Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Chongqing Jianshe Vehicle System Co., Ltd. The First Quarterly Report 2020 2020-054 April 2020 1 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 1 Important notes The Board of Directors,the Supervisory Committee, the directors, the supervisors, and executives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Quarterly Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Quarterly Report. Other directors attending the Meeting for annual report deliberation except for the followed: The name of director who did The name of director who was Title for absent director Reasons for absent not attend the meeting in person authorized Wang Jun Independent director Out of office Li Dingqing Mr. Lv Hongxian, The Company Leader, Mr.Tan Mingxian, Chief financial officer and the Ms.Niu Yanli, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in the report. 2 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 II. Basic Information of the Company I.Main financial data and financial index Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. □Yes √No Changes of this period over This period Same period of last year same period of last year(%) Operation revenue(Yuan) 159,386,309.82 208,419,491.98 -23.53% Net profit attributable to the shareholders -24,237,509.94 -15,704,995.56 54.33% of the listed company(Yuan) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of -24,329,373.91 -15,991,228.39 52.14% listed company(Yuan) Net Cash flow generated by business 21,163,192.63 29,472,232.97 -28.19% operation(Yuan) Basic earning per share(Yuan/Share) -0.2030 -0.1316 54.26% Diluted gains per -0.2030 -0.1316 54.26% share(Yuan/Share)(Yuan/Share) Net asset earning ratio(%) -15.14% -5.50% -9.64% Changes of this period-end End of this period End of last period over same period-end of last year(%) Gross assets(Yuan) 1,099,678,778.64 1,190,147,356.58 -7.60% Net assets attributable to shareholders of 147,935,220.67 172,172,730.61 -14.08% the listed company(Yuan) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning to the end Items Notes of the report period.) Non-current asset disposal gain/loss(including the write-off part for which 13,663.97 assets impairment provision is made) 3 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Government subsidies recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s 78,200.00 policies) Total 91,863.97 -- 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. 4 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 II. Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders with Total number of common 7,696 the voting power recovered at the 0 shareholders at the period-end end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing Properties of Share tradable shares Shareholder name Quantity Status of the shareholder proportion % with Conditional Quantity shares held China Military Equipment State-owned legal 71.13% 84,906,250 84,906,250 Group Co., Ltd. person Domestic natural Gu Zuocheng 1.89% 2,261,000 2,218,750 person Domestic Hengsheng Sun Group Co., non-state-owned 1.47% 1,750,000 1,750,000 Freeze 1,750,000 Ltd. legal person Domestic natural Liu Dan 0.91% 1,083,251 person Domestic Xu Yuanhui non-state-owned 0.65% 777,889 legal person Overseas natural Yu Lingfeng 0.51% 612,921 person Domestic natural Chen Xinqiang 0.51% 612,400 person Domestic Zhang Meilan non-state-owned 0.43% 513,560 legal person Domestic natural Feng Yonghui 0.42% 500,000 500,000 person Domestic Li Jianping non-state-owned 0.36% 435,650 legal person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the non-restricted Share type Shareholders’ Names shares held Share type Quantity 5 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Foreign shares placed in Liu Dan 1,083,251 1,083,251 domestic exchange Foreign shares placed in Xu Yuanhui 777,889 777,889 domestic exchange Foreign shares placed in Yu Lingfeng 612,921 612,921 domestic exchange Foreign shares placed in Chen Xinqiang 612,400 612,400 domestic exchange Foreign shares placed in Zhang Meilan 513,560 513,560 domestic exchange Foreign shares placed in Li Jianping 435,650 435,650 domestic exchange CORE PACIFIC-YAMAICHI Foreign shares placed in 434,650 434,650 INTERNATIONAL (H.K.) LIMITED domestic exchange Foreign shares placed in Chen Houping 423,561 423,561 domestic exchange Foreign shares placed in Liu Guosheng 345,575 345,575 domestic exchange Foreign shares placed in Lv Gang 343,000 343,000 domestic exchange 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 Explanation on associated relationship among the ‘Acting in concert’ in accordance with ‘The rules of information disclosure on aforesaid shareholders change of 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. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period □ Applicable √Not applicable 6 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 III Significant Events 1.Significant Issues I. Major changes of main accounting statement items and financial indicators in the reporting period, as well as reasons for the changes √ Applicable □ Not applicable During the reporting period, affected by the new coronarvirus epidemic, the domestic automobile production and sales fell sharply. As an auto parts match-supply enterprise, the Company's sales of products fell 22.61% YOY, resulting in a loss for the Company's first quarter performance. II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √ Applicable □ Not applicable Progress in the implementation of share repurchase □ Applicable √ Not applicable Progress in the implementation of the reduction of the repurchased shares by means of centralized bidding □ Applicable √ Not applicable III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period □ Applicable √Not applicable No such cases in the reporting period. IV Securities investments □ Applicable √ Not applicable No such cases in the Reporting Period V.Entrusted Financial Management □ Applicable √Not applicable No such cases in the Reporting Period VI. Investment in derivatives □ Applicable √Not applicable No such cases in the Reporting Period 7 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 VII.Particulars about researches, visits and interviews received in this reporting period √ Applicable □Not applicable Way of Reception time Types of visitors Basic index reception Q:Is the Company's first quarter results affected by the new coronarvirus epidemic? Answer: The new coronarvirus epidemic caused a decline in domestic automobile production and sales. As an auto parts match-supply March 20,2020 By phone Individual enterprise, the new coronarvirus epidemic has a certain impact on the Company's compressor production and sales in the first quarter, which is subject to disclosure in the Company's first quarter report. VIII. Illegal providing of external guarantees □ Applicable √ Not applicable No illegal providing of external guarantees in the report period. IX. Controlling shareholder and its related parties occupying non-business capital of the listed company □ Applicable √Not applicable No such cases in the reporting period. 8 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by: Chongqing Jianshe Vehicle System Co., Ltd. March 31, 2020 In RMB Items March 31, 2020 December 31, 2019 Current asset: Monetary fund 97,842,931.30 154,613,734.94 Settlement provision Outgoing call loan Transactional financial assets Derivative financial assets Notes receivable 58,604,305.96 23,412,900.18 Account receivable 180,891,913.47 231,648,218.97 Financing receivable Prepayments 8,910,497.59 10,076,917.93 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Other account receivable 5,752,335.99 3,439,028.39 Including:Interest receivable Dividend receivable Repurchasing of financial assets Inventories 138,459,429.34 146,318,458.60 Contract assets Assets held for sales Non-current asset due within 1 year Other current asset 2,875,368.07 3,047,932.61 Total of current assets 493,336,781.72 572,557,191.62 Non-current assets: Loans and payment on other’s behalf disbursed 9 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Creditor's Investment Other Creditor's Investment Long-term receivable Long term share equity investment 226,265,252.45 230,649,585.63 Other equity instruments investment Other non-current financial assets Property investment 23,936,012.87 71,928,994.28 Fixed assets 312,252,178.09 278,885,442.43 Construction in progress 9,514,417.63 3,858,269.05 Production physical assets Oil & gas assets Use right assets Intangible assets 22,658,918.53 22,823,384.71 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset 6,087,000.47 6,060,931.98 Other non-current asset 5,628,216.88 3,383,556.88 Total of non-current assets 606,341,996.92 617,590,164.96 Total of assets 1,099,678,778.64 1,190,147,356.58 Current liabilities Short-term loans 449,990,000.00 422,280,000.00 Loan from Central Bank Borrowing funds Transactional financial liabilities Derivative financial liabilities Notes payable 228,545,000.00 330,644,075.95 Account payable 223,567,122.96 225,193,165.80 Advance receipts 2,228,822.44 1,117,423.35 Contract liabilities Selling of repurchased financial assets Deposit taking and interbank deposit Entrusted trading of securities Entrusted selling of securities 10 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Employees’ wage payable 16,922,121.94 14,879,129.15 Tax payable 17,338,173.15 17,773,372.17 Other account payable 13,152,317.48 6,087,459.55 Including:Interest payable Dividend payable Fees and commissions payable Reinsurance fee payable Liabilities held for sales Non-current liability due within 1 year Other current liability Total of current liability 951,743,557.97 1,017,974,625.97 Non-current liabilities: Reserve fund for insurance contracts Long-term loan Bond payable Including:preferred stock Sustainable debt Lease liability Long-term payable Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total non-current liabilities Total of liability 951,743,557.97 1,017,974,625.97 Owners’ equity Share capital 119,375,000.00 119,375,000.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 958,575,094.29 958,575,094.29 Less:Shares in stock 11 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Other comprehensive income Special reserve Surplus reserves 125,686,000.00 125,686,000.00 Common risk provision Retained profit -1,055,700,873.62 -1,031,463,363.68 Total of owner’s equity belong to the 147,935,220.67 172,172,730.61 parent company Minority shareholders’ equity Total of owners’ equity 147,935,220.67 172,172,730.61 Total of liabilities and owners’ equity 1,099,678,778.64 1,190,147,356.58 Legal Representative: Lv Hongxian Person in charge of accounting:Tan Mingxian Accounting Dept Leader: Niu Yanli 2.Parent Company Balance Sheet In RMB Items March 31, 2020 December 31, 2019 Current asset: Monetary fund 1,271,772.98 4,448,232.99 Transactional financial assets Derivative financial assets Notes receivable 10,000,000.00 16,320,000.00 Account receivable 1,270,592.91 1,184,945.81 Financing receivable Prepayments 5,238,954.02 5,428,338.82 Other account receivable 5,264,791.71 2,376,451.69 Including:Interest receivable Dividend receivable Inventories 1,759,665.31 1,446,434.47 Contract assets Assets held for sales Non-current asset due within 1 year Other current asset 3,047,932.61 Total of current assets 24,805,776.93 34,252,336.39 Non-current assets: Creditor's right investment 12 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Other Creditor's right investment Long-term receivable Long term share equity investment 386,265,252.46 390,649,585.63 Other equity instruments investment Other non-current financial assets Property investment 23,936,012.87 71,928,994.28 Fixed assets 123,019,467.78 77,199,380.23 Construction in progress 166,386.41 166,386.41 Production physical assets Oil & gas assets Use right assets Intangible assets 14,485,072.96 14,589,584.29 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset Other non-current asset Total of non-current assets 547,872,192.48 554,533,930.84 Total of assets 572,677,969.41 588,786,267.23 Current liabilities Short-term loans Transactional financial liabilities Derivative financial liabilities Notes payable Account payable 182,747,158.56 191,919,884.09 Advance receipts 343,572.38 200,823.38 Contract Liabilities Employees’ wage payable 13,166,800.04 12,275,806.23 Tax payable 14,195,394.02 15,169,059.96 Other account payable 301,888,328.82 293,722,742.58 Including:Interest payable Dividend payable Liabilities held for sales Non-current liability due within 1 year 13 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Other current liability Total of current liability 512,341,253.82 513,288,316.24 Non-current liabilities: Long-term loan Bond payable Including:preferred stock Sustainable debt Lease liability Long-term payable Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total non-current liabilities Total of liability 512,341,253.82 513,288,316.24 Owners’ equity Share capital 119,375,000.00 119,375,000.00 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 reserve Surplus reserves 125,686,000.00 125,686,000.00 Retained profit -1,143,299,378.70 -1,128,138,143.30 Total of owners’ equity 60,336,715.59 75,497,950.99 Total of liabilities and owners’ equity 572,677,969.41 588,786,267.23 3.Consolidated Income statement In RMB Items Report period Same period of the previous year I. Income from the key business 159,386,309.82 208,419,491.98 14 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Including:Business income 159,386,309.82 208,419,491.98 Interest income Insurance fee earned Fee and commission received II. Total business cost 179,331,350.56 222,452,818.78 Including:Business cost 145,336,603.62 187,696,471.26 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net amount of withdrawal of insurance contract reserve Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 2,201,784.04 2,536,742.68 Sales expense 4,133,596.78 4,459,442.04 Administrative expense 17,510,484.48 20,307,711.48 R & D costs 3,114,978.09 3,296,251.21 Financial expenses 7,033,903.55 4,156,200.11 Including:Interest expense 5,151,406.45 Interest income 957,214.94 Add:Other income 78,200.00 Investment gain(“-”for loss) -4,384,333.17 -1,752,567.83 Including: investment gains from affiliates -4,384,333.17 -1,752,567.83 Termination of recognition of gains on financial assets at -1,752,567.83 amortized cost Gains from currency exchange Net exposure hedging income Changing income of fair value Loss of credit impairment Impairment losses on assets Income on disposal of assets 13,663.97 III. Operational profit(“-”for loss) -24,237,509.94 -15,785,894.63 Add :Non-operational income 286,232.83 Less: Non-operating expense 15 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 IV. Total profit(“-”for loss) -24,237,509.94 -15,499,661.80 Less:Income tax expenses 205,333.76 V. Net profit -24,237,509.94 -15,704,995.56 (I) Classification by business continuity 1.Net continuing operating profit 2.Termination of operating net profit (II) Classification by ownership Net profit attributable to the owners of parent company -24,237,509.94 -15,704,995.56 Minority shareholders’ equity VI. Net after-tax of other comprehensive income Net of profit of other comprehensive income attributable to ow ners of the 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 de bt or net assets 2.Other comprehensive income under the equity method investe e can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity instruments 4. Changes in the fair value of the company’s credit risks 5.Other (II) Other comprehensive income that will be reclassified into profit or loss. 1.Other comprehensive income under the equity method investe e can be reclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations 3. Other comprehensive income arising from the reclassification of financial assets 4. Allowance for credit impairments in investments in other debt obligations 5. Reserve for cash flow hedges 16 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 6. Translation differences in currency financial statements 7.Other Net of profit of other comprehensive income attributable to Min ority shareholders’ equity VII. Total comprehensive income -24,237,509.94 -15,704,995.56 Total comprehensive income attributable to the owner of the -24,237,509.94 -15,704,995.56 parent company Total comprehensive income attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share -0.2030 -0.1316 (II)Diluted earnings per share -0.2030 -0.1316 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0.00, last period the combined party realized RMB0.00. Legal Representative: Lv Hongxian Person in charge of accounting:Tan Mingxian Accounting Dept Leader: Niu Yanli 4. Income statement of the Parent Company In RMB Items Report period Same period of the previous year I. Revenue 114,032,194.70 154,431,343.28 Including:Business cost 109,931,765.56 155,625,182.84 Business tax and surcharge 942,790.56 1,108,561.97 Sales expense 384,759.27 234,066.25 Administrative expense 11,180,548.85 10,887,375.39 R & D costs 366,902.34 299,740.72 Financial expenses 2,015,994.32 1,469,083.00 Including:Interest expenses 1,592,445.56 Interest income 3,933.11 Add: Other income Investment gain(“-”for loss) -4,384,333.17 -1,752,567.83 Including: investment gains from affiliates -4,384,333.17 -1,752,567.83 Termination of recognition of gains on financial assets at amortized cost Net exposure hedging income 17 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Changing income of fair value Credit impairment loss Asset impairment loss Income on disposal of assets 13,663.97 II. Operational profit(“-”for loss) -15,161,235.40 -16,945,234.72 Add :Non-operational income 76,681.23 Less:Non -operational expenses III. Total profit(“-”for loss) -15,161,235.40 -16,868,553.49 Less:Income tax expenses IV. Net profit -15,161,235.40 -16,868,553.49 1.Net continuing operating profit 2.Termination of operating net profit V. Net after-tax 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 change s in net debt or net assets 2.Other comprehensive income under the equity meth od investee can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity instruments 4. Changes in the fair value of the company’s credit risks 5.Other (II) Other comprehensive income that will be reclassified into profit or loss. 1.Other comprehensive income under the equity meth od investee can be reclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations 3. Other comprehensive income arising from the reclassification of financial assets 4. Allowance for credit impairments in investments in other debt obligations 5. Reserve for cash flow hedges 18 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 6. Translation differences in currency financial statemen ts 7.Other VI. Total comprehensive income -15,161,235.40 -16,868,553.49 VII. Earnings per share (I)Basic earnings per share -0.1270 -0.1413 (II)Diluted earnings per share -0.1270 -0.1413 5. Consolidated Cash flow statement In RMB Items Report period Same period of the previous year I. Cash flows from operating activities Cash received from sales of goods or rending of 100,524,193.14 88,800,738.74 services 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 Cash received from interest, commission charge and commission Net increase of inter-bank fund received Net increase of repurchasing business Net cash received by agent in securities trading Tax returned 658,274.94 5,164,177.22 Other cash received from business operation 1,465,816.94 2,101,284.84 Sub-total of cash inflow 102,648,285.02 96,066,200.80 Cash paid for purchasing of merchandise and services 50,687,714.14 31,521,904.01 Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim 19 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Net increase for Outgoing call loan Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 25,071,964.19 26,906,538.41 Taxes paid 1,008,486.56 2,858,709.62 Other cash paid for business activities 4,716,927.50 5,306,815.79 Sub-total of cash outflow from business activities 81,485,092.39 66,593,967.83 Net cash generated from /used in operating activities 21,163,192.63 29,472,232.97 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains Net cash retrieved from disposal of fixed assets, 20,447.77 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 20,447.77 Cash paid for construction of fixed assets, intangible 648,200.00 2,804,989.02 assets 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 648,200.00 2,804,989.02 Net cash flow generated by investment -648,200.00 -2,784,541.25 III.Cash flow generated by financing Cash received as investment Including: Cash received as investment from minor shareholders Cash received as loans 187,710,000.00 20,000,000.00 Other financing –related cash received 70,351,349.97 226,006,425.05 Sub-total of cash inflow from financing activities 258,061,349.97 246,006,425.05 Cash to repay debts 160,000,000.00 30,950,645.83 Cash paid as dividend, profit, or interests 5,881,093.59 5,107,223.98 20 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Including: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 112,741,868.71 223,192,941.23 Sub-total of cash outflow due to financing activities 278,622,962.30 259,250,811.04 Net cash flow generated by financing -20,561,612.33 -13,244,385.99 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash equivalents -46,619.70 13,443,305.73 Add: balance of cash and cash equivalents at the 9,312,375.75 72,551,130.34 beginning of term VI ..Balance of cash and cash equivalents at the end 9,265,756.05 85,994,436.07 of term 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 21,309,472.84 26,033,156.46 services Tax returned Other cash received from business operation 79,963.67 63,963.21 Sub-total of cash inflow 21,389,436.51 26,097,119.67 Cash paid for purchasing of merchandise and services 15,082,651.24 12,755,825.18 Cash paid to staffs or paid for staffs 13,240,422.84 12,994,998.68 Taxes paid 93,956.01 72,338.50 Other cash paid for business activities 447,571.49 454,815.54 Sub-total of cash outflow from business activities 28,864,601.58 26,277,977.90 Net cash generated from /used in operating activities -7,475,165.07 -180,858.23 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains Net cash retrieved from disposal of fixed assets, 20,447.77 intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 21 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Sub-total of cash inflow due to investment activities 20,447.77 Cash paid for construction of fixed assets, intangible 648,200.00 2,799,028.48 assets 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 648,200.00 2,799,028.48 activities Net cash flow generated by investment -648,200.00 -2,778,580.71 III. Cash flow generated by financing Cash received as investment Cash received as loans Other financing –related ash received 97,710,000.00 82,360,000.00 Sub-total of cash inflow from financing activities 97,710,000.00 82,360,000.00 Cash to repay debts 0.00 0.00 Cash paid as dividend, profit, or interests 423,583.32 3,119,273.98 Other cash paid for financing activities 92,260,000.00 76,792,003.63 Sub-total of cash outflow due to financing activities 92,683,583.32 79,911,277.61 Net cash flow generated by financing 5,026,416.68 2,448,722.39 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash equivalents -3,096,948.39 -510,716.55 Add: balance of cash and cash equivalents at the 4,368,716.37 66,377,117.54 beginning of term VI ..Balance of cash and cash equivalents at the end 1,271,767.98 65,866,400.99 of term II Adjustments to the Financial Statements 1. Adjustment of the relevant items of the financial statements at the current year beginning according to the new standards for financial instruments, the new standards for revenues and the new standards for lease implemented commencing from year 2020 √ Applicable □ Not applicable 22 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Consolidated balance sheet In RMB Items December 31, 2019 January 1, 2020 Adjustment Current asset: Monetary fund 154,613,734.94 154,613,734.94 Notes receivable 23,412,900.18 23,412,900.18 Account receivable 231,648,218.97 231,648,218.97 Prepayments 10,076,917.93 10,076,917.93 Other account receivable 3,439,028.39 3,439,028.39 Inventories 146,318,458.60 146,318,458.60 Other current assets 3,047,932.61 3,047,932.61 Total of current assets 572,557,191.62 572,557,191.62 Non-current assets: Long term share equity investment 230,649,585.63 230,649,585.63 Property investment 71,928,994.28 71,928,994.28 Fixed assets 278,885,442.43 278,885,442.43 Construction in process 3,858,269.05 3,858,269.05 Intangible assets 22,823,384.71 22,823,384.71 Deferred tax assets 6,060,931.98 6,060,931.98 Other non-current asset 3,383,556.88 3,383,556.88 Total of non-current assets 617,590,164.96 617,590,164.96 Total of assets 1,190,147,356.58 1,190,147,356.58 Current liabilities Short-term loans 422,280,000.00 422,280,000.00 Notes payable 330,644,075.95 330,644,075.95 Account payable 225,193,165.80 225,193,165.80 Advance payment 1,117,423.35 1,117,423.35 Employees’ wage payable 14,879,129.15 14,879,129.15 Tax payable 17,773,372.17 17,773,372.17 Other account payable 6,087,459.55 6,087,459.55 Total of current liability 1,017,974,625.97 1,017,974,625.97 Non-current liabilities: Total of liability 1,017,974,625.97 1,017,974,625.97 Owners’ equity 23 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Share capital 119,375,000.00 119,375,000.00 Capital reserves 958,575,094.29 958,575,094.29 Surplus reserves 125,686,000.00 125,686,000.00 Retained profit -1,031,463,363.68 -1,031,463,363.68 Total of owner’s equity belong to the 172,172,730.61 172,172,730.61 parent company Total of owners’ equity 172,172,730.61 172,172,730.61 Total of liabilities and owners’ equity 1,190,147,356.58 1,190,147,356.58 Adjustment statement Parent Company Balance Sheet In RMB Items December 31, 2019 January 1, 2020 Adjustment Current asset: Monetary fund 4,448,232.99 4,448,232.99 Notes receivable 16,320,000.00 16,320,000.00 Account receivable 1,184,945.81 1,184,945.81 Prepayments 5,428,338.82 5,428,338.82 Other account receivable 2,376,451.69 2,376,451.69 inventories 1,446,434.47 1,446,434.47 Other current assets 3,047,932.61 3,047,932.61 Total of current assets 34,252,336.39 34,252,336.39 Non-current assets: Long term share equity investment 390,649,585.63 390,649,585.63 Property investment 71,928,994.28 71,928,994.28 Fixed assets 77,199,380.23 77,199,380.23 Construction in process 166,386.41 166,386.41 Intangible assets 14,589,584.29 14,589,584.29 Total of non-current assets 554,533,930.84 554,533,930.84 Total of assets 588,786,267.23 588,786,267.23 Current liabilities Account payable 191,919,884.09 191,919,884.09 Advance payment 200,823.38 200,823.38 Employees’ wage payable 12,275,806.23 12,275,806.23 24 Chongqing Jianshe Vehicle System Co., Ltd The First Quarterly Report 2020 Tax payable 15,169,059.96 15,169,059.96 Other account payable 293,722,742.58 293,722,742.58 Total of current liability 513,288,316.24 513,288,316.24 Non-current liabilities: Total of liability 513,288,316.24 513,288,316.24 Owners’ equity Share capital 119,375,000.00 119,375,000.00 Capital reserves 958,575,094.29 958,575,094.29 Surplus reserves 125,686,000.00 125,686,000.00 Retained profit -1,128,138,143.30 -1,128,138,143.30 Total of owners’ equity 75,497,950.99 75,497,950.99 Total of liabilities and owners’ equity 588,786,267.23 588,786,267.23 Adjustment statement 2. Note to the retroactive adjustment of the previous comparative data according to the new standards for financial instruments and the new standards for lease implemented commencing from year 2020 √Applicable □Not applicable In 2020, the company implements the new income standard, and the income method is the same as before. III. Auditors’ Report Is the Third Quarterly Report be audited? □ Yes √No The First Quarterly report is not audited. Chongqing Jianshe Vehicle System Co., Ltd. Chairman of the Board: Lv Hongxian April 24,2020 25