Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 Stock code: 200054 Stock Abbreviation: Jianmo B Announcement No.: 2017-013 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 1。 Important notes The summary is abstract from full-text of summary of the semi-annual report, for more details information , investors should found in the full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointed by CSRC. Company Profile Objection statement of directors, supervisors and senior executives Name Position Content and reason Statement Other directors attending the Meeting for annual report deliberation except for the followed: The name of director who did The name of director who was Positions Reason not attend the meeting in person authorized Non-standard auditor’s opinion □ Applicable √ Not applicable Plans for profit distribution on ordinary shares or conversion of capital reserves into share capital proposed to the Board during the reporting period. □ Applicable √ Not applicable The Company will not distribute ash dividend or bonus shares, neither capitalizing of common reserves for the report period. Plans for profit distribution on preference shares for the reporting period approved by the Board □ Applicable √ Not applicable II. Basic information about the company 1. Company profile Stock abbreviation Jianmo B Stock code 200054 Stock exchange for listing Shenzhen Stock Exchange Contact person and contact manner Board secretary Securities affairs Representative Name Xue Gangyi Liu Hongyu No.1 Jianshe Road, Huaxi Industrial Zone, No.1 Jianshe Road, Huaxi Industrial Zone, Office address Ba’nan District , Chongqing Ba’nan District , Chongqing Fax 023-66295333 023-66295333 Tel 023-66295333 023-66295333 E-mail cqjsmc@jianshe.com.cn cqjsmc@jianshe.com.cn 2. Brief introduction to the main business or products in the reporting period At the end of 2015, the company completed the major asset restructuring of stripping motorcycle business, 1 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 thus realized a major adjustment of industrial structure, so the company has become the auto parts manufacturing enterprise and mainly engaged in automotive air-conditioning compressor production and sales. The products include rotary vane iron type and aluminum type compressor, piston swashplate fixed displacement compressor, piston swashplate variable displacement compressor and electric compressor, covering 32cc to 480cc displacement. The main products won the "China famous brand", "High quality products of French science and technology quality supervision and evaluation committee ", “China enters WTO Recommended Products” and so on. The strategic customers of the products are the manufacturing enterprises with vehicle production and sales in the top list, and the strategic customers include Chang’an Automobile, Peugeot, Dongfeng Nissan, Chang’an Suzuki and Great Wall Automobile, and the sales ranks in top three in the industry. 3.Major accounting data and financial indicators (1)Major accounting data and financial indicators for the last three years Retrospective adjustment to or restatement of the accounting data for prior years by the Company due to change of accounting policies and correction of accounting errors □ Yes √ No In RMB Changed over last year 2016 2015 2014 (%) Operating Gross income(RMB) 873,286,486.75 1,341,331,910.93 -34.89% 1,763,619,804.97 Net profit attributable to the shareholders of the listed company 12,267,006.14 240,735,112.20 -94.90% -133,593,949.98 (RMB) Net profit after deducting of non-recurring gain/loss attributable 12,908,428.98 -255,602,553.80 -105.06% -153,898,341.02 to the shareholders of listed company(RMB) Cash flow generated by business 108,619,119.02 82,306,010.61 31.97% 94,598,651.91 operation, net(RMB) Basic earning per 0.103 2.017 -94.89% -1.119 share(RMB/Share) Diluted gains per 0.103 2.017 -94.89% -1.119 share(RMB/Share)(RMB/Share) Net asset earning ratio(%) 4.68% 175.35% -170.67% -158.82% End of Changed over last year End of 2016 End of 2014 2015 (%) Gross assets(RMB) 1,559,334,881.03 1,550,615,831.44 0.56% 2,389,211,010.43 Net assets attributable to shareholders of the listed company 268,383,091.65 256,116,085.51 4.79% 17,321,196.61 (RMB) (2)Main Financial Index by Quarters In RMB First quarter Second quarter Third quarter Fourth quarter Operating income 208,588,488.00 259,588,803.88 222,817,415.03 182,291,779.84 Net profit attributable to the 4,399,465.72 4,103,379.70 4,314,063.61 -549,902.89 shareholders of the listed company Net profit after deducting of non-recurring gain/loss attributable 4,348,808.65 4,012,998.17 5,164,583.47 -617,961.31 to the shareholders of listed company Net Cash flow generated by 24,195,604.08 37,744,133.71 34,576,909.96 12,102,471.27 business operation 2 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 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 4.Share capital and shareholders (1)Number of holders of ordinary shares and preference shares with restored voting right and Top 10 shareholders In shares Total number Total Total of common The total number shareholders at preferred sharehold shareholders at of preferred shar the end of the ers at the end of the the end of the 8,350 8,371 eholders voting ri 0 0 month from the month from the date ghts restored at p reporting date of disclosing of disclosing the eriod-end period the annual report annual report Shareholdings of Top 10 shareholders Number of Number or share Shareholders Nature of Proportion of shares held pledged/frozen shareholder shares held(%) at period Amount of restricted shares held -end State of share Amount Chongqing Jianshe State-owned Mechanical and 71.13% 84,906,250 84,906,250 legal person Electric Co., Ltd. Domestic Gu Zuocheng natural 1.89% 2,261,000 2,218,750 person Anhui Domestic Hengsheng non-state-ow Economic 1.47% 1,750,000 1,750,000 ned legal Development person Group Co., Ltd. Domestic Liu Dan natural 0.88% 1,054,001 0 person GUOTAI JUNAN Overseas SECURITIES( 0.60% 716,920 0 legal person HONGKONG) LIMITED Domestic Yu Lingfeng natural 0.52% 623,621 0 person Domestic Chen Xinqiang natural 0.51% 612,400 0 person Domestic Xu Yuanhui natural 0.51% 610,789 0 person Domestic Zhang Meilan natural 0.43% 513,560 0 person Domestic Feng Yonghui natural 0.42% 500,000 500,000 person There isn’t any associated relationship between the sponsoring shareholder and the other Explanation on associated shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in accordance relationship among the with ‘The rules of information disclosure on change of shareholding.’ Foreign shareholders are aforesaid shareholders unknown for their condition of ‘Associated relationship’ and ‘Acting in concert’. (2)Total preference shareholders and the shares held by the Top 10 Preference shareholders □ Applicable √ Not applicable 3 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 Nil (3)Block diagram of the ownership and control relations between the Company and the actual controller 5. Corporation bonds Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due butnot folly cashed on the approval date of annual report No 1.Basic information of corporate bonds Bond name Bond short name Bond code Due day Bond balance ‘0000 Interest rate 2. Bond trustee and the credit rating agency information 3.The key accounting data and financial indicators of the latest two years to the end of the reporting period In RMB’0000 Items 2016 2015 At the same time rate of change III. Discussion and Analysis of the Management 1. Business Operation summary in the reporting period Whether the company needs to comply with the disclosure requirements of the particular industry No The year of 2016 is a year for the company’s independent operation that features the main business of automotive air conditioning compressor. The total production of vehicle air conditioning compressor in the year was 2.369 million units, a year-on-year growth of 31.3%; the total sales was 2.157 million units, a year-on-year growth of 16.1%; and the sales ranks in top three in the industry. The main work carried out in the year was as follows: Implementation of the reorganization of assets: the implementation of the spirit of the resolution of the board of directors, the successful implementation of the reorganization of assets, completed the restructuring of the organization after the reorganization, staffing, business process reconstruction, asset and liability transfer, internal 4 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 control system reconstruction work, in January 2017 the company received independent financial adviser Issued by the reorganization of the completion of the report, marking the successful completion of the reorganization of the work. The aspect of adjustment of market structure: firstly, strengthened the management and development of large customers. To the year, the company realized the sales to GEELY. The company has become the supplier to the top three brands (Chang’an, Great Wall, Geely) of Chinese independent automobile brand; through increasing the proportion of high-quality customers, the sales to top ten strategic customers reached 93%, thus the company preliminarily shaped a reasonable echelon customer structure. Secondly, the company actively explored the new energy market. It has set up the new energy division and initially started the professional operation (including large displacement compressor). The aspect of R & D capability enhancement: firstly, it has set up the technology center of Chongqing municipal level, and established the rotary vane technology platform and the piston technology platform and formed the three series products of iron, aluminum and electric-driven. Secondly, the experimental capability was further enhanced. The construction project for test ability was fully completed and the semi anechoic chamber was put into use, which has obtained low temperature capability recognition by CNAS (China National Accreditation Committee for Conformity Assessment). Thirdly, the project development capabilities for customers and the basic research level were further enhanced. The aspect of manufacturing capacity: firstly, the capacity-expansion work for 0.5 million units was completed, thus formed the annual production capacity of 2.3 million units; secondly, the company promoted the just-in-time system, so the production efficiency has been continuously improved; thirdly, the company continuously optimized the quality management system, introduced STA (supplier technical support system) in the front end of industrial chain and established professional after-sales department for the customers, thus realized the whole process management of quality. 2. Material change in principal activities during the reporting period □ Yes √No 3. Products accounting for over 10% of revenue or profit from principal activities of the Company √ Applicable □Not applicable In RMB Increase Increase Increase /decrease Gross profit /decrease of /decrease of Name Operating income Operating cost of Gross profit ratio% operating income operating cost ratio(%) (%) (%) Motorcycle 8,335,299.07 3,498,285.24 -5.58% -98.41% 101.36% 4.28% and part Vehicle air 845,417,715.99 12,516,222.14 17.78% 12.58% 149.18% -3.12% conditioner 4. Seasonal or cyclical operations requiring special attention □ Yes √No 5. Material difference of revenue, operating costs or net profit attributable to holders of ordinary shares of the Company for the reporting period from the last reporting period √ Applicable □Not applicable The end of 2015, the company completed the divestiture of the motorcycle business major asset restructuring, to achieve a major industrial restructuring, mainly engaged in automotive air conditioning compressor production and sales. For this period the relevant indicators than the previous period there is a big change. 6. Suspension in trading or delisting □ Applicable √ Not applicable 7. Events relating to the financial report 5 Chongqing Jianshe Motorcycle Co., Ltd. Summary of the Annual Report 2016 (1) Reason for changes in accounting policies, accounting estimates and accounting methods as compared to the financial report for the prior year √ Applicable □Not applicable 1. Changes in significant accounting policy Implementation of VAT Accounting Treatment On December 3, 2016, Ministry of Finance issued the "VAT Accounting Treatment" (No. 22-[2016] Accounting), which is applicable to the relevant transactions occurred from May 1, 2016. The main impact of the company’s implementation of the provision is as follows: The contents and reasons of accounting policy changes Approval procedure Affected item name and amount in the report (1) The “Business taxes and surcharges” in the profit National uniform Taxes and surcharges statement is adjusted to be “Taxes and surcharges” item. accounting system changes 2) The property tax, land use tax, vehicle and vessel National uniform Adjustment of increasing RMB usage tax and tamp tax incurred from the business accounting system 2,217,753.53 in taxes and activities since May 1, 2016 are reclassified into “Taxes changes surcharges, while reducing RMB and surcharges” item from the previous “management 2,217,753.53 for the year’s fees" item, but such taxes occurred before May 1, 2016 management fees. will not be adjusted. And The comparative data will not be adjusted. 2. Changes in significant accounting estimates There are no changes in significant accounting estimates for the company in the current year. (2) Reason for retrospective restatement to correct major accounting errors during the reporting period □ Applicable √ Not applicable Nil (3) Reason for changes in scope of the consolidated financial statements as compared to the financial report for the prior year □ Applicable √ Not applicable Nil 6