors, supervisors and senior executives, which can
ensure that shareholders fully exercise their legal rights, ensure that the Board of Directors is responsible to the
company and shareholders, and ensure the transparency of major information disclosure, legal operation and
honesty and trustworthiness of the company. There is no significant difference between the actual situation of
corporate governance and the normative documents on governance of listing companies issued by China
Securities Regulatory Commission.
In 2023, the board of directors and the board office of the Company won the "2023 Excellent Practice Case
of Board of Directors of Listed Companies" and "2023 Excellent Practice Case of Board Office of Listed
Companies" respectively in the evaluation by the China Association of Listed Companies.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC.
II. Independence of the Company relative to controlling shareholder and the actual controller in ensuring
the Company’s assets, personnel, finance, organization and businesses
The Company is completely separate from the holding shareholder in aspects of business, asset, finance, and
organization. It has its independent business operation.
Business: The Company has independent and complete development, purchase, production and marketing system.
The Company is capable to perform business operation independently.
Personnel: The Company established independent functional department responsible for labor, personnel and
wage management and formed labor, personnel and wage management system.
Asset: The Companys assets are independent and complete. The assets are registered, booked, accounted, and
administrated independently.
Organization: The Company has established an organizational structure that is independent of its controlling
shareholder. The organs of the Company are able to exercise their functions independently.
Finance: The Company has set up independent finance department, formed independent financial accounting
system, established and perfected financial control system and internal control measures, opened independent
bank accounts and paid taxes independently.
III. Competition situations of the industry
□ Applicable √ Not Applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reportin
1.Annual General Meeting
35
2023 Annual Report
Investor
Sessions Type participation Meeting Date Disclosure date Disclosure index
ratio
It was reviewed and approved: 1.Proposal on 2023 Annual
The First Extraordinary Extraordinary Investment Plan. 2.Proposal on the financing plan for 2023.
shareholders General shareholders 74.45% February 24,2023 February 25,2023 3.Proposal on the expected provision of guarantees for Subsidiaries
meeting in 2023 General meeting in 2023.4.Proposal on expected routine related party transactions in
2023.
It was reviewed and approved: 1. The Work Report of the Board of
Directors for 2022.2. The Work Report of Supervisors committee
2022 Shareholders Annual General 2022.3.Annual Report for 2022 and its summary. 4. Profit
76.24% May 26,2023 May 27,2023
general meeting Meeting distribution plan for 2022.5. Proposal on the general election of the
board of directors.6.Proposal on the general election of the Board of
Supervisors.
It was reviewed and approved: . 1. Proposal on the change of
The Second accounting firm. 2. Proposal on amending the Articles of Association
Extraordinary
Extraordinary 3. Proposal on amending the Rules of Procedure of the General
shareholders 74.57% December 22,2023 December 23,2023
shareholders General Meeting of Shareholders. 4. Proposal on amending the Rules of
General meeting
meeting in 2023 Procedure of the Board of Directors.
5. Proposal on formulating the "Independent Director System".
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Information about Directors, Supervisors and Senior Executives
1.Basic situation
Amount Amount
Shares of of Other Shares
held at shares shares changes held at
Office
Name Sex Age Positions Starting date of tenure Expiry date of tenure the year- increase decrease increase the year- Reason
status
begin(sh d at the d at the /decreas end(shar
are) reportin reportin e e)
g g
36
2023 Annual Report
period(s period(s
hare) hare)
Not
Fan Aijun Male 52 Chairman In office October 27,2023 May 29,2026 0 0 0 0 0
applicable
Not
Fan Aijun Male 52 Director In office February 3,2021 May 29,2026 0 0 0 0 0
applicable
Dimissi Not
Fan Aijun Male 52 GM January 18,2021 October 27,2023 0 0 0 0 0
on applicable
Zhou Not
Male 44 Director In office February 2,2024 May 29,2026 0 0 0 0 0
Chaodong applicable
Zhou Not
Male 44 GM In office December 22,2023 May 29,2026 0 0 0 0 0
Chaodong applicable
Not
Dong Qihong Male 59 Director In office April 11,2019 May 29,2026 0 0 0 0 0
applicable
Not
Qiao Guoan Male 59 Director In office May 26,2023 May 29,2026 0 0 0 0 0
applicable
Dimissi Not
Qiao Guoan Male 59 Supervisor April 11,2019 May 26,2023 0 0 0 0 0
on applicable
Not
Shi Qingong Male 51 Director In office May 28,2021 May 29,2026 0 0 0 0 0
applicable
Not
Gu Xiaozhou Male 36 Director In office May 26,2023 May 29,2026 0 0 0 0 0
applicable
Independent Not
Li Jiaming Male 58 In office May 22,2020 May 29,2026 0 0 0 0 0
Director applicable
Independent Not
Xie Fei Male 59 In office May 22,2020 May 29,2026 0 0 0 0 0
Director applicable
Independent Not
Liu Wei Male 59 In office May 22,2020 May 29,2026 0 0 0 0 0
Director applicable
Femal Independent Not
Song Weiwei 48 In office May 22,2020 May 29,2026 0 0 0 0 0
e Director applicable
Chairman of the
Not
Lu Xianyun Male 59 supervisory In office November 27,2020 May 29,2026 0 0 0 0 0
applicable
committee
Zhang Not
Male 56 Supervisor In office April 11,2019 May 29,2026 0 0 0 0 0
Lungang applicable
Employee Not
Liao Jian Male 52 In office March 3,2021 May 29,2026 0 0 0 0 0
supervisor applicable
Employee Not
Su Qiang Male 37 In office November 29,2021 May 29,2026 0 0 0 0 0
supervisor applicable
37
2023 Annual Report
Secretary of the
Commission for Not
Xu Wanming Male 52 In office August 29,2022 0 0 0 0 0
Discipline applicable
Inspection
Not
Tan Mingxian Male 50 Chief accountant In office March 25,2019 May 29,2026 0 0 0 0 0
applicable
Not
Li Yongjiang Male 42 Deputy GM In office December 5,2021 May 29,2026 0 0 0 0 0
applicable
Zhou Not
Male 51 Deputy GM In office June 26,2022 May 29,2026 0 0 0 0 0
Yongqiang applicable
Zhang Secretary of the Not
Male 36 In office May 17,2018 May 29,2026 0 0 0 0 0
Hushan Board applicable
Yan Dimissi Not
Male 60 Chairman November 13,2020 October 27,2023 0 0 0 0 0
Xuechuan on applicable
Yan Dimissi Not
Male 60 Director October 11,2018 October 27,2023 0 0 0 0 0
Xuechuan on applicable
Dimissi Not
Hao Lin Male 60 Director April 29,2008 May 26,2023 0 0 0 0 0
on applicable
Total -- -- -- -- -- -- 0 0 0 0 0 --
During the reporting period, whether there is dismissal of directors and supervisors and decruitment of senior executives
√ Yes □No
During the reporting period, The company has the resignation of directors and supervisors and the dismisssal of Senior executives personnel during their term of
office. For details, please refer to the following "Changes in the company's directors, supervisors and senior management personnel"
38
2023 Annual Report
.Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Positions Types Date Reason
Elected as Chairman by the Board
Fan Aijun Chairman Elected October 27,2023
of Directors
Fan Aijun GM Dismiss October 27,2023 Job changes
Appointment by the Board of
Zhou Chaodong GM Appointed December 22,2023
Directors
Director, Retire at the age and resign from the
Yan Xuechuan Dimission October 27,2023
Chairman position
General election of directors,
Qiao Guoan Director Elected May 26,2023
elected as director
Leave office at the The supervisor's term of office has
Qiao Gluoan Supervisor May 26,2023
end of your term expired and he/she has resigned
General election of directors,
Gu Xiaozhou Director Elected May 26,2023
elected as director
Leave office at the The director's term expires and
Hao Lin Director May 26,2023
end of your term he/she leaves office
II. Status of service
Working experiences of current directors, supervisors, and executives
Situation by the end of 2023:
Fan Aijun, male, was born in July 1971, postgraduate degree of business management, engineer. He had served
as workshop technician, office secretary, deputy director of general administration, and deputy chief of staff of
Construction Group; he had served as vice general manager of Pan India Construction Co., Ltd, section chief of
overseas business section of Chongqing Jianya, deputy chief, and section chief of matching section, and section
chief of matching section of automobile division of the company; he had served as vice general manager, and
general manager of automotive air-conditioner compressor division, and he had served as vice general manager of
the company; currently, he serves as deputy party secretary of Jianshe Mechanical and Electric Company, and he
is the general manager, director and CFO of the company. Currently, he serves as Secretary of party committee
and Chairman of the Company.
Zhou Chaodong, male, born in January 1979, holds a bachelor's degree in automobile and tractor from
Shenyang Institute of Technology, and is a senior engineer. He used to be the chief designer, minister and
deputy director of the MF platform of the technology center of Chongqing Qingshan Transmission Branch, the
executive deputy director of the technology center of Chongqing Qingshan Transmission Branch, the assistant
to the general manager of Chongqing Qingshan Transmission Branch, and the deputy general manager of
Chongqing Qingshan Industrial Co., Ltd. He is currently the director, general manager and deputy secretary of
the party committee of the Company.
Dong Qihong, male, was born in September 1964, bachelor degree in economic management, senior engineer.
He was Former Secretary of Youth League Committee of Qingshan Machinery Factory, Deputy Director of
39
2023 Annual Report
Motorcycle Parts Branch; Deputy Minister and Minister of Personnel and Labor Department of Chongqing
Qingshan Industrial Co., Ltd., Deputy Secretary of Party Committee, Secretary of Discipline Inspection
Committee, Chairman of Worker Union, Deputy General Manager, Director, Secretary of Party Committee of
Chongqing Qingshan Industrial Co., Ltd; he had served as Deputy General Manager and General Manager of
Chongqing Qingshan Transmission Branch of China South Industrial Automobile Co., Ltd; General Manager of
Chongqing Qingshan Industrial Co., Ltd .; Deputy Director and Director of Audit and Risk Department of China
South Industries Group Corporation; Chairman and Secretary of Party Committee of Baoding Tianwei Group Co.,
Ltd.; Inspector of Audit and Risk Department, Inspector of Supervision Department, Inspector of Discipline
Inspection and Supervision Department of China South Industries Group Corporation; Supervisor of South Asset
Management Company; Chairman of Changan Automobile Supervisory Committee; and he was Director of
Construction Mechatronics. Currently, he is the director of China Jialing, director of Luoyang North, director of
Jinan Qingqi and Dajing Industrial and director of the Company.
Qiao Guoan, male, was born in May 1964, holding a bachelor's degree in systems engineering and a senior
engineer title. He used to be Chief of Technology Section, Chief of Integrated Management Section of Chief
Engineer's Office, Deputy Chief of Science and Technology Department, Minister of Science and Technology
Quality Department of 861 plant, Assistant General Manager, Deputy General Manager and Chief Engineer,
Director, General Manager, Deputy Secretary of the Party Committee of Hunan Yunjian Group Co., Ltd; and
Supervisor of Jianshe Mechanical and Electric . He is currently the supervisor of Yunnan Xiyi Industry Co., Ltd.
and the supervisor of Jianshe Industry and the supervisor of the Company. Currently, he serves as director of of
the Company.
Shi Qingong, male, born in July 1972, master's degree in software engineering, Senior Accountant. He used to
be the Leading Accountant of Accounting Section, Director of Enterprise Management Section, Director of Asset
Management Department, Director of Investment and Financing Management Department and Deputy Director of
Financial Settlement Center, Director of Financial Audit Department, Assistant to General Manager, Financial
Director of Lida Optoelectronics Dongguan Xujin Optoelectronics Co., Ltd., Director, Chief Accountant, General
Manager, Member and Deputy Secretary of the Party Committee of Hunan South China Optoelectronics Co., Ltd.
He is currently the Director of Luoyang North, Jinan Qingqi and the Company.
Gu Xiaozhou, male, born in January 1987, holds a bachelor's degree in business administration from
Huazhong University of Science and Technology. He used to be the manager of Shenzhen Zhongzhenxing
Technology Development Co., Ltd. He is currently the general manager of Shenzhen Baimai Investment Co.,
Ltd. and a director of the Company.
Li Jiaming: male, was born in 1965, with a doctoral degree and a professor title. He was former Head of the
Teaching and Research Section of the Department of Economics II, Yuzhou University; deputy director of the
accounting department of Chongqing University School of Business Administration, deputy director of the
Disciplinary Supervision Office of Chongqing University, deputy director, director of the Audit Office of
40
2023 Annual Report
Chongqing University, General Manager of Chongqing University Science and Technology Enterprise Group,
Director of MPAcc Center of School of Economics and Management of Chongqing University, and Executive
Deputy Dean of Chongqing University of Science and Technology of Dazi City, he served concurrently as
independent director of Chongqing Yu Development Co., Ltd, Guangxi Liugong Machinery Co., Ltd. and
Chongqing Jianshe Motorcycle Company. Currently, he is the chairman of Chongqing University Asset
Management Co., Ltd and an independent director of the Company.
Xie Fei: Male, born in 1964, doctor degree, professor title, visiting scholar at Australian National University,
and research student at Ritsumeikan University in Japan. He was a member of the Standing Committee of the
Youth League Committee of Chongqing University, a teacher and director of Chongqing Industrial Management
Institute, and a teacher and director of Chongqing Institute of Technology. Currently, he is Dean of the School of
Economics and Finance of Chongqing University of Technology, concurrently serves as Educational Inspector of
Chongqing Municipal Peoples Government, Executive Director of Chongqing Finance Society, Executive
Director of Chongqing Macroeconomics, Decision Consulting Expert of Chongqing Development and Reform
Commission, Leader of Applied Economics and Asset Appraisal of Chongqing University of Technology, and he
is an independent director of Chongqing Yuxin Pingrui Electronics Co., Ltd and an independent director of the
Company.
Liu Wei: Male, born in 1964, post-doctorate and professor of new prodect development at Manchester
Universityof Technology, UK. Served as a lecturer, associate professor, assistant to the department head of the
First Department of Mechanical Engineering of Chongqing University, professor of the School of Mechanical
Engineering of Chongqing University, deputy director of the research institute, and concurrently served as
Chongqing Changan Automobile Co., Ltd., Chongqing Science and Technology Venture Capital Co., Ltd. Co.
, Ltd., Chongqing Angel Investment Guidance Fund Co., Ltd., Chongqing Zaisheng Technology Co., Ltd.,
Chongqing Electromechanical Co., Ltd., Chongqing Fuling Electric Power Industry Co., Ltd., Chongqing
Three Gorges Paint Co., Ltd., and Chongqing Zhengchuan Pharmaceutical Packaging Materials Co., Ltd. are
independent Director, outside director of Chongqing Iron and Steel (Group) Co., Ltd. He is currently a
professor, doctoral supervisor, deputy director of the research center, and department head of the School of
Economics and Business Administration of Chongqing University, and concurrently serves as an independent
director of Kunming Yunnei Power Co., Ltd. and the company.
Song Weiwei: female, born in 1975, master degree, professor of financial management and certified public
accountant. She served concurrently as the chairman of Chongqing University of Technology Weigan Technology
Co., Ltd. Currently, she serves as professor at the School of Accounting of Chongqing University of Technology,
concurrently serving as independent director of Chongqing Chuanyi Automation Co., Ltd, SPIC Yuanda
Environmental Protection Co., Ltd, Chongqing Three Gorges Paint Co., Ltd and the Company.
Lu Xianyun, male, Han nationality, was born in November 1964. He has a postgraduate degree in business
41
2023 Annual Report
administration and has the title of researcher-level senior engineer. He served as Minister of Manufacturing
Department, Assistant to General Manager and Minister of Human Resources, and Deputy General Manager of
Qingshan Plant, and once served as Deputy General Manager, Secretary of the Party Committee, Secretary of the
Disciplinary Committee, Chairman of the Labor Union, and Director of Chongqing Qingshan Industrial Co., Ltd,
and he was Secretary of the Party Committee of, Secretary of the Commission for Discipline Inspection,
Chairman of the Labor Union in Chongqing Qingshan Transmission Branch. Currently, he is a supervisor of
Yunnan Xiyi and the chairman of the Company's board of supervisors.
Zhang Lungang, male, was born in January 1967, university degree in financial management, senior
accountant title. He was Former financial chief accountant of 5003 Factory; Deputy division chief of the Financial
Department of Southwest Ordnance Bureau; Financial Manager of Chongqing Wanyou Kangnian Hotel; Division
Chief of the Financial Department, Division Chief of Financial Audit Department, Division Chief of Asset
Management Department of Southwest Ordnance Bureau; Deputy General Manager, Chief Accountant of Dajiang
Industrial Group Corporation; Deputy General Manager of Chongqing Jiangtong Machinery; Director, Chief
Accountant and Secretary of the Party Committee of Chongqing Changan Industry (Group) Co., Ltd .; Chairman
of the Supervisory Board of Chengdu Jinlin Industrial Manufacturing Co., Ltd; Supervisor and Chairman of the
Supervisory Board of Chengdu Lingchuan Special Industry Co., Ltd.; Supervisor of the Supervisory Board of
Sichuan Huaqing Machinery Co., Ltd .; and Chairman of the Supervisory Committee of Construction
Mechatronics. He is currently the Chairman of the Supervisory Committee of Construction Mechatronics, and
Supervisor of Yunnan Xiyi Industry Co., Ltd. and the Supervisor of the Company'.
Liao Jian, male, born in April 1971, college degree in accounting, Assistant Accountant. He used to be the
Director of Accounting Office of Finance Department of Jianshe Group, Director of Securities Office of Asset
Operation Department, Deputy Director, Deputy Director and Director of Finance Department of Jianmo B,
Deputy General Manager (concurrently) of Vehicle Air Conditioning, Director of Jianshe Electromechanical
Finance Department, Executive and Deputy General Manager of Pingshan Taikai, and Deputy Director (presiding)
of Audit Risk Department of Jianche B. He is currently the Director of Audit Risk Department and Employee
Supervisor of the Company.
Su Qiang, male, born in November 1986, graduated from North University of China, majoring in Mechanical
and Electronic Engineering, Political Engineer. He used to be the Technician in the Casting Room of the
Company's Equipment Preservation Section, participating in post-job training in Chongqing Municipal Committee
of the Communist Youth League, Communist Youth League officer and organization officer in the Party-mass
Work Department of the Company, Marketing Planner and Engine Salesman in the Joint Venture Business
Department of the Company, and Deputy Head of the Purchase Management Division in the Production
Management Department of Zhuzhou Jianshe Yamaha Motorcycle Co., Ltd. He is currently the Deputy Secretary
of the Communist Youth League Committee, the Deputy Secretary of the Party Branch ,the Deputy Director of the
42
2023 Annual Report
Party-mass Work Department and Employee Supervisor of the Company.
Xu Wanming, male, born in August 1971, bachelor's degree in economics from Chongqing Institute of
Technology, title of senior engineer. He used to be deputy director of the organization department of the Party
Committee and secretary of the party branch, deputy director of the supervision department of committee for
discipline inspection and secretary of the joint party branch of discipline inspection and audit, director of human
resources department and secretary of the party branch (during which he served as deputy director of the human
resources section of the human resources department of CSGC) in Chang'an Industry and secretary of
committee for discipline inspection of Sichuan Jian'an Industry Co., Ltd. He is currently the secretary of
committee for discipline inspection of the Company.
Mr. Tan Mingxian, male, was born in May 1973, bachelor degree in accounting, senior accountant, Chinese
Certified Tax Agent, Certified Management Accountant (CMA). He had served as Supervisor, Deputy Minister
and Minister of Finance Department of Chongqing Wangjiang Industrial Co., Ltd.; served as Chief Accountant of
Sichuan Xiguang Industrial Group Co., Ltd; severed as Deputy Minister of Finance Department of Chongqing
Changan Industrial Group Co., Ltd.; severed as Deputy Chief Accountant of Chongqing Wangjiang Industrial
Co., Ltd; he was a supervisor of supervisory board of China Jialing, Jianmo B, Jinan Qingqi, and Luoyang North;
he had served as Office Director of Southern Motorcycle Supervisory Affairs Office; severed as Chief Financial
Officer of Chongqing Southern Motorcycle Technology R&D Co., Ltd. Currently, he is the chief accountant of
Construction Electromechanical; he is a director of the Company. he served as Chief accountant of the Company.
Li Yongjiang, male, was born in November 1981, holding bachelor degree in mechanical engineering and
automation and the senior engineer title. He used to be Deputy Section Chief of the Engine Group of Construction
Group; Chief of Workshop Room 54, Deputy Chief of Machine Shop of Manufacturing Department, Director of
Precision Management Office of Jianmo B Engine Business Department; Practice Section Chief of Chongqing
Jianya casting section; Deputy Director of the Jianmo B press welding workshop; Deputy Minister of the
production management department; Deputy Minister of the construction machinery manufacturing management
department; Deputy Division Chief of the manufacturing department of Changan Automobile Yubei Factory
(Concurrent Post). He is currently the Vice Chairman of the Company's worker union, Minister of the party and
mass work department, and Employee Supervisor. he served as Deputy General Manager of the Company.
Zhou Yongqiang, male, born in December 1972, bachelor's degree in management engineering from
Chongqing Institute of Industrial Management, title of senior economist. He used to be the director of
investment management section and the deputy director of investment management section in China Jialing
Group, the assistant director of planning department, the deputy director and director of enterprise development
department in China Jialing; General manager of Chongqing Jiufang Foundry Co., Ltd.; Assistant to general
manager and director of development planning department, secretary of board of directors and deputy general
manager of China Jialing; Director of Jianshe Mechanical & Electrical Equipment, Chongqing Jialing Industrial
43
2023 Annual Report
Co., Ltd. and Jinan Qingqi; Director of motorcycle reform and development section, southwest region
department of Southern Group; Director of Luoyang North and the Company. He is currently the deputy general
manager of the Company.
Mr. Zhang Hushan, male, was born in August 1987, bachelor degree, political engineer title. He had served as
the operation administrator in the company's business planning department and secretary of the league branch of
the business cooperation group (during the period of 2011.08~2013.02, worked in the capital operation
department of China South Industries Group Corporation); served as the general affairs officer of the company
office, and he was the member of the Youth League Committee and the secretary of the league branch of the
second group; he had severed as deputy minister of the Business Planning Department and deputy minister of the
Automotive Air Conditioning Business Planning Department. Currently, he is the deputy minister of the
company's business planning department (the secretary-general office) and the deputy director of the secretary-
general office; and he is the secretary of the Board of the Company.
Office taking in shareholder companies
√Applicable □Not applicable
Does he /she
receive
Names of the Titles engaged
Names of the Sharing date of office Expiry date of office remuneration
persons in in the
shareholders term term or allowance
office shareholders
from the
shareholder
Dong Qihong Luoyang North Director October 10,2018 Yes
Dong Qihong Jinan Qingqi Director December 3,2018 Yes
Dong Qihong Dajiang Industrial Director November 29,2021 Yes
Shi Qingong Luoyang North Director April 16,2021 Yes
Shi Qingong Jinan Qingqi Director April 6,2021 Yes
Lu Xianyun Jianshe Industry Supervisor November 10,2020 Yes
Lu Xianyun Chongqing Wanyou Director December 19,2022 Yes
Qiao Guoan Jianshe Industry Supervisor January 3,2018 January 11,2023 Yes
Chairman of
Zhang
Jianshe Industry the board of November 6,2017 January 11,2023 Yes
Lungang
supervisors
Zhang Yunnan Xiyi Industry
Supervisor November 6,2017 April 6,2023 Yes
Lungang Co., Ltd.
Zhang
Jianshe Industry Director May 20,2023 Yes
Lungang
Chongqing Hongyu
Zhang
Precision Industry Co., Director November 15,2021 Yes
Lungang
Ltd.
Anhui Military Industry
Zhang
Group Holding Co., Director August 24,2023 August 23,2026 Yes
Lungang
Ltd.
44
2023 Annual Report
Offices taken in other organizations
√Applicable □Not applicable
Take
Names Name of the parties Positions Job started Job ended remunerations
from the party
Chongqing University
Li
Assets Management Co., GM November 21,2021 July 24,2023 Yes
Jiaming Ltd.
School of Economics and
Li
Business Administration, P0rofessor July 24,2023 Yes
Jiaming
Chongqing University
Chongqing University of
Xie Fei Technology School of Professor January 4,2016 Yes
Economics and Finance
Professor,Ph.D,
Associate Director
of the research
Chongqing University of
center, Head of the
Liu Wei School of Economics and April 2,2001 Yes
Business Administration Department of
Business
Management,
Ph.D
Song Accounting School of
Professor July 3,2000 Yes
Weiwei CQUT
Gu Shenzhen Baimai
GM January 5,2015 Yes
Xiaozhou Investment Co.,ltd.
Chongqing Tongkang
Hao Lin Chairman July 1,1999 Yes
Technology Co., Ltd.
Punishments to the current and leaving board directors, supervisors and senior managers during the report
period by securities regulators in the recent three years
□ Applicable √Not applicable
III. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
The Board of Directors follows the market rules and reflects the characteristics of enterprise, and implements
an annual salary system for the members of the managers, which consists of basic annual salary and performance
annual salary. By signing employment contracts and performance contracts, stipulating responsibilities, rights and
obligations, conducting strict employment management and objective assessment, and smoothing the exit
mechanism, it will build a professional and specialized management team.
During the implementation, the Board of Directors decides the salary structure and level of managers in
accordance with the Salary Management Measures and the Performance Management Measures. The basic annual
salary is the annual basic income, which is mainly determined according to the relative value of the positions of
managers, the responsibilities and risks they undertake, work experience, ability to hold positions and other
factors. The annual salary of performance is the annual floating income, which is linked to the annual performance
assessment results, reflects the situation of managers' completion of the annual business plan and objectives, and
is determined according to the completion of the Company's main financial indexes and individual performance
assessment results.
Remuneration of directors, supervisors, and executives in the report period
In RMB 10,000
Total Remuneration
Name Sex Age Positions Office status
remuneration actually
45
2023 Annual Report
received from receives at the
the shareholder end of the
reporting
period
Fan Aijun Male 52 Chairman In office 37.6 No
Zhou
Male 44 Director, GM In office 4.38 No
Chaodong
Dong Qihong Male 59 Director In office 23.72 Yes
Qiao Guoan Male 59 Director In office 37.42 Yes
Shi Qingong Male 51 Director In office 24.08 Yes
Gu Xiaozhou Male 36 Director In office 0 Yes
Li Jiaming Male 58 Independent Director In office 3.57 No
Xie Fei Male 59 Independent Director In office 3.57 No
Liu Wei Male 59 Independent Director In office 3.57 No
Song Weiwei Female 48 Independent Director In office 3.57 No
Chairman of the
Lu Xianyun Male 59 In office 40.05 Yes
supervisory committee
Zhang Lungang Male 56 Supervisor In office 38.66 Yes
Liao Jian Male 52 Employee Supervisor In office 16.22 No
Su Qiang Male 37 Employee Supervisor In office 17.38 No
Secretary of the
Xu Wanming Male 52 Commission for In office 36.68 No
Discipline Inspection
Tan Mingxian Male 50 Chief accountant In office 32.32 No
Li Yongjiang Male 42 Deputy GM In office 36.32 No
Zhou
Male 51 Deputy GM In office 35.88 No
Yongqiang
Secretary of the Board,
Zhang Hushan Male 36 general manager In office 20.4 No
assistant
Yan Xuechuan Male 60 Chairman Dimission 24.99 No
Hao Lin Male 60 Director Dimission 0 Yes
Total -- -- -- -- 440.38 --
Other note
□Applicable Not applicable
46
2023 Annual Report
VI. Performance of directors' duties during the reporting period
1. Information of the board meetings during the reporting period
Session Convening date Disclosure date Meeting resolution
It was reviewed and approved: Proposal on 2023 Annual
Investment Plan; Proposal on the 2023 Annual Financing
The 19th
Plan; Proposal on Estimated External Guarantee in 2023;
meeting of the
January 16,2023 January 17,2023 Proposal on Estimated Daily Related Party Transactions in
Ninth Board of
2023; Proposal on amending the "Compliance Management
Directors
Measures", Proposal on convening the first extraordinary
general meeting of shareholders in 2023.
It was reviewed and approved: 2022 Annual Report on the
Work by the Board of Directors, 2022 Annual Report on the
Work by the General Manager, Full Text and Summary of
The 20th the 2022 Annual Report, 2022 Annual Profit Distribution
meeting of the Plan, 2022 Internal Control Evaluation Report, Risk
April 27,2023 April 29,2023
Ninth Board of Assessment Report on CSGC Finance Co., Ltd., Proposal
Directors on the 2023 Annual Audit Plan, 2023 First Quarter Report
of the Company, Proposal on the General Election of the
Board of Directors, and Proposal on Convening the 2022
Annual General Meeting of Shareholders.
It was reviewed and approved: roposal on the election of the
chairman of the 10th session of the board of directors,
Proposal on the appointment of the general manager,
Proposal on the election of members and chairman of the
The 1st meeting
strategy committee of the 10th board of directors, Proposal
of the tenth
May 26,2023 May 27,2023 on the election of members and chairman of the audit
Board of
committee of the 10th board of directors, Proposal on the
Directors
election of members and chairman of the nomination
committee of the 10th board of directors, and Proposal on
the election of members and chairman of the remuneration
and assessment committee of the 10th board of directors.
The 2nd
It was reviewed and approved: Full text and summary of the
meeting of the
July 27,2023 July 29,2023 2023 semi-annual report, the risk assessment report on
tenth Board of
CSGC Finance Co., Ltd.
Directors
Listened to the report: Report on Mr. Yan Xuechuan's
resignation from his positions as Chairman and Director.
Reviewed and approved: Proposal on the election of Mr.
Fan Aijun as the chairman of the 10th session of the Board
of Directors, Proposal on the election of Mr. Fan Aijun as a
member and chairman of the Strategy Committee of the
The 3rd
10th session of the Board of Directors, Proposal on the
meeting of the
October 27,2023 October 31,2023 dismissal of Mr. Fan Aijun as General Manager, Report for
tenth Board of
the third quarter of 2023, Proposal on change of accounting
Directors
firm, Proposal on amending the Working Rules of the Audit
Committee, Proposal on amending the Working Rules of the
Nomination Committee, Proposal on amending the
"Working Rules of the Remuneration and Appraisal
Committee" and Proposal on amending the "Measures for
the Administration of Remuneration".
47
2023 Annual Report
It was reviewed and approved: Proposal on Amending the
Articles of Association of the Company; Proposal on
Amending the Rules of Procedure for General Shareholders'
The 4th
Meeting; Proposal on Amending the Rules of Procedure of
meeting of the
November 30,2023 December 1,2023 the Board of Directors; Proposal on Formulating the
tenth Board of
Independent Director System; Proposal on Amending the
Directors
Management Measures for Authorization by the Board of
Directors; Proposal on convening the second extraordinary
general meeting of shareholders for the year 2023.
The 5th It was reviewed and approved: Proposal on Appointing Mr.
meeting of the Zhou Chaodong as the General Manager; Proposal on
December 22,2023 December 23,2023
tenth Board of Nominating Mr. Zhou Chaodong as a Director Candidate
Directors for the 10th Board of Directors.
2. Attendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders
Number of Number of
Whether to
board Number of board Number of
Number of attend the General
meetings board meetings board
Name of board board meetings of
attended meetings attended by meetings
director meetings meeting in shareholders
during the attended in means of attended by
absent from person twice attended
reporting person communicati proxy
in a row
period on
Fan Aijun 7 6 1 0 0 No 3
Dong Qihong 7 6 1 0 0 No 3
Qiao Guoan 5 4 1 0 0 No 2
Shi Qingong 7 6 1 0 0 No 3
Gu Xiaozhou 5 3 1 1 0 No 2
Li Jiaming 7 6 1 0 0 No 3
Xie Fei 7 6 1 0 0 No 3
Li Wei 7 5 1 1 0 No 3
Song Weiwei 7 6 1 0 0 No 3
Yan
4 4 0 0 0 No 2
Xuechuan
Hao Lin 2 2 0 0 0 No 0
Explanation of absent the Board Meeting for the second time in a row
Not applicable
3. Directors' objections to related matters of the Company
Whether the director raises any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other descriptions of directors' performance of duties
Whether the directors' suggestions on the Company have been adopted
√ Yes □No
The director's statement on whether the relevant suggestions of the Company have been adopted or not
48
2023 Annual Report
In 2023, the Company's directors learned about the its production and operation through field visits, consulting
the Company's information and listening to reporting, and paid attention to the development of the automobile
industry, important customers, key suppliers, major competitors and other related situations. In their respective
professional fields, they have put forward professional opinions and management suggestions on the Company's
product structure adjustment, new product research and development, market expansion, risk prevention and
control, and quality improvement of subsidiaries. The Company's management listened to and adopted the
suggestions of the directors and implemented them in specific work.
49
2023 Annual Report
VII. Situation of special committees under the Board of Directors during the reporting period
Number
of
Details of
Committee Member meeting Convenin Put forward important opinions and Other information of
Meeting content objections (if
name information s g date suggestions duty performance
any)
convene
d
1. It is agreed to submit the 2022 Negotiate with the
annual accounting statement prepared accounting firm to
1. Review the 2022 annual accounting report
by the Company's Finance determine the time
prepared by the Company's finance department
Department to the accounting firm for schedule of the annual
and put forward opinions.
preliminary review. 2. It is agree that financial report audit,
2. Review the overall audit strategy and specific
the accounting firm should implement pay attention to the
January audit plan of the 2022 financial report
the audit procedures according to the progress of the audit
10,2023 submitted by Dahua Certified Public
above audit strategy and specific plan. many times during the
Accountants (LLP) and put forward opinions.
3. It is agreed to submit the Proposal audit, and urge the
3. Review the Company's expected routine
on Estimated Daily Related Party accounting firm to
related party transactions in 2023 and put
Transactions of the Company in 2023 submit the audit
forward opinions.
4：Chairman to the Board of Directors for report within the
of consideration. agreed time limit.
mommittee: 1. Agreed to submit the 2022 annual
Audit
Song Weiwei audit report issued by Dahua Certified
Committee 4
Member : Li Public Accountants to the Board of
Jiaming, Xie 1. Review the Company's 2022 annual Directors for consideration.
Fei, Dong accounting report and the first draft of the audit 2. Agreed to submit the 2022 annual
Qihong report and put forward opinions. internal control evaluation report to
2. Review the 2022 internal control evaluation the Board of Directors for
report and put forward opinions. deliberation.
April
3. Summarize the Company's audit work by the 3. Recognized the audit work of
4,2023
accounting firm in 2022. Dahua Certified Public Accountants
4. Review "The Company's 2023 Audit Plan" in 2022.
and put forward opinions. 4. Agreed to submit the Company's
5. Evaluate on the risk assessment of CSGC 2023 annual audit plan to the board of
Finance Co., Ltd. and put forward opinions. directors for consideration.
5. Considered that the risk of the
deposit and loan financial business
carried out by the Company and the
50
2023 Annual Report
CSGCFinance Company is
controllable, and its agreed to submit
it to the board of directors for
deliberation.
1. Agreed to submit the Company's
2023 semi-annual accounting report
to the board of directors for
deliberation.
1. Review the Company's 2023 semi-annual
2.Recognized the Company's routine
accounting report and put forward opinions.
related party transactions in the first
2. Review the Company's routine related party
half of the year and agreed to submit
transactions in the first half of the year and put
it to the board of directors for
forward opinions.
July deliberation.
3. Review the capital transactions between the
17,2023 3. Considered that the Company does
Company and related parties during the
not have non-operating capital
reporting period and put forward opinions.
occupation except for the operating
4. Carry out semi-annual risk assessment and
capital transactions with related
put forward opinions on the CSGCFinance
parties.
Company.
4. Considered that the risk of the
Company's deposit and loan finance
business with the CSGCFinance
Company is controllable.
1. Agreed to submit the Company's
accounting report for the third quarter
1. Review the Company's accounting report for
of 2023 to the board of directors for
the third quarter of 2023 and put
October deliberation.
forwardopinions.
16,2023 2.Agreedthechange to appoint Baker
2. Review the Company's change of accounting
Tilly International Accounting Firm
firm and put forward opinions.
(LLP) as the Company's financial
report and internal control audit
51
2023 Annual Report
agency for the year 2023, with a term
of one year and a total audit fee of
550,000 yuan. Agreed to submit it to
the Company's board of directors for
review.
1. Study the Company's 2023 investment plan
and put forward opinions.
Agreed to submit the 2023 investment
2. Study the Company's 2023 financing plan
January plan, the 2023 financing plan, and the
and put forward opinions.
10,2023 2023 expected external guarantees to
4：Chairman 3. Study the Company's estimated external
the board of directors for deliberation.
of the guarantee matters in 2023 and put forward
Committee : opinions.
Yan 1. Recommended that the Company's
Strategy Xuechuan, sales target for automotive air
2
Committee Member : conditioning compressor products in
Qiao Guoan, 2023 is 1.4 million units, including
1. Study and propose the Company's overall
Shi 100,000 new energy electric
April business objective for 2023.
Gongqing, compressors, and the operating
4,2023 2. Put forwardopinions on the profit distribution
Liu WEI income is 570 million yuan.
plan for 2022.
2. Proposed that notto distribute or
implement the conversion of
provident fund to share capital for the
year.
Considered that the director
candidates meet the qualifications and
April Proposal on the general election of the 10th
4：Chairman have the ability to perform the duties,
19,2023 board of directors
of the and agreed to submit it to the board of
Committee : directors for deliberation.
Li Jiaming, Considered the candidate is qualified
Nomination 1. Nominate the chairman of the 10th board of
Member : 4 May and capable of performing the duties,
Committee directors
Liu Wei, 11,2023 and agreed to submit it to the Board
2. Nominate the candidate for general manager
Song of Directors for consideration
Weiwei, Fan Considered that Fan Aijun, as a
Aijun October Regarding the qualification review of candidate candidate for chairman, meets the
16,2023 for the chairman qualifications and has the ability to
perform the duties, and agreed to
52
2023 Annual Report
submit it to the board of directors for
deliberation.
Consideredthat Zhou Chaodong, as a
candidate for director and general
December Qualification review of Zhou Chaodong- manager, meets the qualifications and
15,2023 proposed to serve as director and general has the ability to perform the duties,
manager. and agreed to submit it to the board of
directors for deliberation.
Review the performance of duties by the
1. Agreed to the signing of the
Company's directors and senior management in
Supplementary Agreement on the
2021, and carry out annual performance
Implementation of the Tenure System
evaluation.
and Contractual Management for
1. Study the "Supplementary Agreement on the
Managerial Members by members of
Implementation of the Tenure System and
the Company's management team.
Contractual Management of Managerial
2. Agreed with the 2022 annual
Members" and put forward opinions.
February1 performance evaluation results and
2. Evaluate the 2022 performance of
0,2023 recommendations for the appointment
managerial members, and put forward the
(or dismissal) of the Company's
assessment results and recommendations for
4：Chairman management members.
appointment (or dismissal).
of the 3. Agreed to the evaluation indicators
3. Study the assessment indicators of the
Remuneratio Committee: of the 2023 Annual Performance
Company's general manager, chief accountant
n and Xie Fei, Contract for the general manager,
2 and deputy general manager of the "2023
Assessment Member: Liu chief accountant, and deputy general
Annual Performance Contract", and put
Committee Wei, Li manager of the Company
forward opinions
Jiaming,
In 2022, there was a total number of
Dong Qihong
19 of directors (including independent
directors) and senior
managementpersonnel (including
Review the performance of duties by the those who have resigned)received
April Company's directors and senior management in remuneration in the
4,2023 2022, and carry out annual performance Company .According to the
evaluation. completion of the Company's main
financial indicators and the business
objective in 2022, and combined with
the completion of the above
personnel's work indicators and the
53
2023 Annual Report
assessment of their business
capabilities, it's considered that the
remuneration level of the Company's
directors and senior management for
the year is in line with the provisions
of the Company's "Senior
Management Evaluation and Reward
and Incentive System", and agreed to
the Companys total remuneration
payment of 3,780,400 yuan.
VIII.The working status of the board of supervisors
The board of supervisors finds out whether the company has risks during the monitoring activities during the reporting period
Yes □No
The
disclosure
The search index of date of the
Meeting Date of Attending
Name of Proposal in the meeting Resolution Status the meeting resolution information
session convening supervisors
disclosure website published in
the meeting
resolution
Chairman of the
Proposal 1: Proposal on Investment Plan for 2023
Supervisory Board All the 5 proposals in
Proposal 2: Proposal on the 2023 Financing Plan
The 19th Lu Xianyun, the meeting were
Proposal 3: Proposal on Estimated Guarantees Providing for
Meeting of the Supervisors Zhang deliberated and passed, （www.cninfo.com.c
January Subsidiaries in 2023 January
9th Term of Lungang and Qiao and the voting results n），Announcement
16,2023 Proposal 4: Proposal on Expected Routine Related Party 17,2023
Supervisory Guoan, and all were 5 in favor, 0 No.:2023-002
Transactions for 2023
Committee Employee against, and 0
Proposal 5: Proposal on Amending the Compliance Management
Supervisors Liao abstention.
Measures
Jian and Su Qiang.
54
2023 Annual Report
Proposal 1: 2022 Annual Report on the Work by the Board of
Directors
Proposal 2: 2022 Annual Report on the Work by the Board of
Chairman of the Supervisors
Supervisory Board Proposal 3: 2022 General Manager's Work Report All the 11 proposals in
The 20th Lu Xianyun, Motion 4: Full text and summary of the 2022 Annual Report the meeting were
Meeting of the Supervisors Zhang Proposal 5: 2022 Profit Distribution Plan deliberated and passed, （www.cninfo.com.c
April April
9th Term of Lungang and Qiao Proposal 6: 2022 Annual Internal Control Evaluation Report and the voting results n），Announcement
27,2023 29,2023
Supervisory Guoan, and Proposal 7: Risk Assessment Report on CSGC Finance Co., Ltd all were 5 in favor, 0 No.:2023-014
Committee Employee Proposal 8: Proposal on the 2023 Annual Audit Plan against, and 0
Supervisors Liao Proposal 9: The Company's Q1 2023 Report abstention.
Jian and Su Qiang. Proposal 10: Proposal on the General Election of the Board of
Directors
Proposal 11: Proposal on the General Election of the Supervisory
Board
Proposal 1: Proposal on the election of the chairman of the board
of directors of the 10th board of directors of the Company
Proposal 2: Proposal on the appointment of the general manager
by the board of directors of the Company
Chairman of the
Proposal 3: Proposal on the election of members and chairmen of
Supervisory Board All the 7 proposals in
the strategy committee of the board of directors of the Company
The 1st Lu Xianyun, the meeting were
Proposal 4: Proposal on the election of members and chairman of
Meeting of the Supervisors Zhang deliberated and passed, （www.cninfo.com.c
May the audit committee of the board of directors of the Company May
10th Term of Lungang and Qiao and the voting results n），Announcement
26,2023 Proposal 5: Proposal on the election of members and chairman of 27,2023
Supervisory Guoan, and all were 4 in favor, 0 No.:2023-048
the nomination committee of the board of directors of the
Committee Employee against, and 0
Company
Supervisors Liao abstention.
Proposal 6: Proposal on the election of members and chairman of
Jian and Su Qiang.
the remuneration and assessment committee of the board of
directors of the Company
Proposal 7: Proposal on electing Mr. Lu Xianyun as the chairman
of the 10th board of supervisors of the Company
Chairman of the
All the 2 proposals in
Supervisory Board
The 2nd the meeting were
Lu Xianyun,
Meeting of the deliberated and passed, （www.cninfo.com.c
July Supervisors Zhang Proposal 1: Full text and summary of the 2023 semiannual report July
10th Term of and the voting results n），Announcement
27,2023 Lungang, and Proposal 2: Risk Assessment Report on CSGC Finance Co., Ltd 29,2023
Supervisory all were 4 in favor, 0 No.:2023-052
Employee
Committee against, and 0
Supervisors Liao
abstention.
Jian and Su Qiang.
55
2023 Annual Report
Proposal 1: Report on Mr. Yan Xuechuan's Resignation from
Chairman and Director Positions
Proposal 2: Proposal on electing Mr. Fan Aijun as the Chairman of
the 10th Board of Directors
Proposal 3: Proposal on the Election of Mr. Fan Aijun as a
Member and Chairman of the Strategy Committee of the 10th
Chairman of the
Board of Directors All the 10 proposals in
Supervisory Board
The 3rd Proposal 4: Proposal on the Dismissal of Mr. Fan Aijun as General the meeting were
Lu Xianyun,
Meeting of the Manager by the Board of Directors deliberated and passed, （www.cninfo.com.c
October Supervisors Zhang October
10th Term of Proposal 5: The Third quarter report for 2023 and the voting results n），Announcement
27,2023 Lungang, and 21,2023
Supervisory Proposal 6: Proposal on Changing the Accounting Firm all were 4 in favor, 0 No.:2023-061
Employee
Committee Proposal 7: Proposal on Amending the Work Rules of the Audit against, and 0
Supervisors Liao
Committee abstention.
Jian and Su Qiang.
Proposal 8: Proposal on Amending the Working Rules of the
Nomination Committee
Proposal 9: Proposal on Revising the Work Rules of the
Remuneration and Assessment Committee
Proposal 10: Proposal on Amending the Remuneration
Management Measures
Proposal 1: Proposal on Amending the Company's Articles of
Chairman of the Association
All the 5 proposals in
Supervisory Board Proposal 2: Proposal on Amending the Rules of Procedure of the
The 4th the meeting were
Lu Xianyun, General Meeting of Shareholders
Meeting of the deliberated and passed, （www.cninfo.com.c
November Supervisors Zhang Proposal 3: Proposal on Amending the Rules of Procedure of the December
10th Term of and the voting results n），Announcement
30,2023 Lungang, and Board of Directors 1,2023
Supervisory all were 4 in favor, 0 No.:2023-071
Employee Proposal 4: Proposal on Formulating the Independent Director
Committee against, and 0
Supervisors Liao System
abstention.
Jian and Su Qiang. Proposal 5: Proposal on Amending the Management Measures for
Authorization of the Board of Directors
Chairman of the
All the 2 proposals in
Supervisory Board
The 5th Proposal 1: Proposal on Appointing Mr. Zhou Chaodong as the the meeting were
Lu Xianyun,
Meeting of the General Manager by the Board of Directors deliberated and passed, （www.cninfo.com.c
December Supervisors Zhang December
10th Term of Proposal 2: Proposal on Nominating Mr. Zhou Chaodong as a and the voting results n），Announcement
22,2023 Lungang, and 23,2023
Supervisory Director Candidate for the 10th Board of Directors by the Board of all were 4 in favor, 0 No.:2023-083
Employee
Committee Directors against, and 0
Supervisors Liao
abstention.
Jian and Su Qiang.
56
2023 Annual Report
Brief Opinion of the Supervisory Board on the Risks Related to the Company
The supervisory board has no objection to the supervisory matters during the reporting period.
57
2023 Annual Report
IX. Particulars about employees.
1. Staff jobs, education, job title number and proportion refer to the following pie chart:
Number of in-service staff of the parent company（person） 142
Number of in-service staff of the main subsidiaries（person） 571
Total number of the in-service staff（person） 713
Total number of staff receiving remuneration in the current
713
period（person）
The number of the parent company and the main subsidiarys
162
retired staffs who need to bear the cost（person）
Professional
Classified according by Professions Number of persons（person）
Production 402
Sales 31
Technical 168
Financial 10
Administrative 102
Total 713
Education
Classified according by Professions Number of persons（person）
Mid-school or below 262
Colleges or above 204
Universities or above 232
Postgraduate or above 15
Total 713
2. Remuneration policies
The mode of piecework wage for production personnel was carried out. Sales commissions are employed
to sales personnel. Some technicians implement the agreed salary model; The rest of the staff implement the
broadband salary model.
3.Training plan
In 2023, 196 training sessions were organized throughout the year, with a total of 3,415 person-time and a
total learning time of 31,663 hours, fully completing the Company's annual training plan. In the year, 340
person-time production operation employees completed on-the-job (job transfer) training and assessment, and
they were issued certificates of qualification for on-the-job operations. It provided an online learning platform
and offered multi-disciplinary self-learning courses for company employees. As of the end of the year, the per
capita learning hours have reached 56.
In 2023, the directors, supervisors, and senior executives participated in a total of 61 training sessions
organized by the State owned Assets Supervision and Administration Commission, Shenzhen Stock Exchange,
58
2023 Annual Report
Chongqing Securities Regulatory Bureau, and Listed Company Association on the topics of the 20th National
Congress, registration system reform, improving the quality of state-owned listed companies, independent
director system, standardized operation of the board of directors, follow-up training for independent directors,
insider information prevention, and asset impairment.
4. Outsourcing situation
□ Applicable √ Not applicable
X. Specification of profit distribution and capitalizing of common reserves
Formulation, implementation or adjustment of the profit distribution policy, especially the cash dividend policy
during the reporting period
√ Applicable □ Not applicable
According to the Notice on Further Implementing Cash Dividends of Listed Companies (JJF [2012] No.37)
issued by China Securities Regulatory Commission, on July 26, 2012, the Seventh Meeting of the Sixth Board of
Directors of the Company supplemented and revised the profit distribution policy in the Articles of Association, in
which specific policies such as the form of profit distribution, the specific conditions and proportion of dividend
distribution, and the principle of using undistributed profits were defined, and submitted it to the First Provisional
General Meeting of Shareholders in 2012 held on August 30, 2012 for review and approval. The Board of
Directors of the Company prepares a profit distribution plan every year, which conforms to the provisions of the
Articles of Association of the Company, and independent directors have expressed their consent. The profit
distribution plan reviewed and approved by the General Meeting of Shareholders of the Company has been
implemented by the Board of Directors.
Special description of cash dividend policy
Whether it meets the requirements of the Articles of Association or the resolution of the
Yes
general meeting of shareholders:
Whether the dividend standard and proportion are explicit and clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether the independent directors have performed their duties and played their due role: Yes
If a company does not distribute cash dividends, it should disclose the specific reasons
Yes
and the measures it intends to take to enhance the level of investor returns:
Whether the minority shareholders have the opportunity to fully express their opinions
Yes
and demands, and whether their legitimate rights and interests have been fully protected:
Whether the cash dividend policy is adjusted or changed, and whether the conditions and
Yes
procedures are compliant and transparent:
During the reporting period, the Company made a profit and the profit available to shareholders of the parent
company was positive, but no cash dividend distribution plan was put forward.
□ Applicable √ Not applicable
Profit distribution and capitalization of capital reserve during the reporting period
□ Applicable √ Not applicable
The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the
report period.
59
2023 Annual Report
XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or other
employee incentives
□Applicable Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other
employee incentives that have not been implemented.
XII. Construction and implementation of internal control system during the reporting period
1. Construction and implementation of internal control
In 2023, with the goal of "strengthening internal control, preventing risks, and promoting compliance", the
Company organized the construction and supervision of the internal control system, established and improved a
risk management oriented internal control system, and laid a solid foundation for the Company's transformation,
upgrading, and high-quality development, promoting the Company's sustained and healthy development.
1. Construction of internal control system
(1) The Company has established a governance structure consisting of general shareholders meeting,
board of directors, supervisory board, management team, and various business institutions, clarifying the rights
and obligations of each level. We have established the Company's articles of association, rules of procedure for
various governance entities, authorization management measures, major matter reporting system, and various
business management systems, and strictly implemented them. It has been clarified that the main leaders shall
play the primary responsibility of internal control management, further strengthen the constraint and supervision
of power operation, and continuously improve the internal control mechanism and system of the enterprise.
(2) The audit committee under the Company's board of directors is responsible for supervising and
evaluating the Company's internal control and risk management. The audit risk department inspects and
supervises the establishment and implementation of the Company's internal control system, as well as the
authenticity and completeness of the Company's financial information. The finance department is responsible
for the construction of the internal control system, the asset management department is responsible for
compliance management, and the Company's board of directors is responsible for the implementation and
effectiveness of the Company's internal control system. In 2023, the Company did not have any material
deficiencies in internal control over financial reporting, nor did it discover any material deficiencies in internal
control over non-financial reporting.
The Company currently has 20 internal control personnel, including 4 full-time internal control personnel
(2 with intermediate professional titles and 2 with junior professional titles). According to the Company's
performance management measures and relevant regulations, the Company conducts a comprehensive
evaluation of employee performance at the end of the year. The annual evaluation of internal control personnel
is: excellent.
(3) Construction and implementation of internal control system.
60
2023 Annual Report
In 2023, the Company's board of directors completed the general election, and the new board of directors
has been carrying out its duties normally; At the beginning of the year, the board of directors prepared and
issued the "2023 Annual Work Plan by Board of Directors ", further enhancing the standardization and
effectiveness of the Company's board of directors work and ensuring the smooth and efficient operation of the
board of directors; We have revised and improved eight corporate governance documents, including the Articles
of Association, Rules of Procedure of the Board of Directors, and Working Rules of Each Special Committee.
We have also revised the "Five Lists and One Table" list and the implementation methods of the "Three Major
and One Large" decision-making system, making the operating mechanism of the board of directors more
perfect and the decision-making and management execution of the board of directors more effective.
In order to establish a sound compliance management system and effectively prevent compliance risks, in
accordance with the Central Enterprise Compliance Management Measures of the State owned Assets
Supervision and Administration Commission and the Compliance Management Measures of CSGC Co., Ltd.,
and in combination with the actual situation of the Company, the Measures for Compliance Management was
formulated in February 2023, which improved the Company's compliance management capability and level.
The Company has revised the Financial Risk Management Measures and sorted out the risk points of
various business sectors from eight aspects: fund compliance risk, liquidity risk, debt risk, creditor's rightrisk,
commercial credit risk, tax risk, and overseas financial risk. The Company has determined the "Financial Risk
Prevention and Control List" and "Financial Risk Hidden Danger Data base Table" and continuously tracked
them to ensure the achievement of risk prevention and control goals.
The Company strengthened the comprehensive sorting of various business activities and control points,
revised and improved relevant systems and processes, and ensured the effectiveness of the Company's internal
control system. In 2023, 88 management systems were revised and improved, including internal control systems
in key areas such as compliance management, financial risk, personnel performance, procurement bidding,
production management, risk management, asset disposal, and new product research and development. The
current management system of the Company has been effectively implemented.
(4) Monitoring of major risk assessment.
Strengthen daily monitoring of major and important risks, coordinate responsible units to formulate
response measures according to control objectives, and implement improvements. The Company conducted an
annual comprehensive risk management assessment, implemented relevant responsible units, formulated major
(important) risk prevention and measures, and formed the Company's Comprehensive Risk Management Report;
By setting monitoring thresholds for major risks and combined with actual situations, it regularly assessed
quarterly adjustments and continuously promoted the level evaluation and risk control work of the risk customer,
solidly carried out quarterly risk monitoring, and ensured that the key areas did not have risk exploded.
(5) Information management and control situation.
61
2023 Annual Report
The Company has sound organizational guarantee and capital investment guarantee, and the designated
information technology professionals are responsible for the Company's information construction and security
operation and maintenance, with a relatively complete information management system. In terms of digital
transformation, the Company has made significant progress in both the construction of digital design platform
and the construction of manufacturing digital platform. The digital level of product design has been improved,
and the manufacturing MES system has been put into operation. In terms of business risk prevention and control,
according to the risk areas determined by the Company, the corresponding risk prevention and control projects
are matched, and the corresponding risk indicator data tables are automatically generated. The relevant system
functions have been officially launched and operated, and the risk information platform has been put into trial
operation, providing strong support for risk prevention and control in the Company's production and operation
activities.
The Company strengthened daily network technology monitoring in accordance with the network
information security management requirements of CSGC and Chongqing City, and did a good job in internal
information system and external website security supervision and inspection, as well as security protection work.
The Company's information system operated safely and effectively.
(6) The management and control of overseas enterprises.
The Company has no overseas enterprises.
2. Supervision and evaluation of the internal control system
(1) The effectiveness of the Company's internal control is audited by an external auditor every year, and
the board of directors issues a self-evaluation report on the Company's internal control.
(2) Supervision and evaluation of the internal control system.
The Audit Risk Department of the Company took the lead in organizing the key personnel of various
departments to carry out the 2023 internal control self-evaluation from January 4, 2024 to February 22, 2024,
and submitted the 2023 Internal Control Evaluation Report to the Board of Directors.
2.Details of major internal control defects found during the reporting period
□ Yes √ No
XIII. Management and control of the Company's subsidiaries during the reporting period
Problems
Integration Measures taken Subsequent
Company name Integration plan encountered in Solution progress
progress for solution planned solution
integration
N/A N/A N/A N/A N/A N/A N/A
XIV.Internal control self-evaluation report or internal control audit report
1.Self-evaluation report on internal control
Disclosure date of appraisal
April 30,2024
report on internal control
Disclosure index of Juchao Website:（http://www.cninfo.com.cn），Announcement No.:2024-015
62
2023 Annual Report
appraisal report on internal
control
Proportion of total unit
assets covered by appraisal
in the total assets of the 100.00%
consolidated financial
statements of the company
Proportion of total unit
incomes covered by
appraisal in the total
100.00%
business incomes of the
consolidated financial
statements of the company
Standards of Defects Evaluation
Category Financial Report Non-financial Report
Indicator 1: General defects in companys daily
operation. Its almost impossible that some specific
business fails to operate normally. Other business
activities and achievement of business goals will not
be affected. Serious defects: Its reasonably possible
General defects: ① Minor financial loss; ②
that normal operations of some business may be
Minor misstatement or omission of
influenced but it will not affect the sustainable
statement in terms of financial statement;
operation of our company. Significant defects: its
③ Minor damage of reputation caused by
reasonably possible that operation capacity of some
its negative influence in some regions.
business may be lost and it will endanger the
Serious defects: ① Bring some financial
companys sustainable operation. Indicator 2:
loss to company; ② Cause moderate
Financial loss. General defects: Its almost
misstatement or omission of statement in
impossible that minor financial losses may be led to
terms of financial statement; ③ Serious
company. Serious defects: Its reasonably possible
damage of reputation caused by its
Qualitative standard that moderate financial losses may be led to
comparatively large-scale influence in some
company. Significant defects: Its possible that
regions. Significant defects: ① Bring
significant financial losses may be led to company.
significant financial loss to company; ②
Indicator 3: Reputation of company. General
Significant misstatement or omission of
defects: Its almost impossible that the negative
statement in terms of financial statement;
information popular in some regions will be caused,
③ The significantly negative influence has
which may further affect companys reputation.
attracted large-scale attention by the public
Serious defects: Its reasonably possible that the
and unrecoverable losses have been brought
negative information popular in some regions will
to company.
be caused, which may lead moderate influence to
companys reputation. Significant defects: Its
reasonably possible that the negative information
popular in some regions will be caused, which may
lead significant influence to companys reputation.
Indicator: The proportion of misstatement
in the overall assets. General defects: Its
Indicator: The proportion of financial losses in the
almost impossible that the amount of
overall assets. General defects: Its almost
misstatement accounting for 0.05% of the
impossible that the amount of financial losses
overall assets or less will occur. Serious
accounting for 0.05% of overall assets or less will
defects: Its reasonably impossible that the
occur. Serious defects: Its reasonably possible that
Quantitative criteria amount of misstatement accounting 0.05%
the amount of financial losses accounting for 0.05%
to 1% of the overall assets will occur.
to 1% of the overall assets will occur. Significant
Significant defects: Its reasonably possible
defects: Its reasonably possible that the amount of
that the amount of misstatement accounting
financial losses accounting for 1% of the overall
for 1% of the overall assets or more will
assets or more will occur.
occur.
Number of major defects in
0
financial reporting（a）
Number of major defects in
0
non financial reporting (a)
Number of important
defects in financial 0
reporting（a）
Number of important
0
defects in non financial
63
2023 Annual Report
reporting（a）
2. Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
We acknowledge that Chongqing Jianshe Vehicle System Co., Ltd. has been conducting effective internal control in all material
aspects complying with “Fundamental Rules of Enterprise Internal Control” .On December 31,2023.
Disclosure date of audit report
Disclosure
of internal control
Index of audit report of
April 30,2024
internal control (full-text)
Juchao Website: （http://www.cninfo.com.cn），
Internal audit reports opinion
Announcement No.:2024-029
Type of audit report on internal control Unqualified auditors report
Whether there is significant defect in non-financial report No
Has the CPAs issued a qualified auditors report of internal control .
□ Yes √No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes □No
XV. Rectification of self-examination problems in special governance actions of listed companies
According to the Notice on Well Ensuring the Special Self-examination of Listed Company Governance
(YZJF [2020] No.367) issued by Chongqing Supervision Bureau of China Securities Regulatory Commission,
the Company carried out self-examination according to the List of Special Self-examination of Listed Company
Governance issued by the government service platform of China Securities Regulatory Commission, and has
completed rectification for the existing problems. For details, please refer to the 2021 Annual Report.
64
2023 Annual Report
V. Environmental & Social Responsibility
I. Significant environmental issues
Whether the Company or any of its subsidiaries is identified as a key polluter by the environment authorities
√ Yes □No
Policies and industry standards related to environmental protection
Environmental Protection Law of People's Republic of China, Water Pollution Prevention Law of People's
Republic of China, Air Pollution Prevention Law of People's Republic of China, Noise Pollution Prevention Law of
People's Republic of China, Solid Waste Pollution Prevention Law of People's Republic of China and Soil Pollution
Prevention Law of People's Republic of China.
Environmental protection administrative license
Three synchronizations for construction projects shall be conducted as required to obtain acceptance approval, and
pollution discharge permits shall be applied in accordance with regulations.
65
2023 Annual Report
Industrial emission standards and the specific situation of the pollutant emission involved in the production and business activities
Exces
Emissi Emission
Company or Main pollutant Implemente Verified sive
Main pollutant and on port Emission Total
and specific d pollutant total emissi
subsidiary specific pollutant Emission way port distributio concentration emission
pollutant emission emission(To on
name name numbe n (mg/Nm3)
Typeame standards ns) condit
r condition
ion
COD：147mg/L； Simplified Simplified
Indirect discharge: it is managemen managemen
petroleun： Grade III
Main pollutants of discharged into t of t of
Chongqing Total 0.83mg/L； Standard of
Main pollutants wastewater：COD, Zhongliangshan sewage pollutant pollutant
Jianshe wastewate ammonia the discharge discharge
of wastewater, ammonia nitrogen, treatment plant after
Vehicle 1 r nitrogen： Integrated permits, no permits, no N/A
Petroleum total phosphoru,PH； reaching the Grade III
System Co., discharge 14.2mg/L；Total Wastewater total amount total amount
category particular pollutants: standard of the
Ltd. outlet phosphorus： Discharge required required
Petroleum category Integrated Wastewater
4.54mg/L；PH： Standard
Discharge Standard
6.9-7.0
Limit value Simplified Simplified
Waste gas: Main of main managemen managemen
Chongqing Direct emission: The Nitrogen oxide： urban area t of t of
pollutants: sO 2， Exhaust
Jianshe treatment meets the 14mg/m3； of the pollutant pollutant
Waste gas: Main nitrogen oxides, gas outlet
Vehicle Integrated Emission 1 Particulate matter： Integrated discharge discharge N/A
pollutants particulate matter; ofmelting Emission permits, no permits, no
System Co., Standard of Air 5.8mg/m3；sO 2：
characteristic furnace Standard of total amount total amount
Ltd. Pollutants 3mg/m3
pollutants:N/A Air required required
Pollutants
COD：345mg/L Simplified Simplified
Indirect discharge: it is managemen managemen
petroleum： Grade III
Main pollutants of discharged into t of t of
Total 0.79mg/l ammonia Standard of
wastewater: COD, Zhongliangshan sewage pollutant pollutant
Main pollutants wastewate nitrogen： the discharge discharge
Vehicle air ammonia nitrogen, treatment plant after
of wastewater, 1 r 12.3mg/LTotal Integrated permits, no permits, no N/A
conditioner total phosphorus, PH reaching the Grade III Wastewater
total zinc discharge phosphorus： total amount total amount
particular pollutants: standard of the Discharge
outlet 2.04mg/LPH：7.5- required required
total zinc Integrated Wastewater Standard
7.6 Total zinc：
Discharge Standard
0.01mg/L
66
2023 Annual Report
Outlet of Simplified Simplified
phosphati managemen managemen
ng t of t of
productio pollutant pollutant
n line 1, discharge discharge
outlet of permits, no permits, no
phosphati total amount total amount
ng required required
Limit value
productio
Waste gas: Main of main
n line 2,
Waste gas: Main pollutants: nitrogen Direct emission: The Nitrogen oxide： urban area
outlet of
treatment meets the of the
Vehicle air pollutants: oxides, particulate tin plating 3mg/m3，
Integrated Emission 6 Integrated N/A
conditioner hydrogen matter; characteristic productio particulate matter：
Standard of Air Emission
chloride, xylene pollutants: hydrogen n line, 6.7mg/m3
Pollutants Standard of
surface
chloride, xylene Air
treatment
Pollutants
line, outlet
of shot
peening
workshop
and outlet
of PTFE
productio
n line
Implement Implement
registration registration
PH：7.6-7.9； for filing, for filing,
COD：86； fill in the fill in the
Main pollutants of Direct discharge: it BOD5：16.4； pollutant pollutant
Chongqing Grade I
wastewater: PH, reaches the first-class Total suspwnded matter： discharge discharge
Pingshan standard of
COD, BOD5, standard of Integrated registration registration
Main pollutants waste 12；petroleum： Integrated
Taikai suspended solids, Wastewater Discharge 1 form, do not form, do not N/A
of wastewater water 0.06mg/L；animal Wastewater
Carburetor petroleum, animal and Standard after treatment need to need to
outlet and vegetable oil： Discharge
Co., Ltd vegetable oils, and is discharged into apply for a apply for a
Standard
ammonia nitrogen. Huangxi River. 0.15 mg/L； pollutant pollutant
ammonia discharge discharge
nitrogen：12.7mg/L permit, with permit, with
total amount total amount
not required not required
67
2023 Annual Report
Nitrogen Implement Implement
oxide:3L， registration registration
particulate for filing, for filing,
fill in the fill in the
matter:8.3 mg/m3， Limits on
pollutant pollutant
Chongqing sulfur dioxide:3L； Main Urban
Main pollutants: Direct discharge: it Exhaust discharge discharge
Pingshan The data with "L" Area in
registration registration
Waste gas: Main nitrogen oxides, sulfur meets the Integrated port of die Comprehens
Taikai 1 indicates that the form, do not form, do not N/A
pollutants: dioxide and Atmospheric Discharge casting ive
Carburetor concentration of the need to need to
particulate matter. Standard after treatment machine Atmospheric
Co., Ltd pollutant is lower apply for a apply for a
Emission
pollutant pollutant
than the method Standard
discharge discharge
detection limit, and permit, with permit, with
the detection limit is total amount total amount
3 mg/m3. not required not required
68
2023 Annual Report
The treatment of the pollutants
Wastewater: The Company and its subsidiary vehicle air-conditioning company have respectively built a
wastewater treatment station. The wastewater station is operating steadily, equipment maintenance is carried out
regularly, and the treatment effect is good, and the discharge of pollutants from the total discharge outlet of the
wastewater has continued and steadily reached the standard.
Exhaust gas: the acid mist produced by phosphating, tinning and surface treatment is absorbed by the spray tower
to reach the standard. The exhaust gas at the outlet of the shot blasting workshop is washed and filtered with the
particle absorption device to reach the standard. The exhaust gas of the PTFE production line is equipped with
activated carbon adsorption + light Catalytic oxidation treatment to reach the standard. The melting furnace uses
the clean energy-natural gas, which reaches the standard at directly discharge. The pollution control facilities are
operating well and the operation records are complete.
Emergency plan for emergency environmental incidents
In order to establish a sound emergency response mechanism for environmental pollution incidents, improve
the Companys ability to respond to sudden environmental pollution incidents involving public crises, prevent
environmental emergencies from polluting the public environment (atmosphere and water), maintain social
stability, protect the life, health and property safety of enterprises and the surrounding public, protect the
environment, and to promote the comprehensive, coordinated and sustainable development of society, the
Company and its wholly-owned subsidiary vehicle air-conditioning company have prepared the "Emergency Plan
for Emergent Environmental Incidents", which has been reviewed and approved by experts and thus its been
implemented.
Environmental self-monitoring program
The environmental protection administrative department did not require the Company to carry out self-
monitoring, and in 2023, it commissioned a monitoring unit with national CMA qualification to monitor the
wastewater, organized exhaust gas, unorganized waste gas and noise discharged by the Company and its
subsidiaries automotive air conditioning company and Pingshan Taikai company.
According to the monitoring results shown in the Monitoring Reports(No. WT230Zi [2023] Huiyuan(Jian) )
and (No. WT229Zi [2023] Huiyuan (Jian))issued in March 2023 and the monitoring results shown in the
Monitoring Report (No. WT406Zi [2023] Yu Jiu (Jian)) issued in October 2023, the emissions of wastewater,
organized exhaust gas, fugitive waste gas and noise generated by the Company and its subsidiaries-automotive
air conditioning company and Pingshan Taikai company all complied with the relevant emission standards.
Investment in environmental governance and protection and the relevant payment of environmental protection tax
In 2023, the taxable pollutant type of the Company and the vehicle air conditioning company was air
pollutants, and the actual total amount of environmental protection tax paid was 10,000 yuan. Pingshan Taikai
paid a total of 6,584.4 yuan.
Measures taken to reduce its carbon emissions during the reporting period and their effects
Applicable □Not applicable
69
2023 Annual Report
First, vigorously develop the thermal management industry of new energy vehicles, and realize large-scale
market sales of new energy electric compressor products. Second, vigorously develop the green low-carbon
parts industry, adapt to the requirements of emission upgrading, and actively develop and cultivate the low-
carbon competitiveness of new products. Third, strengthen the green design of products, implement the green
design through the whole life cycle of products, strengthen the tracking of carbon footprint of products, select
green low-carbon materials and green low-carbon suppliers, and adopt modular and detachable design, and
green recycling packaging. Fourth, strengthen the low-carbon manufacturing of products, carry out low-carbon
technological reform, integrate or simplify processes, tap potential opportunities for carbon reduction, and carry
out upgrading of equipment in terms of information, automation, digitalization and intelligence. Fifth, adjust the
energy consumption structure, continuously increase the proportion of electric energy use through the
electrification transformation of equipment, promote the transformation of equipment and facilities and process
optimization, and reduce carbon dioxide emissions per unit output. Sixth, scientifically arrange production plans,
carry out energy conservation monitoring and energy design, and take energy evaluation as one of KPI
indicators for control. Seventh, the implementation of photovoltaic power generation projects and the frequency
conversion transformation of air compressor were carried out to further improve the efficiency of energy
conservation and carbon reduction.
Administrative penalties for environmental problems during the reporting period
Impact on the
Company's
Reason of Violation of Punishme production and
Company or subsidiary name rectification
punishment regulations nt result operation of listed
measures
companies
Chongqing Jianshe Vehicle System Co., Not No violation Not Not
Not applicable
Ltd. applicable and punishment applicable applicable
Not No violation Not Not
Vehicle air conditioner Not applicable
applicable and punishment applicable applicable
Chongqing Pingshan Taikai Carburetor Not No violation Not Not
Not applicable
Co., Ltd applicable and punishment applicable applicable
Other environmental information that should be disclosed
For environmental disclosure information, please refer to the Company's extranet http://www.jianshe.com.cn.
Other Environmental Related Information
See the foregoing for details.
II. Social responsibilities
(1) Protection of shareholders equity
The company always insists on fair treatment to all investors, protects the legitimate rights and interests of
shareholders, especially small and medium shareholders, and actively creates conditions to attract small and
medium shareholders to participate in major decisions of the company. During the reporting period, the Board
of Directors convened 3 general meetings of shareholders by providing on-site voting and online voting, and the
shares held by shareholders participating in voting accounted for more than 74.45% of the total shares of the
company.
The Company strictly follows the principles of information disclosure and publishes regular reports and
70
2023 Annual Report
temporary announcements in a true, accurate, complete and timely manner. There is no selective information
disclosure and private disclosure or disclosure of undisclosed material information. Also, the Company seriously
replies or receives investors calls and visits and maintains good management of investor relations.
(II) Protection of employee rights and interests
The Company respects and safeguards employees' rights and interests, and is committed to promoting
employees' all-round development, realizing the common promotion of employees' personal value and
enterprise value, and striving to benefit the majority of employees from the achievements of enterprise reform
and development. First, adhere to the democratic management system. Set up employee directors and employee
supervisors to participate in the Company's decision-making and supervision, establish a democratic
management system with employee congresses as the basic form, and support employees to participate in
enterprise management. In 2023, the Company held one employee representative meeting, one model worker
symposium and 2 employee representative symposiums, and widely listened to employees' opinions and
suggestions on the Company's development, and implemented or replied to 59 items one by one. Second,
continue to make factory affairs public.
Utilizing the collaborative office platform of Construction Co., Ltd. and OA, it timely disclosed the
information that employees should know, and publicly disclosed 157 major issues related to their immediate
interests throughout the year. Thirdly, it attached importance to the basic guarantee of employees. The
Company paid the "insurances and housing fund" for its employees on time, with a cumulative payment of
25,780,400 yuan throughout the year. It purchased 686 major disease insurances for employees and paid an
insurance premium of 20,600 yuan. The Company improved the Company's assistance and condolence system,
providing 73 visits to employees in need, sick and hospitalized employees, and employee relatives throughout
the year; Caring for female employees and children, it carried out activities such as condolences, autumn
education assistance, and reading companionship to assist by 446 person-time; The Company carried out
summer cooling activities and holiday condolences for 2052 person-time. The cumulative amount of
condolences was 851,200 yuan. Fourthly, the Company was cared about the physical health of employees. It
strengthened the occupational health management, conducted emergency rescue knowledge training and
occupational health promotions, and regularly conducted occupational hazard factor testing in the workplace. A
number of 349 personnel who may exposure to harmful substances was organized to undergo occupational
health examinations on dutyand off duty, as well as it distributed cool drinks and heatstroke prevention drugs,
with a total payment of 66,000 yuan. Fifthly, the Company attached importance to employee growth and talent
cultivation. A number of 196 training sessions were organized throughout the year, with a total of 3415 person-
time training and a total of 31,663 hours of training; It strengthened the cultivation and utilization of young
cadres, the proportion of "80s generation" full-time employees in the Company's middle-level leadership has
increased to 19.15%, continuously improving the comprehensive quality of the cadre team. In 2023, a number
71
2023 Annual Report
of 60 person-time of external training for middle-level cadres was organized, including 17 person-time
participating in class for research work-with a total of 3,900 class hours.
(III) Protection of rights and interests of suppliers, customers and consumers
First, adhere to fairness, justice and good faith in market transactions, strictly abide by all laws, regulations,
regulatory provisions and international rules, adhere to equal consultation, achieve mutual benefit and win-win,
strictly abide by contract terms, fulfill transaction promises and fulfill contractual obligations. Promote the
informatization of procurement management, deepen the use of the electronic procurement platform of
Norincogroup-eBuy, and fully realize the openness, centralization and electronization of tendering procurement.
Second, improve and upgrade the product quality, adhere to the value orientation of "Quality First", vigorously
carry forward the "Artisan Spirit" and continue to pursue quality excellence.
In 2023, the Company has continued to promote the "quality improvement activity", continued to solve key
quality problems of electric compressors, and control the internal quality loss rate and zero-kilometer failure
rate of electric compressors within the annual target.
(IV) Environmental protection and sustainable development
The Company aims at green development, establishes employees' awareness of environmental protection,
actively fulfills environmental responsibility and practices the concept of low-carbon life. First, vigorously
develop the thermal management industry of new energy vehicles, and realize large-scale market sales of new
energy electric compressor products. Second, vigorously develop the green low-carbon parts industry, adapt to
the requirements of emission upgrading, and actively develop and cultivate the low-carbon competitiveness of
new products. Third, strengthen the green design of products, implement the green design through the whole
life cycle of products, strengthen the tracking of carbon footprint of products, select green low-carbon materials
and green low-carbon suppliers, and adopt modular and detachable design, and green recycling packaging.
Fourth, strengthen the low-carbon manufacturing of products, carry out low-carbon technological reform,
integrate or simplify processes, tap potential opportunities for carbon reduction, and carry out upgrading of
equipment in terms of information, automation, digitalization and intelligence. Fifth, adjust the energy
consumption structure, continuously increase the proportion of electric energy use through the electrification
transformation of equipment, promote the transformation of equipment and facilities and process optimization,
and reduce carbon dioxide emissions per unit output. Sixth, scientifically arrange production plans, carry out
energy conservation monitoring and energy design, and take energy evaluation as one of KPI indicators for
control. Seventh, it continued to promote the Company's participation in the standardization construction of
environmental management in Chongqing's "Five Whole and Four Regulations".
(V) Public relations and social welfare undertakings
72
2023 Annual Report
In 2023, the Company actively participated in activities such as consumption poverty alleviation of
unsalable agricultural and sideline products, consumption assistance of central enterprises, and special
consumption assistance in Yanshan County, Yunnan Province, and realized an assistance total of RMB 104,700.
The Company actively promoted the employment to solve poverty alleviation. In conjunction with the
annual recruitment plan, the Company actively participated in activities such as national school recruitment,
participated in 3 offline double selection job fairs of the school, and cooperated with recruitment platforms such
as 51job, received more than 500 resumes throughout the year, screened and organized more than 60 interviews,
and admitted a total of 20 college students and mature talents.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
For details, please refer to "Public Relations and Social Welfare" in "II(5). Social Responsibility" in this section.
73
2023 Annual Report
VI. Important Events
I. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
□ Applicable √Not applicable
There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers
of the Company
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is
still in the forecast period, the company has assets or projects meet the original profit forecast made and
the reasons explained
□ Applicable √ Not applicable
II. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No such cases in the reporting period.
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the reporting period.
IV. Explanation of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable √ Not applicable
V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board of
directors and supervisory board
□ Applicable √ Not applicable
VI. Explanation of the changes in accounting polices, accounting estimates or correction of significant
accounting errors compared with the financial report of the previous year
□ Applicable √ Not applicable
No such cases in the reporting period.
VII.Explain change of the consolidation scope as compared with the financial reporting of last year.
□ Applicable √ Not applicable
No such cases in the reporting period.
74
2023 Annual Report
VIII. Engagement/Disengagement of CPAs
CPAs currently engaged
Domestic CPA Baker Tilly China Certified Public Accountants（LLP）
Reward for domestic CPA (RMB '0,000) 40
Successive years the domestic CPA has been providing service
1
to the Company
Name of CPAs from the domestic CPA firm Liu Zonglei, Liu Taiping
Continuous life of auditing service for domestic accounting
1year, 1 year
firm
Re-appointed accounting firms in this period
Yes □No
Whether to hire an accounting firm during the audit
□Yes No
Whether the change of accounting firm has fulfilled the examination and approval procedures
Yes □No
Detailed explanation of the change of employment and change of the accounting firm
1. Annual audit accounting firm appointed for the year 2023: Baker Tilly China Certified Public
Accountants (LLP)
2. Annual audit accounting firm appointed for 2022: Dahua Certified Public Accountants (LLP)
3. Reason for changing the accounting firm: According to the Administrative Measures for the Selection
and Appointment of Accounting Firms by State-owned Enterprises and Listed Companies (No. 4[2023] Cai
Kuai, hereinafter referred to as the "Selection and Appointment Measures")issued by the China Securities
Regulatory Commissionin conjunction withthe Ministry of Finance and the State-owned Assets Supervision and
Administration Commission (SASAC), the Company, as a state-controlled listed company, shall comply with
the relevant provisions of the Selection and Appointment Measureson the selection of accounting firms for both
state-owned enterprises and listed companies. In view of that, the selection and appointment of the Company's
accounting firm in 2023 shall be coordinated and arranged by the CSGC, which performs the responsibilities of
the investor. After the public bidding of the CSGC, Baker Tilly China Certified Public Accountants (LLP)
4. Communication between the former and successor accounting firm: The Company communicated with
Dahua Certified Public Accountants in advance on the change of accounting firm. In accordance with the
relevant provisions of the Chinese Certified Public Accountants Auditing Standard No. 1153-Communication
between the Former CPA and the SuccessorCPA, the Company agreed that Baker Tilly China Certified Public
Accountants (LLP) and Dahua Certified Public Accountants shall fully communicate, and the two parties had
completed the relevant communication and cooperation work on the change of the accounting firm, and neither
had raised any objection to the change of the accounting firm.
75
2023 Annual Report
5. Procedures for changing the accounting firm: The Company's audit committee, independent directors
and the board of directors have no objection to the change of the accounting firm, and on December 22, 2023,
the "Proposal on Change of the Accounting Firm" that was deliberated and passed in the Company's second
extraordinary general meeting of shareholders in 2023 agreed to appoint Baker Tilly International Accounting
Firm (LLP) as the Company's 2023 financial accounting report and internal control audit institution for one year
with an audit fee of RMB 550,000, of which the audit fee for financial accounting report is RMB 400,000 per
year and the audit fee for internal control is RMB 150,000 per year.
For details, please refer to the Announcement on change of the accounting firm disclosed by the
Company on October 31, 2023 on the Cninfo website, with the announcement number 2023-065.
Description of the CPAs, financial adviser or sponsor engaged for internal control auditing
√ Applicable □ Not applicable
Baker Tilly China Certified Public Accountants（LLP） is engaged the auditor of internal control system for the
current year. With payment of RMB 150,000 for its service.
IX. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly
Report
□Applicable √ Not applicable
X. Relevant Matters of Bankruptcy Reorganization
□Applicable √ Not applicable
No such cases in the reporting period.
76
2023 Annual Report
XI. Matters of Important Lawsuit and Arbitration
√ Applicable □ Not applicable
Involve
d
Decisions and Execution of Disclosure Index to disclosed
General information amount Provision Progress
effects decisions date information
(RMB
'0,000)
The Company's wholly-owned subsidiary, Vehicle Air
Conditioning Company, filed a lawsuit in Chongqing
No. 5 Intermediate People's Court against Ran Ping,
Luo Fangqing, Zhang Ye, Changzhou Kangpurui Air
Filed case number
Automobile Air Conditioning Co., Ltd, Chongqing After many conditioning
No. 305Min www.cninfo.com.cn
Yuxian Sanji Auto Parts Co., Ltd, and Chongqing hearings and court has been April
100 No Chu05Su(2021) by （Announcement
Dongdian Refrigeration Equipment Co., Ltd for sessions, in April appealed and 28,2020
Suzhou Intermediate No.:2020-024）
infringement of technical secrets. After the Chongqing 2023 the court has
People's Court
court filed the case, it was transferred to the Suzhou not yet opened
Intermediate People's Court due to jurisdictional issue,
The case was filed in January 2021 at the Suzhou
Intermediate People's Court.
The case of Zhao Fujun suing Tan Xixiang and On March 12, the case
Chongqing Jianshe Vehicle System Co., Ltd. over a was heard in court
60 No Not yet ruled Not yet ruled
vehicle traffic accident dispute was filed in the Yicheng (Case No.Min Chu
People's Court of Hubei Province in January 2024 4971E 0684 (2023))
XII. Situation of Punishment and Rectification
□Applicable √ Not applicable
No such cases in the reporting period.
XIII. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□Applicable √ Not applicable
XIV. Material related transactions
1. Related transactions in connection with daily operation
√ Applicable □ Not applicable
Related Relationsh Type of Subjects Principl Price of Amount of Ratio in Way of Market Date of Index of
parties ip trade of the e of trade trade(RMB similar Trading Whether payment price of disclosure information
77
2023 Annual Report
related pricing '0,000) trades similar disclosure
transacti the limit over the trade
ons related available
approved( approved
transacti
ons RMB limited or
'0,000) not (Y/N)
Purchase www.cninfo
of raw .com.cn.An
Under
Jianshe materials Market January
same Energy 150 205.32 0.48% 150 Yes Cash 150 nouncement
Industry from the Price 17,2023
control No.:2023-
Related
person 005
China
Changan
Automobi Sale of www.cninfo
le Group finished .com.cn.An
Under
Sales of parts Market Cash and January
Co., Ltd. same 15,000 5,688.27 12.26% 15,000 No 15,000 nouncement
goods and Price Bill 17,2023
And its control No.:2023-
compon
affiliated ents 005
Enterprise
s
Joint www.cninfo
venture of .com.cn.An
Spare
Chongqin controllin Sales of Market January
parts 1,500 889.87 1.92% 1,500 No Cash 1,500 nouncement
g Jianya g goods Price 17,2023
sales No.:2023-
sharehold
er 005
www.cninfo
Spare .com.cn.An
Jianshe Joint Sales of Market January
part 200 447.03 0.96% 200 Yes Cash 200 nouncement
HANON venture goods Price 17,2023
sales No.:2023-
005
Sell
products www.cninfo
Jianshe
Under and .com.cn.An
Mechanic Operatio Market January
same commodit 50 0.26 0.00% 50 No Cash 50 nouncement
al and control ies to n cost Price 17,2023
No.:2023-
Electric related 005
persons
Jianshe Joint Sales of Operatio Market January www.cninfo
1,200 2.63 0.01% 1,200 No Cash 1,200
HANON venture goods n cost Price 17,2023 .com.cn.An
78
2023 Annual Report
nouncement
No.:2023-
005
www.cninfo
Under .com.cn.An
Jianshe Sales of Operatio Market January
same 200 2.9 0.01% 200 No Cash 200 nouncement
Industry goods n cost Price 17,2023
control No.:2023-
005
Joint
venture of
Spare
Chongqin controllin Sales of Market January
parts 0 54.28 0.12% 0 Yes Cash 0
g Jianya g goods Price 17,2023
sales
sharehold
er
www.cninfo
Under .com.cn.An
Jianshe Sales of Market January
same Test fee 50 31.26 2.18% 50 No Cash 50 nouncement
Industry goods Price 17,2023
control No.:2023-
005
Minsheng Joint www.cninfo
Accepta
Logistrics venture of .com.cn.An
nce of
controllin Market January
And its Services warehou 50 40.6 2.88% 50 No Cash 50 nouncement
g Price 17,2023
affiliated sing No.:2023-
sharehold
Enterprise services 005
er
Southwes
t
Ordnance
www.cninfo
Chongqin
Under .com.cn.An
g Institute Market January
same Services Services 150 0 0.00% 150 No Cash 150 nouncement
of control Price 17,2023
No.:2023-
Environm
005
ental
Protection
Co., Ltd.
Changan
www.cninfo
Automobi
Under Accept .com.cn.An
le Group Market January
same Services mainten 100 69.56 4.92% 100 No Cash 100 nouncement
Co., Ltd. control ance Price 17,2023
No.:2023-
And its
005
affiliated
79
2023 Annual Report
Enterprise
s
Total -- -- 7,431.98 -- 18,650 -- -- -- -- --
Details of any sales return of a large amount None
1. The total amount of raw materials purchased by related persons is expected to be 1.5 million yuan, and the actual occurrence is
Give the actual situation in the report period 2,053,200 yuan, which is actually completed by 33.67% of the expected at the beginning of the year.
where a forecast had been made for the total 2. "Sales of products and commodities to related persons" is expected to be in total of181,500,000 yuan, the actual occurrence is 70.8524
amounts of routine related-party transactions by million yuan, which is actually completed by -60.96% of the expected at the beginning of the year.
type to occur in the current period(if any) 3. "Accepting labor services provided by related persons" is expected to be in total of 3.5 million yuan, and the actual occurrence is
1,414,160 yuan, which actually completes the -59.60% of the expected at the beginning of the year.
Reason for any significant difference between the
transaction price and the market reference price Not applicable
(if applicable)
80
2023 Annual Report
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No such cases in the reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No such cases in the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Does there exist non-operating current associated rights of credit and liabilities
□ Yes √No
No such cases in the reporting period.
5. Transactions with related finance company, especially one that is controlled by the Company
√ Applicable □ Not applicable
Deposit business
Related party Relationship Maximum Deposit Beginning The amount incurred
daily deposit interest rate balance
limited（Ten range （Ten Total deposit Total amount Ending
thousand thousand amount of withdrawn in balance
yuan） yuan） the current the current （Ten
period（Ten period（Ten thousand
thousand thousand yuan）
yuan） yuan）
Military
Under same
Finance 30,000 0.455% 16,689.71 225,115.79 229,073.72 12,731.77
control
Company
Loan business
Related party Relationship Beginning The amount incurred
balance
（Ten Total Ending
Total loan
Loan limit thousand repayment
Loant amount for balance
（Ten yuan） amount of
interest rate the current （Ten
thousand this period
range period（Ten thousand
yuan） （Ten
thousand yuan）
thousand
yuan）
yuan）
Military
Under same 3.65%-
Finance 45,000 41,150 47,249.35 47,150 41,249.35
control 4.35%
Company
Credit extension or other financial services
Related party Relationship Business type Total amount(Ten Actual amount
thousand yuan) incurred(Ten thousand
yuan)
Military Finance
Under same control Credit 56,000 47,699.35
Company
Military Finance
Under same control Other 56,000 0
Company
81
2023 Annual Report
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and related parties.
7. Other significant related-party transactions
□ Applicable √ Not applicable
No such cases in the reporting period.
XV. Significant contracts and execution
1.Entrustments, contracting and leasing
（1）Entrustment
□Applicable √ Not applicable
No such cases in the reporting period.
（2）Contracting
□Applicable √ Not applicable
No such cases in the reporting period.
（3）Leasing
□Applicable √ Not applicable
No such cases in the reporting period.
2.Significant Guarantees
√ Applicable □ Not applicable
82
2023 Annual Report
InRMB10,000
Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)
Relevant Guarantee
Date of
disclosure Counter- Complete for
happening Actual
Name of the date/No. of Amount of Guaranty Guarantee implement associated
(Date of mount of Guarantee type guarantee（If
Company the Guarantee （If any） term ation parties
signing guarantee any）
guaranteed or not (Yes or
agreement)
amount no)
Total amount of approved external guarantee in the Total actually amount of external guarantee in the
0 0
report period(A1) report period(A2)
Total amount of approved external guarantee at the Total actually amount of external guarantee at the end
0 0
end of the report period(A3) of the report period(A4)
Guarantee of the company for its subsidiaries
Relevant Guarantee
Date of
disclosure Complete for
happening Actual Counter-
Name of the date/No. of Amount of Guaranty（If Guarantee implement associated
(Date of mount of Guarantee type guarantee
Company the Guarantee any） term ation parties
signing guarantee （If any）
guaranteed or not (Yes or
agreement)
amount no)
Vehicle air
January 22,2022 2,600 April 20,2022 2,600 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 1,949 April 27,2022 1,949 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 1,250 May 10,2022 1,250 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 2,000 May 17,2022 2,000 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 1,460 May 23,2022 1,460 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 2,501.35 June 14,2022 2,501.35 Joint liabilities 12 months Yes No
conditioner
Vehicle air
January 22,2022 1,750 June 29,2022 1,750 Joint liabilities 12 months Yes No
conditioner
Vehicle air 6.73
January 17,2023 2,600 February 27,2023 2,600 Joint liabilities Yes No
conditioner months
Vehicle air 6.6
January 17,2023 2,501.35 March 3,2023 2,501.35 Joint liabilities Yes No
conditioner months
Vehicle air 6.5
January 17,2023 1,949 March 6,2023 1,949 Joint liabilities Yes No
conditioner months
Vehicle air 6.43
January 17,2023 1,300 March 8,2023 1,300 Joint liabilities Yes No
conditioner months
Vehicle air
January 17,2023 2,710 March 14,2023 2,710 Joint liabilities 6.23 Yes No
conditioner
83
2023 Annual Report
months
Vehicle air 6.1
January 17,2023 900 June 17,2023 900 Joint liabilities Yes No
conditioner months
Vehicle air
January 17,2023 850 June 25,2023 850 Joint liabilities 12 months No No
conditioner
Vehicle air
January 17,2023 3,000 September 19,2023 3,000 Joint liabilities 12 months No No
conditioner
Vehicle air
January 17,2023 3,000 September 19,2023 3,000 Joint liabilities 12 months No No
conditioner
Vehicle air 6.1
January 17,2023 900 December 28,2023 900 Joint liabilities No No
conditioner months
Vehicle air
Vehicle air
January 17,2023 1,250 November 27,2023 1,250 Mortgage conditioner 3 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 4,221 September 11,2023 4,221 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 2,000 October 10,2023 2,000 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 3,500 October 19,2023 3,500 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 3,900 October 23,2023 3,900 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 3,818.35 October 25,2023 3,818.35 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 2,500 November 8,2023 2,500 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 2,500 November 14,2023 2,500 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air
Vehicle air
January 17,2023 2,500 November 23,2023 2,500 Mortgage conditioner 12 months No No
conditioner
land
Vehicle air Vehicle air
January 17,2023 2,010 November 27,2023 2,010 Mortgage 12 months No No
conditioner conditioner
84
2023 Annual Report
land
Total of guarantee to subsidiaries approved in the Total of guarantee to subsidiaries actually occurred in
56,000 47,909.7
report term (B1) the report term (B2)
Total of guarantee to subsidiaries approved as of the Total of balance of guarantee actually provided to the
56,000 35,949.35
report term (B3) subsidiaries as of end of report term (B4)
Guarantee of the subsidiaries for its subsidiaries
Relevant Guarantee
Date of
disclosure Complete for
happening Actual Counter-
Name of the date/No. of Amount of Guaranty（If Guarantee implement associated
(Date of mount of Guarantee type guarantee
Company the Guarantee any） term ation parties
signing guarantee （If any）
guaranteed or not (Yes or
agreement)
amount no)
Total of guarantee to subsidiaries approved in the Total of guarantee to subsidiaries actually occurred in
0 0
report term (C1) the report term (C2)
Total of guarantee to subsidiaries approved as of the Total of balance of guarantee actually provided to the
0 0
report term (C3) subsidiaries as of end of report term (C4)
The Companys total guarantee(i.e.total of the first three main items)
Total guarantee quota approved in the reporting Total amount of guarantee actually incurred in the
56,000 47,909.7
period（A1+B1+C1）
reporting period（A2+B2+C2）
Total guarantee quota already approved at the end of Total balance of the actual guarantee at the end of the
56,000 35,949.35
the reporting period（A3+B3+C3） reporting period（A4+B4+C4）
The proportion of the total amount of actually
guarantee in the net assets of the Company (that is 823.15%
A4+B4+C4）%
Including：
Amount of guarantees provided for shareholders, the
0
actual controller and their related parties (D)
Amount of debt guarantees provided directly or
indirectly for entities with a liability-to-asset ratio 35,949.35
over 70% (E)
Proportion of total amount of guarantee in net assets
33,741.81
of the company exceed 50%（F）
Total amount of the three kinds of guarantees above
35,949.35
(D+E+F)
Explanations about joint and several liability for
None
repayment in respect of undue guarantee(if any)
Explanation about external guarantee violating
None
established procedure if any）
85
2023 Annual Report
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
□ Applicable √ Not applicable
Not-existent
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
Not-existent
4. Other significant contract
□ Applicable √ Not applicable
Not-existent
XVI. Explanation on other significant events
√ Applicable □ Not applicable
Name
Date of disclosure Website for disclosure
http//www.cninfo.com.cn.Announcement
Announcement on the election of the Board of Directors April 29,2023
No.:2023-021
http//www.cninfo.com.cn.Announcement
Announcement on the election of the Supervisory Board April 29,2023
No.:2023-022
Announcement on Resolution of the first meeting of the
10th Board of Directors (Election of the chairman, http//www.cninfo.com.cn.Announcement
May 27,2023
appointment of the general manager, election of members No.:2023-047
and chairmen of the special committees)
Announcement on the Resolution of the third Meeting of
http//www.cninfo.com.cn.Announcement
the 10th Supervisory Board (Election of the Chairman of May 27,2023
No.:2023-048
the Supervisory Board)
Announcement on the Resolution of the First Meeting of
http//www.cninfo.com.cn.Announcement
the 10th board of directors （Election of Chairman and October 31,2023
No.:2023-060
Dismissal of General Manager）
http//www.cninfo.com.cn.Announcement
Announcement on the Resignation of the Chairman October 31,2023
No.:2023-063
http//www.cninfo.com.cn.Announcement
Announcement on Change of the Accounting Firm October 31,2023
No.:2023-065
Announcement on Revising the Work Rules of the Audit http//www.cninfo.com.cn.Announcement
October 31,2023
Committee No.:2023-066
Announcement on Revising the Working Rules of the http//www.cninfo.com.cn.Announcement
October 31,2023
Nomination Committee No.:2023-067
Announcement on Revising the Work Rules of the http//www.cninfo.com.cn.Announcement
October 31,2023
Remuneration and Assessment Committee No.:2023-068
Announcement on Amending the Articles of Association http//www.cninfo.com.cn.Announcement
December 1,2023
of the Company No.:2023-073
Announcement on Amending the Rules of Procedure of http//www.cninfo.com.cn.Announcement
December 1,2023
General Shareholders' Meeting No.:2023-075
Announcement on Amending the Rules of Procedure of the http//www.cninfo.com.cn.Announcement
December 1,2023
Board of Directors No.:2023-077
86
2023 Annual Report
http//www.cninfo.com.cn.Announcement
Independent Director System December 1,2023
No.:2023-079
Announcement on the Resolution of the fifth Meeting of
http//www.cninfo.com.cn.Announcement
the 10th board of directors （ Appointment of General December 23,2023
No.:2023-082
Manager）
XVII. Significant event of subsidiary of the Company
√ Applicable □ Not applicable
Vehicle Air Conditioning Company, a wholly-owned subsidiary of the Company, provides lubricating oil
service for air conditioning compressor assembly in the supporting business for customers of the main
machinery factory. In view of this, the automotive air conditioning company applied to the Chongqing
Municipal Bureau of Industry and Commerce to increase the "lubricating oil sales" item in its business scope,
and completed the change registration and renewed its business license on April 14, 2023.
87
2023 Annual Report
VII. Change of share capital and shareholding of Principal Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
In Shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportion Capitalization
Bonus
Share allotment of common Other Subtotal Quantity Proportion
shares
reserve fund
I. Unlisted shares 89,375,000 74.87% 0 0.00 0.00 0.00 0.00 89,375,000 74.87%
1. Founder's stock 89,375,000 74.87% 0 0 0 0 0 89,375,000 74.87%
Including: State-owned shares 84,906,250 71.13% 0 0 0 0 0 84,906,250 71.13%
Shares held by domestic legal
1,750,000 1.46% 0 0 0 0 0 1,750,000 1.46%
persons
Share held by foreign investors 0 0.00% 0 0 0 0 0 0 0.00%
Other 2,718,750 2.28% 0 0 0 0 0 2,718,750 2.28%
2. Raising legal person shares 0 0.00% 0 0 0 0 0 0 0.00%
3. Internal staff shares 0 0.00% 0 0 0 0 0 0 0.00%
4. Preferred stock or other 0 0.00% 0 0 0 0 0 0 0.00%
II Listed shares 30,000,000 25.13% 0 0 0 0 0 30,000,000 25.13%
1. Common shares in RMB 0 0.00% 0 0 0 0 0 0 0.00%
2. Foreign shares in domestic market 30,000,000 25.13% 0 0 0 0 0 30,000,000 25.13%
3. Foreign shares in overseas market 0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total of capital shares 119,375,000 100.00% 0 0 0 0 0 119,375,000 100.00%
88
2023 Annual Report
Reasons for share changed
□Applicable √Not applicable
Approval of Change of Shares
□Applicable √Not applicable
Ownership transfer of share changes
□Applicable √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable
to common shareholders of Company in latest year and period
□Applicable √Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √Not applicable
2.Self-defined Chapter
When the company was founded in 1995, North China Industrial Shenzhen Co., Ltd., one of the founders,
held 17,875,000 shares of the company, accounting for 3.74% of the company's total share capital. According to
the Civil Order of the Shenzhen Intermediate Peoples Court of Guangdong Province- [2006] Shenzhong Famin
Two Bankruptcy Zi No. 21-4) on March 6th, 2007, its ruled that the proprietary rights of the 3.74% stake
(17,875,000 legal person shares) of the company held by North China Industrial Shenzhen Co., Ltd. belongs to the
buyers Gu Zuocheng, Yangpu Xinyufeng Investment Co., Ltd. and Feng Yonghui. Thereinto, Gu Zuocheng held
8,875,000 shares; Yangpu Xinyufeng Investment Co., Ltd. held 7,000,000 shares; Feng Yonghui held 20,000
million shares.
On September 12, 2013, the company implemented a 4:1 share-shrunk. After the share-shrunk, Gu
Zuocheng held 2,218,750 shares; Hengsheng Sun Group Co., Ltd. held 1,750,000 shares; Feng Yonghui held
500,000 shares.
Therefore, in the above “Changes in Shares” table, the number of shares thats filled in the “others” for the
sponsors shares is the total shares held by the natural persons Gu Zuocheng and Feng Yonghui, namely:
2,718,750 shares.
3. Change of shares with limited sales condition
□Applicable √Not applicable
Ⅱ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□Applicable √Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□Applicable √Not applicable
3.About the existing employees’ shares
□Applicable Not applicable
89
2023 Annual Report
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Shares
Total Total
number of
common shareholders at The total number of p
Total preferred shareholders at the
shareholder the end of the referred shareholders
end of the month from the date of
s at the end 6,786 month from the 6,760 voting rights restored 0 0
disclosing the annual report(if
of the date of at period-end(if
any)(See Notes 8)
reporting disclosing the any)(See Notes 8)
period annual report
Particulars about shares held above 5% by shareholders or top ten shareholders（Excluding shares lent through refinancing)
Number of share
Proportion Changes in Amount of Amount of
Shareholders Nature of Number of shares pledged/frozen
of shares reporting restricted shares un-restricted
shareholder held at period -end State of
held（%） period held shares held Amount
share
State-owned Not
China Military Equipment Group Co., Ltd. 71.13% 84,906,250 0 84,906,250.00 0 0
legal person applicable
Domestic Not
Gu Zuocheng 1.89% 2,261,000 0 2,218,750.00 42,250 0
natural person applicable
Domestic non-
Anhui Hengsheng Investment Development Co., Not
state-owned 1.47% 1,750,000 0 1,750,000.00 0 0
Ltd. applicable
legal person
Domestic Not
Xu Yuanhui 0.84% 999,999 32000 0 999,999 0
natural person applicable
Domestic Not
Liu Dan 0.74% 879,376 -1000 0 879,376 0
natural person applicable
Domestic Not
Chen Xinqiang 0.51% 612,400 0 0 612,400 0
natural person applicable
CORE PACIFIC-YAMAICHI Overseas Legal Not
0.51% 605,650 0 0 605,650 0
INTERNATIONAL (H.K.) LIMITED person applicable
Domestic Not
Feng Yonghui 0.42% 500,000 0 500,000 0 0
natural person applicable
Domestic Not
Li Jianping 0.37% 439,050 16550 0 439,050 0
natural person applicable
Domestic Not
Chen Houping 0.36% 424,000 200 0 424,000 0
natural person applicable
90
2023 Annual Report
Strategic investor or general legal person becoming top-10 ordinary
Not applicable
shareholder due to rights issue (if any)（See Note 3)
There isnt any associated relationship between the sponsoring shareholder and the other shareholders among the top-10
list. None of them are regarded as Acting in concert in accordance with The rules of information disclosure on change
Related or acting-in-concert parties among shareholders above
of shareholding. Foreign shareholders are unknown for their condition of Associated relationship and Acting in
concert.
Above shareholders entrusting or entrusted with voting rights, or
Not applicable
waiving voting rights
Top 10 shareholders including the special account for repurchase (if
Not applicable
any) (see note 10)
Top 10 holders of unconditional shares
Category of shares
Amount of unconditional shares held at end of
Name of the shareholder
period
Category of shares Amount
Xu Yuanhui 999,999 Foreign shares placed in domestic exchange 999,999
Liu Dan 879,376 Foreign shares placed in domestic exchange 879,376
Chen Xinqiang 612,400 Foreign shares placed in domestic exchange 612,400
CORE PACIFIC-YAMAICHI
605,650 Foreign shares placed in domestic exchange 605,650
INTERNATIONAL (H.K.) LIMITED
Li Jianping 439,050 Foreign shares placed in domestic exchange 439,050
Chen Houping 424,000 Foreign shares placed in domestic exchange 424,000
Lv Gang 418,099 Foreign shares placed in domestic exchange 418,099
Zhang Long 414,252 Foreign shares placed in domestic exchange 414,252
Liu Guosheng 345,575 Foreign shares placed in domestic exchange 345,575
Jiang Guangsen 314,799 Foreign shares placed in domestic exchange 314,799
There is no affiliated relationship between the top ten non-restricted tradable shareholders and the controlling shareholder China Military
Action-in-concert among top 10 non-restricted
Equipment Group Co., Ltd. nor do they belong to the consistent actors stipulated in the Administrative Measures for the Acquisition of
current share holders, top 10 non-restricted
Listed Companies; it is unknown to the company whether there is an affiliated relationship between the top ten non-restricted tradable
current share holders and top 10 shareholders
shareholders as well as between the top ten non-restricted tradable shareholders and the other top ten shareholders, or whether they are
91
2023 Annual Report
included in the consistent actors stipulated in the Administrative Measures for the Acquisition of Listed Companies.
Top 10 ordinary shareholders conducting
Not applicable
securities margin trading (if any) (see note 4)
92
2023 Annual Report
Lending of shares by the top ten shareholders participating in refinancing business
□ Applicable √ Not applicable
The top ten shareholders have changed from the previous period
□ Applicable √ Not applicable
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the
Company have no buy –back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Central State-owned Holdings
Type of Controlling Shareholders: Legal person
Name of the Legal Date of
Organizatio
Controlling representative incorporatio Principal business activities
n code
shareholder /Leader n
Investment, operation and management of state-
owned assets: research and development,
production, guarantee and service of weapons and
equipment; Research and development,
manufacturing, sales and comprehensive services of
China Military
June 9111000071 vehicles, electrical equipment, photoelectric
Equipment Group Co., Xu Xianping
29,1999 0924929L information and products and their equipment,
Ltd.
mechanical equipment, engineering and construction
machinery, chemical materials (except hazardous
chemicals), fire fighting equipment, medical and
environmental protection equipment, metal and
nonmetal materials and their products.
As of December 31, 2023, Shares held and controlled by other domestic and overseas listed
Equity of other companies directly or indirectly: 40.70% by Chongqing Changan Automobile Co., Ltd.( Stock
domestic/foreign listed code:000625); 2. 45.40 by Baoding Tianwei Baobian Electric Co., ltd(Stock code: 600550).;
company with share 3. .41.03% by Jiangling Motors Corporation, Ltd（Stock code:000550）；4. 37.40% by Hunan
controlling and share Tianyan Machinery Co., Ltd(Stock code: 600698）；5.49.94% by Haerbin Automobile Power Co.,
participation by
Ltd.( Stock code: 600178)；6.42.00 by Costar Group Co., Ltd.(Stock Code 002189）；7. 71.77%
controlling by Jianshe Industry(Yunnan) Co., Ltd(Stock code:002265）；8. 8. 25.44% by Chongqing Minsheng
shareholder in Logistic Co., Ltd( Stock code:1292.HK）；9.70.35% by Hubei Huangqiang High-Tech Co.,
reporting period Ltd.(Stock；688151）;10.30.03% by Anhui Great Well Miltary Industry Co., Ltd.( Stock
code:601606).
Change of holding shareholder
□ Applicable √ Not applicable
No such cases in the reporting period.
3．Information about the controlling shareholder of the Company
Actual controller nature：Central state owned Assets Management t
Actual controller type：Legal person
Legal Date of Principal
Organization
Name of the controlling shareholder representative/person in establish business
code
charge ment activities
State-owned Assets Supervision and
administration Commission of the State Director of SASAC Not applicable Not applicable
Council
Situation of domestic and abroad holding
Not applicable
listed companies
Changes of the actual controller in the reporting period
□Applicable √Not applicable
93
2023 Annual Report
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4.The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of
the company and its person acting in concert accounts for 80% of the number of shares held by the
company
□Applicable √Not applicable
5.Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
6.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers,
Restructuring Party and Other Commitment Subjects
□Applicable √Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in implementation of share repurchase
□ Applicable √Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √Not applicable
94
2023 Annual Report
VIII. Situation of the Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares in the reporting period.
95
2023 Annual Report
IX. Corporate Bond
□ Applicable √Not applicable
96
2023 Annual Report
CHONGQING JIANSHE VEHICLE SYSTEM CO., LTD.
AUDITOR'S REPORT
Baker Tilly China [2024] No.34454-4
97
2023 Annual Report
Auditor’s Report
Baker Tilly China [2024] No. 34454-4
To all shareholders of Chongqing Jianshe Vehicle System Co., Ltd.:
Ⅰ. Opinion
We have audited the accompanying financial statements of Chongqing Jianshe Vehicle System Co., Ltd.
(hereinafter referred as "the Company"), which comprise the consolidated and the parent company’s
balance sheets as at December 31, 2023, the consolidated and the parent company's income statement,
the consolidated and the parent company’s statements of cash flows,and the consolidated and the
parent company’s statements of changes in shareholder’s equity for 2023, and the relevant notes to the
financial statements.
In our opinion, the financial statements attached are prepared, in all significant respects, in accordance
with the Accounting Standards for Business Enterprises, and fairly present the Companys consolidated
and the parent companys financial positions as at December 31, 2023 and its consolidated and the parent
companys operating results and cash flows for the year then ended.
Ⅱ. Basis of opinion
We conducted our audit in accordance with Auditing Standards for Certified Public Accountants (“CSAs”)
in China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report.
We are independent of the Company in accordance with Code of Ethics for Professional Accountants of
the Chinese Institute of Certified Public Accountants (“CICPA Code”), and we have fulfilled our other
ethical responsibilities in accordance with the CICPA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Ⅲ. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Auditor’s Report (Continued)
98
2023 Annual Report
Baker Tilly China [2024] No. 34454-4
Key Audit Matters How our audit addressed the matter
Revenue recognition
The main business of the The audit procedures we implement for revenue recognition mainly include:
Company is the production 1. Understand and test the effectiveness of the design and operation of
and sales of automotive air- internal controls related to revenue recognition;
conditioning compressors, and 2. Understand the information technology application procedures and
provide supporting services process related to revenue confirmation, and test the general control and
for automobile OEMs. application control of the relevant information system;
In 2023, the Company 3. Understand and analyze the business environment related to the business,
achieved the main business analyze the rationality of technical service income changes combine with
income of 459.41 million the industry environment and the actual situation of the Company;
yuan, of which domestic sales 4. Select samples to inspect sales contracts, identify relevant clauses that
revenue of 237.58 million can reliably estimate the results of labor service transactions, and evaluate
yuan and foreign sales revenue the rationality of revenue recognition policies;
of 221.83 million yuan. As 5. Implement substantial analysis procedure for operating income and gross
revenue is one of the profit margin according to monthly, type, etc., identify whether there is a
Company's key performance significant or abnormal fluctuations, and find out the cause of fluctuations;
indicators, we have identified 6. For the sales revenue recognized before or after the balance sheet date,
revenue recognition as a key sample and inspect the supporting evidence of the sales delivery note and
audit matter. customer acceptance note to evaluate whether the revenue has been
recognized in an appropriate period;
Index to Notes 3.29 Revenue 7. Combined with the confirmation letter of Accounts receivable, select a
and 6.32 Operating Income portion of major customers to confirm the sales of the current period by
and Operating Costs of the sampling;
financial statements. 8. Check whether the information related to operating income is properly
presented and disclosed.
Ⅳ. Other Information
The Management of the Company (hereinafter referred as “the Management”) shall be responsible for
other information. The other information comprises the information covered in the 2023 Annual Report of
the Company, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information, and we do not and will not
express any form of assurance conclusion thereon.
In conjunction with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is significantly
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated.
Auditor’s Report (Continued)
Baker Tilly China [2024] No.xxxxx
99
2023 Annual Report
Based on the work we have performed, if we determine that there is a material misstatement of the other
information, we are required to report that fact. However, we have no matters to report in this regard.
Ⅴ.Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the requirements of Accounting Standards for Business Enterprises, and for such
internal control as management determinesis necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s
going-concern ability, disclosing the matters related to going concern, and using the going-concern
assumption unless the Management intends to liquidate the Company or to cease operation,or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing of the Company’s financial reporting
process.
100
2023 Annual Report
Auditor’s Report (Continued)
Baker Tilly China [2024] No. 34454-4
Ⅵ. Auditor’s Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with CSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risk of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
101
2023 Annual Report
Auditor’s Report (Continued)
Baker Tilly China [2024] No. 34454-4
(4) Conclude on the appropriateness of management's use of the going-concernassumption,Meanwhile,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention of the users of reports to
the related disclosures in the financial statements, if such disclosures are inadequate, We should
express an non-standard unqualified opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the
financial statements fairly represent the underlying transactions and events.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities
or business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regardingthe planned scope and timing of the
audit,significant audit findings and other matters, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
professional ethics requirements related to our independence and communicate with governance about
all relationships and other matters that might reasonably be considered to affect our independence, as
well as relevant precautions, if applicable.
From the matters communicated with those charged with governance, we determine those matters that
were ofmost important to the audit of the current period's Consolidated Financial Statements and
therefore the key audit matters. We describe these matters in our audit reports unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our audit report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
102
2023 Annual Report
Certified Public
Baker Tilly China Accountant of China:
Beijing, China
[month] [day] 2024 Certified Public
Accountant of China:
103
2023 Annual Report
Consolidated Balance Sheet
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Closing Opening
Items Notes
Balance Balance
Current assets: —— ——
Currency funds Ⅵ-1 137,195,899.72 179,954,522.99
Financial assets held for trading
Derivative financial assets
Notes receivable Ⅵ-2 6,041,598.66
Accounts receivable Ⅵ-3 125,956,261.01 113,710,214.72
Receivables financing Ⅵ-4 24,290,736.39 17,548,591.75
Prepayments Ⅵ-5 2,651,180.08 4,024,366.02
Other receivables Ⅵ-6 1,825,860.96 1,720,044.17
Including: Interest receivable
Dividends receivable
Inventories Ⅵ-7 130,309,955.62 131,860,572.93
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets Ⅵ-8 1,981,210.62 1,468,399.16
Total current assets 430,252,703.06 450,286,711.74
Non-current assets： —— ——
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments Ⅵ-9 221,207,680.99 210,112,321.04
Other equity instrument investments
Other non-current financial assets Ⅵ-10
Investment properties
Fixed assets Ⅵ-11 188,907,962.58 202,039,143.80
Construction in progress Ⅵ-12 15,244,362.53 989,429.96
Bearer biological assets
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2023 Annual Report
Oil and gas assets
Right-of-use assets
Intangible assets Ⅵ-13 10,724,848.59 11,801,504.95
Development expenditures
Goodwill
Long-term prepaid expenses Ⅵ-14 23,582.53 70,280.65
Deferred tax assets Ⅵ-15 5,755,412.09 5,752,057.03
Other non-current assets Ⅵ-16 70,000.00 15,860,120.00
Total non-current assets 441,933,849.31 446,624,857.43
Total assets 872,186,552.37 896,911,569.17
Legal Representative: Chief Financial Officer: Head of Accounting Department:
Consolidated Balance Sheet (Continued)
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Closing Opening
Items Notes
Balance Balance
Current liabilities: —— ——
Short-term borrowings Ⅵ-18 540,993,500.00 546,603,500.00
Financial liabilities held for trading
Derivative financial liabilities
Notes payable Ⅵ-19 28,080,000.00 30,379,988.94
Accounts payable Ⅵ-20 229,626,385.55 171,190,476.10
Receipts in advance
Contract liabilities Ⅵ-21 2,058,111.01 3,441,205.38
Employee benefits payable Ⅵ-22 6,722,120.46 8,529,392.78
Tax and surcharge payable Ⅵ-23 6,702,419.03 16,649,704.07
Other payables Ⅵ-24 8,535,416.39 7,566,872.62
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities Ⅵ-25 5,152,509.50 447,356.63
Total current liabilities 827,870,461.94 784,808,496.52
Non-current liabilities: —— ——
105
2023 Annual Report
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual debts
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred tax liabilities Ⅵ-15 643,051.02 1,011,787.97
Other non-current liabilities
Total non-current liabilities 643,051.02 1,011,787.97
Total liabilities 828,513,512.96 785,820,284.49
Owners' equity (or Shareholders' equity): —— ——
Paid-in capital (or share capital) Ⅵ-26 119,375,000.00 119,375,000.00
Other equity instruments
Including: Preference shares
Perpetual debts
Capital reserve Ⅵ-27 958,565,294.29 958,565,294.29
Less: Treasury shares
Other comprehensive income Ⅵ-28 9,800.00 9,800.00
Special reserve Ⅵ-29 5,147,711.40 3,234,669.03
Surplus reserve Ⅵ-30 125,686,000.00 125,686,000.00
- -
Unappropriated profit Ⅵ-31
1,165,110,766.28 1,095,779,478.64
Total owners' equity (or shareholders'
43,673,039.41 111,091,284.68
equity) attributable to the parent
*Non-controlling interests
Total owners' equity (or shareholders'
43,673,039.41 111,091,284.68
equity)
Total liabilities and owners' equity (or
872,186,552.37 896,911,569.17
shareholders' equity)
Legal Representative: Chief Financial Officer: Head of Accounting Department:
Consolidated Income Statement
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Items Notes Current Year Prior Year
1. Total operating revenue 464,078,962.46 474,114,098.08
106
2023 Annual Report
Including: Operating revenue Ⅵ-32 464,078,962.46 474,114,098.08
2. Total operating costs 545,501,488.38 565,181,800.23
Including: Operating costs Ⅵ-32 428,374,544.72 450,395,435.30
Taxes and surcharges Ⅵ-33 4,586,353.16 3,754,824.57
Selling expenses Ⅵ-34 14,232,724.26 15,239,315.12
Administrative expenses Ⅵ-35 52,350,776.53 47,721,110.67
Research and development expenses Ⅵ-36 27,227,617.00 30,598,868.69
Financial expenses Ⅵ-37 18,729,472.71 17,472,245.88
Including: Interest expense Ⅵ-37 20,877,409.62 20,216,911.43
Interest income Ⅵ-37 1,692,490.51 1,640,888.48
Add: Other income Ⅵ-38 1,118,557.63 1,205,689.22
Investment income (losses expressed
Ⅵ-39 11,095,359.95 8,128,052.32
with "-")
Including: Investment income from
11,095,359.95 8,128,052.32
associates and joint ventures
Gains from derecognition of
financial assets measured at amortized
costs
Gains on hedge of a net position
(losses expressed with "-")
Gains from changes in fair value
(losses expressed with "-")
Credit impairment losses (lossed
Ⅵ-40 331,504.85 989,437.83
expressed with "-")
Assets impairment losses (losses
Ⅵ-41 -490,947.61
expressed with "-")
Gains on disposal of assets (losses
Ⅵ-42 -413,963.91 40,420,431.93
expressed with "-")
3. Operating profit (loss expressed with "-
-69,782,015.01 -40,324,090.85
")
Add: Non-operating income Ⅵ-43 79,114.42 170,256.15
Less: Non-operating expenses Ⅵ-44 1,260.70 3,112.43
4. Total profit (loss expressed with "-") -69,704,161.29 -40,156,947.13
Less: Income tax expenses Ⅵ-45 -372,873.65 -423,852.44
5. Net profit (net loss expressed with "-") -69,331,287.64 -39,733,094.69
Including: net profit realized by the merged
party before the combination
A. Classified by continuing and discontinued
operations
Net profit from continuing operations
-69,331,287.64 -39,733,094.69
(losses expressed with "-")
Net profit from discontinued operations
(losses expressed with "-")
B. Attributable to
Shareholders of the parent (losses
-69,331,287.64 -39,733,094.69
expressed with "-")
*Non-controlling interests (losses
expressed with "-")
6. Other comprehensive income, net of
income tax
107
2023 Annual Report
Attributable to shareholders of the parent
A. Items that will not be reclassified
subsequently to profit or loss
1. Remeasurement of defined benefit
liability /(asset)
2. Other comprehensive income that
cannot be reclassified to profit or loss under
equity method
3. Equity instrument designated at fair
value through other comprehensive income -
Changes in fair value
4. Own credit risk - Changes in fair value
B. Items that may be reclassified
subsequently to profit or loss
1.Other comprehensive income that can
be reclassified to profit or loss under equity
method
2. Gains or losses on changes in fair
value of available-for-other debt investments
3. Other comprehensive income from
reclassification of financial assets
4.Other debt investment credit impairment
provisions
5. Cash flow hedge reserve
6. Translation differences of financial
statements presented in foreign
currencies
7. Others
*Attributable to non-controlling interests
7. Total comprehensive income -69,331,287.64 -39,733,094.69
Attributable to shareholders of the parent -69,331,287.64 -39,733,094.69
*Attributable to non-controlling interests
8. Earnings per share —— ——
Basic earnings per share -0.58 -0.33
Diluted earnings per share -0.58 -0.33
Legal Representative： Chief Financial Officer: Head of Accounting
Department:
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Items Notes Current Year Prior Year
1. Cash flows from operating activities: — —
Cash received from sales of goods or
408,545,122.71 455,186,338.69
rendering of services
Refunds of taxes and surcharges 22,896,090.58 10,282,411.62
Cash received relating to other operating
Ⅵ-46 17,636,883.69 12,374,241.54
activities
Sub-total of cash inflows from operating
449,078,096.98 477,842,991.85
activities
Cash paid for goods and services 311,855,716.29 320,316,578.74
108
2023 Annual Report
Cash paid to and on behalf of employees 102,360,452.36 107,843,217.38
Cash paid for taxes and surcharges 9,080,289.02 15,295,146.76
Cash paid relating to other operating
Ⅵ-46 23,243,415.70 21,978,449.88
activities
Sub-total of cash outflows from operating
446,539,873.37 465,433,392.76
activities
Net cash flows from operating activities Ⅵ-47 2,538,223.61 12,409,599.09
2. Cash flows from investing activities: — —
Cash received from disposal of
investments
Cash received from investment income
Net cash received from disposal of fixed
assets, intangible assets and other long- 159,773.95 153,543,148.36
term assets
Net cash received from disposal of
subsidiaries and other business units
Cash received relating to other investing
activities
Sub-total of cash inflows from investing
159,773.95 153,543,148.36
activities
Cash paid for purchase and construction
of fixed assets, intangible assets and other 18,995,468.32 26,166,782.57
long-term assets
Cash paid for acquisition of investments
Cash paid for obtaining subsidiaries and
other business units
Cash paid relating to other investing
activities
Sub-total of cash outflows from investing
18,995,468.32 26,166,782.57
activities
Net cash flows from investing activities -18,835,694.37 127,376,365.79
3. Cash flows from financing activities: — —
Cash received from capital contributions
Including: Cash received from non-
controlling shareholders' capital
contributions to subsidiaries
Cash received from borrowings 711,597,000.00 650,903,500.00
Cash received relating to other financing
Ⅵ-46 70,015,717.55 81,688,328.08
activities
Sub-total of cash inflows from financing
781,612,717.55 732,591,828.08
activities
Cash repayments of borrowings 717,207,000.00 597,760,000.00
Cash payments for distribution of
20,847,409.62 20,216,911.43
dividends, profits, or for interest expenses
Including: Subsidiaries' cash payments
for distribution of dividends or profits to non-
controlling shareholders
Cash paid relating to other financing
Ⅵ-46 69,135,758.11 108,137,271.47
activities
Sub-total of cash outflows from financing
807,190,167.73 726,114,182.90
activities
Net cash flows from financing
-25,577,450.18 6,477,645.18
activities
4. Effect of foreign exchange rate -3,742.89 -7,599.20
109
2023 Annual Report
changes on cash and cash equivalents
5. Net increase/ (decrease) in cash and
Ⅵ-47 -41,878,663.83 146,256,010.86
cash equivalents
Add: Opening balance of cash and cash
169,994,534.05 23,738,523.19
equivalents
6. Closing balance of cash and cash
Ⅵ-47 128,115,870.22 169,994,534.05
equivalents
Legal Representative： Chief Financial Officer: Head of Accounting
Department:
110
2023 Annual Report
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Current Year
Shareholders' equity attributable to the parent
Non-
Other equity Less: △ Total
Items Paid-in Other control
instruments Trea Gener sharehold
capital Capital compreh Special Surplus Unappropr ling
Prefer Perpet sury al risk Sub-total ers'
(Share Oth reserve ensive reserve reserve iated profit interes
ence ual shar reser equity
capital) ers income ts
shares debts es ve
I. Closing -
balance of prior 119,375,0 958,565,2 9,800.00 3,234,6 125,686,0 1,095,779,4 111,091,2 111,091,2
year 00.00 94.29 69.03 00.00 78.64 84.68 84.68
Add: changes in
accounting — — — — — — — — — — — — — —
policies
Corrections
of prior period — — — — — — — — — — — — — —
errors
Others
II. Opening -
balance of 119,375,0 - - - 958,565,2 - 9,800.00 3,234,6 125,686,0 - 1,095,779,4 111,091,2 - 111,091,2
current year 00.00 94.29 69.03 00.00 78.64 84.68 84.68
III. Changes in
current year - - -
(decrease 1,913,0 69,331,287. 67,418,24 67,418,24
expressed with 42.37 64 5.27 5.27
"-")
(i) Total - - -
comprehensive — — — — — — — — — 69,331,287. 69,331,28 69,331,28
income 64 7.64 7.64
(ii)
Contributions by
and distributions
to owners
1. Capital
contributions from — — — — — — — — —
owners
111
2023 Annual Report
2. Capital
contributions from
other equity — — — — — —
instruments
holders
3. Share-based
payments
recognized in — — — — — — — — —
shareholders'
equity
4. Others — — —
(iii) Special
— — — 1,913,0 1,913,042. 1,913,042.
reserve
42.37 37 37
1.
Appropriation to — — — — — — — 3,279,3 — — — 3,279,360. 3,279,360.
special reserve 60.59 59 59
- - -
2. Use of
— — — — — — — 1,366,3 — — — 1,366,318. 1,366,318.
special reserve
18.22 22 22
(iv) Profit
distribution
1.
Appropriation to — — — — — — — — — —
surplus reserve
Including:
Statutory surplus — — — — — — — — — —
reserve
Discretionary — — — — — — — — — —
surplus reserve
#Reserve
— — — — — — — — — —
fund
#Enterprise — — — — — — — — — —
development fund
#Profit
returned for — — — — — — — — — —
investment
△ 2.
Appropriation to — — — — — — — — — —
general risk
reserve
3. Distributions — — — — — — — — — —
112
2023 Annual Report
to shareholders
4. Others
(v) Internal
transfer of
shareholders'
equity
1.
Capitalization of — — — — — — — — — —
capital reserve
2.
Capitalization of — — — — — — — — — —
surplus reserve
3. Making up
losses from — — — — — — — — — —
surplus reserve
4. Transfer of
changes in
defined benefit — — — — — — — — — —
plans to retained
earnings
5. Transfer of
other
comprehensive — — — — — — — — — —
income to
retained earnings
6. Others
IV. Closing -
balance of 119,375,0 958,565,2 9,800.00 5,147,7 125,686,0 1,165,110,7 43,673,03 43,673,03
current year 00.00 94.29 11.40 00.00 66.28 9.41 9.41
Legal Representative： Chief Financial Officer: Head of Accounting Department:
Consolidated Statement of Changes in Equity (Continued)
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Prior Year
Items
Shareholders' equity attributable to the parent Non- Total
113
2023 Annual Report
Other equity control sharehold
instruments
Less: △Gen ling ers'
Paid-in Other
Trea eral
capital Prefer Capital compreh Special Surplus Unappropr interes equity
Perpet sury risk Sub-total
(Share ence Oth reserve ensive reserve reserve iated profit ts
ual shar reserv
capital) share ers income
debts es e
s
I. Closing -
119,375,0 958,565,2 1,713,8 125,686,0 149,303,5 149,303,5
balance of prior 9,800.00 1,056,046,
00.00 94.29 82.50 00.00 92.84 92.84
year 383.95
Add: changes in
accounting
policies
Corrections
of prior period
errors
Others
II. Opening -
119,375,0 958,565,2 1,713,8 125,686,0 149,303,5 149,303,5
balance of 9,800.00 1,056,046,
00.00 94.29 82.50 00.00 92.84 92.84
current year 383.95
III. Changes in
current year - - -
1,520,7
(decrease 39,733,094 38,212,30 38,212,30
86.53
expressed with .69 8.16 8.16
"-")
(i) Total - - -
comprehensive — — — — — — — — — 39,733,094 39,733,09 39,733,09
income .69 4.69 4.69
(ii)
Contributions by
and distributions
to owners
1. Capital
contributions from — — — — — — — — —
owners
2. Capital
contributions from
other equity — — — — — —
instruments
holders
3. Share-based
payments
recognized in — — — — — — — — —
shareholders'
equity
114
2023 Annual Report
4. Others — — —
(iii) Special 1,520,7 1,520,786. 1,520,786.
— — —
reserve 86.53 53 53
1.
2,673,8 2,673,873. 2,673,873.
Appropriation to — — — — — — — — — —
73.52 52 52
special reserve
- - -
2. Use of
— — — — — — — 1,153,0 — — — 1,153,086. 1,153,086.
special reserve
86.99 99 99
(iv) Profit
distribution
1.
Appropriation to — — — — — — — — — —
surplus reserve
Including:
Statutory surplus — — — — — — — — — —
reserve
Discretionary — — — — — — — — — —
surplus reserve
#Reserve
— — — — — — — — — —
fund
#Enterprise — — — — — — — — — —
development fund
#Profit
returned for — — — — — — — — — —
investment
△ 2.
Appropriation to — — — — — — — — — —
general risk
reserve
3. Distributions
— — — — — — — — — —
to shareholders
4. Others
(v) Internal
transfer of
shareholders'
equity
1.
Capitalization of — — — — — — — — — —
capital reserve
2. — — — — — — — — — —
115
2023 Annual Report
Capitalization of
surplus reserve
3. Making up
losses from — — — — — — — — — —
surplus reserve
4. Transfer of
changes in
defined benefit — — — — — — — — — —
plans to retained
earnings
5. Transfer of
other
comprehensive — — — — — — — — — —
income to
retained earnings
6. Others
IV. Closing -
119,375,0 958,565,2 3,234,6 125,686,0 111,091,2 111,091,2
balance of 9,800.00 1,095,779,
00.00 94.29 69.03 00.00 84.68 84.68
current year 478.64
Legal Representative： Chief Financial Officer: Head of Accounting Department:
116
2023 Annual Report
Balance Sheet
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Closing Opening
Items Notes
Balance Balance
Current assets: —— ——
Currency funds 10,047,508.93 19,632,308.54
Financial assets held for trading
Derivative financial assets
Notes receivable 1,846,226.16
Accounts receivable XVIII-1 4,014,658.51 3,266,890.00
Receivables financing 10,000,000.00
Prepayments 1,690,146.39 2,796,181.98
Other receivables XVIII-2 289,159.26 1,345,740.08
Including: Interest receivable
Dividends receivable
Inventories 3,873,607.68 3,992,120.63
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 26,885.79
Total current assets 31,761,306.93 31,060,127.02
Non-current assets： —— ——
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments XVIII-3 420,253,124.94 409,157,764.99
Other equity instrument investments
Other non-current financial assets
Investment properties
Fixed assets 24,979,453.65 27,476,448.18
Construction in progress
Bearer biological assets
Oil and gas assets
Right-of-use assets
117
2023 Annual Report
Intangible assets
Development expenditures
Goodwill
Long-term prepaid expenses
Deferred tax assets
Other non-current assets 135,600.00
Total non-current assets 445,232,578.59 436,769,813.17
Total assets 476,993,885.52 467,829,940.19
Legal Representative: Chief Financial Officer: Head of Accounting
Department:
Balance Sheet (Continued)
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Opening
Items Notes Closing Balance
Balance
Current liabilities: —— ——
Short-term borrowings
Financial liabilities held for trading
Derivative financial liabilities
Notes payable
Accounts payable 214,806,534.89 148,575,684.59
Receipts in advance
Contract liabilities 159,365.82 177,064.96
Employee benefits payable 3,379,898.21 4,008,918.72
Tax and surcharge payable 6,177,907.09 15,529,178.05
Other payables 229,760,873.88 273,461,451.21
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 1,866,943.72 23,018.42
Total current liabilities 456,151,523.61 441,775,315.95
Non-current liabilities: —— ——
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual debts
Lease liabilities
118
2023 Annual Report
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 456,151,523.61 441,775,315.95
Owners' equity (or Shareholders' equity): —— ——
Paid-in capital (or share capital) 119,375,000.00 119,375,000.00
Other equity instruments
Including: Preference shares
Perpetual debts
Capital reserve 958,565,294.29 958,565,294.29
Less: Treasury shares
Other comprehensive income 9,800.00 9,800.00
Special reserve 286,543.15 430,254.50
Surplus reserve 125,686,000.00 125,686,000.00
-
-
Unappropriated profit 1,178,011,724.5
1,183,080,275.53
5
Total owners' equity (or shareholders'
20,842,361.91 26,054,624.24
equity)
Total liabilities and owners' equity (or
476,993,885.52 467,829,940.19
shareholders' equity)
Legal Representative: Chief Financial Officer: Head of Accounting Department:
Income Statement
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Items Notes Current Year Prior Year
1. Total operating revenue 318,886,528.02 255,751,276.44
Including: Operating revenue XVIII-4 318,886,528.02 255,751,276.44
2. Total operating costs 335,564,149.49 286,818,016.69
Including: Operating costs XVIII-4 312,846,255.11 259,112,698.56
Taxes and surcharges 416,635.91 565,321.94
Selling expenses 398,919.79 390,581.47
Administrative expenses 22,541,349.55 28,175,164.70
Research and development expenses 21,032.44 12,161.64
119
2023 Annual Report
Financial expenses -660,043.31 -1,437,911.62
Including: Interest expense
Interest income 37,946.67 132,857.64
Add: Other income 523,708.73 990,023.53
Investment income (losses expressed
XVIII-5 11,095,359.95 8,128,052.32
with "-")
Including: Investment income from
11,095,359.95 8,128,052.32
associates and joint ventures
Gains from derecognition of
financial assets measured at amortized costs
Gains on hedge of a net position (losses
expressed with "-")
Gains from changes in fair value (losses
expressed with "-")
Credit impairment losses (lossed
expressed with "-")
Assets impairment losses (losses
expressed with "-")
Gains on disposal of assets (losses
-10,025.19 40,420,431.93
expressed with "-")
3. Operating profit (loss expressed with "-
-5,068,577.98 18,471,767.53
")
Add: Non-operating income 27.00 138,583.14
Less: Non-operating expenses
4. Total profit (loss expressed with "-") -5,068,550.98 18,610,350.67
Less: Income tax expenses
5. Net profit (net loss expressed with "-") -5,068,550.98 18,610,350.67
Net profit from continuing operations
-5,068,550.98 18,610,350.67
(losses expressed with "-")
Net profit from discontinued operations
(losses expressed with "-")
6. Other comprehensive income, net of
income tax
Attributable to shareholders of the parent
A. Items that will not be reclassified
subsequently to profit or loss
1. Remeasurement of defined benefit
liability /(asset)
2. Other comprehensive income that cannot
be reclassified to profit or loss under equity
method
3. Equity instrument designated at fair
value through other comprehensive income -
Changes in fair value
4. Own credit risk - Changes in fair value
B. Items that may be reclassified
subsequently to profit or loss
1.Other comprehensive income that can be
reclassified to profit or loss under equity
method
2. Gains or losses on changes in fair value
of available-for-other debt investments
3. Other comprehensive income from
reclassification of financial assets
120
2023 Annual Report
4.Other debt investment credit impairment
provisions
5. Cash flow hedge reserve
6. Translation differences of financial
statements presented in foreign currencies
7. Others
7. Total comprehensive income -5,068,550.98 18,610,350.67
8. Earnings per share —— ——
Basic earnings per share
Diluted earnings per share
Legal Representative： Chief Financial Officer: Head of Accounting
Department:
Statement of Cash Flows
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Items Notes Current Year Prior Year
1. Cash flows from operating activities: — —
Cash received from sales of goods or
162,918,445.15 144,583,207.21
rendering of services
Refunds of taxes and surcharges
Cash received relating to other operating
6,276,486.09 6,939,605.77
activities
Sub-total of cash inflows from operating
169,194,931.24 151,522,812.98
activities
Cash paid for goods and services 138,120,225.13 149,508,190.51
Cash paid to and on behalf of employees 30,568,200.13 34,840,152.31
Cash paid for taxes and surcharges 2,160,306.98 9,780,875.37
Cash paid relating to other operating
8,084,841.09 7,407,611.52
activities
Sub-total of cash outflows from operating
178,933,573.33 201,536,829.71
activities
Net cash flows from operating activities -9,738,642.09 -50,014,016.73
2. Cash flows from investing activities: — —
Cash received from disposal of investments
Cash received from investment income
Net cash received from disposal of fixed
assets, intangible assets and other long-term 153,507,597.36
assets
Net cash received from disposal of
subsidiaries and other business units
Cash received relating to other investing
activities
Sub-total of cash inflows from investing
153,507,597.36
activities
Cash paid for purchase and construction of
fixed assets, intangible assets and other long- 916,846.40 1,890,939.45
term assets
Cash paid for acquisition of investments
Cash paid for obtaining subsidiaries and
121
2023 Annual Report
other business units
Cash paid relating to other investing
activities
Sub-total of cash outflows from investing
916,846.40 1,890,939.45
activities
Net cash flows from investing activities -916,846.40 151,616,657.91
3. Cash flows from financing activities: — —
Cash received from capital contributions
Including: Cash received from non-
controlling shareholders' capital contributions
to subsidiaries
Cash received from borrowings
Cash received relating to other financing
626,487,000.00 233,343,500.00
activities
Sub-total of cash inflows from financing
626,487,000.00 233,343,500.00
activities
Cash repayments of borrowings
Cash payments for distribution of dividends,
profits, or for interest expenses
Including: Subsidiaries' cash payments
for distribution of dividends or profits to non-
controlling shareholders
Cash paid relating to other financing
625,416,311.12 317,460,000.00
activities
Sub-total of cash outflows from financing
625,416,311.12 317,460,000.00
activities
Net cash flows from financing activities 1,070,688.88 -84,116,500.00
4. Effect of foreign exchange rate changes
on cash and cash equivalents
5. Net increase/ (decrease) in cash and
-9,584,799.61 17,486,141.18
cash equivalents
Add: Opening balance of cash and cash
19,632,308.54 2,146,167.36
equivalents
6. Closing balance of cash and cash
10,047,508.93 19,632,308.54
equivalents
Legal Representative： Chief Financial Officer: Head of Accounting
Department:
122
2023 Annual Report
Statement of Changes in Equity
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Current Year
Shareholders' equity attributable to the parent
Other equity Less Non-
Items instruments △ contr Total
Paid-in : Other
Special Gener olling sharehold
capital Prefe Perp Capital Trea compreh Surplus Unappropri Sub-
Ot reserv al risk intere ers' equity
(Share rence etual reserve sury ensive reserve ated profit total
her e reser sts
capital) share debt shar income
s ve
s s es
I. Closing -
balance of prior 119,375,0 958,565,2 9,800.00 430,25 125,686,000 1,178,011,7 26,054, 26,054,624.
year 00.00 94.29 4.50 .00 24.55 624.24 24
Add: changes in
accounting — — — — — — — — — — — — — —
policies
Corrections
of prior period — — — — — — — — — — — — — —
errors
Others
II. Opening -
balance of 119,375,0 - - - 958,565,2 - 9,800.00 430,25 125,686,000 - 1,178,011,7 26,054, - 26,054,624.
current year 00.00 94.29 4.50 .00 24.55 624.24 24
III. Changes in
current year - - - -
(decrease 143,71 5,068,550.9 5,212,2 5,212,262.3
expressed with "- 1.35 8 62.33 3
")
(i) Total - - -
comprehensive — — — — — — — — — 5,068,550.9 5,068,5 5,068,550.9
income 8 50.98 8
(ii) Contributions
by and
distributions to
owners
1. Capital
contributions from — — — — — — — — —
owners
123
2023 Annual Report
2. Capital
contributions from
other equity — — — — — —
instruments
holders
3. Share-based
payments
recognized in — — — — — — — — —
shareholders'
equity
4. Others — — —
- -
(iii) Special -
— — — 143,71 143,711
reserve 143,711.35
1.35 .35
1. Appropriation
— — — — — — — 46,195. — — — 46,195. 46,195.32
to special reserve
32 32
- -
2. Use of -
— — — — — — — 189,90 — — — 189,906
special reserve 189,906.67
6.67 .67
(iv) Profit
distribution
1. Appropriation
— — — — — — — — — —
to surplus reserve
Including:
Statutory surplus — — — — — — — — — —
reserve
Discretionary — — — — — — — — — —
surplus reserve
#Reserve
— — — — — — — — — —
fund
#Enterprise
— — — — — — — — — —
development fund
#Profit
returned for — — — — — — — — — —
investment
△ 2.
Appropriation to
— — — — — — — — — —
general risk
reserve
3. Distributions
— — — — — — — — — —
to shareholders
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2023 Annual Report
4. Others
(v) Internal
transfer of
shareholders'
equity
1. Capitalization
— — — — — — — — — —
of capital reserve
2. Capitalization
— — — — — — — — — —
of surplus reserve
3. Making up
losses from — — — — — — — — — —
surplus reserve
4. Transfer of
changes in
defined benefit — — — — — — — — — —
plans to retained
earnings
5. Transfer of
other
comprehensive — — — — — — — — — —
income to retained
earnings
6. Others
IV. Closing -
balance of 119,375,0 958,565,2 9,800.00 286,54 125,686,000 1,183,080,2 20,842, 20,842,361.
current year 00.00 94.29 3.15 .00 75.53 361.91 91
Legal Representative： Chief Financial Officer: Head of Accounting Department:
Statement of Changes in Equity (Continued)
For the year ended 31 December 2023
Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. Currency: CNY
Prior Year
Items Shareholders' equity attributable to the parent Non- Total
Paid-in Other equity Capital Les Other Special Surplus Unappropri Sub- contr shareholde
△ ollin rs' equity
capital instruments reserve s: compreh reserve reserve ated profit total
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2023 Annual Report
(Share Prefe Perp Trea ensive Gener g
Ot
capital) rence etual sury income al risk inter
her
share debt shar reser ests
s
s s es ve
I. Closing -
119,375,0 958,565,2 612,361 125,686,000 7,626,38 7,626,380.1
balance of prior 9,800.00 1,196,622,0
00.00 94.29 .09 .00 0.16 6
year 75.22
Add: changes in
accounting
policies
Corrections
of prior period
errors
Others
II. Opening -
119,375,0 958,565,2 612,361 125,686,000 7,626,38 7,626,380.1
balance of 9,800.00 1,196,622,0
00.00 94.29 .09 .00 0.16 6
current year 75.22
III. Changes in
current year -
18,610,350. 18,428,2 18,428,244.
(decrease 182,106
67 44.08 08
expressed with "- .59
")
(i) Total
18,610,350. 18,610,3 18,610,350.
comprehensive — — — — — — — — —
67 50.67 67
income
(ii) Contributions
by and
distributions to
owners
1. Capital
contributions from — — — — — — — — —
owners
2. Capital
contributions from
other equity — — — — — —
instruments
holders
3. Share-based
payments
recognized in — — — — — — — — —
shareholders'
equity
4. Others — — —
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2023 Annual Report
- -
(iii) Special
— — — 182,106 182,106. -182,106.59
reserve
.59 59
1. Appropriation 118,560 118,560.
— — — — — — — — — — 118,560.72
to special reserve .72 72
- -
2. Use of
— — — — — — — 300,667 — — — 300,667. -300,667.31
special reserve
.31 31
(iv) Profit
distribution
1. Appropriation
— — — — — — — — — —
to surplus reserve
Including:
Statutory surplus — — — — — — — — — —
reserve
Discretionary — — — — — — — — — —
surplus reserve
#Reserve
— — — — — — — — — —
fund
#Enterprise
— — — — — — — — — —
development fund
#Profit
returned for — — — — — — — — — —
investment
△ 2. Appropriation
to general risk — — — — — — — — — —
reserve
3. Distributions
— — — — — — — — — —
to shareholders
4. Others
(v) Internal
transfer of
shareholders'
equity
1. Capitalization
— — — — — — — — — —
of capital reserve
2. Capitalization
— — — — — — — — — —
of surplus reserve
3. Making up
losses from — — — — — — — — — —
surplus reserve
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2023 Annual Report
4. Transfer of
changes in defined
— — — — — — — — — —
benefit plans to
retained earnings
5. Transfer of
other
comprehensive — — — — — — — — — —
income to retained
earnings
6. Others
IV. Closing -
119,375,0 958,565,2 430,254 125,686,000 26,054,6 26,054,624.
balance of 9,800.00 1,178,011,7
00.00 94.29 .50 .00 24.24 24
current year 24.55
Legal Representative： Chief Financial Officer: Head of Accounting Department:
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2023 Annual Report
Chongqing Jianshe Vehicle System Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2023
(Unless otherwise specified, the currency is CNY)
I.Basic Information of the Company
1．The Company’s place of registration, organizational form and address of headquarters.
Chongqing Jianshe Vehicle System Co., Ltd. (hereinafter referred to as “Company”, “the
Company” or “Chongqing Jianche”), whose original name was Chongqing Jianshe Motorcycle
Co., Ltd., was established in July 1995 by Jianshe Industry (Group) Co., Ltd. and China North
Industries Shenzhen Corp. The unified social credit code/registration No. of the Company is
915000007474824231. The Company was listed on the Shenzhen Stock Exchange in July 1995.
On December 27, 2017, the Company announced that it had completed the relevant
industrial and commercial registration procedures for the change of its full name in Chinese,
and obtained the Notice of Approval of Change Registration from Chongqing Administration for
Industry and Commerce (YGSWZBD [2017] No.1206-1), the renewed Business License and the
approval documents of Shenzhen Stock Exchange. The Company name was changed from
Chongqing Jianshe Motorcycle Co., Ltd. to Chongqing Jianshe Vehicle System Co., Ltd. The
abbreviation of the Company was changed from "Jianmo B" to "Jianche B", and the Company
stock code 200054 remained unchanged.
The former controlling shareholder, Chongqing Jianshe Mechanical & Electrical Equipment
Co., Ltd. (hereinafter referred to as “Jianshe Mechanical & Electrical”), signed the Equity
Transfer Agreement of State-owned Listed Companies with China South Industries Group Co.,
Ltd.(hereinafter referred to as "CSGC") on October 22, 2018, that is, Jianshe Mechanical &
Electrical agreed to transfer 84,906,250 shares of its state-owned legal shares to CSGC,
accounting for 71.13% of the total share capital of the Company, and the nature of the shares
is the initiator legal shares.
The Company received the Jianchen Letter of Confirmation for Securities Transfer
Registration issued by China Securities Depository and Clearing Co., Ltd., Shenzhen Branch on
December 21, 2018, and the registration formalities for the equity transfer under this
agreement have been completed at China Securities Depository and Clearing Co., Ltd.,
Shenzhen Branch. Chongqing Jianshe Mechanical & Electrical Equipment Co., Ltd. no longer
holds the shares of the Company, and CSGC has become the controlling shareholder of the
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2023 Annual Report
Company, holding 84,906,250 shares of the Company, accounting for 71.13%. The shares are
legal person shares of the sponsor.
As of December 31, 2023, the total share capital cumulatively issued by the Company was
119,375,000 shares. The registered capital was 119,375,000 yuan. Its place of registration is
No.1 Jianshe Avenue, Huaxi Industrial Park, Banan District, Chongqing. The address of the
headquarters is in Banan District, Chongqing. Legal representative: Fan Aijun.
2．The main business activities actually engaged by the Company
As of the date of approval for the financial statements, the main business activities of the
Company and its subsidiaries include the research and development, processing, and
manufacturing of motorcycles, automotive parts and accessories.
3．Name of controlling shareholder and actual controller
As of the date of approval for the financial statements, the controlling shareholder of the
Company is CSGC, and the actual controller is the State-owned Assets Supervision and
Administration Commission of the State Council.
4．This financial report was approved by the seventh meeting of the tenth Board of
Directors of the Company on April 28, 2024.
5．The operating period of the Company is from July 19, 1995 to July 18, 2045.
II.Basis of Preparation of Financial Statements
1．Basis for the Preparation of the Financial Statements
The financial statements are prepared on a going concern basis. It is based on
transactions actually occurring, in accordance with the relevant provisions of the latest
Accounting Standards for Business Enterprises issued by the Ministry of Finance and its
application guidelines, and is based on the significant accounting policies and accounting
estimates described below.
2．Going Concern
The Company has assessed the going-concern ability for 12 months as of the end of the
reporting period, and has no matter or situation bringing material doubt to the going-concern
ability. Therefore, the financial statements are prepared on the basis of going-concern
assumption.
The Company has taken the following measures to improve its ability to continue
operations:
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2023 Annual Report
(1) Vigorously advance product development. Focus on solidifying, optimizing, and
commercializing electric platform products to address current issues affecting electric products.
This includes completing the performance optimization of 27CC and 34CC models to establish
a competitive edge in product technology.
(2) Intensify efforts in market expansion. Accelerate the increase in sales volume of
electric compressors by enhancing existing projects such as Changan CPA platform, Ruichi, and
Geely Tangjun while also driving new projects like Changan A158, Changan KaiCheng G393,
Kaiyi, and Xinyuan. Maintain consistent sales scale for constant-displacement compressors.
(3) Concentrate on enhancing engineering capabilities. Emphasize improving product
quality by strengthening the effectiveness of the quality assurance system and implementing
robust process monitoring to reduce quality losses. Strengthen production management by
aligning with market order plans to ensure timely delivery through balanced production
organization and optimized material distribution. Additionally, focus on advancing process
technology capabilities while elevating workstation maturity levels.
(4) Prioritize cost reduction and expense control. Adhere strictly to budget constraints by
cascading targets down through all levels of responsibility while intensifying monitoring efforts
for cost and overhead expenses to ensure alignment with scale efficiency metrics. Enforce
strict controls over receivables and payables management by linking sales with production
activities as well as procurement processes to minimize inventory occupancy. Timely clearance
of excess or inefficient inventory is essential along with reinforced control over accounts
receivable processes.
Although the company has been incurring losses continuously, its production and
operation are normal, and there is no significant uncertainty regarding its continuing operating
ability. The board of directors of the company believes that the company will continue to
operate and has based the preparation of this year's financial statements on the assumption of
continued operations.
III.Significant Accounting Policies and Accounting Estimates
1.Statement on compliance with Accounting Standards for Business Enterprises
The Company's financial statements prepared on the basis of the above preparation are in
line with the requirements of the latest Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance and its application guidelines, interpretations and
other relevant provisions (collectively referred to as "Accounting Standards for Business
Enterprises"), truly and completely reflect the Company's financial position, operating results
and cash flow and other relevant information.
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2023 Annual Report
In addition, this financial report has been prepared with reference to the presentation
and disclosure requirements of the "Rules for Information Disclosure and Reporting of
Companies with Publicly Issued Securities No. 15 - General Provisions for Financial Reporting"
(revised in 2023), issued by the China Securities Regulatory Commission.
2. Accounting Period
The financial year of the Company is calendar year from 1st January to 31st December.
3. Functional Currency
The Company’s functional currency is CNY.
4. Report Items with Changes in Measurement Attributes in the Current Period and the
Measurement Attributes Adopted in the Current Period
The measurement attributes used by the Company include historical cost, replacement
cost, net realizable value, present value and fair value.
5. Determination Method and Selection Basis of Criterion of Materiality
Item Criterion of Materiality
Important accounts receivable for single The Company recognizes accounts receivable
provision for bad debts that exceed 5% of the absolute value of the
total profit as important accounts receivable.
Write-off of important accounts receivable The Company recognizes accounts receivable
with a single write off amount exceeding 5% of
the absolute value of the total profit as
important accounts receivable.
Important other receivables for single provision The Company recognizes other receivables that
for bad debts exceed 5% of the absolute value of the total
profit as importance other receivables.
The Company recognizes prepayments that
with a single aging of more than 1 year and an
Important prepayments with an aging of over 1
amount exceeding 0.5% of the total assets as
year
important prepayments with an aging of more
than 1 year.
The Company recognizes construction in
progress projects with a single amount
Important projects of construction in progress
exceeding 0.5% of the total assets as important
construction in progress projects.
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2023 Annual Report
The Company recognizes accounts payable that
with a single aging of more than 1 year and an
Important accounts payable with an aging of
amount exceeding 0.5% of the total assets as
over 1 year
important accounts payable with an aging of
more than 1 year.
The Company recognizes other payables that
with a single aging of more than 1 year and an
Important other payables with an aging of over
amount exceeding 0.5% of the total assets as
1 year
important other payables with an aging of
more than 1 year.
6. Accounting Treatment Methods for Business Combinations under Common Control
and Not Under Common Control
(1)Accounting Treatment Methods for Business Combinations under Common Control
The Company's assets and liabilities acquired in a business combination are measured at
the Company's shares of the carrying amount of the consolidated party's ownership interest in
the consolidated financial statements of the ultimate controlling party at the combination date.
The difference between the carrying amount of the net assets acquired by the Company and
the carrying amount of the consideration paid for the merger (or the aggregate nominal value
of shares issued) is adjusted against capital reserve; if capital reserve is not sufficient to cover
the reduction, it is adjusted against retained earnings.
(2)Accounting Treatment Methods for Business Combination not under Common Control
The Company recognizes goodwill at the acquisition date for the difference between the
cost of the combination and the share of the fair value of the acquiree's identifiable net assets
acquired in the combination; if the cost of the combination is less than the share of the fair
value of the acquiree's identifiable net assets acquired in the combination, the fair value of
each of the acquiree's identifiable assets, liabilities and contingent liabilities and the
measurement of the cost of the combination are first reviewed, and if, after the review, the
cost of the combination is still less than the share of the fair value of the acquiree's identifiable
net assets acquired in the combination, the difference is recognized in profit or loss for the
current period.
Business combination not under common control through multiple transactions shall be
processed in the following order:
①Adjust the initial investment cost of long-term equity investment. If the equity held
before the purchase date is accounted for by the equity method, it shall be re-measured
according to the fair value of the equity on the purchase date, and the difference between the
133
2023 Annual Report
fair value and the carrying value shall be included in the current investment income; The
equity held by the purchaser before the purchase date, which involves changes in other
comprehensive income and other owner's equity under the equity method should be
converted to the current income of the purchase date, except for other comprehensive income
arising from changes in the net liabilities or net assets of the defined benefit plan and changes
in the fair value of investments in other equity instruments held by the invevee.
②Recognize goodwill (or the amount recorded into profit or loss for the current period).
The initial investment cost of the long-term equity investment adjusted in the first step is
compared with the fair value share of the identifiable net assets of the subsidiary on the
purchase date, if the former is bigger than the latter, the difference will be recognized as
goodwill; The former is less than the latter, the difference will be recorded in current profit or
loss.
Disposal of equity through multiple transactions in stages until loss of control over
subsidiaries
(1)The principle of determining whether each transaction in the process of step-by-step
disposal of equity until the loss of control of the subsidiary belong to "a package deal"
If the terms, conditions, and economic impact of various transactions related to the
disposal of equity investments in subsidiaries are in accordance with the following conditions,
generally indicates that multiple transactions should be accounted for as "a package deal":
1) These transactions were entered into simultaneously or considering mutual influence;
2) These transactions as a whole can achieve a complete commercial outcome;
3) The occurrence of a transaction depends on the occurrence of at least one other
transaction;
4) A single transaction may not be economical when viewed separately, but it is
economical when considered together with other transactions.
(2)The accounting treatment method for various transactions in the process of step -by-
step disposal of equity until the loss of control over subsidiaries belongs to "a package deal"
If the disposal of equity investments in subsidiaries until the loss of control belongs to a
package deal, each transaction should be accounted for as a disposal of subsidiaries and loss of
control transaction; However, the difference between the disposal price and the net asset
share of the subsidiary corresponding to the disposal investment before the loss of control
should be recognized as other comprehensive income in the consolidated financial statements,
and transferred to the current period's profit and loss when the loss of control occurs.
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2023 Annual Report
In the consolidated financial statements, the remaining equity should be remeasured at
its fair value on the date of loss of control. The difference between the consideration obtained
from the disposal of equity and the fair value of the remaining equity, minus the share of net
assets that should have been continuously calculated from the date of purchase by the parent
company based on the original shareholding ratio, is recognized as investment income in the
current period of loss of control. Other comprehensive income related to equity investments in
original subsidiary should be converted into current investment income or retained earnings
when the loss of control occurs.
(3)The accounting treatment method for various transactions in the process of step -by-
step disposal of equity until the loss of control over subsidiaries not belonging to "a package
deal"
If the disposal of the investment in the subsidiary does not lose control, the difference
between the disposal price and the share of the subsidiary's net assets corresponding to the
disposal investment in the consolidated financial statements is included in the capital reserve
(capital premium or equity premium), and if the capital premium is insufficient to be deducted,
the retained earnings shall be adjusted.
If the disposal of investment in a subsidiary loses control, the remaining equity should be
remeasured at its fair value on the date of loss of control in the consolidated financial
statements. The difference between the consideration obtained from the disposal of equity
and the fair value of the remaining equity, minus the share of net assets that should have been
continuously calculated from the purchase date of the original subsidiary based on the original
shareholding ratio, is recognized as investment income in the current period of loss of control.
Other comprehensive income related to equity investments in existing subsidiaries should be
converted into current investment income or retained earnings when control is lost.
7. The Criterion of Control and Preparation Method of Consolidated Financial
Statements
The scope of consolidation of the financial statement shall be determined on the basis of
control.
Control refers to the Company having the power over the invested party, enjoying variable
returns through participating in related activities of the invested party, and having the ability
to use the power over the invested party to influence its return amount. Related activities
refer to activities that have a significant impact on the returns of the invested party. The
relevant activities of the invested party should be judged based on specific circumstances,
usually including the sale and purchase of goods or services, management of financial assets,
purchase and disposal of assets, research and development activities, and financing activities.
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2023 Annual Report
The Company makes a judgment on whether to control the invested party based on
comprehensive consideration of all relevant facts and circumstances indicates. If facts and
circumstances indicate that there are changes to one or more of the elements in the above
definition, the Company shall reassess whether it controls an investee.
The consolidated financial statements are based on the financial statements of the parent
company and its subsidiaries, and are prepared by the Company in accordance with
Accounting Standards for Enterprises No. 33- Consolidated Financial Statements, based on
other relevant information.
8. Types of Joint Arrangements and Accounting Treatment for Joint Operations
(1)Identification and Classification of Joint Venture Arrangements
A joint arrangement is an arrangement of which two or more parties have joint control.
The joint arrangement has the following characteristics: ①Each participating parties is bound
by the arrangement; ②Two or more participating parties exercise joint control over the
arrangement. No party can independently control the arrangement, and any party with joint
control over the arrangement can prevent other parties or a combination of parties from
independently controlling the arrangement.
Joint control refers to the common control over a certain arrangement in accordance with
relevant agreements, and the related activities of the arrangement must be unanimously
agreed upon by the participating parties who share control.
Joint arrangements are divided into joint operations and joint ventures. A joint operation
is a joint arrangement whereby the Company that has joint control of the arrangement and has
rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint
venture is a joint arrangement which the Company has joint control together with other
parties only has rights to the net assets of the arrangement.
(2)Accounting Treatment of Joint Arrangements
The participant of the joint operation shall recognize the following items related to its
share of interests in the joint operation, and carry out accounting treatment in accordance
with the provisions of relevant accounting standards for enterprises: ①Its assets, including its
share of any assets held jointly; ②Its liabilities, including its share of any liabilities incurred
jointly; ③Its revenue from the sale of its share of the output arising from the joint operation;
④Its share of the revenue from the sale of the output by the joint operation; ⑤Its expense,
including its share of any expense incurred jointly.
The participants shall account for their investments in the joint venture in accordance
with the provisions of Accounting Standards for Enterprises No. 2- Long term Equity
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2023 Annual Report
Investments..
9. Criteria for Determining Cash and Cash Equivalents
Cash and cash equivalents comprise the Company’s cash on hand, demand deposits, and
short-term (which means it has a short maturity of three months or less from the date of
acquisition) highly liquid investments that are readily convertible into known amounts of cash
and are subject to an insignificant risk of changes in value.
10. Foreign Currency Transactions and Translation to the Presentation Currency
(1)Reporting Foreign Currency Transactions
On initial recognition, foreign currency transactions are translated into CNY amounts
using the spot exchange rate at the date of the transaction. At the balance sheet date,
monetary items denominated in foreign currencies are translated using the spot exchange rate
at the balance sheet date, and exchange differences arising from differences in exchange rates
are recognized in profit or loss for the current period, except for exchange differences on the
principal of and interest on special borrowings in foreign currencies related to the acquisition
of assets eligible for capitalization; non-monetary items denominated in foreign currencies
measured at historical cost are still translated using the spot exchange rate at the date of the
transaction, without changing their amounts in CNY; non-monetary items measured at fair
value in foreign currencies are translated using the spot exchange rate at the date when the
fair value was determined, and the difference is recognized in profit or loss for the current
period or in other comprehensive income.
11. Financial Instruments
(1) Recognition and Derecognition of Financial Instruments
The Company recognizes a financial asset or a financial liability when the Company
becomes party to the contractual provisions of the instrument.
Buying and selling financial assets in a conventional manner, recognition and termination
of recognition shall be based on the accounting of the transaction date. Buying and selling
financial assets in a conventional manner refers to the collection or delivery of financial assets
within the time limit specified by regulations or common practices, in accordance with the
terms of the contract. The trading day refers to the date on which the Company promises to
buy or sell financial assets.
If the following conditions are met, the recognition of financial assets (or a portion of
financial assets, or a group of similar financial assets) shall be terminated, that is, transferred
from their accounts and balance sheets:
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2023 Annual Report
①The right to receive cash flows from financial assets has expired;
②Transferred the right to receive cash flows from financial assets, or assumed the
obligation to timely and fully pay the received cash flows to third parties under a "pass
through agreement"; And (a) substantially transferred almost all the risks and rewards of
ownership of the financial asset, or (b) relinquished control over the financial asset even
though substantially neither transferred nor retained almost all the risks and rewards of
ownership of the financial asset.
(2) Classification and Measurement of Financial Assets
The Company classifies financial assets as subsequently measured at amortized cost, fair
value through other comprehensive income or fair value through profit or loss on the basis of
both the Company’s business model for managing the financial assets and the contractual cash
flow characteristics of the financial asset. Subsequent measurement of financial assets
depends on their classification.
The Company's classification of financial assets is based on the Company's business model
of managing financial assets and the cash flow characteristics of financial assets.
①Financial Assets Measured at Amortized Cost
Financial assets are classified as financial assets measured at amortized cost if they
simultaneously meet the following conditions: It is held within a business model whose
objective is to hold financial assets in order to collect contractual cash flows, and its
contractual cash flow characteristics are consistent with those of a basic lending arrangement,
that is, the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. the
Company applies effective interest method and subsequently measures this type of financial
assets at amortized costs, a gain or loss arising from amortization or impairment is recognized
in profit or loss.
②Debt Instrument Investments Measured at Fair Value Through Other Comprehensive
Income
Financial assets are classified as financial assets measured at fair value through other
comprehensive income if they simultaneously meet the following conditions: The contractual
terms of the financial asset provide that the cash flow generated on a particular date is only
the payment of the principal amount and the interest based on the outstanding principal
amount. For such financial assets, fair value is used for subsequent measurement. The
discount or premium is amortized using the effective interest method and recognized as
interest income or expense. Except for impairment losses and exchange differences of foreign
currency monetary financial assets recognized as profit or loss for the current period, changes
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2023 Annual Report
in the fair value of such financial assets are recognized as other comprehensive income until
the financial asset is derecognized, and its cumulative gains or losses are transferred to the
current period profit and loss. Interest income related to such financial assets is recognized as
profit or loss for the current period.
③Equity Instrument Investments Measured at Fair Value Through Other Comprehensive
Income
The Company irrevocably chooses to designate particular investments in equity
instruments that are not held for trading as financial assets measured at fair value through
other comprehensive income. And only the dividends on such investments are recognized in
profit or loss; changes in fair values of the investments are recognized in other comprehensive
income. Upon derecognition of these financial assets, cumulative gains or losses presented in
other comprehensive income will be subsequently transferred to retained earnings.
④Financial Assets Measured at Fair Value Through Profit or Loss
A financial asset is measured at fair value through profit or loss unless it is measured at
amortized cost or at fair value through other comprehensive income in accordance with
preceding paragraphs. In addition, the Company designates some financial assets as measured
at fair value through profit or loss when doing so eliminates or significantly reduces accounting
mismatches. the Company subsequently measures this type of financial assets at fair value;
changes in fair values are recognized in profit or loss.
All affected related financial assets will be reclassified only when the Company changes its
business model for managing financial assets.
For financial assets measured at fair value through profit or loss, relevant transaction
costs are directly recognized in profit or loss, while transaction costs for other categories of
financial assets are recognized in their initial recognition amount.
(3) Classification and Measurement of Financial Liabilities
At initial recognition, financial liabilities are classified as financial liabilities at amortized
cost or financial liabilities at fair value through profit or loss.
Financial liabilities that meet one of the following conditions can be designated as
financial liabilities measured at profit or loss at initial measurement: ①This designation can
eliminate or significantly reduce accounting mismatch; ②Manage and evaluate financial
liability portfolios or financial asset and financial liability portfolios based on fair value, in
accordance with the Company's risk management or investment strategy outlined in formal
written documents, and report to key management within the Company on this basis; ③This
financial liability contains embedded derivative that require separate splitting.
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2023 Annual Report
The Company determines the classification of financial liabilities at the time of initial
recognition. For financial liabilities at fair value through profit or loss, related transaction costs
are directly recorded in profit or loss; for other financial liabilities, related transaction costs are
recorded in the amount initially recognized.
The subsequent measurement of financial liabilities depends on its classification:
①Financial Liabilities at Amortized Cost
For this type of financial liabilities, the effective interest rate method is adopted and
subsequent measurement is carried out at amortized cost.
②Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss comprise financial liabilities held for
trading (including derivatives that are financial liabilities) and financial liabilities designated as
at fair value through profit or loss at initial recognition.
(4) Offset of Financial Assets
If the following conditions are met simultaneously, financial assets and financial liabilities
shall be presented in the balance sheet at the net amount after offsetting each other: there is
a legal right to offset the recognized amount, and such legal right is currently enforceable; Plan
to settle on a net basis, or simultaneously realize the financial asset and settle the financial
liability.
(5) Impairment of Financial Assets
Based on the expected credit losses, the Company recognizes an impairment loss on a
financial asset measured at amortized cost, a debt instrument investment at fair value through
other comprehensive income, or a financial guarantee contract. Credit loss is the difference
between all contractual cash flows that are due to the Company in accordance with the
contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate..
The Company considers all reasonable and evidence-based information, including
forward-looking information, to estimate, individually or in combination, the expected credit
losses of financial assets measured at amortized cost and financial assets (debt instruments)
measured at fair value through other comprehensive income.
①General Model of Expected Credit Losses
If the credit risk on that financial asset has increased significantly since initial recognition,
the Company shall measure the impairment loss for the financial asset at an amount equal to
the lifetime expected credit losses; if the credit risk has not increased significantly since initial
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recognition, the Company shall measure the impairment loss for the financial asset at an
amount equal to the 12-month expected credit losses.The increase or reversal of the loss
provision resulting from this shall be recognized as impairment loss or gain in the current
period. The specific assessment of credit risk by the Company is detailed in Note 11, Risks
Related to Financial Instruments.
Usually, if the overdue period exceeds 30 days, the Company considers that the credit risk
of the financial instrument has significantly increased, unless there is conclusive evidence that
the credit risk of the financial instrument has not significantly increased since initial
recognition.
Specifically, the Company divides the process of credit impairment for financial
instruments that have not suffered credit impairment at the time of purchase or origin into
three stages, and different accounting treatments are used for the impairment of financial
instruments at different stages:
First stage: Credit risk has not significantly increased since initial recognition
For financial instruments at this stage, the Company should measure the provision for
losses based on the expected credit losses for the next 12 months, and calculate intere st
income based on their book balance (i.e. no impairment provisions deducted) and actual
interest rate (if the instrument is a financial asset, the same below).
Second stage: Credit risk has significantly increased since initial recognition but credit
impairment has not yet occurred
For financial instruments at this stage, the Company shall measure the provision for losses
based on the expected credit losses of the instrument over its entire existence period, and
calculate interest income based on its book balance and actual interest rate.
Third Stage: Credit impairment occurs after initial recognition
For financial instruments in this stage, the Company should measure the provision for
losses based on the expected credit losses of the instrument over its entire lifespan, but the
calculation of interest income is different from that of financial assets in the first two stages.
For financial assets that have suffered credit impairment, the Company should calculate
interest income based on their amortized cost (book balance minus provision for impairment,
i.e. book value) and actual interest rate.
For financial assets that have experienced credit impairment at the time of purchase or
generation, the Company should only recognize changes in expected credit losses over the
entire existence period after initial recognition as loss provisions, and calculate interest income
based on their amortized cost and the actual interest rate adjusted by credit.
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②The Company chooses not to compare the credit risk of financial instruments with
lower credit risk on the balance sheet date, but directly assumes the credit risk of the
instrument has not significantly increased since initial recognition.
If the Company determines that the default risk of a financial instrument is low, the
borrower has a strong ability to fulfill its contractual cash flow obligations in the short term,
and even if there are adverse changes in the economic situation and operating environment
over a long period of time, it may not necessarily reduce the borrower's ability to fulfill its
contractual cash flow obligations, then the financial instrument can be considered to have
lower credit risk.
③Accounts Receivable and Lease Receivables
The Company adopts a simplified model of expected credit loss for accounts receivable
that do not contain significant financing components (including those that do not consider
financing components in contracts which do not exceed one year) according to the Accounting
Standards for Enterprises No. 14- Revenue, and always measures its loss provision based on
the amount of expected credit loss throughout the entire existence period.
The Company has made an accounting policy choice to adopt a simplified model of
expected credit loss for accounts receivable containing significant financing components and
lease receivables regulated by Enterprise Accounting Standard No. 21- Leases, which measures
loss provisions at an amount equivalent to the expected credit loss for the entire existence
period.
④The Combination Categories, Determination Basis, Calculation Method, and Judgment
Criteria for Bad Debt Provision
For those with objective evidence indicating impairment, and notes receivable, accounts
receivable, other receivables, receivable financing, and long-term receivables applicable to
individual evaluation, separate impairment tests shall be conducted to confirm expected credit
losses and make individual impairment provisions. When the Company's accounts receivable
meet the following conditions, the Company conducts a single evaluation to confirm the
expected credit loss: ①The debtor is unable to pay off debts within a foreseeable period of
time due to factors such as loss of contact, revocation, bankruptcy, insolvency, severe cash
flow shortage, and serious natural disasters resulting in production stoppage; (2) Other
conclusive evidence indicates that it is indeed impossible or unlikely to be recovered. For notes
receivable, accounts receivable, other receivables, and receivable financing that do not have
objective evidence of impairment, or when a single financial asset cannot assess expected
credit losses at reasonable cost, the Company divides notes receivable, accounts receivable,
other receivables, receivable financing, and long-term receivables into several combinations
based on credit risk characteristics, and calculates expected credit losses on the basis of the
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combination. The determination basis for different combinations is as follows:
Item Determine Basis of the Combination
Portfolio 1 Bank acceptance bills
Portfolio 2 Commercial acceptance bills
Portfolio 3 Aging portfolio
Portfolio 4 Related parties within the scope of consolidation
The different combinations are determined on the following basis:
Portfolio 1: Bank acceptance bills, refer to historical credit loss experience, combined with
current conditions and expectations for future economic conditions, have extremely low credit
risk and no provision for bad debts is made.
Portfolio 2: Commercial acceptance bills, refer to historical credit loss experience,
combined with current conditions and expectations for future economic conditions, prepare
the comparison table of the aging of accounts receivable and the expected credit loss rate for
the entire existence period, and calculate the expected credit loss.
Portfolio 3: With reference to the historical credit loss experience, combined with current
conditions and expectations of future economic conditions, prepare a comparison table of the
aging of accounts and the expected credit loss rate for the entire existence period, and
calculate the expected credit loss.
Portfolio 4: With reference to the historical credit loss experience, combined with current
conditions and expectations for future economic conditions, no provision for bad debts will be
made for related party transactions within the scope of consolidation.
Comparison table between the Aging of credit risk portfolio of notes receivable, accounts
receivable, other receivables, contract assets and the expected credit loss rate for the whole
survival period:
Aging Expected credit loss rate (%)
1 - 6 months (including 6 months)
Within 6 months -1 year (including 1 year) 5
1 - 2 years (including 2 year) 10
2 - 3 years (including 3 year) 30
3 - 4 years (including 4 year) 50
4 - 5 years (including 5 year) 80
Over 5 years 100
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(6) Transfers of Financial Assets
If the Company has transferred almost all the risks and rewards of ownership of financial
assets to the transferee, the recognition of the financial asset shall be terminated; If almost all
risks and rewards related to ownership of financial assets are retained, the recognition of the
financial asset will not be terminated.
If the Company neither transfers nor retains almost all the risks and rewards related to
the ownership of financial assets, it shall be dealt with in the following cases: if the Company
give up control of the financial asset, it shall terminate the recognition of the financial asset
and recognize the assets and liabilities generated by the financial asset; if th e Company does
not give up control of the financial asset, the relevant financial asset shall be recognized
according to the extent to which it continues to be involved in the transferred financial asset,
and the relevant liability shall be recognized accordingly..
For those the Company continue to be involved by providing financial guarantees for the
transferred financial assets, the assets formed by further involvement shall be recognized
based on the lower of the book value of the financial assets and the amount of financial
guarantees. The financial guarantee amount refers to the highest amount of consideration
received that will be required to be repaid.
12. Notes receivable
The determination method and accounting treatment method of expected credit los s of
notes receivable
The Company has elected to use the simplified model of expected credit losses for notes
receivable that do not have a significant financing component as defined in Accounting
Standards for Business Enterprises No. 14 - Revenue (including situations where the financing
component of contracts not exceeding one year is not considered under this standard), i.e. the
provision for losses is always measured at the amount of expected credit losses throughout
their lives and the resulting increase or reversal of the provision for losses is recorded as an
impairment loss or gain in profit or loss for the current period.
For notes receivable with significant financing components, the Company has elected to
use a simplified model of expected credit losses, whereby the provision for losses is always
measured at the amount of expected credit losses over the entire life of the receivables.
Please refer to Note Ⅲ-11 “Financial Instruments” for details.
13. Accounts Receivable
The determination method and accounting treatment method of expected credit loss of
accounts receivable
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The Company has elected to use the simplified model of expected credit losses for
receivables that do not have a significant financing component as defined in Accounting
Standards for Business Enterprises No. 14 - Revenue (including situations where the financing
component of contracts not exceeding one year is not considered under this standard), i.e. the
provision for losses is always measured at the amount of expected credit losses throughout
their lives and the resulting increase or reversal of the provision for losses is recorded as an
impairment loss or gain in profit or loss for the current period.
For receivables with significant financing components, the Company has elected to use a
simplified model of expected credit losses, whereby the provision for losses is always
measured at the amount of expected credit losses over the entire life of the receivables.
Please refer to Note Ⅲ-11 “Financial Instruments” for details.
14. Receivables financing
The determination method and accounting treatment method of expected credit loss of
receivables financing
The Company has elected to use the simplified model of expected credit losses for
receivable financing that do not have a significant financing component as defined in
Accounting Standards for Business Enterprises No. 14 - Revenue (including situations where
the financing component of contracts not exceeding one year is not considered under this
standard), i.e. the provision for losses is always measured at the amount of expected credit
losses throughout their lives and the resulting increase or reversal of the provision for losses is
recorded as an impairment loss or gain in profit or loss for the current period.
For receivable financing with significant financing components, the Company has elected
to use a simplified model of expected credit losses, whereby the provision for losses is always
measured at the amount of expected credit losses over the entire life of the receivables.
Please refer to Note Ⅲ-11 “Financial Instruments” for details.
15. Other receivables
For other receivables, the Company has elected to use a general model of expected credit
losses. Please refer to Note Ⅲ-11 “Financial Instruments” for details.
16. Inventories
(1) Classification of Inventories
Inventories refers to finished goods or commodities held by the Company for sale in its
daily activities, products in the process of production, materials and supplies consumed in the
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process of production or provision of services. It mainly include raw materials, revolving
materials, goods in process, stock commodities, goods dispatched, etc.
(2) Cost Measurement for Inventories
Inventory is initially measured at cost upon acquisition, including purchase costs,
processing costs and other costs. Inventory is valued using the weighted average method at
the end of each month when it is dispatched.
(3) Inventory Counting
Inventory counting is performed using the perpetual inventory system.
(4) Amortization of Low-Cost Consumables and Packaging Materials
①Low-cost Consumables
Amortization based on the lump sum amortization method.
②Packaging Materials
Amortization based on the expected number of uses.
(5)Measurement of Net Realizable Value and Write-Down
After a comprehensive inspection of the inventory at the end of the period, the provision
for inventory impairment shall be withdrawn or adjusted based on the lower of the cost and
net realizable value of the inventory.. The net realizable value of inventories used directly for
sale is determined in the normal course of production and operation at the estimated selling
price of the inventory less estimated selling expenses and related taxes; the net realizable
value of inventories subject to processing is determined in the normal course of production
and operation at the estimated selling price of the finished goods produced less the estimated
costs to be incurred to completion, estimated selling expenses and related taxes. The net
realizable value of inventory held for the execution of sales contracts or labor contracts shall
be calculated based on the contract price. If the quantity of inventory held exceeds the
quantity ordered in the sales contract, the net realizable value of the excess inventory shall be
calculated based on the general sales price.At the balance sheet date, the net realizable value
of part of the same inventory for which there is a contractual price agreement and other parts
for which there is no contractual price is determined separately and compared with it s
corresponding cost to determine the amount of provision for decline in value or reversal of
inventory, respectively.
Provision for inventory impairment shall be made at the end of the period based on
individual inventory items; But for inventory with a large quantity and low unit price, provision
for inventory impairment shall be made according to the category of inventory; Inventory
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related to product series produced and sold in the same region, with the same or similar end
use or purpose, and difficult to measure separately from other items, shall be consolidated
and provisioned for inventory impairment.
If the factors affecting the previous write-down of inventory value have disappeared, the
amount of write-down shall be restored and reversed within the original provision for
inventory impairment, and the reversed amount shall be recognized in the current period
profit and loss.
17. Contract assets
(1)Determining and criteria for Recognizing contract assets
The Company presents contract assets or contract liabilities in the balance sheet based on
the relationship between the fulfillment of performance obligations and payments from
customers. Consideration (other than receivables) that the Company is entitled to receive for
goods transferred or services rendered to customers is presented as a contract asset.
(2)Determining and accounting for expected credit losses on contract assets
The Company has elected to use the simplified model of expected credit losses for
contract asset that do not have a significant financing component as defined in Accounting
Standards for Business Enterprises No. 14 - Revenue (including situations where the financing
component of contracts not exceeding one year is not considered under this standard), i.e. the
provision for losses is always measured at the amount of expected credit losses throughout
their lives and the resulting increase or reversal of the provision for losses is recorded as an
impairment loss or gain in profit or loss for the current period.
For contract asset with significant financing components, the Company has elected to use
a simplified model of expected credit losses. Please refer to Note Ⅲ-11 “Financial Instruments”
for details.
18. Non-current Assets Held for Sale or Disposal Groups
(1)Determining and accounting for non-current asset held for sale or disposal groups
The Company classifies as held for sale those parts of the business (or non-current assets)
that meet the following conditions: (1) they are ready for immediate sale in their present
condition, in accordance with the practice for the sale of such assets or disposal groups in
similar transactions; (2) it is highly probable that the sale will take place, a resolution has been
reached on a plan of sale and firm purchase commitments(a definite purchase commitment is
a legally binding purchase agreement between enterprise and other parties, which contains
important terms such as transaction price, time and sufficiently severe penalties for breach of
contract, making it highly unlikely that the agreement will be significantly adjusted or revoked)
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have been obtained, and the sale is expected to be completed within one year. Approval has
been obtained from the relevant authority or regulatory authority in accordance with the
relevant regulations.
The Company adjusts the estimated net residual value of assets held for sale to reflect
their fair value less costs to sell (but not exceeding the original carrying amount of the holding
for sale). The difference between the original carrying amount and the adjusted estimated net
residual value is charged to current profit or loss as an asset impairment loss, together with a
provision for impairment of assets held for sale. For the amount of asset impairment loss
recognized by the disposal group held for sale, the carrying amount of the goodwill in the
disposal group shall be offset first, and then the carrying amount shall be offset proportionally
according to the proportion of the carrying amount of the non-current assets in the disposal
group that are subject to the provisions of the Accounting Standard for Business Enterprises
No. 42 - Non-current Assets Held for Sale, Disposal Group and Termination of Operation.
If the net increase in the fair value less costs to sell of non-current assets held for sale at a
subsequent balance sheet date, the amount previously written down should be restored and
reversed within the amount of impairment loss on assets recognized after classification as held
for sale, with the amount reversed charged to current profit or loss. Impairment losses
recognized before classification as held for sale are not reversed. If the net amount of the fair
value of the disposal group held for sale on the subsequent balance sheet date after deducting
the sale expenses increases, the amount previously written down shall be restored, and the
amount of asset impairment losses recognized by the non-current assets recognized in the
Accounting Standard for Business Enterprises No. 42 - Non-current Assets Held for Sale,
Disposal Group and Discontinued Operations shall be reversed after being classified into the
category of held for sale, and the amount reversed shall be included in the profit or loss for the
current period. The carrying amount of goodwill that has been deducted and the impairment
loss of non-current assets that are subject to the measurement requirements of Accounting
Standard for Business Enterprises No. 42 - Non-current Assets Held for Sale, Disposal Group
and Discontinued Operations shall not be reversed before they are classified as held -for-sale.
The subsequent reversal amount of asset impairment losses recognized by the disposal group
held for sale shall be increased proportionally according to the proportion of the book value of
the non-current assets in the disposal group that are subject to the measurement provisions of
Accounting Standard for Business Enterprises No. 42 - Non-current Assets Held for Sale,
Disposal Group and Termination of Operations, except for goodwill. If an enterprise loses
control over a subsidiary as a result of, for example, the sale of its investment in the subsidiary,
regardless of whether the enterprise retains part of its equity investment after the sale, it
should classify the investment in the subsidiary as a whole as held for sale in the parent
company's individual financial statements and all assets and liabilities of the subsidiary as held
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for sale in the consolidated financial statements when the investment in the subsidiary to be
sold meets the conditions for classification as held for sale.
(2) Recognition criteria and reporting methods for discontinued operation
Discontinued operation refers to distinguishable component that meets one of the
following conditions, and has been disposed of or classified as held for sale: ①the component
represents an independent main business or a separate main operating area; ②This
component is part of a related plan to dispose of a independent main business or a separate
main operating area; ③This component is a subsidiary acquired specifically for resale.
The definition of discontinued operation includes the following three meanings:
①Discontinued operation should be a separate component that can be distinguished by
the enterprise. The operations and cash flows of this component can be clearly distinguished
from other parts of the enterprise when operating and preparing financial statements.
②Discontinued operation should have a certain scale. Discontinued operations should
represent an independent main business or a separate main operating area, or be part of a
related plan to dispose of an independent main business or a separate main operating area.
③Discontinued operation shall meet certain time requirements. The components that
meet the definition of discontinued operation should belong to one of the following two
situations, the component has been disposed of before the balance sheet date, including sale
and end of use (such as closure or scrapping, etc.); The component has been classified as held
for sale before the balance sheet date.
19. Long-term Equity Investments
(1)Cost of Investments
①For business combinations formed under the same control, if the consolidating party
pays Cash, transfers non-Cash assets, assumes debt or issues equity securities as consideration
for the combination, its initial investment cost at the date of combination is based on the
acquisition of the share of the ownership interest of the consolidated party in the book value
of the consolidated financial statements of the ultimate controlling party. The difference
between the initial investment cost of a long-term equity investment and the carrying amount
of the consideration paid for the combination or the aggregate nominal value of the shares
issued is adjusted against capital reserve (capital premium or equity premium); if capital
reserve is not sufficient to cover the reduction, retained earnings are adjusted.
For business combinations formed under the same control is achieved step by step, the
initial investment cost of the investment shall be the share of the owner's equity of the
merged party on the merger date calculated based on the shareholding ratio. The difference
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between the initial investment cost and the book value of the original long-term equity
investment plus the book value of the consideration for acquiring further shares on th e merger
date shall be adjusted for the capital reserve (capital premium or equity premium). If the
capital reserve is insufficient to offset, the retained earnings shall be offset.
②For business combinations that are not formed under common control, the fair value
of the consideration paid for the combination is used as the initial cost of its investment at the
date of purchase.
③Except for those formed by business combinations: if acquired by paying Cash, the
initial cost of investment is based on the actual purchase price paid; if acquired by issuing
equity securities, the initial cost of investment is based on the fair value of the equity
securities issued; if invested by investors, the initial cost of investment is based on the value
agreed in the investment contract or agreement (except where the value agreed in the
contract or agreement is not fair).
(2) Subsequent Measurement and Recognition of Profit or Loss
Long-term equity investments over which the investee is able to exercise control are
accounted for using the cost method; long-term equity investments over which there is joint
control or significant influence are accounted for using the equity method.
When adopting the cost method, long-term equity investments is valued at the initial
investment cost. Except for the actual payment made at the time of investment or the cash
dividends or profits declared but not yet distributed included in the consideration, the cash
dividends or profits declared to be distributed by the invested entity are recognized as current
investment income, and the impairment of long-term investments is considered in accordance
with relevant asset impairment policies..
When adopting the equity method, if the initial investment cost of long-term equity
investments is greater than the share of fair value of identifiable net assets of the invested
entity at the time of investment, it shall be classified as the initial investment cost of long -term
equity investments; If the initial investment cost of long-term equity investments is less than
the share of the fair value of the identifiable net assets of the invested entity at the time of
investment, the difference shall be recorded into the current profit and loss, and the cost of
long-term equity investments shall be adjusted accordingly.
When adopting the equity method, after obtaining the long-term equity investments, the
investment profit and loss shall be recognized and the book value of the long-term equity
investments shall be adjusted according to the share of the net profit and loss realized by the
invested entity that should be enjoyed or shared. When recognizing the share of net profit and
loss of the invested entity, it shall be based on the fair value of identifiable assets of the
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invested entity at the time of acquisition of investment, and according to the accounting policy
and accounting period of the Company, offset the part of internal trading profit and loss
between the associated enterprise and the joint venture, which is attributable to the invested
enterprise according to the shareholding ratio (however, if the loss of internal trading belongs
to the asset impairment loss If, it shall be fully recognized), and the net profit of the invested
entity shall be recognized after adjustment. Calculate the portion to be distributed based on
the profits or cash dividends declared by the invested entity, and correspondingly reduce the
book value of long-term equity investments. The Company recognizes the net loss of the
invested entity,with the book value of the long-term equity investments and other long-term
equity that essentially constitute the net investment in the invested entity reduced to zero,
unless the Company is obligated to bear additional losses. For other changes of owners' equity
other than net profit and loss of the invested entity, the book value of long-term equity
investments shall be adjusted and recorded into owners' equity.
(3) Determination of the Basis of Common Control, Significant Influence over the Investee
Control refers to having the power over the invested party, owning variable returns
through participating in related activities of the invested party, and having the ability to use
the power over the invested party to influence the amount of returns; Significant impact refers
to the investor has the power to participate in decision-making over the financial and
operating policies of the investee but does not control, or jointly control with other parties,
the formulation of those policies.
(4) Disposal of Long-term Equity Investments
①Partial disposal of long-term equity investments in subsidiaries without losing control
When partially disposing of long-term equity investments in subsidiaries without losing
control, the difference between the disposal price and the corresponding book value of the
disposed investment should be recognized as current investment income.
②Loss of control over the subsidiary due to partial disposal of equity investment or
other reasons
If partial disposal of equity investment or other reasons result in loss of control over a
subsidiary, the book value of the long-term equity investment corresponding to the sold equity
should be carried forward. The difference between the sale price and the book value of the
disposed long-term equity investments shall be recognized as investment income (loss);
Meanwhile, the remaining equity shall be recognized as long-term equity investments or other
related financial assets at its book value. If the remaining equity after disposal can exercise
common control or significant influence on the subsidiary, accounting treatment should be
carried out in accordance with the relevant provisions on the conversion from cost method to
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equity method.
(5) Impairment Testing Methodology and Provision for Impairment
Where there is objective evidence of impairment of investments in subsidiaries,
associates and joint ventures at the balance sheet date, a provision for impairment is made for
the difference between the carrying amount and the recoverable amount.
20. Investment Properties
(1) Investment properties comprise land use rights leased, land use rights held and
intended for transfer upon appreciation and buildings leased.
(2) Investment properties are initially measured at cost, subsequently measured using the
cost model, and depreciated or amortized using the same methods as those used for fixed
assets and intangible assets. If, at the balance sheet date, there is an indication that an
investment property is impaired, a corresponding provision for impairment is made for the
difference between the carrying amount and the recoverable amount.
21. Fixed Assets
(1) Recognition Requirements, Valuation and Depreciation Methods for Fixed Assets
Fixed assets are tangible assets held for use in the production of goods, provision of
services, rental or management of operations and have a useful life of more than one
accounting year.
Fixed assets are recorded at actual cost at the time of acquisition and depreciated using
the average of annual method from the month following the month in which they reach their
intended serviceable condition.
(2) Depreciation Methods for Various Types of Fixed Assets
Depreciation Appreciable life Residual value Annual depreciation
Projects
method (in years) rate (%) rate (%)
Buildings and
Straight-line method 25-35 3 2.77-3.88
constructions
Machinery equipment Straight-line method 7-15 3 6.47-13.86
Transportation
Straight-line method 8-10 3 9.70-12.13
equipment
Other equipment Straight-line method 5-10 3 9.10-19.40
(3) Impairment Test and Measurement of Impairment
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Where there is an indication that a fixed asset is impaired at the balance sheet date, a
corresponding provision for impairment is made for the difference between the carrying
amount and the recoverable amount.
22. Construction in Progress
(1)Construction in progress is transferred to fixed assets at the actual cost of the
construction when it reaches its intended usable state. If the project has reached its intended
usable state but has not yet been completed, it is first transferred to fixed assets at its
estimated value and then adjusted to its original provisional value at its actual cost after
completion of the final account, but without adjusting the depreciation originally charged.
(2)If, at the balance sheet date, there is an indication that construction in progress is
impaired, a provision for impairment is made for the difference between the carrying amount
and the recoverable amount.
23. Intangible Assets
Intangible assets, including land use rights, patent rights and software, are initially
measured at cost.
(1)Useful life and its determination basis, estimated situation, amortization method or
review procedure
Intangible assets with finite useful lives are amortized systematically and reasonably over
their useful lives in accordance with the expected realization of the economic benefits
associated with the intangible asset, or, if the expected realization cannot be reliably
determined, using the straight-line method. The specific useful lives are as follows.
Projects Amortization Period ( Years)
Land use rights 30-50
Patent rights 5
Software 5
Intangible assets with uncertain useful life are unamortized and the Company reviews the
useful life of intangible assets in each accounting period. If it is still uncertain after re
examination at the end of the period, impairment testing shall continue in each accounting
period.
Intangible assets with a definite useful life and for which there is an indication of
impairment at the balance sheet date are provided for at the difference between the carrying
amount and the recoverable amount; intangible assets with an indefinite useful life and
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intangible assets that have not yet reached a usable condition are tested annually for
impairment, regardless of whether there is an indication of impairment.
(3) The scope of R&D expenditure collection and related accounting treatment methods
①Scope of R&D expenditure collection
1)Labor costs
Labor costs include wages and salaries, basic endowment insurance, basic medical
insurance, unemployment insurance, work-related injury insurance, maternity insurance and
housing provident fund of the Company's R&D personnel,, as well as the labor costs of external
R&D personnel. If R&D personnel serve multiple R&D projects simultaneously, the
confirmation of labor costs is based on the working hours records of R&D personnel provided
by the Company's management department, and is allocated proportionally between different
R&D projects. For personnel directly engaged in R&D activities and external R&D personnel
engaged in non R&D activities simultaneously, the Company allocates the actual labor costs
incurred by R&D personnel in different positions between R&D expenses and production and
operation expenses based on reasonable methods such as the proportion of actual working
hours.
2)Material costs
Material costs refer to the actual expenses incurred by the Company for the
implementation of R&D activities. Including: 1)Direct consumption of materials, fuel, and
power costs; 2) The development and manufacturing costs of molds and process equipment
used for intermediate testing and trial production of product, purchase fees for samples,
prototypes, and general testing methods that do not constitute fixed assets,, and the
inspection costs of trial production products; 3) Expenses for operation and maintenance,
adjustment, inspection, testing and repair of instruments and equipment used in R&D
activities.
3)Depreciation expenses
Depreciation expenses refer to the depreciation expenses of instruments, equipment, and
buildings used for research and development activities. For instruments, equipment, and
buildings used for research and development activities, as well as for non research and
development activities, necessary records shall be kept of the usage. The actual depreciation
expenses shall be allocated between research and development expenses and production and
operation expenses in a reasonable way based on factors such as actual working hours and
usage area.
4)Amortization expenses of intangible assets
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The amortization expense of intangible assets refers to the amortization expense of
software, intellectual property, and non patented technology used for R&D activities.
5) Design costs
Design costs refer to the expenses incurred in conceptualizing, developing and
manufacturing of new products and processes, designing of processes, technical specifications,
regulations, and operational characteristics, including related expenses incurred in creative
design activities to obtain innovative, creative, and breakthrough products.
6) Outsourced R&D costs
Outsourced R&D expenses refer to the expenses incurred by the Company to entrust
domestic and foreign institutions or individuals carry out R&D activities (the results of research
and development activities are owned by the Company and closely related to the main
business of the Company).
7) Other expenses
Other expenses refer to other expenses directly related to R&D activities, including
technical book fees, translation fees, expert consultation fees, insurance fee for shigh-tech
research and development, the cost of searching, demonstrating, evaluating, appraising, and
accepting research and development achievements, Intellectual property application fees,
registration fees, agency fees, conference fees, travel expenses, communication fees, etc.
②Accounting treatment of R&D expenditure
Expenditure on the research phase of internal research and development projects is
charged to current profit or loss as incurred. Expenditure on the development phase of an
internal research and development project is recognized as an intangible asset if both of the
following conditions are met: (1) it is technically feasible to complete the intangible asset so
that it can be used or sold; (2) there is an intention to complete the intangible asset and use it
or sell it; (3) the intangible asset generates economic benefits in a manner that includes the
ability to demonstrate that a market exists for the product produced using the intangible asset
or that the intangible asset exists for itself and the usefulness of the intangible asset can be
demonstrated if it is to be used internally; (4) there are sufficient technical, financial and other
resources to support the completion of the development of the intangible asset and the ability
to use or sell the intangible asset; and (5) the expenditure attributable to the development
phase of the intangible asset can be measured reliably.
The Company's specific criteria for classifying research phase expenditure and
development phase expenditure for internal research and development projects are:
Research stage: the stage of original planned investigation and research activities aimed
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at acquiring and understanding new scientific or technological knowledge, etc.
Development stage: the stage in which research results or other knowledge are applied to
a plan or design to produce new or substantially improved materials, devices, products, and
other activities before commercial production or use.
24.Impairment of Long-term Assets
The Company should assess whether there are any signs of possible impairment of assets
on the balance sheet date.
The goodwill and intangible assets with uncertain useful lives formed by business mergers
shall be tested for impairment every year, regardless of whether there are signs of impairment.
The presence of the following signs indicates that assets may be impaired:
(1)The market value of the assets has declined significantly, with a significant increase
compared to the expected decline over time or normal use; (2)The economic, technological or
legal environment in which the enterprise operates and the market in which the assets are
located change significantly in the current period or will change in the near future, thus
adversely affecting the enterprise; (3)The market interest rate or the return on investment in
other markets has increased in the current period, thus affecting the discount rate at which
the enterprise calculates the present value of the expected future cash flow of assets, resulting
in a significant decrease in the recoverable amount of assets; (4)The evidence to suggest that
the assets have become outdated or the physical entities have been damaged; (5)The assets
have been or will be idle, discontinued or planned to be disposed of in advance; (6)The
evidence in the internal report of the Company shows that the economic performance of the
asset has been or will be lower than expected, such as the net cash flow created by the asset
or the realized operating profit (or loss) is far lower (or higher) than the expected amount;
(7)Other signs indicating that the asset may have been impaired.
If there are signs of impairment of an asset, the recoverable amount shall be estimated.
The recoverable amount should be determined based on the higher of the net amount
after deducting disposal expenses from the fair value of the asset and the present value of the
expected future cash flows of the asset.
Disposal costs include legal expenses related to asset disposal, relevant taxes, handling
fees, and direct expenses incurred to make the assets available for sale.
The present value of the estimated future cash flow of an asset shall be determined
according to the estimated future cash flow generated during the continuous use of the asset
and the final disposal of the asset, and discounted after selecting an appropriate discount rate.
The present value of the estimated future cash flow of an asset shall take into account the
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estimated future cash flow, useful life and discount rate of the asset.
If the measurement result of the estimated unrecoverable amount of an asset shows that
the recoverable amount of the asset is lower than its book value, the book value of the asset
shall be written down to the recoverable amount, and the written down amount shall be
recognized as an asset impairment loss and recorded into the current profit and loss, and the
corresponding asset impairment provision shall be made at the same time.
25. Long-term Prepaid Expenses
Long-term amortization is recorded in the accounts as incurred and is amortized evenly
over the period of benefit or over a specified period. If an item of long-term amortization does
not benefit subsequent accounting periods, the entire amortized value of the item is
transferred to current profit or loss.
26. Contract liabilities
The Company presents contract assets or contract liabilities in the balance sheet based on
the relationship between the fulfillment of performance obligations and payments from
customers. the Company's obligations to transfer goods or provide services to customers for
consideration received or receivable from customers are presented as contract liabilities.
27. Employee Benefits
Employee benefits refer to multiform remuneration or compensation offered of the
Company in order to get services provided by its employees or sever the labor relation.
Employee compensation mainly includes short-term employee compensation, post-
employment benefits, dismissal benefits and other long-term employee benefits. The benefits
provided by the Company to employee spouses, children, dependents, deceased employee
families and other beneficiaries also belong to employee benefits.
1. Short term compensation
During the accounting period which employees provide services, our company recognizes
the actual short-term compensation as a liability and includes it in the current profit and loss
or the cost of related assets. Among them, non-monetary benefits are measured at fair value.
2. Dismissal benefits
When the Company terminates the labor relationship with employees before the
expiration of the labor contract, or proposes compensation to encourage employees to
voluntarily accept layoffs. When the Company is unable to unilaterally withdraw the plan to
terminate the employment relationship or propose layoffs, and when recognizing the costs and
expenses related to restructuring involving the payment of termination benefits, the earlier of
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the two, the liability arising from compensation for terminating the employment relationship
with the employee shall be recognized and included in the current period's profit and loss.
3. Defined Contribution Plan
The Company's employees have participated in the social basic pension insurance
organized and implemented by the local labor and social security department. The Company
pays the pension insurance premiums to the local social basic pension insurance agency on a
monthly basis based on the local prescribed social basic pension insurance payment base and
proportion. After retirement, the local labor and social security department is responsible for
paying the basic social pension to retired employees. During the accounting period in which
employees provide services, the Company shall recognize the amount payable according to the
above social security regulations as a liability and include it in the current profit and loss or
related asset costs.
28. Estimated liabilities
(1)The Company recognizes a contingent obligation arising from external guarantees,
litigation matters, product quality guarantees, loss-making contracts, etc. as a present
obligation to the Company, when it is probable that an outflow of economic benefits will result
from the performance of the obligation and the amount of the obligation can be measured
reliably, as a projected liability.
(2)The Company initially measures the projected liability based on the best estimate of
the expenditure required to settle the related present obligation and reviews the carrying
amount of the projected liability at the balance sheet date.
29. Revenue
（1）Recognition of Revenue
The Company's revenue mainly includes sales revenue of automotive air conditioning
products , etc.
The company has fulfilled its performance obligation under the contract, that is, it
recognizes revenue when the customer obtains control of the relevant commodities. Acqu iring
control over relevant goods refers to being able to lead the use of the goods and obtain almost
all economic benefits from them.
(2) Based on the relevant provisions of the revenue standard, the Company determines
that the nature of the relevant performance obligations belongs to "performance obligations
performed within a certain period of time" or "performance obligations performed at a certain
point in time", and recognizes revenue according to the following principles
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If our company meets one of the following conditions, it is considered to fulfill its
performance obligations within a certain period of time:
①The customer obtains and consumes the economic benefits brought by the Company's
performance at the same time as the Company fulfills its obligations.
②Customers are able to control the assets under construction during the Company's
performance process.
③The assets produced by the Company during the performance process have
irreplaceable uses, and the Company has the right to receive payments for the accumulated
performance completed to date throughout the entire contract period.
For performance obligations performed within a certain period of time, the Company
recognizes revenue based on the progress of performance during that period, except for cases
that the progress of performance cannot be reasonably determined. The Company considers
the nature of the goods and adopts the output method or the input method to determine the
appropriate performance schedule.
For performance obligations that are not fulfilled within a certain period of time but are
fulfilled at a certain point in time, the Company recognizes revenue at the point when the
customer obtains control of the relevant goods.
When determining whether the customer has obtained control over the product, the
Company considers the following indications:
①The Company has the right to receive current payments for the product, which means
that the customer has a current payment obligation for the product.
②The Company has transferred the legal ownership of the product to the customer, that
is, the customer already has legal ownership of the product.
③The Company has transferred the product to the customer, that is, the customer has
physical possession of the product.
④The Company has transferred the main risks and rewards of ownership of the product
to the customer, that is, the customer has acquired the main risks and rewards of ownership of
the product.
⑤The customer has accepted the product.
⑥Other signs indicating that the customer has obtained control over the product.
Specific policies for revenue recognition of the Company:
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The recognition of revenue from sales of automotive air conditioners is divided by client
group into three categories:
Large customers. The cooperation method is mainly based on the client's production
demand, the Company will ship the goods to the designated or cooperative third -party
logistics company, and the third-party logistics company is responsible for storage and
distribution services. Each month, the client issues a pending notice according to the actual
consumption of the production plan, and the sales clerk issues an invoicing notice according to
the client's pending notice and in combination with the client's consumption, contract unit
price and other information, and the finance department issues an invoice to confirm the sales
revenue.
Client obtaining the goods after payment. According to the client's demand and relevant
invoicing information, after the client pays and confirms the payment, the sales personnel will
ship and issue invoicing notice according to the unit price of the sales contract and the
quantity demanded by the client, and the Finance Department will issue an invoice to confirm
the sales revenue.
Post-sales client. The sales operation personnel will ship the goods to the clients in
accordance with the contract and the client's demand, and after reaching the time point
agreed in the contract, issue the invoicing notice in accordance with the contract unit price
and the shipping quantity agreed with the clients, and the Finance Department will issue the
invoice to confirm the sales revenue.
(3)Measurement of Revenue
The Company shall measure revenue based on the transaction price allocated to each
individual performance obligation. When determining the transaction price, the Company
considers the impact of variable consideration, significant financing components present in the
contract, non cash consideration, and consideration payable to customers.
(1) Variable Consideration
The Company determines the best estimate of the variable consideration based on the
expected value or the most likely amount, provided that the transaction price including the
variable consideration shall not exceed the amount of accumulated recognized revenue that is
highly unlikely to be materially reversed at the time the relevant uncertainty is resolved. The
Company shall also consider the possibility and proportion of revenue reversal when
evaluating whether it is highly likely that the accumulated recognized revenue will not be
significantly reversed.
(2) Significant Financing Components
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If there are significant financing components in the contract, the Company shall
determine the transaction price based on the assumed amount payable in cash when the
customer obtains control of the goods. The difference between the transaction price and the
contract consideration shall be amortized using the effective interest rate method during the
contract period.
(3) Non-cash Consideration
If a customer pays non-cash consideration, the Company determines the transaction price
based on the fair value of the non-cash consideration. If the fair value of non-cash
consideration cannot be reasonably estimated, the Company indirectly determines the
transaction price with reference to the separate selling price of the commodities it undertakes
to transfer to the customer.
(4) Consideration Payable to Customers
At the point at which the relevant revenue is recognized and at the point at which the
customer consideration is paid (or promised to be paid), the current revenue shall be written
down, except where the customer consideration is payable to obtain other clearly
distinguishable goods from the customer.
The consideration payable by the Company to customers is to obtain other clearly
distinguishable goods from customers, and the purchased goods should be confirmed in a
manner consistent with other purchases made by the Company. If the consideration payable
by the Company to the customer exceeds the fair value of the identifiable goods obtained from
the customer, the excess amount shall be offset against the transaction price. If the fair value
of identifiable goods obtained from customers cannot be reasonably estimated, the enterprise
shall offset the full amount of consideration payable to customers against the transaction price.
30. Contract Cost
Contract costs are divided into contract performance costs and contract acquisition costs.
Costs incurred by an enterprise of the Company to perform a contract are recognized as
an asset as contract performance costs when the following conditions are simultaneously met:
(1)This cost is directly related to a current or anticipated contract that has been awarded
and includes direct labor, direct materials, manufacturing overhead (or similar costs), costs
explicitly attributable to the customer, and other costs incurred solely as a result of that
contract;
(2)The cost increases the resources available to the enterprise to meet its performance
obligations in the future;
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(3)The cost is expected to be recovered.
Incremental costs incurred by the Company to acquire a contract that are expected to be
recovered are recognized as an asset as the cost of acquiring the contract; however, the
amortization of the asset over a period of not more than one year may be recognized in profit
or loss as incurred.
Assets related to contract costs are amortized using the same basis as revenue
recognition for the goods or services to which the assets relate.
If the carrying amount of an asset related to contract costs is more than the difference
between the following two items, the Company makes a provision for impairment and
recognizes an asset impairment loss for the excess:
(1)The residual consideration expected to be realized from the transfer of the goods or
services associated with the asset;
(2)The estimated costs to be incurred for the transfer of the related goods or service s.
If there is a subsequent reversal of the provision for impairment of the above assets, the
carrying amount of the asset after the reversal does not exceed the carrying amount of the
asset at the date of the reversal, assuming that no provision for impairment was made.
31. Government Grants
(1)Government grants involve grants related to assets and grants related to income.
(2)Monetary government grants shall be measured at the amount received or expected to
be received. Non-monetary government grants shall be measured at fair value, and otherwise
measured at nominal amount if the fair value cannot be reliably obtained.
(3)The total amount method is adopted for government grants:
①Government grants related to assets are recognized as deferred income and are
recognized in profit or loss over the useful life of the relevant assets in a reasonable and
systematic manner. If the relevant assets are sold, transferred, scrapped or damaged before
the end of their useful life, the undistributed deferred income balance shall be transferred to
the profit or loss of the asset disposal period.
②Government grants related to income, used to compensate for related expenses or
losses in future periods, are recognized as deferred income and are recognized in the current
profit and loss during the period of recognition of related expenses;
(4) The net amount method is adopted for government grants:
①Government grants related to assets, offsetting the book value of related assets;
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②Government grants related to income, used to compensate for related expenses or
losses in future periods, are recognized as deferred income, and related costs are offset during
the period of recognizing related expenses; Used to compensate for related expenses or losses
that have already occurred, directly offsetting related costs.
(5)If the government grants comprise both grants related to assets and grants related to
income, the Company shall treat them separately, and if they cannot be distinguished from
each other, they shall be accounted for as government grants related to income as a whole.
(6)Government grants related to the daily operation of the Company shall be recognized
in other income or by deducting related costs based on the nature of such economic business.
Government grants unrelated to daily operation shall be recognized in non-operating revenue
or expenses.
(7)The policy-based preferential loan interest discounts obtained by the Company shall be
handled according two different treatments based on whether the government allocates
interest subsidy funds to the lending bank or directly allocates interest subsidy funds to the
Company:
①If the finance department allocates discount interest funds to the lending bank, and
the lending bank provides loans to the Company at preferential policy interest rates, the
Company chooses to conduct accounting treatment according to the following methods:
1）The actual amount of the loan received shall be taken as the recorded value of the
loan, and the relevant loan costs shall be calculated according to the loan principal and the
policy-based preferential interest rate.
2) The fair value of the loan is taken as the recorded value of the loan and the borrowing
cost is calculated according to the effective interest rate, and the difference between the
amount actually received and the fair value of the loan is recognized as deferred income.
Deferred income shall be amortized according the effective interest rate method during the life
of the loan to offset related borrowing costs.
(2) If the finance department directly allocates the discount interest funds to the
Company, the Company will offset the relevant borrowing costs with the corresponding
interest subsidy.
32. Deferred Tax Assets and Deferred Tax Liabilities
(1)Deferred income tax assets or deferred income tax liabilities are recognized on the
basis of the difference between the carrying amount of the asset or liability and its tax basis
(or, if the tax basis of an item not recognized as an asset or liability can be determined in
accordance with the provisions of the Tax Law, the difference between that tax basis and its
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carrying amount), calculated at the tax rate applicable to the period when the asset is
expected to be recovered or the liability settled.
(2)Deferred income tax assets are recognized to the extent that it is probable that taxable
income will be available against which deductible temporary differences can be utilized.
Deferred income tax assets not recognized in prior accounting periods are recognized to the
extent that it is probable that sufficient taxable income will be available against which
deductible temporary differences can be utilized in future periods at the balance sheet date.
(3)At the balance sheet date, the carrying amount of deferred tax assets is reviewed and
the carrying amount of deferred tax assets is written down if it is more likely than not that
sufficient taxable income will not be available in future periods to allow for the benefit of the
deferred tax assets. To the extent that it is probable that sufficient taxable income will be
available, the written down amount is reversed.
(4)The Company's current income tax and deferred income tax are recognized in profit or
loss as income tax expense or benefit, except for income tax arising from: (a) business
combinations; and (b) transactions or events recognized directly in owners' equity.
IV.Taxes
1. Major Taxes and Tax Rates
Tax Basis of tax assessment Tax rate
Value added tax (VAT) Taxable income 13%, 9%, 6%
Urban maintenance and construction tax Turnover tax payable 7%
Educational surtax Turnover tax payable 3%
Local educational surtax Turnover tax payable 2%
Enterprise income tax Taxable income 25%, 15%
Notes to the income tax rates for different taxpayers:
Name of taxpayer Income tax rate
Chongqing Jianshe Vehicle System Co., Ltd. 25%
Chongqing Jianshe Automobile A/C Co., Ltd. 15%
Chongqing Pingshan TK Carburetor Co., Ltd. 15%
2. Important Tax Preferential Policies and their basis
(1)Chongqing Jianshe Automobile A/C Co., Ltd., a subsidiary of the Company, was
certified as a high-tech enterprise on November 28, 2022 and obtained a high-tech
enterprise qualification certificate with certificate No.GR202251102508, which is valid for
three years and is subject to a reduced income tax rate of 15% for the calculation of
enterprise income tax from 2022 to 2024.
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2023 Annual Report
(2)According to the Circular of the Ministry of Finance, the General Administration of
Customs and the State Taxation Administration on Issues concerning Tax Policies for In -depth
Implementation of Western Development Strategies (CS [2011] No.58), from January 1, 2011
to December 31, 2020, the enterprise income tax on enterprises established in western areas
and engaging in industries encouraged by the State is levied at a reduced tax rate of 15%;
According to the Announcement on Continuing the Western Development Enterprise Income
Tax Policy (Announcement of the Ministry of Finance, the State Taxation Administration and
the National Development and Reform ommission [2020] No.23), from January 1, 2021 to
December 31, 2030, the enterprise income tax on encouraged enterprises in western areas
shall be levied at 15%. The enterprise income tax of the Company’s subsidiary Chongqing
Pingshan TK Carburetor Co., Ltd. was 15% in 2022.
(3)The Company’s export tax refund applies to the policy for tax exemption, offset and
refund at tax refund rate of 13%.
V.Changes in Accounting Policies, Accounting Estimates, and Correction of
Errors
1. Changes in Accounting Policies
Since January 1, 2023, the Company has implemented the relevant provisions of
"Accounting treatment for deferred income tax related to assets and liabilities arising from a
single transaction is not applicable to initial recognition exemption" in Interpretation of
Accounting Standards for Business Enterprises No. 16 (CK [2022] No.31) issued by the Ministry
of Finance on December 13, 2022. For individual transactions that occur between the
beginning of the earliest period in which this interpretation is first implemented and the date
of implementation of this interpretation, adjustments shall be made in accordance w ith the
provisions of this interpretation; For the taxable temporary differences and deductible
temporary differences arising from the lease liabilities and right of use assets recognized at the
beginning of the earliest period in which this interpretation is first applied in the financial
statements, as well as expected liabilities and corresponding assets related to abandonment
obligations recognized, the cumulative impact shall be adjusted to the initial retained earnings
and other related financial statement items in the earliest period in accordance with this
interpretation and the provisions of Enterprise Accounting Standard No.18 Income Tax. The
change in accounting policy has no impact on the Company.
2. Changes of Accounting Estimates
None
3. Correction of Material Prior Period Errors
None
VI.Significant Items in Consolidated Financial Statements
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Note: The beginning of the period refers to January 1, 2023, the end of the period refers
to December 31, 2023, the previous period refers to 2022, and the current period refers to
2023.
1. Currency Funds
(1)List by category
Items Balance as at December 31, 2023 Balance as at January 1, 2023
Cash on hand
Bank deposits 798,135.29 3,097,932.48
Other cash balances 9,080,029.50 9,959,988.94
Deposits with financial company 127,317,734.93 166,896,601.57
Total 137,195,899.72 179,954,522.99
(2)At the end of the period, there were 9,080,029.50 yuan of restricted funds, such as
mortgage, pledge and freezing.
2. Notes Receivable
(1) Classification of Notes Receivable
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Bank acceptance bills 6,041,598.66
Total 6,041,598.66
(2)There are no pledged notes receivable at the end of the period.
(3)Notes Receivable that has been Endorsed or Discounted but Not Yet Mature at Year
End
Amount derecognized Amount not derecognized
Classification
at year end at year end
Bank acceptance bills 4,907,818.10
Total 4,907,818.10
(4)Allowance for Doubtful Accounts of Notes Receivable
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2023 Annual Report
Balance as at December 31, 2023 Balance as at January 1, 2023
Allowance for
Allowance for Gross carrying
Gross carrying amount doubtful
doubtful accounts amount
accounts
Classificatio Carryin
Expecte Expecte Carrying
n g
d credit d credit amount
Proportio Amoun amount Amoun Proportio Amou
Amount loss loss
n (%) t t n (%) nt
rate rate
（%） （%）
Collectively
Assessed 6,041,5 6,041,5
100.00
for 98.66 98.66
Impairment
Including:
Bank
6,041,5 6,041,5
acceptance 100.00
98.66 98.66
bills
6,041,5 6,041,5
Total -- -- -- --
98.66 98.66
3. Accounts Receivable
(1)Disclosed Using Aging Analysis Method
Balance as at Balance as at
Aging
December 31, 2023 January 1, 2023
Within 1 year (including 1 year) 125,834,322.38 113,252,407.20
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2023 Annual Report
Including:1 - 6 months (inclusive) 124,323,905.20 112,999,606.01
Within 6 months -1 year 1,510,417.18 252,801.19
Subtotal within 1 year 125,834,322.38 113,252,407.20
1-2 years (including 2 year) 189,236.29 404,993.90
2-3 years (including 3 year) 9,768.26 299,630.17
3-4 years (including 4 year) 35,989.00 1,412,714.62
4-5 years (including 5 year) 1,267,753.05 10,530,065.63
Over 5 years 32,862,078.01 22,394,794.03
Total 160,199,146.99 148,294,605.55
(2) Classified and Disclosed Accounts receivable According to the Method of Provision for
Allowance for Doubtful Accounts
Balance as at December 31, 2023
Classification Gross carrying amount Allowance for doubtful accounts
Carrying amount
Amount Proportion (%) Amount Proportion （%)
Accounts receivable that are individually
27,688,627.26 17.28 27,688,627.26 100.00
assessed for impairment
Accounts receivable that are collectively
132,510,519.73 82.72 6,554,258.72 4.95 125,956,261.01
assessed for impairment
Including:
Aging portfolio 132,510,519.73 82.72 6,554,258.72 4.95 125,956,261.01
Total 160,199,146.99 -- 34,242,885.98 -- 125,956,261.01
(Continued)
Balance as at January 1, 2023
Gross carrying amount Allowance for doubtful accounts
Classification
Proportion Carrying amount
Amount Proportion (%) Amount
（%)
Accounts receivable that are individually
28,054,549.77 18.92 28,054,549.77 100.00
assessed for impairment
Accounts receivable that are collectively
120,240,055.78 81.08 6,529,841.06 5.43 113,710,214.72
assessed for impairment
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2023 Annual Report
Including:
Aging portfolio 120,240,055.78 81.08 6,529,841.06 5.43 113,710,214.72
Total 148,294,605.55 -- 34,584,390.83 -- 113,710,214.72
Accounts receivable that are Individually Assessed for Impairment
Balance as at December 31, 2023
Debtor Allowance for Expected Credit Reason for
Gross carrying amount
doubtful accounts Loss Rate (%) recognition
Chongqing Hyosow Autopart Co., Ltd. 12,723,992.31 12,723,992.31 100.00 Expected to be irrecoverable
Chongqing Bisu Yunbo Power
5,217,475.35 5,217,475.35 100.00 Expected to be irrecoverable
Technology Co., Ltd.
Hafei Motor Co.,Ltd. 3,999,944.43 3,999,944.43 100.00 Expected to be irrecoverable
Hangzhou Fuyang Instrument General
2,681,594.66 2,681,594.66 100.00 Expected to be irrecoverable
Factory Co., Ltd.
Chongqing Kaite Engine Technology
1,481,654.59 1,481,654.59 100.00 Expected to be irrecoverable
Co., Ltd.
Hubei Meiyang Automobile Industry Co.,
1,225,666.00 1,225,666.00 100.00 Expected to be irrecoverable
Ltd.
Celis Automobile (Hubei) Co., LTD.
102,720.66 102,720.66 100.00 Expected to be irrecoverable
Chongqing Branch
GAC GONOW Automobile Co., Ltd.
75,821.20 75,821.20 100.00 Expected to be irrecoverable
Luqiao Company
GAC GONOW Automobile Co., Ltd. 67,998.51 67,998.51 100.00 Expected to be irrecoverable
BAIC Heibao (Weihai) Automobile Co.,
51,021.77 51,021.77 100.00 Expected to be irrecoverable
Ltd.
Dongying Ji 'ao Automobile Co., Ltd. 48,579.85 48,579.85 100.00 Expected to be irrecoverable
Sichuan Yema Automobile Co., Ltd. 12,157.93 12,157.93 100.00 Expected to be irrecoverable
Total 27,688,627.26 27,688,627.26 100.00 —
Accounts receivable that are Collectively Assessed for Impairment
Portfolio: Aging portfolio
Balance as at December 31, 2023 Balance as at January 1, 2023
Allowance for Allowance for
Aging Proportion Proportion
Amount doubtful Amount doubtful
(%) (%)
accounts accounts
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2023 Annual Report
1 - 6 months (inclusive) 124,323,905.20 112,999,606.01
Within 6 months -1 year 1,510,417.18 75,520.85 5.00 252,801.19 12,640.05 5.00
1-2 years (including 2 year) 189,236.29 18,923.63 10.00 404,993.90 40,499.40 10.00
2-3 years (including 3 year) 9,768.26 2,930.48 30.00 104,647.32 31,394.20 30.00
3-4 years (including 4 year) 23,783.26 11,891.63 50.00 61,962.82 30,981.41 50.00
4-5 years (including 5 year) 42,087.05 33,669.64 80.00 8,592.69 6,874.15 80.00
Over 5 years 6,411,322.49 6,411,322.49 100.00 6,407,451.85 6,407,451.85 100.00
Total 132,510,519.73 6,554,258.72 -- 120,240,055.78 6,529,841.06 --
(3) Provision for bad debts
Change in 2023
Balance as at January Balance as at
Classification Recovery or Other
1, 2023 Provision Charge-off December 31, 2023
reversal changes
Accounts receivable
that are individually
28,054,549.77 365,922.51 27,688,627.26
assessed for
impairment
Accounts receivable
that are collectively
6,529,841.06 24,417.66 6,554,258.72
assessed for
impairment
Total 34,584,390.83 24,417.66 365,922.51 34,242,885.98
(4) There were no accounts receivable actually written off in 2023.
(5)Top Five of Accounts Receivable and Contract Assets According to Closing Balances,
presented by debtor
Ending Proportion of total
Closing balance of
Closing balance of balance of Accounts Allowance for
Debtor name accounts receivable
accounts receivable contract receivable and doubtful accounts
and contract assets
assets contract assets(%)
Stellantis N.V. 59,587,562.74 59,587,562.74 37.20
170
2023 Annual Report
Chongqing Hyosow Autopart Co.,
12,723,992.31 12,723,992.31 7.94 12,723,992.31
Ltd.
Great Wall Motor Co., LTD.
9,766,212.63 9,766,212.63 6.10
Chongqing Procurement branch
Chengdu Henggao Mechanical
7,771,678.24 7,771,678.24 4.85
Electronics Co., Ltd.
Hebei Changan Automobile Co., Ltd. 5,761,875.20 5,761,875.20 3.60
Total 95,611,321.12 95,611,321.12 - 12,723,992.31
4. Receivables Financing
(1)Classification of Receivables Financing
Balance as at Balance as at
Classification
December 31, 2023 January 1, 2023
Bank acceptance bills 24,290,736.39 17,548,591.75
Total 24,290,736.39 17,548,591.75
(2)There were no pledged receivables financing at the end of the period.
(3)Receivables Financing that has been Endorsed or Discounted but Not Yet Mature at
Year End
Amount derecognized Amount not derecognized
Classification
at year end at year end
Bank acceptance bills 78,563,756.36
Total 78,563,756.36
(4) Classified and Disclosed Receivables Financing According to the Method of Provision
for Allowance for Doubtful Accounts
Balance as at December 31, 2023
Classification Gross carrying amount Allowance for doubtful accounts Carrying
Amount Proportion (%) Amount Proportion （%) amount
Accounts receivable that are individually
assessed for impairment
Accounts receivable that are collectively
assessed for impairment
Including: Bank acceptance bills 24,290,736.39 100.00 24,290,736.39
Total 24,290,736.39 -- -- 24,290,736.39
171
2023 Annual Report
(Continued)
Balance as at January 1, 2023
Classification Gross carrying amount Allowance for doubtful accounts
Carrying amount
Amount Proportion (%) Amount Proportion （%)
Accounts receivable that are individually
assessed for impairment
Accounts receivable that are collectively
assessed for impairment
Including: Bank acceptance bills 17,548,591.75 100.00 17,548,591.75
Total 17,548,591.75 -- -- 17,548,591.75
5. Prepayments
(1)Aging Analysis
Balance as at Balance as at
Aging December 31, 2023 January 1, 2023
Amount Proportion (%) Amount Proportion (%)
Within 1 year (including 1 year) 2,041,096.43 76.99 3,577,455.19 88.89
1-2 years (including 2 years) 406,928.95 15.35 90,007.50 2.24
2-3 years (including 3 years) 75,600.00 2.85 127,554.40 3.17
Over 3 years 127,554.70 4.81 229,348.93 5.70
Total 2,651,180.08 100.00 4,024,366.02 100.00
(2)Top Five Prepayments Classified by Debtors at Year End
Proportion of total
Debtor name Gross carrying amount
prepayments (%)
Asahi Trading (Shanghai) Co., Ltd. 351,200.00 13.25
Suzhou RUICHANG ELECTROMECHANICAL Engineering Co. LTD 335,400.00 12.65
Shenyang Huatai Mould Co., Ltd 328,480.00 12.39
Chongqing Jiantao Aluminum Co., Ltd. 294,700.00 11.12
Ningbo Dongda AUTO PARTS Co. LTD 274,581.35 10.36
172
2023 Annual Report
Total 1,584,361.35 --
6. Other Receivables
(1)Classification of Other Receivables
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Other receivables 1,825,860.96 1,720,044.17
Total 1,825,860.96 1,720,044.17
(2)Other Receivables
①Other Receivables Disclosed Using Aging Analysis Method
Balance as at Balance as at
Aging
December 31, 2023 January 1, 2023
Within 1 year (including 1 year) 1,645,860.96 1,730,044.17
Including:1 - 6 months (inclusive) 1,645,860.96 1,530,044.17
Within 6 months -1 year 200,000.00
Subtotal within 1 year 1,645,860.96 1,730,044.17
1-2 years (including 2 year) 200,000.00
2-3 years (including 3 year) 1,223,146.45
3-4 years (including 4 year) 1,223,146.45 255,723.62
4-5 years (including 5 year) 255,723.62
Over 5 years 4,774,182.33 4,774,182.33
Total 8,098,913.36 7,983,096.57
②Classification of Other Receivables by the Mature of Payment
Balance as at Balance as at
Nature of Payment December 31, 2023 January 1, 2023
Reserves, security deposits, advance
payment for social insurance premiums 321,567.27 284,542.01
for employees, etc.
Current accounts 7,777,346.09 7,698,554.56
Total 8,098,913.36 7,983,096.57
173
2023 Annual Report
③Classified and Disclosed Other Receivables According to the Method of Provision for
Allowance for Doubtful Accounts
Balance as at December 31, 2023
Gross carrying amount Allowance for doubtful accounts
Classification Carrying
Proportion Proportion
Amount Amount amount
(%) (%)
Other receivables that are
2,531,179.2 2,531,179.2
individually assessed for 31.25 100.00
4 4
impairment
Other receivables that are
3,741,873.1
collectively assessed for 68.75 67.21
5,567,734.12 6 1,825,860.96
impairment
Including:
3,741,873.1
Aging portfolio 68.75 67.21
5,567,734.12 6 1,825,860.96
8,098,913.3 6,273,052.4
Total -- -- 1,825,860.96
6 0
(Continued)
Amount
Balance as at January 1, 2023
Gross carrying amount Allowance for doubtful accounts
Classification Carrying
Proportion Proportion
Amount Amount amount
(%) (%)
Other receivables that are
2,531,179 2,531,179
individually assessed for 31.71 100.00
.24 .24
impairment
Other receivables that are
5,451,917 3,731,873 1,720,044.
collectively assessed for 68.29 68.45
.33 .16 17
impairment
174
2023 Annual Report
Including:
5,451,917 3,731,873 1,720,044.
Aging portfolio 68.29 68.45
.33 .16 17
7,983,096 6,263,052 1,720,044.
Total -- --
.57 .40 17
Other receivables that are Individually Assessed for Impairment at Year End
Balance as at December 31, 2023
Debtor Allowance for Expected Credit
Carrying amount Reason for recognition
doubtful accounts Loss Rate(%)
Chongqing Jianshe Lijue Industrial Expected to be
1,478,870.07 1,478,870.07 100.00
Co., Ltd. irrecoverable
Expected to be
Temporary supplier 390,655.08 390,655.08 100.00
irrecoverable
Expected to be
Ningbo Jianshe Motorcycle Co., Ltd 329,628.73 329,628.73 100.00
irrecoverable
Chongqing Yiqun Industry and Expected to be
91,900.00 91,900.00 100.00
Trade Co., Ltd. irrecoverable
Wage security deposit for migrant
workers in Chongqing Huachuang Expected to be
88,000.00 88,000.00 100.00
Science and Technology Complex irrecoverable
Project
Expected to be
Chongqing Customs 78,825.36 78,825.36 100.00
irrecoverable
Yangzhou Qionghua Coating Expected to be
56,500.00 56,500.00 100.00
Engineering Equipment Co., Ltd. irrecoverable
Chongqing Jinxiang Lifting
Expected to be
Equipment 16,800.00 16,800.00 100.00
irrecoverable
Manufacturing Co., Ltd.
Total 2,531,179.24 2,531,179.24 100.00 —
175
2023 Annual Report
Provision for bad debts made by Aging Portfolio
Balance as at Balance as at
December 31, 2023 January 1, 2023
Aging Proportion
Provision for Provision for Proportion of
Book value of Book value
bad debts bad debts provision(%)
provision(%)
Within 1 year (including 1
1,730,044.17
year) 1,645,860.96
Including: 1-6 months
1,530,044.17
(inclusive) 1,645,860.96
Within 6 months -1 10,000.0
200,000.00 5.00
year 0
10,000.0
Subtotal within 1 year 1,730,044.17 5.00
1,645,860.96 0
20,000.0
1-2 years (including 2 year) 10.00
200,000.00 0
2-3 years (including 3 year)
3-4 years (including 4 year)
4-5 years (including 5 year)
3,721,873.1
Over 5 years 3,721,873.16 100.00 3,721,873.16 3,721,873.16 100.00
6
5,567,734.1
Total 3,741,873.16 — 5,451,917.33 3,731,873.16 —
2
④Allowance for Doubtful Accounts of Other Receivables According to the General Model of
Expected Credit Losses
Stage I Stage II Stage III
Expected credit loss Expected credit loss
Allowance for doubtful Expected credit
over the duration over the duration Total
accounts losses over the next
(without credit (credit impairment
12 months
impairment) incurred)
Balance as at 6,263,052.4
3,731,873.16 2,531,179.24
January 1, 2023 0
Opening Balance is in the
Current Year
--Transfer into Stage II
176
2023 Annual Report
--Transfer into Stage III
--Reverse into Stage II
--Reverse into Stage I
Current-period
10,000.00 10,000.00
Recognition
Current-period Reversals
Current-period Charge-off
Current-period Write-off
Other Changes
Balance as at 6,273,052.4
3,741,873.16 2,531,179.24
December 31, 2023 0
⑤Provision for bad debts
Change in 2023
Balance as at Balance as at
Classification Recovery or December 31,
January 1, 2023 Provision Charge-off Other changes 2023
reversal
Accounts receivable that are
individually assessed for 2,531,179.24 2,531,179.24
impairment
Accounts receivable that are
10,000.0
collectively assessed for 3,731,873.16 3,741,873.16
0
impairment
10,000.0
Total 6,263,052.40 6,273,052.40
0
⑥There were no other receivables actually written off in 2023.
⑦Top Five Debtors According to Closing Balances
Proportion of
Gross carrying total other Nature of Allowance for
Debtor name Aging
amount receivables receivables doubtful accounts
(%)
177
2023 Annual Report
Over 5
Shenzhen Jianshe Motorcycle Co., Ltd. 3,013,664.00 37.21 Current accounts 3,013,664.00
years
Over 5
Chongqing Jianshe Lijue Industrial Co., Ltd. 1,478,870.07 18.26 Current accounts 1,478,870.07
years
Over 5
Ningbo Jianshe Chongqing Office 692,035.31 8.54 Current accounts 692,035.31
years
Over 5
Ningbo Construction Motorcycle Co. LTD 329,628.73 4.07 Current accounts 329,628.73
years
Dongmu (Tianjin) Powder Metallurgy Co., Ltd 200,000.00 2.47 Current accounts 1-2 years 20,000.00
Total 5,714,198.11 -- -- -- 5,534,198.11
⑧There were no other receivables reported in the current period due to centralized
management of funds.
7. Inventories
(1)Classification of Inventories
Balance as at December 31, 2023 Balance as at January 1, 2023
Write-down of Write-down of
Items Gross carrying inventories/ Write- Gross carrying inventories/ Write-
Carrying amount Carrying amount
amount down of contract amount down of contract
performance cost performance cost
Raw materials 29,186,743.44 29,186,743.44 23,279,997.14 23,279,997.14
Goods in process 10,784,112.39 42,930.77 10,741,181.62 9,357,445.63 42,930.77 9,314,514.86
Stock commodities 89,862,349.48 2,661,811.73 87,200,537.75 98,610,353.14 2,170,864.12 96,439,489.02
Revolving materials 4,475,512.86 1,294,020.05 3,181,492.81 4,120,591.96 1,294,020.05 2,826,571.91
Total 134,308,718.17 3,998,762.55 130,309,955.62 135,368,387.87 3,507,814.94 131,860,572.93
(2)Provision for inventory depreciation and provision for contract performance cost
impairment
Increase in 2023 Decrease in 2023
Balance as at
Balance as at
Items Release or December 31,
January 1, 2023
Provision Other Other 2023
Write-off
Goods in process 42,930.77 42,930.77
Stock Merchandis 2,170,864.12 490,947.61 2,661,811.73
Revolving materials 1,294,020.05 1,294,020.05
Total 3,507,814.94 490,947.61 3,998,762.55
178
2023 Annual Report
8. Other Current Assets
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Input tax to be deducted 1,981,210.62 1,468,399.16
Total 1,981,210.62 1,468,399.16
9. Long-term Equity Investments
(1)Long-term Equity Investments
Increase/decrease in Year 2023
Balance as at Investment gain or loss
Investee Increase in Decrease in Adjustment in other
January 1, 2023 recognized under equity
investments investments comprehensive income
method
I. Joint ventures
Chongqing Hanon
Jianshe Thermal 210,112,321.04 11,095,359.95
Systems Co., Ltd.
Subtotal 210,112,321.04 11,095,359.95
Total 210,112,321.04 11,095,359.95
(Continued)
Increase/decrease in Year 2023 Balance as at
Closing balance of
Investee Other changes Cash dividends declared and December 31,
Impairment loss Others impairment loss
in equity profits to be distributed 2023
I. Joint ventures
Chongqing Hanon
221,207,68
Jianshe Thermal
0.99
Systems Co., Ltd.
221,207,68
Subtotal
0.99
221,207,68
Total
0.99
10. Other Non-current Financial Assets
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
179
2023 Annual Report
Financial assets measured at fair value through the current profit or loss
Including: investment in Ningbo Jianshe Investment Company 1,140,915.04 1,140,915.04
Provision for impairment 1,140,915.04 1,140,915.04
Total
11. Fixed Assets
(1)Classification of Fixed Assets
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Fixed assets 188,907,962.58 202,039,143.80
Total 188,907,962.58 202,039,143.80
(2)Fixed Assets
①Situation of Fixed Assets
Items
Buildings and Machinery Transportation
Other equipment Total
constructions equipment facilities
I. Total gross carrying
amount
1. Balance as at January 103,844,073.8
625,135,240.34 5,898,095.03 20,453,739.44 755,331,148.61
1, 2023 0
2.Increase in current
541,128.23 11,737,940.80 100,000.00 486,684.68 12,865,753.71
year
(1)Pruchase 541,128.23 11,473,781.50 100,000.00 486,684.68 12,601,594.41
(2)Transfer-in of
264,159.30 264,159.30
construction in progress
3.Decrease in current
11,785,329.59 59,104.62 414,271.28 12,258,705.49
year
(1)Disposal or scrapping 11,785,329.59 59,104.62 414,271.28 12,258,705.49
4. Balance as at 104,385,202.0
625,087,851.55 5,938,990.41 20,526,152.84 755,938,196.83
December 31, 2023 3
180
2023 Annual Report
II.Accumulated
depreciation
1. Balance as at January
57,311,359.61 462,125,881.00 5,148,029.86 18,661,172.23 543,246,442.70
1, 2023
2.Increase in current
3,110,179.02 21,593,525.21 98,949.30 475,457.90 25,278,111.43
year
(1)Provision 3,110,179.02 21,593,525.21 98,949.30 475,457.90 25,278,111.43
3.Decrease in current
10,965,760.78 57,331.50 355,467.33 11,378,559.61
year
(1)Disposal or scrapping 10,965,760.78 57,331.50 355,467.33 11,378,559.61
4. Balance as at
60,421,538.63 472,753,645.43 5,189,647.66 18,781,162.80 557,145,994.52
December 31, 2023
III. Total impairment loss
1.Balance as at
10,045,562.11 10,045,562.11
January 1, 2023
2.Increase in current
year
3.Decrease in current
161,322.38 161,322.38
year
(1)Disposal or scrapping 161,322.38 161,322.38
4.Balance as at
9,884,239.73 9,884,239.73
December 31, 2023
IV. Total carrying amount
1. Book value as at
43,963,663.40 142,449,966.39 749,342.75 1,744,990.04 188,907,962.58
December 31, 2023
2. Book value as at
46,532,714.19 152,963,797.23 750,065.17 1,792,567.21 202,039,143.80
January 1, 2023
181
2023 Annual Report
②There is no temporarily idle fixed assets in 2023.
③There are no fixed assets leased through operating lease in 2023.
④There are no fixed assets without a certificate of title in 2023.
12. Construction in Progress
(1)Classification of Fixed Assets
Items Balance as at December 31, 2023 Balance as at January 1, 2023
Construction in Progress 15,244,362.53 989,429.96
Total 15,244,362.53 989,429.96
(2)Construction in Progress
①Situation of Fixed Assets
Balance as at December 31, 2023 Balance as at January 1, 2023
Gross
Items Gross carrying Provision for Carrying Provision for Carrying
carrying
amount impairment amount impairment amount
amount
Production line 14,996,87 14,996,8 524,783 524,78
project 4.03 74.03 .95 3.95
Mold to be 247,488.5 247,488. 395,619 395,61
fixed 0 50 .46 9.46
Comprehensive
69,026. 69,026
performance
test-bed 55 .55
15,244,36 15,244,3 989,429 989,42
Total
2.53 62.53 .96 9.96
②Changes of Significant Construction in Progress in Current Year
Amount
Budget (ten Balance as at Increase in transferred to Other decrease Balance as at
Project name
thousand yuan) January 1, 2023 current year fixed assets in in current year December 31, 2023
current year
182
2023 Annual Report
Production line 14,472,090.
2,552.56 524,783.95 14,996,874.03
project 08
14,472,090.
Total 2,552.56 524,783.95 14,996,874.03
08
(Continued)
Including: Capitalized Interest capitalization
Proportion of accumulated Percentage of Cumulative amount of
interests in current rate for current year Sources of funds
investments to the budget (%) completion capitalized interests
year (%)
58.75% 58.75% Self-raised
-- -- -- --
13. Intangible Assets
(1)Situation of Intangible Assets
Items Land use right Patent right Software Total
I. Total gross carrying amount
1. Balance as at January 1, 2023 21,224,143.33 2,691,549.96 3,933,749.40 27,849,442.69
2.Increase in current year 780,530.97 780,530.97
(1)Pruchase 780,530.97 780,530.97
3.Decrease in current year
(1)Disposal
4. Balance as at December 31, 2023 21,224,143.33 2,691,549.96 4,714,280.37 28,629,973.66
II. Accumulated amortization
1. Balance as at January 1, 2023 12,863,535.82 1,108,285.29 2,076,116.63 16,047,937.74
2.Increase in current year 701,418.88 474,979.47 680,788.98 1,857,187.33
①Provision 701,418.88 474,979.47 680,788.98 1,857,187.33
3.Decrease in current year
(1)Disposal
4. Balance as at December 31, 2023 13,564,954.70 1,583,264.76 2,756,905.61 17,905,125.07
III. Total impairment loss
1. Balance as at January 1, 2023
2.Increase in current year
①Provision
3.Decrease in current year
(1)Disposal
4. Balance as at December 31, 2023
183
2023 Annual Report
IV. Total carrying amount
1. Book value as at December 31, 2023 7,659,188.63 1,108,285.20 1,957,374.76 10,724,848.59
2. Book value as at January 1, 2023 8,360,607.51 1,583,264.67 1,857,632.77 11,801,504.95
(2)There is no land use right without a certificate of title in this period
14. Long-term Prepaid Expenses
Balance as at
Balance as at Increase in Amortization in Other
Items December 31,
January 1, 2023 current year current year decrease
2023
SlidDworks2018 three-year service charges 70,280.65 46,698.12 23,582.53
Total 70,280.65 46,698.12 23,582.53
15. Deferred Tax Assets and Deferred Tax Liabilities
(1)Deferred Tax Assets before Offset
Balance as at December 31, 2023 Balance as at January 1, 2023
Items
Deductible temporary difference Deferred tax assets Deductible temporary difference Deferred tax assets
Impairment loss for assets 4,852,465.88 727,869.89 4,522,840.65 678,426.10
Impairment loss for credit 33,516,948.02 5,027,542.20 33,873,448.97 5,073,630.93
Total 38,369,413.90 5,755,412.09 38,396,289.62 5,752,057.03
(2)Deferred Tax Liabilities before Offset
Balance as at December 31, 2023 Balance as at January 1, 2023
Items Taxable Deferred tax Taxable Deferred tax
temporary difference liabilities temporary difference liabilities
Asset evaluation increment from business
1,879,988.85 469,997.22 3,281,012.83 820,253.21
combination not under common control
One-time before-tax deduction of the
1,153,692.01 173,053.80 1,276,898.41 191,534.76
depreciation of fixed assets
Total 3,033,680.86 643,051.02 4,557,911.24 1,011,787.97
(3)Details of Unrecognized Deferred Tax Assets
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Deductible temporary differences 16,029,526.76 16,043,773.40
Deductible losses 421,361,571.01 321,263,266.35
Total 437,391,097.77 337,307,039.75
184
2023 Annual Report
④Deductible Losses Unrecognized for Deferred Tax Assets that will Expire in Following
Years
Balance as at Balance as at
Year Notes
December 31, 2023 January 1, 2023
2024 98,193,562.96 104,612,349.02
2025 63,729,976.97 63,729,976.97
2026 62,309,195.92 62,309,195.92
2027 90,611,744.44 90,611,744.44
2028 106,517,090.72
Total 421,361,571.01 321,263,266.35
16. Other Non-current Assets
Balance as at December 31, 2023 Balance as at January 1, 2023
Carrying
Items Gross carrying Provision for Carrying Gross carrying Provision for
amount
amount impairment amount amount impairment
Payment in advance
for purchase of long- 70,000.00 70,000.00 15,860,120.00 15,860,120.00
term assets
Total 70,000.00 70,000.00 15,860,120.00 15,860,120.00
17.Assets with Restricted Ownership or Use Rights
Balance as at December 31, 2023
Items Restricted
Gross carrying amount Carrying amount Type of restriction
situations
Margin for bank
Monetary Capital 9,080,029.50 9,080,029.50 Pledge
acceptance bills
Fixed assets 41,102,080.06 24,295,232.36 Mortgage Mortgage of loan
Intangible assets 12,031,346.49 7,274,522.82 Mortgage Mortgage of loan
Total 62,213,456.05 40,649,784.68 -- --
(Continued)
Balance as at January 1, 2023
Items Carrying Restricted
Gross carrying amount Type of restriction
amount situations
Margin for bank
Monetary Capital 9,959,988.94 9,959,988.94 Pledge
acceptance bills
185
2023 Annual Report
Balance as at January 1, 2023
Items Carrying Restricted
Gross carrying amount Type of restriction
amount situations
Pledge of bank
Financing receivable 7,820,000.00 7,820,000.00 Pledge
acceptance bills
Total 17,779,988.94 17,779,988.94 -- --
18. Short-term Borrowings
(1)Classification
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Credit borrowings 190,500,000.00 411,500,000.00
Guaranteed borrowings 68,500,000.00 135,103,500.00
Mortgage borrowings 281,993,500.00
Total 540,993,500.00 546,603,500.00
(2)There is no overdue short-term loan at the end of this period
19. Notes Payable
Items Balance as at December 31, 2023 Balance as at January 1, 2023
Bank acceptance bills 28,080,000.00 30,379,988.94
Total 28,080,000.00 30,379,988.94
20. Accounts Payable
(1)Presentation of accounts payable
Aging Balance as at December 31, 2023 Balance as at January 1, 2023
Within 1 year (including 1 year) 224,163,444.91 167,925,916.80
1-2 years (including 2 year) 4,171,236.57 1,002,926.50
2-3 years (including 3 year) 431,930.74 936,903.59
Over 3 years 859,773.33 1,324,729.21
Total 229,626,385.55 171,190,476.10
(2)At the end of this period, there is no significant accounts payable with an account age
of more than 1 year or overdue.
21. Contract Liabilities
(1)Situation of Contract liability
186
2023 Annual Report
Items Balance as at December 31, 2023 Balance as at January 1, 2023
Goods payment 2,058,111.01 3,441,205.38
Total 2,058,111.01 3,441,205.38
(2)There is no important contract liability with an account age of more than 1 year at the
end of this period
22. Employee Benefits Payable
(1)Presentation of Employee Benefits Payable
Balance as at Increase in Decrease in Balance as at
Items
January 1, 2023 current year current year December 31, 2023
I. Short-term employee benefits 5,443,402.41 89,228,674.05 89,498,868.08 5,173,208.38
II. Post-employment benefits – defined
3,085,990.37 10,183,994.63 11,721,072.92 1,548,912.08
contribution plan
Total 8,529,392.78 99,412,668.68 101,219,941.00 6,722,120.46
(2)Presentation of Short-term Employee Benefits
Balance as at January Increase in Decrease in Balance as at December
Items
1, 2023 current year current year 31, 2023
I. Salaries, bonuses, allowances and
2,264,517.88 65,664,857.86 65,958,817.98 1,970,557.76
subsidies
II. Welfare 5,056,349.07 5,056,349.07
III. Social Insurance 1,233,775.80 8,901,180.53 9,036,211.38 1,098,744.95
Including: 1. Health insurance and
1,164,912.31 8,207,106.28 8,332,128.35 1,039,890.24
maternity insurance
2. Work injury insurance 68,863.49 694,074.25 704,083.03 58,854.71
IV. Housing funds 477,137.46 7,571,515.00 7,667,565.00 381,087.46
V. Labor union funds and employee
1,467,971.27 2,034,771.59 1,779,924.65 1,722,818.21
education funds
Total 5,443,402.41 89,228,674.05 89,498,868.08 5,173,208.38
(3)Presentation of Defined Contribution Plan
Balance as at Increase in Decrease in Balance as at
Items
January 1, 2023 current year current year December 31, 2023
I. Basic Pensions 2,738,319.74 9,867,792.72 11,368,717.33 1,237,395.13
II.Unemployment 316,201.91 352,355.59 311,516.95
347,670.63
insurance
187
2023 Annual Report
Total 3,085,990.37 10,183,994.63 11,721,072.92 1,548,912.08
23. Tax and Surcharge Payable
Balance as at Balance as at
Items
January 1, 2023 December 31, 2023
VAT 241,971.57 896,389.23
Individual income tax 601,837.09 969,485.81
Urban maintenance and construction tax 1,339,222.53 3,182,393.81
House property tax 2,322,993.87 3,727,900.64
Land use tax 1,808,215.20
Educational surtax 956,587.53 2,035,831.03
Others 1,239,806.44 4,029,488.35
Total 6,702,419.03 16,649,704.07
24. Other Payables
(1)List of items
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Other Payables 8,535,416.39 7,566,872.62
Total 8,535,416.39 7,566,872.62
(3)Others Payables
①Other Payables Presented by Nature
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Deposit and security deposit 692,620.27 863,901.85
Employee-related expenses 3,519,234.93 3,806,031.38
Others 4,323,561.19 2,896,939.39
Total 8,535,416.39 7,566,872.62
②There is no significant other payables aged over one year at the end of the period.
25. Other Current Liabilities
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Taxes to be reversed 244,691.40 447,356.63
188
2023 Annual Report
Bill of exchange not terminated at the
4,907,818.10
end of the period
Total 5,152,509.50 447,356.63
26. Share capital
Changes in 2023 (+,-)
Balance as at January Conversion of Balance as at
Item New shares Share
1, 2023 capital reserves Others Sub-total December 31, 2023
issued donation
into share capital
I. Restricted shares 119,375,000.00 119,375,000.00
1.State shareholding
2.Shareholding by state-
owned legal persons 84,906,000.00 84,906,000.00
3.Other domestic
holdings 4,469,000.00 4,469,000.00
Among them:
domestic legal person
shares 1,750,000.00 1,750,000.00
Shares held by
domestic natural persons 2,719,000.00 2,719,000.00
4.Overseas shareholdings
II. Unrestricted tradable
shares 30,000,000.00 30,000,000.00
1. Domestically listed
foreign shares 30,000,000.00 30,000,000.00
Total shares 119,375,000.00 119,375,000.00
27. Capital Reserve
Balance as at Increase in Decrease in Balance as at
Items
January 1, 2023 current year current year December 31, 2023
I. Capital (or share)
702,032,741.07 702,032,741.07
premiums
II. Other capital reserve 256,532,553.22 256,532,553.22
Total 958,565,294.29 958,565,294.29
28. Other Comprehensive Income
189
2023 Annual Report
Year 2023
Less: amount Less: financial assets
previously included included in other Amount Amount
Balance
Amount in other comprehensive Less: after tax after tax Balance as
as at at
Item before comprehensive income in prior income attributable attributable December
January 1,
income tax in income and period and re- tax to the to minority 31, 2023
2023
2023 currently measured at retained expenses parent shareholder
transferred to the earnings in the company s
profit or loss current period
I. Other
comprehensive
income that
9,800.00 9,800.00
cannot be
reclassified into
profit or loss
1. Other
comprehensive
income that
cannot be
9,800.00 9,800.00
transferred to
profit or loss
under the equity
method
Total 9,800.00 9,800.00
29. Special Reserve
Balance as at January Increase in Decrease in Balance as at
Items
1, 2023 current year current year December 31, 2023
Work safety expenses 3,234,669.03 3,279,360.59 1,366,318.22 5,147,711.40
Total 3,234,669.03 3,279,360.59 1,366,318.22 5,147,711.40
30.Surplus Reserve
Balance as at Increase in Decrease in Balance as at
Items
January 1, 2023 current year current year December 31, 2023
Statutory surplus reserve 56,724,000.00 56,724,000.00
Discretionary surplus reserve 68,962,000.00 68,962,000.00
Total 125,686,000.00 125,686,000.00
31.Unappropriated Profit
Item Year 2023 Year 2022
Undistributed profits at the end of prior period before adjustment -1,095,779,478.64 -1,056,046,383.95
Total adjustment to undistributed profits
at the beginning of the period ("+" for increase and "-" for decrease)
190
2023 Annual Report
Item Year 2023 Year 2022
Undistributed profits at the beginning of the period after adjustment -1,095,779,478.64 -1,056,046,383.95
Plus: net profit attributable to owners of the parent -69,331,287.64
-39,733,094.69
company in the current period
Less: withdrawal of statutory surplus reserves
Withdrawal of discretionary surplus reserves
Withdrawal of general risk reserves
Common stock dividends payable
Common stock dividends transferred to share capital
Undistributed profits at the end of the period -1,165,110,766.28 -1,095,779,478.64
32. Operating Revenue and Operating Costs
(1) Operating Revenue and Operating Cost
Year 2023 Year 2022
Items
Revenue Costs Revenue Costs
Principal operating activities 459,412,209.46 427,333,668.74 470,261,936.64 448,590,807.18
Other operating activities 4,666,753.00 1,040,875.98 3,852,161.44 1,804,628.12
Total 464,078,962.46 428,374,544.72 474,114,098.08 450,395,435.30
(2)Statement of operating income deduction
Specific Specific
Items Year 2023 Year 2022
deductions deductions
Amount of operating income 464,078,962.46 474,114,098.08
Total amount of operating income deductible
4,666,753.00 3,852,161.44
items
Proportion of total amount of deductible items in
1.01 0.81
operating income (%)
Ⅰ.Business income unrelated to the principal operating activities
191
2023 Annual Report
Revenue from
Revenue from the sale of
the sale of materials1,27
materials1,186 2.40 thousand
.60 thousand yuan; The
(1)Other business income beyond normal yuan; The income from
operations. Revenue generated from renting out income from labor support
fixed assets, intangible assets, packaging labor support was 1,236.40
materials, selling materials, exchanging non- was 542.80 thousand
monetary assets with materials, operating 4,666,753.00 thousand 3,852,161.44 yuan; Power
entrusted management businesses, and other yuan; Power energy
activities, as well as the income included in the energy revenue
main business income, but outside the normal revenue 474.70
operation of the listed company.. 9.90 thousand thousand
yuan; other yuan; other
income was income was
2,927.50 868.70
thousand yuan thousand
yuan
Subtotal of business income unrelated to the
4,666,753.00 3,852,161.44
principal operating activities
Amount after deduction of operating income 459,412,209.46 470,261,936.64
(3)Segment of operating revenue and operating cost
prime operating revenue
Classifications of Contracts
Revenue Costs
Type of goods
Automobile and motorcycle parts 459,412,209.46 427,333,668.74
Other business 4,666,753.00 1,040,875.98
Total 464,078,962.46 428,374,544.72
Classified by operating region
Domestic 242,244,364.87 211,894,581.71
Export 221,834,597.59 216,479,963.01
Total 464,078,962.46 428,374,544.72
192
2023 Annual Report
33. Taxes and surcharges
Item Year 2023 Year 2022
Urban maintenance and construction tax 1,194,760.13 533,840.42
Educational surcharge 853,400.08 381,314.61
House property tax 880,522.45 860,544.46
Land use right 1,076,365.20 1,076,365.20
Stamp duty 564,783.99 323,275.85
Others 16,521.31 579,484.03
Total 4,586,353.16 3,754,824.57
34. Selling Expenses
Items Year 2023 Year 2022
Employee compensation 6,699,763.41 6,827,653.20
Depreciation expenses 15,117.42 31,742.65
Office expenses 92,170.79 66,973.88
Advertising expenses 154,123.76
Expenses for business trips 691,030.73 566,078.58
Handling charges 58,210.81 199,885.56
Sales and service fees 187,379.63 157,067.52
Repair charge 4,740,415.47 5,629,736.77
Warehousing and custodian fees 652,299.74 1,000,193.68
Other fees 942,212.50 759,983.28
Total 14,232,724.26 15,239,315.12
35. Administrative Expenses
Items Year 2023 Year 2022
Employee compensation 33,768,905.69 26,516,905.13
Depreciation and amortization 5,417,274.22 5,117,551.67
Repair charge 1,444,260.68 4,416,563.67
Office expenses 851,449.26 714,345.12
Agency fee 759,313.26 912,850.26
Expenses for business trips 515,148.22 300,230.25
Membership fees of board of directors 472,617.11 392,640.06
Entertainment expenses 444,889.18 400,888.58
193
2023 Annual Report
Insurance premiums and others 8,676,918.91 8,949,135.93
Total 52,350,776.53 47,721,110.67
36. Research and Development Expenses
Items Year 2023 Year 2022
Employee compensation 18,837,891.18 23,830,773.15
Materials expenses 1,955,125.85 760,693.67
Expenses for business trips 422,363.03 241,075.43
Depreciation expenses 2,445,953.39 2,143,128.61
Amortization of intangible assets 346,580.58 268,527.48
Others 3,219,702.97 3,354,670.35
Total 27,227,617.00 30,598,868.69
37. Financial Expenses
Items Year 2023 Year 2022
Interest expenses 20,877,409.62 20,216,911.43
Less: Interest income 1,692,490.51 1,640,888.48
Gains or losses on foreign exchange 20,246.31 139,891.22
Cash discount -636,522.10 -1,314,322.50
Bank charges and others 160,829.39 70,654.21
Total 18,729,472.71 17,472,245.88
38. Other Income
Items Year 2023 Year 2022
Government grants 1,104,494.20 205,826.00
Reduction or exemption of value-added tax,
14,063.43 999,863.22
residual insurance fund, etc.
Total 1,118,557.63 1,205,689.22
Government grants included in other income
Asset-related/
Items Year 2023 Year 2022
Income-related
Subsidy for technological innovation and industrial
80,000.00 Income-related
application projects
major new product research and development costs 24,100.00 Income-related
Research and development investment subsidy 50,400.00 Income-related
194
2023 Annual Report
Asset-related/
Items Year 2023 Year 2022
Income-related
Subsidy for employment and talent center in Banan
64,187.20 51,326.00 Income-related
District
Key talent allowances and reward subsidies 170,000.00 Income-related
Employment and Talent Center Unemployment Transfer
345,307.00 Income-related
Benefits in Jiulongpo District, Chongqing
Rewards for scientific and technological innovation 25,000.00 Income-related
Key special funds for industrial and information
500,000.00 Income-related
technology in the city
Total 1,104,494.20 205,826.00 Income-related
39. Investment Income
Sources for investment income Year 2023 Year 2022
Income from long-term equity investments using equity method 11,095,359.95 8,128,052.32
Total 11,095,359.95 8,128,052.32
40. Credit Impairment Losses
Items Year 2023 Year 2022
Impairment loss for accounts receivable 341,504.85 999,437.83
Impairment loss for other receivables -10,000.00 -10,000.00
Total 331,504.85 989,437.83
41. Assets Impairment Losses
Items Year 2023 Year 2022
Impairment loss for inventories and costs to fulfill a contrac t -490,947.61
Total -490,947.61
42. Gains on Disposal of Assets
Items Year 2023 Year 2022
Gains or losses from disposal of non-current assets -413,963.91 40,420,431.93
Total -413,963.91 40,420,431.93
43. Non-operating Income
Amount recognized in non-
Items Year 2023 Year 2022
recurring profit or loss
Others 79,114.42 170,256.15 79,114.42
Total 79,114.42 170,256.15 79,114.42
44. Non-operating Expenses
195
2023 Annual Report
Amount recognized in non-
Items Year 2023 Year 2022
recurring profit or loss
Losses on retirement of non-current assets 469.69
Including: loss on disposal of fixed assets 469.69
Administrative penalty and overdue payment 1,260.70 2,642.74 1,260.70
Total 1,260.70 3,112.43 1,260.70
45. Income Tax Expenses
(1)Income Tax Expenses
Items Year 2023 Year 2022
Income tax expenses in current period -781.64 -220,882.55
Deferred income taxes expenses -372,092.01 -202,969.89
Total -372,873.65 -423,852.44
(2)Reconciliation of Accounting Profit and Income Tax Expenses
Items Year 2023
Total profit -69,704,161.29
Income tax expenses calculated at the statutory / applicable tax rate -17,426,040.32
Effects of different applicable tax rates on subsidiaries 6,323,458.63
Effects of adjustments of income taxes in previous periods -781.64
Effects of non-taxable income -2,773,839.99
Effects of non-deductible costs, expenses, and losses 62,317.37
Effects of utilizing deductible losses that are not previously recogni zed as deferred tax assets -60,800.28
Effects of deductible temporary differences or deductible losses that are not recognized as deferred tax
17,589,058.37
assets in current year
Others -4,086,245.79
Income tax expense -372,873.65
46. Other Comprehensive Income Items and Their Impact on Income Tax and transfer to
Profit and Loss
Please refer to "VI. Notes to Main Items in the Consolidated Financial Statements (28)
Other Comprehensive Income" for details.
47.Notes to the Statement of Cash Flows
(1)cash paid relating to operating activities
①Cash received from other operating activities
Item Year 2023 Year 2022
196
2023 Annual Report
Item Year 2023 Year 2022
Interest income 1,187,339.83 1,640,888.48
Government grants 1,104,494.20 205,826.00
Margin and deposit etc. 15,345,049.66 10,527,527.06
Total 17,636,883.69 12,374,241.54
②Cash paid for other operating activities
Item Year 2023 Year 2022
Expenses from cash payment in the period 14,327,273.01 10,673,279.12
Margin and deposit etc. 8,916,142.69 11,305,170.76
Total 23,243,415.70 21,978,449.88
(2)Cash received relating to financing activities
①Cash received from other financing activities
Item Year 2023 Year 2022
Bills, deposits and other related funds received 70,015,717.55 81,688,328.08
Total 70,015,717.55 81,688,328.08
②Cash paid for other financing activities
Item Year 2023 Year 2022
Bills, deposits and other related funds paid 69,135,758.11 108,137,271.47
Total 69,135,758.11 108,137,271.47
③Changes in liabilities arising from fund-raising activities
Increase in Year 2023 Decrease in Year 2023
Balance as at
Balance as at
Item Changes December 31,
January 1, 2023 Changes Changes in Non- Changes
in Non- 2023
in cash cash in cash
cash
Short-
term
borro 546,603,500.00 711,597,000.00 20,847,409.62 738,054,409.62 540,993,500.00
wing
546,603,500.00 711,597,000.00 20,847,409.62 738,054,409.62 540,993,500.00
Total
48.Supplementary Information to the Statement of Cash Flows
(1)Supplementary information to the statement of cash flows
Item Year 2023 Year 2022
1. Net profit adjusted to cash flows from operating activities
Net profit -69,331,287.64 -39,733,094.69
197
2023 Annual Report
Item Year 2023 Year 2022
Plus: provision for asset impairment 490,947.61
Losses from credit impairment -331,504.85 -989,437.83
Depreciation of fixed assets, oil and gas assets and productive
biological assets 25,278,111.43 26,220,968.81
Depreciation of right-of-use assets
Amortization of intangible assets 1,857,187.33 1,779,134.09
Amortization of long-term deferred expenses 46,698.12 46,698.12
Losses from disposal of fixed assets, intangible assets and other long -
term assets ("-" for gains) 413,963.91 -40,420,431.93
Losses from write-off of fixed assets ("-" for gains)
Losses from changes in fair value ("-" for gains)
Financial expenses ("-" for gains) 20,877,409.62 20,216,911.43
Investment loss ("-" for income) -11,095,359.95 -8,128,052.32
Decreases in deferred income tax assets ("-" for increases) -3,355.06 308,560.96
Increases in deferred income tax liabilities ("-" for decreases) -368,736.95 -511,530.85
Decreases in inventories ("-" for increases) 1,059,669.70 74,859,032.86
Decreases in operating receivables ("-" for increases) -23,943,727.05 48,007,274.99
Increases in operating payables ("-" for decreases) 57,588,207.39 -69,246,434.55
Others
Net cash flows from operating activities 2,538,223.61 12,409,599.09
2. Significant investing and financing activities not involving cash
receipts and payments
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Fixed assets under financing lease
3. Net changes in cash and cash equivalents
Ending balance of cash 128,115,870.22 169,994,534.05
Less: beginning balance of cash 169,994,534.05 23,738,523.19
Plus: ending balance of cash equivalents
Less: beginning balance of cash equivalents
Net increase in cash and cash equivalents -41,878,663.83 146,256,010.86
(2)Breakdown of cash and cash equivalents
Balance as at Balance as at
Item
December 31, 2023 January 1, 2023
I. Cash 128,115,870.22 169,994,534.05
Including: cash on hand
Unrestricted bank deposit 128,115,870.22 169,994,534.05
Other unrestricted monetary funds
II. Cash equivalents
Including: bond investments maturing within three months
III. Ending balance of cash and cash equivalents 128,115,870.22 169,994,534.05
Including: cash and cash equivalents restricted for use by the parent
company or subsidiaries of the Company
198
2023 Annual Report
49.Foreign Currency Monetary Items
(1)Foreign Currency Monetary Items
Closing balance in foreign Closing balance in
Items Exchange rate
currency CNY (translated)
Monetary funds 1,734,427.00 0.0502 87,068.24
Including: Japanese Yen 1,734,427.00 0.0502 87,068.24
Ⅶ.Research and Development Expenses
1.Listed by the nature of the expenses
Item Year 2023 Year 2022
Employee compensation 18,837,891.18 23,830,773.15
Materials expenses 1,955,125.85 760,693.67
Travel expenses 422,363.03 241,075.43
Depreciation expenses 2,445,953.39 2,143,128.61
Amortization of intangible assets 346,580.58 268,527.48
Others 3,219,702.97 3,354,670.35
Total 27,227,617.00 30,598,868.69
Including: Expensed R&D expenses 27,227,617.00 30,598,868.69
Capitalized R&D expenses
Total 27,227,617.00 30,598,868.69
2.There are no R&D project development expenditures that meet the capitalization
criteria in this period.
Ⅷ.Changes in the Consolidation Scope
There was no change in the consolidation scope of the Company during the reporting
period.
Ⅸ.Rights and Interests in Other Entities
199
2023 Annual Report
1.Equity in the subsidiaries
(1)Structure of the Company
Shareholding
Principal
Registered Registered Business ratio (%) Acquisition
Name of subsidiaries place of
capital place nature method
business Direct Indirect
Production and
Chongqing Jianshe sales of Establishment by
Chongqing 16 million yuan Chongqing 100.00
Automobile A/C Co., Ltd. automobile air investment
conditioners
Production and
Chongqing Pingshan TK 83.55 million sales of Combination not
Chongqing Chongqing 100.00
Carburetor Co., Ltd. yuan motorcycle under common control
accessories
2.Equity in joint venture arrangements or associates
(1)Significant joint ventures or associates
Shareholding ratio (%)
Principal Method for
Name of joint venture Registered Business
place of accounting
or associate place nature Direct Indirect
business treatment
Assembly of variable
Chongqing Hanon Jianshe displacement compressor
Chongqing Chongqing 50.00 Equity method
Thermal Systems Co., Ltd. and production of core
components
(2)Major financial information on significant joint ventures
Balance as at Balance as at
December 31, 2023 January 1, 2023
Item / Year 2023 / Year 2022
Chongqing Hanon Jianshe
Thermal Systems Co., Ltd.
Current assets 188,049,638.38 166,787,138.08
Including: cash and cash equivalents 124,294,005.60 55,135,317.36
Non-current assets 330,384,903.10 355,276,389.82
Total assets 518,434,541.48 522,063,527.90
Current liabilities 69,842,985.52 95,641,912.16
Non-current liabilities 9,292,912.78 9,313,692.45
Total liabilities 79,135,898.30 104,955,604.61
Minority equity
Equity attributable to the shareholders of parent company 439,298,643.18 417,107,923.29
Share of net assets calculated at the shareholding ratio 219,649,321.59 208,553,961.65
Adjusted items
- Goodwill
- Unrealized profits of internal transactions
- Others 1,558,359.40 1,558,359.39
Book value of the equity investment in joint ventures 221,207,680.99 210,112,321.04
Fair value of equity investment with public offer
200
2023 Annual Report
Balance as at Balance as at
December 31, 2023 January 1, 2023
Item / Year 2023 / Year 2022
Chongqing Hanon Jianshe
Thermal Systems Co., Ltd.
Operating revenue 277,217,202.96 254,562,100.17
Financial expenses 1,244,259.32 4,586,867.43
Income tax expenses 3,945,140.60 1,799,442.01
Net profit 22,190,719.89 16,256,104.64
Net profit of discontinued operation
Other comprehensive income
Total comprehensive income 22,190,719.89 16,256,104.64
Dividends received from joint ventures in current period
Ⅹ.Government Grants
1.At the end of the reporting period, there were no government subsidies recognized
based on the amount receivable.
2.Government subsidies recorded in current profits and losses
Item Year 2023 Year 2022
Other income 1,104,494.20 205,826.00
Total 1,104,494.20 205,826.00
XI.Risks Associated with Financial Instruments
The Company's main financial instruments including bank loans, monetary funds, etc. The
primary purpose of these financial instruments is to finance the Company's operations. The
Company has a variety of other financial assets and liabilities arising directly from its
operations, such as accounts receivable, other receivables, accounts payable, other payables,
etc.
The main risks arising from the Company's financial instruments are credit risk, liquidity
risk and market risk.
1.Risks of Financial Instruments
(1)Book value of various financial assets on the balance sheet date
①December 31, 2023
Financial assets Financial Assets Measured Financial Assets Measured at Fair
Item measured at amortized at Fair Value Through Value Through Other Total
cost Profit or Loss Comprehensive Income
Currency funds 137,195,899.72 137,195,899.72
201
2023 Annual Report
Financial assets Financial Assets Measured Financial Assets Measured at Fair
Item measured at amortized at Fair Value Through Value Through Other Total
cost Profit or Loss Comprehensive Income
Notes receivable 6,041,598.66 6,041,598.66
Accounts receivable 125,956,261.01 125,956,261.01
Receivables financing 24,290,736.39 24,290,736.39
Other receivables 1,825,860.96 1,825,860.96
Other non-current financial assets - -
②December 31, 2022
Financial Assets Financial Assets Measured Financial Assets Measured at Fair
Item Measured at Amortized at Fair Value Through Value Through Other Total
Cost Profit or Loss Comprehensive Income
Currency funds 179,954,522.99 179,954,522.99
Notes receivable
Accounts receivable 113,710,214.72 113,710,214.72
Receivables financing 17,548,591.75 17,548,591.75
Other receivables 1,720,044.17 1,720,044.17
Other non-current financial assets
(2) Book value of various financial liabilities on the balance sheet date
①December 31, 2023
Financial Liabilities Measured at Fair Other
Item Total
Value Through Profit or Loss Financial Liabilities
Short-term borrowings 540,993,500.00 540,993,500.00
Notes payable 28,080,000.00 28,080,000.00
Accounts payable 229,626,385.55 229,626,385.55
Other payables 8,535,416.39 8,535,416.39
②December 31, 2022
Financial Liabilities Measured at Fair Other
Item Total
Value Through Profit or Loss Financial Liabilities
Short-term borrowings 546,603,500.00 546,603,500.00
Notes payable 30,379,988.94 30,379,988.94
Accounts payable 171,190,476.10 171,190,476.10
Other payables 7,566,872.62 7,566,872.62
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1. Credit Risks
The company only conducts transactions with recognized and reputable third parties.
According to the Company's policy, credit review is required for all customers who require
credit transactions. In addition, the Company continuously monitors the balance of accounts
receivable to ensure that do not face significant bad debt risks.
The other financial assets of the Company including monetary funds, other receivables,
etc. The credit risk of these financial assets arises from counterparty defaults, and the
maximum risk exposure is equal to the carrying amount of these instruments.
As the Company only deals with recognized and reputable third parties, no collateral is
required. Credit risk is centrally managed according to customers. The Company does not hold
any collateral or other credit enhancement for the balance of accounts receivable.
Criteria for Judging Significant Increase in Credit Risk
The Company assesses on each balance sheet date whether the credit risk of relevant
financial instruments has significantly increased since initial recognition.
When determining whether credit risk has significantly increased since initial recognition,
the Company considers obtaining reasonable and evidence-based information without
unnecessary additional costs or efforts, including qualitative and quantitative analysis based
on the historical data, external credit risk ratings, and forward-looking information. Based on a
single financial instrument or a combination of financial instruments with similar credit risk
characteristics, the Company compares the risk of default of financial instruments on the
balance sheet date with the risk of default on the initial recognition date to determine th e
changes in default risk during the expected lifespan of financial instruments.
When one or more of the following quantitative and qualitative criteria are triggered, the
Company believes that the credit risk of financial instruments has significantly inc reased:
The quantitative criterion mainly refers to the probability of default for the remaining
duration at the reporting date has increased by more than a certain proportion compared to
the initial recognition
Qualitative criteria include significant adverse changes in the business or financial
situation of the main debtor, list of early warning customers, etc
Definition of an asset with a credit impairment
To determine whether credit impairment has occurred, the definition criteria adopted by
the Company are consistent with the internal credit risk management objectives for relevant
financial instruments, while considering quantitative and qualitative indicators. When
evaluating whether a debtor has experienced credit impairment, the Company mainly
considers the following factors:
The issuer or debtor has encountered significant financial difficulties;
The debtor has violated the contract, such as default or overdue payment of interest or
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principal;
Creditors, due to economic or contractual considerations related to the debtor's
financial difficulties, give concessions that the debtor will not make in any other circumstances;
The debtor is likely to go bankrupt or undergo other financial restructuring;
Financial difficulties of the issuer or debtor result in the disappearance of the active
market for the financial asset;
Purchase or generate a financial asset at a significant discount that reflects the fact of
credit loss;
The credit impairment of financial assets may be caused by the combined effect of
multiple events, and may not necessarily be a separately identifiable event.
Parameters for measuring expected credit losses
Depending on whether there is a significant increase in credit risk and whether credit
impairment has occurred, the Company measures the impairment provisions for different
assets at the expected credit losses of 12 months or the entire life. The key parameters of
expected credit loss measurement include default probability, default loss rate and default
risk exposure. The Company considers quantitative analysis and forward-looking information
of historical statistical data (such as counterparty ratings, guarantee method and collateral
types, repayment method, etc.) to establish default probability, default loss rate and default
risk exposure models.
The relevant definitions are as follows:
The probability of default refers to the likelihood that the debtor will be unable to fulfill
its repayment obligations in the next 12 months or throughout the remaining period of
existence. The default probability of the Company is adjusted based on the historical transfer
rate model of accounts receivable, incorporating forward-looking information to reflect the
default probability of debtors in the current macroeconomic environment ;
The default loss rate refers to the expected degree of loss arising from default exposure.
The default loss rate varies depending on the type of counterparty, the method and priority of
recovery, and the type of collateral. The default loss rate is the percentage of risk exposure
loss at the time of default, calculated based on the next 12 months or the entire duration;
Default risk exposure refers to the amount payable to the Company when a default
occurs in the next 12 months or throughout the remaining existence period.
Forward looking information
The assessment of significantly increased credit risk and the calculation of expected credit
losses both involve forward-looking information. Through historical data analysis, the
Company identifies key economic indicators that affect the credit risk and expected credit
losses of each business type.
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2. Liquidity risk
The Company adopts a revolving liquidity planning tool to manage the risk of capital
shortage. This instrument takes into account both the maturity date of its financial
instruments and the expected cash flows generated by the Company's operations. The finance
department ensures that the company has sufficient funds to repay its debts under all
reasonable forecasts by monitoring cash balances, readily realizable financial assets, and
rolling forecasts of cash flows over the next 12 months.
Maturity analysis of financial liabilities based on undiscounted contract cash flows:
December 31, 2023
Item
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings 540,993,500.00 540,993,500.00
Notes payable 28,080,000.00 28,080,000.00
Accounts payable 229,626,385.55 229,626,385.55
Other payables 8,535,416.39 8,535,416.39
(Continued)
December 31, 2022
Item
Within 1 year 1-3 years Over 3 years Total
Short-term borrowings 546,603,500.00 546,603,500.00
Notes payable 30,379,988.94 30,379,988.94
Accounts payable 171,190,476.10 171,190,476.10
Other payables 7,566,872.62 7,566,872.62
3. Market risk
Market risk refers to the risk that the fair value of a financial instrument or future cash
flow will fluctuate due to changes in market prices. Market risk mainly includes interest rate
risk, foreign exchange risk, and other price risks, such as equity instrument investment price
risk.
XII.Capital Management
The primary objectives of the Company's capital management are to ensure the
Company's ability to continue operating and maintain a healthy capital ratios to support
business development and maximise shareholder value.
The Company manages its capital structure and adjusts it in response to changes in
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economic conditions and the risk characteristics of the underlying assets. In order to maintain
or adjust its capital structure, the Company may adjust the profit distribution to shareholders,
return capital to shareholders or issue new shares. The Company is not subject to external
mandatory capital requirements. There have been no changes in capital management goals,
policies or procedures for 2023 and 2022.
XIII.Disclosure of Fair Value
1.The fair value of assets and liabilities measured at fair value at the end of the period
Fair value at the end of the period
The first level of The second level The third level
Item
fair value of fair value of fair value Total
measurement measurement measurement
Ⅰ.Continuous fair value measurement
1.Receivables financing 24,290,736.39 24,290,736.39
Total assets continuously measured
24,290,736.39 24,290,736.39
at fair value
2.Continuous and non continuous third level fair value measurement items, using
valuation techniques and qualitative and quantitative information of important parameters
The receivables financing of financial assets measured at fair value through other
comprehensive income is the bank acceptance bill due within one year. Due to the short
maturity of the bill, its fair value is approximately the par value of the bill.
XIV.Related parties and related transactions
1. Criteria for identifying related parties
If one party controls, jointly controls or exerts significant influence on the other party,
and two or more parties are jointly controlled, jointly controlled or significantly influenced by
the same party, they constitute related parties.
2. Basic Information of the Parent
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Proportion of Proportion of voting
Registered
Name of the parent Business nature Registered capital shares held by the rights held by the
address
parent (%) parent (%)
China South Industries State-owned assets
Beijing 35.30 billion yuan 71.13 71.13
Group Corporation investment
The ultimate controlling party of the Company is the State-owned Assets Supervision and
Administration Commission of the State Council.
3. Subsidiaries of the Company
See Note Ⅸ-1 “Equity in the subsidiaries”.
4. Joint Ventures and Associates of the Company
See Note Ⅸ-2 “Equity in joint venture arrangements or associates”.
5.Other related parties
Other related party Relationship with the Company
Chongqing Jianshe Mechanical & Electrical Equipment Co., Ltd. Controlled by the same party
Chongqing Jianshe Industry (Group) Co., Ltd. Controlled by the same party
China South Industries Group Finance Co., Ltd. Controlled by the same party
Chongqing Changan Automobile Co., Ltd. Controlled by the same party
Beijing Changan Automobile Company under
Chongqing Changan Automobile Co., Ltd. Controlled by the same party
Chongqing Lingyao Automobile Co., Ltd. Joint venture of subsidiaries of CSGC
Hebei Changan Automobile Co., Ltd. Controlled by the same party
Nanjing Changan Automobile Co., Ltd. Controlled by the same party
Baoding Changan Bus Manufacturing Co., Ltd. Controlled by the same party
Hefei Changan Automobile Co., Ltd. Controlled by the same party
Chongqing Changan Automobile Customer Service Co., Ltd. Controlled by the same party
Chongqing North Jianshe IMP. & EXP. Trade Co., Ltd. Controlled by the same party
Hafei Motor Co., Ltd. Controlled by the same party
South Air International Conditioning Co., Ltd. Controlled by the same party
Southwest Ordnance Chongqing Environmental
Protection Research Institute Co., Ltd. Controlled by the same party
China Ordnance Equipment Group Commercial Factoring Co., Ltd. Controlled by the same party
Chongqing Jianshe Yamaha Motorcycle Co., Ltd. Joint venture of subsidiaries of CSGC
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Other related party Relationship with the Company
Changan Minsheng APLL Logistics Co., Ltd. Joint venture of subsidiaries of CSGC
Chongqing Jianshe Lijue Industrial Co., Ltd. Associates of subsidiaries of CSGC
Changan Minsheng APLL Logistics Co., Ltd. Controlled by the same party
Baoding Changan Bus Manufacturing Co., Ltd. Controlled by the same party
Hefei Changan Automobile Co., Ltd. Controlled by the same party
Hebei Changan Automobile Co., Ltd. Controlled by the same party
Nanjing Changan Automobile Co., Ltd. Controlled by the same party
Chongqing Changan Automobile Co., Ltd. Controlled by the same party
Luoyang North Enterprises Group Co., Ltd. Controlled by the same party
Norendar International Co., Ltd. Controlled by the same party
Zhuzhou Jianshe Yamaha Motorcycle Co., Ltd. Associates of subsidiaries of CSGC
6.Related party transactions
(1)Related transactions on purchase of goods and receiving of services
①Table of goods purchased/ services received
Contents of related
Related-party Year 2023 Year 2022
transaction
Inspection of parts and
312,629.70 441,640.30
Chongqing Jianshe Industry (Group) Co., Ltd. accessories
Changan Minsheng APLL Logistics Co., Ltd. Warehousing services 405,957.33 448,659.50
Southwest Ordnance Chongqing Environmental Protection Inspection of parts and
1,512,267.38
Research Institute Co., Ltd. accessories
Chongqing Jianshe Industry (Group) Co., Ltd. Materials 2,053,179.68 837,856.39
Baoding Changan Bus Manufacturing Co., Ltd. Maintenance 876.89 139,252.59
Hefei Changan Automobile Co., Ltd. Maintenance 69,527.90 90,432.89
Hebei Changan Automobile Co., Ltd. Maintenance 104,728.23
Nanjing Changan Automobile Co., Ltd. Maintenance 33,594.70 33,762.40
Chongqing Changan Automobile Co., Ltd. Maintenance 486,895.09 578,496.61
Total 3,467,389.52 4,082,368.06
②List of goods sold/services provided
Contents of related
Related-party Year 2023 Year 2022
transaction
Auto and parts and
26,479,514.47 43,720,572.99
Chongqing Changan Automobile Co., Ltd. accessories
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Contents of related
Related-party Year 2023 Year 2022
transaction
Auto and parts and
60,388.32 4,636,556.72
Chongqing Lingyao Automobile Co., Ltd. accessories
Auto and parts and
12,785,893.50 11,134,628.84
Hefei Changan Automobile Co., Ltd. accessories
Auto and parts and
501,883.16 2,161,621.42
Nanjing Changan Automobile Co., Ltd. accessories
Auto and parts and
4,998,827.48 150,622.08
Baoding Changan Bus Manufacturing Co., Ltd. accessories
Auto and parts and
12,036,323.46 121,469.92
Hebei Changan Automobile Co., Ltd. accessories
Chongqing Changan Automobile Customer Service Auto and parts and
1,439.88
Co., Ltd. accessories
Chongqing Jianshe Yamaha Motorcycle Co., Ltd. Motorcycle parts 3,964,246.09 12,974,854.46
Chongqing Jianshe Yamaha Motorcycle Co., Ltd. Labor Services 542,823.63
Chongqing Jianshe Industry (Group) Co., Ltd. Materials 29,005.80 21,617.53
Chongqing Jianshe Mechanical & Electrical
2,631.90 88,671.74
Equipment Co., Ltd. Materials
Chongqing Hanon Jianshe Thermal Systems Co., Ltd. Materials 26,289.93 15,848.42
Auto parts and
4,470,298.88 1,780,532.11
Chongqing Hanon Jianshe Thermal Systems Co., Ltd. accessories
Changan Minsheng APLL Logistics Co., Ltd. and its Auto parts and
18,439.20
affiliates accessories
Total 65,918,005.70 76,806,996.23
(2)Remuneration of key senior officers
Item Year 2023 Year 2022
Remuneration of key senior officers 4,403,872.63 3,780,412.68
(3)Other related-party transactions
①Related-party deposits
Balance as at
Balance as at Increase Decrease
Name of related parties
in 2023 in 2023
December 31,
January 1, 2023
2023
China South Industries 166,896,601.5 2,214,792,896. 2,254,371,763. 127,317,734.
Group Finance Co., Ltd
7 63 27 93
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Remark: the interest of related-party deposits received in 2023 totaled RMB 943,414.26.
7.Unsettled items of accounts receivable, accounts payable to related parties
①Receivables
Balance as at Balance as at
Item name Related party December 31, 2023 January 1, 2023
Provision for Provision for
Book balance Book balance
bad debts bad debts
Accounts 7,072,474.5
4,071,362.45
receivable Chongqing Changan Automobile Co., Ltd. 3
Accounts 3,999,944. 3,999,944.4 3,999,944.
3,999,944.43
receivable Hafei Motor Co., Ltd. 43 3 43
Accounts 2,846,630.1
4,017,199.05
receivable Hefei Changan Automobile Co., Ltd. 8
Accounts Chongqing Hanon Jianshe Thermal Systems 2,290,479.2
3,281,571.27
receivable Co., Ltd. 2
Accounts Chongqing Jianshe Yamaha Motorcycle Co.,
2,124,935.30 769,838.66
receivable Ltd.
Accounts
5,761,875.20 189,172.54 22,436.51
receivable Hebei Changan Automobile Co., Ltd.
Accounts
211,294.25 132,101.39
receivable Nanjing Changan Automobile Co., Ltd.
Accounts
20,836.30
receivable Changan Minsheng APLL Logistics Co., Ltd.
Receivables
financing Hebei Changan Automobile Co., Ltd. 1,070,000.00
Receivables
1,201,784.82
financing Hefei Changan Automobile Co., Ltd.
Receivables 12,320,000.
1,610,000.00
financing Chongqing Changan Automobile Co., Ltd. 00
Notes Chongqing Jianshe Yamaha Motorcycle Co.,
247,000.00 267,000.00
receivable Ltd.
Other 1,478,870. 1,478,870.0 1,478,870.
1,478,870.07
receivables Chongqing Jianshe Lijue Industrial Co., Ltd. 07 7 07
Other Chongqing Jianshe Industry (Group) Co., 1,294,150.6
receivables Ltd. 6
②Payables
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Balance as at Balance as at
Item name Related party
December 31, 2023 January 1, 2023
China Ordnance Equipment Group Commercial
Accounts payable Factoring Co., Ltd. 13,430,000.00 18,250,000.00
Chongqing Hanon Jianshe Thermal Systems Co.,
Accounts payable Ltd. 996,427.96 526,575.70
Accounts payable Chongqing Jianshe Yamaha Motorcycle Co., Ltd. 23,210.00
Accounts payable Changan Minsheng APLL Logistics Co., Ltd. 20,895.96
Notes payable China South Industries Group Finance Co., Ltd 3,790,000.00 14,000,000.00
Other payables Chongqing Jianshe Industry (Group) Co., Ltd. 1,105,662.69 341,525.92
Other payables Luoyang North Enterprises Group Co., Ltd. 142,730.00 142,730.00
Southwest Ordnance Chongqing Environmental
Other payables Protection Research Institute Co., Ltd. 100,000.00
Other payables Chongqing Jianshe Lijue Industrial Co., Ltd. 57,200.00
Other payables Norendar International Co., Ltd. 25,000.00 25,000.00
Chongqing Hanon Jianshe Thermal Systems Co.,
Other payables Ltd. 20,470.00
Contract liabilities Chongqing Lingyao Automobile Co., Ltd. 7,588.38 223,940.62
Chongqing Hanon Jianshe Thermal Systems Co.,
Contract liabilities Ltd. 14,617.55
Chongqing Changan Automobile Co., Ltd., Changan
Contract liabilities Automobile (Beijing) Company 2,799.75
Chongqing North Jianshe IMP. & EXP. Trade Co.,
Contract liabilities Ltd. 698.20 698.20
Contract liabilities Zhuzhou Jianshe Yamaha Motorcycle Co., Ltd. 553.11
XV.Commitments and contingencies
1.Significant commitments
The Company has no significant commitments to be disclosed.
2.Significant contingencies
The Company has no significant contingencies required to be disclosed.
XVI.Post balance sheet events
As at the reporting date of financial report, the Company has no major post balance sheet
events required to be disclosed
XVII.Other significant events
1.Segment information
The Company has a single business, mainly the manufacture and sale of automotive air
conditioners and their parts and carburetors, and the repair of automotive air conditioners and
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their parts. The management manages this business as a whole and evaluates the operating
results, therefore, no segment information is presented in the financial statements.
XVIII.Notes to Major Items in Financial Statements of the Parent
1. Accounts Receivable
(1)Accounts Receivable Disclosed Using Aging Analysis Method
Balance as at December 31, Balance as at
Aging
2023 January 1, 2023
Within 1 year (including 1 year) 4,014,658.51 3,266,890.00
Including:1 - 6 months (inclusive) 4,014,658.51
Within 6 months -1 year 3,266,890.00
Subtotal within 1 year 4,014,658.51 3,266,890.00
1-2 years (including 2 year)
2-3 years (including 3 year)
3-4 years (including 4 year)
4-5 years (including 5 year)
Over 5 years 1,291,496.94 1,291,496.94
Total 5,306,155.45 4,558,386.94
(2) Classified and Disclosed Accounts receivable According to the Method of Provision for
Allowance for Doubtful Accounts
Balance as at December 31, 2023
Gross carrying amount Allowance for doubtful accounts
Classification Carrying
Proportion Proportion
Amount Amount amount
(%) （%)
Accounts receivable that are individually
assessed for impairment
Accounts receivable that are collectively
5,306,155.45 100.00 1,291,496.94 24.34 4,014,658.51
assessed for impairment
Including:
Aging portfolio 5,306,155.45 100.00 1,291,496.94 24.34 4,014,658.51
Total 5,306,155.45 100.00 1,291,496.94 24.34 4,014,658.51
(Continued)
Classification Balance as at January 1, 2023
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Gross carrying amount Allowance for doubtful accounts
Carrying
Proportion
Amount Amount Proportion （%) amount
(%)
Accounts receivable that are individually assessed
for impairment
Accounts receivable that are collectively assessed
4,558,386.94 100.00 1,291,496.94 28.33 3,266,890.00
for impairment
Including:
Aging portfolio 4,558,386.94 100.00 1,291,496.94 28.33 3,266,890.00
Total 4,558,386.94 100.00 1,291,496.94 28.33 3,266,890.00
Accounts receivable that are Collectively Assessed for Impairment:
Portfolio: Aging portfolio
Balance as at December 31, 2023
Aging Allowance for Proportion
Amount
doubtful accounts (%)
Within 1 year (including 1 year) 4,014,658.51
Including:1 - 6 months (inclusive) 4,014,658.51
Within 6 months -1 year
Subtotal within 1 year 4,014,658.51
1-2 years (including 2 year)
2-3 years (including 3 year)
3-4 years (including 4 year)
4-5 years (including 5 year)
Over 5 years 1,291,496.94 1,291,496.94 100.00
Total 5,306,155.45 1,291,496.94 24.34
(3)Provision for bad debts
Change in 2023
Balance as at Balance as at
Classification Recovery or Other
January 1, 2023 Provision Charge-off December 31, 2023
reversal changes
Accounts receivable that are
individually assessed for
impairment
Accounts receivable that are
collectively assessed for 1,291,496.94 1,291,496.94
impairment
Including: Aging portfolio 1,291,496.94 1,291,496.94
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Change in 2023
Balance as at Balance as at
Classification Recovery or Other
January 1, 2023 Provision Charge-off December 31, 2023
reversal changes
Total 1,291,496.94 1,291,496.94
(4)There were no accounts receivable actually written off in 2023.
(5)Top Five Debtors According to Closing Balances
Proportion of
Allowance for
Debtor name Gross carrying amount total Accounts
doubtful accounts
receivable (%)
Chongqing Hanon Jianshe Thermal Systems Co., Ltd. 3,281,571.27 61.84
Chongqing Jianshe Yamaha Motorcycle Co., Ltd. 732,703.66 13.81
Wuhan Longchang Company Wujiao 473,539.96
8.92 473,539.96
Marketing Department
Changzheng Machinery Factory of China Aerospace 395,296.04
7.45 395,296.04
Science and Technology Corporation
Chongqing Chihai Machinery Manufacturing Co., Ltd 145,999.35 2.75 145,999.35
Total 5,029,110.28 94.78 1,144,335.35
2. Other Receivables
(1)Classification of Other Receivables
Balance as at Balance as at
Items
December 31, 2023 January 1, 2023
Other receivables 289,159.26 1,345,740.08
Total 289,159.26 1,345,740.08
(2)Other Receivables
①Other Receivables Disclosed Using Aging Analysis Method
Balance as at Balance as at
Aging
December 31, 2023 January 1, 2023
Within 1 year (including 1 year) 289,159.26 1,345,740.08
Including:1 - 6 months (inclusive) 289,159.26 1,345,740.08
Within 6 months -1 year
Subtotal within 1 year 289,159.26 1,345,740.08
1-2 years (including 2 year)
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2-3 years (including 3 year) 1,223,146.45
3-4 years (including 4 year) 1,223,146.45 255,723.62
4-5 years (including 5 year) 255,723.62
Over 5 years 4,203,627.25 4,203,627.25
Total 5,971,656.58 7,028,237.40
②Classification of Other Receivables by the Mature of Payment
Balance as at Balance as at
Nature of Payment
December 31, 2023 January 1, 2023
Reserves, security deposits, advance
payment for social insurance premiums for 181,567.27 51,589.42
employees, etc.
Current accounts 5,790,089.31 6,976,647.98
Total 5,971,656.58 7,028,237.40
③Classified and Disclosed Other Receivables According to the Method of Provision for
Allowance for Doubtful Accounts
Balance as at December 31, 2023
Gross carrying amount Allowance for doubtful accounts
Classification Carrying
Proportion
Amount Proportion (%) Amount amount
(%)
Other receivables that are individually
1,960,624.16 32.83 1,960,624.16 100.00
assessed for impairment
Other receivables that are collectively
4,011,032.42 67.17 3,721,873.16 92.79 289,159.26
assessed for impairment
Including:
Aging portfolio 4,011,032.42 67.17 3,721,873.16 92.79 289,159.26
Total 5,971,656.58 -- 5,682,497.32 -- 289,159.26
(Continued)
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Balance as at January 1, 2023
Gross carrying amount Allowance for doubtful accounts
Classification Carrying
Proportion Proportion
Amount Amount amount
(%) (%)
Other receivables that are individually
1,960,624.16 27.90 1,960,624.16 100.00
assessed for impairment
Other receivables that are collectively
5,067,613.24 72.10 3,721,873.16 73.44 1,345,740.08
assessed for impairment
Including:
Aging portfolio 5,067,613.24 72.10 3,721,873.16 73.44 1,345,740.08
Total 7,028,237.40 -- 5,682,497.32 -- 1,345,740.08
Other receivables that are Individually Assessed for Impairment at Year End
Balance as at December 31, 2023
Debtor Allowance for doubtful Expected Credit Reason for
Carrying amount
accounts Loss Rate(%) recognition
Chongqing Jinxiang Lifting Equipment Expected to be
16,800.00 16,800.00 100.00
Manufacturing Co., Ltd. irrecoverable
Yangzhou Qionghua Coating Engineering Expected to be
56,500.00 56,500.00 100.00
Equipment Co., Ltd. irrecoverable
Expected to be
Chongqing Customs 78,825.36 78,825.36 100.00
irrecoverable
Chongqing Jianshe Lijue Industrial Co., Expected to be
1,478,870.07 1,478,870.07 100.00
Ltd. irrecoverable
Expected to be
Ningbo Jianshe Motorcycle Co. Ltd. 329,628.73 329,628.73 100.00
irrecoverable
Total 1,960,624.16 1,960,624.16 100.00 —
Accounts receivable that are Collectively Assessed for Impairment:
Portfolio: Aging portfolio
Balance as at December 31, 2023
Aging Allowance for Proportion
Amount
doubtful accounts (%)
1 - 6 months (inclusive) 289,159.26
Within 6 months -1 year
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1-2 years (including 2 year)
2-3 years (including 3 year)
3-4 years (including 4 year)
4-5 years (including 5 year)
Over 5 years 3,721,873.16 3,721,873.16 100.00
Total 4,011,032.42 3,721,873.16 --
④Allowance for Doubtful Accounts of Other Receivables According to the General
Stage I Stage II Stage III
Allowance for Expected credit loss over the Expected credit loss over
Expected credit losses Total
doubtful accounts duration (without credit the duration (credit
over the next 12 months
impairment) impairment incurred)
Opening Balance 3,721,873.16 1,960,624.16 5,682,497.32
Opening Balance is in the
Current Year
--Transfer into Stage II
--Transfer into Stage III
--Reverse into Stage II
--Reverse into Stage I
Current-period Recognition
Current-period Reversals
Current-period Charge-off
Current-period Write-off
Other Changes
Closing Balance 3,721,873.16 1,960,624.16 5,682,497.32
⑤Provision for bad debts
Balance as at Change in 2023 Balance as at
Classification January 1, Recovery or December 31,
Provision Charge-off Other changes
2023 reversal 2023
Accounts receivable that are
individually assessed for 1,960,624.16 1,960,624.16
impairment
Accounts receivable that are
collectively assessed for 3,721,873.16 3,721,873.16
impairment
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Balance as at Change in 2023 Balance as at
Classification January 1, Recovery or December 31,
Provision Charge-off Other changes
2023 reversal 2023
Total 5,682,497.32 5,682,497.32
⑥There were no other receivables actually written off in 2023.
⑦Top Five Debtors According to Closing Balances
Proportion of total
Gross carrying Nature of Allowance for doubtful
Debtor name other receivables Aging
amount receivables accounts
(%)
Current Over 5
Shenzhen Jianshe Motorcycle Co., Ltd. 3,013,664.00 50.47 3,013,664.00
accounts years
Current
Chongqing Jianshe Lijue Industrial Co., Ltd. 1,478,870.07 24.76 3-4 years 1,478,870.07
accounts
Current Over 5
Ningbo Jianshe Chongqing Office 692,035.31 11.59 692,035.31
accounts years
Current Over 5
Ningbo Jianshe Motorcycle Co., Ltd. 329,628.73 5.52 329,628.73
accounts years
Current Over 5
Chongqing Customs 78,825.36 1.32 78,825.36
accounts years
Total 5,593,023.47 93.66 -- -- 5,593,023.47
3. Long-term Equity Investments
Balance as at Balance as at
December 31, 2023 January 1, 2023
Items
Provision Provision
Gross carrying Carrying Gross carrying Carrying
for for
amount amount amount amount
impairment impairment
199,045,443 199,045,443 199,045,443
Investment in subsidiaries 199,045,443.95
.95 .95 .95
Investments in associates and joint 210,112,321 210,112,321
ventures 221,207,680.99
221,207,680.99 .04 .04
420,253,124 409,157,764 409,157,764
Total 420,253,124.94
.94 .99 .99
(1) Investments in subsidiaries
218
2023 Annual Report
Provision
Balance of provision
Balance as at Increase in Decrease Balance as at for
Investee for impairment as at
January 1, 2023 2023 in 2023 December 31, 2023 impairment
December 31, 2023
in 2023
Chongqing Jianshe Automobile
160,000,000.00 160,000,000.00
A/C Co., Ltd.
Chongqing Pingshan TK
39,045,443.95 39,045,443.95
Carburetor Co., Ltd.
Total 199,045,443.95 199,045,443.95
(2) Investments in associates and joint ventures
Increase or decrease in 2023
Balance as at
Investee
January 1, 2023 Additional investment Reduced investment
I. Joint venture
Chongqing Hanon Jianshe Thermal Systems Co.,
Ltd. 210,112,321.04
Subtotal 210,112,321.04
Total 210,112,321.04
(Continued)
Increase/decrease in 2023
Other changes Cash dividends or profits Provision for
Others
in equities declared to be distributed impairment
11,095,359.95
11,095,359.95
11,095,359.95
(Continued)
Increase/decrease in 2022
Balance as at Balance of provision for
Provision for December 31, 2023 impairment as at December 31, 2023
Others
impairment
221,207,680.99
221,207,680.99
221,207,680.99
4. Operating Revenue and Operating Costs
(1)Operating revenue and operating costs
219
2023 Annual Report
Year 2023 Year 2022
Items
Revenue Costs Revenue Costs
Principal operating activities 318,399,972.24 312,801,655.04 255,276,559.90 259,099,923.72
Other operating activities 486,555.78 44,600.07 474,716.54 12,774.84
Total 318,886,528.02 312,846,255.11 255,751,276.44 259,112,698.56
(2)Segment of operating revenue and operating cost
prime operating revenue
Classifications of Contracts
Revenue Costs
Type of goods
Automobile and motorcycle parts 318,399,972.24 312,801,655.04
Classified by operating region
Domestic 318,886,528.02 312,846,255.11
Total 318,886,528.02 312,846,255.11
5. Investment Income
Sources for investment income Year 2023 Year 2022
Income from long-term equity investments using equity method 11,095,359.95 8,128,052.32
Total 11,095,359.95 8,128,052.32
XIX.Supplementary Information
1.Breakdown of non-recurring profit or loss in 2023
Details of non-recurring profit and lossItem Amount Remark
Profit or loss from disposal of non-current assets, Including the write-off portion
of the provision for asset impairment -413,963.91
Government grants included in current profits or losses, except for government
grants closely related to the enterprise business, in accordance with the
provisions of national policies, enjoyed in accordance with the determined 1,104,494.20
standards and having a continuous impact on the profit or loss of the Company
Except for effective hedging business related to the normal operation of the
Company, the fair value gains and losses arising from the holding of financial
assets and financial liabilities by non-financial enterprises, as well as the gains
and losses arising from the disposal of financial assets and financial liabilities
Expenses for using funds charged from non-financial enterprises and included in
the current profit or loss
Profit or loss from entrusting others to invest in or manage assets
Profit or loss from outward entrusted loans
Provisions for impairment of various assets due to any force majeure, such as the
natural disaster
Reversal of provision for impairment of receivables under single impairment test 365,922.51
Gains from the difference between the investment costs of acquisition of
subsidiaries, associates and joint ventures and share in the net fair value of the
identifiable assets of the investee when investing
220
2023 Annual Report
Details of non-recurring profit and lossItem Amount Remark
Net profit or loss of the subsidiary from the business combination under
common control for the period from the beginning of the period to the
combination date
Profit or loss from exchange of non-monetary assets
Profits or losses from debt restructuring
The one-time expenses incurred by the enterprise due to the discontinuation of
related business activities, such as expenses for resettling employees, etc
One-time impact on current profit and loss due to adjustment of laws and
regulations such as taxation and accounting
The one-time confirmation of share based payment fees due to cancellation or
modification of equity incentive plans
For cash settled share based payments, the gains and losses arising from changes
in fair value of employee compensation payable after the vesting date
Profit or loss from changes in fair value of investment property subsequently
measured by adopting the fair value model
Profit or loss from the part generating in the transaction where the transaction
price is not fair and exceeding the fair value
Profit or loss from contingencies irrelevant to the Company's normal business
Revenue from trustee fee from the entrusted management
Non-operating revenue and expenses other than the above-mentioned items 77,853.72
Other items of profit or loss subject to the definition of non-recurring profit or
loss
Less: affected amount of income tax
Affected minority equity (after tax)
Total 1,134,306.52
2.Rate of return on net assets and earnings per share
Earnings per share
Weighted average Net
Profit in the reporting period Basic earnings per Diluted earnings
return on assets (%)
share per share
Net profit attributable to ordinary shareholders
of the Company -89.60 -0.58 -0.58
Net profit attributable to common shareholders of the
Company after deducting the non-recurring profit or loss -91.06 -0.59 -0.59
221
