Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 2021-051 August 2021 1 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 Vehicle System Co., Ltd. June 30, 2021 In RMB Items June 30,2021 December 30,2020 Current asset: Monetary fund 123,787,878.06 159,343,241.47 Settlement provision Outgoing call loan Transactional financial assets Derivative financial assets Note receivable 124,019,463.07 66,548,530.50 Account receivable 210,941,638.23 221,386,452.90 Financing of receivables Prepayments 6,704,203.33 8,539,316.15 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Other account receivable 2,852,368.78 1,253,612.91 Including:Interest receivable Dividend receivable Repurchasing of financial assets Inventories 145,864,862.46 169,145,986.78 Contract assets Assets held for sales 2 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Non-current asset due within 1 year Other current asset 2,018,362.24 3,396,186.56 Total of current assets 616,188,776.17 629,613,327.27 Non-current assets: Loans and payment on other’s behalf disbursed Creditor's right investment Other creditor's right investment Long-term receivable Long term share equity investment 186,981,712.23 186,213,719.02 Other equity instruments investment Other non-current financial assets Real estate investment 23,043,398.52 Fixed assets 320,167,159.27 310,131,438.69 Construction in progress 1,824,327.45 1,871,241.59 Production physical assets Oil & gas assets Use right assets Intangible assets 28,514,765.32 27,384,056.97 Development expenses Goodwill Long-germ expenses to be amortized 140,327.83 24,750.00 Deferred income tax asset 6,274,078.12 6,274,078.12 Other non-current asset 2,093,500.00 2,141,443.59 Total of non-current assets 545,995,870.22 557,084,126.50 Total of assets 1,162,184,646.39 1,186,697,453.77 Current liabilities Short-term loans 556,410,000.00 553,910,000.00 Loan from Central Bank Borrowing funds Transactional financial liabilities Derivative financial liabilities Notes payable 139,770,000.00 110,020,000.00 Account payable 240,725,746.54 288,803,247.07 3 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Advance receipts Contract liabilities 2,584,147.93 1,479,711.62 Selling of repurchased financial assets Deposit taking and interbank deposit Entrusted trading of securities Entrusted selling of securities Employees’ wage payable 28,748,853.18 28,427,402.84 Tax payable 16,481,094.80 18,106,616.93 Other account payable 9,704,354.89 10,260,888.23 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 335,939.23 192,362.51 Total of current liability 994,760,136.57 1,011,200,229.20 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 1,733,423.53 1,908,551.51 Other non-current liabilities Total non-current liabilities 1,733,423.53 1,908,551.51 Total of liability 996,493,560.10 1,013,108,780.71 Owners’ equity 4 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Share capital 119,375,000.00 119,375,000.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 958,565,294.29 958,565,294.29 Less:Shares in stock Other comprehensive income 9,800.00 9,800.00 Special reserve Surplus reserves 125,686,000.00 125,686,000.00 Common risk provision Retained profit -1,037,945,008.00 -1,030,047,421.23 Total of owner’s equity belong to the 165,691,086.29 173,588,673.06 parent company Minority shareholders’ equity Total of owners’ equity 165,691,086.29 173,588,673.06 Total of liabilities and owners’ equity 1,162,184,646.39 1,186,697,453.77 Legal Representative: Yan Xuechuan Person in charge of accounting:Tan Mingxian Person in charge of Accounting institute: Niu Yanli 2.Parent Company Balance Sheet In RMB Items June 30,2021 December 31,2020 Current asset: Monetary fund 22,316,394.39 1,039,038.26 Transactional financial assets Derivative financial assets Note receivable 7,490,000.00 11,600,000.00 Account receivable 3,003,547.30 2,189,335.14 Financing of receivables Prepayments 2,251,292.55 5,477,412.18 Other account receivable 1,816,416.14 934,239.22 Including:Interest receivable 5 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Dividend receivable Inventories 2,137,522.96 1,645,305.96 Contract assets Assets held for sales Non-current asset due within 1 year Other current asset 3,179.92 Total of current assets 39,015,173.34 22,888,510.68 Non-current assets: Creditor's right investment Other creditor's right investment Long-term receivable Long term share equity investment 386,027,156.19 385,259,162.97 Other equity instruments investment Other non-current financial assets Real estate investment 23,043,398.52 Fixed assets 125,474,756.03 110,261,716.77 Construction in progress 66,037.74 Production physical assets Oil & gas assets Use right assets Intangible assets 13,959,780.47 14,171,538.97 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset Other non-current asset Total of non-current assets 525,461,692.69 532,801,854.97 Total of assets 564,476,866.03 555,690,365.65 Current liabilities Short-term loans 15,000,000.00 Transactional financial liabilities Derivative financial liabilities Notes payable Account payable 185,794,336.08 265,278,880.90 6 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Advance receipts Contract liabilities 159,843.70 248,849.01 Employees’ wage payable 9,658,571.01 10,058,993.74 Tax payable 15,115,564.12 15,199,300.72 Other account payable 310,787,267.79 231,990,706.48 Including:Interest payable Dividend payable Liabilities held for sales Non-current liability due within 1 year Other current liability 20,779.68 32,350.37 Total of current liability 536,536,362.38 522,809,081.22 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 536,536,362.38 522,809,081.22 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 7 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Special reserve Surplus reserves 125,686,000.00 125,686,000.00 Retained profit -1,175,695,590.64 -1,170,754,809.86 Total of owners’ equity 27,940,503.65 32,881,284.43 Total of liabilities and owners’ equity 564,476,866.03 555,690,365.65 3.Consolidated Income statement In RMB Items The first half year of 2021 The first half year of 2020 I. Income from the key business 456,964,429.02 334,590,261.85 Incl:Business income 456,964,429.02 334,590,261.85 Interest income Insurance fee earned Fee and commission received II. Total business cost 469,027,653.86 362,297,018.78 Incl:Business cost 399,274,067.43 299,582,322.70 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 4,017,274.05 2,270,492.41 Sales expense 10,384,056.14 8,737,461.10 Administrative expense 33,501,329.26 34,235,208.92 R & D costs 8,173,694.94 6,371,705.72 Financial expenses 13,677,232.04 11,099,827.93 Including:Interest expense Interest income Add: Other income 461,493.97 412,200.00 Investment gain(“-”for loss) 767,993.22 -8,214,068.19 Incl: investment gains from affiliates 767,993.22 -8,214,068.19 Financial assets measured at amortized cost cease to be 8 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 recognized as income Gains from currency exchange Net exposure hedging income Changing income of fair value Credit impairment loss -108,153.11 -7,385.32 Impairment loss of assets 1,430,078.95 Assets disposal income 1,566,473.14 -54,625.39 III. Operational profit(“-”for loss) -9,375,417.62 -34,140,556.88 Add :Non-operational income 198,658.55 79,499.99 Less: Non-operating expense 171.52 634,363.43 IV. Total profit(“-”for loss) -9,176,930.59 -34,695,420.32 Less:Income tax expenses -1,279,343.82 V. Net profit -7,897,586.77 -34,695,420.32 (I) Classification by business continuity 1.Net continuing operating profit 2.Termination of operating net profit (II) Classification by ownership 1.Net profit attributable to the owners of parent company -7,897,586.77 -34,695,420.32 2.Minority shareholders’ equity VI. Net after-tax of other comprehensive income Net of profit of other comprehensive income attributable to owner s 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 debt or net assets 2.Other comprehensive income under the equity method 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 o r loss. 9 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 1.Other comprehensive income under the equity method 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 6.Translation differences in currency financial statements 7.Other Net of profit of other comprehensive income attributable to Minor ity shareholders’ equity VII. Total comprehensive income -7,897,586.77 -34,695,420.32 Total comprehensive income attributable to the owner of the -7,897,586.77 -34,695,420.32 parent company Total comprehensive income attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share -0.0662 -0.2906 (II)Diluted earnings per share -0.0662 -0.2906 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: Yan Xuechuan Person in charge of accounting:Tan Mingxian Person in charge of Accounting institute: Niu Yanli 4. Income statement of the Parent Company In RMB Items The first half year of 2021 The first half year of 2020 I. Income from the key business 297,472,060.19 222,468,662.97 Incl:Business cost 287,010,577.69 206,762,567.75 Business tax and surcharge 1,331,918.72 562,313.55 Sales expense 305,392.04 770,265.75 10 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Administrative expense 16,241,678.56 20,937,668.90 R & D expense 152,163.97 641,292.41 Financial expenses -54,183.63 559,663.50 Including:Interest expenses Interest income Add:Other income 9,403.42 Investment gain(“-”for loss) 767,993.22 -8,214,068.19 Including: investment gains from affiliates 767,993.22 -8,214,068.19 Financial assets measured at amortized cost cease to be recognized as income Net exposure hedging income Changing income of fair value Credit impairment loss Impairment loss of assets Assets disposal income II. Operational profit(“-”for loss) -5,139,428.02 -16,137,535.83 Add :Non-operational income 198,647.24 55,100.00 Less:Non -operational expenses 633,882.63 III. Total profit(“-”for loss) -4,940,780.78 -16,716,318.46 Less:Income tax expenses IV. Net profit -4,940,780.78 -16,716,318.46 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 changes in net debt or net assets 2.Other comprehensive income under the equity method 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 prof 11 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 it or loss 1.Other comprehensive income under the equity method 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 6.Translation differences in currency financial statements 7.Other VI. Total comprehensive income -4,940,780.78 -16,716,318.46 VII. Earnings per share (I)Basic earnings per share -0.0414 -0.1400 (II)Diluted earnings per share -0.0414 -0.1400 5. Consolidated Cash flow statement In RMB Items The first half year of 2021 The first half year of 2020 I.Cash flows from operating activities Cash received from sales of goods or rending of services 275,878,351.04 218,102,030.44 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 10,762,678.49 3,751,715.83 12 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other cash received from business operation 5,109,205.63 6,565,809.34 Sub-total of cash inflow 291,750,235.16 228,419,555.61 Cash paid for purchasing of merchandise and services 192,460,861.01 93,632,722.83 Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim Net increase in financial assets held for trading purposes Net increase for Outgoing call loan Cash paid for interest, processing fee and commission Cash paid to staffs or paid for staffs 55,354,015.78 48,032,744.83 Taxes paid 9,550,656.23 2,496,399.06 Other cash paid for business activities 12,630,681.73 11,135,794.91 Sub-total of cash outflow from business activities 269,996,214.75 155,297,661.63 Net cash generated from /used in operating activities 21,754,020.41 73,121,893.98 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains Net cash retrieved from disposal of fixed assets, intangible assets, and 1,609,454.58 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 1,609,454.58 Cash paid for construction of fixed assets, intangible assets and other 3,192,691.68 996,035.66 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 3,192,691.68 996,035.66 Net cash flow generated by investment -1,583,237.10 -996,035.66 III.Cash flow generated by financing Cash received as investment Including: Cash received as investment from minor shareholders Cash received as loans 330,210,000.00 317,720,000.00 13 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other financing –related cash received 244,002.56 140,229,885.72 Sub-total of cash inflow from financing activities 330,454,002.56 457,949,885.72 Cash to repay debts 327,710,000.00 240,000,000.00 Cash paid as dividend, profit, or interests 12,038,512.41 11,106,520.85 Including: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 32,808,697.08 267,306,351.71 Sub-total of cash outflow due to financing activities 372,557,209.49 518,412,872.56 Net cash flow generated by financing -42,103,206.93 -60,462,986.84 IV. Influence of exchange rate alternation on cash and cash -9,951.87 equivalents V.Net increase of cash and cash equivalents -21,942,375.49 11,662,871.48 Add: balance of cash and cash equivalents at the beginning of term 79,310,253.55 9,390,326.10 VI ..Balance of cash and cash equivalents at the end of term 57,367,878.06 21,053,197.58 6. Cash Flow Statement of the Parent Company In RMB Items The first half year of 2021 The first half year of 2020 I.Cash flows from operating activities Cash received from sales of goods or rending of services 106,427,010.24 60,980,104.52 Tax returned Other cash received from business operation 4,060,057.61 5,840,848.89 Sub-total of cash inflow 110,487,067.85 66,820,953.41 Cash paid for purchasing of merchandise and services 64,778,291.50 44,567,550.59 Cash paid to staffs or paid for staffs 18,463,252.41 24,407,469.95 Taxes paid 3,936,592.64 600,648.78 Other cash paid for business activities 16,462,800.95 2,625,236.39 Sub-total of cash outflow from business activities 103,640,937.50 72,200,905.71 Net cash generated from /used in operating activities 6,846,130.35 -5,379,952.30 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains Net cash retrieved from disposal of fixed assets, intangible assets, and 1,609,454.58 other long-term assets Net cash received from disposal of subsidiaries or other operational 14 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 units Other investment-related cash received Sub-total of cash inflow due to investment activities 1,609,454.58 Cash paid for construction of fixed assets, intangible assets and other 2,181,728.80 996,035.66 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 2,181,728.80 996,035.66 Net cash flow generated by investment -572,274.22 -996,035.66 III. Cash flow generated by financing Cash received as investment Cash received as loans 15,000,000.00 Other financing –related ash received 210,210,000.00 187,229,125.01 Sub-total of cash inflow from financing activities 225,210,000.00 187,229,125.01 Cash to repay debts Cash paid as dividend, profit, or interests Other cash paid for financing activities 210,206,500.00 182,260,000.00 Sub-total of cash outflow due to financing activities 210,206,500.00 182,260,000.00 Net cash flow generated by financing 15,003,500.00 4,969,125.01 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash equivalents 21,277,356.13 -1,406,862.95 Add: balance of cash and cash equivalents at the beginning of term 1,039,038.26 4,448,232.99 VI ..Balance of cash and cash equivalents at the end of term 22,316,394.39 3,041,370.04 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB The first half year of 2021 Owner’s equity Attributable to the Parent Company Other Equity Other Total Minor instrument Less: Compr Surplu Comm of Items Share Capital Specia Retain shareh Shares ehensi s on risk Subtot owners Capit Prefe reserve lized ed Other olders’ in ve reserve provisi al ’ Susta equity al rred Other s reserve profit stock Incom s on equity inabl stock e e 15 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 debt 119,3 958,56 125,68 -1,030, 173,58 173,58 I.Balance at the 9,800. 75,00 5,294. 6,000. 047,42 8,673. 8,673. end of last year 00 0.00 29 00 1.23 06 06 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the 119,3 958,56 125,68 -1,030, 173,58 173,58 9,800. beginning of 75,00 5,294. 6,000. 047,42 8,673. 8,673. 00 current year 0.00 29 00 1.23 06 06 III.Changed in -7,897, -7,897, -7,897, the current year 586.77 586.77 586.77 (1)Total -7,897, -7,897, -7,897, comprehensive 586.77 586.77 586.77 income (II)Investment or decreasing of capital by owners 1 . Ordinary Sh ares invested by shareholders 2.Holders of o ther equity instr uments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment 1.Providing of 16 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 surplus reserves 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.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V). Special reserves 1. Provided this year 17 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 2.Used this term (VI)Other IV. Balance at 119,3 958,56 125,68 -1,037, 165,69 165,69 9,800. the end of this 75,00 5,294. 6,000. 945,00 1,086. 1,086. 00 term 0.00 29 00 8.00 29 29 Amount in last year In RMB The first half year of 2020 Owner’s equity Attributable to the Parent Company Other Equity instrument Other Minor Less: Compr Surplu Comm Total of Items shareho Share Capital Specia Retain Shares ehensi s on risk Subtot owners’ Capit Prefe Susta reserve lized ed Other lders’ in ve reserve provisi al equity al rred inabl Other s reserve profit equity stock Incom s on stock e e debt 119,3 958,56 125,68 -1,031, 172,17 I.Balance at the 9,800. 172,172 75,00 5,294. 6,000. 463,36 2,730. end of last year 00 ,730.61 0.00 29 00 3.68 61 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at 119,3 958,56 125,68 -1,031, 172,17 9,800. 172,172 the beginning 75,00 5,294. 6,000. 463,36 2,730. 00 ,730.61 of current year 0.00 29 00 3.68 61 III.Changed in 1,415, 1,415, 1,415,9 the current year 942.45 942.45 42.45 (1)Total 1,415, 1,415, 1,415,9 comprehensive 942.45 942.45 42.45 income (II) Investment or 18 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 decreasing of capital by owners 1.Ordinary Sh ares invested b y shareholders 2 . Holders of other equity ins truments invest ed capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment 1.Providing of surplus reserves 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 19 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 reserves. 4.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V). Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at 119,3 958,56 125,68 -1,030, 173,58 9,800. 173,588 the end of this 75,00 5,294. 6,000. 047,42 8,673. 00 ,673.06 term 0.00 29 00 1.23 06 8.Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB The first half year of 2021 Other Equity instrument Other Less: Specializ Total of Items Share Preferr Capital Compreh Surplus Retaine Sustain Shares in ed Other owners’ capital ed Other reserves ensive reserves d profit able stock reserve equity stock Income debt 119,37 -1,170, I.Balance at the 958,565, 125,686, 32,881,28 5,000.0 9,800.00 754,80 end of last year 294.29 000.00 4.43 0 9.86 Add: Change of accounting 20 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 policy Correcting of previous errors Other II.Balance at the 119,37 -1,170, 958,565, 125,686, 32,881,28 beginning of 5,000.0 9,800.00 754,80 294.29 000.00 4.43 current year 0 9.86 III.Changed in -4,940, -4,940,780 the current year 780.78 .78 (I)Total -4,940, -4,940,780 comprehensive 780.78 .78 income (II) Investment or decreasing of capital by owners 1.Ordinary Sha res invested by s hareholders 2.Holders of ot her equity instru ments invested c apital 3.Amount of shares paid and accounted as owners’ equity 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 21 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at 119,37 -1,175, 958,565, 125,686, 27,940,50 the end of this 5,000.0 9,800.00 695,59 294.29 000.00 3.65 term 0 0.64 Amount in last year In RMB The first half year of 2020 Other Equity Other Less: Specializ Total of Items Share instrument Capital Compre Surplus Retained Shares ed Other owners’ Capital Preferr reserves hensive reserves profit Other in stock reserve equity ed Sustai Income 22 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 stock nable debt 119,37 I.Balance at the 958,565 9,800.0 125,686 -1,128,13 75,497,950. 5,000. end of last year ,294.29 0 ,000.00 8,143.30 99 00 Add: Change of accounting policy Correcting of previous errors Other II.Balance at 119,37 958,565 9,800.0 125,686 -1,128,13 75,497,950. the beginning 5,000. ,294.29 0 ,000.00 8,143.30 99 of current year 00 III.Changed in -42,616,6 -42,616,666 the current year 66.56 .56 (I)Total -42,616,6 -42,616,666 comprehensive 66.56 .56 income (II) Investment or decreasing of capital by owners 1.Ordinary Sh ares invested by shareholders 2.Holders of o ther equity instr uments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment 1.Providing of surplus reserves 2.Allotment to 23 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at 119,37 958,565 9,800.0 125,686 -1,170,75 32,881,284. 24 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 the end of this 5,000. ,294.29 0 ,000.00 4,809.86 43 term 00 III.Basic Information of the Company Chongqing Jianshe Vehicle System Co.,Ltd. (hereinafter referred to as the "Company", "Company" or "Chongqing Jianshe"),the company’s original name is Chongqing Jianshe Motorcycle Co.,Ltd.,was jointly set up in July 1995 by the Construction Industry (Group) Co., Ltd. and China North Industries Shenzhen Corporation. The Business License of the Enterprise: No. 915000007474824231. The Company was listed in July 1995 at the Shenzhen Stock Exchange. The Company is engaged in the manufacturing industry. On December 27, 2017, the company issued an announcement that it has completed the relevant business registration procedures for the change in Chinese, obtained the notice of approval for change of registration of Chongqing administration of industry and commerce (Chongqing Industrial and commercial registration of changes [2017] No.1206-1),got an issue of a business license and approval rear of implementing the Shenzhen stock exchange. The name of the company was changed from " Chongqing Jianshe Motorcycle Co., Ltd." to " Chongqing Jianshe Vehicle System Co.,Ltd.". Abbreviation of the company was changed from "Jianmo B" to "Jianshe B", and the securities code of the company was unchanged at 200054. On October 22, 2018, Chongqing Jianshe mechanical and electrical co., LTD., the controlling shareholder of the company, signed the "Equity transfer Agreement for State-owned listed companies" with China South Industries Group Corporation (hereinafter referred to as "GSGC"). The Chongqing Jianshe mechanical and electrical co., LTD. transferred 84,906,250 shares of its state-owned legal person shares to the GSGC, it accounts for 71.13% of the Chongqing Jianshe 's total share capital. On December 21, 2018, the company received the " Confirmation of registration of securities transfer " issued by the Shenzhen Branch of China Securities Registration and Clearing Co., Ltd., and the registration procedures for the transfer of shares under this agreement have been completed in the Shenzhen branch of China Securities Registration and settlement Co., Ltd. After the completion of this agreement transfer, Chongqing Jianshe mechanical and electrical co., LTD., would no longer hold shares of the company. GSGC was became the controlling shareholder of the company, the proportion of shareholding is 71.13%, and the nature of the shares is State-owned legal person shares. The ultimate controller of the Company is the State-owned Assets Supervision and Administration Commission (SASAC). As at June 30, 2021, 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: Hongxian Lv. 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 disclosure of the financial report was approved by the Board of Directors on August 26, 2021. The scope consolidated financial statements of the first half year of 2021 has reduced 2 subsidiary,see "Note 7 Equity in other subjects " for details. 25 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 The company and Chongqing Jianshe Automobile A/C Co., Ltd., its important subsidiary, mainly engaged in the manufacture, sale of air conditioners and accessories, air conditioning and spare parts maintenance. IV. Basis for the Preparation of financial statements 1.Basis for Preparation The Company prepares the financial statements on the basis of going concern, according to actual transactions and events, and in accordance with the Accounting Standards for Business Enterprises – Basic Standards and 38 concrete accounting standards issued by the Ministry of Finance on February 15, 2006, 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. In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements. 2. Going Concern 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: None 1. Statement on compliance with accounting standards for business Enterprises The Company state: the financial statements prepared are in line with the requirements in enterprise accounting st andards in line with of system, and have truly and completely reflected of the financial status in June 30, 2021 operational results, cash flow, and other relevant information of January–June 2021. 2 .Accounting period The Company’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year from January 1 to December 31 as one accounting year. 3.Operating cycle The normal operating cycle refers to the period from the assets used for processing after purchased by the company to the cash or cash equivalents achieved. 12 months are regarded as one operating cycle in the company, and which is as the division criterion for the liquidity of assets and liabilities. 4.Functional currency The functional currency is Renminbi. 26 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 5. Accounting treatments of the combination of enterprises under common control and the combination of enterprises not under the common control Business combination refers to the transactions or items with one reporting entity formed by the combination of two or more separate enterprises. The business combination shall be divided into the business combination under common control and the business combination under non-common control. (1)Business combination under common control The business combination under common control refers to the business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. Of which, the combining party is that acquiring the control right to other combining enterprises at combining date, and the combining date means the date that the combining party actually acquires the control right of the combined party. The acquisition date means the date that the acquirer actually obtains the control right of the acquiree. The assets and liabilities acquired by the combining party are measured in accordance with the book value of the combined party at the combining date. For the balance between the book value of net assets acquired by the combining party and the book value of the combining valuable consideration (or the nominal amount of issued shares), the capital reserves (stock premium) shall be adjusted, or the retained earnings shall be adjusted when the capital reserves (stock premium) are insufficient. All the costs directly incurred for the business combination by the combining party shall be recorded into the current profits and losses when occurred. (2)Combination of enterprises not under the common control The business combination under non-common control refers to the business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the combination. Of which, the acquirer is that obtaining the control right to other combining enterprises at acquisition date, and other combining enterprises refers to the acquiree. The acquisition date means the date that the acquirer actually obtains the control right of the acquiree. For the business combination under non-common control, the merger costs include the assets paid for obtaining the control right of acquiree by the acquirer, the liabilities occurred or borne and the fair value of equity securities issued, the intermediary fees for audit, legalservices, evaluation and consultation when the business combination issued, and other management costs shall be recorded into the current profits and losses when occurred. The transaction costs of equity securities or debt securities issued for the merger consideration by the acquirer shall be included into the initially recognized amount of the equity securities or the debt securities. The contingent consideration involved shall be recorded into the merger cost as per the fair value at the acquisition date. Within 12 months after the acquisition date, the combining business reputation should be adjusted correspondingly if the contingent consideration is required to adjust because of new or further evidence for the existed situation on the acquisition date. The merger cost issued by the acquirer and the identifiable net assets acquired in the combination are measured as per the fair value on the acquisition date. The difference of the merger cost less the fair value shares of identifiable net assets obtained by the acquiree during the merger on the acquisition date, is recognized as the business reputation. While the merger cost is less than the fair value shares of identifiable net assets obtained by the acquiree during the merger, all the measurement on the identifiable assets, 27 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 the liabilities, the fair value of liabilities and the merger cost obtained by the acquiree should firstly be rechecked, and the difference shall be recorded into the current profits and costs if the merger cost is still less than the fair value shares of identifiable net assets obtained by the acquiree during the merger after rechecking. If the deductible temporary difference of acquiree obtained by the acquirer is not recognized due to the recognition condition of the deferred income tax assets unmet on the acquisition date within 12 months after the acquisition date, the relevant deferred income tax assets shall be recognized and the business reputation shall be reduced if the acquired new or further evidence shows that the relevant situation has already existed and the economic benefit gained by the acquiree from the deductible temporary difference is expected to achieve, and the differences are recognized as the current profits and losses if the business reputation is insufficient to offset. With the exception of the above, the deferred income tax assets related to the business combination are recorded into the current profits and losses. For the business combination under non-common control realized step-by-step through multiple transactions, the multiple transactions shall be judged if belong to “the package deal” according to the “Notice on Issuance of Interpretation of Accounting Standards for Business Enterprises from Ministry of Finance” (Finance and Accounting [2012] No.19) and the judgment standards on “the package deal” in Article 51st of “Accounting Standards for Business Enterprises No.33 – Consolidated Financial Statement” (please see Note 3.6 (2)). For the package deal, please refer to above description of this section and Note 3.14 “Long-term Equity Investment” to conduction the accounting treatment. For the non-package deal, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements: For the individual financial statements, the sum of the book value of equity investment from the purchased party held before the purchase date and the new investment cost at the purchase date shall be as the initial investment cost of the investment. For the other comprehensive incomes involved in the equity of the acquiree held before the acquisition date, the investment and the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree (Namely, the rest is transferred into the current investment incomes with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquiree as per the equity method). In the consolidated financial statements, the equity of the acquiree held before the acquisition date shall be measured again as per the fair value of the equity on the acquisition date, and the difference between the fair value and the book value is recorded into the current investment income. For the other comprehensive incomes involved in the equity of the acquire held before the acquisition date, the relevant other comprehensive incomes shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquire (Namely, the rest is transferred into the current investment incomes on the acquisition date, with the exception of the corresponding shares of changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the acquire as per the equity method). 6. Preparation of consolidated financial statements (1)Principle for determining the consolidation scope The consolidation scope for financial statements is determined on the basis of control. The term “control” is the power of the Group upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence the amount of returns. The scope of consolidation includes the Company and its all subsidiaries. A subsidiary is an enterprise or entity controlled by the Group. 28 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Once any changes in the relevant facts or situations resulted in any changes in the elements involved in the aforesaid definition of “control”, the Company shall carry out a reassessment. (2)Compiling method of consolidated accounting statements The company starts to include the actual control right to the net assets and the production and management decisions of the subsidiaries into the combination scope since the date of the actual right acquired, and will stop covering into the combination scope on the date of the actual right lost. For the disposed subsidiaries, the business performance and the cash flow before the disposal date have been properly covered in the consolidated profit statement and the consolidated cash flow statement. For the subsidiaries disposed in the current period, the opening balance of the consolidated balance sheet shall not be adjusted. through the business combination under non-common control, the business performance and the cash flow after the acquisition date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the opening balance and the comparison balance of the consolidated financial statement shall not be adjusted. For the subsidiaries increased through the business combination under common control, the business performance and the cash flow from the beginning of current combination period to the combination date have been properly included in the consolidated profit statement and the consolidated cash flow statement, and the comparison balance of the consolidated financial statement shall be adjusted simultaneously. With the preparation of the consolidated financial statement, the necessary adjustment shall be made according to the accounting policy of the company and the financial statement of the subsidiaries during the fiscal period if the accounting policy or the fiscal period adopted by the subsidiaries and the company is discrepant. For the subsidiaries acquired through the business combination under non-common control, the financial statement shall be adjusted on the basis of the fair value of the identifiable net assets on the acquisition date. All the major balances, transactions and the unrealized profits of the company shall be offset in the preparation of the consolidated financial statement. Those not belong to the company in the shareholders’ equity and the current net profit or loss of the subsidiaries shall be respectively as the minority equity and the minority interest income and individually listed under the shareholders’ equity and the net profit of the consolidated financial statement. The minority equity portion from the net profit or loss in current period shall be as “minority interest income” and listed under the net profit in the consolidated financial statement. Moreover, the minority equity is still offset even if the losses of the subsidiaries undertaken by the minority shareholders are beyond the portion of the shareholders’ equity shared by the minority shareholders of the company at the beginning of period. When the control on the original subsidiaries lost due to the disposal of partial equity investment or other reasons, the remaining equity should be measured again according to the fair value on the control lost date. The difference of the consideration acquired by the disposal of equity and the fair value of the surplus equity minus the net assets portion of the original subsidiaries calculated from the purchase date as per the original stock proportion shall be 29 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 recorded into the current investment income after the control lost. Other comprehensive returns relevant to the original subsidiary shares investment shall be disposed through the accounting treatment on the same basis of the direct disposal of the relevant assets or liabilities by the acquiree when the control lost (Namely, all the rest are transferred into the current investment incomes, with the exception of the changes caused by the net liabilities or the net assets of the defined benefit plans re-measured by the original subsidiaries). Thereafter, the subsequent measurement shall be made for the rest equity according to the relevant provisions of “Accounting Standards for Business Enterprises No. 2 – Long-term Equity Investment” or “Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments”. For the details, please see Notes 3.14 “Long-term Equity Investment” or Notes 3.10 “Financial Instruments”. For the equity investment in the subsidiary through the step-by-step disposal of multiple transactions till the control right lost, the company should respectively dispose all the transactions if belong to the package deal. As long as the terms, conditions and economic influence on all the transactions of the disposal of the equity investment in the subsidiary meet one status below, it usually shows that the multiple transactions matters should be conducted the accounting treatment as the package deal: ① these transactions are made simultaneously or under the consideration of the influence each other. ② these transactions shall be as the whole to achieve one complete business results. ③ one transaction occurs depending on the appearance of other one transaction at least. ④ one transaction is economic under the consideration with other transactions even if it is not economic when individually considerate. For the non-package deal, each transaction shall be respectively conducted the accounting treatment according to the applicable principles of “Partial Disposal of Long-term Equity Investment in Subsidiary without Control Lost” (please refer to (2) ④ in Note 3.14) and “The Control on Original Subsidiary Lost due to Disposal of Part of Equity Investment or Other Reasons” (details please see forepart). For the package deal from the transactions after the disposal of equity investment in the subsidiary till the control right lost, the transactions shall be as one transaction of the disposal of subsidiary and the control lost for the accounting treatment. Therefore, every balance between the net assets proportion of the subsidiary shared relative to the disposal price and the disposal investment before the control right lost, shall be recognized as other comprehensive incomes in the consolidated financial treatment and transferred into the current profits and losses when the control lost. 7. Joint venture arrangements classification and Co-operation accounting treatment Joint enterprise arrangement is two or more parties jointly control the enterprise. The company enjoys rights and bears obligations based on joint enterprise arrangement. Joint enterprise arrangement is composed of joint operation and joint enterprises. Joint operation means the company has the right to arrange related assets and related liabilities. Joint enterprises means the company only has the right to arrange the net asset. The company adopts equity method to calculate investment to joint enterprises by referring to accounting policies stated in "Long-term Stock Ownership for Equity Method Calculation" (please refer to (2) ② in Note 3.13) As one party of joint operation, the company confirms assets and liabilities only held by itself and confirms joint 30 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 assets and liabilities as proportion of the company’s shares; confirm incomes from sales and production in the way of joint operation as proportion of the company’s shares; confirm the company’s own expenses and all expenses in the way of joint operation as proportion. As a party of joint operation, the company funds or sells assets (not used for operation, the same below) of joint operation or purchases assets from joint operation. Before the assets are sold to a third party, the company only confirms the loss and benefit in the trade which belong to other parties in the joint operation. In case the assets is in conformity to the asset impairment loss regulated in Asset Impairment --No.8 of Accounting Criteria for Enterprises, the company confirms all losses in full amount for the company funding or selling assets of joint operation. The company confirms the loss as proportion of shares for the company purchasing assets from joint operation. 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)Translation Method of Foreign Currency Transaction The shot exchange rate (usually refers to the middle rate at the date of currency exchange published by the People’s Bank of China, hereinafter inclusive) on the transaction date is adopted to convert to the amount of functional currency when the foreign currency transaction issued in the company is initially recognized. However, the foreign currency exchanges or the transactions relative to the foreign currency exchanges occurred in the company shall be translated into the amount of functional currency as per the actually adopted exchange rate. (2)Translation Method for Monetary Items of Foreign Currency and Non-monetary Items of Foreign Currency On the balance sheet date, the monetary items of foreign currency are translated as per the shot exchange rate on the balance sheet date, and the foreign exchange conversion gap arising from which shall be recorded into the profits and losses of the current period, except for ① the balance of exchange arising from special foreign currency borrowings for the purchase and construction of qualified assets subject to the principle of borrowing costs. ② the exchange balance generated from other book balances in the foreign currency monetary items available for sale with the exception of the post-amortization costs shall be recorded into other comprehensive incomes. When it involves overseas business in preparing the consolidated financial statement, for the translation difference of foreign currency monetary items of net investment in overseas business arising from the change in exchange rate, it shall be recorded into the other comprehensive income; and be recorded into disposal gains and losses at current period when disposing overseas business. 31 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 The non-monetary items of foreign currency measured at the historical cost shall still be measured by the amount of functional currency translated at the spot exchange rate on the transaction date. The non-monetary items of foreign currency measured at the fair value shall be translated at the spot exchange rate on the fair value recognized date, and the gap of the translated amount of functional currency and the original the amount of functional currency shall be as the fair value variation (change in exchange rate included) to make treatment and recorded into the current profits and losses or recognized as other comprehensive incomes. (3)Translation Method of Foreign Currency Financial Statement For the overseas business operation involved in the preparation of the consolidated financial statement, the exchange balance arising from the change in exchange rate for the foreign currency monetary items of the net investment in the overseas business, shall be as “translation reserve of foreign currency statement” and recognized as other comprehensive incomes. The profits and losses of the current disposal period shall be recorded when disposal of the overseas business operations. The foreign currency financial statement of the overseas business operation shall be translated as RMB statement as per the following methods: the assets and liabilities in the balance sheet shall be translated at a spot exchange rate on the balance sheet date. For the shareholders’ equity items, other items shall be translated at a spot exchange rate when occurring, except for the “undistributed profit” items. The earnings and expenses items in the profit statement shall be translated at a spot exchange rate on the transaction date. Moreover, the Retained Earnings at the beginning of this year are the profits translated at the end of last year which shall be distributed and listed all the items measurement as per the translated profits. The difference between the translated assets items and the sum of the liability’s items and the shareholders’ equity items shall be as the translation reserve of foreign currency statement and recognized as other comprehensive incomes. When disposing the overseas business operation and losing the control right, the translation reserves of foreign currency statement related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses or shifted as per the disposal proportion of the overseas business operation. The cash flows of foreign currency and overseas subsidiary shall be translated at the spot exchange rate on the cash flow date. The influence amount of the change in exchange rate on the cash shall be individually listed and reported as the adjustment items in the cash flow statement. The amount at the beginning of this year and the actual amount of last year shall be listed according to the translated amount of the financial statement. If the control on the overseas business operation lost due to the disposal of partial equity investment or other reasons when disposing all the owners’ equity of the overseas business operation of the company, the translation reserves of foreign currency statement belong to the owners’ equity of the parent company related to the overseas business operation which listed in the shareholders’ equity items in the balance sheet, are all recorded into the current disposal profits and losses. If the held equity proportion of the overseas business operation reduced due to the disposal of partial equity investment or other reasons, but the control on the overseas business operation not lost, the translation reserves of foreign currency statement related to the partial disposal of the overseas business operation shall be belong to the minority equity and not recorded into the current profits and losses. When disposing partial equity of the joint ventures or the cooperative enterprises of the overseas business operations, the translation reserves of foreign currency statement related to the overseas business operations shall be recorded into the current disposal profits and losses as per the disposal proportion of the overseas business operations. 32 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 10 Financial instruments A financial instrument refers to a contract that concludes the financial assets of one party and the financial liabilities or equity instruments of another party. Related financial assets or financial liabilities are recognized when the company becomes a party to a financial instrument contract. Financial assets and financial liabilities are measured at fair values at the initial recognition: (i) for the financial assets and financial liabilities measured at fair values with variations recorded into the current profits and losses, related transaction expenses are directly recorded into the current profits and losses;(ii) for other kinds of financial assets and financial liabilities, related transaction expenses are included in the initial recognition amounts. Furthermore, subsequent measurements of financial assets and liabilities are decided by their own classifications. A financial asset or financial liability that qualified with one of the following conditions are indicating its transactional purposes: (i) the purpose of acquiring relevant financial assets or assuming relevant financial liabilities is mainly made for the purpose of selling or repurchasing in the near future; (ii) the initial confirmation is a part of the identifiable portfolio of financial instruments under centralized management, and there is objective evidence that the short-term profit model actually exists in the near future;(iii) where it is defined as the derivative instrument, but conforms to the financial guarantee contract definition and is designated as an effective hedging instrument of the derivative instruments. (1)Debt Instruments Debt instruments refer to the instruments that conform to the definition of financial liabilities from the perspective of the issuers. The classifications and subsequent measurements of debt instruments depends on the company's business models for financial assets management and the contractual cash flow characteristics of financial assets. Where it fails to pass the cash flow characteristic test, direct classification as a financial asset measured at fair values shall be adopted with variations to be recorded into the current profits and losses; where it succeed to pass the cash flow characteristic test, its classification shall be determined on the business model of financial assets management, and its qualification as a financial asset measured at fair values, of which variations shall be recorded into the current profit and loss. 1) To be measured at amortized costs. The company's business models for the management of such financial assets are aimed at the collection of the contract cash flows, of which the characteristics of the contract cash flow shall be consistent with the benchmark lending arrangement, that is, the cash flows generated at a certain date are referred to the payment of the principal and the interest based on the outstanding principal amount only while the financial assets are not designated to be measured at fair values, but their variations are recorded into the current profits and losses. However, the company recognizes interest incomes for such financial assets in accordance with the effective interest rate methods. The profits or losses of such financial assets due to the termination of recognition together with the losses as a result of the impairment are directly recorded into the current profits and losses. 2) To be measured at fair values with its variations included in other comprehensive incomes. The company's business model for managing such financial assets is both to receive the contract cash flows and to sell, of which the characteristics of the contract cash flows shall be consistent with the benchmark lending arrangements, that is, the cash flow generated at acertain date is only the payment of the principal and the interest based on the outstanding principal amount while the financial assets are not designated to be measured at fair values, but their variations are recorded into the current profits and losses. However, such financial assets are measured at fair values and their variations are included in other comprehensive incomes, but impairment losses 33 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 or gains, exchange gains & losses and interest incomes calculated according to the actual interest rate method are included in the current profits and losses. Furthermore, variations in fair values accumulated into other comprehensive incomes will be carried forward to the current profits and losses when the recognition of such financial assets is terminated. Such financial assets are listed as other lending investments. 3) To be measured at fair values with variations booked into the current profits and losses. Debt instruments held by the company that are not divided into those measured at amortized costs and those measured at fair values with their variations recorded in other comprehensive incomes are measured at fair values and their variations are recorded into the current profits and losses, of which those classified as financial assets are measured at fair values with variations recorded into current profits and losses are listed as transactional financial assets or other non-current financial assets. (2)Equity Instruments An equity instrument is one that is analyzed from the perspective of the issuers in accordance with the definition of an equity instrument. Equity instrument investments is measured at fair values with variations recorded into current profits and losses, which are listed as transactional financial assets, except that the management of the company that is specified to be measured at fair values with variations recorded into other comprehensive incomes. Items designated to be measured at fair values with variations included in the comprehensive incomes are listed as the investments of other equity instruments, of which related changes in fair values shall not be carried forward to the current profits and losses, and such designation shall not be revoked once made. However, related dividend gains are booked into the current profits and losses, and no impairment provision is included in the other equity instruments. When terminate recognition, the accumulated gains or losses as previously recorded in other comprehensive incomes are transferred from other comprehensive incomes and recorded in retained earnings. (3)Financial Liabilities Financial liabilities are classified as financial liabilities and other financial liabilities which are measured at fair values with variations to be recorded into the current profits and losses at the initial recognition. Financial liabilities measured at fair values with variations recorded into the current profits and losses includes trading financial liabilities and financial liabilities that are specified to be measured at fair values with variations booked into the current profit and loss. Financial liabilities can be designated as financial liabilities to be measured at fair values at the initial measurement with their variations recorded into the current profits and losses upon the any of the following conditions: 1)the designation can eliminate or significantly reduce the accounting mismatches; 2)The portfolio of financial liabilities or the portfolio of financial assets and financial liabilities is managed and evaluated on the basis of fair values, and reported to key management within the company thereafter according to the risk management or investment strategies stated in the official written documents. Such designation shall not be revoked once made. For financial liabilities designated to be measured at fair values with variations recorded in the current profits and losses, variations in fair values caused by changes in the company's own credit risks shall be recorded in other comprehensive incomes, while variations of other fair values are booked into the current profits and losses. Furthermore, when terminate the recognition of such financial liabilities, the accumulated gains or losses as previously recorded in other comprehensive incomes are transferred from other comprehensive incomes and recorded in retained earnings. Other financial liabilities of the company mainly include short-term loans, long-term loans and the like. For such financial liabilities, effective interest methods are adopted with subsequent measurement to be made according to the amortized costs. 34 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (4)Termination Recognition of Financial Assets and Financial Liabilities A financial asset shall be terminated upon one of the following circumstances: 1) The contractual right to receive the cash flow of the financial assets is terminated; 2) The financial asset with almost all the risks and rewards from the ownership of the financial assets have been transferred to the transferee; 3) Although the company has neither transferred nor retained nearly all the risks and rewards in the ownership of the financial asset, the financial assets of the company have been transferred and have relinquished control of the financial assets. Where the current obligations of a financial liability (or any part thereof) have been discharged, the company ceases to recognize such financial liability (or any part thereof). (5)Impairment of Financial Instruments The company carries out impairment accounting treatment to the financial instruments based on expected credit losses and confirms loss provisions. Expected credit loss refers to the weighted average credit losses of financial instruments by the risks of defaults, and credit losses refer to the difference between all contract cash flow receivable under the contract as well as all cash flows expected to be collected that discounted at the original real interest rates, that is, the present values of all cash shortfalls. Measuring methods of the company's expected credit losses on financial instruments reflects the following factors: unbiased probability weighted averages as determined by a range of possible outcomes; the time value of money; reasonable and informed information about past events, current conditions and future economic conditions available up to the balance sheet date without unnecessary additional costs or efforts. The company determines the expected credit losses of relevant financial instruments in the following manners: 1) For financial assets, the credit losses are the present values of the difference between the contract cash flows and the expected cash flows payable by the company; 2) For leasing receivables, the credit losses are the present values of the difference between the contract cash flows and the expected cash flows payable by the company; 3) For any uncommitted loan commitment, the credit losses are the present values of the difference between the contract cash flows payable by the company and the cash flows expected to be collected if the loan commitment holder withdraws corresponding loans. The company's estimations on the expected credit losses of the loan commitment are consistent with its expectations on the utilization of the loan commitments; 4) In the case of a financial guarantee contract, the credit losses are the present values of the difference between the amount the company expects to receive from the contract holders, debtors or any other party, and the amount of money the company expects to pay to the contract holder in respect of the credit losses incurred by the contract holder; 5) In the case of a financial asset whose credit impairment has occurred on the date as indicated by the balance sheets but is not purchased or originated, the credit losses are referred to the difference between the book balance of the financial assets and the present values of the estimated future cash flow discounted at the original real interest rates. Three stages are adopted to identify expected credit losses by assessing whether its credit risks have increased significantly since its initial recognition together with considerations to the reasonable and evidence-based information (including forward-looking information) on each balance sheet date. In the case that the credit risk has not increased significantly since the initial confirmation, the expected credit losses are defined as the first stage, and the loss provisions are measured according to the expected credit losses of the financial instruments within the next 12 months; where the credit risk has increased significantly since the initial confirmation but no credit impairment has occurred, the expected credit losses are defined as the first stage, and the loss provisions are 35 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 made according to the expected credit losses of the financial instruments for the entire duration; in the event that a credit impairment has occurred since the initial recognition, the expected credit losses are defined as the third stage, and the loss provisions are measured in accordance with the expected credit losses of the financial instruments throughout its duration. For financial instruments of the first and second stages, the interest income shall be calculated according to the book balance and the actual interest rates; for financial instruments of the third stage, the interest income shall be determined according to its amortized costs and the real interest rates. For purchased or originated financial assets with credit impairment, only the cumulative variations in the expected credit losses during the entire period (up to the date as indicated by balance sheet) after the initial recognition are recognized as loss provisions, and its interest gains are determined according to the amortized costs of financial assets and the real interest rates as adjusted by credit. An increase or reversal of the loss provisions is recorded as an impairment loss or gain of the current period. For debt instruments as held at fair values with variations recorded into othercomprehensive incomes, impairment losses or gains are recorded into the current profits and losses, and other comprehensive incomes is adjusted synchronously. A. Provisions of the company for the losses are measured on the expected credit losses for the entire duration The company divides notes and accounts receivable into several combinations and calculates the expected credit losses with reference to the combination based on the characteristics of credit risks. For notes receivable by portfolios, the expected credit losses are calculated by the default risk exposures and the expected credit loss rates of the entire duration with reference to company's historical credit loss experience, and the combination with the current situation and the forecast of future economic conditions. Determining basis of the portfolios is as follows: Portfolio A of notes receivable trade acceptances Portfolio B of notes receivable bank acceptances For accounts receivable by portfolios, a comparison table of the expected credit loss rates is prepared between the age of accounts receivable and the entire duration to calculate the expected credit losses with reference to company's historical credit loss experience, and the combination with the current situation and the forecast of future economic conditions. Determining basis of the portfolios is as follows: Portfolio A of accounts receivable vintage analysis Portfolio B of accounts receivable specific identification The company divides other receivables and long-term receivables into several portfolios according to the characteristics of credit risks and calculates the expected credit losses on the basis of such portfolios when individual other receivables and long-term receivables fails to obtain the information to assess the expected credit losses at a reasonable cost. Determining basis of the portfolios is as follows: Portfolio A of other receivables deposits and securities receivable Portfolio B of other receivables advanced money receivable Portfolio A of long-term receivables lease receivables For lease receivables by portfolios, the expected credit losses are calculated by the default risk exposures and the expected credit loss rates of the entire duration with reference to company's historical credit loss experience, and the combination with the current situation and the forecast of future economic conditions. For other receivables and long-term receivables divided into combinations other than lease receivables, the expected credit losses are calculated by the default risk exposure and the expected credit loss rates for the next 12 months or the entire duration. (6)Derivatives and Embedded Derivatives Derivatives of the company's mainly include forward contracts, futures contracts and swap contracts. 36 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Derivatives are initially measured at the fair values at the execution dates of the derivative trading contracts, and are subsequently measured at their fair values thereafter. The gains or losses arising from the variations in the fair values of the company's derivatives are directly recorded into the current profits and losses. Embedded derivative refers to the derivatives that are embedded in the non-derivative instruments (i.e., the master contracts), which constitutes the hybrid contracts with the master contracts. Where the master contracts contained inside the hybrid contract are assets regulated by the Standards for Financial Instruments, the company does not split the embedded derivatives from the hybrid contracts, and instead, the hybrid contracts are applied as a whole to relevant provisions of the financial instrument criterion on the classification of financial assets. In the case that the master contracts contained in the hybrid contracts are not assets under the financial instrument criterion but meet the following conditions, the company splits the embedded derivative from the master contracts and settle as separate derivatives: 1) The economic characteristics and risks of the embedded derivative instruments are not closely related to the economic characteristics and risks of the master contracts. 2) Separate instruments with terms associated with embedded derivatives are conforming to the definition of derivatives; 3) The hybrid contracts are not measured at fair values and its variations are recorded into the current profits and losses for accounting settlements. (7)Offsets of Financial Assets and Liabilities When the company is legally entitled to offset the recognized financial assets and financialliabilities, and such right is currently enforceable, and when the company plans to settle such financial assets and pay off the financial liabilities on a net basis or liquidate the financial assets and liabilities, the amount of financial assets and financial liabilities offset against each other are stated in the balance sheets. In addition, financial assets and financial liabilities are shown separately in the balance sheets and are not offset against each other. (8)The Fair Values Determination of Financial Instruments For financial instruments with active markets, the fair values of assets are determined by the price the market participant who would have to pay to receive or transfer a liability from the sale of such asset in an orderly transaction on the measurement date. Where there are financial instruments without active markets, the fair values is determined by valuation methodologies. In the valuations, the input values consistent with the characteristics of the assets or liabilities as considered by the market participants in the transaction of the relevant assets or liabilities, together with relevant observable input values as preferred reference are adopted by the company through the valuation techniques that are applicable in the current situation and are supported by sufficient data and other information available. An un-observable input value is adopted when relevant observable input values cannot be obtained or is not feasible to obtain 11.Notes receivable 12.Account receivable 13. Financing of receivables 14.Other account receivable Determination method of expected credit loss of other receivables and accounting treatment method 37 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 15. Inventories 16.Contract assets The company presents contract assets or liabilities in the balance sheet according to the relationship between performance obligation and customer payment. Contract assets are the right of the company to receive consideration for the goods transferred to the customer, and the right depends on other factors other than the passage of time. Contract liability is the obligation of the company to transfer goods to the customer for the consideration it has received or receivable from the customer. The contract assets are prepared for impairment according to the expected credit loss method. No matter whether it contains significant financing components or not, the company measures its loss provision according to the amount of expected credit loss in the whole duration on the balance sheet date. If the expected credit loss is greater than the book amount of current contract asset impairment provision, the difference is recognized as impairment loss, otherwise, it is recognized as impairment gain. The relevant contract assets are deemed to be unable to be recovered and have actual impairment loss, which shall be written down after approval. 17. Contract costs On the balance sheet date, the contract assets and liabilities are listed separately due to different contracts. For contract assets and contract liabilities under the same contract, the net amount is shown as the debit balance, and the contract assets or other non-current assets are listed respectively according to their liquidity. If the provision for impairment has been accrued, the balance at the end of the period minus the provision for impairment of contract assets shall be listed; If the net amount is the credit balance, it shall be listed as contract liabilities or other non-current liabilities according to their liquidity. 18. Held-for-sale assets The Company will retrieve its book value by means of selling assets (including the exchange of commercial non-monetary assets) instead of sequentially using a non-monetary asset or a disposal group, and when meeting two of the following conditions, the book value will be divided into held-for-sale category: (1) When a certain non-monetary assets or a certain disposal group sells such kind of assets in similar transactions in accordance with the convention , assets can be sold immediately under the current situation. (2)The Company has made decision for the selling plans and has acquired assured purchase commitment, predicting that selling will be completed within one year.( The selling, which can only be sold after acquiring approval from relevant authorities or supervision departments according to relevant provision requirement , has acquired its approval ). The Company will be specifically for dividing the non-current assets or disposal group which are acquired from reselling into on-sales category on acquisition date if on acquisition date they can meet the stipulated condition that the predicted selling will be completed within one year , and in a short term (usually 3 months) they are likely to meet other conditions of dividing into on-sales category. 38 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 When the non-monetary assets and disposal group were measured by the Company at the beginning or remeasured and divided into held-for-sale category on balance sheet date, if its book value is higher than the net amount after fair value deducts selling expense, the book value will be written down to the net amount after fair value deducts selling expense, and the written-down amount will be confirmed as assets impairment losses and counted into the current profits and losses, and the impairment provision with held-for-sale assets will be withdrawn in the meanwhile. For the held-for-sale disposal group’s confirmed amount of loss of asset impairment, the book value of goodwill will be deducted first, and its book value will then be deducted proportionally according to the book value’s percentages of all non-current assets in the disposal group which can be adopted by the measurement stipulations of Accounting Standards for Business Enterprises NO.42- Held-for-sale Non-current Assets, Disposal Groups and Operation Termination If any increment occurs in the net amount after the held-for-sale non-current assets on the subsequent balance sheet date deducts selling expense, the amount deducted previously will be recovered and will be transferred back within the amount of asset impairment losses confirmed after being divided into held-for-sale category, and the amount transferred back will be counted into the current profits and losses. There will be no restitution for asset impairment losses confirmed before being divided into held-for-sale category. The amount deducted previously of held-for-sale disposal group shall be recovered, and when after being divided into held-for-sale category, it will be transferred back within the amount of impairment confirmed by non-current assets by the means of the measure stipulations of Accounting Standards for Business Enterprises NO.42- Held-for-sale Non-current Assets, Disposal Groups and Operation Termination, and the amount transferred back will be counted into the current profits and losses. There will be no restitution for the book value of goodwill which has been deducted and for asset impairment losses confirmed before being divided into held-for-sale category which can be adopted by the measure stipulation of this principle. Non-current held-for-sale assets or non-current assets in the disposal group shall not be depreciated or amortized, and interest and other expenses on liabilities held in the disposal group for sale shall continue to be recognized. When the non-current assets or the disposal group can not meet the conditions of dividing into on-sales category, the Company will not continue to divide it into on-sales category or remove the non-current assets from the on-sales disposal group, and the valuation will be made according to the lower one between two of followings: (1) Book value before being divided into on-sales category, and the amount of money after being under the situation where book value is supposed not to be divided into on-sales category and adjustment is made in depreciation, amortization or impairment which should have been confirmed. (2)Recoverable amount. When derecognizing the on-sales non-current assets or disposal group, the Company will count the gains and losses which are yet to be confirmed into the current profits and losses. 39 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 19. Creditor's investment 20.Other creditor's investment 21.Long-term account receivable 22. Long-term equity investment The long-term equity investment in this section refers to the long-term equity investment of this enterprise that is able to control to or does joint control with or significant influences over the invested enterprise. For the long-term equity investment of this enterprise that is not able to control to or does not do joint control with or have significant influences over the invested enterprise, this enterprise shall record it as available-for-sale financial asset or the financial asset measured by its fair value with its changes in fair value recorded into the profits or losses of current period as the changes. For details of its accounting policy, please refer to Note 3.10 "Financing Instruments". The term "joint control" refers to the joint control over an arrangement of this enterprise in accordance with the contracts and agreements, and decisions over relevant activity of such arrangement shall not be unless the assent on sharing the control power. The term "significant influences" refers to this enterprise's power to participate in making decisions on the financial and operating policies of the invested enterprise, but not to control or do joint control together with other parties over the formulation of these policies. (1)Determination of investment cost For the merger of enterprises under the same control, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, no-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reverse. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of book value of the owner’s equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. For the merger of enterprises under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the share of book value of the owner’s equity of the merged enterprise as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held by this enterprise before the date of merger shall 40 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 be accounted for by equity method, or shall be recorded as the other comprehensive income recognized as available-for-sale financial asset and not accounted for. For the merger of enterprises not under the same control, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The merger costs include the assets paid, liabilities occurred or borne and sum of the fair value of the equity securities issued by the purchaser. For the merger of enterprises not under the same control through gaining the shares of the combined enterprise by multiple steps of deals, it shall deal with it in the following two ways depending on that if it belongs to "a package deal": if it belongs to "a package deal", it shall deal with all the deals as one obtaining the control power; if it does not belong to "a package deal", it shall, on the date of merger, regard the sum of book value of the owner’s original equity of the merged enterprise and the newly increased investment cost as the initial cost of the long-term equity investment. For the shares originally held by this enterprise accounted for by weighted equity method, the relevant other comprehensive income shall not be accounted for temporarily. For the equity investment accounted for as available-for-sale financial asset, the difference of its fair value and its face value and the accumulated changes in its fair value originally recorded as other comprehensive income shall be switched to the profits or losses of the current period. The audit cost, law service cost, evaluation and consultation fees and agent commissions as well as other related administration costs occurred and borne by the merging or purchasing enterprise for the purpose of merger, shall be recorded into the profits or losses of current period at the time when the costs occurred. Other equity investments except the long-term equity investment formed by merger of enterprises shall be initially ascertained by their costs which, depending on the different ways in acquiring the long-term equity investments, shall be recognized separately as cash purchasing prices actually paid by this enterprise, fair value of the equity securities issued by this enterprise, agreed value of the investment contracts or agreements, fair value or original book value of the assets obtained by exchange of no-monetary assets, the fair value of the long-term equity investment itself, etc. The relevant expenses, tax payments as well as other necessary expenses directly associated with obtaining the long-term equity investment shall be recorded into the investment costs as well. If this enterprise is able to do joint control or significant influence, which does not constitute control, over the invested entity as a result of additional investment, the long-term equity investment cost shall be the sum of the fair value of the equity investment ascertained in accordance with the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instrument and the cost of the increased investment. (2)Subsequent measurement and recognition of profit or loss A long-term equity investment of this enterprise that does joint control (not including joint venture) or significant influences over the invested entity shall be measured by employing the equity method. Besides, the cost method is employed in this enterprise's financial reports to measure the long-term equity investment that could form control over the invested entity. 41 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 ① Long-term equity investment calculated under the cost method The price of a long-term equity investment measured by employing the cost method shall be included at its initial investment cost. If there are additional investments, the cost of the long-term equity investment shall be adjusted. Except the prices actually paid when obtaining the investment or cash dividends or profits being approved in the consideration but not yet issued, the investment income of the current period shall be recognized in accordance with the cash dividends or profits being approved by the invested entity. ② Long-term equity investment calculated under the equity method If the initial cost of a long-term equity investment is more than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the investing enterprise's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of long-term equity investment shall be adjusted simultaneously. When employing the equity method, this enterprise shall, in accordance with the attributable share of the net profits or losses of the invested entity, recognize the investment profits or losses and adjust the book value of the long-term equity investment. This enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall obtain, and shall reduce the book value of the long-term equity investment correspondingly. Where any change is made to the owner's equity other than the net profits and losses of the invested entity, the book value of the long-term equity investment shall be adjusted and included in the capital reserves. This enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the invested entity are different from those adopted by this enterprise, an adjustment shall be made to the financial statements of the invested entity in accordance with the accounting policies and accounting periods of this enterprise and recognize the investment profits or losses and other comprehensive incomes. For the transactions between this enterprise and its joint ventures and associated entities, where the assets invested or sold do not constitute a business, the unrealized internal transaction profits or losses shall be calculated in accordance with proportion shared, with the proportion shared by this enterprise offset and recognize the investment profits or losses based thereof. However, if losses occurred in the internal transaction between the invested entities is the impairment loss of transferred assets, they shall not be offset. When the assets invested by this enterprise to its joint ventures or associated entities constitute a business, and the investing party obtains long-term equity but without control power, the fair value of the invested business shall be recognized as the initial investment cost of the additional long-term equity investment. The total difference between the original investment cost and the book face of the invested business shall be recorded into the profits or losses of the current period. If the assets purchased from the joint ventures or associated entities constitute a business, this enterprise shall account for the 42 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 business in accordance with this enterprise Accounting Standard No. 20 - Business Combinations, with the total profits or losses associated with the transaction recognized. The Company bears the net losses of its invested business to the limit of the book value of its long-term equity investment and other long-term equity that in real terms constitutes investment on the business. For additional loss of its invested business, if the Company is obligated to undertake, it shall be recognized as estimated liabilities accordingly and recorded in current investment losses. If the invested business earns profits afterwards, the Company shall reinstate and recognize its share of gains after compensating its unrecognized share of losses. ③ Purchase of minority interest While compiling consolidated financial statements, the Company adjusts its capital reserve in terms of the difference between the increase of long-term equity investments due to purchase of minority interest and its share of the subsidiaries’ net assets since the purchase (or combination) date or dates. If its capital reserve is not sufficient to write down the difference, then the Company adjusts its retained income. ① Disposal of long-term equity investment In consolidated financial statements, the Company records in shareholders’ equity the difference between partial disposals of its long-term equity investments in its subsidiaries and its share of the subsidiaries’ net assets if it does not lose control of the subsidiaries; and if such partial disposals result in loss of its control of the subsidiaries, the difference shall be treated in accordance with the accounting policies related and specified in “Compiling Principles for Consolidated Financial Statements”. ( Please refer to (2) in Note 3.6 ) For disposals of long-term equity investments under other circumstances, the difference between the book value and the actual received consideration is recorded in current profit and loss. For the long-term equity investments calculated by equity method, the same method applies to the remaining equity after disposal. Meanwhile, the other comprehensive gains originally recorded in shareholders’ equity is treated pro rata by the same method how the invested businesses handle the accounts while directly disposing the related assets or liabilities. The investor recognizes the ownership interest due to equity changes except net profit and loss, other comprehensive gains and profit distribution, and carries it over pro rata to current profit and loss. For long-term equity investments calculated by costs method, the same method applies to the remaining equity after disposal. Other comprehensive gains calculated and recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control of the invested businesses are treated on the same basis that the invested businesses directly dispose the related assets or liabilities, and it will be carried over pro rata to current profit and loss; and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. 43 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 For disposals of long-term investment equity resulting in loss of control over the invested businesses, when compiling individual financial statements, the Company changes to adopt equity method to calculate the remaining equity that is still sufficient to exert joint control or significant influence, and to make adjustments as since it was acquired; and if the remaining equity is not sufficient, it will be handled in accordance with the relevant recognition and measurement principles for financial instruments and the difference between its fair value and book value will be recorded in current profit and loss since the Company loses control of the invested businesses. For other comprehensive gains recognized by equity method or recognition and measurement principles for financial instruments before the Company obtains control over the invested businesses, the Company adopts the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities, and among the invested businesses’ net assets that are calculated and recognized by equity method are all other equity changes than net profit and loss, other comprehensive gains and profit distribution carried over pro rata to current profit and loss. For the remaining equity calculated by equity method, other comprehensive gains and other ownership interests will be carried over pro rata while for those treated in accordance with the recognition and measurement principles for financial instruments, other comprehensive gains and other ownership interests will be carrier over entirely. Under the circumstances that the Company loses joint control over or has no significant influence on the invested businesses due to partial equity disposal, the remaining equity changes to be calculated in accordance with the recognition and measurement principles for financial instruments, and the difference between its fair value on the date that the Company loses the joint control and significant influence and the book value is recorded in current profit and loss. For other comprehensive gains recognized due to calculation of the original equity investments by equity method, the Company adopts the equity method no longer but the same basis to handle the accounts as the invested businesses directly dispose the related assets or liabilities while carrying over to current profit and loss all the ownership interest recognized due to other equity changes than net profit and loss, other comprehensive gains and profit distribution. If the Company gradually loses control of a subsidiary through multiple transactions, which is a package deal as a whole, then all these transactions will be treated as control losing equity disposal, and before loss of control, the difference between each transaction consideration and the book value of the corresponding long-term equity investment is recognized as other comprehensive gains and in the end, carried over to current profit and loss upon loss of control. 23. Investment property The measurement mode of investment property The measurement by the cost method 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 44 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 leases, and buildings that are being constructed or developed for future lease out under operating leases). The Company makes initial measurement at the costs that the properties is acquired and records as part of the property costs the subsequent expenses that could bring economic benefit inflows and be measured reliably while other subsequent expenses as part of current profit and loss. Such properties are depreciated or amortized in accordance with the relevant regulations for fixed assets or intangible assets. 24. Fixed assets (1) Recognition criteria for fixed assets (1)Criteria for recognition of fixed assets,Fixed assets refer to tangible assets that are held for production, services, leases or operations and the useful life of which are over one accounting year. Fixed assets are recognized if it produces economic benefit inflows and its costs can be measured reliably. The Company makes initial measurements on fixed assets at the costs that they are acquired.(2)Classification and depreciation policy of fixed assets,The company adopts the Straight-line method to carry out depreciation. The fixed assets shall begin to be depreciated upon reaching the intended usable state, and shall cease to be depreciated upon termination of recognition or when they are classified as non-current & held-for-sale assets. Without taking into account the provision for impairment, the Company determines the annual depreciation rates of all types of fixed assets according to the type of fixed assets, the expected useful life and the estimated residual value as follows: (2)Depreciation method The method for Category Expected useful life Estimated residual value Depreciation depreciation 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 Other equipment Straight-line method 5-10 3 9.70-19.40 Thereinto, the fixed asset whose asset impairment provision has been withdrawn should also have its accumulated amount deducted to count and confirm the depreciation rate. At the end of each year, the company reviews the useful life, estimated net residual value and depreciation method of fixed assets. If the estimated useful life is different from the original estimate, the useful life of the fixed assets shall be adjusted. If the estimated net residual value is different from original estimated, the estimated net residual value shall be adjusted (3)Recognition basis, pricing and depreciation method of fixed assets by finance lease Fixed assets leased by the Company are recognized as financing leased fixed assets when they meet one or 45 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 more of the following criteria: 1) At the end of the lease term, ownership of the leased assets is transferred to the Company. 2) The Company has the option to purchase leased assets, and the contracted purchase price is expected to be well below the fair value of the leased assets at the time of exercise of the option, So it can be reasonably certain that the Company will exercise this option on the date of commencement of the lease. 3) Even if ownership of the assets is not transferred, the lease term accounts for the majority of the useful life of the leased assets. 4) The present value of the minimum lease payment of the Company at the date of commencement of the lease is almost equivalent to the fair value of the leased assets on the date of commencement of the lease. 5) The leased assets are of a special nature, if no major modifications are made, only the company can use them. Fixed assets from financial leasing are depreciated during the useful life if it is reasonable to determine that the ownership could be obtained upon lease expiration; otherwise, the Company should choose the shorter of the lease period and the remaining useful life to depreciate the assets. (4)Charge for Major repair The Company conducts regular checking on major overhaul fee incurred in the fixed asset, and any parts of the fee that have unambiguous evidence to indicate they conform with the condition for confirming fixed asset will be counted into the fixed asset costs, otherwise into the profit and loss of the current period. During the interval period of regular major overhaul, the fixed asset will be depreciated as before. 25 .Projects under construction 26. Borrowing expenses Borrowing expenses include interest, amortization of discount or premium, auxiliary expenses, translation differences arising from borrowings in foreign currency etc. The Company starts to capitalize the borrowing expenses in direct connection to purchase, construction or production of the assets that meet capitalization conditions when there are assets expenditures and borrowing expenses incurred and/or the Company starts all the necessary events to purchase, construct or produce such assets till the assets can be used and sold. Other borrowing expenses are recognized as costs when incurred. The Company capitalizes the actual interest expense incurred by use of special borrowings, minus the interest income from the remaining borrowing funds in bank or any investment income earned from the interim investment of those borrowings; and for general borrowings, the amount to capitalize is the weighted average of the accumulated assets expenditures in exceed of the special borrowings times the capitalization rate of the used general borrowings, which is determined by the weighted average interest rate of the general borrowings. 46 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 During capitalization, all translation differences of special borrowings in foreign currency should be capitalized while those of general borrowings in foreign currency are recorded in current profit and loss. The qualifying assets to be capitalized are fixed assets, investment properties and inventories which need to be acquired, constructed or produced through a long period of time, in order to become ready for its intended use or sale. The Company stops capitalization of borrowing costs if an abnormal interruption more than 3 consecutive months occurs during purchase, construction or production of the assets that are eligible to capitalization till all those restart. 27. Biological assets 28. Oil-gas assets 29. Assets of the right to use 30. Intangible assets 1 Pricing method, useful life and impairment test The Company makes initial measurements on intangible assets in terms of the costs and determines the useful life when obtaining the assets. For intangible assets of a limited useful life, from the time the assets are available for use, the Company adopts the amortization method that reflects realization of the expected economic benefits, or the straight-line amortization method if unable reliably to determine how to realize the expected economic benefits; and no amortization are made for intangible assets of an unlimited useful life. At the end of each year, the Company reviews the useful life and amortization methods of intangible assets of a limited useful life and makes adjustments and accounting treatment if different from the previous estimates. For the intangible assets that are estimated to produce no more economic benefits in the future, the Company records the book value of such assets all in current profit and loss. (2)Research and development expenses The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures. The research expenditures shall be recorded into the profit or loss for the current period. The development expenditures shall be capitalized when they satisfy the following conditions simultaneously: It is feasible technically to finish intangible assets for use or sale; Having the intention to complete the intangible asset and use or sell it; The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the 47 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 intangible assets or there is a potential market for the intangible assets itself for the intangible assets will be used internally; It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; Expenditures attributable to the development phase of the intangible assets can be measured reliably. Development expenditures that do not meet the above conditions are included in the profits and losses of the current period. After meeting the above conditions, the corresponding projects of the company study their technical feasibility and economic feasibility, and enter the development stage after the formation of the project. 31 Impairment of the long-term assets On balance sheet dates, the Company determines whether there are impairments occurring to fixed assets, construction in progress, intangible assets of a limited life, investment properties measured in the cost model as well as non-current and non-financial assets like the long-term equity investments on subsidiaries, joint ventures and associated companies. If impaired, the Company estimates the retrievable amount and conducts an impairment test. Impairment tests need to be done on goodwill, intangible assets of an unlimited life and the intangible assets that are not yet to reach the usable status, no matter they are impaired or not. If the impairment test result shows the retrievable amount lower than the book value, impairment provisions will be set aside and recorded in impairment loss. The retrievable amount is the fair value of the assets minus the disposal expenses or the present value of the estimated future cash flows of the assets, whichever is higher. The fair value of the assets is determined in terms of the price specified in the selling agreement that is fair trade; if no selling agreement but there is an active assets market existing, it is determined in terms of the buyer’s offer; and if no selling agreement and active assets market, the fair value can be estimated based on the best available information. Disposal expenses include all related legal charges, taxes, delivery fees or the direct expenses incurred to have the assets reach the usable or sellable status. To determine the present value of the estimated future cash flows from the assets, the Company chooses an appropriate discount rate in the light of the continual usage of the assets and the estimated future cash flows occurring upon final disposal. Impairment provisions of the assets are calculated and recognized on the basis of individual assets. If unable to estimate the retrievable amount of individual assets, the Company determines the amount by reference to the asset group that includes the individual assets. Asset groups are the minimum assets combination that independently produces cash inflows. For the goodwill separately listed in financial statements, while an impairment test being conducted, the book value is apportioned to the asset groups or combination of asset groups expected to benefit from the synergy effects arising from business combinations. The Company recognizes impairment losses when the test result shows that the retrievable amount of the asset groups or combination of asset groups is lower than their book values. The impairment loss will be first used to write down the book values of the asset groups or combination of asset groups and then those of other assets pro rata. Once the aforesaid impairment losses are recognized, they cannot be reinstated in the future. 32. Long-term amortizable expenses Long-term unamortized expenses are valued at the actual costs and amortized at average in an estimated beneficial 48 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 period of time. If those cannot benefit the Company in future accounting periods, the remaining will be recorded all in current profit and loss. 33.Constract Liabilities 34. Employee compensation 1.Accounting treatment of short-term remuneration Employee compensation refers to all kinds of rewards or compensations given in return for employees’ services or employment termination. It includes short-term compensation, post-employment benefits, demission benefit. Short-term compensation includes payroll, bonus, allowances and subsidies, employee welfare, medical insurance, injury insurance and birth insurance, housing fund, labor union and employee training expenditures, non-monetary benefits and other short-term rewards. It recognizes as liabilities the actual short-term compensation incurred during the accounting period that the employees provide their services and records in current profit and loss or the relevant asset costs. Non-monetary benefits are measured at the fair value. 2.Accounting treatment of benefits paid after departure Post-service benefits mainly include defined contribution plan and defined benefit plan. The defined contribution plan mainly includes basic pension, unemployment insurance etc. The corresponding contributions are recorded in the relevant asset costs or current profit and loss when incurred. 3.Accounting treatment of dismissal welfare When terminating labor relations before expiration of contract, or layoffs with compensations, and the Company cannot terminate the labor relations unilaterally or reduce the demission welfare, remuneration and liabilities produced from the demission welfare should be determined and included in current profits and losses when determining the costs of demission welfare and recombination. However, demission welfare not fully paid within 12 months after annual Reporting Period should be handled the same as other long-term employees’ payrolls. The inside employee retirement plan is treated by adopting the same principle with the above demission welfare. The Company would record the salary and the social security insurance fees paid and so on from the employee’s service terminative date to normal retirement date into current profits and losses (demission welfare) under the condition that they meet the recognition conditions of Retained Earnings. 4 .Accounting treatment of other long term employee benefits The inside employee retirement plan is treated by adopting the same principle with the above demission welfare. The Company would recorded the salary and the social security insurance fees paid and so on from the employee’s service terminative date to normal retirement date into current profits and losses (demission welfare) under the condition that they meet the recognition conditions of Retained Earnings. 35. Lease liabilities 36. Estimated Liabilities The Company recognizes obligations relating to contingent events as estimated liabilities if they meet the following conditions: 49 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 A. That obligation is a present obligation of the enterprise; B. It is probable that an outflow of economic benefits from the enterprise will be required to settle the obligation; C. A reliable estimate can be made of the amount of the obligation. The estimated liabilities is initially measured on the basis of the best estimate of the expenditure required to meet the relevant current obligations, taking into account factors such as risks, uncertainties and the time value of the currency associated with contingencies. Where the time value of the currency has a significant impact, the best estimate is determined by discounting the relevant future cash outflows. When all or some of the expenses necessary for the liquidation of an estimated liabilities of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement should not exceed the book value of the estimated liabilities. 37.Share-based Payment 38 . Other financial instruments such as preferred shares and perpetual capital securities 39.Revenues Accounting policies used for revenue recognition and measurement Different business models of similar businesses lead to differences in revenue recognition accounting policies. 40. Governmental subsidy Government subsidy means the Company gratuitously obtains monetary assets or non-monetary assets from the government, not including the capital into which the government invests as an investor who has relevant ownership interest. Government subsidies are divided into the subsidy related to assets and the other related to earnings. Government subsidies related to monetary assets will be measured according to the amount received or the amount receivable. Those which related to non-monetary assets will be measured according to fair value; For any fair value which cannot be reliable to be obtained, the assets will be measured according to the nominal amount, and the one measured according to the nominal amount will be directly counted into the current profits and losses. Government subsidies can only be recognized when the company is able to meet the conditions attached to government subsidies and is able to receive government subsidies. Government subsidies are divided into asset-related government subsidies and income-related government subsidies. Government subsidies related to assets refer to government subsidies obtained by companies for the purchase, construction or other formation of long-term assets. Government subsidies related to income refer to government subsidies in addition to those related to assets. The government grants pertinent to assets are recognized as deferred income and are credited to profit or loss by stages in accordance with a reasonable and systematic method within the useful life of the pertinent assets. If the pertinent assets are sold, transferred, scrapped or destroyed before the end of their useful life, the non-allocated pertinent deferred income balance shall be transferred to the profit or loss of the period of assets disposal, and the 50 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 recognized government grant needs to be refunded, then it shall write down the carrying amount of the relevant deferred income and the excess part shall be included in the current profit and loss. The government grants pertinent to income that are used to compensate the relevant costs or losses of the subsequent period of the enterprise are recognized as deferred income and are credited to the current profit or loss for the period when the relevant costs, expenses or losses are recognized; those government grants used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses. For the government subsidy which includes both the assets related part and the income related part, the different parts are treated separately; if it is difficult to distinguish, the whole is classified as the government subsidy related to the income. Government subsidies related to the daily activities of the company shall be included in other earnings in accordance with the substance of the economic business. Government subsidies not related to the daily activities of the company shall be included in the non-operating income and expenditure. 41.Deferred income tax assets and deferred income tax liabilities The balance between the book value and the tax basis of some items of assets and liabilities, as well as the temporary differences issued as the balance between the book value and the tax basis of the tax basis items that unrecognized as assets and liabilities but can be determined as per the provisions of tax law, which shall be determined as the deferred income tax assets and the deferred income tax liabilities in accordance with the balance sheet debt law. Taxable temporary differences related to the initial recognition of goodwill, as well as the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax liabilities shall not be recognized. In addition, as for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, if the Company could control the reverse time of such differences and such differences cannot be reversed in the foreseeable future, the relevant deferred income tax liabilities also shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes all other deferred income tax liabilities caused by taxable temporary differences. Deductible temporary differences related to the initial recognition of an asset or liability in a transaction that neither belongs to a business consolidation, nor affects the accounting profit and taxable income (or deductible loss) when it happens, the relevant deferred income tax assets shall not be recognized. In addition, as for deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, if such differences cannot be reversed in the foreseeable future or are not likely to obtain the taxable income to deduct the deductible temporary differences of the taxable income, the relevant deferred income tax assets shall not be recognized. Apart from the above-mentioned exceptional cases, the Company recognizes other deferred income tax assets caused by deductible temporary differences within the limit of likely obtained taxable income that can be used to deduct the deductible temporary differences of the taxable income. 51 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 The corresponding deferred tax assets of deductible loss and tax reduction that can be carried forward during subsequent years shall be recognized within the limit of likely obtained future taxable income that can be used to deduct the deductible loss and tax reduction. As per the provisions of tax law, the deferred income tax assets and deferred income tax liabilities shall be measured at the applicable tax rates used during the period of expectation recovery of relevant assets or pay-off relevant liabilities at the balance sheet date. The book value of the deferred income tax assets shall be re-checked at the balance sheet date. The book value of the deferred income tax assets shall be written-down if it is unlikely to obtain sufficient taxable income in the future to deduct the benefit of the deferred tax assets and the written-down amount shall be carried forward if it is likely to obtain sufficient taxable income. 42. Self-defined Chapter Income tax Income tax is composed of current income tax and deferred income tax. All taxes and expenses are written in current profit and loss except those for reputation adjustment in enterprise combination or trades directly counted into shareholder’s equity or some deferred income tax which is counted in shareholder’s equity. Current income tax is payable tax amount currently calculated as current taxable income. Payable tax amount is calculated by adjusting pre-tax accounting profit specified in related tax laws. The company confirms deferred income tax by adopting liability method in Balance Sheet based on the temporary difference between book value of asset and liability in Balance Sheet and tax base. Temporary difference of items of payable taxes are confirmed to be related deferred income tax liabilities, except the temporary difference of payable taxes are made in the following conditions: A. Initial confirmation of reputation or that of assets or liabilities made in trades with these features: the trade is not enterprise combination and it neither influences accounting profit nor amount of payable tax when it happens. B. As for temporary difference of items of payable taxes related to investment to subsidiaries, joint enterprises and associated enterprises. The temporary difference return time may be controlled and may not return in foreseeable future. On the date of balance sheet , the company will calculate deferred income tax assets and deferred income tax liabilities according to applicable tax between expected recovered assets and paid liabilities, and also the company will reflect the income tax influence in ways of expected recovered assets and paid liabilities on the date of balance sheet. On the date of balance sheet, the company will check the book value of the deferred income tax assets. If it was unlikely to obtain sufficient taxable income taxes to offset benefit of deferred income tax assets, while it was likely to obtain sufficient taxable income, carrying amount of deferred income tax assets shall be written down. 52 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 43.Operational leasing 1.Accounting treatment of operating lease The Company will transfer substantially all the risks and rewards of ownership of an asset lease are recognized as a finance lease. Other forms of lease besides financial leasing are considered as operating leasing. At the commencement of the lease term, an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments shall be regarded as the recorded value of the leased assets and an amount equal to the minimum lease payments shall be recognized as a long-term recorded value of the leased assets of payables. The balance between the recorded amount of the leased asset and the recorded amount of the payable shall be accounted for as unrecognized finance charge. Lease payments under an operating lease shall be accounted into the relevant asset cost or current profit or loss over the lease term on a straight-line basis. 2.Accounting treatment of financing lease 44. Other significant accounting policies and estimates (1)Discontinued Operation Discontinued operation means enterprises which can meet one of the following conditions and can be distinguished into a constituent part separately, and this part has been disposed or divided into a on-sales category. ① This constituent part represents an independent main business or a separate main business area; ② This part is a one of the related parts which proposes to dispose an independent main business or an independent main business area. ③This part is a subsidiary acquired from being specifically for reselling. For accounting treatment methods for discontinued operation, see the relevant descriptions at Article 12- Possession of On-Sales Asset in Note III 45.Change of main accounting policies and estimations (1)Change of main accounting policies □ Applicable √ Applicable (2) Change of main accounting estimations □ Applicable √ Not applicable 53 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (3)Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards Governing Financial Instruments, Revenue or Leases from year 2021 Not applicable (4)Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards Governing Financial Instruments or Leases from year 2021 □ Applicable √ Not applicable 46.Other VI. Taxation 1. Main categories and rates of taxes Class of tax Tax basis Tax rate VAT Income should be taxed 13,10,9,6 City maintenance and construction tax Levied based on the taxable income 7 Enterprise income tax Levied based on the taxable income 25,15 Education surcharges Levied based on the taxable income 3 Local education surcharges Levied based on the taxable income 2 The disclosure on the rate of income tax of taxpayers in different enterprises is stated below Name of Taxpayer Rate of Income Tax 2.Preferential tax treatment (1)Chongqing Jianshe Automobile A/C Co., Ltd. by high and new technology enterprise qualification on November21, 2019, acquire the qualification of new high-tech enterprises, Certificate No. GR201951100777, valid for three years. The company calculates and pay enterprise income tax shall be levied at the reduced tax rate 15% from 2020 to 2022. (2)The tax rebate for export of a company shall be exempted from deductions and the tax rebate rate shall be 13%. 3.Other VII. Notes on major items in consolidated financial statements of the Company 1. Monetary funds In RMB 54 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Items Closing balance Opening balance Cash on hand 5,418.26 Bank deposits 57,367,878.06 79,304,835.29 Other cash and cash equivalents 66,420,000.00 80,032,987.92 Total 123,787,878.06 159,343,241.47 The total amount of money that has restrictions on use due to pledge or 66,420,000.00 80,032,987.92 freezing Other note 2. Transactional financial assets In RMB Items Closing balance Opening balance Of which : Of which: Other note 3. Derivative financial assets In RMB Items Closing balance Opening balance Other note 4. Note receivable (1) Notes receivable listed by category In RMB Items Closing balance Opening balance Bank acceptance bill 124,019,463.07 65,509,530.50 Trade acceptance bill 1,039,000.00 Total 124,019,463.07 66,548,530.50 In RMB Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Book Proportio Proportio Proportio Proportio Amount Amount value Amount Amount value n% n% n% n% 55 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Of which Of which Accrual of bad debt provision by single item: In RMB Closing balance Name Book balance Bad debt provision Proportion Reason Accrual of bad debt provision by portfolio: In RMB Closing balance Name Book balance Bad debt provision Proportion Note: Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √ Not applicable (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or Closing balance Accrual Write-off collected amount Of which the significant actual write-off accounts receivable: □ Applicable √ Not applicable (3)Notes receivable pledged by the Company at the end of the period In RMB Items Pledged amount (4)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 263,981,094.36 56 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Total 263,981,094.36 (5)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 note (6) 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 Note of the write-off the accounts receivable: 5. Accounts receivable (1) 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 Proportio Book value Amount Amount value Amount Amount n% n% n% n% Accrual of bad debt 28,211,4 28,211,4 28,211,46 28,211,46 provision by single 65.26 65.26 5.26 5.26 item Including: Accrual of bad debt 217,865, 6,924,04 210,941,6 228,202,3 6,815,890 221,386,45 provision by 681.97 3.74 38.23 43.53 .63 2.90 portfolio Including: 246,077, 35,135,5 210,941,6 256,413,8 35,027,35 221,386,45 Total 147.23 09.00 38.23 08.79 5.89 2.90 57 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Accrual of bad debt provision by single item: In RMB Closing balance Name Book balance Bad debt provision Proportion Reason Unable to Chongqing Huansu Auto Parts Co.,Ltd. 12,723,992.31 12,723,992.31 100.00% recover Chongqing Bisu Yunbo Power Unable to 5,396,775.35 5,396,775.35 100.00% Technology Co.,Ltd. recover Unable to Hafei Automobile co., Ltd. 3,999,944.43 3,999,944.43 100.00% recover Chongqing Kaite Power Technology Unable to 1,481,654.59 1,481,654.59 100.00% Co.,Ltd. recover Guangqi Jiao Auto Co.,Ltd..Luqiao Unable to 75,821.20 75,821.20 100.00% Branch recover Unable to Dongying Jiao Auto Co.,Ltd. 48,579.85 48,579.85 100.00% recover Unable to Beiqi Yinxiang Auto Co.,Ltd. 20,700.00 20,700.00 100.00% recover Hangzhou Fuyang Instrument Factory Unable to 2,821,287.26 2,821,287.26 100.00% Co., Ltd. recover Unable to Guangqi Jiao Auto Co.,Ltd. 67,998.51 67,998.51 100.00% recover Hubei Meiyang Automobile Industry Unable to 1,408,811.40 1,408,811.40 100.00% Co., Ltd. recover Beiqi Heibao(Weihai)Automobile Co., Unable to 51,021.77 51,021.77 100.00% Ltd. recover Dongfeng Xiaokang Automobile Co., Unable to 102,720.66 102,720.66 100.00% Ltd.Changqing Branch recover Unable to Suchuan Yema Automobile Co., Ltd. 12,157.93 12,157.93 100.00% recover Total 28,211,465.26 28,211,465.26 -- -- Accrual of bad debt provision by single item: In RMB Closing balance Name Book balance Bad debt provision Proportion Reason Accrual of bad debt provision by portfolio: In RMB Name Closing balance 58 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Book balance Bad debt provision Proportion Note: Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √ Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 239,291,604.96 1-2 years 71,687.60 2-3 years 299,974.73 Over 3 years 6,413,879.94 3-4 years 28,434.38 4-5 years 6,385,445.56 Over 5 years 246,077,147.23 Total (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or Closing balance Accrual Write-off Other collected amount Credit 35,027,355.89 108,153.11 35,135,509.00 impairment loss Total 35,027,355.89 108,153.11 35,135,509.00 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 Items Amount Of which the significant actual write-off accounts receivable: In RMB 59 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Whether occurred Name Nature Amount Reason Process from the related transactions Note of the write-off the accounts receivable: (4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party In RMB Proportion of Amount of Amount of Company Name total accounts ending balance ending balance receivable % for bad debts PSA group 122,912,109.83 56.42% Chongqing Changan Auto 25,454,777.42 11.68% Zhejiang Yuanjing Auto Parts Co.,Ltd. 20,284,809.84 9.31% Chongqing Yongchuan Great Wall Auto 16,051,803.13 7.37% Parts Co., Ltd. Chongqing Huansu Auto Parts Co.,Ltd. 12,723,992.31 5.84% 12,723,992.31 Total 197,427,492.53 90.62% (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 note: 6. Financing of receivables In RMB Items Closing balance Opening balance Changes in the current period of receivables financing and fair value □ Applicable √ Not applicable Relevant information of the financing provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √ Not applicable 7.Prepayments (1) List by aging analysis: In RMB 60 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Closing balance Opening balance Aging Amount Proportion % Amount Proportion % Within 1 year 6,474,854.70 96.58% 8,133,267.52 95.24% 1-2 years 176,700.00 2.07% 2-3 years 169,785.97 2.53% 169,785.97 1.99% Over 3 years 59,562.66 0.89% 59,562.66 0.70% Total 6,704,203.33 -- 8,539,316.15 -- 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 collected according to the prepayment target Other note: 8. Other accounts receivable In RMB Items Closing balance Opening balance Other accounts receivable 2,852,368.78 1,253,612.91 Total 2,852,368.78 1,253,612.91 (1)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 note: 3)Bad-debt provision □ Applicable √Not applicable (2)Dividend receivable 1) Dividend receivable In RMB Items Closing balance Opening balance 61 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 2) Significant dividend receivable aged over 1 year In RMB Whether occurred Items Closing balance Aging Reason impairment and its judgment basis Other notes: 3)Bad-debt provision □ Applicable √ Not applicable Other note: (3) Other accounts receivable 1) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Petty cash and borrowings with small 2,852,757.96 1,254,002.09 amount Fully provided provision for bad debts regarding long-term receivables and 6,490,804.90 6,490,804.90 payables Total 9,343,562.86 7,744,806.99 2)Bad-debt provision In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit losses for Bad Debt Reserves Expected credit loss over Total losses over the next the entire duration (credit life (no credit impairment) 12 months impairment occurred) Balance as at January 1, 6,491,194.08 6,491,194.08 2021 Balance as at January 1, —— —— —— —— 2021 in current Balance as at June 6,491,194.08 6,491,194.08 30,2021 Loss provision changes in current period, change in book balance with significant amount □ Applicable √Not applicable Disclosure by aging In RMB 62 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Aging Closing balance Within 1 year(Including 1 year) 5,217,702.95 Over 3 years 4,125,859.91 Over 5 years 4,125,859.91 Total 9,343,562.86 3) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Increased amount Decreased amount Closing Items Opening balance Reverse or Remark Withdrawal Other Other balance write-off Of which the significant amount of the reversed or collected part during the reporting period In RMB Items Reversed or collected amount Method 4) 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 Note of the write-off other accounts receivable: 5) Top 5 of the closing balance of the other accounts receivable collated 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 Shenzhen Jianshe Current account 3,013,664.00 Over 5 years 32.25% 3,013,664.00 Motorcycle Co.,Ltd. Chongqing Jianshe Current account 1,478,870.07 Within 2 years 15.83% 1,478,870.07 63 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Lijue Industry Co., Ltd. Ningbo Jianshe Current account 329,628.73 Over 5 years 3.53% 329,628.73 Motorcycle Co., Ltd. Ningbo Jianshe Current account 692,035.31 Over 5 years 7.41% 692,035.31 Chongqing Office Temporary supplier Current account 390,655.08 Over 3 years 4.18% 390,655.08 Total -- 5,904,853.19 -- 63.20% 5,904,853.19 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 note: 9. Inventories Whether the company need to comply with the disclosure requirements of the real estate industry No (1)Category of Inventory In RMB Closing book balance Opening book balance Items Provision for Provision for Book balance inventory Book value Book balance inventory Book value impairment impairment Raw materials 18,445,057.19 1,396.55 18,443,660.64 21,059,315.45 1,396.55 21,057,918.90 Goods in progress 7,862,252.89 210,319.10 7,651,933.79 6,915,376.31 210,319.10 6,705,057.21 Stock goods 119,708,041.31 2,920,686.69 116,787,354.62 141,445,525.10 3,387,974.33 138,057,550.77 Turnover 4,292,998.35 1,311,084.94 2,981,913.41 4,636,544.84 1,311,084.94 3,325,459.90 materials Total 150,308,349.74 4,443,487.28 145,864,862.46 174,056,761.70 4,910,774.92 169,145,986.78 64 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (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 1,396.55 1,396.55 Goods in progress 210,319.10 210,319.10 Stock goods 3,387,974.33 467,287.64 2,920,686.69 Turnover 1,311,084.94 1,311,084.94 materials Total 4,910,774.92 467,287.64 4,443,487.28 (3)Description of The closing balance of inventories contain the amount of borrowing costs capitalized (4)Description of amortization amount of contract performance cost in the current period 10.Contact assets In RMB Closing balance Opening balance Items Provision for Provision for Book balance inventory Book value Book balance inventory Book value impairment impairment Amount and reason of material change of book value of contract assets in the current period: In RMB Items Amount Reason Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of contract assets is accrued according to the general model of expected credit loss: □ Applicable √ Not applicable Provision for impairment of contract assets in the current period In RMB Items Withdrawal switch back or write-off write-off Reason Other note: 11. Assets divided as held-to-sold In RMB Book balance at Impairment Closing book Estimated Estimated Items fair value the end of the provision value disposal cost disposal time 65 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 period Other note: 12. Non-current assets due within 1 year In RMB Items Closing balance Opening balance Important creditor's rights Investment/other creditor's rights investment In RMB Closing balance Opening balance Contract Contract Creditor's rights item Expiration Expiration Face value interest rate, Actual rate Face value interest rate, Actual rate date date stated rate stated rate Other note: 13. Other current assets In RMB Items Closing balance Opening balance Overpaid VAT 2,018,362.24 3,396,186.56 Total 2,018,362.24 3,396,186.56 Other note: 14.Creditor's rights investment In RMB Closing balance Opening balance Items Provision for Provision for Book balance inventory Book value Book balance inventory Book value impairment impairment Important creditor's rights Investment/ In RMB Closing balance Opening balance Contract Contract Items Expiration Expiration Face value interest rate, Actual rate Face value interest rate, Actual rate date date stated rate stated rate Provision for bad debts In RMB 66 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Stage 1 Stage 2 Stage 3 Expected credit Expected credit losses for Bad Debt Reserves Expected credit loss over Total losses over the next the entire duration (credit life (no credit impairment) 12 months impairment occurred) Balance as at January 1, —— —— —— —— 2021 in current period Loss provision changes in current period, change in book balance with significant amount □ Applicable √ Not applicable Other note: 15.Other creditor's rights investment In RMB Cumulative Remark provision for Change in Change in losses Opening Accrued fair value in Closing Items Costs cumulative recognized in balance interest the current balance fair value other period consolidated income Important creditor's rights Investment/ In RMB Closing balance Opening balance Contract Contract Items Expiration Expiration Face value interest rate, Actual rate Face value interest rate, Actual rate date date stated rate stated rate Provision for bad debts In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit losses for Bad Debt Reserves Expected credit loss over Total losses over the next the entire duration (credit life (no credit impairment) 12 months impairment occurred) Balance as at January 1, —— —— —— —— 2021 in current period Loss provision changes in current period, change in book balance with significant amount □ Applicable √ Not applicable 67 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other note: 16. Long-term accounts receivable (1) List of long-term accounts receivable In RMB Closing balance Opening balance Discount rate Items Provision for Provision for Book balance inventory Book value Book balance inventory Book value interval impairment impairment Provision for bad debts In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit losses for Bad Debt Reserves Expected credit loss over Total losses over the next the entire duration (credit life (no credit impairment) 12 months impairment occurred) Balance as at January 1, —— —— —— —— 2021 in current period Loss provision changes in current period, change in book balance with significant amount □ Applicable √ Not applicable (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 note 17. Long-term equity investment In RMB Increase /decrease Closing Profits and losses Cash Withdraw balance Opening Additiona Decrease on Other Closing of bonus or al of Investees investmen Changes balance l in comprehe balance impairme ts in other profits impairme Other investmen investmen nsive Recogniz equity announce nt nt t t ed under income the equity d to issue provision provision method I. Joint ventures Chongqin 186,213,7 767,993.2 186,981,7 g Jianshe 19.02 2 12.24 68 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Hanon Automobi le heat managem ent system co., Ltd. 186,213,7 767,993.2 186,981,7 Subtotal 19.02 2 12.24 II. Associates 186,213,7 767,993.2 186,981,7 Total 19.02 2 12.24 Other note 18. Other equity instruments investment In RMB Items Closing balance Opening balance Itemized disclosure of the current non - trading equity instrument investment In RMB Reasons for being Amount of other measured at fair Reasons for other comprehensive value and whose comprehensive Recognized Recognized Accumulating Name income changes are income dividend income dividend income losses transferred to included in other transferred to retained earnings comprehensive retained earnings income Other note 19.Other non-current assets In RMB Items Closing balance Opening balance Other note 20. Investment property (1) Investment property adopted the cost measurement mode √Applicable □ Not applicable In RMB 69 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Construction in Items House, Building Land use right Total process I. Original price 1. Balance at period-beginning 36,808,839.38 36,808,839.38 2.Increase in the current period (1) Purchase (2)Inventory\Fixed assets\ Transferred from construction in pr ogress (3)Increased of Enterprise Combination 3.Decreased amount of the period 36,808,839.38 36,808,839.38 (1)Dispose (2)Other out (3)Transfer to fixed assets 36,808,839.38 36,808,839.38 4. Balance at period-end 0.00 0.00 II.Accumulated amortization 13,765,440.86 13,765,440.86 1.Opening balance 13,765,440.86 13,765,440.86 2.Increased amount of the period 297,538.11 297,538.11 (1) Withdrawal 297,538.11 297,538.11 3.Decreased amount of the period 14,062,978.97 14,062,978.97 (1)Dispose (2)Other out (3)Transfer to fixed assets 14,062,978.97 14,062,978.97 4. Balance at period-end 0.00 0.00 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 70 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 4. Balance at period-end IV.Book value 1.Book value at period -end 0.00 2.Book value at period-beginning 23,043,398.52 23,043,398.52 (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 note 21. Fixed assets In RMB Items Closing balance Opening balance Fixed assets 320,167,159.27 310,131,438.69 Total 320,167,159.27 310,131,438.69 (1)List of fixed assets In RMB Items Fixed assets Total I. Original book value: 1. Opening balance 871,356,569.79 871,356,569.79 2.Increased amount of the period 50,614,178.86 50,614,178.86 (1)Purchase 13,805,339.48 13,805,339.48 (2)Transfer of project under Construction (3)Increased from enterprise merger (4)Investment property transfer 36,808,839.38 36,808,839.38 3.Decreased amount of the period 19,173,873.08 19,173,873.08 (1)Disposal or scrap 19,173,873.08 19,173,873.08 4.Closing balance 902,796,875.57 902,796,875.57 II. Accumulative depreciation 71 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 1.Opening balance 546,864,535.01 546,864,535.01 2.Increased amount of the period 31,215,180.76 31,215,180.76 (1)Withdrawal 17,152,201.79 17,152,201.79 (2)Investment property transfer 14,062,978.97 14,062,978.97 3.Decreased amount of the period 9,780,513.31 9,780,513.31 (1)Disposal or scrap 9,780,513.31 9,780,513.31 4.Closing balance 568,299,202.46 568,299,202.46 III. Impairment provision 1. Opening balance 14,360,596.09 14,360,596.09 2.Increased amount of the period (1)Withdrawal 3.Decreased amount of the period (1)Disposal or scrap 30,082.25 30,082.25 4.Closing balance 14,330,513.84 14,330,513.84 IV. Book Value 1.Closing book value 320,167,159.27 320,167,159.27 2.Opening book value 310,131,438.69 310,131,438.69 (2) List of temporarily idle fixed assets In RMB Accumulative Accumulative Items Original Book value Book value Notes depreciation depreciation (3) Fixed assets leased out from operation lease In RMB Items In RMB (4) Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason 72 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other note (5)Liquidation of fixed assets In RMB Items Closing balance Opening balance Other note 22. Construction in progress In RMB Items Closing balance Opening balance Construction in progress 1,824,327.45 1,871,241.59 Total 1,824,327.45 1,871,241.59 (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 Mould 507,566.39 507,566.39 426,150.46 426,150.46 CNC lathe 13,566.37 13,566.37 Renovation project of science 615,980.77 615,980.77 615,980.77 615,980.77 and technology complex building No.5 assembly line information 461,185.83 461,185.83 analyzing system New energy production line 66,037.74 66,037.74 design fee Joint plant value-added (foam board 365,137.62 365,137.62 replacement and ceiling renovation of cleaning room Intelligent 314,528.30 314,528.30 301,886.79 301,886.79 73 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 transformation of suspended vane compressor production line Expert evaluation fee of dynamic and static disc 7,548.00 7,548.00 production line of electric compressor Total 1,824,327.45 1,824,327.45 1,871,241.59 1,871,241.59 (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 (3) List of the withdrawal of the impairment provision of the construction in progress In RMB Items Withdrawn amount Reason Other note: (4)Engineering material In RMB Closing balance Opening balance Items Provision for Provision for Book balance Book value Book balance Book value impairment impairment Other note: 74 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 25. Right to use assets In RMB Items Total Other note: 26. Intangible assets (1) Information In RMB Items Land use right Patent Non-patents Software Total I. Total original book value 1. Opening balance 42,126,408.29 2,691,549.96 1,880,957.69 46,698,915.94 2. Increase in the reporting period 2,052,791.71 2,052,791.71 (1)Purchase 1,271,681.35 1,271,681.35 (2)Internal R&D (3)Increase from enterprise combination (4)Other transfers 781,110.36 781,110.36 3.Decrease in the reporting period (1)Disposal 4.Closing balance 42,126,408.29 2,691,549.96 3,933,749.40 48,751,707.65 II. Total accrued amortization 1.Opening balance 18,191,424.21 158,326.47 965,108.29 19,314,858.97 2.Increased in the reporting period 562,467.90 237,489.71 122,125.76 922,083.37 (1)Withdrawal 562,467.90 237,489.71 122,125.76 922,083.37 75 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 3.Decrease in the reporting period (1)Disposal 4.Closing balance 18,753,892.11 395,816.18 1,087,234.05 20,236,942.33 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 IV. Book value 1.Book value of the period-end 23,372,516.18 2,295,733.78 2,846,515.35 28,514,765.32 2.Book value of the period-begin 23,934,984.08 2,533,223.49 915,849.40 27,384,056.97 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 Reasons for absence of certificate of title Other note: 27. R&D expenses In RMB Opening Closing Items Increase Decrease balance balance Other note In RMB 28. Goodwill (1) Original book value of goodwill In RMB Name of the Opening balance Increase Decrease Closing balance 76 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 investees or the 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 note 29. Long-term unamortized expenses In RMB Amortization Items Opening balance Increase Decrease Closing balance amount SlidDworks 24,750.00 140,094.34 24,516.51 140,327.83 service charge Total 24,750.00 140,094.34 24,516.51 140,327.83 Other note 30. 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 5,955,882.88 1,097,038.44 5,955,882.88 1,097,038.44 provision Credit impairment 34,306,803.21 5,177,039.68 34,306,803.21 5,177,039.68 provision Total 40,262,686.09 6,274,078.12 40,262,686.09 6,274,078.12 (2) Deferred income tax liabilities had not been off-set In RMB Items Closing balance Opening balance 77 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities Estimated added value of assets not under the same 6,083,060.52 1,520,765.13 6,083,060.52 1,520,765.13 control Tax deduction for depreciation of fixed 1,551,145.52 387,786.38 1,551,145.52 387,786.38 assets Total 7,634,206.04 1,908,551.51 7,634,206.04 1,908,551.51 (3) Deferred income tax assets or liabilities listed by net amount after off-set In RMB Trade-off between the Opening balance of Trade-off between the End balance of deferred deferred income tax deferred income tax Items deferred income tax income tax assets or assets and liabilities at assets or liabilities after assets and liabilities liabilities after off-set period-begin off-set Deferred income tax 6,274,078.12 6,274,078.12 assets Deferred income tax 1,733,423.53 1,908,551.51 liabilities (4)Details of income tax assets not recognized In RMB Items Balance in year-end Balance in year-begin Deductible temporary difference 21,668,149.93 21,668,149.93 Deductible loss 190,208,959.14 190,208,959.14 Total 211,877,109.07 211,877,109.07 (5)Deductible losses of the un-recognized deferred income tax asset will expire in the following years In RMB Year Balance in year-end Balance in year-begin Remark 2021 1,176,802.39 1,176,802.39 2022 2023 850,355.91 850,355.91 2024 145,565,134.28 145,565,134.28 2025 42,616,666.56 42,616,666.56 78 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Total 190,208,959.14 190,208,959.14 -- Other note: 31 .Other non-current assets In RMB Balance in year-end Balance in year-begin Items Book balance Provision for Book value Book balance Provision for Book value devaluation devaluation Advance purchase of long-term assets 2,093,500.00 2,093,500.00 2,141,443.59 2,141,443.59 Total 2,093,500.00 2,093,500.00 2,141,443.59 2,141,443.59 Other note: 32. Short-term borrowings (1) Category of short-term borrowings In RMB Items Closing balance Opening balance Guaranteed borrowings 351,000,000.00 383,500,000.00 Credit borrowings 205,410,000.00 170,410,000.00 Total 556,410,000.00 553,910,000.00 Notes of short-term borrowings category (2) List of the short-term borrowings 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 note: 33. Transactional financial liabilities In RMB Items Closing balance Opening balance Including: Including: Other note: 79 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 34. Derivative financial liability In RMB Items Closing balance Opening balance Other note: 35.Note payable In RMB Items Closing balance Opening balance Bank acceptance bill 139,770,000.00 110,020,000.00 Total 139,770,000.00 110,020,000.00 The total amount of the due but not pay notes payable at the period-end was of RMB 0.00. 36. Accounts payable (1) List of accounts payable In RMB Items Closing balance Opening balance Within 1 year 238,374,599.66 284,998,378.45 1-2 years 673,945.40 1,837,069.84 2-3 years 46,248.74 0.08 Over 3 years 1,630,952.74 1,967,798.70 Total 240,725,746.54 288,803,247.07 (2) Note of the accounts payable aging over one year In RMB Items Closing balance Unpaid/un-carry-over reason Other note: 37. Advance from customers (1) List of advance from customers In RMB Items Closing balance Opening balance 80 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (2) Significant advance from customers aging over one year In RMB Items Closing balance Unpaid/un-carry-over reason Other note: 38.Contract liabilities In RMB Items Closing balance Opening balance Contract liabilities 2,584,147.93 1,479,711.62 Total 2,584,147.93 1,479,711.62 Amount and reason for significant changes in book value during the reporting period In RMB Items Amount Reason 39. Payroll payable (1) List of Payroll payable In RMB Items Opening balance Increase Decrease Closing balance Short-term compensation 8,802,162.43 51,086,037.13 50,383,085.71 9,505,113.85 Post-employment benefits - defined 7,076,035.45 5,134,146.83 5,201,144.91 7,009,037.37 contribution plans Dismissal welfare 12,549,204.96 10,500.00 325,003.00 12,234,701.96 Total 28,427,402.84 56,230,683.96 55,909,233.62 28,748,853.18 (2)Presentation of short-term compensation In RMB Items Opening balance Increase Decrease Closing balance (1) Salary, bonus, 5,174,763.88 37,284,653.70 37,268,985.70 5,190,431.88 allowance and subsidy (2) Employee benefits 1,097,945.30 4,075,968.67 3,784,739.35 1,389,174.62 (3) Social insurance 1,446,984.41 4,841,506.44 4,816,041.62 1,472,449.23 expenses Including: medical 1,144,293.26 4,500,714.05 4,514,971.47 1,130,035.84 insurance premium Work-related injury 285,932.74 340,792.39 301,070.15 325,654.98 81 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 insurance premium Maternity insurance 16,758.41 16,758.41 premium (4) Housing fund 380,205.46 3,623,528.00 3,653,949.00 349,784.46 (5) Labor union expenditures and 702,263.38 880,139.20 724,128.92 858,273.66 employee education expenses Short-term absence 380,241.12 135,241.12 245,000.00 with payment Total 8,802,162.43 51,086,037.13 50,383,085.71 9,505,113.85 (3) List of drawing scheme In RMB Items Opening balance Increase Decrease Closing balance Basic endowment 6,778,246.97 4,978,622.56 5,044,700.95 6,712,168.58 insurance premium Unemployment insurance 297,788.48 155,524.27 156,443.96 296,868.79 premium Total 7,076,035.45 5,134,146.83 5,201,144.91 7,009,037.37 Other note: 40. Taxes payable In RMB Items Closing balance Opening balance VAT 211,799.58 23,721.14 Enterprise income tax 1,147,186.86 2,762,007.64 Individual income tax 426,076.75 565,599.19 Urban maintenance and construction tax 3,131,178.66 3,132,397.23 property tax 3,727,900.64 3,727,900.64 Land use tax 1,810,309.94 1,808,215.20 Educational surtax 1,995,043.67 2,000,119.16 Other 4,031,598.70 4,086,656.73 Total 16,481,094.80 18,106,616.93 Other note: 82 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 41.Other account payable In RMB Items Closing balance Opening balance Other account payable 9,704,354.89 10,260,888.23 Total 9,704,354.89 10,260,888.23 (1) Interest payable In RMB Items Closing balance Opening balance Particulars of significant overdue unpaid interest: In RMB Unit Overdue amount Overdue reason Other note: (2) 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: (3) Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Closing balance Opening balance Cash deposit 1,238,000.00 1,426,426.77 Work-related injury payment 136,378.73 216,487.83 Test expenses 2,743,194.59 1,670,056.33 Party organization funds 528,583.83 541,589.50 Design cost and Others 5,058,197.74 6,406,327.80 Total 9,704,354.89 10,260,888.23 (2)Significant other payables for over 1 year In RMB Item Ending balance Reason for unreimbursed or transferred 83 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other note 42. Liabilities classified as holding for sale In RMB Items Closing balance Opening balance Other note: 43. Non-current liabilities due within 1 year In RMB Items Closing balance Opening balance Other note: 44. Other current-liabilities In RMB Items Closing balance Opening balance Taxes to be written off 335,939.23 192,362.51 Total 335,939.23 192,362.51 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 note: 45. Long-term borrowing (1) Category of long-term loan In RMB Items Closing balance Opening balance Note: Other notes,including interest rate range: 46. Bonds payable (1) Bonds payable In RMB 84 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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) In RMB The Withdraw Overflow Pay in Name of Face Issue Opening Closing Issue date Period current interest at discount current the bonds value amount balance balance issue par amount period Total -- -- -- (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 Provision for Provision for Provision for Provision for Book balance Book balance Book balance Book balance outstanding impairment impairment impairment impairment issued Amount Book value Amount Book value Amount Book value Amount Book value Note to the basis of other financial instrument classified as financial liabilities Other note: 47. Lease liability In RMB Items Closing balance Opening balance Other note 48. Long-term payable In RMB Items Closing balance Opening balance (1) Long-term payable listed by nature of the account In RMB 85 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Items Closing balance Opening balance Other note: (2)Special payable In RMB Items Opening balance Increase Decrease Closing balance Formation reasons Other note: 49. Long term payroll payable (1) List of long term payroll payable In RMB Items Closing balance Opening balance (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: 50. Accrued liabilities In RMB Items Closing balance Opening balance Formation reasons Other notes, including related important assumptions and estimates of accrued liabilities: 86 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 note: 52. Other non-current liabilities In RMB Items Closing balance Opening balance Other note: 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 119,375,000.00 119,375,000.00 Other note: 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: Other note: 87 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 55. Capital reserves In RMB Items Opening balance Increase Decrease Closing balance Capital premium 702,032,741.07 702,032,741.07 Other capital reserves 256,532,553.22 256,532,553.22 Total 958,565,294.29 958,565,294.29 Other notes, including changes and reason of change: 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 Occurred current term Less: Less:Prior Amount period transferred included into profit in other After-tax Amount and loss in Less: After-tax Opening composite attribute to Closing Items incurred the current Income attribute to balance income minority balance before period that tax the parent transfer to shareholde income tax recognied expenses company retained r into other income in comprehensi the current ve income in period prior period 1. Other comprehensive income that cannot be reclassified in the 9,800.00 9,800.00 loss and gain in the future Share of other combined income of invested units that cannot be 9,800.00 9,800.00 reclassified into profit or loss under the equity method Total of other comprehensive 9,800.00 9,800.00 income Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow 88 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 58. Special reserves In RMB Items Opening balance Increase Decrease Closing balance Other note, 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 60. Retained profits In RMB Items Amount of the Current Term Amount of the Previous Term Adjust the undistributed profits before and at the -1,030,047,421.23 -1,031,463,363.68 end of the period Opening balance of retained profits after -1,030,047,421.23 -1,031,463,363.68 adjustments Add: Net profit attributable to owners of the -7,897,586.77 1,415,942.45 Parent company Closing retained profits -1,037,945,008.00 -1,030,047,421.23 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. Operating income and operating costs In RMB Items Amount of the Current Term Amount of the Previous Term 89 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Income Cost Income Cost Main business 448,479,663.54 392,932,260.12 329,293,920.54 296,844,587.53 Other business 8,484,765.48 6,341,807.31 5,296,341.31 2,737,735.17 Total 456,964,429.02 399,274,067.43 334,590,261.85 299,582,322.70 Income related information: In RMB Classification of the Division 1 Division 2 Total contract Of which Of which Of which Of which Of which Of which Of which Information related to performance obligations: Not applicable Information related to the transaction price apportioned to the residual performance obligation: The income corresponding to the performance obligations that have not been performed or have been performed incompletely but the contract has been signed at the end of the reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as income in the year, RMB 0.00 is expected to be recognized as income in the year, and RMB 0.00 is expected to be recognized as income in the year. Other notes 62.Taxes and surcharges In RMB Items Amount of the Current Term Amount of the Previous Term Urban maintenance and construction tax 1,097,858.28 737,191.84 Educational surtax 574,017.06 541,896.51 House tax 846,961.06 420,041.27 Land royalties 786,341.60 393,170.80 vehicle ship royalties 600.00 2,220.00 Stamp duty 156,616.80 135,564.30 Other 554,879.25 40,407.69 Total 4,017,274.05 2,270,492.41 Other note: 90 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 63. Selling expenses In RMB Items Amount of the Current Term Amount of the Previous Term Repair cost 4,774,043.21 1,546,955.07 Transportation cost 207,286.45 1,554,187.06 Payroll Payable 3,782,298.55 3,549,036.79 Storage fee 723,217.64 617,299.61 Travel expenses 297,284.47 191,761.40 Sales service charge 221,712.81 546,631.07 Advertising expenses 95,049.50 94,000.00 Exhibition fees -40,608.00 78,113.21 Office expenses 34,507.53 30,891.02 Depreciation costs 36,757.99 22,843.33 Insurance expenses 252,505.99 505,742.54 Total 10,384,056.14 8,737,461.10 Other note: 64. Administrative expenses In RMB Items Amount of the Current Term Amount of the Previous Term Payroll Payable 22,806,176.80 21,012,265.58 Depreciation costs 3,960,725.33 4,040,065.76 Repair charges 2,505,130.64 2,237,552.47 Consulting fee 92,145.74 151,475.66 Office expenses 330,038.98 312,028.95 Agency fee 624,737.43 814,439.31 Travel expenses 210,054.21 164,442.66 Amortization of intangible assets 914,987.77 328,932.36 Board of directors' expenses 173,867.91 62,445.38 Business entertainment 198,607.38 75,951.10 Sewage charge 794,194.81 860,376.90 Lawsuit fee 13,800.00 8,850.00 Insurance expenses 876,862.26 4,166,382.79 Total 33,501,329.26 34,235,208.92 91 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Other note: 65. R&D Expense In RMB Items Amount of the Current Term Amount of the Previous Term Salary 5,389,798.75 4,500,317.20 Office expenses 13,554.56 16,589.14 Material cost 501,790.54 429,880.71 Travel expenses 169,741.86 72,017.19 Fees for evaluation, identification and 54,721.35 45,849.32 authentication Software fee 59,648.00 59,648.00 Trademark, property right, patent fee 79,303.65 151,978.91 Test inspection fee 134,659.84 21,468.79 Sample fee 29,250.03 77,069.35 Business entertainment 9,830.00 5,183.00 Depreciation expense 1,200,775.10 977,598.08 Other 530,621.26 14,106.03 Total 8,173,694.94 6,371,705.72 Other note: 66. Financial expenses In RMB Items Amount of the Current Term Amount of the Previous Term Interest expenses 13,938,512.41 11,733,685.64 Less: Interest income 381,047.67 794,481.03 discount rate of bill Exchange gains and losses 20,547.36 17,988.25 Commission Charge and others 99,219.94 142,635.07 Total 13,677,232.04 11,099,827.93 Other note: 67.Other income In RMB Amount of the Current Amount of the Previous Other sources of revenue Term Term Quality management award funds from the Market Supervision and 300,000.00 92 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Administration Bureau of Jiulongpo District, Chongqing Incentives from the Finance Office of Jiulong Park, Chongqing High-tech 45,000.00 Industrial Development Zone Special funds for international service trade from Chongqing Jiulongpo 10,000.00 District Finance Bureau of Jiulongpo District Commerce Committee Received the second batch of special funds for industrial informatization 23,200.00 from Jiulongpo District Finance Bureau Key Enterprise Recruitment Subsidies by Financial Bureau of Jiulongpo 8,400.00 34,000.00 District, Chongqing Municipality Major New Product Research and Development Subsidy Funds in 2019 by 10,000.00 Jiulongpo District Finance Bureau of Chongqing Municipality Reward for stable growth of industrial enterprises above designated scale by 100,000.00 the Finance Bureau of Jiulongpo District, Chongqing Subsidies from the Finance Bureau of Jiulongpo District, Chongqing 44,700.00 Municipality, Jiulongpo District Ecological Environment Bureau Third generation service fee 16,316.61 Subsidies from the District-level Enterprise Technology Innovation Center of 200,000.00 the Finance Bureau of Jiulongpo District, Chongqing City in 2019 Subsidies for science and technology projects from the Technology Bureau of 50,000.00 Jiulongpo District, Chongqing(District property rights) Subsidies from Ba’nan District Ecological Environment Bureau 32,077.36 Total 461,493.97 412,200.00 68.Investment income In RMB Items Amount of the Current Term Amount of the Previous Term Long-term equity investment income 767,993.22 -8,214,068.19 calculated by equity method Total 767,993.22 -8,214,068.19 Other note: 69.Net exposure hedging income In RMB Items Amount of the Current Term Amount of the Previous Term Other note 93 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 70. Gains on the changes in the fair value In RMB Source Amount of the Current Term Amount of the Previous Term Other note 71. Credit impairment loss In RMB Items Amount of the Current Term Amount of the Previous Term Loss of receivables -108,153.11 -7,385.32 Total -108,153.11 -7,385.32 Other note: 72. Losses from asset impairment In RMB Items Amount of the Current Term Amount of the Previous Term II. Loss of inventory value and impairment 1,430,078.95 of contract performance costs Total 1,430,078.95 Other note: 73. Asset disposal income In RMB Source Amount of the Current Term Amount of the Previous Term Total profits of non-current assets disposal 1,566,473.14 -54,625.39 Including: Profits of disposal of fixed 1,566,473.14 -54,625.39 assets Profits of disposal of intangible assets Disposal of other non-current assets Total 1,566,473.14 -54,625.39 74. Non-operating income In RMB Amount of the Current Term Amount of the Previous Term Recorded in the amount of the Items non-recurring gains and losses Other 11.31 79,499.99 11.31 Write off the accounts payable 198,647.24 198,647.24 94 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Total 198,658.55 79,499.99 198,658.55 Government subsidies recorded into current profits and losses: In RMB Whether the impact of Amount of Amount of Whether Assets-relate Issuing subsidies on Items Issuing body Nature special current previous d/income Reason the current subsidies -related profit and period period loss Quality management award funds from the Market Supervision Award 300,000.00 and Administration Bureau of Jiulongpo District, Chongqing Incentives from the Finance Office of Jiulong Park, Chongqing Award 45,000.00 High-tech Industrial Development Zone Special funds for international service trade from Chongqing 10,000.00 Jiulongpo District Finance Bureau of Jiulongpo District Commerce 95 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Committee Received the second batch of special funds for industrial Subsidy 23,200.00 informatization from Jiulongpo District Finance Bureau Key Enterprise Recruitment Subsidies by Financial Related to Bureau of Subsidy 8,400.00 34,000.00 income Jiulongpo District, Chongqing Municipality Major New Product Research and Development Subsidy Funds Related to in 2019 by Subsidy 10,000.00 income Jiulongpo District Finance Bureau of Chongqing Municipality Reward for stable growth of industrial enterprises above Related to designated Award 100,000.00 income scale by the Finance Bureau of Jiulongpo District, Chongqing Subsidies from Related to the Finance Subsidy 44,700.00 income Bureau of 96 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Jiulongpo District, Chongqing Municipality, Jiulongpo District Ecological Environment Bureau Third Related to generation 16,316.61 income service fee Subsidies from the District-level Enterprise Technology Innovation Related to Subsidy 200,000.00 Center of the income Finance Bureau of Jiulongpo District, Chongqing City in 2019 Subsidies for science and technology projects from the Technology Related to Bureau of Subsidy 50,000.00 income Jiulongpo District, Chongqing(Dis trict property rights) Subsidies from Ba’nan District Related to Ecological Subsidy 32,077.36 income Environment Bureau Related to Total 461,493.97 412,200.00 income Other note: 97 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 75. Non-operating expenses In RMB Items Amount of the Current Term Amount of the Previous Term Carried to current contingent gain/loss Loss of non-current assets 169.23 169.23 damaged and scrapped Other 2.29 634,363.43 2.29 Total 171.52 634,363.43 171.52 Other note 76. 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 -1,279,343.82 Total -1,279,343.82 (2) Adjustment process of accounting profit and income tax expense In RMB Items Amount of the Current Term Total profit -9,176,930.59 Income tax expenses -1,279,343.82 Other note 77. Other comprehensive income Refer to the note 78. 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 136,678.82 50,667.29 Other 4,972,526.81 6,515,142.05 Total 5,109,205.63 6,565,809.34 Note: 98 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (2) Other cash paid related to operation In RMB Items Amount of the Current Term Amount of the Previous Term Other 4,938,288.46 1,141,072.15 Duration expenses 7,692,393.27 9,994,722.76 Total 12,630,681.73 11,135,794.91 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 Note: (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 (5) Other cash received related to financing In RMB Items Amount of the Current Term Amount of the Previous Term Receipt of discounted funds for financing 139,895,745.48 bills Conclusion 244,002.56 334,140.24 Total 244,002.56 140,229,885.72 Note: (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 32,787,012.08 214,405,000.00 Decrease of note deposit 52,901,351.71 Commission charge 21,685.00 Total 32,808,697.08 267,306,351.71 99 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Note: 79. Supplementary information to cash flow statement (1) Information of net profit to net cash flows In RMB Amount of the Current Amount of the Supplementary information Term Previous Term 1. Net profit adjusted to cash flows from operating activities -- -- Net profits -7,897,586.77 -34,695,420.32 Add:Provision for assets impairment 108,153.11 -1,422,693.63 Depreciation of fixed assets, oil and gas assets and consumable biological assets 15,989,303.04 16,473,168.52 Depreciation of Use right assets Amortization of intangible assets 563,812.93 328,932.36 Amortization of Long-term deferred expenses -115,577.83 Loss on disposal of fixed assets, intangible assets and other long-term deferred assets -1,566,473.14 54,625.39 Fixed assets scrap loss Loss on fair value changes Financial cost 13,938,512.41 11,099,827.93 Loss on investment -767,993.22 8,214,068.19 Decrease of deferred income tax assets Increased of deferred income tax liabilities Decrease of inventories 23,281,124.32 44,658,304.65 Decease of operating receivables -45,411,936.63 -34,621,901.84 Increased of operating Payable 23,632,682.19 63,032,982.73 Other Net cash flows arising from operating activities 21,754,020.41 73,121,893.98 II. Significant investment and financing activities that without cash flows: -- -- Conversion of debt into capital Convertible corporate bonds maturing within one year Financing of fixed assets leased 3.Movement of cash and cash equivalents: -- -- Ending balance of cash 57,367,878.06 21,053,197.58 100 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Less: Beginning balance of cash equivalents 79,310,253.55 9,390,326.10 Add:End balance of cash equivalents Less: Beginning balance of cash equivalents Net increase of cash and cash equivalent -21,942,375.49 11,662,871.48 (2) Net Cash paid of obtaining the subsidiary In RMB Amount Of which -- Of which -- Of which -- Other note: (3) Net Cash receive of disposal of the subsidiary In RMB Amount Of which -- Of which -- Of which -- Other note: (4) Component of cash and cash equivalents In RMB Items Closing balance Opening balance I. Cash 57,367,878.06 79,310,253.55 Including:Cash at hand 5,418.26 Demand bank deposit 57,367,878.06 79,304,835.29 III. Balance of cash and cash equivalents at 57,367,878.06 79,310,253.55 the period end Other note:None 80. Note of statement of changes in the owner's equity Specify the description of the item "others" and the adjusted amount of the balance at the end of last year: Not applicable 81. The assets with the ownership or use right restricted In RMB 101 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Book value at the end of the reporting Items Cause of restriction period Monetary funds 66,420,000.00 Guarantee deposit, fixed deposit Total 66,420,000.00 -- Other note:None 82. Foreign currency monetary items (1) Foreign currency monetary items In RMB Closing foreign currency Closing convert to RMB Items Exchange rate balance balance Monetary funds -- -- Including:USD Euro HKD Account receivable -- -- Including:USD Euro HKD Long-term borrowing -- -- Including:USD Euro HKD Other note: (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 102 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 83. Arbitrage Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged risk qualitative and quantitative information: 84. Government subsidies (1)Government subsidies confirmed in current period In RMB Amount included in Items Amount Project current profit and loss Key Enterprise Recruitment Subsidies by Financial Bureau of Jiulongpo 8,400.00 Other income 8,400.00 District, Chongqing Municipality Major New Product Research and Development Subsidy Funds in 2019 10,000.00 Other income 10,000.00 by Jiulongpo District Finance Bureau of Chongqing Municipality Reward for stable growth of industrial enterprises above designated scale 100,000.00 Other income 100,000.00 by the Finance Bureau of Jiulongpo District, Chongqing Subsidies from the Finance Bureau of Jiulongpo District, Chongqing 44,700.00 Other income 44,700.00 Municipality, Jiulongpo District Ecological Environment Bureau Third generation service fee 16,316.61 Other income 16,316.61 Subsidies from the District-level Enterprise Technology Innovation Center of the Finance Bureau of Jiulongpo District, Chongqing City in 200,000.00 Other income 200,000.00 2019 Subsidies for science and technology projects from the Technology 50,000.00 Other income 50,000.00 Bureau of Jiulongpo District, Chongqing(District property rights) Subsidies from Ba’nan District Ecological Environment Bureau 32,077.36 Other income 32,077.36 Total 461,493.97 Other income 461,493.97 (2)Government subsidy return □ Applicable √ Not applicable Other note: 85.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 103 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Income of Net profits of Time and Cost of Way to gain Recognition acquiree acquiree place of Proportion of Name gaining the the stock Purchase 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 note: (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 note: (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 note: (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 reporting period □ Yes √ No (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 note: 2. Business combination under the same control (1) Business combination under the same control during the reporting period In RMB Proportion of Combination Recognition Income from Net profits Income Net profits Name Basis the profits date basis of the from the during the during the 104 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 combination period-begin reporting period of period of date to the period to the comparison comparison combination combination date of the date of the combination combination Other note: (2) Combination cost In RMB Combination cost Notes to contingent consideration or other changes: Other note: (3) The book value of the assets and liabilities of the merged party on the date of consolidation In RMB Combination date Last closing period Contingent liabilities of the combined party undertaken in combination Other note: 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. 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control □ Yes √No 105 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 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 Registratio shareholding Way of Name operating Nature of business n place Indirectl gaining place Directly y Chongqin Production and sale of Establishmen Vehicle air conditioner Chongqing 100.00% t by g automotive air-conditioners investment Merger under Chongqing Pingshan TK Carburetor Chongqin Production and sales of 100.00% Chongqing different Co., Ltd g motorcycle parts 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 note: (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 Holding proportion of minority shareholder in subsidiary different from voting proportion: Other note: 106 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (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 In RMB June 30,2021 June 30,2020 Total Total Name Operation Operating Operation Operating Net profit comprehensi Net profit comprehensi revenue cash flow revenue cash flow ve income ve income Other note: (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 note: 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 note 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Shareholding ratio Accounting (%) treatment Domicile of methods for the Name of joint venture or Registered primary Business nature associate place Indire investments in operation Directly ct joint ventures or associates Chongqing HanonJianshe 50.00% Equity method Chongqing Chongqing Compressor assembly and Automotive Thermal 107 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Systems Co., Ltd. core auto parts production 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, 2021 Opening balance/June 30, 2020 Other note (3) Main financial information of significant associated enterprise In RMB Amount of current period Amount of previous period Other note (4) Summary financial information of insignificant joint venture or associated enterprise In RMB Amount of current period Amount of previous period 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 note (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 no cumulative Name losses in previous share of net profit in reporting unrecognized losses in reporting accumulatively derecognized period period Other note: (7) The unrecognized commitment related to joint venture investment 108 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (8) Contingent liabilities related to joint venture or associated enterprise investment 4. Significant common operation Main operating place Proportion /share portion Name Registration place Business nature registration place Directly Indirectly 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 note 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 value -- -- -- -- measurement 109 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 Name of the parent Shareholding ratio in Voting ratio in the Registered place Business nature Registered capital company the Company (%) Company (%) Military Equipment Investment in Beijing 35,300,000,000 yuan 71.13% 71.13% Group state-owned assets Notes The ultimate controller of the Company is The State-owned Assets Supervision and Administration Commission of the State Council. Other note 2. Subsidiaries of the Company See notes 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 110 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Chongqing Jianshe Hanon Heat Management system Co., Ltd. Joint venture Other note 4.Other related parties of the Company Name of other related parties Relationship with the Company Jianshe Mechanical and Electric Under the common control of the same party Jianshe Industry Under the common control of the same party Military Finance Co. Under the common control of the same party Chongqing Jianxing Machinery Manufacturing Co., Ltd. An Joint venture a subsidiary of a controlling shareholder Changan Auto Under the common control of the same party Changan Auto.Beijing Chanan Auto Company. Under the common control of the same party Changan SUZUKI An Joint venture a subsidiary of a controlling shareholder Hefei Changan Under the common control of the same party Nanjing Changan Under the common control of the same party Baoding Changan Bus Manufacturing Co., Ltd. Under the common control of the same party Heifei Changan Auto Under the common control of the same party Southern Motorcycle Under the common control of the same party Chongqing Changan Auto Customer service Co., Ltd. Under the common control of the same party Chongqing Changan Auto International Sale Service Co., Ltd. Under the common control of the same party Chongqing Northern Jianshe Import & Export Co., Ltd. Under the common control of the same party Harbin Hafei Automobile Co., Ltd Under the common control of the same party Sichuan Huaqing Machinery Co., Ltd. Under the common control of the same party Changan Ford Motor Co., Ltd. Harbin Branch An Joint venture a subsidiary of a controlling shareholder Harbin Dongan Auto Power Co., Ltd. Under the common control of the same party Chongqing Jianshe Yamaha Motorcycle A Joint venture of subsidiary of a controlling shareholder Other note 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 Trading limit Over the trading Occurred in Related party Content current term approved limit or not previous term 111 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Lease production Jianshe Mechanical and Electric 0.00 3,500,000.00 No 1,565,752.62 site Jianshe Industry Part test 344,312.29 1,000,000.00 No 270,904.30 Jianshe Industry Energy Fee 877,216.88 2,000,000.00 No Acceptance of Cbangan Group and its repairing service 478,707.99 2,500,000.00 No 455,921.54 Subsidiaries Southwest Ordnance Chongqing Environmental Protection Service 777,495.22 2,400,000.00 No 854,960.98 Research Institute Co., Ltd Chongqing Chang'an Minsheng Service 1,818,237.91 1,000,000.00 Yes 78,612.24 Logistics Co., Ltd Sales of goods and services In RMB Occurred current Occurred in Related parties Subjects of the related transactions term previous term Cbangan Group and its Subsidiaries Sales of goods 101,396,938.36 51,440,306.18 Jianshe Mechanical and Electric Lease storehouse 0.00 1,593,863.78 Chongqing Yamaha Motorcycle Co., Ltd. Selling parts 6,604,586.53 1,917,272.74 South Air International Selling parts 0.00 36,000.00 Chongqing Jianshe HANON Automobile Thermal Selling parts 2,351,020.24 Management System Co., Ltd Chongqing Jianshe HANON Automobile Thermal Energy fee 4,083,965.12 Management System Co., Ltd Jianshe Industry Energy fee 204,367.98 109,389.35 Note (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 Note Lists of entrust/contractee: In RMB Name of the Name of the Type Initial date Due date Pricing basis Charge 112 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 entruster/Contract entrustee/Contrac 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 Electric Fixed assets 1,593,863.78 2,198,845.20 The Company was lessee: In RMB The lease income confirmed in Lessor Category of leased assets Category of leased assets this year (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 Notes (5) Inter-bank lending of capital of related parties: 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 113 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 Project Related parties Book balance Bad debt provision Book balance Bad debt provision (2)Payables In RMB Project Related parties At end of term At beginning of term 114 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 at June 30,2021, the Company did not need to disclose important commitments. 2. Contingency (1) Significant contingency at balance sheet date As at June 30,2021, the Company did not need to disclose important commitments. 115 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (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 Content 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 116 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 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 note 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 117 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Closing balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Proportio Proportio Proportio Proportio Book value Amount Amount value Amount Amount n% n% n% n% Of which Accrual of bad debt 4,295,04 1,291,49 3,003,547 3,480,832 1,291,496 2,189,335.1 provision by 4.24 6.94 .30 .08 .94 4 portfolio Of which 4,295,04 1,291,49 3,003,547 3,480,832 1,291,496 2,189,335.1 Total 4.24 6.94 .30 .08 .94 4 Accrual of bad debt provision by single item: In RMB Closing balance Name Book balance Bad debt provision Proportion Reason Accrual of bad debt provision by portfolio: In RMB Closing balance Name Book balance Bad debt provision Proportion Note: Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of account receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √ Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 3,003,547.30 Over 3 years 1,291,496.94 Over 5 years 1,291,496.94 Total 4,295,044.24 (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB 118 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Amount of change in the curent period Category Opening balance Reversed or Closing balance Accrual Write-off Other collected amount Bad debt provision for 1,291,496.94 1,291,496.94 accounts receivable Total 1,291,496.94 1,291,496.94 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 Items Amount Of which the significant actual write-off accounts receivable: In RMB Whether occurred Name Nature Amount Reason Process from the related transactions (4)The ending balance of other receivables owed by the imputation of the top five parties In RMB Name Amount Proportion(%) Bad debt provision Chongqing Jianshe HANON Automobile 1,760,978.18 Termal Management System Co., Ltd Chongqing Yamaha Motorcycle Co., Ltd 1,022,782.57 Wuhan Longchang Company Wujiao Market 473,539.96 473,539.96 Department China Aerospace Science and Technology 395,296.04 395,296.04 Corporation long March Machinery Factory Chongqing Chihai Machine Manufacturing 145,999.35 145,999.35 Co.,Ltd Total 3,798,596.10 119 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (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 note 2. Other accounts receivable In RMB Items Closing balance Opening balance Other accounts receivable 1,816,416.14 934,239.22 Total 1,816,416.14 934,239.22 (1)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 note: 3)Bad-debt provision □ Applicable √ Not applicable 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 120 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 judgment basis Other notes: 3)Bad-debt provision □ Applicable √ Not applicable Other note: (3) Other accounts receivable (1) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Current account 7,736,665.96 6,854,489.04 Total 7,736,665.96 6,854,489.04 2)Provision for bad debts In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit losses for Bad Debt Reserves Expected credit loss over Total losses over the next the entire duration (credit life (no credit impairment) 12 months impairment occurred) Balance as at January 1, 5,920,249.82 5,920,249.82 2021 Balance as at January 1, —— —— —— —— 2021 in current Balance as at June 5,920,249.82 5,920,249.82 30,2021 Loss provision changes in current period, change in book balance with significant amount □ Applicable √Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 3,039,562.59 1-2 years 255,723.62 Over 3 years 4,441,379.75 Over 5 years 4,441,379.75 Total 7,736,665.96 121 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 3) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or collected Closing balance Accrual amount Of which the significant amount of the reversed or collected part during the reporting period In RMB Items Reversed or collected amount Method (4) 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 other accounts receivable: (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party In RMB Bad debt Portion in total Year-end provision of Name Nature Aging other balance year-end receivables(%) balance Shenzhen Jianshe Motorcycle Current account 3,013,664.00 Over 5 years 3,013,664.00 Chongqing Jianshe Lijue Industry 7-12 months, 1-2 Current account 1,478,870.07 1,478,870.07 Co., Ltd. years Advance payment to employees Current account 802,838.81 Within 6 months Ningbo Jianshe Auto Co.,Ltd Current account 692,035.31 Over 5 years 692,035.31 Chongqing Office Ningbo Jianshe Motorcycle Current account 329,628.73 Within 1-6 months 329,628.73 Total -- 6,317,036.92 -- 5,514,198.11 122 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 (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 note: 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 199,045,443.95 199,045,443.95 199,045,443.95 199,045,443.95 subsidiaries Investments in associates and 186,981,712.24 186,981,712.24 186,213,719.02 186,213,719.02 joint ventures Total 386,027,156.19 386,027,156.19 385,259,162.97 385,259,162.97 (1) Investments in subsidiaries In RMB Increase /decrease Closing balance Withdrawn of Investees Opening balance Add Decreased Closing balance impairment Other impairme investment investment provision nt provision Chongqing Jianshe Automobile A/C Co., 160,000,000.00 160,000,000.00 Ltd. Chongqing Pingshan 39,045,443.95 39,045,443.95 TK Carburetor Co., Ltd Total 199,045,443.95 199,045,443.95 (2)Investments in associates and joint ventures In RMB 123 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 Increases/decreases in the current year Balance as at June profits and losses 30, 2019 on Declarati Opening Additio Decrease Other Impairme Closing of Investee investmen Changes on of cash Balance nal in comprehe balance provision ts in other nt Other investm investmen nsive dividends recognize equity provision for ent t d under income or profits the equity impairme method nt 1. Joint ventures Jianshe 186,213,7 767,993.2 186,981,7 HANON 19.02 2 12.24 186,213,7 767,993.2 186,981,7 Subtotal 19.02 2 12.24 2.Associates 186,213,7 767,993.2 186,981,7 Total 19.02 2 12.24 (3)Other note 4. Operation income and operation cost In RMB Occurred current term Occurred in previous term Items Income Cost Income Cost Major business turnover 291,221,279.33 282,009,975.23 219,350,659.90 206,028,338.17 Other business income 6,250,780.86 5,000,602.46 3,118,003.07 734,229.58 Total 297,472,060.19 287,010,577.69 222,468,662.97 206,762,567.75 Income related information: In RMB Type Division 1 Division 2 Total Of which: Information related to performance obligations: Not applicable Information related to the transaction price apportioned to the residual performance obligation: The income corresponding to the performance obligations that have not been performed or have been performed incompletely but the contract has been signed at the end of the reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as income in the year, RMB 0.00 is expected to be recognized as income in the year, and RMB0.00 is expected to be recognized as income in the year. Other note: 5. Investment income 124 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 In RMB Items Occurred current term Occurred in previous term Long-term equity investment income 767,993.22 -8,214,068.19 calculated by equity method Total 767,993.22 -8,214,068.19 6.Other XVIII. Supplementary Information 1. Details of non-recurring gain/loss of the term √ Applicable □ Not applicable In RMB Items Amount Notes Non-current asset disposal gain/loss 1,566,473.14 Government subsidy recognized in current gain and loss(excluding those closely related to the Company’s business 461,493.97 and granted under the state’s policies) Other non-business income and expenditures other than the above 198,487.03 Total 2,226,454.14 -- 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 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 -4.66% -0.0662 -0.0662 shareholders of the Company Net profit attributable to the common owners of the PLC after -5.97% -0.0848 -0.0848 deducting of non-recurring gains/losses 125 Chongqing Jianshe Vehicle System Co., Ltd. The Semi-Annual Financial Report 2021 3. Differences between accounting data under domestic and overseas accounting standards (1).Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □ Applicable□√ Not applicable (2). Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable□√ Not applicable (3) .Explanation of the reasons for the differences in accounting data under domestic and foreign accounting stand ards. If the data that has been audited by an overseas audit institution is adjusted for differences, the name of the o verseas institution should be indicated 4.Other 126