Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-Annual Report 2017 2017-050 July 2017 1 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 I. Important Prompts, Table of Contents, and Definitions The Board of Directors, The Supervisory Committee, the supervisors and the directors 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. Lv Hongxian, The Company leader, Mr. Xue Gangyi, 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 the semi-report. All directors presented the Board Meeting at which this report was examined: 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 analyzed the risks that may exist in the course of the operation of the Company and the countermeasures in the section "The Risks Faced by the Company and the Countermeasures " in Section 4 "Discussion and Analysis of Business Operation Situation", so please pay attention to that relevant contents. The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the report period. 2 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Table of Contents 2017 Semi-Annual Report I.Important Notice and Definitions II. Corporate Profile and Key Financial Results III. Business Profile IV. Performance Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII.Information about Directors, Supervisors and Senior Executives IX. Corporate Bonds . X.Financial Report XI. Documents available for inspection 3 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Definition Terms to be defined Define Definition d as Define Company, the Company, Jianmo Stock Chongqing Jianshe Motorcycle Co., Ltd. d as Shenjianmo Define Shenzhen North Jianshe Motorcycle Co., Ltd. (predecessor of the d as Company) Military Equipment Group Define China Military Equipment Group Co., Ltd. (China Southern Industry d as Group Co., Ltd.) Southern Group Define China Southern Industry Group Co., Ltd. d as Military Finance Co. Define Military Equipment Group Finance Co., Ltd. d as Southern Motorcycle Define Chongqing Southern Motorcycle Co., Ltd. d as Southern Motorcycle R&D Co., Ltd. Define Chongqing Southern Motorcycle Technologies Development Co., Ltd. d as Jianshe Industry Define Chongqing Jianshe Industry Co., Ltd. – former State-owned Jianshe d as Machinery Factory, Jianshe Industry (Group) Co., Ltd. Jianshe Group Define Jianshe Industrial (Group) Co., Ltd. d as Jianshe Machinery Define Chongqing Jianshe Machinery Co., Ltd. d as Define Jianshe Mechanical and Electric Chongqing Jianshe Mechanical and Electric Co., Ltd. d as China Jialin Define China Jialin Industry Co., Ltd. (Group) d as Jinan Qingqi Define Jinan Qingqi Motorcycle Co., Ltd. d as Changan Auto Define Chongqing Changan Automobile Co., Ltd. d as Luoyang Northern Define Luoyang Northern Enterprise Group Co., Ltd. d as Sales Co. Define Chongqing Jianshe Sales Co., Ltd. d as Vehicle air conditioner Define Chognqing Jianshe Automobile Air-conditioner Co., Ltd. d as Import & Export Co. Define Chongqing Northern Jianshe Import & Export Co., Ltd. d as Shanghai Jianshe Define Shanghai Jianshe Motorcycle Co., Ltd. d as Slaes Company Define Chongqing Jianshe Motorcycle Sales Co., Ltd. d as Chongqing Yamaha Define Chongqing Jianshe YAMAHA Motorcycle Co., Ltd. d as Zhuzhou Jianya Define Zhuzhou Jianshe YAMAHA Motorcycle Co., Ltd. d as Pingshan Taikai Define Chongqing Pingshan Taikai Carburetor Co., Ltd. d as Jianxing Machinery Define Chongqing Jianxing Machinery Co., Ltd. d as Tongsheng Construction Define Chongqing Tongsheng Jianshe Industry Co., Ltd. d as Fuyeda Define Chongqing Fuda Property Management Co., Ltd. d as Jiangmen Qingqi Define Jiangmen Qingqi South China Motorcycle Co., Ltd. 4 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 d as Changan SUZUKI Define Chongqing Chang’an SUZUKI Automobile Co., Ltd. d as Changhe SUZUKI Define Jiangxi Changhe SUZUKI Automobile Co., Ltd. d as Hebei Changan Define Hebei Changan Automobile Co., Ltd. d as Define Hefei Changan Hefei Changan Automobile Co., Ltd. d as Define Hafei Automobile Harbin Hafei Automobile Co., Ltd. d as Define Changan Ford ,Harbin Branch Changan Ford Automobile Co., Ltd. Harbin Branch d as Define Harbin Dongan Auto Engine Harbin Dongan Auto Engine Co., Ltd. d as Define South Air International South Air International Co., Ltd. d as Define Nanjing Changan Nanjing Changan Automobile Co., Ltd. d as The company has made an agreement to sale the 100% stake of Jianshe Define Mechanical and Electric Company-the company’s subsidiary funded by Major asset restructuring d as the liabilities and the motorcycle business related assets held by the company to Military Equipment Group. 5 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 II. Corporate Profile and Key Financial Results 1. Basic Information Stock ID Jianmo B Stock Code 200054 Stock Exchange Listed in Shenzhen Stock Exchange Company Name in Chinese 重庆建设摩托车股份有限公司 Short form of Company Name 建设摩托 in Chinese Company Name in English CHONGQING JIANSHE MOTORCYCLE CO.,LTD. Short form of Company Name JSMC-B in English Legal representative: Lv Hongxian 2. Contact person and contact manner Secretary of the Board Representative of Stock Affairs Name Xue Gangyi Liu Hongyu No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan No.1 Jianshe Road, Huaxi Industrial Zone, Address District, Chongqing Ba’nan District, Chongqing Tel. 023-66295333 023-66295333 Fax. 023-66295333 023-66295333 E-mail. cqjsmc@jianshe.com.cn cqjsmc@jianshe.com.cn 3.Other (1)Way to contact the Company Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable □√ Not Applicable The registered address, office address and their postal codes, website address and email address of the Company did not change during the reporting period. The said information can be found in the 2016 Annual Report. (2)About information disclosure and where this report is placed Did any change occur to information disclosure media and where this report is placed during the reporting period? □ Applicable √ Not applicable 6 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report and the location where this report is placed did not change during the reporting period. The said information can be found in the 2016 Annual Report. IV.Summary of Accounting data and Financial index May the Company make retroactive adjustment or restatement of the accounting data of the previous years □ Yes √ No Reporting period Same period of last year YoY+/-(%) Operating income(RMB) 550,074,257.84 468,177,291.88 17.49% Net profit attributable to the shareholders 11,418,319.36 8,502,845.42 34.29% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 11,141,929.71 8,361,806.82 33.25% listed company(RMB) Cash flow generated by business operation, 63,135,091.91 61,939,737.79 1.93% net(RMB) Basic earning per share(RMB/Share) 0.0957 0.0712 34.41% Diluted gains per 0.0957 0.0712 34.41% share(RMB/Share)(RMB/Share) Weighted average ROE(%) 4.17% 3.37% 0.80% As at the end of the As at the end of last YoY+/-(%) reporting period year Gross assets (RMB) 1,321,411,142.26 1,559,334,881.03 -15.26% Shareholders’ equity attributable to 279,801,411.01 268,383,091.65 4.25% shareholders of the listed company(RMB) V. Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards. □ Applicable √Not applicable No difference. 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable No difference. 7 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 VI.Items and amount of deducted non-current gains and losses √ Applicable □ Not applicable In RMB Items Amount Notes Non-current asset disposal gain/loss(including the write-off part 58,191.62 for which assets impairment provision is made) Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s business 36,900.00 and granted under the state’s policies) Other non-business income and expenditures other than the above 181,298.03 Total 276,389.65 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 8 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 III. Business Profile Ⅰ.Main Business the Company is Engaged in During the Report Period Whether the company needs to comply with the disclosure requirements of the particular industry No The company 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 the technical platform of 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 other titles.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. Ⅱ.Major Changes in Main Assets 1.Major Changes in Main Assets Main assets Major changes Construction in process Equipment update project increased investment 1,729,011.54 yuan 2. Main Conditions of Overseas Assets □ Applicable √ Not applicable Ⅲ.Analysis On core Competitiveness Whether the company needs to comply with the disclosure requirements of the particular industry No The company has the enterprise technology center which recognized by Chongqing City, established the rotary vane technology platform and the piston technology platform and formed the three series products of iron, aluminum and electric-driven. In the rotary vane compressor market, the company’s product has constantly gained a stable market share. In terms of R & D and design, the company possesses the R & D and design capability of compressor including the CAD design capability, 3D design capability of electronic prototype and CAE simulation analysis capability of the compressor and related products. For the prototype trial production, the company possesses CAM simulation processing and analysis capabilities and is able to implement small quantities of full-size manual prototype trial manufacture and the assembly. In the experimental evaluation aspect, the company possesses the advanced compressor performance test 9 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 equipment, compressor NVH anechoic chamber, whole-vehicle NVH anechoic chamber, oil cycle test bench for real vehicle air conditioning system, air conditioning system test bench, clutch impact test bench, real vehicle system durability test stand, vibration test stand and other examination and test equipment, having the national laboratory CNAS-CL01 (ISO / IEC 17025) standard accreditation qualification, and having the test evaluation capability of the most domestic customers' compressor standard system and of the compressor standard system of major foreign customers including Nissan, Suzuki, Peugeot, GM and Ford. In the Manufacturing aspect, the company imported advanced equipment from countries such as USA, Germany, Switzerland and Japan, with the imported equipment accounting for more than 80%. It has formed the production capacity of 2.3 million units, with 6 general assembly lines (4 rotary vane type, 1 piston type and 1 variable displacement type), and the daily output reached 7,000 units/ day. There are 22 production lines of machine iron parts and 4 production lines of aluminum machine parts, with μ-level accuracy and the massive use of MARPOOS online testing. 10 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 IV. Performance Discussion and Analysis Ⅰ.General In the first half of the year, the growth of the domestic auto industry has slowed down compared to the same period last year, and the passenger cars fell obviously year on year. Under the severe market situation, the company continued to carry out the structure adjustment of the product and the market: first, the cultivation and development of large customers market were further enhanced, thus in the first half of the year, the sales of top five customers grew by 9% compared with the beginning of the year; second, the company increased the overseas market development efforts, thus in the first half of the year, the realized foreign sales was 316,000 units, an year-on-year increase of 313.5%. During the reporting period, the Company accumulative sales 1.259 million units air-conditioning compressors for automobiles, recorded an YOY increase of 16.5%; representing a completion of 54.7% of the annual sales plan formulated at the beginning of the year. The realized sales revenue was RMB 550 million, a YOY increase of 17.5%. II.Main business analysis Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”. Changes in the financial data In RMB This report period Same period last year YOY change(%) Cause change Operating income 550,074,257.84 468,177,291.88 17.49% Operating cost 456,540,934.80 394,452,147.33 15.74% Sale expenses 12,358,836.00 12,291,404.24 0.55% Administrative expenses 46,644,017.51 36,444,955.02 27.98% Financial expenses 18,617,069.49 16,021,092.40 16.20% The total amount of profits Income tax expenses 600,586.60 300,493.66 99.87% increased and the income tax increased accordingly Cash flow generated by 63,135,091.91 61,939,737.79 1.93% business operation, net Net cash flow generated Construction of fixed assets to -1,343,707.62 -9,545,403.02 -85.92% by investment reduce spending Due to the Company controls Net cash flow generated -168,060,263.37 40,435,547.04 -515.63% the scale of financing and the by financing change of financing structure Net increasing of cash Reduced corporate notes -106,268,879.08 92,829,881.81 -214.48% and cash equivalents financing Major changes in profit composition or cources during the report period □ Applicable √ Not applicable 11 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The profit composition or sources of the Company have remained largely unchanged during the report period. Breakdown of main business In RMB Increase/decrease Increase/decrease Increase/decrease of principal of gross profit of reverse in the Operating Gross profit business cost over rate over the operating costs same period of revenue rate(%) the same period same period of the previous of previous year the previous year year(%) (%) (%) On Industries Industry 503,087,025.50 411,899,437.65 18.13% 17.83% 15.73% 1.49% On products Veicle air 499,464,264.91 408,094,419.32 18.29% 18.21% 16.16% -1.99% conditioner Other 3,622,760.59 3,805,018.33 -5.03% -18.28% -17.43% -1.23% On Area Domestic 387,090,356.54 309,754,861.41 19.98% -2.66% -6.68% 3.44% Overseas 115,996,668.96 102,144,576.24 11.94% 295.82% 325.31% -6.11% III.Non-core business analysis √ Applicable □Not applicable In RMB Ratio to the total Amount Notes of the causes Recurring or not profit amount (%) Investment income for Investment income 1,994,582.10 16.31% Yes subsidiaries Impairment of The provision for bad debts 1,492,613.98 12.20% No assets of accounts receivable Non-operating Non current assets disposal 883,547.75 7.22% No income gains Non-operating Loss on disposal of 167,158.10 1.37% No expense non-current assets IV.Analysis of assets and liabilities 1.Significant changes in asset composition In RMB 12 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 End of same period of last End of Reporting period year Change in As a percentag Reason for significant change percentage Amount e(%) of total assets(%) The company controls the scale of Monetary fund 295,278,417.88 22.35% 357,074,497.26 22.80% -0.45% financing and other monetary funds are reduced Accounts 255,105,669.86 19.31% 253,694,248.13 16.20% 3.11% receivable Inventories 154,692,361.34 11.71% 154,144,290.55 9.84% 1.87% Real estate 112,986,190.01 8.55% 8.55% Fixed assets intangible assets rental Investment Long-term equity 81,252,694.41 6.15% 81,197,752.83 5.18% 0.97% investment Fixed assets leased to investment real Fixed assets 315,059,363.89 23.84% 423,832,625.71 27.06% -3.22% estate Construction in 4,176,362.84 0.32% 13,097,409.12 0.84% -0.52% process The company's long-term borrowings Short-term loans 284,500,000.00 21.53% 212,000,000.00 13.54% 7.99% decreased and short-term borrowings increased The company controls the scale of Long-term loans 24,490,000.00 1.85% 77,890,000.00 4.97% -3.12% long-term borrowing 2.Asset and Liabilities Measured by Fair Value □ Applicable √ Not applicable 3. Restricted asset rights as of the end of this Reporting Period Nil V. Analysis on investment Status 1. General √Applicable □Not applicable Investments made in same period of last Investments made in the reporting period +/- % year 0.00 5,090,000.00 -100.00% 2.Condition of Acquiring Significant Share Right Investment during the Report Period 13 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 □ Applicable √ Not applicable 3.Situation of the Significant Non-equity Investment Undergoing in the Report Period √Applicable □Not applicable In RMB Cumulat Reasons ive Cumula of the Inveswt amount t ive unreach Fixed ment of Project expecte income ed Disclos Invest assets Project during Source Disclos Project name investme schedul d by the project ure method investme industry the of funds ure date nt by the e income end of progres Index nt reporting end of reportin s and period reporting g period expecte period d profit The project has been See on fully www.cn put into info.co Technical operatio m.cn Renovation n, On compan Project of Automot January y Automotive ive Air to June, announ Rotary-vane Conditio Self-rais August Self-cons 90,900,0 100.00 22,160, 11,399, the cement Air Condition Yes n 0.00 ed, Bank 5, truction 00.00 % 000.00 300.00 actual on Compressor Compres Loan 2014 yield of August (New sor 97%, 5.2014, 500,000 of Industry has Announ Expending achieve cement Capacity) d No. investm 2014-06 ent 4 expectat ions. 90,900,0 22,160, 11,399, Total -- -- -- 0.00 -- -- -- -- -- 00.00 000.00 300.00 4.Investment of Financial Asset (1)Securities investment □ Applicable √ Not applicable There was no investment in securities by the Company in the Reporting period. 14 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2)Investment in Derivatives □ Applicable √ Not applicable The Company had no investment in derivatives in the reporting period. VI. Sales of major assets and equity 1. Sales of major assets □ Applicable √ Not applicable The Company had no sales of major assets in the reporting period. 2.Sales of major equity □ Applicable √ Not applicable Ⅶ.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 Main Registered Operating Type Industry Total assets Net assets Turnover Net Profit name business capital profit Manufactur Air ing and sales of Manufactur 160,000,00 1,096,887,8 254,339,31 501,290,63 3,414,913 Conditioner Subsidiaries 3,398,144.00 auto ing 0 70.00 3.00 4.00 .00 Co. air-conditio ners Domestic Shanghai sales of Manufactur 15,885,788. 2,926,505.0 6,169,704.0 1,028,608 Subsidiaries 16,000,000 436,126.00 Jianshe motorcycles ing 00 0 0 .00 and parts Production Pingshan and sales of Manufactur 191,715,15 165,633,13 64,818,696. 4,997,179 Shareholding 158758676 4,070,576.00 Taikai motorcycles ing 5.00 6.00 00 .00 company and parts Acquirement and disposal of subsidiaries in the Reporting period □ Applicable √ Not applicable Notes VIII.Structured vehicle controlled by the Company □ Applicable √ Not applicable 15 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 IX. Prediction of business performance for January -September 2017 Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason. □ Applicable √ Not applicable X.Risks facing the Company and countermeasures (I)Problems that the company is facing or potential risks 1. The policy impact on the automotive industry. In 2016, due to the main reasons of stimulus policies for the automobile industry, it realized a relatively high year-on-year growth. However, in the first half of 2017, with the preferential car purchase tax rate narrowed, the growth of the industry has slowed down over the same period last year. Thereinto, the growth of the production and sales of the passenger vehicle market had slowed down to 4.16% and 7.62% respectively. 2. Pressure from the competition. With the flat growth of the automobile sales and the capacity release of the newly-completed plants of the main engine plants, the price competition of the main engine manufactures will transfer the costs pressure to the matching components companies, thus the competition in automotive industry chain will be further intensified. 3. The company once again faced the capacity bottleneck. With the development of the automotive industry, the company's automotive air-conditioning compressor business has increased year by year, and by the end of last year, the company's production capacity had reached the saturation value of production capacity. 4. Risk of relying on single customer. In the first half, The company’s sales to the company’s top five customers accounted for 79% of the company’s annual sales, so there was a large extent of relying on larger customers. 5. The uncertainties of overseas development environment will bring challenges for the overseas business breakthrough. 6, Competition risk brought by single product. The company's main product is rotary vane compressor, which is a small-type compressor, thus it does not have advantages in terms of B-class or above type vehicle. (II)Countermeasures Facing the difficulties or problems brought by the above-said policies and factors of the industry and the company itself, the company will actively adapt to the demand of the automobile industry development and greatly promote the development in the automotive air conditioning industry to continue lead the market. Firstly, introduce new technology and new system, and establish the complete automotive thermal management system industry chain; secondly, explore new business filed, continuously optimize and improve rotary vane compressor and snatch the market share of new-energy automotive air conditioning market; thirdly, increase high-quality customers and expand overseas market, increase the sales scale and maintain the leading position in the industry; fourthly, build future-oriented technologies and product reserves. 16 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 V. Important Events I. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period 1.Annual General Meeting Investor Meeting Type participation Convened date Disclosure date Index to disclosed information ratio For details please find the Resolutions of Shareholders’ Meeting 2016, Announcement Annual Genral Annual General 75.46% May 25,2017 May 26,2017 2017-042 on securities times, Meeting of 2016 Meeting Hongkong Commercial daily and http://www.cninfo.com.cn 2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting. □Applicable√Not applicable See details in the company’s announcement published on securities times, Hongkong Commercial daily and http//www.cninfo.com.cn II. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period □ Applicable √Not applicable For the reporting period, the Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital. III. 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 No such cases in the Reporting Period. IV. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? □ Yes √ Not The semi-annual report was not audited. 17 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 V.Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued by CPAs firm for the reporting period □ Applicable √ Not applicable VI. Explanations given by Board of Directors regarding “ Modified auditor’s Report” Issued for last year □ Applicable √ Not applicable VII. Bankruptcy and restructuring □ Applicable √ Not applicable No such cases in the reporting period. VIII. Legal matters Signifieant lawsuits or arbitrations □ Applicable √ Not applicable No such cases in the reporting period. Other legal matters □ Applicable √ Not applicable IX. Punishments and rectifications □ Applicable √ Not applicable No such cases in the reporting period. X. Credit conditions of the Company as well as its Controlling shareholder and actual Controller □ Applicable √ Not applicable XI.Equity incentive plans, employee stock ownership plans or other incentive measures for employees □ Applicable √ Not applicable No such cases in the reporting period. XII.Material related transactions 1. Related transactions in connection with daily operation √ Applicable □Not applicable Subjects Principl Amount Market Index Ratio in Trading Whether Date of Related Relation Type of of the e of Price of of trade Way of price of of similar disclosu parties ship trade related pricing trade RMB0’ payment similar inform trades limit over the re transacti the 000 trade ation 18 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 ons related availabl disclos transacti approve approve e ure ons d d (RMB limited ’0000) or not (Y/N) See details in the company’s announcement published on securities times, Controll Hongkong Jianshe Purchas Fair ing Spare Commercial Machine e of Market 2745 2,745 8,000 No Cash 2745 sharehol parts daily and ry goods Price der http//www.cninf o.com.cn on April 28,2017(Annou ncement No.:2017-016 Subsidia ry of the Import Purchas Fair The same as controlli Spare & e of Market 1525 1,525 3,200 No Cash 1525 above ng parts export goods Pric sharehol der Controll Jianshe Purchas Lease Fair The same as ing Machine e of producti Market 0 0 250 No Cash 0 above sharehol ry goods on site Pric der China Changa Under Sales of Fair The same as Sales of n and same finished Market 9107 9,107 25,000 No Cash 9107 above goods subsidia control parts Pric ries Controll Jianshe Wareho Fair The same as ing Sales of Machine use Market 0 0 1,000 No Cash 0 above sharehol goods ry rental Pric der Under Fair The same as Jianshe Spare same Services Market 83 83 200 No Cash 83 above Industry parts control Pric 19 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Joint venture Chongqi of Fair The same as Spare ng controlli Services Market 0.4 0.4 2 No Cash 0.4 above parts Jianya ng Pric sharehol der Joint venture of Fair The same as Transpo Fuyeda controlli Services Market 25.4 25.4 60 No Cash 25.4 above rtion ng Pric sharehol der China Accepta Changa Under nce of Fair The same as n and same Services repairin Market 103 103 500 No Cash 103 above subsidia control g Pric ries service Total -- -- 13,588.8 -- 38,212 -- -- -- -- -- Details of any sales return of a large Nil amount Give the actual situation in the report Upon the approval by the company's 2016 annual shareholders' meeting, the estimated total period where a forecast had been amount of the daily related transactions for 2017 is RMB 382.12 million(For details, please made for the total amounts of routine see the announcement on April 28, 2017, with Announcement No.: 2017-016). As of June related-party transactions by type to 30, 2017, the actual amount occurred was RMB 135.888 million. occur in the current period(if any) Reason for any significant difference between the transaction price and the Not applicable market refernce price (if applicable) 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. 20 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 4.Contact ofrelated credit and debt □ Applicable √ Not applicable No such cases in the reporting period. 5. Other significant related-party transactions □ Applicable √ Not applicable No such cases in the reporting period. XIII. Particulars about the non-operating occupation of funds by the Controlling shareholder and other related parties of the Company □Applicable √ Not applicable The company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the reporting period. XIV. Significant contracts and execution 1.Entrustments, contracting and leasing (1) Trusteeship □Applicable √ Not applicable No trusteeship, contract or leasing for the Company in reporting period. (2) Contract □ Applicable √ Not applicable No any contract for the Company in the reporting period. (3) Lease □Applicable √ Not applicable No any lease for the Company in the reporting period.. 2.Guarantees √Applicable□Not applicable (1)Guarantees In RMB’0000 21 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 External Guarantee (Exclude controlled subsidiaries) Guarante Relevant e Date of disclosure Complete for happening Actual Name of the date/No. of Amount of Guarantee Guarantee implemen associate (Date of mount of Company the Guarantee type term tation d signing guarantee guaranteed or not parties agreement) amount (Yes or no) Total amount of approved Total actually amount of external guarantee in the report 0 external guarantee in the 0 period(A1) report period(A2) Total amount of approved Total actually amount of external guarantee at the end of 0 external guarantee at the end 0 the report period(A3) of the report period(A4) Guarantee of the company for its subsidiaries Guarante Name of Complete Related Date of Actually e for the Amount of Guarantee implemen announcement date happening(date of guarantee Guarantee type related company guarantee term tation or and no. signing agreement) amount party(yes guaranteed not or no) Vehicle air conditione April 28,2017 3,500 February 16,2016 3,500 Joint liabilities 366 days Yes No r Vehicle air conditione April 28,2017 3,500 February 18,2016 3,500 Joint liabilities 366 days Yes No r Vehicle air conditione April 28,2017 2,800 May 12,2016 2,800 Joint liabilities 365 days Yes No r Vehicle air conditione April 28,2017 1,700 July 4,2016 1,700 Joint liabilities 365 days No No r Vehicle air conditione April 28,2017 3,000 September 21,2016 3,000 Joint liabilities 364 days No No r Vehicle air conditione April 28,2017 3,000 October 8,2016 3,000 Joint liabilities 364 days No No r Vehicle air conditione April 28,2017 2,450 October 10,2016 2,450 Joint liabilities 365 days No No r Vehicle air conditione April 28,2017 2,850 October 13,2016 2,850 Joint liabilities 365 days No No r Vehicle air conditione April 28,2017 4,200 October 17,2016 4,200 Joint liabilities 364 days No No r Vehicle air conditione April 28,2017 5,000 December 5,2016 5,000 Joint liabilities 364 days No No r 22 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Vehicle air conditione April 28,2017 3,500 January 23,2017 3,500 Joint liabilities 365days No No r Vehicle air conditione April 28,2017 3,500 January 24,2017 3,500 Joint liabilities 365 days No No r Vehicle air conditione April 28,2017 2,800 May 15,2017 2,800 Joint liabilities 184 days No No r Total amount of actual Total amount of approving occurred guarantee for guarantee for subsidiaries in 104,000 9,800 subsidiaries in reportperiod report period(B1) (B2) otal amount of actual occurred Total amount of approved guarantee for subsidiaries at guarantee for subsidiaries at the 104,000 32,000 the end of reporting period end of reporting period(B3) (B4) Guarantee of the subsidiaries for its subsidiaries Guarante Related Date of Complete Name of the Actually e for announcem Amount of happening(date Guarantee Guarantee implemen company guarantee related ent date and guarantee of signing type term tation or guaranteed amount party(yes no. agreement) not or no) Total amount of guarantee to Total guarantee quota to the the subsidiaries actually subsidiaries approved in the 0 0 incurred in the reporting reporting period (C1) period (C2) )otal balance of actual Total guarantee quota to the guarantee to the subsidiaries at subsidiaries approved at the end 0 0 the end of the reporting period of the reporting period (C3) (C4) Total of Company’s guarantee(namely total of the large three aforementioned) Total of guarantee in the Period Total of actual guarantee in 104,000 9,800 (A1+B1+C1) the Period(A2+B2+C2) Total of actual guarantee at Total of guarantee at Period-end 104,000 Period-end 32,000 (A3+B3+C3) (A4+B4+C4) The Company’s total guarantee(i.e.total of the first three main 114.37% items)(A4+B4+C4) Incluidng: Amount of guarantee for shareholders, actual controller and its 0 associated parties(D) 23 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 32,000 70% directly or indirectly(E) Proportion of total amount of guarantee in net assets of the 18,581 company exceed 50%(F) Total guarantee Amount of the abovementioned guarantees 32,000 (D+E+F) Description of the guarantee with complex method (2) Illegal providing of external guarantees □ Applicable √ Not applicable No such cases in the reporting period. 4. Other significant contract □ Applicable √ Not applicable No such cases in the reporting period. XV.Social responsibilities 1.Overview of the annual targeted poverty alleviation The company has no precise social responsibility for poverty alleviation in theperiodand bas no follow-up plan either. 2.Major environmental protection The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department XVI.Other material events √ Applicable □Not applicable The Company received the share frozen data of China Securities Depository and Clearing Co., Ltd Shenzhen Branch respectively on April 13, 2017,June 7 2017 and August 18 2017, thus knowing a total of 5,900,000 shares of the Company-that's held by the company's controlling shareholder Construction Electromechanical-has got judicial frozen by Chongqing Ba'nan District People's Court. The details were as follows: In connection to the contract dispute between Chongqing Xingyong Industrial Co., Ltd and Jianshe Mechanical and Electric, the applicant Xingyong Company filed the application for property preservation before litigation. Chongqing Ba'nan District People's Court issued the Document of Ruling-No.258 Zhibao Yu 0113-2017, ruled to freeze the bank deposit of RMB 5.1 million of the party the application against-namely Jianshe Mechanical and Electric-or to seal up (detain) other assets with that value. On April 12, 2017, the execution of freezing 5 million shares of the company-that's held by Jianshe Mechanical and Electric-was made, and such 24 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 shares account for 4.19% of the company's total share capital. In connection to the sales contracts dispute between Chongqing Jiantao Aluminum Co., Ltd and Jianshe Mechanical and Electric, the applicant Jiantao Company filed the application for preservation of property in litigation. Chongqing Ba'nan District People's Court issued the Document of Ruling-One of No.539 Zhibao Yu 0113-2017, ruled to freeze the bank deposit of RMB 2.85 million of the party the application against-namely Jianshe Mechanical and Electric-with sealing up (detaining) other assets with value corresponding to insufficient part if the frozen is not enough. On June 6, 2017, the execution of freezing 0.3 million shares of the company-that's held by Jianshe Mechanical and Electric -was made, and such shares account for 0.25% of the company's total share capital. In connection to the disputes over financial loan contracts between Chongqing Fuji Machinery Manufacturing Co., Ltd and Jianshe Mechanical and Electric , the applicant Fuji Company filed the application for property preservation. Chongqing Ba'nan District People's Court issued the Document of Ruling-One of No.482 Zhibao Yu 0113-2017, ruled to freeze the bank deposit of RMB 3.34 million of the party the application against-namely Jianshe Mechanical and Electric -with sealing up (detaining) other assets with value corresponding to insufficient part if the frozen is not enough. On June 6, 2017, the execution of freezing 0.3 million shares of the company-that's held by Jianshe Mechanical and Electric-was made, and such shares account for 0.25% of the company's total share capital. In connection to the sales contract dispute between Chongqing Lin Dian Yu Electromechanical Manufacturing Co Ltd and Construction Electromechanical, the applicant Lin Dian Yu Company filed the application for preservation of property. Chongqing Ba'nan District People's Court issued the Document of Ruling-One of No.779 Zhibao Yu 0113-2017, ruled to freeze the bank deposit of RMB 3 million of the party the application against-namely Construction Electromechanical-with sealing up (detaining) other assets with the value corresponding to the insufficient part if the frozen is not enough. On August 17, 2017, the execution of freezing 0.3 million shares of the company-that's held by Construction Electromechanical-was made, and such shares account for 0.25% of the company's total share capital. As of the date of this report, Jianshe Mechanical and Electric holds 84,906,250 shares of the Company, accounting for 71.13% of the total share capital of the Company. The total frozen shares of Jianshe Mechanical and Electric's holding shares of the company is 5,900,000 shares, accounting for 4.94% of the total share capital of the Company. The matter of judicial freezing of shares of Jianshe Mechanical and Electric 's holding shares of the company will not affect the company's production and operation, and the judicial dispose of its holding shares of the company will not affect the corporate control rights. Currently, Jianshe Mechanical and Electric been actively consulted with the above-said four companies, so as to resolve the litigation matters as soon as possible. XVII. Material events of subsidiaries √ Applicable □Not applicable The Company planned to transfer its holding equity of 51% stake of Shanghai Construction, and on December 5, 2016, the pre disclosure of such transfer was disclosed on the Shanghai United Assets and Equity Exchange. The detailed information of the underlying subject is as follows: Shanghai Construction Company was incorporated on February 28, 2001. The place of registration: No.588 Yangpai Road Nanqiao Town Fengxian District Shanghai City. The main business: Two wheeled motorcycle, light two wheeled motorcycle and the components manufacturing, processing and sales, moped motorcycle manufacturing, processing and sales; electric bicycles and related components manufacturing, processing and 25 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 sales, engaged in the import and export business of goods, self-owned housing leasing. Registered capital: RMB 16 million. The legal representative: Che Lianfu. As of the end of 2016, the total assets was RMB 13.43 million and the net assets was RMB 2.49 million which account for 0.93% of the company's most recent audited net assets. The business income of 2016 was RMB 14.65 million, the operating profit was 1.66 million and the net profit was RMB 0.9 million. Owned the state-owned land use rights of 32,324 square meters area (industrial) and the building area of 15,540.33 square meters in Fengxian District The Transfer of Shanghai Construction Equity is only in the pre-disclosure stage on the Property Rights Exchange, and it still needs the approval of the parties concerned, thus there is uncertainty, so please pay attention to the investment risks. For details, please refer to the company announcements published on Securities Times, Hong Kong Commercial Daily, and the Cninfo Network (cninfo.com.cn) dated on December 6,2016. VI. 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 Capitalizat Share ion of Bonus Proportio allotm common Other Subtotal Quantity shares n ent reserve fund I. Shares with trade 89,375,000 74.87% 0 0 0 0 0 89,375,000 74.87% restriction conditions 1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00% 2. State-owned legal 84,906,250 71.13% 0 0 0 0 0 84,906,250 71.13% person shares 3. Other domestic shares 4,468,750 3.74% 0 0 0 0 0 4,468,750 3.74% Incl. Shares held by 1,750,000 1.46% 0 0 0 0 0 1,750,000 1.46% domestic legal persons Domestic natural 2,718,750 2.28% 0 0 0 0 0 2,718,750 2.28% person shares 4. Share held by foreign 0 0.00% 0 0 0 0 0 0 0.00% investors Incl. Shares held by 0 0.00% 0 0 0 0 0 0 0.00% foreign legal persons Foreign natural 0 0.00% 0 0 0 0 0 0 0.00% person shares II. Shares without trading 30,000,000 25.13% 0 0 0 0 0 30,000,000 25.13% limited conditions II. Shares without trading 0 0.00% 0 0 0 0 0 0 0.00% limited conditions 26 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 1. Common shares in RMB 30,000,000 25.13% 0 0 0 0 0 30,000,000 25.13% 2. Foreign shares in 0 0.00% 0 0 0 0 0 0 0.00% domestic market 3. Foreign shares in 0 0.00% 0 0 0 0 0 0 0.00% overseas market 4. Others 119,375,000 100.00% 0 0 0 0 0 119,375,000 100.00% III. Total of capital shares 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. Change of shares with limited sales condition □ Applicable √Not applicable Ⅱ.Issuing and listing □ Applicable √Not applicable III. Shareholders and shareholding In Shares Total number of preferred Total number of common shareholders that had restored shareholders at the end of the 8,351 the 0 reporting period voting right at the end of the reporting period (if any) (note 8) Particulars about shares held above 5% by shareholders or top ten shareholders Number of Changes Number of share Proportion Amount of Amount of Shareholders Nature of shares held in pledged/frozen of shares restricted un-restricted shareholder at period reporting State of held(%) shares held shares held Amount -end period share Chongqing Jianshe State-owned 71.13% 84,906,250 0 84,906,250 0 Freeze 5,600,000 27 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Mechanical and Electric legal person Co., Ltd. Domestic Gu Zuocheng 1.89% 2,261,000 0 2,261,000 42,250 natural person Domestic Anhui Hengsheng non-state-own Economic Development 1.47% 1,750,000 0 1,750,000 0 ed legal Group Co., Ltd. person Domestic Liu Dan 0.86% 1,032,201 -21800 0 1,032,201 natural person GUOTAI JUNAN Overseas legal SECURITIES(HONGKO 0.54% 649,366 -67554 0 649,366 person NG) LIMITED Domestic Yu Lingfeng 0.52% 623,621 0 0 623,621 natural person Domestic Chen Xinqiang 0.51% 612,400 0 0 612,400 natural person Domestic Xu Yuanhui 0.51% 610,789 0 0 610,789 natural person Domestic Zhang Meilan 0.43% 513,560 0 0 513,560 natural person Domestic Feng Yonghui 0.42% 500,000 0 500,000 0 natural person There isn’t 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 Explanation on associated relationship accordance with ‘The rules of information disclosure on change of shareholding.’ among the aforesaid shareholders Foreign shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in concert’. Shareholding of top 10 shareholders of unrestricted shares Quantity of unrestricted shares held at Share type Name of the shareholder the end of the reporting period Share type Quantity Foreign shares placed Liu Dan 1,032,201 1,032,201 in domestic exchange GUOTAI JUNAN Foreign shares placed 649,366 649,366 SECURITIES(HONGKONG) LIMITED in domestic exchange Foreign shares placed Yu Lingfeng 623,621 623,621 in domestic exchange Foreign shares placed Chen Xinqiang 612,400 612,400 in domestic exchange Foreign shares placed Xu Yuanhui 610,789 610,789 in domestic exchange Zhang Meilan 513,560 Foreign shares placed 513,560 28 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 in domestic exchange Foreign shares placed Feng Yonghui 500,000 500,000 in domestic exchange Foreign shares placed Chen Houping 416,161 416,161 in domestic exchange Foreign shares placed Liu Guosheng 313,000 313,000 in domestic exchange CORE PACIFIC-YAMAICHI Foreign shares placed 293,299 293,299 INTERNATIONAL (H.K.) LIMITED in domestic exchange There isn’t any associated relationship between the sponsoring shareholder and the Action-in-concert among top 10 non-restricted other shareholders among the top-10 list. None of them are regarded as ‘Acting in current share holders, top 10 non-restricted concert’ in accordance with ‘The rules of information disclosure on change of current share holders and top 10 shareholders shareholding.’ Foreign shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in concert’. 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. IV. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable There was no any change of the controlling shareholder of the Company in the reporting period. Change of the actual controller in the reporting period □ Applicable √ Not applicable There was no any change of the actual controller of the Company in the reporting period. VII. Situation of the Preferred Shares □Applicable √Not applicable The Company had no preferred shares in the reporting period 29 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 VIII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives □Applicable √Not applicable There was no change in shareholding of directors, supervisors and senior management staffs, for the specific information please refer to the 2016 Annual Report. II. Changes in directors, supervisors and senior management staffs √ Applicable □ Not applicable Name Title Type Date Reason After the general election, continue Lv Hongxian Board chairman,director Be elected May 25,2017 to work as Board chairman Zhou After the general election, continue Director Be elected May 25,2017 Yongqiaqng to work as director After the general election, continue Ye Yuxin Director Be elected May 25,2017 to work as director After the general election, continue Yu Wenbiao Director Be elected May 25,2017 to work as director After the general election, continue Fan Aijun Director Be elected May 25,2017 to work as director After the general election, continue Hao Lin Director Be elected May 25,2017 to work as director After the general election, continue Deng Gang Employee director Be elected May 25,2017 to work as director After the general election, continue Li Dingqing Independent director Be elected May 25,2017 to work as Independent director After the general election, continue Wang Jun Independent director Be elected May 25,2017 to work as Independent director After the general election, continue Peng Jue Independent director Be elected May 25,2017 to work as Independent director After the general election, continue Liu Zhiqiang Independent director Be elected May 25,2017 to Independent director After the general election, continue Chairman of the supervisory Lv Cuiwei Be elected May 25,2017 to work as the chairman of the board committee, Supervisor of supervisors After the general election, continue Tao Xuqian Supervisor Be elected May 25,2017 to work as Supervisor Wu Haiwen Supervisor Be elected May 25,2017 After the general election, continue 30 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 to work as Supervisor After the general election, continue Xu Dongxia Employee supervisor Be elected May 25,2017 to work as Employee supervisor After the general election, continue Wu Yangmin Employee supervisor Be elected May 25,2017 to work as Employee supervisor After the general election, the board Fan Aijun GM Appointment May 25,2017 of directors appointed Zhang After the general election, the board Deputy GM Appointment May 25,2017 Xiangdong of directors appointed Deputy GM.CFO, Secretary After the general election, the board Xue Gangyi Appointment May 25,2017 to the board of directors of directors appointed After the general election, the board Zhang Guofeng Deputy GM Appointment May 25,2017 of directors appointed After the general election, the board Deng Xianming Deputy GM Appointment May 25,2017 of directors appointed After the general election, the board Cao Bing Deputy GM Appointment May 25,2017 of directors appointed After the general election, no longer Wang Mao Employee supervisor Left May 25,2017 served as supervisors 31 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 IX. Corporate Bond 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 32 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 X. Financial Report I. Audit report Has this semi-annual report been audited? □ Yes √ No The semi-annual financial report has not been audited. II. Financial statements Currency unit for the statements in the notes to these financial statements:RMB 1. Consolidated balance sheet Prepared by: Chongqing Jianshe Motorcycle Co., Ltd. June 30, 2017 In RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 295,278,417.88 514,414,822.57 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 62,644,057.09 14,907,890.35 Account receivable 255,105,669.86 255,587,439.92 Prepayments 8,227,304.05 10,891,933.02 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 8,142,426.73 8,579,890.08 Repurchasing of financial assets 33 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Inventories 154,692,361.34 201,207,030.54 Assets held for sales Non-current asset due in 1 year Other current asset 1,836,709.63 1,734,063.70 Total of current assets 785,926,946.58 1,007,323,070.18 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 81,252,694.41 83,178,112.31 Property investment 112,986,190.01 115,326,025.61 Fixed assets 315,059,363.89 325,843,861.71 Construction in progress 4,176,362.84 2,438,832.43 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 11,540,143.86 11,696,305.26 R & D petrol Goodwill Long-germ expenses to be amortized 1,744,336.65 2,471,588.65 Differed income tax asset 1,816,875.69 1,816,875.69 Other non-current asset 6,908,228.33 9,240,209.19 Total of non-current assets 535,484,195.68 552,011,810.85 Total of assets 1,321,411,142.26 1,559,334,881.03 Current liabilities Short-term loans 284,500,000.00 224,500,000.00 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities 34 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Bill payable 425,710,000.00 718,560,000.00 Account payable 190,022,762.43 193,368,485.45 Advance payment 2,529,303.47 9,126,126.31 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 3,800,016.29 2,629,812.54 Tax payable 16,443,532.01 16,163,190.70 Interest payable Dividend payable Other account payable 39,280,129.46 40,693,888.64 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liability due in 1 year 53,400,000.00 36,100,000.00 Other current liability Total of current liability 1,015,685,743.66 1,241,141,503.64 Non-current liabilities: Long-term loan 24,490,000.00 48,590,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable Long-term payable employees’s remuneration Special payable Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total non-current liabilities 24,490,000.00 48,590,000.00 Total of liability 1,040,175,743.66 1,289,731,503.64 Owners’ equity Share capital 119,375,000.00 119,375,000.00 35 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 958,575,094.29 958,575,094.29 Less:Shares in stock Other comprehensive income Special reserves Surplus reserves 125,686,000.00 125,686,000.00 Common risk provision Undistributed profit -923,834,683.28 -935,253,002.64 Total of owner’s equity belong to the parent company 279,801,411.01 268,383,091.65 Minority shareholders’ equity 1,433,987.59 1,220,285.74 Total of owners’ equity 281,235,398.60 269,603,377.39 Total of liabilities and owners’ equity 1,321,411,142.26 1,559,334,881.03 Legal Representative:Lv Hongxian Person in charge of accounting:Xue Gangyi Accounting Dept Leader: Niu Yanli 2. Balance sheet of Parent Company In RMB Items Year-end balance Year-beginning balance Current asset: Monetary fund 146,182,096.26 290,491,337.89 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable Account receivable 4,307.10 4,307.10 Prepayments 3,140,497.04 1,182,599.45 Interest receivable Dividend receivable Other account receivable 5,281,967.85 5,021,347.04 Inventories 36 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Assets held for sales Non-current asset due in 1 year Other current asset 131,046.64 Total of current assets 154,608,868.25 296,830,638.12 Non-current assets: Disposable financial asset Expired investment in possess Long-term receivable Long term share equity investment 249,412,694.41 251,338,112.31 Property investment 112,986,190.01 115,326,025.61 Fixed assets 67,114,422.76 70,991,009.78 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets R & D petrol Goodwill Long-germ expenses to be amortized Deferred income tax asset Other non-current asset Total of non-current assets 429,513,307.18 437,655,147.70 Total of assets 584,122,175.43 734,485,785.82 Current liabilities Short-term loans Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 142,850,000.00 Account payable 137,243,657.31 147,819,149.98 Advance payment 180,083.38 180,083.38 Employees’ wage payable 554,830.16 14,467.08 Tax payable 16,267,804.23 15,945,044.76 37 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Interest payable Dividend payable Other account payable 234,772,026.24 240,371,017.71 Liabilities held for sales Non-current liability due in 1 year Other current liability Total of current liability 389,018,401.32 547,179,762.91 Non-current liabilities: Long-term loan Bond payable Including:preferred stock Sustainable debt Long-term payable Employees’ wage payable Special payable Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total of Non-current liabilities Total of liability 389,018,401.32 547,179,762.91 Owners’ equity Share capital 119,375,000.00 119,375,000.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 958,575,094.29 958,575,094.29 Less:Shares in stock Other comprehensive income Special reserves Surplus reserves 125,686,000.00 125,686,000.00 Undistributed profit -1,008,532,320.18 -1,016,330,071.38 Total of owners’ equity 195,103,774.11 187,306,022.91 Total of liabilities and owners’ equity 584,122,175.43 734,485,785.82 38 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 3.Consolidated Income Statement In RMB Same period of the previous Items Report period year I. Income from the key business 550,074,257.84 468,177,291.88 Incl:Business income 550,074,257.84 468,177,291.88 Interest income Insurance fee earned Fee and commission received II. Total business cost 540,112,621.78 460,454,082.01 Incl:Business cost 456,540,934.80 394,452,147.33 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 4,459,150.00 1,499,484.01 Sales expense 12,358,836.00 12,291,404.24 Administrative expense 46,644,017.51 36,444,955.02 Financial expenses 18,617,069.49 16,021,092.40 Asset impairment loss 1,492,613.98 -255,000.99 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 1,994,582.10 1,216,436.70 Incl: investment gains from affiliates 1,994,582.10 1,216,436.70 Gains from currency exchange(“-”for loss) Other income III. Operational profit(“-”for loss) 11,956,218.16 8,939,646.57 Add :Non-operational income 443,547.75 459,509.47 Including:Income from disposal of non-current assets 200,962.58 Less:Non business expenses 167,158.10 318,470.87 Incl:Loss from disposal of non-current assets 142,770.96 39 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 IV.Total profit(“-”for loss) 12,232,607.81 9,080,685.17 Less:Income tax expenses 600,586.60 300,493.66 V. Net profit 11,632,021.21 8,780,191.51 Net profit attributable to the owners of parent company 11,418,319.36 8,502,845.42 Minority shareholders’ equity 213,701.85 277,346.09 VI. Other comprehensive income Net of profit of other comprehensive income attributable to owners of t he parent company. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can n ot be reclassified into profit or loss. (II)Other comprehensive income that will be reclassified into profit or l oss. 1.Other comprehensive income under the equity method investee can b e reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale financia l assets 3.Held-to-maturity investments reclassified to gains and losses of availa ble for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other 7.Net of profit of other comprehensive income attributable to Minority shareholders’ equity VII. Total comprehensive income 11,632,021.21 8,780,191.51 Total comprehensive income attributable to the owner of the parent 11,418,319.36 8,502,845.42 company Total comprehensive income attributable minority shareholders 213,701.85 277,346.09 VIII. Earnings per share (I)Basic earnings per share 0.0957 0.0712 (II)Diluted earnings per share 0.0957 0.0712 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0, last period the combined party realized RMB 0. Legal Representative:Lv Hongxian 40 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Person in charge of accounting:Xue Gangyi Accounting Dept Leader: Niu Yanli 4. Income statement of the Parent Company In RMB Items Amount in this period Amount in last period I. Income from the key business 339,527,118.70 336,824,318.43 Incl:Business cost 305,125,226.46 313,550,271.27 Business tax and surcharge 841,394.14 241,560.44 Sales expense Administrative expense 22,238,575.73 10,596,697.69 Financial expenses 5,993,807.50 4,913,633.54 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 1,994,582.10 1,216,436.70 Incl: investment gains from affiliates 1,994,582.10 1,216,436.70 Other income II. Operational profit(“-”for loss) 7,322,696.97 8,738,592.19 Add :Non-operational income 207,862.58 Including:Income from disposal of non-current assets Less:Non business expenses -267,191.65 26,696.96 Incl:Loss from disposal of non-current assets 142,770.96 III.Total profit(“-”for loss) 7,797,751.20 8,711,895.23 Less:Income tax expenses IV. Net profit(“-”for net loss) 7,797,751.20 8,711,895.23 V.Net of profit of other comprehensive income (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can n ot be reclassified into profit or loss. (II)Other comprehensive income that will be reclassified into profit or l oss. 41 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 1.Other comprehensive income under the equity method investee can b e reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale financia l assets 3.Held-to-maturity investments reclassified to gains and losses of availa ble for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other VI. Total comprehensive income 7,797,751.20 8,711,895.23 VII. Earnings per share: (I)Basic earnings per share 0.0653 0.0730 (II)Diluted earnings per share 0.0653 0.0730 5. Consolidated Cash flow statement In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or rending of services 233,913,811.59 238,598,416.24 Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Net increase of inter-bank fund received Net increase of trade financial asset disposal Net increase of repurchasing business Tax returned 4,086,887.50 3,714,512.19 Other cash received from business operation 8,555,466.77 4,572,178.51 Sub-total of cash inflow 246,556,165.86 246,885,106.94 42 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Cash paid for purchasing of merchandise and services 110,250,299.46 138,732,260.06 Net increase of client trade and advance Net increase of savings n central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 25,208,850.06 27,812,463.74 Taxes paid 17,335,347.98 9,112,317.40 Other cash paid for business activities 30,626,576.45 9,288,327.95 Sub-total of cash outflow from business activities 183,421,073.95 184,945,369.15 Cash flow generated by business operation, net 63,135,091.91 61,939,737.79 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 4,000,000.00 3,400,000.00 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received Sub-total of cash inflow due to investment activities 4,000,000.00 3,400,000.00 Cash paid for construction of fixed assets, intangible assets 5,343,707.62 12,945,403.02 and other long-term assets Cash paid as investment Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 5,343,707.62 12,945,403.02 Net cash flow generated by investment -1,343,707.62 -9,545,403.02 III.Cash flow generated by financing Cash received as investment Incl: Cash received as investment from minor shareholders Cash received as loans 222,500,000.00 Cash received from bond placing Other financing –related ash received 548,004,868.94 1,338,108,850.64 43 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Sub-total of cash inflow from financing activities 548,004,868.94 1,560,608,850.64 Cash to repay debts 26,300,000.00 412,800,000.00 Cash paid as dividend, profit, or interests 22,593,991.30 17,899,685.36 Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 667,171,141.01 1,089,473,618.24 Sub-total of cash outflow due to financing activities 716,065,132.31 1,520,173,303.60 Net cash flow generated by financing -168,060,263.37 40,435,547.04 IV. Influence of exchange rate alternation on cash and cash 0 equivalents V.Net increase of cash and cash equivalents -106,268,879.08 92,829,881.81 Add: balance of cash and cash equivalents at the beginning of term 273,768,758.46 23,643,515.81 VI ..Balance of cash and cash equivalents at the end of term 167,499,879.38 116,473,397.62 6. Cash flow statement of the Parent Company In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or rending of services 132,211,763.35 140,584,159.57 Tax returned Other cash received from business operation 286,365.25 162,250.98 Sub-total of cash inflow 132,498,128.60 140,746,410.55 Cash paid for purchasing of merchandise and services 81,048,957.61 81,695,480.33 Cash paid to staffs or paid for staffs 9,247,217.96 13,993,730.48 Taxes paid 5,726,931.81 4,961,700.84 Other cash paid for business activities 1,982,919.53 984,106.09 Sub-total of cash outflow from business activities 98,006,026.91 101,635,017.74 Cash flow generated by business operation, net 34,492,101.69 39,111,392.81 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 4,000,000.00 3,400,000.00 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 44 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Sub-total of cash inflow due to investment activities 4,000,000.00 3,400,000.00 Cash paid for construction of fixed assets, intangible assets 40,000.00 450,000.00 and other long-term assets Cash paid as investment Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 40,000.00 450,000.00 Net cash flow generated by investment 3,960,000.00 2,950,000.00 III.Cash flow generated by financing Cash received as investment Cash received as loans 202,500,000.00 Cash received from bond placing Other financing –related ash received 383,791,136.86 1,538,413,233.34 Sub-total of cash inflow from financing activities 383,791,136.86 1,740,913,233.34 Cash to repay debts 379,300,000.00 Cash paid as dividend, profit, or interests 8,540,566.36 5,375,548.25 Other cash paid for financing activities 515,152,973.17 1,295,397,905.00 Sub-total of cash outflow due to financing activities 523,693,539.53 1,680,073,453.25 Net cash flow generated by financing -139,902,402.67 60,839,780.09 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash equivalents -101,450,300.98 102,901,172.90 Add: balance of cash and cash equivalents at the beginning of term 247,582,579.15 4,486,524.01 VI ..Balance of cash and cash equivalents at the end of term 146,132,278.17 107,387,696.91 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB Amount in this period Owner’s equity Attributable to the Parent Company Other Equity Minor Other Commo Total of Items instrusment Share Less: Speciali Attribut shareho Capital Compre Surplus n risk owners’ Capita prefer Shares zed able lders’ reserves hensive reserves provisio equity l red Sustai Other in stock reserve profit equity Income n stock nable 45 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 debt 119,37 -935,25 I.Balance at the 958,575 125,686 1,220,2 269,603 5,000. 3,002.6 end of last year ,094.29 ,000.00 85.74 ,377.39 00 4 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 119,37 -935,25 958,575 125,686 1,220,2 269,603 beginning of 5,000. 3,002.6 ,094.29 ,000.00 85.74 ,377.39 current year 00 4 III.Changed in the 11,418, 213,701 11,632, current year 319.36 .85 021.21 (1)Total 11,418, 213,701 11,632, comprehensive 319.36 .85 021.21 income (II)Investment or decreasing of capital by owners 1.Ordinary Share s invested by hare holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment 1.Providing of surplus reserves 46 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2.Providing of common risk provisions 3.Allotment to the owners (or shareholders) 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V). Special reserves 1. Provided this year 2.Used this term (VI)Other 119,37 -923,83 IV. Balance at the 958,575 125,686 1,433,9 281,235 5,000. 4,683.2 end of this term ,094.29 ,000.00 87.59 ,398.60 00 8 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Other Equity Minor instrusment Total of Items Other Commo Less: Speciali Attribut shareho share Capital Compre Surplus n risk owners’ prefer Shares zed able lders’ Capita Sustai reserves hensive reserves provisio equity red Other in stock reserve profit equity nable Income n stock debt 47 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 119,37 -947,52 I.Balance at the 958,575 125,686 781,632 256,897 5,000. 0,008.7 end of last year ,094.29 ,000.00 .77 ,718.28 00 8 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 119,37 -947,52 958,575 125,686 781,632 256,897 beginning of 5,000. 0,008.7 ,094.29 ,000.00 .77 ,718.28 current year 00 8 III.Changed in the 12,267, 438,652 12,705, current year 006.14 .97 659.11 (1)Total 12,267, 438,652 12,705, comprehensive 006.14 .97 659.11 income (II)Investment or decreasing of capital by owners 1.Ordinary Share s invested by hare holders 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the owners (or shareholders) 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of 48 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (VI )Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this term (V) Special reserves 1. Provided this year 2.Used this term (VI)Other 119,37 -935,25 IV. Balance at the 958,575 125,686 1,220,2 269,603 5,000. 3,002.6 end of this term ,094.29 ,000.00 85.74 ,377.39 00 4 8. Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Amount in this period Other Equity instrusment Other Less: Total of Items Share Capital Compreh Specialize Surplus Attribut preferre Sustain Shares in able owners’ cpaital Other reserves ensive d reserve reserves profit d stock able stock equity Income debt -1,016,3 119,375, 958,575,0 125,686,0 187,306,0 30,071. I.Balance at the 000.00 94.29 00.00 22.91 end of last year 38 Add: Change of 49 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 accounting policy Correcting of previous errors Other II.Balance at the -1,016,3 119,375, 958,575,0 125,686,0 187,306,0 beginning of 30,071. 000.00 94.29 00.00 22.91 current year 38 III.Changed in the 7,797,7 7,797,751 current year 51.20 .20 (1)Total 7,797,7 7,797,751 comprehensive 51.20 .20 income (II)Investment or decreasing of capital by owners 1.Ordinary Share s invested by hareh olders 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the owners (or shareholders) 4.Other (III)Profit allotment 1.Providing of surplus reserves 2.Allotment to the owners (or shareholders) 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or 50 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other -1,008,5 IV. Balance at the 119,375, 958,575,0 125,686,0 195,103,7 32,320. end of this term 000.00 94.29 00.00 74.11 18 Amount in last year In RMB Amount in last year Other Equity instrusment Other Less: Total of Items Share Capital Compreh Specialize Surplus Attribut preferre Sustain Shares in able owners’ Capital Other reserves ensive d reserve reserves profit d stock able stock equity Income debt -1,015,1 119,375, 958,575,0 125,686,0 188,482,8 53,268. I.Balance at the 000.00 94.29 00.00 25.30 end of last year 99 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the -1,015,1 119,375, 958,575,0 125,686,0 188,482,8 beginning of 53,268. 000.00 94.29 00.00 25.30 current year 99 51 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 III.Changed in the -1,176,8 -1,176,80 current year 02.39 2.39 (1)Total -1,176,8 -1,176,80 comprehensive 02.39 2.39 income (II)Investment or decreasing of capital by owners 1.Ordinary Share s invested by hareh olders 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the owners (or shareholders) 4.Other (III)Profit allotment 1.Providing of surplus reserves 2.Allotment to the owners (or shareholders) 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other 52 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (V) Special reserves 1. Provided this year 2.Used this term (VI)Other -1,016,3 IV. Balance at the 119,375, 958,575,0 125,686,0 187,306,0 30,071. end of this term 000.00 94.29 00.00 22.91 38 III.Corporate information Chongqing Jianshe Motorcycle Co., Ltd. (hereinafter referred to as the "Company", "Company" or "Chongqing Jianshe Motorcycle ") was jointly set up in July 1995 by the Construction Industry (Group) Co., Ltd. and China North Industries Shenzhen Corporation. The company now holds a unified social credit code for the 915000007474824231 business license, The Company was listed in July 1995 at the Shenzhen Stock Exchange. The Company is engaged in the manufacturing industry. As at December 31, 2016, the Company issued 119,375,000 shares in total and had the registered capital of 119,375,000. The registration place: NO.1, Jianshe Road Huaxi Industry Park, Banan District, Chongqing; the headquarters address: Banan District, Chongqing Municipality. Legal representative: Li Huaguang. The main business activities: research and development, processing, manufacturing and related technical services of Motorcycles, auto parts, accessories, machinery products, design , manufacturing and related technical services of tooling (except for those subject to national special provisions) ; R & D, production and sales of motorcycle engines; research , development and processing of mechanical and electrical products, home appliances, bicycles, environmental protection product; imports, wholesale, retail, commission agency (except auction) of similar products of these products. The parent company and the actual controller of the Company is China South Industries Group Corporation, and the ultimate controller of the Company is the State-owned Assets Supervision and Administration Commission (SASAC). The disclosure of the financial statements was approved by the Board of Directors on August 25,2017. As at June 30, 2017, the subsidiaries included in the scope of consolidated financial statements of the Company are presented as set out below: Name of the subsidiary Chongqing Jianshe Automobile A/C Co., Ltd. Shanghai Jianshe Motorcycle Co., Ltd. See "Note 8 Change in the scope of consolidation" and "Note 9 Interests in other entities" for details of scope consolidated financial statements and the change therein. IV.Basis of preparation for financial statements 1.Basis of preparation The Company prepares the financial statements on the basis of going concern, according to actual transactions and events, the subsequently issued Accounting Standards for Business Enterprises – Application Guidelines, and the Accounting Standards for Business Enterprises – Interpretations and other relevant provisions (hereinafter collectively referred to as “Accounting Standards for Business Enterprises”), as well as Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 - General Provisions on Financial Reports issued by China Securities Regulatory Commission. 2.Going concern 53 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The Company was on a going concern basis in 12 months as of the end of the current reporting period and was not affected by any material event having impact on the going concern. V. Principal accounting policies and accounting estimates Specific accounting policies and accounting estimates: The disclosure as set out below cover the specific accounting policies and accounting estimates developed by the Company in accordance with the actual production and management features. See "Note 3.11 Provision for bad debts of accounts receivables, "Note 3.12 Inventories", "Note 3.16 Fixed assets", "Note 3.19 Intangible assets" and "3.25 Revenues" for details. 1.Statements on Compliance with Accounting Standards for Business Enterprises The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the Company’s financial position, operating results and cash flows, etc. for the reporting period. 2.Accounting period The accounting year is from January 1 to December 31. 3.Operating cycle The Company has an operating cycle of 12 months. 4.Functional currency The functional currency is Renminbi. 5.Accounting treatments of the combination of enterprises under common control and the combination of enterprises not under the common control Business combination under common control: The assets and liabilities acquired by the Company in a business combination are stated at the book value of the assets and liabilities (including the goodwill arising from the acquisition of the acquiree by the ultimate controller) of the acquiree on the combination date. The stock premium in the capital reserve is adjusted according to the difference between the book value of net assets acquired through combination and the book value of consideration paid for the combination (or total par value of shares issued). If the stock premium in the capital reserves is insufficient to cover the difference, the remaining amount shall be charged against retained earnings. Combination of enterprises not under the common control: The assets paid and liabilities incurred or assumed by the Company on the acquisition date for the business combination are measured at their fair values, and the difference between the fair value and book value is charged to the current profit or loss. The Company shall recognize the difference of the combination costs in excess of the fair value of the identifiable net assets acquired from the acquiree as goodwill. The difference of the combination costs in short of the fair value of the identifiable net assets acquired from the acquiree is charged to the current profit and loss after review. The intermediary service charges incurred for audit, legal service, consulting services and other direct relevant expenses are charged to the current profit and loss; the transaction costs incurred for issuance of equity securities for business combination offest the equities. 6.Preparation of consolidated financial statements 1.Scope of consolidation The scope of consolidated financial statements is determined on the basis of control, and all subsidiaries (including the divisable portion of the investee under the control of the Company) are included in the consolidated financial statements. 2.Combination procedures 54 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The Company prepares the consolidated financial statements on the basis of the financial statements of itself and its subsidiaries, according to other relevant information. When preparing the consolidated financial statements, the Company regards the whole group as an accounting entity to reflect the overall financial position, operating results and cash flow of the Group, in accordance with requirements of relevant accounting standards for the recognition, measurement and presentation, on the basis of the uniform accounting policies. The accounting polidies and accounting period adopted by the subsidiaries included in the scope of consolidated financial statements are in line with those adopted by the Company. In case any disrepancy between the accounting policies and accounting period adopted by the subsidiary and those adopted by the Company, the adjustment will be made in light of the accounting policies and accounting period adopted by the Company, when the consolidated financial statements are prepared.The financial statements of the subsidiary acquired through the combination of enterprises not under common control are adjusted on the basis of the fair value of the identifiable net assts on the acquisition date. The financial assets of the subsidiary acquired through the combination of enterprises under the common control are adjusted on the basis of the book value of the assets and liabilities (including the goodwill arising from the acquisition of such subsidiary by the ultimate controller) as stated in the financial statements of the ultimate controller. The owners' equities, current net profit or loss and current comprehensive income attributable to minority shareholders are separately presented under the owners' equities item of the consolidated balance sheet, net profit item and total comprehensive income item of the consolidated income statement, respectively. Where the current losses attributable to minority shareholders of the subsidiary exceed the owners' equities attributable to the same at the period beginning, the difference between them will offset the minority equity. (1) Increase of the subsidiary or business In case of increase of subsidiary or business as a result of combination of enterprises under common control during the reporting period, the beginning amount stated in the consolidated balance sheet will be adjusted; the income, expense and profit generated from the subsidiary or business from the beginning of the period of combination to the end of reporting period will be included in the consolidated statement of cash flows, with the adjustment made to the relevant items of the comparative statement, as if the reporting entity after the combination still existed from the beginning of control of the ultimate controller. Where the additional investment or other reason leads to the control over the investee under the common control, all entities considered to take a part in the combination will be adjusted to the extent that they are in the current status as they come to be under the control of the ultimate controller. The retained earnings or the current profit or loss at the period beginning during the statement period are offset by equity investment held before the control over the mergee is obtained, and the equity investments held before the control over the acquiree is obtained, and the related profit or loss, other comprehensive income and change in other net assets that are recognized during the period which starts on the later of the date when the original equities are obtained and the date when both merger and mergee are under the common control and ends on the combination date, respectively. In case of increase of subsidiary or business during the reporting period as a result of combination of enterprises not under the common control, the beginning amount stated in the consolidated balance sheet will not be adjusted; the income, expense and profit generated from such subsidiary or business from the acquisition date to the end of reporting period will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the acquisition date to the end of reporting period will be incldued in the consolidated statement of cash flows. Where the additional investment or other reason leads to the control over the investee not under the common control, the equities of the mergee held before the acquisition date will be remeasured at the fair value of such equities on the acquisition date, and the difference between the fair value and book value thereof will be charged to the current investment income. Where the equities of the acquiree held before the acquisition date involves the change in other comprehensive income or in other owners' equities other than the net profit or loss, other comprehensive income and profit distribution, the change in other comprehensive income or other owners' equities will be converted into tthe investment income for the period covering the acquisition date, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee. (2) Disposal of the subsidiary or business a. General method of treatment In case of treatment of subsidiary or business during the reporting, the the income, expense and profit generated 55 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 from such subsidiary or business from the period beginning to the disposal date will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the period beginning to the disposal date will be incldued in the consolidated statement of cash flows. Where the control over the investee is lost due to the disposal of some of equity investments or other reasons, the remaining equity investment after disposal will be re-measured at fair value on the day when the control is lost.The sum of the consideration received for disposal of equities and the fair value of the remaining equities, less the difference between the net assets of the former subsidiary of which the continuous calculation starts from the acquisition date or combination date and the goodwill, should be charged to the investment income for the period during which the control is lost.Changes in other comprehensive income related to the equity investment in the former subsidiary or in owners' equities other than the net profit or loss, other comprehensive income and profit distribution are converted into the current investment income upon the loss of control, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee. b. Disposal of subsidiary by stages In case of disposal of investment in the equity of subsidiary by stages through a number of transactions, such transactions will be treated as a package deal, provided that the terms and conditions on and the economic effect of the equity investment in the subsidiary meet one of more of the following conditions: ⅰ. These transactions are entered into considering their effects are considered; ⅱ. These transactions can lead to a complete business result as a whole; ⅲ. The occurrence of a transaction depends on the occurrence of at least one of others; and ⅳ. A single transaction is deemed uneconomical, but the economical efficiency can be seen when it is put together with other transactions; Where the transctions involved in the disposal of the equity investment in the subsidiary are package deals, the Company will treat each transaction as the one involved in the disposal of the subsidiary with loss of control; however, the difference between the consideration for each disposal before the loss of control and the net assets of such subsidiary corresponding to the disposal of investment will be recognized as other comprehensive income in the consolidated financial statements, and will be transferred to the loss or profit for the period during which the control is lost, upon the loss of control. Where the transctions involved in the disposal of the equity investment in the subsidiary are not package deals, these transactions will be treated according to the policies on the disposal of part of the equity investments in the subsidiary without loss of control, before the loss of control; or treated in the general treatment method of disposa of subsidiary, upon the loss of control. (3) Acquisition of minority equity of subsidiary The stock premium under the capital reserve in the consolidated balance sheet is adjusted at the difference between the long-term equity investment newly acquired as a result of acquisition of minority equity and the net assets of the subsidiary attributable to the Company, of which the continuous calculation starts from the acquisition date (or combination date); and the retained earnings will be adjusted if the stock premium under the capital reserve is insufficient as to the offset. (4) Disposal of part of the equity investments in the subsidiary without loss of control The stock premium under the capital reserve in the consolidated balance sheet is adjusted at the difference between the consideration received for the disposal of part of the long-term equity investments in the subsidiary without loss of control and the net assets of the subsidiary attributable to the Company, of which the continuous calculation starts from the acquisition date (or combination date); and the retained earnings will be adjusted if the stock premium under the capital reserve is insufficient as to the offset. 56 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 7.Classification and accounting treatment of joint venture arrangement Joint venture arrangement is classified into joint operation and joint ventures. In terms of the joint operation, the Company is the joint venturer under the joint venture arrangement and is entitled to the assets and bear the liabilities under such arrangement. The Company recognizes the following items in relation with the share of interest in the joint operation, and conducts the accounting treatment of the the said items according to the provisions of Accounting Standards for Enterprises: (1) Recognition of the assets held separately by the Company and of the assets held by the Company jointly others in proportion; (2) Recognition of the liabilities separately borne by the Company and of the liabilities borne by the Company jointly others in proportion; (3) Recognition of proportioned income generated attributable to the Company as one of the co-operators; (4) Recognition of income generated fattributible to the Company as one of the co-sellers; (5) Recognition of the expenses incurred separately and the proportioned expenses incurred by the Company as one of the co-opeartors. See "Note 3.14 Long-term equity investments" for detailed of accounting policies on the investment of the Company in joint ventures. 8.Recognition criteria of cash and cash equivalents For the purpose of preparing the statement of cash flows, the term “cash” refers to cash on hand and deposits of that are readily available for payment. And the term “cash equivalents” refers to short-term (maturing within three months from acquisition) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. 9.Foreign currency business and foreign currency translation 1.Foreign currency business: Transactions denominated in foreign currency are translated into RMB for accounting purpose at the spot exchange rate on the day when the transaction occurs. The balances of foreign currency monetary items are converted at the spot exchange rate prevailing on the balance sheet date. The exchange differences arising from the conversion, other than those arising from specific-purpose borrowings in foreign currencies related to acquisition and construction of assets eligible for capitalization, which shall be measured in accordance with principle of capitalization of the borrowing costs, shall be charged to the current profit or loss. 2.Translation of financial statement denominated in foreign currency The asset and liability items in the balance sheet shall be converted at the spot exchange rates prevailing on the balance sheet date. Except retained profit, the owners’ equity items shall be converted at the spot exchange rates on the occurrence date.The income and expense items in the income statement shall be converted at the spot exchange rates which are determined by systematic and reasonable methods and similar to the spot exchange rate on the date of occurrence of transaction. On disposal of a foreign operation, the difference arising from the converstion of financial statements denominated in foreign currency and related to such foreign operation should be transferred to the current gain or loss on disposal, from the owners' equities. 57 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 10.Financial instruments Financial instruments include financial assets, financial liabilities and equity instruments. 1 Classification of financial instruments Upon the initial recognition, fFinancial assets and liabilities are classified into the following categories according to the purpose of acquisition: the financial assets or financial liabilities measured at fair value through current profit and loss, including financial assets or financial liabilities held for trading (and those financial assets or financial liabilities directly designated under this category), held-to-maturity investments, receivables, financial assets available for sale and other financial liabilities, etc. 2.Recognition and measurement of financial instruments (1) Financial assets (financial liabilities) measured at fair value through current profit and loss Financial assets (financial liabilities) are initially stated at fair values when acquired (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn), and relevant transaction expenses are included in the current profit and loss. The interests or cash dividends to be received during the holding period are recognized as investment income. Change in fair values is included in the current profit and loss at the end of the period. Upon the disposal, the difference between the fair value and initial book-entry value is recognized as investment income upon disposal; meanwhile, adjustment is made to gains or losses from changes in fair values. (2) Held-to-maturity investments Held-to-maturity investments are initially recorded at fair values when acquired (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn). The interest income is calculated and recognized at amortized cost and effective interest rates (or the nominal interest rate, if there is small difference between the effective interest rate and the nominal interest rate) and is charged to the investment income. The effective interest rates are determined upon acquisition and remain unchanged during the expected remaining period, or a shorter period if applicable. Difference between the proceeds and the book value of the investment is recognized as investment income upon disposal. (3) Accounts receivable For creditor’s rights receivable arising from external selling commodities or providing service by the Company and other creditor's rights in respect of liability instruments of other enterprises (excluding those quoted in an active market) held by the Company, including accounts receivable, other receivables, notes receivables, prepayments, long-term receivables etc., the initial recognition amount shall be the contract price or agreed price receivable due from purchasing party. The initial amount of the accounts receivable with financing nature are recognized based on the present value. The difference between the amount obtained and the book value of the accounts receivable is included in current profit and loss upon recovery or disposal. (4) Available-for-sale financial assets Available-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn) and transaction costs when acquired. The interests or cash dividends to be received during the holding period are recognized as investment income. Available-for-sale financial assets are measured at fair value at the end of the period, and changes in fair value are included in the capital reserves (other capital reserves). those equity instrument investments not quoted in an active market and whose fair value cannot be reliably measured, and the derivative financial assets linked to and settled by way of delivery of such equity investments are measured at the cost. Difference between the proceeds and the book value of the financial assets is recognized as gain or loss on investment upon disposal; meanwhile, amount of disposal corresponding to the accumulated change in fair value which is originally and directly included in the owners’ equity shall be transferred out and charged to the current gains or losses. (5) Other financial liabilities 58 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Other financial liabilities are initially recognized at the sum of fair value and transaction expenses. The subsequent measurement is based on amortized costs. They are subsequently measured at amortized cost. 3.Recognition and measurement for transfer of financial assets If the Company has transferred nearly all of the risks and rewards relating to the ownership of the financial assets to the transferee, they shall be derecognized. If it retains nearly all of the risks and rewards relating to the ownership of the financial assets, they shall not be derecognized. In judging whether the transfer of a financial asset meets the above requirements of derecognizing financial assets, the principle of substance over form is adopted. The Company divides the transfer of a financial asset into entire financial asset transfer and partial transfer. As for the entire financial asset transfer which is qualified for derecognition, the difference between the following two amounts is recognized in the current profit and loss: The Company divides the transfer of a financial asset into entire financial asset transfer and partial transfer. As for the entire financial asset transfer which is eligible for derecognition, the difference between the following two amounts is recognized in the current profit and loss: i) Book value of the transferred financial assets; ii) Sum of the price received from the transfer with the cumulative change in the amount of fair value directly recorded in the original owners’ equity (involving the case when the transferred financial assets are those available for sale). As for the partial financial assets transfer which are eligible for derecognition, the whole book value of the transferred financial assets should be apportioned in accordance with their respective relative fair value between the derecognized parts and the recognized parts; and the difference between the following two amounts is recognized in the current profit and loss: (i) book value of the derecognized parts; (ii) sum of the consideration received from the derecognized parts with the amount of the derecognized parts corresponding to the cumulative changes in the amount of fair value directly included in the original owners’ equity (involving the case when the transferred financial assets are those available for sale). If the transfer of financial assets does not satisfy requirements for derecognition, the financial assets shall continue to be recognized, and the consideration received will be recognized as financial liabilities. 4.Conditions for derecognition of financial liabilities Financial liabilities shall be entirely or partially derecognized if the present obligations derived from them are entirely or partially discharged. Where the Company enters into an agreement with a creditor so as to substitute the current financial liabilities with new ones, and the contract clauses of which are substantially different from those of the current ones, it shall recognize the new financial liabilities in place of the current ones. If material amendments have been made to all or part of contract terms of current financial liabilities, all or part of current financial liabilities are derecognized, and the financial liabilities with amended terms are recognized as new financial liabilities. Upon entire or partial derecognition of financial liabilities, differences between the carrying amounts of the derecognized financial liabilities and the consideration paid (including non-monetary assets surrendered or new financial liabilities assumed) are charged to profit or loss for the current period. If the Company repurchases part of financial liabilities, it shall distribute, on the repurchase day, the whole book value of the financial liabilities in accordance with the relatively fair value between the part to be recognized continuously and the part to be derecognized. The balance between the book value distributed to the part which has been derecognized and the consideration paid to it (including non-cash assets which have been transferred out or the new financial liabilities it assumed), shall be included in current profit and loss. 5.Recognition of fair values of financial assets and financial liabilities The fair value of the financial instrument with an active market is determined based on the quotation in the active market. The fair value of the financial instrument without an active market is determined using valuation techniques. In terms of the estimation, the estimation technology which is applicable in the current circumstance and supported by enough available data and other information is adopted and the input value which is similar to 59 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 the features of assets and liabilities and taken into account of by the market participants in the transaction of relevant assets or liabilities are selected by the Company, which give priority in use of the relevant observable value. The unobservable value is used only when the relevant observable value cannot be obtained or is impracticable. 6.Testing and accounting treatment of financial assets (excluding accounts receivable) Except for the financial assets measured at fair values through current profit and loss, the book value of financial assets on the balance sheet date should be checked. If there is objective evidence that a financial asset is impaired, provision for impairment shall be made. (1) Provision for impairment of available-for-sale financial assets: If the fair values of available-for-sale financial assets have significantly declined at the period end, or it is expected that the trend of decreases in values is non-temporary after consideration of all the relevant factors, impairment shall be recognized, and the accmulated loss on decreases in fair values previously charged directly to capital reserves are reversed and recognized as impairment loss. For available-for-sale debt instruments whose impairment losses have been recognized, if their fair values rise in the subsequent accounting period and such rise is objectively related to the matters occurring after the recognition of impairment loss, the previously recognized impairment loss shall be reversed and recorded into the current profit and loss. Impairment losses on available-for-sale equity instruments shall not be reversed through profit or loss. (2) Provision for impairment of held-to- maturity investments: Measurement of provisions for impairment loss on held-to-maturity investments is similar to that applicable to provisions for impairment loss on receivables. 11.Account receivable (1) Bad debt provision on receivable accounts with major amount individually Basis of recognition or standard amount Individual account receivable over 5 millions, other individual receivable over 3 millions of individual account with large amount For large amount receivable accounts which been proved with solid evidence to impair, the difference between the future cash flow and its book value shall be provided as bad Basis of bad debt provision debt provision.For large amount receivable accounts which was tested not impaired, bad debt provision shall be provided on age analyse basis. (2) Accounts receivable with provision for bad debts accrued by credit risk features portfolio Name Basis of bad debt provision Accounts receivable without provision for bad debt Age analysis method In Group ,Accounts on age basis in the portfolio: √ Applicable □ Not applicable Proportion of provision for accounts Provision for bad debt of other receivables Aging receivable (%) (%) Within 6 months(including 6 months) 0.00% 0.00% 6-12 months 5.00% 5.00% 60 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% 3-4 years 50.00% 50.00% 4-5 years 80.00% 80.00% Over 5 years 100.00% 100.00% Receivable accounts on which had debt provisions are provided on percentage analyze basis in a portfolio □Applicable √Not applicable Receivable accounts on which had debt provisions are provided by other ways in the portfolio □Applicable √Not applicable (3)Account receivable with non-material specific amount but specific bad debt preparation Reasons for individual provision for bad debts: If there is any clear evidence indicating that the receivables cannot or are unlikely to be recovered, for example, the bankruptcy, insolvency, insufficient cash flow of the debtor, or the insolvency Reasons of Withdrawing Individual Bad Debt Provision in a short time due to the production halt resulting from the severe natural disaster, or the accounts receivable may be exposed to risk as indicated by other evidence, the individual provision for bad debt will be made. Method of provision for bad debt: The provision for bad debt is individually recognized at the difference between the book value and the present value of estimated future cash flow. Method of Withdrawing Method of Bad Debt Provision provision for bad debt: The provision for bad debt is individually recognized at the difference between the book value and the present value of estimated future cash flow. 12. Inventories Whether the company needs to comply with the disclosure requirements of the particular industry No 1.Classification of inventories Inventories are classified into: raw materials, revolving materials, consigned processing materials, low-cost consumables, packaging materials, stock commodities, goods in progress, semi-finished goods, finished goods, etc. 2.Valuation of dispatched inventories The inventories dispatched are measured by weighted average method. 3.Basis for determination of net realizable value of different categories of inventories Net realizable values of merchandise inventories held directly for sale, such as finished goods, merchandise inventories, and available-for-sale materials, are measured at the estimated selling prices less estimated sales expenses and relevant taxes and surcharges in the normal production process. Net realizable values of material inventories which need further processing are measured at the estimated selling prices less the estimated costs of completion, estimated sales expenses and relevant taxes and surcharges in the normal production process. Net 61 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 realizable values of inventories held for the purpose of fulfillment of sales contracts or service contracts should be calculated on the basis of the contract prices; if the quantity of inventories held exceeds that stated in the contract, the net realizable values of the excessive part should be calculated on the basis of normal selling prices. The Company shall make provisions for impairment loss on diminution in value of inventories on an individual basis at the year end. For inventories with large quantities and relatively low unit prices, the provisions for loss on diminution in value of inventories shall be made on a category basis. For the inventories related to the product portfolios manufactured and sold in the same area, and of which the final usage or purpose is identical or similar thereto, and which is difficult to separate from other items for measurement purposes, the provisions for impairment loss on diminution in value of inventories may be made on a portfolio basis. The net realizable value of inventory items is determined based on the market price on the balance sheet date, unless there is clear evidence that the market price is abnormal on the balance sheet date. The net realizable value of inventory items as at the end of the period is determined based on the market price on the balance sheet date. 4.Inventory system The perpetual inventory system is adopted. 5.Amortization of low-cost consumables and packaging materials (1) Low-cost consumables are amortized under the lump-sum method; (2) Packing materials are amortized under the lump-sum method. 13 .Assets classified as held-for-sale assets The component (or non-current asset) will be recognized as the thing held for sale, if all the following conditions are met at the same time: (1) Such component can be sold as it is, in accordance with the usual terms on its sales; (2)The Company has been an integral part of the disposal of the (non-current assets) made a resolution, such as the need to obtain the required shareholder approval, has the approval of the shareholders' meeting or the appropriate authority; (3)The Company has signed an irrevocable transfer agreement with the transferee; (4)Such transfer will be completed within one year. 14.Long-term equity investment 1.Judgment criteria of joint control or effect of material impact Common control refers to the control shared over an arrangement in accordance with the relevant stipulations, and the decision-making of related activities of the arrangement should not be made before the party sharing the control right agrees the same. Where the Company exercises common control over the investee together with other parties to the joint venture and enjoys the right on the investee's net assets, the investee is a joint venture of the Company. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those polices. Where the Company has significant influences on an investee, the investee shall be an associate of the Company. 2.Determination of initial investment cost (1) Long-term equity investment acquired from business combination For business combination under common control: If the Company makes payment in cash, transfers non-cash assets or bears debts and issues equity securities as the consideration for the business combination, the share of 62 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 owners' equity of the acquiree obtained on the combination date in the book value of the ultimate controller's consolidated financial statement is recognized as the initial cost of the long-term equity investment. Where additional investment or other reasons make the control over the investee under the same control possible, the initial investment cost of the long-term equity investments is measured at the share of net assets of the acquiree on the combination date in the book value of the ultimate controller's consolidated financial statements. The stock premium is adjusted according to the difference between the initial cost of long-term equity investments on the combination date and the sum of the book value of long-term equity investments before combination and the book value of the consideration further paid for obtaining shares; if there is no sufficient share premium for write-downs, the retained earnings are offset. For business combination not under common control: the Company recognizes the combination cost determined on the combination date as the initial cost of long-term equity investment. Where additional investment, or other reasons make the control over the investee not under the same control possible, the initial investment cost under the cost method will be the sum of the book value of the equity investments previously held and the newly increased investment costs. (2)Long-term equity investment acquired by other means The initial costs of a long-term equity investments obtained by payments of cash shall be the purchase prices actually paid. The initial costs of long-term equity investments in equity securities shall be stated at their fair values. If the exchange of non-monetary assets has commercial substance and the fair values of assets traded out and traded in can be measured reliably, the initial cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of the assets traded out unless there is any conclusive evidence that the fair values of the assets traded in are more reliable; if the exchange of non-monetary assets does not meet the above criteria, the book value of the assets traded out and the relevant taxes and surcharges payable are recognized as the initial cost of long-term equity investment traded in. The initial costs of long-term equity investments arising from debt restructuring shall be stated at their fair values. 3.Subsequent measurement and recognition of profit or loss (1) Long-term equity investment calculated under the cost method The Company applies cost method to account for the long-term equity investments of subsidiaries. Except for the price actually paid upon acquisition or the cash dividends or profit included in the price that are declared but not yet paid, the Company recognizes investment income for the current period at the share of the cash dividends or profits declared and released by the investee. (2)Long-term equity investment calculated under the equity method Long-term equity investments in associates and in joint ventures are accounted for under the equity method. If the cost of initial investment is in excess of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will not be adjusted to the initial cost of long-term equity investment; if the cost of initial investment is in short of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will be included in the current profit and loss. The Company recognizes the investment income and other comprehensive income according to the net gain or loss and other comprehensive income of the investee attributable to the Company, and adjusts the book value of long-term equity investment; reduces the book value of long-term equity investments according to the profit or cash dividends declared by the investee and attributable to the Company; and adjusts the book value of the long-term equity investments in the investee, as to the change in owners' equities other than the net gain or loss, other comprehensive income and profit distribution of the investee, and charges the same to the owners' equities. When the share in net profit and loss of the investee is recognized, the fair value of the identifiable net assets of the investee when the investment is obtained shall be taken as a basis and the share will be determined after the net profit is adjusted in accordance with the Company's accounting policies and accounting periods. During the period of holding the investment, if the investee is capable of providing consolidated financial statements, the profit or loss shall be measured based on the net profit and other changes in equity recorded in the consolidated financial statements. 63 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 The profit and loss of the internal transactions that are not realized arising among the Company, affiliated enterprises, and joint ventures will be offset at the part attributable to the Company and the investment income will be recognized on that basis. For internal trading losses that have not occurred with the investee, they will be fully recognized if they belong to the asset impairment losses. The trading of assets between the Company and its associates or joint ventures, which constitutes business, are treated according to the policies disclosed in "Note 3.5 Accounting Treatment of Combination of enterprises under common control and enterprises not under common control" and "Note 3.6 Preparation of consolidated financial statements". When the Company confirms that it should share losses of the investee, treatment shall be done in following sequence: Firstly, the book value of the long-term equity investment shall be reduced. Secondly, where the book value is insufficient to cover the share of losses, investment losses are recognized to the extent of book value of other long-term equity which form net investment in the investee in substance and the book value of long term receivables shall be reduced. finally, after all the above treatments, if the Company is still responsible for any additional liabilities in accordance with the provisions stipulated in the investment contracts or agreements, estimated liabilities are recognized and included into current investment loss according to the obligations estimated to undertake. (3)Disposal of long-term equity investment Upon disposal, the difference between the book value and the price obtained is recognized in current profit and loss. Disposal of long-term equity investments accounted for under the equity method, which is previously charged to other comprehensive income is treated in proportion on the same basis for direct disposal of relevant assets of liabilities by the investee. Owner's equities recognized arising from change in other owners' equities other than net gain or loss, other comprehensive income and profit distribution of the investee are carried forward to the current profit or loss in proportion, except for the other comprehensive income arising from the change on re-measurement of the net liabilities or net assets under the defined benefit plan by the investee. In case of loss of common control over or material impact on the investee due to the disposal of part of the equity investments, the remaining equity after the disposal are computed according to the principles for recognition and measurement of financial instruments, and the difference between the fair value and book value on the day of loss of common control or material impact is charged to the current profit or loss. For other comprehensive income that is recognized from original equity investment by using the equity method, the accounting treatment will be made on the basis the same as that for the direct disposal of related assets and liabilities with the investee when the equity method is terminated for accounting purpose. Owner's equities recognized arising from change in other owners' equities other than net gain or loss, other comprehensive income and profit distribution of the investee are entirely transferred to the current profit or loss when the accounting under the equity method is ended. In case of loss of common control over or material impact on the investee due to the disposal of part of the equity investments, the remaining equity after the disposal are computed under the equity method, with the adjustment made as if such remaining equities are calculated under the equity method after they are obtained, when the separate financial statement is prepared; the remaining equities after disposal leading to the incapable exercise of common control over or material impact on the investee shall be treated according to the principles for recognition and measurement of financial instruments, and the difference between the fair value and book value on the day of loss of common control or material impact is charged to the current profit or loss. If the equities disposed were obtained from the business merger by reason of additional investment or others, and the remaining equities after disposal are calculated under the cost method or equity method when the individual financial statement is prepared, other comprehensive income and other owners' equities recognized and arising from the calculation of the equity investment held before the acquisition date under the equity method will be carried forward in proportion; if the remaining equities after disposal are treated according to the principles for recognition and measurement of financial instruments, both of other comprehensive income and other owners' equities are entirely carried forward. 15. Investment property The measurement mode of investment property The measurement by the cost method 64 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Depreciation or amortization method Investment properties are properties to earn rentals or for capital appreciation or both. Examples include land leased out under operating leases, land held for long-term capital appreciation, buildings leased out under operating leases, (including buildings that have been constructed or developed for future lease out under operating leases, and buildings that are being constructed or developed for future lease out under operating leases). The Company adopts cost model to measure all current investment properties. The Company adopts the same depreciation policy for the investment property measured at cost model building for renting as that for the Company’s fixed assets and the same amortization policy of land use right for renting as that for the Company’s intangible assets. 16.Fixed assets (1) Criteria for recognition of fixed assets Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting or business management with useful lives exceeding one accounting year. Fixed assets will only be recognized when all the following criteria are satisfied: Fixed assets will only be recognized when all the following criteria are satisfied: (1) It is probable that the economic benefits relating to the fixed assets will flow into the Company; and (2)The costs of the fixed asset can be measured reliably. (2)Depreciation method The method for Expected useful life Category Estimated residual value Depreciation depreciation (Year) Buildings and Straight-line method 25-35 3 2.77-3.88 constructions Straight-line method 7-15 3 6.47-13.86 Machinery equipment Transportation Straight-line method 8-10 3 9.70-12.13 equipment Straight-line method 5-10 3 9.70-19.40 Other equipment Straight-line method (3)Basis for recognition and measurement of fixed assets acquired under the finance lease The fixed assets acquired under financing lease are recognized if one of the following conditions is specified by the Company and the leaser in their lease agreement: (1)The ownership of the leased assets is transferred to the Company by the end of the lease terms; (2)The Company has the option to purchase the assets at prices which are expected to be sufficiently lower than fair values at the date the option becomes exercisable that, at the inception of the leases, it is reasonably certain that the option will be exercised; (3)The lease terms cover the major part of the economic lives of the assets, even if titles are not transferred; (4)At the inception of the leases, the present values of the minimum lease payments amount to at least substantially all of the fair values of the leased assets. On the lease commencement date, the book-entry value of a fixed asset acquired under financing lease is measured at the asset’s fair value or the present value of the minimum lease payment, whichever is the lower. The minimum lease payment is recorded as the book-entry value of the long-term payables, and the difference between them is deemed as the unrecognized financing expenses. 65 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 17.Construction in progress The book values of the construction in progress are stated at total expenditures incurred before reaching working condition for their intended use. For construction in progress that has reached working condition for intended use but relevant budgets for the completion of projects have not been completed, the estimated values of project budgets, prices, or actual costs should be included in the costs of relevant fixed assets, and depreciation should be provided according to relevant policies of the Company when working condition is reached. After the completion of budgets needed for the completion of projects, the estimated values should be substituted by actual costs, but depreciation already provided is not adjusted. 18.Borrowing costs 1.Principles for recognition of capitalization of borrowing costs Borrowing costs include the interest on borrowings, the amortization of discount or premium, auxiliary expenses, exchange differences incurred by foreign currency borrowings, etc. The borrowing costs incurred to the Company and directly attributable to the acquisition and construction or production of assets eligible for capitalization should be capitalized and recorded into asset costs; other borrowing costs should be recognized as costs according to the amount incurred and be included into current profit and loss. Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assets which may reach their intended use or sale status only after long-time acquisition and construction or production activities. Borrowing costs may be capitalized only when all the following conditions are met at the same time: (1)The asset disbursements have already incurred, which shall include the cash paid, non-cash assets transferred or interest bearing debts undertaken for the acquisition and construction or production activities for preparing assets eligible for capitalization; (2)The borrowing costs has already incurred; and (3)The acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started. 2.Capitalization period of borrowing costs Capitalization period refers to the period from commencement of capitalization of borrowing costs to its cessation; period of suspension for capitalization is excluded. When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. Where construction for assets purchased, constructed or manufactured eligible for capitalization is completed in stages, which can be used while construction of the other parts continues, capitalization of attributable borrowing costs should cease when substantially all of the activities necessary to prepare that part for its intended use or sale are complete. Where construction for each part of assets purchased, constructed or manufactured has been completed separately but can be used or sold only after the entire assets have been completed, capitalization of attributable borrowing costs should cease at the completion of the entire assets. 3.Period of capitalization suspension If the acquisition and construction or production activities of assets eligible for capitalization are interrupted abnormally and this condition lasts for more than three months, the capitalization of borrowing costs should be suspended; if the interruption is necessary for the acquisition and construction or production to prepare the assets for their intended use or sale, the capitalization of borrowing costs should continue. The borrowing costs incurred during interruption are recognized in the current profit and loss, and the capitalization of borrowing costs continues after the restart of the acquisition and construction or production activities of the assets. 66 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 4,Capitalization rate and measurement of capitalized amount of borrowing costs As for special borrowings borrowed for acquiring and constructing or producing assets eligible for capitalization, the to-be-capitalized amount shall be determined at interest expense of special borrowing actually incurred in the current period less the interest income of the borrowings unused and deposited in bank or return on temporary investment. As for general borrowings used for acquiring and constructing or producing assets eligible for capitalization, the to-be-capitalized amount should be calculated by multiplying the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special borrowings by the capitalization rate of used general borrowings. The capitalization rate is calculated by using the weighted average interest rate of general borrowings. 19. Biological assets 20. Oil-gas assets 21. Intangible assets 1 Pricing method, useful life and impairment test (1) The Company initially measures intangible assets at cost on acquisition; The costs of external purchase of intangible assets comprise their purchase prices, related taxes and surcharges and any other directly attributable expenditure incurred to prepare the asset for its intended use. If payments for the purchase of intangible assets are extended beyond the normal credit terms with financing nature, the costs of intangible assets are determined on the basis of present values of the purchase prices. For intangible assets obtained from debtors in settlement of his liabilities in case of debt restructuring, they should be initially stated at their fair values. Differences between the book values and the fair values of the intangible assets are charged to profit or loss for the current period. If the exchange of non-monetary assets has commercial substance, and the fair values of these assets can be measured reliably, the book-entry values of intangible assets traded in are based on the fair values of the intangible assets traded out unless there is any conclusive evidence that the fair values of the assets traded in are more reliable. If the exchange of non-monetary assets does not meet the above criteria, the costs of the intangible assets traded in should be the book values of the assets traded out and relevant taxes and surcharges paid, and no profit or loss shall be recognized. (2) Subsequent measurement The useful lives of the intangible assets are analyzed and determined on their acquisition. As for intangible assets with limited useful life, straight-line amortization method is adopted in the period when the intangible assets generate economic benefit for enterprise; if the period when the intangible assets generate economic benefit for enterprise cannot be forecasted, the intangible assets shall be deemed as those with indefinite useful life and shall not be amortized. 2.Estimate of the useful life of the Intangible assets with finite useful lives: The useful lives and amortization methods of intangible assets with limited useful lives are reviewed at each year end. Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not different from those estimated before. 3.Basis for judgment of intangible assets with indefinite useful life and procedures for review of the life thereof The useful lives and amortization method of intangible assets with limited useful lives are reviewed at the end of 67 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 each period. Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not different from those estimated before. 4.Specific criteria of classification into the research phase and the development phase Expenditures on an internal research and development project shall be classified into expenditures on the research phase and expenditures on the development phase. Research phase: Research is original and planned investigation, undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development phase: Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, or products before the start of commercial production or use. 5.Criteria for capitalization of qualifying expenditures during the development phase Expenditures arising from development phase on internal research and development projects must be capitalized if the Company can satisfy all of the following criteria: (1) It is technically feasible to finish intangible assets for use or sale; (2) It is intended to finish and use or sell the intangible assets; (3) the method that the intangible assets generate economic benefits, including existence of a market for products produced by the intangible assets or for the intangible assets themselves, shall be proved. Or, if to be used internally, the usefulness of the assets shall be proved; (4) adequate technical, financial, and other resources are available to complete the assets, and the Company has the ability to use or sell the assets; and (5) The expenditures attributable to the intangible assets during their development phase can be reliably measured. If the above conditions are not satisfied, expenditures on the development phase shall be included in current profit and loss when they occur. Expenditures on the research phase shall be included in current profit and loss when they occur. According to the Accounting Standards for Enterprises in combination with the actual situation of the Company, the period between the report on pre-study of project to the issuance of project assessment and examination report is defined as the research state, in which the expenditures incurred are expensed when incurred and charged to the current profit or loss. In the development stage, research findings or other knowledge is applied to a plan or design for the production of new or substantially improved materials, devices, or products before the start of commercial production or use. This phase is equipped with the basic conditions for the formation of a new product or technology to a greater extent. According to the actual situation of the Company, the period between the adoption of project assessment and examination with the assessment and examination report issued to the batched production is defined as the development stage. The project development expenditures will be capitalized, if the conditions for capitalization of development expenditures are met. All expenditures incurred on research of application of basic techniques are classified as research stage expenditures and charged to the current profit or loss when incurred. (2)Internal research and development expenditure accounting policy 22. Impairment of long-term assets The Company will conduct the impairment test if any evidence suggests that the long assets, such as the long-term equity investment and the investment property, fixed assets, construction in progress and intangible assets, are impaired on the balance sheet date. If impairment test results indicate that the recoverable amounts of the assets 68 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 are lower than their carrying amounts, the provision for impairment is made based on the differences which are recognized as impairment losses. The recoverable amounts of intangible assets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to be derived from the assets. The provision for assets impairment is calculated and recognized by the individual asset. If it is difficult to estimate the intangible amount of an individual asset, the Company shall estimate the recoverable amount of the asset portfolio that the individual asset belongs to. The asset portfolio is the minimum asset group that can independently generate the cash inflow. At least the goodwill impairment test is conducted at the year-end. The Company conducts an impairment test for the goodwill. The book value of goodwill arising from business combinations is amortized to relevant asset groups with a reasonable method since the date of acquisition; or amortized to relevant combination of asset groups if it is difficult to be amortized to relevant asset groups. The book value of goodwill is amortized to relevant asset groups or combinations of asset groups according to the proportion of the fair value of such asset groups or combinations of asset groups in the total fair value of relevant asset groups or combinations of asset groups. Where the fair value cannot be reliably measured, it should be amortized according to proportion of the book value of each asset group or combination of asset group in the total book value of relevant asset groups or combinations of asset groups. When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any indication shows that the asset groups or combinations of asset groups related to the goodwill may be impaired, the Company shall first conduct an impairment test on the asset groups or combinations of asset groups not containing goodwill, calculate the recoverable amount and compare it with the relevant book value to recognize the corresponding impairment loss. Then the Company shall conduct an impairment test on the asset groups or combinations of asset groups containing goodwill, and compare the book value of these asset groups or combinations of asset groups (including the book value of the goodwill apportioned thereto) with the recoverable amount. Where the recoverable amount of the relevant asset groups or combinations of asset groups is lower than the book value thereof, the Company shall recognize the impairment loss of the goodwill. The above impairment loss is not reversed in the future accounting period once recognized. 23.Long-term deferred expenses Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are evenly amortized over the benefit period. 24.Employee compensation 1.Accounting treatment of short-term remuneration During the accounting period in which employees provide service to the Company, the short-term remuneration actually incurred is recognized as liabilities and charged to the current profit or loss or the relevant assets cost. The medical insurance premium, work-related injury insurance premium and the housing provident fund paid by the Company for its employees, together with the labor union expenditures and employee education are used to calculate and determine the relevant employee compensation amount based on the prescribed accrual basis and accrual proportion. The non-monetary benefits for employees that can be measured reliably are measured at fair value. 2.Accounting treatment of benefits paid after departure The basic endowment insurance premium and unemployment insurance premium paid by the Company for its employees in accordance with relevant provisions of the local government are recognized as liabilities and charged to the current profit or loss or the relevant assets cost, with the payable amount calculated based on the local prescribed payment base and percentage, during the accounting period in which the employees provide services to the Company. In addition to the basic endowment insurance, the Company also build the enterprise annuity payment system (supplementary pension insurance) in accordance with relevant national policies established a pension payment system / corporate pension plans. The Company pays a certain percentage of the total 69 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 employee compensation to the local social institution for the payment/payment under annuity plan, and record the relevant expenditures into the current profit or loss or the relevant assets cost. 3.Accounting treatment of dismissal welfare Where the Company cannot unilaterally withdraw when termination benefits due to termination of employment or layoff proposal offered, or confirm the reorganization involves the payment of termination benefits when associated costs or expenses (both what early), confirm termination benefits employees pay liabilities, and profit or loss. 4 .Accounting treatment of other long term employee benefits 25.Estimated liabilities 1.Recognition criteria for estimated liabilities The Company recognizes the estimated liabilities when the obligations relating to litigation, debt-guarantee, loss contract, restructuring and other contingencies satisfy the following conditions simultaneously: (1)That obligation is a present obligation of the Company; (2)The performance of such obligation is likely to result in outflow of economic benefits from the Company; and (3)The amount of the obligation can be measured reliably. 2.Measurement of a variety of estimated liabilities The estimated liabilities of the Company are initially measured as the best estimate of expenses required for the performance of relevant present obligations. When determining the best estimate, the Company shall comprehensively consider the risks, uncertainties, time value of money, and other factors relating to the contingencies. If the time value of money is significant, the best estimates shall be determined after discount of relevant future cash outflows. The best estimates shall be treated as follows in different circumstances: If there is continuous range (or interval) for the necessary expenses, and probabilities of occurrence of all the outcomes within this range are equal, the best estimate shall be determined at the average amount of upper and lower limits within the range. Given the fact that there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of all the outcomes within this range are unequal despite such a range exists, in case that the contingency involves a single item, the best estimate shall be determined at the most likely outcome; if the contingency involves two or more items, the best estimate should be determined according to all the possible outcomes with their relevant probabilities. When all or part of the expenses necessary for the settlement of an estimated liabilities are expected to be compensated by a third party or other parties, the compensation shall be separately recognized as an asset only when it is virtually certain that the compensation will be received. The amount recognized for the compensation shall not exceed the book value of the estimated liabilities. 26.Share-based payment The share-based payment is the transaction the Company has to grant the equity instrument to employees or assume the liability determined based on the equity instrument, for the service provided by the employees [or other parties]. The share-based payments of the Company can be divided into the equity-settled share-based 1.Equity-settled share-based payments and equity instruments In case of the equity-settled share-based payment for the service provided by employees, the measurement is based on the fair value of the equity instruments granted to employees. Where the Company carries out a 70 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 restricted share-based payment, the employees subscribe shares by contributing capital, and the shares cannot be traded or transferred in the market until they satisfy the conditions for removing the freeze; if the conditions for removing the freeze as prescribed by the ultimate stock stimulating plan fail to be satisfied, the Company shall repurchase the shares as previously agreed. When the Company receives the payments for subscription of restricted shares from the employees, it shall recognize the share capital and capital reserves (share capital premiums) according to the payments for subscription received, and recognize a liability and treasury shares with respect to the repurchase obligation. On every balance sheet date during the waiting period, the Company estimates the quantity of the exercisable equity instruments in light of the latest subsequent information, such as the change in the number of employees obtaining the exercisable equity instrument or whether the specified performance requirements are met, based on which the services obtained in the current period are charge to the relevant costs or expenses at the fair value on the grant date, with the capital reserves added correspondingly. Those payments which are exercisable immediately after the grant are charged to the relevant costs or expenses, with the capital reserves added correspondingly. After the vesting date, the recognized relevant costs or expenses or total amount of owners' equity shall not be adjusted any more. No cost or expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified. In addition, an expense is recognized for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled share-based payment is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during the pending period, equity-settled share-based payments are deemed cancelled. However, if a new equity instrument is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the new equity instrument are treated as if they were a modification of the original award. 2.Cash-settled share-based payments and equity instruments The cash-settled share-based payment is measured in accordance with the fair value of liability calculated and confirmed based on the shares or other equity instruments undertaken by the Company. The cash-settled share-based payment is initially measured in accordance with the fair value on the vesting date, in consideration of the terms and conditions for granting the equity instruments. If the right may be exercised immediately after the grant, the fair value of the liabilities shall, on the vesting date, be included in the costs or expenses, together with a corresponding increase in the liabilities; if the right cannot be exercised until the vesting period comes to an end or until the prescribed performance conditions are met, then within the vesting period, the services obtained in the current period shall, based on the best estimate of the number of vested equity instruments, be included in the relevant costs or expenses at the fair value of the liabilities on the vesting date, together with a corresponding increase in the liabilities. On each balance sheet date and on each account date prior to the settlement of the relevant liabilities, the fair values of the liabilities are re-measured and the changes. 27. Other financial instruments such as preferred shares and perpetual capital securities 28.Revenues Whether the company needs to comply with the disclosure requirements of the particular industry No 1 General principles for recognition of revenues from sales of goods: 71 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (1) The Company has transferred to the buyer the significant risks and rewards of ownership relevant to the goods in question; (2) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (3) The relevant amount of revenue can be measured reliably; (4) It is probable that the economic benefits related to the transaction will flow into the Company; and (5) The relevant costs incurred or to be incurred can be measured reliably. 2 Concrete principles for revenues from primary businesses Sales of automobile air-conditioner: the Air-conditioner Company deliveries goods according to the customers' production plans and safty stock; after the customers use the products, the salesmen issue a notification of making out an invoice according to the customers' monthly usage amounts and contracted prices, the finance department issues an invoice and the revenues from sales shall be recognized. 29.Government grants (1) Judgment basis and accounting treatment of government subsidies related to assets Government subsidies related to assets refer to the subsidies obtained by the Company from the government and used to form long-term assets through acquisition and construction or otherwise, including the financial appropriation for purchase of fixed assets or intangible assets and the finance discounts for special borrowings of fixed assets. Government grants related to assets are recognized as deferred income and included in non-operating income over the useful lives of the assets constructed or purchased by stages; (2) Judgment basis and accounting treatment of government subsidies related to profits Government grants related to assets are recognized as deferred income and included in non-operating income over the useful lives of the assets constructed or purchased by stages; If government subsidies related to income are used to compensate the Company’s relevant expenses or losses in future periods, such government subsidies should be recognized as deferred income on acquisition and be included into the current non-operating income in the period of recognizing relevant expenses; if government subsidies related to income are used to compensate the enterprise’s relevant expenses or losses incurred, such government subsidies are directly included into the current non-operating income on acquisition. 30.Deferred income tax assets and deferred income tax liabilities Deferred income tax assets shall be recognized for deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. As for any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained. Taxable temporary differences are recognized as deferred income tax liabilities except in special circumstances. Special circumstances in which deferred income tax assets or deferred income tax liabilities shall not be recognized include: the initial recognition of goodwill; other transactions or events excluding business combinations, which affect neither accounting profits nor the taxable income (or deductible losses) when occurred. If the Company has the legal right of netting and intends to settle in net amount or to obtain assets and discharge liabilities simultaneously, the income tax assets and income tax liabilities of the Company for the current period shall be presented based on the net amount after offset. When the Company has the legal rights to balance income tax assets and income tax liabilities for the current 72 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 period with net settlement, and deferred income tax assets and deferred income tax liabilities are related to the income tax which are imposed on the same taxpaying subject by the same tax collection authority or on different taxpaying subjects, but, in each important future period in connection with the reverse of deferred income tax assets and liabilities, the involved taxpaying subject intends to balance income tax assets and liabilities for the current period with net settlement at the time of obtaining assets and discharging liabilities, deferred income tax assets and deferred income tax liabilities shall be presented based on the net amount after offset. 31.Leases 1.Accounting treatment of operating lease (1) Lease fees paid by the Company for leased asset shall be amortized at straight-line method over the whole lease period (including rent-free period) and shall be included in the current expenses. Initial direct costs relating to lease transactions incurred by the Company shall be recognized as the current expenses. If the expense related to the lease which shall be paid by the Company is assumed by the lessor of the asset, then such expenses shall be deducted from total lease fees, and the balances shall be amortized over the lease term s and charged to the current expenses. (2) Lease fees received by the Company from leasing assets shall be amortized at straight-line method over the whole lease period (including rent-free period), and shall be recognized as lease income. Initial direct costs relating to lease transactions incurred by the Company shall be recognized as the current expenses; if the amounts are material, they shall be capitalized and included in the current income on the same basis as the recognition of lease income. If expenses relating to leases which should be borne by the lessee of the assets are paid by the Company, they shall be deducted from the total lease income and the balances shall be amortized over the lease terms by the Company. 2.Accounting treatment of financing lease (1) Assets acquired under financing leases: At the commencement of the lease terms, assets acquired under financing leases shall be recorded at the lower of their fair values and the present values of the minimum lease payments, and the Company shall recognize the long-term payables at amounts equal to the minimum lease payments, and shall record the differences between book value of the leased assets and the long-term payables as unrecognized finance charges. The Company adopts the effective interest rate method for unrecognized financing charges, which shall be amortized over the lease terms and included in financial expenses. Initial direct costs incurred by the Company shall be included in the value of leased assets. (2) Assets rented out under financing leases: At the commencement of the lease terms, the Company shall recognize the differences between the undiscounted rents receivable plus unguaranteed residual values and their present values as unrealized financing income, and shall recognize them as lease income during each period when rents are received. Initial direct costs associated with the lease transactions and incurred by the Company shall be included in the initial measurement of the financing lease receivable and lease income recognized over the lease terms shall be reduced accordingly. 32. Main accounting policies and accounting estimates Termination of operation refers to any integral part that satisfies any of the following conditions, has been disposed or classified into assets held for sale by the Company and that is able to be separately distinguished upon operation and preparation of the financial statements: (1) the integral part represents an independent primary business or a key operation region; (2) the integral part is an element of the plan of proposing to dispose an independent primary business or a key operation region; or (3) the integral part is a subsidiary acquired only for the resale purpose. 73 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 33.Change of main accounting policies and estimations (1)Change of main accounting policies √ Applicable □Not applicable Approval The content and reasons of accounting policy changes Remarks process There was adjustment on the financial statements presentation of the semi-annual Examined and report, and it adjusted the received On May 10, 2017, the Ministry of Finance promulgated the Notice on approved at the government finance interest subsidies to Issuing the Amendment to Accounting Standards for Business 2nd meeting of the financial expenses-interest expenses Enterprises No. 16-Government Grants (Accounting [2017] No. 15), the 8th Board of from the non-operating revenue and which came into effect on June 12, 2017. Directors expenses. This change has no significant impact on the financial condition, operating results and the cash flow. Enforce Value - added Tax Accounting Regulations.The Ministry of Finance released Value - added Tax Accounting Regulations (Financial Accounting [2016] No:22 ) on December 3, 2016, which is appropriate for related transacrions form May 1, 2016. (2) Change of main accounting estimations □ Applicable √ Not applicable 34.Other Not applicable VI. Taxation 1. Main categories and rates of taxes Class of tax Tax basis Tax rate Calculated on tax law from selling goods and taxable services based on the VAT calculation of output tax, after deduction of input tax deductibility of the 17%、11%、6% current period, the balance part of VAT payable Consumption tax Revenue of taxable consumables 3% City maintenance and Value-added tax, operating tax and consumption tax paid 7% construction tax Enterprise income tax Taxable income 25%、15% Levied based on the taxable income (Since May 1, 2016, the Business tax Operational tax 5% changes to Value-added tax) The disclosure on the rate of income tax of taxpayers in different enterprises is stated below Name of Taxpayer Rate of Income Tax 74 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Chongqing Jianshe Motorcycle Co., Ltd. 15% Shanghai Jianshe Motorcycle Co., Ltd. 25% Chongqing Jianshe Automobile A/C Co., Ltd. 15% 2. Preferential tax treatment The company is subject to the enterprise income tax rate of 15% in 2016, as a result of the preferential enterprise income tax policies to promote the large-scale development of the western region in accordance with the Announcement on Issues of Enterprise Income Tax concerning In-depth Implementation of Western Region Large-scale Development Strategy (Announcement of the State Administration of Taxation [2012] No.12) Chongqing Jianshe Automobile A/C Co., Ltd. by high and new technology enterprise qualification on November 8, 2013, acquire the qualification of new high-tech enterprises, Certificate No. GR201351100081, valid for three years. Chongqing Jianshe Automobile A/C Co., Ltd. calculates and pay enterprise income tax shall be levied at the reduced tax rate 15% from 2014 to 2016. The Company and other subsidiaries pay the enterprise income tax at a tax rate of 25%. 3.Other VII. Notes on major items in consolidated financial statements of the Company 1. Monetary funds In RMB Items Closing balance Opening balance Cash on hand 24,628.87 31,205.34 Bank deposits 167,475,250.51 273,737,553.12 Other cash and cash equivalents 127,778,538.50 240,646,064.11 Total 295,278,417.88 514,414,822.57 Other notes 2. Financial assets measured at fair value through current profit and loss In RMB Items Closing balance Opening Other notes: 3. Derivative financial assets □ Applicable √Not applicable 75 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 4. Notes receivable (1) Notes receivable listed by category In RMB Items Closing balance Opening balance Bank acceptance bill 62,644,057.09 14,907,890.35 Total 62,644,057.09 14,907,890.35 (2) Notes receivable pledged by the Company at the period-end In RMB Items Amount (3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end In RMB Amount of recognition termination at the Amount of not terminated recognition at Items period-end the period-end Bank acceptance bill 331,556,355.38 Total 331,556,355.38 (4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or agreement In RMB Amount of the notes transferred to account receivable at the Items period-end Other notes 5. Accounts receivable (1) Accounts receivable disclosed by category In RMB Closing balance Opening balance Category Book balance Bad debt provision Book Book balance Bad debt provision Book value Amount Proportio Amount Proportio value Amount Proportio Amount Proportion 76 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 n% n% n% % Accounts receivable with provision for bad debt made on a 271,313, 16,207,8 255,105,6 270,302 14,715,22 255,587,43 100.00% 5.97% 100.00% 5.44% portfolio with similar 510.41 40.55 69.86 ,666.49 6.57 9.92 risk credit characteristics basis 271,313, 16,207,8 255,105,6 270,302 14,715,22 255,587,43 100.00% 5.97% 100.00% 5.44% Total 510.41 40.55 69.86 ,666.49 6.57 9.92 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end □ Applicable √ Not applicable In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision: √ Applicable □ Not applicable In RMB Closing balance Aging Accounts receivable Provision for bad debts Proportion of provision (%) Subitem within 1 year Within 6 months(Including 6 254,250,801.38 months) 6-12 months Subtotal within 1 year 254,250,801.38 5.00% 1-2 years 726,608.71 365,593.83 10.00% 2-3 years 1,971,790.47 1,522,136.87 30.00% Over 3 years 14,364,309.85 14,320,109.85 3-4 years 2,329,000.00 2,329,000.00 50.00% 4-5 years 257,359.38 213,159.38 80.00% Over 5 years 11,777,950.47 11,777,950.47 100.00% Total 271,313,510.41 16,207,840.55 Notes of the basis of recognizing the group: In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision □ Applicable √ Not applicable In the groups, accounts receivable adopting other methods to accrue bad debt provision: (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB0.00; the amount of the reversed or collected part during the reporting period was of RMB 0.00. Of which the significant amount of the reversed or collected part during the reporting period 77 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 In RMB Items Reversed or collected amount Method (3) The actual write-off accounts receivable In RMB Items Amount Of which the significant actual write-off accounts receivable: In RMB Whether occurred Name Nature Amount Reason Process from the related transactions Notes of the write-off the accounts receivable: (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party The top five accounts receivable by the credit balance as at June 30, 2017 total RMB 154,005,291.23, accounting for 56.76% of total amount of balance as at June 30, 2017 of accounts receivable, and the balance as at June 30, 2017 of provision for bad debts provided correspondingly totals RMB9,245,739.19. (5) Account receivable which terminate the recognition owning to the transfer of the financial assets (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Other notes: 6.Prepayments (1) List by aging analysis: In RMB Closing balance Opening balance Aging Amount Proportion % Amount Proportion % Within 1 year 8,098,996.10 98.44% 10,729,869.21 98.51% 1-2 years 59,823.65 0.73% 73,792.01 0.68% 2-3 years 51,254.50 0.62% 71,862.00 0.66% Over 3 years 17,229.80 0.21% 16,409.80 0.15% Total 8,227,304.05 -- 10,891,933.02 -- Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target 78 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Oter notes: 7. Interest receivable (1) Category of interest receivable In RMB Items Closing balance Opening balance (2) Significant overdue interest Whether occurred Borrower Closing balance Overdue time Reason impairment and its judgment basis Other notes: 8. Dividend receivable (1) Dividend receivable In RMB Items Closing balance Opening balance (2) Significant dividend receivable aged over 1 year In RMB Whether occurred Items Closing balance Aging Reason impairment and its judgment basis Other notes: 9. Other accounts receivable (1) Other accounts receivable disclosed by category In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Proportio Proportio Proportion Book value Amount Amount value Amount Amount n% n% n% % Other receivables 12,671,7 97.23% 4,529,36 35.74% 8,142,426 13,109, 97.32% 4,529,364 34.55% 8,579,890.0 with provision for 79 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 bad debt made on a 91.41 4.68 .73 254.76 .68 8 portfolio with similar risk credit characteristics basis Other receivables with insignificant single amount and 361,125. 361,125. 361,125 361,125.3 2.77% 100.00% 0.00 2.68% 100.00% provision for bad 35 35 .35 5 debt made on an individual basis 13,032,9 4,890,49 8,142,426 13,470, 4,890,490 8,579,890.0 100.00% 36.31% Total 16.76 0.03 .73 380.11 .03 8 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end □ Applicable √ Not applicable In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision: √Applicable □ Not applicable In RMB Closing balance Aging Other receivables Provision for bad debts Proportion of provision (%) Subitem within 1 year Within 6 months(including 6 4,718,647.09 months) 6-12 months 1,534,749.60 76,737.48 5.00% Subtotal within 1 year 6,253,396.69 76,737.48 1.23% 1-2 years 2,184,186.13 218,418.61 10.00% Over 3 years 0 0 0 Over 5 years 4,234,208.59 4,234,208.59 100.00% Total 12,671,791.41 4,529,364.68 35.74% Notes of the basis of recognizing the group: In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision □ Applicable √ Not applicable In the groups, other accounts receivable adopting other methods to accrue bad debt provision: □ Applicable √ Not applicable 2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB 0.00;the amount of the reversed or collected part during the reporting period was of RMB 000. Of which the significant amount of the reversed or collected part during the reporting period In RMB 80 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Name Reversed or collected amount Method (3) The actual write-off other accounts receivable In RMB Items Amount Of which the significant write-off other accounts receivable: In RMB Whether occurred Name Nature Amount Reason Process from the related transactions Notes of write-off other accounts receivable: (4) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Petty cash and borrowings with small 8,437,582.82 8,875,046.17 amount Margins and others Fully provided provision for bad debts regarding long-term receivables and 4,595,333.94 4,595,333.94 payables Export rebates receivable Current account Total 13,032,916.76 13,470,380.11 (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party In RMB Proportion of the Closing total year end Closing balance of Name Nature Aging balance balance of the bad debt provision accounts receivable Top 5 of the closing balance of the other accounts receivable colleted according 8,098,507.84 62.14% 4,244,328.04 to the arrears party Total 8,098,507.84 62.14% 4,244,328.04 81 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (6) Accounts receivable involved with government subsidies In RMB Estimated received time, Name Project of government Opening balance Closing balance amount and basis (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Other notes: 10. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1) Category of inventory In RMB Closing balance Opening balance Provision for Provision for Items Book balance inventory Book value Book balance inventory Book value impairment impairment Raw materials 41,244,392.73 4,618,914.59 36,625,478.14 47,168,260.45 4,618,914.59 42,549,345.86 Goods in progress 12,286,422.18 12,286,422.18 1,931,391.64 1,931,391.64 Stock goods 105,954,671.59 174,210.57 105,780,461.02 156,900,503.61 174,210.57 156,726,293.04 Total 159,485,486.50 4,793,125.16 154,692,361.34 206,000,155.70 4,793,125.16 201,207,030.54 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements (2) Falling price reserves of inventory In RMB Increased amount Decreased amount Items Opening balance Reverse or Closing balance Withdrawal Other Other write-off Raw materials 4,618,914.59 4,618,914.59 Stock goods 174,210.57 174,210.57 Total 4,793,125.16 4,793,125.16 82 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses (4) Completed unsettled assets formed from the construction contact at the period-end In RMB Items Amount Other notes: 11. Assets divided as held-to-sold In RMB Estimated disposal Items Closing book value Fair value Estimated disposal time expense Other notes: 12. Non-current assets due within 1 year In RMB Itmes Closing balance Opening balance Other notes: 13. Other current assets In RMB Items Closing balance Opening balance Overpaid tax for offsetting the future tax 1,836,709.63 1,734,063.70 payable Total 1,836,709.63 1,734,063.70 Other notes: 14. Available-for-sale financial assets (1) List of available-for-sale financial assets In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment Available-for-sale equity 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 instruments Measured at cost 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 83 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Total 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 (2) Available-for-sale financial assets measured by fair value at the period-end In RMB Category of the Available –for-sale Available-for-sale available-for –sale Total equity instruments liabilities instruments financial assets (3) Available-for-sale financial assets measured by cost at the period-end In RMB Book balance Impairment provision Shareholdi Cash ng bonus of Investee Period-beg Period-beg proportion the Increase Increase Decrease Period-end in in among the reporting investees period Ningbo Jianshe Motorcycl 1,140,915. 1,140,915. 1,140,915. 1,140,915. e 51.00% 04 04 04 04 Manufactu ring Co., Ltd. 1,140,915. 1,140,915. 1,140,915. 1,140,915. Total -- 04 04 04 04 (4) Changes of the impairment of the available-for-sale financial assets during the reporting period In RMB Cagegory of the Available-for-sale equity Available-for-sale avalable-for-sale Total instruments liabilities instruments financial assets (5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or temporarily fell but not withdrawn the impairment provision Items sof Falling range of Withdrawn Reason of not available-for-sale Fair value of the Continued falling Investment cost the fair value amount of with drawn the equity period-end time(month) against the cost impairment impairment instruments Other notes 84 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 15. Investment held-to-maturity (1) List of investment held-to-maturity In RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision (2) Significant held-to-maturity investment at the period-end In RMB Bond item Par value Norminal interest rate Actual interest rate Due date (3) Re-classified held-to-maturity investment during the reporting period Other notes 16. Long-term accounts receivable (1) List of long-term accounts receivable In RMB Discount rate Items Closing balance Opening balance range (2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets (3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term accounts receivable Other notes 17. Long-term equity investment In RMB Increase /decrease Closing Gains and Adjustme Cash Withdraw balance Opening Additioal Reduced losses nt of Chinges bonus or al of Closing of Investees balance investmen investmen recognize other of other profits impairme Other balance impairme t t d under comprehe equity announce nt nt the equity nsive d to issue provision provision 85 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 mithod incme I. Joint ventures Chongqin g Pingshan 83,178,11 2,071,582 4,000,000 81,252,69 TK 2.31 .10 .00 4.41 Carburett or Co., Ltd. 83,178,11 2,071,582 4,000,000 81,252,69 Subtoal 2.31 .10 .00 4.41 II. Associates 83,178,11 2,071,582 4,000,000 81,252,69 Total 2.31 .10 .00 4.41 Other notes 18. Investment property (1) Investment property adopted the cost measurement mode √Applicable □ Not applicable In RMB Construction Items House, Building Land use right Total in process I. Original price 1. Balance at period-beginning 131,695,310.84 20,902,264.96 152,597,575.80 2.Increase in the current period (1) Purchase (2)Inventory\Fixed assets\ Transferred from construction in prog ress (3)Increased of Enterprise Combination 3.Decreased amount of the period 0 0 0 0 (1)Dispose (2)Other out Transfer to fixed assets, intangible assets 0 0 0 0 accounting 4. Balance at period-end 131,695,310.84 20,902,264.96 152,597,575.80 86 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 II.Accumulated amortization 1.Opening balance 32,213,005.48 5,058,544.71 37,271,550.19 2.Increased amount ofthe period 2,130,812.94 209,022.66 2,339,835.60 (1) Withdrawal 2,130,812.94 209,022.66 2,339,835.60 3.Decreased amount of the period (1)Dispose (2)Other out Transfer to fixed assets, intangible assets 0 0 0 0 accounting 4. Balance at period-end 34,343,818.42 5,267,567.37 39,611,385.79 III. Impairment provision 1. Balance at period-beginning 2.Increased amount of the period (1) Withdrawal 3.Decreased amount of the period (1)Dispose (2)Other out 4. Balance at period-end IV.Book value 1.Book value at period -end 97,351,492.42 15,634,697.59 - 112,986,190.01 2.Book value at period-beginning 99,482,305.36 15,843,720.25 115,326,025.61 (2) Investment property adopted fair value measurement mode □ Applicable √Not applicable (3) Details of investment property failed to accomplish certification of property In RMB Items Book value Reason Other notes 87 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 19. Fixed assets (1) List of fixed assets In RMB Electronic and office Items House and Buildings Machinery equipment Vehicles Total equipment I. Original book value: 1. Opening balance 89,165,656.22 633,299,247.37 8,924,256.63 15,777,854.39 747,167,014.61 2.Increased amountof the 0 5,721,170.96 0.00 34,223.94 5,755,394.90 period (1)Purchase 5,721,170.96 34,223.94 5,755,394.90 (2)Transfer of project under Construction (3)Increased fromenterprise merger —-Into the investment 0 0 properties 3.Decreased amount 0.00 19,182,856.12 0.00 0.00 19,182,856.12 of the period (1)Disposal 19,182,856.12 19,182,856.12 orscrap 4.Closing balance 89,165,656.22 619,837,562.21 8,924,256.63 15,812,078.33 733,739,553.39 II. Accumulative depreciation 1.Opening balance 25,974,085.30 376,877,571.47 7,159,133.06 11,312,363.07 421,323,152.90 2.Increased amountof the 1,032,800.08 12,002,355.97 1,457,973.25 1,933,992.46 16,427,121.76 period (1)Withdrawal 1,032,800.08 12,002,355.97 1,457,973.25 1,933,992.46 16,427,121.76 —Into the investment 0 0 properties 88 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 3.Decreased amountof the 0.00 19,070,085.16 0.00 0.00 19,070,085.16 period (1)Disposalor 19,070,085.16 19,070,085.16 scrap 4.Closing balance 27,006,885.38 369,809,842.28 8,617,106.31 13,246,355.53 418,680,189.50 III. Depreciation reserves 1. Opening balance 2.Increased amount of the period (1)Withdrawal 3.Decreased amount of the period (1)Disposalor scrap 4.Closing balance IV. Book Value 1.Closing book value 62,158,770.84 250,027,719.93 307,150.32 2,565,722.80 315,059,363.89 2.Opening book 63,191,570.92 256,421,675.90 1,765,123.57 4,465,491.32 325,843,861.71 value (2) List of temporarily idle fixed assets In RMB Accumulative Impairment Items Original book value Book value Notes depreciation provision (3) Fixed assets leased in from financing lease In RMB Accumulative Items Original book value Impairment provision Book value depreciation 89 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (4) Fixed assets leased out from operation lease In RMB Items Machinery equipment 41,913,560.74 (5) Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason Buildings and constructions 42,288,815.25 Waiting for final acceptance Other notes 20. Construction in progress (1) List of construction in progress In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment Replacement of 4,045,781.97 4,045,781.97 2,252,455.05 2,252,455.05 equipment Other 130,580.87 130,580.87 186,377.38 186,377.38 Total 4,176,362.84 4,176,362.84 2,438,832.43 2,438,832.43 (2) Changes of significant construction in progress In RMB Of Amount Proporti which: Accumul that on The Capitaliz Other ative Increase transferr estimate amount ation rate Estimate decrease amount Name of Opening d amount ed to Closing d of the Project of the of the Capital d d amount of items balance of the fixed balance project progress capitaliz interests resources number of the capitaliz period assets of accumul ed of the period ed the ative interests period interests period input of the period Capacity 2,252,45 1,729,01 Loans of expansion 5.05 1.54 financial 90 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 of institutio air-conditi ns oner Loans of 186,377. financial Other 8,518.87 38 institutio ns 2,438,83 1,737,53 Total -- -- -- 2.43 0.41 (3) List of the withdrawal of the impairment provision of the construction in progress In RMB Items Withdrawn amount Reason Other notes 21. Engineering material In RMB Items Closing balance Opening balance Other notes: 22. Liquidation of fixed assets In RMB Items Closing balance Opening balance Other notes: 23. Productive biological assets (1) Productive biological assets measured at cost methods □ Applicable √ Not applicable (2) Productive biological assets measured at fair value □ Applicable √ Not applicable 24. Oil and gas assets □ Applicable √ Inapplicable 91 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 25. Intangible assets (1) Information In RMB Items Land use right Patent Non-patents Total I. Total original book value 1. Opening balance 15,768,620.49 15,768,620.49 2. Increase in the reporting period (1)Purchase (2)Internal R&D (3)Increase fromenterprise combination —Into the investment properties 0 0 3.Decrease in thereporting period (1)Disposal 4.Closing balance 15,768,620.49 15,768,620.49 II. Total accoruedamortization 1.Opening balance 4,072,315.23 4,072,315.23 2.Increased in the reporting period (1)Withdrawal 156,161.40 156,161.40 —Into the investment properties 0 0 3.Decrease in the reporting period (1)Disposal 4.Closing balance 4,228,476.63 4,228,476.63 III. Impairment provision 1.Opening balance 2.Increases in the reporting period (1)Withdrawal 3.Decrease in the reporting period (1)Disposal 4.Closing balance 92 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 IV. Book value 1.Book value of theperiod-end 11,540,143.86 11,540,143.86 2.Book value of theperiod-begin 11,696,305.26 11,696,305.26 The proportion the intangible assets formed from the internal R&D through the Company amount the balance of the intangible assets at the period-end. (2) Details of fixed assets failed to accomplish certification of land use right In RMB Items Book value Reason Other notes: 26. R&D expenses In RMB Opening Closing Items Increase Decrease balance balance Other notes 27. Goodwill (1) Original book value of goodwill In RMB Name of the investees or the Opening balance Increase Decrease Closing balance events formed goodwill (2)Goodwill Impairment provision In RMB Items Opening balance Increase Decrease Closing balance Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Other notes 28. Long-term unamortized expenses In RMB Items Opening balance Increase Amortization Decrease Closing balance 93 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 amount 83 Aluminum machine 1,962,087.22 691,705.36 1,270,381.86 entry fee 96 Aluminum machine 509,501.43 35,546.64 473,954.79 technology transfer fee Total 2,471,588.65 727,252.00 1,744,336.65 Other notes 29. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets had not been off-set In RMB Closing balance Opening balance Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Assets impairment 12,112,504.63 1,816,875.69 12,112,504.63 1,816,875.69 provision Total 12,112,504.63 1,816,875.69 12,112,504.63 1,816,875.69 (2) Deferred income tax liabilities had not been off-set In RMB Closing balance Opening balance Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities (3) Deferred income tax assets or liabilities listed by net amount after off-set In RMB Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred deferred income tax income tax assets or deferred income tax income tax assets or Items assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at the period-end the period-end the period-begin the period-begin Deferred income tax 1,816,875.69 1,816,875.69 (4) List of unrecognized deferred income tax assets In RMB Items Closing amount Opening amount 94 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Deductible temporary difference 13,427,252.17 13,427,252.17 Deductible losses 329,995,380.72 329,995,380.72 Total 343,422,632.89 343,422,632.89 (5) Deductible losses of unrecognized deferred income tax assets will due the following years In RMB Year Closing balance Opening balance Notes 2017 197,428,928.73 197,428,928.73 2018 25,332,418.05 25,332,418.05 2019 98,496,222.54 98,496,222.54 2020 7,561,009.01 7,561,009.01 2021 1,176,802.39 1,176,802.39 Total 329,995,380.72 329,995,380.72 -- Other notes: 30. Other non-current assets In RMB Items Closing balance Opening balance Advance purchase of long-term assets 6,908,228.33 9,240,209.19 Total 6,908,228.33 9,240,209.19 Other notes: 31. Short-term loans (1) Category of short-term loans In RMB Items Closing balance Opening balance Mortgage loan 2,500,000.00 2,500,000.00 Guarantee loan 202,000,000.00 202,000,000.00 Credit loan 80,000,000.00 20,000,000.00 Total 284,500,000.00 224,500,000.00 Notes of short-term loans category 95 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2) List of the short-term loans overdue but not return The total amount of the overdue but not return short-term borrowings at the period-end was of RMB 000, of which the situation of the significant overdue but not return short-term borrowings as follows: In RMB Borrower Closing balance Borrowing rate Overdue time Overdue rate Other notes: 32. Financial liabilities measured by fair value and the changes included in the current gains and losses In RMB Items Closing balance Opening balance Other notes: 33. Derivative financial liabilities □ Applicable √ Inapplicable 34. Notes payabl In RMB Items Closing balance Opening balance Bank acceptance bill 425,710,000.00 718,560,000.00 Total 425,710,000.00 718,560,000.00 The total amount of the due but not pay notes payable at the period-end was of RMB 000. 35. Accounts payable (1) List of accounts payable In RMB Items Closing balance Opening balance Within 1 year 178,797,185.90 185,057,014.26 1-2 years 550,471.95 550,471.95 2-3 years 2,527,491.73 2,527,491.73 Over 3 years 8,147,612.85 5,233,507.51 Total 190,022,762.43 193,368,485.45 96 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2) Notes of the accounts payable aging over one year In RMB Items Closing balance Unpaid/un-carry-over reason Other notes: 36. Advance from customers (1) List of advance from customers In RMB Items Closing balance Opening balance Within 1 year 2,239,303.12 8,453,280.37 1-2 years 109,280.19 492,125.78 2-3 years 34,866.60 34,866.60 Over 3 years 145,853.56 145,853.56 Total 2,529,303.47 9,126,126.31 (2) Significant advance from customers aging over one year In RMB Items Closing balance Unpaid/un-carry-over reason (3) Particulars of settled but unfinished projects formed by construction contract at period-end. In RMB Items Amount Other notes: 37. Payroll payable (1) List of Payroll payable In RMB Items Opening balance Increase Decrease Closing balance Short-term compensation 1,589,014.02 32,736,835.37 32,075,462.33 2,250,387.06 Post-employment benefits - defined 1,040,798.52 5,095,797.87 4,586,967.16 1,549,629.23 contribution plans Dismissal welfare 3,363,195.80 3,363,195.80 Total 2,629,812.54 41,195,829.04 40,025,625.29 3,800,016.29 97 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2) List of Short-term salary In RMB Items Opening balance Increase Decrease Closing balance (1)Salary, bonus, allowance and 804,210.48 25,227,607.93 25,003,431.52 1,028,386.89 subsidy (2)Employee benefits 1,641,475.74 1,639,975.74 1,500.00 (3) Social insurance expenses 96,254.84 2,312,848.91 2,084,134.34 324,969.41 Including: medical insurance 71,138.21 2,029,789.80 1,816,664.67 284,263.34 premium Work-related injury insurance 8,165.84 188,699.28 183,297.08 13,568.04 premium Maternity insurance premium 16,950.79 94,359.83 84,172.59 27,138.03 (4) Housing fund 356,102.00 3,050,832.00 3,019,945.65 386,988.35 (5) Labor union expenditures and employee education 332,446.70 490,501.59 314,405.88 508,542.41 expenses 8. Other short-term salary 13,569.20 13,569.20 Total 1,589,014.02 32,736,835.37 32,075,462.33 2,250,387.06 (3) List of drawing scheme In RMB Items Opening balance Increase Decrease Closing balance Basic endowment 889,602.65 4,930,238.78 4,437,850.80 1,381,990.63 insurance premium Unemployment insurance 151,195.87 165,559.09 149,116.36 167,638.60 premium Total 1,040,798.52 5,095,797.87 4,586,967.16 1,549,629.23 Other notes: 38. Taxes payable In RMB Items Closing balance Opening balance VAT 624,781.08 73,009.55 Enterprise income tax -196,278.30 134,270.95 Individual income tax 672,571.51 1,005,278.13 Urban maintenance and construction tax 3,158,297.77 3,119,147.99 Business tax 490,583.43 393,030.84 98 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Educational surtax 2,018,882.33 1,988,736.03 property tax 3,727,900.64 3,727,900.64 Land royalities 1,808,215.20 Other taxes and surcharges 5,946,793.55 3,913,601.37 Total 16,443,532.01 16,163,190.70 Other notes: 39. Interest payable In RMB Items Closing balance Opening balance Particulars of significant overdue unpaid interes: In RMB Unit Overdue amount Overdue reason Other notes: 40. Dividends payable In RMB Items Closing balance Unpaid/un-carry-over reason Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: 41. Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Closing balance Opening balance Within 1 year 34,722,137.29 36,135,896.36 1-2 years 1,238,802.40 1,238,802.40 2-3 years 480,300.00 480,300.00 Over 3 years 2,838,889.77 2,838,889.88 Total 39,280,129.46 40,693,888.64 (2) Other significant accounts payable with aging over one year In RMB Items Closing balance Unpaid/un-carry-over reason 99 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Other notes: 42. Liabilities classified as holding for sale In RMB Items Closing balance Opening balance Other notes: 43. Non-current liabilities due within 1 year In RMB Items Closing balance Opening balance Long-term loans due within 1 year 53,400,000.00 36,100,000.00 Total 53,400,000.00 36,100,000.00 Other notes: 44. Other current-liabilities In RMB Items Closing balance Opening balance Changes on short term bonds payable: In RMB Overflow The Withdraw Pay in Name of Book Issue Opening discount Closing Issue date period current interest at current the bond value amount balance amortizati balance issue par period on Other notes: 45. Long-term loan (1) Category of long-term loan In RMB Items Closing balance Opening balance Credit loans 24,490,000.00 48,590,000.00 Total 24,490,000.00 48,590,000.00 Notes : Other notes,including interest rate range: 100 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 46. Bonds payable (1) Bonds payable In RMB Items Closing balance Opening balance (2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual capital securities of financial liabilities) (3) Note to conditions and time of share transfer of convertible bonds (4) Note to other financial instrument classified as financial liabilities Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end In RMB Financial Opening period Increase Decrease Closing period instruments outstanding Amount Book value Amount Book value Amount Book value Amount Book value issued Notes to the basis of other financial instrument classified as financial liabilities Other notes: 47. Long-term payable (1) Long-term payable listed by nature of the account In RMB Items Closing balance Opening balance Other notes: 48. Long term payroll payable (1) List of long term payroll payable In RMB Items Closing balance Opening balance 101 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2) Changes of defined benefit plans Present worth of defined benefit plans obligation: In RMB Items Amount of the Current Term Amount of the Previous Term Plan assets: In RMB Items Amount of the Current Term Amount of the Previous Term Net liabilities (net assets) of defined benefit plans In RMB Items Amount of the Current Term Amount of the Previous Term Notes to the influence of the content and related risk of defined benefit plans to the future cash flows, time and uncertainty of the Company: Notes to analysis results of major actuarial assumptions and sensibility of defined benefit plans Other notes: 49. Special payable In RMB Items Opening balance Increase Decrease Closing balance Formation reasons Other notes: 50. Accrued liabilities In RMB Items Closing balance Opening balance Formation reasons Other notes, including related important assumptions and estimates of accrued liabilities: 51. Deferred income In RMB Items Opening balance Increase Decrease Closing balance Formation reasons Items involved in government subsidies:: In RMB Amount of newly Amount accrued Related to the Items Opening balance Other changes Closing balance subsidy in non-business assets/income Other notes: 102 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 52. Other non-current liabilities In RMB Items Closing balance Opening balance Other notes: 53. Share capital In RMB Increase ("+") /decrease ("-") for the current year Opening Share Closing balance Issuance of converted from balance Share donation Others Sub-total new shares public reserve funds Total shares 119,375,000.00 0.00 0.00 0.00 0.00 0.00 119,375,000.00 Oter notes 54. Other equity instruments (1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end (2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-end In RMB Financial Opening balance Increase Decrease Closing balance instruments outstanding Amount Book value Amount Book value Amount Book value Amount Book value issued Changes, reason of change and basis of relevant accounting treatment of other equity instruments in reporting period: Notes: 55. Capital reserves In :RMB Items Opening balance Increase Decrease Closing balance Capital premium 344,407,741.07 344,407,741.07 Other capital reserves 614,167,353.22 614,167,353.22 Total 958,575,094.29 958,575,094.29 Other notes, including changes and reason of change: 103 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 56. Treasury stock In RMB Items Opening balance Increase Decrease Closing balance Other notes, including changes and reason of change: 57. Other comprehensive income In RMB Reporting period Less:Amount transferred into profit and Amount loss in the After-tax After-tax Opening Less: Closing Items incurred current period attribute to attribute to balance Income tax balance before that recognied the parent minority expenses income tax into other company shareholder comprehensive income in prior period Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transfer into arbitraged items: 58. Special reserves In RMB Items Opening balance Increase Decrease Closing balance Other notes, including changes and reason of change: 59. Surplus reserves In RMB Items Opening balance Increase Decrease Closing balance Statutory surplus 56,724,000.00 56,724,000.00 reserves Discretionary surplus 68,962,000.00 68,962,000.00 reserves Total 125,686,000.00 125,686,000.00 Other note, including changes and reason of change 104 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 60. Retained profits In RMB Items Amount of the Current Term Amount of the Previous Term Opening balance of retained profits after -935,253,002.64 -1,015,153,268.99 adjustments Add: Net profit attributable to owners of the 11,418,319.36 -1,176,802.39 Parent company Closing retained profits -923,834,683.28 -1,016,330,071.38 List of adjustment of opening retained profits: 1) RMB 000 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations. 2) RMB 000 opening retained profits was affected by changes on accounting policies. 3) RMB 000 opening retained profits was affected by correction of significant accounting errors. 4) RMB 000 opening retained profits was affected by changes in combination scope arising from same control. 5) RMB 000 opening retained profits was affected totally by other adjustments. 61. Revenue and Cost of Sales In RMB Amount of the Current Term Amount of the Previous Term Items Income Cost Income Cost Main business 503,087,025.50 411,899,437.65 426,970,591.77 355,926,496.01 Other business 46,987,232.34 44,641,497.15 41,206,700.11 38,525,651.32 Total 550,074,257.84 456,540,934.80 468,177,291.88 394,452,147.33 62. Business tax and surcharges In RMB Items Amount of the Current Term Amount of the Previous Term Urban maintenance and construction tax 1,875,078.50 927,815.98 Educational surtax 882,957.36 494,062.79 House tax 874,874.27 Business tax 3,636.58 77,605.24 Other 822,603.29 Total 4,459,150.00 1,499,484.01 Other notes: 105 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 63. Sales expenses In RMB Items Amount of the Current Term Amount of the Previous Term Employee compensation payable 2,887,786.88 1,990,950.83 Depreciation costs 32,592.77 32,025.64 Office costs 103,780.01 123,985.01 Loading and unloading expenses 13,646.99 Transportation cost 3,135,452.31 3,672,205.43 Insurance premium 40,746.56 35,884.13 Operating funds 7,397.70 10,205.80 Exhibition fees 80,776.70 32,715.57 Advertising expenses 100,164.87 26,600.00 Travel expenses 669,615.71 636,794.69 Sale service fees 763,063.83 794,896.71 Repair charges 2,899,469.01 3,244,922.22 Warehousing custodian fees 1,580,550.42 1,342,686.29 Other expenses 57,439.23 333,884.93 Total 12,358,836.00 12,291,404.24 Other notes: 64. Administrative expenses In RMB Items Amount of the Current Term Amount of the Previous Term Employee compensation payable 25,278,939.52 15,276,005.52 Depreciation costs 6,998,453.47 2,169,131.93 Office costs 349,863.66 570,834.88 Water and electric charge Travel expenses 458,888.14 309,697.62 Transportation cost 115,461.79 45,211.30 Insurance premium 10,915.68 5,398.59 Repair charges 1,146,810.29 723,998.55 Consumption of goods and materials 346,813.37 328,172.92 Technological development expenses 5,548,061.06 5,275,038.66 Technological transfer fees 1,378,061.53 1,284,863.67 106 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Taxes 0 2,062,876.53 Amortization of intangible assets 365,184.06 365,184.06 Entertainment expenses 165,266.91 162,536.00 Conference fees 4,000.00 86,094.22 Intermediary service expenses 629,874.75 738,601.23 Board meeting fees 96,348.77 39,499.88 Other 3,751,074.51 7,001,809.46 Total 46,644,017.51 36,444,955.02 Other notes: 65. Financial expenses In RMB Items Amount of the Current Term Amount of the Previous Term Interest expenses 19,436,793.78 17,843,846.03 Less: Interest income 29,113.82 2,464,248.32 Gains or losses on exchange 83,667.69 -115,884.16 Other -874,278.16 757,378.85 Total 18,617,069.49 16,021,092.40 Other notes: 66. Asset impairment loss In RMB Items Amount of the Current Term Amount of the Previous Term I. Bad debt loss 1,492,613.98 -255,000.99 Total 1,492,613.98 -255,000.99 Other notes 67. Gains on the changes in the fair value In RMB Source Amount of the Current Term Amount of the Previous Term Other notes 68. Investment income In RMB 107 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Items Amount of the Current Term Amount of the Previous Term Long-term equity investment income 1,994,582.10 1,216,436.70 calculated by equity method Total 1,994,582.10 1,216,436.70 Other notes: 69. Other income In RMB Source Amount of current period Amount of previous period 70. Non-operating gains In RMB Amount of the Current Term Amount of the Previous Term Recorded in the amount of the Items non-recurring gains and losses Total gains from disposal of 200,962.58 non-current assets Government Subsidy 36,900.00 449,200.00 Other 205,685.17 10,309.47 Total 443,547.75 459,509.47 Government subsidies recorded into current profits and losses: In RMB Whether the impact of Amount of Amount of Whhether Assets-relate Issuing subsidies on Items Issuing body Nature special current previous d/income Reason the current subsidies -related profit and period period loss Recruitment subsidy of Humanreso urce and social bureau industrial enterprises The funds for international 108 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 market development Industrial supporting 36,900.00 449,200.00 funds Special funds of foreign trade and economic development Other Total -- -- -- -- -- 36,900.00 449,200.00 -- Other notes: 71. Non-operational expenditures In RMB Items Amount of the Current Term Amount of the Previous Term Carried to current contingent gain/loss Total loss from disposal of 142,770.96 non-current assets Other 24,387.14 318,470.87 Total 167,158.10 318,470.87 Other notes: 72. Income tax expense (1) Lists of income tax expense In RMB Items Amount of the Current Term Amount of the Previous Term Current income tax expense 600,586.60 300,493.66 Total 600,586.60 300,493.66 (2) Adjustment process of accounting profit and income tax expense In RMB Items June 30, 2017 Total profit 12,232,607.81 109 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Income tax expenses 600,586.60 Oter notes 73. Other comprehensive income Refer to the notes 74. Supplementary information to cash flow statement (1) Other cash received relevant to operating activities In RMB Items Amount of the Current Term Amount of the Previous Term Interest income 86,602.67 2,177,892.38 Other 8,468,864.10 2,394,286.13 Total 8,555,466.77 4,572,178.51 Other notes: (2) Other cash paid related to operation In RMB Items Amount of the Current Term Amount of the Previous Term Operation fees such as freight, 9,411,628.27 4,032,335.96 warehousing fees Administrative expenses such as office 6,652,129.80 3,662,631.23 expenses and traveling expenses Others 14,562,818.38 1,593,360.76 Total 30,626,576.45 9,288,327.95 Statement on other cash paid related to operation (3) Other cash received related to investment In RMB Items Amount of the Current Term Amount of the Previous Term Statement on other cash received related to investment (4) Other cash paid related to investment In RMB Items Amount of the Current Term Amount of the Previous Term Statement on other cash paid related to investment 110 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (5) Other cash received related to financing In RMB Items Amount of the Current Term Amount of the Previous Term Financial note discount received 548,004,868.94 1,338,108,850.64 Total 548,004,868.94 1,338,108,850.64 Statement on other cash received related to financing (6) Other cash paid relevant to financing activities In RMB Items Amount of the Current Term Amount of the Previous Term Payment of due financing notes 554,303,615.40 1,051,057,474.94 Decrease of note deposit 112,867,525.61 38,416,143.30 Total 667,171,141.01 1,089,473,618.24 Other notes: 75. Supplementary information to cash flow statement (1) Information of net profit to net cash flows generated from operating activities In RMB Items Amount of the Current Amount of the Previous Term Term 1. Net profit adjusted to cash flows from operating activities -- -- Net profits 11,632,021.21 8,780,191.51 Add:Provision for assets impairment 1,492,613.98 -255,000.99 Depreciation of fixed assets, oil and gas assets and consumable biological 18,527,934.70 16,439,201.10 assets Amortization of intangible assets 365,184.06 365,184.06 Amortization of Long-term deferred expenses 727,252.00 727,251.60 Loss on disposal of fixed assets, intangible assets and other long-term 142,770.96 deferred assets Financial expenses ("-" for income) 19,057,069.49 16,021,092.40 Investments losses ("-" for gains) -1,994,582.10 -1,216,436.70 Decreases in inventories ("-" for increases) 46,514,669.20 -7,793,356.21 Decreases in operating payables ("-" for increases) -51,840,966.48 53,946,293.67 Increases in operating payables ("-" for decreases) 18,511,127.89 -25,074,682.65 Net cash flows from operating activities 63,135,094.91 61,939,737.79 111 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2. Investing and financing activities that do not involving cash receipts -- -- and payment: 3. Net increase in cash and cash equivalents -- -- Closing balance of cash 167,499,879.38 116,473,397.62 Less: Opening balance of cash 273,768,758.46 23,643,515.81 Net increase in cash and cash equivalents -106,268,879.08 92,829,881.81 (2) Net Cash paid of obtaining the subsidiary In RMB Amount Of which -- Of which -- Of which -- Notes: (3) Net Cash receive of disposal of the subsidiary In RMB 金额 Of which -- Of which -- Of which -- Notes: (4) Cash and cash equivalents In RMB Items Closing balance Opening balance I.Cash 167,499,879.38 273,768,758.46 Including :Cash on hand 24,628.87 31,205.34 Bank deposit on demand 167,475,250.51 273,737,553.12 III. Closing balance of cash and cash 167,499,879.38 273,768,758.46 equivalents 112 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Notes: 76. Note of statement of changes in the owner's equity Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.: 77. The assets with the ownership or use right restricted In RMB Items Closing book value Restricted reason Provide a guarantee for issuance of bank Monetary capital 127,778,538.50 acceptance bills Total 127,778,538.50 -- Notes: 78. Foreign currency monetary items (1) Foreign currency monetary items In RMB Closing foreign currency Closing convert to RMB Items Exchange rate balance balance Including :USD 456.27 6.9688 3,179.66 Notes: (2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason. □ Applicable √Not applicable 113 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 79. Arbitrage Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged risk qualitative and quantitative information: 80.Other VIII. Changes of merge scope 1. Business merger not under same control (1) Business merger not under same control in reporting period In RMB Income of Net profits of Time and Cost of Way to gain Recognition acquiree acquiree place of Proportion of Name gaining the the stock Pruchase date basis of during the during the gaining the stock rights stock rights rights purchase date purchase date purchase date stock right to period-end to period-end Other notes: (2) Combined cost and goodwill In RMB Combined cost Notes to determination method, consideration and changes of fair value of combined cost: The main formation reason for the large goodwill: Other notes: (3) The identifiable assets and liabilities of acquiree at purchase date In RMB Fair value on purchase date Book value on purchase date The recognition method of the fair value of identifiable assets and liabilities Contingent liability of acquiree undertaken by business merger Other notes: (4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again、 Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control during the reorting period □ Yes √ No 114 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge (6) Other notes: 2. Business combination under the same control (1) Business combination under the same control during the reporting period In RMB Income from Net profits the from the Recognition Income Net profits period-begin reporting Proportion of Combination basis of during the during the Name Basis to the period to the the profits date combination period of period of combination combination date comparison comparison date of the date of the combination combination Notes: (2) Combination cost In RMB Combination cost Notes to contingent consideration or other changes: Other notes: (3) The book value of the assets and liabilities of the merged party on the date of consolidatio In RMB Combination date Last closing period Contingent liabilities of the combined party undertaken in combination Other notes: 3. Counter purchase Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights and interests in accordance with the equity transaction process. 115 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control □ Yes √ No Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 5. Other reasons for the changes in combination scope Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information: 6. Other IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group Proportion of Main Registration shareholding Name operating Nature of business Way of gaining place Indirectl place Directly y Production and Air Conditioner Co. Chongqing Chongqing sale of automotive 100.00% Investment air-conditioners Domestic sales of Business motorcycles and combination Shanghai Jianshe Motorcycle Shanghai Shanghai 51.00% the relevant under common accessories control Notes: holding proportion in subsidiary different from voting proportion: Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee: Significant structure entities and controlling basis in the scope of combination: Basis of determine whether the Company is the agent or the principal: Other notes: 116 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (2) Significant not wholly owned subsidiary In RMB The profits and losses Declaring dividends Balance of minority Shareholding proportion Name arbitrate to the minority distribute to minority shareholder at closing of minority shareholder shareholders shareholder period Shanghai Jianshe 49.00% 213,701.85 1,433,987.59 Motorcycle Co., Ltd. Holding proportion of minority shareholder in subsidiary different from voting proportion: Other notes: (3) The main financial information of significant not wholly owned subsidiary In RMB Closing balance Opening balance Non-curr Non-curr Non-curr Current Total Non-curr Current Total Name Current Total ent Current Total ent ent Liabilitie Liabilitie ent Liabilitie Liabilitie assets assets Liabilitie assets assets Liabilitie assets s s assets s s s s Shanghai Jianshe 8,711,62 7,174,15 15,885,7 12,959,2 12,959,2 5,982,24 7,443,92 13,426,1 10,935,7 10,935,7 Motorcy 9.61 8.45 88.06 82.77 82.77 1.44 8.95 70.39 91.32 91.32 cle Co., Ltd. In RMB June 30, 2017 June 30, 2016 Total Total Name Operation Operating Operation Operating Net profit comprehensi Net profit comprehensi revenue cash flow revenue cash flow ve income ve income Shanghai Jianshe 6,169,703.82 436,126.22 436,126.22 1,814,015.77 7,505,633.73 566,012.42 566,012.42 1,754,089.07 Motorcycle Co., Ltd. Other notes: (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements Other notes: 117 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary (1) Note to owner’s equity share changed in subsidiary (2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the parent company In RMB Other notes 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Shareholding ratio (%) Accounting treatment Name of joint methods for the Domicile of venture or Registered place Business nature primary operation Directly Indirectly investments in associate joint ventures or associates Production and Chongqing sales of Pingshan TK motorcycles and 49.00% Equity method Carburettor Co., the relevant Ltd. Chongqing Chongqing accessories Notes to holding proportion of joint venture or associated enterprise different from voting proportion: Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: (2)Major joint ventures and associates In RMB Closing balance/June 30, 2017 Opening balance/June 30, 2016 Current assets 168,577,815.92 171,159,279.38 Including:Cashand cash equivalents 102,666,236.99 98,235,139.01 Not-current assets 23,137,339.55 24,433,588.43 Total assets 191,715,155.47 195,592,867.81 Current Liabilities 26,082,019.34 25,841,618.24 Total Liabilities 26,082,019.34 25,841,618.24 Equity attributable to the shareholders of 165,633,136.13 169,751,249.57 parent company 118 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Operating income 64,818,695.71 60,652,899.25 Financial expenses -435,670.01 -724,443.07 Income tax expenses 1,007,753.29 557,822.50 Net profit 4,070,575.72 2,482,523.87 Total comprehensive income 4,070,575.72 2,482,523.87 Dividends received from joint ventures for 4,000,000.00 3,400,000.00 the current year Other notes (3) Main financial information of significant associated enterprise In RMB Closing balance/June 30, 2017 Opening balance/June 30, 2016 Other notes (4) Summary financial information of insignificant joint venture or associated enterprise In RMB Closing balance/June 30, 2017 Opening balance/June 30, 2016 Joint venture: -- -- The total of following items according to the -- -- shareholding proportions Associated enterprise: -- -- The total of following items according to the -- -- shareholding proportions Other notes: (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company (6) The excess loss of joint venture or associated enterprise In RMB The cumulative recognized The derecognized losses or the The noncumulative Name losses in proevious share of net profit in reporting unrecognized losses in reporting accumulatively derecognized period period Other notes: (7) The unrecognized commitment related to joint venture investment (8) Contingent liabilities related to joint venture or associated enterprise investment 119 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 4. Significant common operation Main operating Proportion /share portion Name plance registration Registration place Business nature Directly Indirectly place Note to holding proportion or share portion in common operation different from voting proportion: Basis of common operation as a single entity, classify as common operation Other notes: Other notes 5. Equity of structure entity not including in the scope of consolidated financial statements Related notes to structure entity not including in the scope of consolidated financial statements 6.Other X. The risk related financial instruments XI. The disclosure of the fair value 1. Closing fair value of assets and liabilities calculated by fair value In RMB Closing fair value Items Fair value measurement Fair value measurement Fair value measurement Total items at level 1 items at level 2 items at level 3 I. Consistent fair value -- -- -- -- measurement II Inconsistent fair -- -- -- -- valuemeasuement 120 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2 4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels 7. Changes in the valuation technique in the current period and the reason for change 8. Fair value of financial assets and liabilities not measured at fair value 9. Other XII. Related party and related Transaction 1. Information related to parent company of the Company Registered Registered Shareholding ratio in Voting ratio in the Name of the parent company Business nature place capital the Company (%) Company (%) Production and chongqing construction mechanical Chongqin sales of 180.30 million 71.13% 71.13% and electrical Co. Ltd. g motorcycles and parts Notes The ultimate controller of the Company is Other notes 2. Subsidiaries of the Company See notes 121 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 3. Information on the joint ventures and associated enterprises of the Company The details of significant joint venture and associated enterprise of the Company Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period: Name of joint venture or associate Relationship with the company Chongqing Pingshan TK Carburettor Co., Ltd.("Pingshan TK") Joint venture Chongqing Tongsheng Machinery Co., Ltd.("Tongsheng Original associates venture, now associates of parent company Jianshe") Chongqing Fuyeda Property Management Co., Ltd.("Fuyeda") Original associates venture, now associates of parent company Other notes 4.Other related parties of the Company Name of other related parties Relationship with the Company Chongqing Jianshe Industrial (Group) Co., Ltd. ("Jianshe industry ") Under the common control of the same party China South Industries Group Finance Co., Ltd. ("South Finance Company ") Under the common control of the same party Chongqing Changan Motor Joint Stock Limited Company ("Changan Motor ") Under the common control of the same party Chongqing Changan Automobile Co., Ltd. Beijing Changan Automobile Company Under the common control of the same party (“Beijing Changan“) An Joint venture a subsidiary of a controlling Chongqing Changan Suzuki Motor Co., Ltd. ("Changan Suzuki ") shareholder Hebei Changan Motor Co., Ltd. ("Hebei Changan ") Under the common control of the same party Nanjing Changan Motor Co., Ltd. ("Nanjing Changan ") Under the common control of the same party Baoding Changan Bus Manufacturing Co., Ltd (“Baoding Changan“) Under the common control of the same party Hefei Changan Motor Co.Ltd (“Hefei Changan’) Under the common control of the same party Chongqing Changan Motor Customer Service Co., Ltd. ("Changan Motor Customer Under the common control of the same party Service ") Chongqing Changan Automobile International Sales & Service Co., Ltd(“Changan Under the common control of the same party Automobile sales “) Chongqing North Construction import and export trade co.ltd (“import and export Under the common control of the same party company”) Chongqing jianshe sales co. Ltd(“the sales company”) Under the common control of the same party Hafei Motor share company(“Hafei motor”) Under the common control of the same party An Joint venture a subsidiary of a controlling Changan Ford Motor Co.Ltd Harbin branch (“Changan Ford Harbin branch”) shareholder Harbin dongan Motor Power shares Co. Ltd(“Harbin dongan power”) Under the common control of the same party 122 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Other notes 5. List of related-party transactions (1) Information on acquisition of goods and reception of labor service Acquisition of goods and reception of labor service In RMB Occurred current Trading limit Over the trading limit Occurred in previous Related party Content term approved or not? term Purchasing parts Jianshe Machinery 27,450,000.00 80,000,000.00 No 971,500.42 and others Purchasing parts Import & export Co 15,250,000.00 32,000,000.00 No 42,304,131.95 and others Lease production Jianshe Machinery 0.00 2,500,000.00 No site Jianshe Industry Part test 830,000.00 2,000,000.00 No Chongqing Jianya Part test 4,000.00 20,000.00 No Fuyeda Transportion 254,000.00 600,000.00 No Accepta nce of Cbangan Group and repairin g service 1,030,000.00 5,000,000.00 No its Subsidiaries Sales of goods and services In RMB Subjects of the related Occurred current Occurred in previous Related parties transactions term term Cbangan Group and its Subsidiaries Sales of goods 91,070,000.00 181,578,578.06 Jianshe Machinery Lease storeouse 0.00 Notes (2) Related trusteeship/contract Lists of related trusteeship/contract In RMB Name of the Name of the Income entruster/Contract entrustee/Contrac Type Initial date Due date Pricing basis recognized in the ee tor reporting period Notes Lists of entrust/contractee: 123 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 In RMB Name eof the Name of the Charge entruster/Contract entrustee/Contrac Type Initial date Due date Pricing basis recognized in the ee tor reporting period Notes: (3) Information of related lease The Company was lessor: In RMB The lease income confirmed in The lease income confirmed in Name of lessee Category of leased assets this year last year Jianshe mechanical and Workshop Equipment 1,844,995.60 electrical The Company was lessee: In RMB The lease income confirmed in Lessor Category of leased assets Category of leased assets this year Jianshe mechanical and Workshop 1,131,405.41 electrical Notes: (4) Related-party guarantee The Company was guarantor In RMB Execution accomplished Secured party Guarantee amount Start date End date or not The Company was secured party In RMB Execution accomplished Guarantor Guarantee amount Start date End date or not Vehicle air conditioner 2,000.00 August 24,2016 February 24,2017 Yes Vehicle air conditioner 1,453.00 October 18,2016 April 18,2017 Yes Vehicle air conditioner 1,097.00 October 18,2016 April 18,2017 Yes Vehicle air conditioner 2,500.00 November 29,2016 May 28,2017 Yes Vehicle air conditioner 2,500.00 December 6,2016 June 6,2017 Yes Vehicle air conditioner 2,450.00 January 17,2017 July 17,2017 No Vehicle air conditioner 5,000.00 August 25,2016 August 24,2017 No Vehicle air conditioner 2,000.00 February 10,2017 August 10,2017 No Vehicle air conditioner 1,453.00 April 7,2017 October 7,2017 No 124 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Vehicle air conditioner 1,097.00 April 11,2017 October 11,2017 No Vehicle air conditioner 2,500.00 May 5,2017 November 5,2017 No Vehicle air conditioner 2,500.00 June 7,2017 December 7,2017 No Notes The above acceptance of the controlling shareholder- Jianshe Mechanical and Electric 's guarantee has been approved by the shareholders' general meeting. For details, please refer to the announcements published on Securities Times, Hong Kong Commercial Daily and Cninfo website on April 28, 2017 and on May 26, 2017. (Announcement No.2017-07and 2017-042). (5) Inter-bank lending of capital of related parties: In RMB Amount borrowed and Related party Initial date Due date Notes loaned Borrowed Loaned (6) Related party asset transfer and debt restructuring In RMB Related party Content Occurred current term Occurred in previous term (7) Rewards for the key management personnel In RMB Items Occurred current term Occurred in previous term (8) Other related transactions 6. Receivable and payables due with related parties (1)Receivables In RMB At end of term At beginning of term Projects Related parties Book balance Bad debt provision Book balance Bad debt provision (2)Payables In RMB 125 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Items Related party Closing book value Openting book value 7. Related party commitment 8. Other XIII. Stock payment 1. The Stock payment overall situation □ Applicable √ Not applicable 2. The Stock payment settled by equity □ Applicable √ Not applicable 3. The Stock payment settled by cash □ Applicable √ Not applicable 4. Modification and termination of the stock payment 5. Other XIV. Commitments 1.Significant commitments Significant commitments at balance sheet date As of June 30, 2017, the company does not need to discourse 126 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2. Contingency (1) Significant contingency at balance sheet date (2) The Company have no significant contingency to disclose, also should be stated There was no significant contingency in the Company. 3.Other XV. Events after balance sheet date 1. Significant events had not adjusted In RMB Influence number to the Reason of unable to estimate Items Conternt Financial position and operating influence number results 2. Profit distribution 3. Sales return 4. Notes of other significant events XVI. Other significant events 1. The accounting errors correction in previous period (1)Retrospective restatement In RMB Name of the influenced report Content Processing program Accumulative impact items during comparison period (2)Prospective application Content Processing program Reason of adopting prospective application 127 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 2. Debt restructuring 3. Replacement of assets (1) Non-monetary assets exchange (2) Other assets replacement 4. Pension plan 5. Discontinuing operation In RMB Termination of the business Income tax profits Items Income Expenses Total profit Net profit expenses attributable to the parent company owner Other notes: 6. Segment information (1) Recognition basis and accounting policies of reportable segment (2) The financial information of reportable segment In RMB Items Offset during segments Total (3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable segment, shall disclose the reason. (4) Other notes 7. Other important transactions and events have an impact on investors’ decision-making 8. Other XVII. Notes of main items in the financial statements of the Parent Company 1. Accounts receivable (1) Accounts receivable classified by category In RMB 128 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Proportio Proportio Proportion Book value Amount Amount value Amount Amount n% n% n% % Accounts receivable with provision for bad debt made on a 1,733,09 1,728,79 1,733,0 1,728,790 100.00% 99.75% 4,307.10 100.00% 99.75% 4,307.10 portfolio with similar 7.58 0.48 97.58 .48 risk credit characteristics basis 1,733,09 1,728,79 1,733,0 1,728,790 100.00% 99.75% 4,307.10 100.00% 99.75% 4,307.10 Total 7.58 0.48 97.58 .48 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end □ Applicable √ Not applicable In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision: √ Applicable □ Not applicable In RMB Closing balance Aging Accounts receivable Provision for bad debts Proportion of provision (%) Subitem within 1 year 2-3 years 6,153.00 1,845.90 30.00% Over 5 years 1,726,944.58 1,726,944.58 100.00% Total 1,733,097.58 1,728,790.48 Notes of the basis of recognizing the group: In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision □Applicable √ Not applicable In the groups, accounts receivable adopting other methods to accrue bad debt provision: (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB0.00; the amount of the reversed or collected part during the reporting period was of RMB 0.00. Of which the significant amount of the reversed or collected part during the reporting period In RMB Items Reversed or collected amount Method (3) The actual write-off accounts receivable In RMB 129 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 Items Amount Of which the significant actual write-off accounts receivable: In RMB Whether occurred Name Nature Amount Reason Process from the related transactions Notes of the write-off the accounts receivable: (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party The top five accounts receivable by the credit balance as at June 30, 2017 total RMB 1,561,146.14, accounting for 90.08% of total amount of balance as at June 30, 2017 of accounts receivable, and the balance as at June 30, 2017 of provision for bad debts provided correspondingly totals RMB1,561,146.14. (5) Account receivable which terminate the recognition owning to the transfer of the financial assets (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Other notes: 2. Other accounts receivable (1) Other accounts receivable disclosed by category In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Proportio Proportio Proportion Book value Amount Amount value Amount Amount n% n% n% % Other receivables with provision for bad debt made on a 9,685,79 4,403,82 5,281,967 9,425,1 4,403,827 5,021,347.0 96.41% 45.47% 96.31% 46.72% portfolio with similar 5.05 7.20 .85 74.24 .20 4 risk credit characteristics basis Other receivables with insignificant single amount and 361,125. 361,125. 361,125 361,125.3 3.59% 100.00% 0.00 3.69% 100.00% provision for bad 35 35 .35 5 debt made on an individual basis 130 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 10,046,9 4,764,95 5,281,967 9,786,2 4,764,952 5,021,347.0 100.00% 48.69% Total 20.40 2.55 .85 99.59 .55 4 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end □ Applicable √ Not applicable In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision: √Applicable □ Not applicable In RMB Closing balance Aging Other receivables Provision for bad debts Proportion of provision (%) Subitem within 1 year 1-6 months 3,755,400.33 Subtotal within 1 year 3,755,400.33 1-2 years 1,696,186.13 169,618.61 10.00% Over 5 years 4,234,208.59 4,234,208.59 100.00% Total 9,685,795.05 4,403,827.20 Notes of the basis of recognizing the group: In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision □Applicable √ Not applicable In the groups, other accounts receivable adopting other methods to accrue bad debt provision: □Applicable √ Not applicable 2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the reporting period was of RMB 0.00;the amount of the reversed or collected part during the reporting period was of RMB 000. Of which the significant amount of the reversed or collected part during the reporting period In RMB Name Reversed or collected amount Method (3) The actual write-off other accounts receivable In RMB Items Amount Of which the significant write-off other accounts receivable: In RMB Whether occurred Name Nature Amount Reason Process from the related 131 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 transactions Notes of write-off other accounts receivable: (4) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Current account 44,037.12 667,041.51 Petty cash and borrowings with small amount 5,407,549.34 4,523,924.14 Fully provided provision for bad debts 4,595,333.94 4,595,333.94 regarding long-term receivables and payables Other Total 10,046,920.40 9,786,299.59 (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party In RMB Proportion of the total year end Closing balance of Name Nature Closing balance Aging balance of the bad debt provision accounts receivable Top 5 of the closing balance of the other accounts receivable 5,132,834.93 Over 5 years 51.09% 4,244,328.04 colleted according to the arrears party Total -- 5,132,834.93 -- 51.09% 4,244,328.04 (6) Accounts receivable involved with government subsidies In RMB Estimated received time, Name Project of government Opening balance Closing balance amount and basis 132 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Other notes: 3. Long-term equity investment In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment Investments in 168,160,000.00 168,160,000.00 168,160,000.00 168,160,000.00 subsidiaries Investments in associates and 81,252,694.41 81,252,694.41 83,178,112.31 83,178,112.31 joint ventures Total 249,412,694.41 249,412,694.41 251,338,112.31 251,338,112.31 (1) Investments in subsidiaries In RMB Provision for Balance as at June 30, 2015 of Investee Opening balance Increase Decrease Closing balance impairment in the provision for period impairment Shanghai Jianshe Motorcycle Co., 8,160,000.00 8,160,000.00 Ltd. Chongqing Jianshe Automobile A/C 160,000,000.00 160,000,000.00 Co., Ltd. Total 168,160,000.00 168,160,000.00 (2)Investments in associates and joint ventures In RMB Increases/decreases in the current year Balance as at June 30, 2017 Declarati Opening Additiona Other Closing of Investee Changes on of cash Impairme Balance l comprehe balance provision in other nt Other investmen nsive dividends equity provision for t income or profits impairme nt 133 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 1. Joint ventures Chongqin g Pingshan 83,178,11 2,074,582 4,000,000 81,252,69 TK 2.31 .10 .00 4.41 Carburett or Co., Ltd. 83,178,11 2,074,582 4,000,000 81,252,69 Subtotal 2.31 .10 .00 4.41 2.Associates 83,178,11 2,074,582 4,000,000 81,252,69 Total 2.31 .10 .00 4.41 (3)Other Notes 4. Operation income and operation cost In RMB Occurred current term Occurred in previous term Items Income Cost Income Cost Major business turnover 182,250.38 Other business income 339,527,118.70 305,125,226.46 336,824,318.43 313,368,020.89 Total 339,527,118.70 305,125,226.46 336,824,318.43 313,550,271.27 Other notes: 5. Investment income In RMB Items Occurred current term Occurred in previous term Long-term equity investment gains on equity 1,994,582.10 1,216,436.70 basis Total 1,994,582.10 1,216,436.70 6.Other XVIII. Supplementary Information 1. Details of non-recurring gain/loss of the term √ Applicable □ Not applicable 134 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 In RMB Items Amount Notes Non-current asset disposal gain/loss 58,191.62 Govemment subsidy recognized in current gain and loss(excluding those closely related to the 36,900.00 Company’s business and granted under the state’s policies) Other non-business income and expenditures other than the above 181,298.03 Total 276,389.65 -- Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item □ Applicable √Not applicable 2. Net income on asset ratio and earning per share In RMB Earnings per share Profit of the report period Net income on asset, weighted Diluted earnings per Basic earnings per share share Net profit attributable to common 4.17% 0.0957 0.0957 shareholders of the Company Net profit attributable to the common owners of the PLC after 4.05% 0.0933 0.0933 deducting of non-recurring gains/losses 3. Differences between accounting data under domestic and overseas accounting standards (1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards □ Applicable √ Notapplicable (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards □ Applicable √ Not applicable (3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions 4.Other 135 Chongqing Jianshe Motorcycle Co., Ltd. The Semi-annual Report 2017 XI. Documents available for inspection I. The semi-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. All of the originals of the Company’s documents and public notices publicized by the presses designated by China Securities Regulatory Commission in the report period; Chongqing Jianshe Motorcycle Co., Ltd. Board chairman:Lv Hongxian August 29,2017 136