Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report Stock Code: 000625 200625 Abbreviated name of the stock: Changan Automobile BulletinNo.：2014-23 Chongqing Changan Automobile Limited Company
Extracts of 2013 Annual Report
1. Important Notice
The summary is abstract from full-text of annual report, for more details information, investors should found in the full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointed by CSRC.
Company Profile
||||||
|-|-|-|-|-|
||Changan AutomobileChangan B|||000625、200625|
|Short form of the stock||Stock Code|||
|Listed on|Shenzhen Stock Exchange||||
|Person/Way to contact|Secretary of the Board of Directors||Securities affairs representative||
|Name|Lijun||||
|TEL:|023-67594008||||
|FAX:|023-67866055||||
|E-mail address|cazqc@changan.com.cn||||

2、Main financial data and changes of shareholders
（1）Main financial data
Unit: Yuan
||||||
|-|-|-|-|-|
||||Increase/decrease on a||
||2013|2012||2011|
||||year-on-year basis (%)||
|Operating revenue (Yuan)|38,481,862,261.90|29,462,588,753.56|30.61%|26,551,846,548.17|
|Net profit belonging to shareholders|3,505,640,520.04|1,446,409,591.28|||
||||142.37%|967,940,639.48|
|of the listed company (Yuan)|||||
|Net profit belonging to shareholders|||||
|of the listed company after deduction|||||
||3,323,415,945.67|1,071,948,748.07|210.03%|794,691,915.61|
|of non-recurring profit and loss|||||
|(Yuan)|||||
|Net cash flow arising from operating|1,832,646,224.37|511,885,673.38|||
||||258.02%|207,217,572.62|
|activities (Yuan)|||||
|Basic earnings per share (Yuan/Share)|0.75|0.31|141.94%|0.2|
|Diluted earnings per share|0.75|0.31|||
||||141.94%|0.2|
|(Yuan/Share)|||||
|Return on equity (ROE) (%)|20.44%|9.66%|10.78%|6.86%|
||||Increase/decrease of||
||||the end of current year||
||End of 2013|End of 2012||End of 2011|
||||compared with that of||
||||the previous year (%)||
|Total assets (Yuan)|53,364,694,275.91|46,117,604,792.27|15.71%|36,532,118,115.54|
|Net assets belonging to shareholders|18,778,354,427.87|15,512,935,348.26|||
|of the listed company (Owner's equity|||||
||||21.05%|14,739,231,462.02|
|belonging to shareholders of the listed|||||
|company) (Yuan)|||||

Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report（2）Statement of shares held by top 10 shareholders
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Ttotaled104,567, of||||||||Ttotaled129,679, of|||
|During the report period, the total|which88,371 was A share||Fifth trading days before the end of the disclosure of the||||||which113,046 was A share|||
|number of shareholders|shareholders and16,196 were B||annual report of the total number of shareholders||||||shareholders and16,633 were|||
||share shareholders.||||||||B share shareholders.|||
|Holding more than 5% of the shareholders||||||||||||
|||Percentage||||Non-circulated||Circulated||Pledged/ Frozen cases||
|Name of shareholders|Nature of||Shares held at|||||||||
||Shareholders|of totalshares（%）|the year-end||+-|shares held atthe year-end||shares held atthe year-end||Share status|Amount|
|China Changan Automobile Co.,Ltd.|State-owned legalperson shares|41.04%|1,913,557,480||-181,260,000|373,358,342||1,540,199,138||||
||||||||||||0|
|VALUE PARTNERS CLASSICFUND|foreign legalperson shares|1.42%|66,295,691|||||||||
|ZhongHui Fortis Investment Co.,Ltd|foreign legalperson shares|1.39%|65,029,258||-17,820,653|||||||
||||||||||||0|
|Agricultural Bank of China—Bankof Communications Schroedergrowth stock securites investmentfund|domesticnon-state legalperson shares|0.97%|45,387,523|||||||||
|National Social Security Fund-Portfolio 102|domesticnon-state legalperson shares|0.9%|42,014,767|||||||||
|Boshi value growth securitesinvestment fund|domesticnon-state legalperson shares|0.88%|41,218,263|||||||||
|HSBC GLOBAL INVESTMENTFUNDS - CHINESE EQUITY|foreign legalperson shares|0.86%|39,928,228|||||||||
|China Life Insurance LimitedDividends dividends - Personal|domesticnon-state legalperson shares|0.83%|38,486,106||11,103,444|||||||
||||||||||||0|
|HTHK-MANULIFE CHINAVALUE FUND|foreign legalperson shares|0.81%|37,963,732|||||||||
|Construction Bank China - Chineseadvantage growth stock typesecurities investment fund|domesticnon-state legalperson shares|0.79%|36,746,059|||||||||
|||Among the top 10 shareholders, China Changan Automobile Group Co., Ltd., the controlling||||||||||
|Explanation on the relationship and the action alike of||shareholder, and its wholly owned subsidiary Zhonghui Futong Investment Co., Ltd. belong to the||||||||||
|above shareholders||concerted actor regulated by “Disclosure Administration of Shares Change Information of The Listed||||||||||
|||Company”.||||||||||
|The ten largest circulated shareholders||||||||||||
||||||||Type and amount of shares|||||
|Names of shareholders||||Shares at the year end||||||||
||||||||type|||amount||
|Type and amount of shares||||1,540,199,138|||RMB ordinary shares|||1,540,199,138||
|VALUE PARTNERS CLASSIC FUND||||66,295,691|||Domestic listed|||||
|||||||||||66,295,691||
||||||||foreign shares|||||
|ZhongHui Fortis Investment Co., Ltd||||65,029,258|||Domestic listed|||||
|||||||||||65,029,258||
||||||||foreign shares|||||
|Agricultural Bank of China—Bank of Communications Schroeder growthstock securites investment fund||||45,387,523||||||||
||||||||RMB ordinary shares|||45,387,523||
|National Social Security Fund- Portfolio 102||||42,014,767|||RMB ordinary shares|||42,014,767||
|Boshi value growth securites investment fund||||41,218,263|||RMB ordinary shares|||41,218,263||
|HSBC GLOBAL INVESTMENT FUNDS - CHINESE EQUITY||||39,928,228|||Domestic listed|||||
|||||||||||39,928,228||
||||||||foreign shares|||||
|China Life Insurance Limited Dividends dividends - Personal||||38,486,106|||RMB ordinary shares|||38,486,106||
|HTHK-MANULIFE CHINA VALUE FUND||||37,963,732|||Domestic listed|||||
|||||||||||37,963,732||
||||||||foreign shares|||||
|Construction Bank China - Chinese advantage growth stock typesecurities investment fund||||36,746,059||||||||
||||||||RMB ordinary shares|||36,746,059||
|The top 10 shareholders to sell circulated shares, and the infinite tradable||||Among the top 10 shareholders, China Changan Automobile Group Co., Ltd., the||||||||
|relationship between shareholders and top 10 shareholders or concerted||||controlling shareholder, and its wholly owned subsidiary Zhonghui Futong||||||||

Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report
|||
|-|-|
|action|Investment Co., Ltd. belong to the concerted actor regulated by “Disclosure|
||Administration of Shares Change Information of The Listed Company”.|

（3）Property right and controlling relationships between the actual controllers of the Company and the Company is as follows:
SASAC
100%
China South Industries Group Corp.
77%
CHINA CHANGAN AUTOMOBILE GROUP CO., LTD.
100%
Zhonghui Futong Investment Co., Ltd.
41.04%
1.39%
Chongqing Changan Automobile Co., Ltd.
Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report3、Discussion and analysis by the Management Team
Ⅰ.
Overview
The effect of company product structure adjustment was obvious in 2013, the research and development capabilities continued to improve, JV cooperation continued to deepen, and the corporate image improved significantly. In terms of the operation effect, the company over fulfilled annual business objectives and continued to consolidate the industry status; profit, sales revenue increased significantly, and created the situation that the profit growth is higher than revenue growth, and the earnings growth is higher than the sales growth. Throughout the year, the company and its affiliated joint enterprises and the associated enterprises produced 2.11 million vehicles and sold out 2.12 million vehicles, increased by21.1% and20.7% on year-on-year basis. Changan sold out 387,200 independent brand cars, up by67.89% on year-on-year basis. In China's automobile market, the company has obtained about9.64% market shares, increased by0.54% on year-on-year basis, and the sales continued to rank top 4 in China auto industry (data source: China Automobile Industry Association data).
（一）Analysis of Main Business
1、Overview
The main business was development, product and sales of vehicles and sedans. During the reporting period, the quality of theCompany’s operationg was improving and the ability of cash flow creation was enhancing. For the reasons for the changes larger than30%, please refer to Supplementary Information to Financial Statements Note 3 “The major fluctuation and related explanation of theGroup’s financial statements”.
The Company summary review of the progress of development strategy and operation plan discloured before during the reporting period.
There was no significant change in theCompany’s development strategy. During the reporting period, the Company completed the business indicators decsided at the beginning of the reporting period by the board of directors well. The total sales volume of the automobiles was 2.12 million, which completed107.61% of the planed business indicators. The sales revenue is 162.6 Billion Yuan (including full revenue from joint venture) on statistic basis, with123.65% over the annual plan, and 38.482 Billion Yuan from consolidated financial statements, with109.95% over the annual plan.
2、 Income
Unit: Ten Thousand Yuan
|||||
|-|-|-|-|
|Item|2013|2012|Increase/decrease on ayear-on-year basis (%)|
|operating revenue|3,848,186|2,946,259|30.61%|
|Investment income|450,660|186,854|141.18%|
|Operating profit|313,053|92,248|239.36%|
|Non-operating income|22,461|42,060|-46.60%|
|Total profit|331,556|132,743|149.77%|
|Net profit attributable to owners|350,564|144,641|142.37%|

 During the reporting period, the salse volume of automobiles was increasing, and the structure of the production was optimizing. The investment income from Changan Ford, a joint venture, increase a lot. The Company revenue, investment income, total profit and net profit attributable to owners increased sharply compared with the last reporting period. The non-operating income decreased compared with the last reporting period, which was mainly due to the decrease of the government grant.
During the reporting period, the total sales amount from top five customer is RMB 4,326,268,374.12 Yuan and the proportion in the total annual sales amountis11.24%.
3、Cost
Unit: Ten Thousand Yuan
Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report
||||||
|-|-|-|-|-|
|2013 2012Ratio in Ratio in Increase/decreaseIndustry operation operation on a year-on-yearclassification Item Amount cost (%) Amount cost (%) basis (%)3,082,050 99.39% 2,309,625 99.09% 33.44%Automobile Prodcut SaleProduction Outsourcing 18,967 0.61% 21,270 0.91% -10.83%Total 3,101,016 100.00% 2,330,895 100.00% 33.04%During the reporting period, the total purchase amount from top five suppliers is RMB 5,105,544,392.46 Yuan and the proportion in thetotal annual purchase amount is 16.08%.4、ExpensesUnit: Ten Thousand YuanItem 2013 2012 increase/decreaseBusiness tax and surcharges 126,078 75,963 65.97%Operating expenses 355,356 262,984 35.12%Financial expenses 7,197 2,894 148.69%Income tax expense -15,293 -8,757 -74.64%During the reporting period, the increase of business tax and surcharges was due to the increase of consumption tax resulted fromthe growth of sales and the increased portion of cars charged with higher tax rate; the growth of sales led to the expansion of salesexpenses; the decrease of corporate income tax was due to the decrease of net profit excluded investment gains, leading to the decreaseof current income tax expense.5、Research and Development ExpenditureThe Company research and development expenditure is classified as the expenditure on research phase and the expenditure ondevelopment phase, and research expenditures will be included in the current profits and losses. In 2013, the expenditure for researchand development project of the Company was 1.621 Billion Yuan, of which 1.106 Billion Yuan for research expenditure, 0.515 BillionYuan for development phase. In 2012, the expenditure for research and development project of the Company was 1.694 Billion Yuan,of which 1.163 Billion Yuan for research expenditure, 0.531 Billion Yuan for development phase.6、Cash FlowUnit: Ten Thousand YuanItem 2013 2012 Increase/decreasenet cash flows from operating activities 183,265 51,189 258.02%net cash flows from investing activities -209,207 -367,973 43.15%net cash flows from financing activity 45,196 251,468 -82.03%Net increase in cash and cash equivalents 18,493 -65,322 128.31%Cash and cash equivalents at end of year 377,043 358,550 5.16%In 2013, the net cash flow generated from operating activities was 1.83 Billion Yuan, a year-on-year increase of 1.32 Billion Yuan,mainly resulting from the sales expansion; the total cash outflows from investing activities was 1.979 Billion Yuan, decreasedamounted to 1.701 Billion yuan comparing to last year, mainly due to the reduce in payment for PPE purchase and CIP consturciton;The inflow of the net cash flow generated from financing activities was 0.45 Billion Yuan, a year-on-year decrease of 2.085 BillionYuan, mainly resulting from the issue of corporate bonds amounted to 1.98 Billion Yuan in 2012.（二）Composition of Main BusinessUnit: Ten Thousand YuanClassified by industryIndustry/prodcut Operating revenue Operating cost Gross profit rate|||||
||Classified by industry||||
||Industry/prodcut|Operating revenue|Operating cost|Gross profit rate|

Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Amount Increase/decrease Amount Increase/decrease Rate（%） Increase/decrease onon a year-on-year on a year-on-year a year-on-year basisbasis (%) basis (%)Automobile3,773,504 30.71% 3,101,016 33.04% 17.82% -1.44%ProductionClassified by product（一）Vehicles3,752,282 31.02% 3,082,050 33.44% 17.86% -1.49%Passenger Vehicle 1,956,376 105.14% 1,606,000 100.50% 17.91% 1.90%Mini Vehicle 1,673,920 -4.65% 1,418,977 1.03% 15.23% -4.76%（二）Outsourcing21,222 -7.53% 18,967 -10.83% 10.63% 3.31%（三）Assets and liability analysis、The significant changes of the assetsUnit: Ten Thousand Yuan||Amount||Increase/decreaseon a year-on-yearbasis (%)|||Amount|||Increase/decreaseon a year-on-yearbasis (%)|||Rate（%）||Increase/decrease ona year-on-year basis|
|||3,773,504||30.71%|||3,101,016|||33.04%|||17.82%||-1.44%|
||Dec.31,2013||||Dec.31,2012|||||||||||
|Item|||Ratio in total|||||Ratio in total||Increase/decrease||instructions||||
||||assets|||||assets||(%)||||||
||Amount||(%)||Amount|||（%）||||||||
|Cash|428,171.56||8.02%||419,976.39|||9.11%||-1.09%||||||
|Accounts||||||||||||||||
||||0.71%|||||0.95%||-0.24%||||||
|receivable|38,001.73||||43,838.43|||||||||||
|Inventories|472,858.23||8.86%||491,103.00|||10.65%||-1.79%||||||
|||||||||||||maily resulting from the sharply||||
|||||||||||||increase in profit from Changan Ford,||||
|Long-term equity||||||||||||||||
||1,246,648.18||23.36%||759,431.15|||16.47%||6.89%||the joint venture, and the completion||||
|investments||||||||||||||||
|||||||||||||of acquisition of the 50% shares of||||
|||||||||||||CAPSA during the reporting period;||||
|Fixed assets|1,374,076.34||25.75%||1,162,706.81|||25.21%||0.54%||||||
|||||||||||||proportion of construction in process||||
|||||||||||||decreased maily resulting from the||||
||||2.49%|||||6.08%||-3.59%||||||
|Construction in||||||||||||completion of construction and||||
|progress|132,877.38||||280,532.89|||||||transferring to PPE.||||
|、The significant changes of the liabilityUnit: Ten Thousand Yuan||||||||||||||||
||Dec.31,2013|||||Dec.31,2012||||||||||
||||||||||||Increase/decrease|||||
|Item|||Ratio in total assets||||||Ratio in total assets|||||instructions||
||||||||||||(%)|||||
||Amount||(%)|||Amount|||（%）|||||||
|Short-term loans|125,800.00||2.36%|||125,000.00|||2.71%||-0.35%|||||
|Long-term loans|127,000.00||2.38%|||99,200.00|||2.15%||0.23%|||||
|Ⅱ.Core Competence Analysishe company is committed to improve the independent innovation ability, and build a continuously leading core r&d ability, and buildhe core competencies for the future long-term development. During the reporting period, the company's core competitivenessmproved further.. Independent innovation solid progresshe company successfully held the first technology carnival activity, published a number of latest security technology such as frontirbag in back row; Changan RAETON refreshed China brand security collision scoring record with 56.2 points; the 2014 model ofChangan EADO successfully passed the first rollover test of China automobile safety collision (North America standard); Dianjiangkid pad of RMB1.3 billion yuan investment and 3-years construction was officially put into operation; the development and industrialse of NVH(noise, vibration and acoustic vibration roughness) control technology won the first prize of Science and Technology||||||||||||||||

Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report Award of China Automobile Industry; In 2013 in the state evaluation of enterprise technology centers, Changan won the first prize of China auto industry, and ranks the first for three consecutive terms in the industry. Changan independent research and development made out the incremental upgrade way from "structure development" to "performance development", then to "quality development". 2. Rapidly increase of product market competence
The company successfully launched many self developed models such as RAETON, EADO, Zhishang XT, CS35, and the product success rate increase substantially. During the report period, the highest monthly sales of EADO was more than 10,000 set, CS35 9000 set, RAETON made breakthrough in official-car market; Zhishang XT, rated as the most beautiful double-box coupe, is harder to get. In 2014, the company will release a series of new products into the market, such as CS75, new Ben-ben, and Yuexiang V7. This fully shows that the structure adjustment and independent innovation achievements of Changan automobile appear in large number, and its market competence ascent rapidly.
3. Brand ability improves further
The company participated Shanghai international auto show with independent brand for the first time, and successfully released 5 new models such as CS95 concept car and Zhishang XT. As China's only OEM, the company reappeared in Frankfurt international motor show with six new models such as CS75, REATON and Zhishang XT, which attracted broad attention.
Through innovation brand communication, it greatly held activities such as going into community, campus, business circle, county, and brand activity such as Changan automobile science and technology experience camp, in order to enhance brand image. The 19th China brand value result was published, that Changan brand value rose to RMB38.202 billion yuan, and continued to rank top ten in Chinese enterprises.
Ⅲ、The company's future development prospect
1. Industry competition pattern and trend of development
In 2014 in terms of economic situation, the central government firmly promotes reform, the state-owned enterprise reform will go further, which will further stimulate growth vigor, meanwhile many new growth factors such as industrialization, urbanization and consumption structure upgrade is forming, and the trend that economy is stable and will become betterwon’t change. In terms of industry situation, rigid demand exists for long time, informatization, electrification and intellectualization are rapidly integrating into automobile industry, and bring new opportunities for automobile industry. But China's automobile industry also faces many challenges such as increasing competition, more restrict laws and regulations, and more purchase restriction.It’s expected in 2014 the growth rate of China auto market is8% -10%, sales about 24 million vehicles.
2.Company development strategy
Take the growth opportunity of China's auto market in the next decade, strengthen brand awareness, speed up brand construction; continuously remain China's leading independentr&d ability, and strive to make classic products; adhere to "walking on two legs", improve joint venture; adhere to Chinese market is the main body, steadily expand overseas markets; adhere to development and reform, continuously optimize the mechanism system; establish and perfect advanced system (including management, organization, human and culture), and ultimately realize rapid and healthy development.
3. Business plan
In 2014 the aim of the board of directors of the company is: strive to produce and sell more than RMB2.33 million cars, sales revenue is over 180 Billion Yuan (including full revenue from joint venture) on statistic basis and approximately 40.9 Billion Yuan from consolidated financial statements. To achieve the above objectives, this year the company will be guided by career leading plan T13612, take "reform, brand, quality, system" as the key points, value creation as the core, constantly emancipate the mind, comprehensively deepen the reform, speed up the transformation and upgrading, greatly promote the platform which takes the products as the core and system construction which takes customers as the core, and focus on the following work: firstly focus on marketing, take good marketing battle; secondly reform quality management, and promote rapid promotion of product quality; thirdly strengthen system construction, vigorously promote strict management, improve management efficiency; fourthly innovate human resource management, activate full vigor; fifthly innovater&d mode, create classic products; sixthly strengthen financial management, reduce cost and improve efficiency, improve operation quality; seventhly innovate brand promotion, create international brand image; eighthly see clearly customer needs, innovative product planning; ninthly strengthen production and marketing synergy, lean manufacturing and logistics management; tenthly innovate supplier management, improve system competition ability; eleventh strengthen the implementation of JV cooperation strategy, improve development quality.
4. Company capital requirement and use plan of 2014
To realize corporate strategic objectives, the company capital expenditure is expected to be RMB3.78 billion yuan in 2014, the investment on fixed assets is RMB2.877 billion yuan, the equity investment is RMB903 million yuan. Investment in fixed assets is mainly in productivity construction, upgrade of production capacity and product adjustment, and research and development ability construction of Yuzui base, Beijing factory and YuBei factory, among which the extension project is RMB1.89 billion yuan, accounting for65.7%. Equityinvestment’s mainly that purchase100% equity funds of Hefei Changan and projects of overseas research and development and investment. The company will, according to the implementation and plan of new projects and related provisions of the listing rules, perform the approval procedures of the corresponding specific project and disclosure them. Capital requirements will combine project progress situation, the company's business and financing environment, the company will study and formulate various channels of financing and capital use plans, improve the service efficiency of funds and reduce the capital cost.
5. Potential risks
China automobile industry development has had and is having very profound changes, in the next decade rigid demand of automobile remains strong, potential consumption is huge, the competition in China auto market will be more intensive and cruel. Main changes
are as follows:
Chongqing Changan Automobile Limited Company Extracts of 2013 Annual Report (1) Market capacity: the overall capacity is increasing, but not a simple linear growth, it will grow depending on the energy, regulations and economic elements.
(2) Policies and regulations: energy saving, environmental protection, safety, hygiene, restrictions of big cities, public procurement and other series of policies and regulations have large influence on future market.
(3) Consumer: Chinese consumers have gradient variation, the brand consciousness is stronger and stronger; Consumer rights protection is diverse and intense; network greatly influencesconsumers’ judgment and consumption behavior.
(4) Competitive situation: more intense, crueler, new entrants of market segment will increase.
(5) Media: Internet and big data era has very profound changes on producers, consumers, marketers and suppliers.
Facing all the changes, the company must comply with the industry development trend, actively reform, seize opportunities, speed up transformation, upgrading and structural adjustment, in order to get competitive advantages.
4. Relevant items involving financial report
(1)Explanation on changes of accounting policy, accounting estimation and settlement method compared with the lastyear’s financial report
In recent years, the volume of production and sales keeps scaling up. Considering theGroup’sproduction’s characteristics, quality assurance period and obligation of warranty clues, the Group changed the extraction method of warranty to keep the balance of warranty as a certain multiples of the average month warranty payment among the last 12 months to state the balance of warranty more reasonably.
The accounting estimation change for warranty was applicable from January 1st, 2013, and the other regulation for warranty remains the same. Prospective application was adopted for the estimation change, which the retroactive adjustment was not proposed for previous years, thus no effect was posed on disclosed financial report. The accounting estimation change led to a decrease of the net profit attributable to owners by RMB 174,109,934.58 during 2013.
(2)Major accounting errors within reporting period that needs retrospective restatement
Non-applicable
(3) Compare with lastyear’s financial report; explain changes in consolidationstatement’s scope
Non-applicable
(4)Explanation of the Board of Directors and Supervisory Committee on the “Qualified Opinion” of the report made by the CPAs
Non-applicable