Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Chongqing Jianshe Motorcycle Co., Ltd.
Annual Report 2016
2017-012
April 2017
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 I. Important Prompts, Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Mr. Lv Hongxian, The Company leader, Mr. Xue Gangyi, the Financial Officer, Ms.Niu Yanli, the manager of accounting department, hereby declare: the truthfulness and completeness of the Financial Report are guaranteed. All directors presented the Board Meeting at which this report was examined:
Prospective statements carried in this report, such as business plans for future are not constituting any substantial commitment to the investors. Please be cautious to the risks.This report is prepared both in English and Chinese. When there is any conflict in understanding, the Chinese version shall prevail.
The company had concretely described the existed factors of risks of the company in the report, of which please refer to the contents in the Report of directors concerning the possible facing risk factors in thecompany’s future development. Thecompany’s business plan and business goal of the year do not represent the 2017-annual earnings forecast made by the company, hence whether those can be realized depending on many factors such as the market circumstance and the extent of hard working of the management team, thus there is a large extent of uncertainty, please be aware of the investment risks.
The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the report period.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV.Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Definition
||||
|-|-|-|
|Terms to be defined|Defined as|Definition|
|Company, the Company, Jianmo Stock|Defined as|Chongqing Jianshe Motorcycle Co., Ltd.|
|||Shenzhen North Jianshe Motorcycle Co., Ltd. (predecessor of the|
|Shenjianmo|Defined as||
|||Company)|
|||China Military Equipment Group Co., Ltd. (China Southern|
|Military Equipment Group|Defined as||
|||Industry Group Co., Ltd.)|
|Southern Group|Defined as|China Southern Industry Group Co., Ltd.|
|Military Finance Co.|Defined as|Military Equipment Group Finance Co., Ltd.|
|Southern Motorcycle|Defined as|Chongqing Southern Motorcycle Co., Ltd.|
|||Chongqing Southern Motorcycle Technologies Development Co.,|
|Southern Motorcycle R&D Co., Ltd.|Defined as||
|||Ltd.|
|||Chongqing Jianshe Industry Co., Ltd. – former State-owned|
|Jianshe Industry|Defined as||
|||Jianshe Machinery Factory, Jianshe Industry (Group) Co., Ltd.|
|Jianshe Group|Defined as|Jianshe Industrial (Group) Co., Ltd.|
|Jianshe Machinery|Defined as|Chongqing Jianshe Machinery Co., Ltd.|
|Jianshe Mechanical and Electric|Defined as|Chongqing Jianshe Mechanical and Electric Co., Ltd.|
|China Jialin|Defined as|China Jialin Industry Co., Ltd. (Group)|
|Jinan Qingqi|Defined as|Jinan Qingqi Motorcycle Co., Ltd.|
|Changan Auto|Defined as|Chongqing Changan Automobile Co., Ltd.|
|Luoyang Northern|Defined as|Luoyang Northern Enterprise Group Co., Ltd.|
|Sales Co.|Defined as|Chongqing Jianshe Sales Co., Ltd.|
|Vehicle air conditioner|Defined as|Chognqing Jianshe Automobile Air-conditioner Co., Ltd.|
|Import & Export Co.|Defined as|Chongqing Northern Jianshe Import & Export Co., Ltd.|
|Shanghai Jianshe|Defined as|Shanghai Jianshe Motorcycle Co., Ltd.|
|Slaes Company|Defined as|Chongqing Jianshe Motorcycle Sales Co., Ltd.|
|Chongqing Jianya|Defined as|Chongqing Jianshe YAMAHA Motorcycle Co., Ltd.|
|Zhuzhou Jianya|Defined as|Zhuzhou Jianshe YAMAHA Motorcycle Co., Ltd.|
|Pingshan Taikai|Defined as|Chongqing Pingshan Taikai Carburetor Co., Ltd.|
|Jianxing Machinery|Defined as|Chongqing Jianxing Machinery Co., Ltd.|
|Tongsheng Construction|Defined as|Chongqing Tongsheng Jianshe Industry Co., Ltd.|
|Fuyeda|Defined as|Chongqing Fuda Property Management Co., Ltd.|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Jiangmen Qingqi|Defined as|Jiangmen Qingqi South China Motorcycle Co., Ltd.|
|Changan SUZUKI|Defined as|Chongqing Chang’an SUZUKI Automobile Co., Ltd.|
|Changhe SUZUKI|Defined as|Jiangxi Changhe SUZUKI Automobile Co., Ltd.|
|Hebei Changan|Defined as|Hebei Changan Automobile Co., Ltd.|
|Hefei Changan|Defined as|Hefei Changan Auto Co., Ltd.|
|Hafei Automobile|Defined as|Harbin Hafei Automobile Co., Ltd.|
|Changan Ford ,Harbin Branch|Defined as|Changan Ford Automobile Co., Ltd. Harbin Branch|
|Harbin Dongan Auto Engine|Defined as|Harbin Dongan Auto Engine Co., Ltd.|
|South Air International|Defined as|South Air International Co., Ltd.|
|Nanjing Changan|Defined as|Nanjing Changan Automobile Co., Ltd.|
|||The company has made an agreement to sale the 100% stake of|
|||Jianshe Mechanical and Electric Company-the company’s|
|Major asset restructuring|Defined as||
|||subsidiary funded by the liabilities and the motorcycle business|
|||related assets held by the company to Military Equipment Group.|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 II. Basic Information of the Company and Financial index
Ⅰ.Company Information
|||||
|-|-|-|-|
|Stock ID|Jianmo B|Stock Code|200054|
|Stock Exchange Listed in|Shenzhen Stock Exchange|||
|Company Name in Chinese|重庆建设摩托车股份有限公司|||
|Short form of Company Name||||
||建设摩托|||
|in Chinese||||
|Company Name in English|CHONGQING JIANSHE MOTORCYCLE CO.,LTD.|||
|Short form of Company Name||||
||JSMC-B|||
|in English||||
|Legal representative:|Lv Hongxian|||
|Registered address|No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan District, Chongqing|||
|Postal code of the Registered||||
||400054|||
|Address||||
|Office Address|No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan District, Chongqing|||
|Postal code of the office||||
||400054|||
|address||||
|Internet Web Site|http://www.jianshe.com.cn|||
|E-mail|cqjsmc@jianshe.com.cn|||

Ⅱ.Contact person and contact manner
||||
|-|-|-|
||Secretary of the Board|Representative of Stock Affairs|
|Name|Xue Gangyi|Liu Hongyu|
||No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan|No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan District,|
|Address|||
||District, Chongqing|Chongqing|
|Tel.|023-66295333|023-66295333|
|Fax.|023-66295333|023-66295333|
|Email.|cqjsmc@jianshe.com.cn|cqjsmc@jianshe.com.cn|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016Ⅲ. Information disclosure and placed
|||
|-|-|
|Newspapers selected by the Company for information||
||Securities Times and Hongkong Commercial Daily.|
|disclosure||
|Internet website designated by CSRC for publishing||
||http://www.cninfo.com.cn|
|the Annual report of the Company||
|The place where the Annual report is prepared and||
||Secretarial office of the Board|
|placed||

Ⅳ.Changes in Registration
|||
|-|-|
|Organization Code|915000007474824231|
||In 2015, the company implemented the major asset restructuring, stripped the main|
|Changes in principal business activities|assets and liabilities involved in the motorcycle business, completed the structural|
|since listing (if any)|adjustment of the main business and the vehicle air-conditioning business has become|
||the company's main business.|
||(a) The company was set up by Jianshe Group and China North Industries Corp|
||Shenzhen Company in July 1995, of which the Jianshe Group was the company’s|
||controlling shareholder that holds 71.13% stake of the company.|
||(cid:10)(b) On August 31, 2005, the 71.13% stake of the company held by Jianshe Group was|
||transferred to Military Equipment Group in an agreement, thus the Military Equipment|
|Changes is the controlling shareholder in||
||Group. has become the company’s controlling shareholder. (cid:10)|
|the past (is any)||
||© On March 2, 2016, according to Agreement of Share Transfer in Zero Price signed|
||between Military Equipment Group and Jianshe Mechanical and Electric, Military|
||Equipment Group shall transfer its 71.13% stake of the company to Jianshe Mechanical|
||and Electric in zero price, thus the Jianshe Mechanical and Electric will become the|
||company’s controlling shareholder.|

Ⅴ. Other Relevant Information
CPAs engaged
|||
|-|-|
|Name of the CPAs|BDO China Shu Lun Pan Certified Public Accountants LLP|
|Office address：|Address: 4/F 61 Nanjing Rd. East, Huangpu, Shanghai|
|Names of the Certified Public||
||Li Shunli, Chen Jia|
|Accountants as the signatiries||

The sponsor performing persistant supervision duties engaged by the Company in the reporting period.
□ Applicable√ Not applicable
The Financial advisor performing persistant supervision duties engaged by the Company in the reporting period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Financial advisor Name|Office address|Representatives|Period of supervision and guide|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
||No.4 Building, No.66 Anli|||
|China Securities|Road, Chaoyang District ,|Liu Lei, Xi Guangyi|2016 -2017|
||Beijing|||

Ⅵ.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors.
□ Yes√ No
||||||
|-|-|-|-|-|
||||Changed over last year||
||2016|2015||2014|
||||（％）||
|Operating Gross income（RMB）|873,286,486.75|1,341,331,910.93|-34.89%|1,763,619,804.97|
|Net profit attributable to the|12,267,006.14|240,735,112.20|||
|shareholders of the listed company|||-94.90%|-133,593,949.98|
|（RMB）|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||12,908,428.98|-255,602,553.80|-105.06%|-153,898,341.02|
|to the shareholders of listed|||||
|company（RMB）|||||
|Cash flow generated by business|108,619,119.02|82,306,010.61|||
||||31.97%|94,598,651.91|
|operation, net（RMB）|||||
|Basic earning per|0.103|2.017|||
||||-94.89%|-1.119|
|share(RMB/Share)|||||
|Diluted gains per|0.103|2.017|||
||||-94.89%|-1.119|
|share(RMB/Share)(RMB/Share)|||||
|Net asset earning ratio（%）|4.68%|175.35%|-170.67%|-158.82%|
|||End of|Changed over last year||
||End of 2016|||End of 2014|
|||2015|（％）||
|Gross assets（RMB）|1,559,334,881.03|1,550,615,831.44|0.56%|2,389,211,010.43|
|Net assets attributable to|268,383,091.65|256,116,085.51|||
|shareholders of the listed company|||4.79%|17,321,196.61|
|（RMB）|||||

Ⅶ.The differences between domestic and international 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
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 (International Accounting Standards) or Chinese GAAP(Generally Accepted Accounting Principles) in the period. 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards.
□ Applicable√Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP(Generally Accepted Accounting Principles) in the period.
Ⅷ.Main Financial Index by Quarters
In RMB
||||||
|-|-|-|-|-|
||First quarter|Second quarter|Third quarter|Fourth quarter|
|Operating income|208,588,488.00|259,588,803.88|222,817,415.03|182,291,779.84|
|Net profit attributable to the|||||
||4,399,465.72|4,103,379.70|4,314,063.61|-549,902.89|
|shareholders of the listed company|||||
|Net profit after deducting of|||||
|non-recurring gain/loss attributable|||||
||4,348,808.65|4,012,998.17|5,164,583.47|-617,961.31|
|to the shareholders of listed|||||
|company|||||
|Net Cash flow generated by|||||
||24,195,604.08|37,744,133.71|34,576,909.96|12,102,471.27|
|business operation|||||

Whether significant variances exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes√No
Ⅸ.Items and amount of non-current gains and losses
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|Items|Amount (2016)|Amount (2015)|Amount (2014)|Notes|
|Non-current asset disposal|-3,646.70||||
|gain/loss(including the write-off part for||2,992,485.20|-328,218.08||
|which assets impairment provision is made)|||||
|Govemment subsidy recognized in|1,223,200.00||||
|currentgain and loss(excluding those closely|||||
|||3,643,800.00|2,875,800.00||
|related to the Company’s business and|||||
|granted under the state’s policies)|||||
|Other non-business income and expenditures|-1,919,510.10||||
|||490,389,196.17|17,756,677.38||
|other than the above|||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Less: Influenced amount of income tax|-29,247.81|694,349.76|||
|Influence on minority shareholders’ equity|-29,286.15||||
|||-6,534.39|-131.74||
|(after tax)|||||
|Total|-641,422.84|496,337,666.00|20,304,391.04|--|

For theCompany’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/itesm as defined by the information disclosure explanatory Announcement No.1- Non–recurring gain/loss in the report period.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 III. Outline of Company Business
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
At the end of 2015, the company completed the major asset restructuring of stripping motorcycle business, thus realized a major adjustment of industrial structure, so the company has become the auto parts manufacturing enterprise and mainly engaged in automotive air-conditioning compressor production and sales. The products include rotary vane iron type and aluminum type compressor, piston swashplate fixed displacement compressor, piston swashplate variable displacement compressor and electric compressor, covering 32cc to 480cc displacement. The main products won the "China famous brand", "High quality products of French science and technology quality supervision and evaluation committee ", “China enters WTO Recommended Products” and so on. The strategic customers of the products are the manufacturing enterprises with vehicle production and sales in the top list, and the strategic customers includeChang’an Automobile, Peugeot, Dongfeng Nissan,Chang’an Suzuki and Great Wall Automobile, and the sales ranks in top three in the industry.
Ⅱ.Major Changes in Main Assets
1.Major Changes in Main Assets
|||
|-|-|
|Main assets|Major changes|
||2016 for the rental of housing from the fixed assets of the divestiture, a separate|
|Fixed assets||
||reflection.|
||Completed to carry forward the fixed assets, the company under construction project|
|Construction in process||
||from 40,435,429.90 yuan reduced to 2,438,832.43 yuan.|
||The increase of monetary funds mainly because come-and-go funds received from|
|Monetary Fund|mechanical and electrical company, the Company's monetary funds increased from RMB|
||259,802,758.76 to RMB514,414,822.57.|
||2016 for the rental of housing from the fixed assets of the divestiture, a separate|
|Real estate investment||
||reflection.|
|Inventories|Air conditioning company business volume increased, turnover increased by 37.48%|

 2. Main Conditions of Overseas Assets
□ Applicable√Not applicable
III.Analysis On core Competitiveness
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Whether the company needs to comply with the disclosure requirements of the particular industry
No
The company has the enterprise technology center which recognized by Chongqing City, established the rotary vane technology platform and the piston technology platform and formed the three series products of iron, aluminum and electric-driven. Through continuous independent innovation and introduction, the company has shaped a strongR&D capability of automotive air conditioner compressor, and the products are mature and cost-effective with stable performance. In the rotary vane compressor market, thecompany’s product has constantly gained a stable market share. The advanced equipment which introduced from countries including the United States, Germany, Switzerland and Japan accounts for more than80%, enabling the company to have precision manufacturing capacity. In the last two years, the company increased the investment in technological transformation, so the company has realized the production and sales scale of 2.3 million per year, and the company has made a comprehensive improvement on on-line testing ability, quality testing ability andR&D capability and experimental capability.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 IV.Management’s Discussion and Analysis
I. General
The year of 2016 is a year for thecompany’s independent operation that features the main business of automotive air conditioning compressor. The total production of vehicle air conditioning compressor in the year was 2.369 million units, a year-on-year growth of31.3%; the total sales was 2.157 million units, a year-on-year growth of16.1%; the realized revenue was RMB 870 million and the profit was RMB 12.267million. The main work carried out in the year was as follows:
The aspect of adjustment of market structure: firstly, strengthened the management and development of large customers. To the year, the company realized the sales to GEELY. The company has become the supplier to the top three brands(Chang’an, Great Wall, Geely) of Chinese independent automobile brand; through increasing the proportion of high-quality customers, the sales to top ten strategic customers reached93%, thus the company preliminarily shaped a reasonable echelon customer structure. Secondly, the company actively explored the new energy market. It has set up the new energy division and initially started the professional operation (including large displacement compressor).
The aspect of R& D capability enhancement: firstly, it has set up the technology center of Chongqing municipal level, and established the rotary vane technology platform and the piston technology platform and formed the three series products of iron, aluminum and electric-driven. Secondly, the experimental capability was further enhanced. The construction project for test ability was fully completed and the semi anechoic chamber was put into use, which has obtained low temperature capability recognition by CNAS (China National Accreditation Committee for Conformity Assessment). Thirdly, the project development capabilities for customers and the basic research level were further enhanced.
The aspect of manufacturing capacity: firstly, the capacity-expansion work for 0.5 million units was completed, thus formed the annual production capacity of 2.3 million units; secondly, the company promoted the just-in-time system, so the production efficiency has been continuously improved; thirdly, the company continuously optimized the quality management system, introduced STA (supplier technical support system) in the front end of industrial chain and established professional after-sales department for the customers, thus realized the whole process management of quality.
II. Main business analysis
1. General
For the year, the company planned to sell 2 million units of automotive air conditioning compressor, and the actual sales was 2.157 million units, which is108% of the planned sales by the beginning of the year. The company realized the annual operating income of RMB 873 million, which is111% of the planned annual operating goal.
1.Income of the main business
Since the completion of the major asset restructuring in 2015, thecompany’s main business structure has been significantly changed. For the income of the main business, the proportion of the income of the automotive
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 air-conditioning business rose to99% from59% before the restructuring last year, so automotive air-conditioning business actually has become the main business; in the year, the automotive air-conditioning business realized the sales revenue of RMB 845 million, a year-on-year increase of12.58%. Due to the costs transmission by the price competition of main engine plants, the operating costs increased in the reporting period, thus the gross margin of the product declined3.12%.
The motorcycle business after the completion of the major asset restructuring is mainly operated by the share-controlled subsidiary-Shanghai Construction, and the realized income of motorcycle business in the year was RMB 8.335 million, which accounts for1% of the income of main business.
The income classified by region: the domestic sales income was RMB 818 million, which accounts for93.68% of the annual business income; while the overseas sales income was RMB 55.168 million, accounting for6.32% of the annual income.
The income classified by customer: thecompany’s top five customers include Great Wall automobile, Changan Automobile and its affiliated enterprises and Shenlong Automobile, and thecompany’s sales to those top five customers was RMB 521 million, which accounts for59.66% of the annual income.
2. Costs of the main business
For the year, the costs of main business was RMB 704 million. Concretely: the direct materials accounts for79.63%, the fuel and power accounts for1.86%, the staff salaries accounts for4.17% and the manufacturing costs accounts for10.51%.
3.Expenses
Because the major asset restructuring had stripped the motorcycle business, the various costs has dropped significantly.
The sales expenses occurred in the year was RMB 27.4296 million, a year-on-year decline of63.93%.
The management expenses occurred in the year was RMB 77.041 million, a year-on-year decline of54.99%. The financial expenses occurred in the year was RMB 36.5955 million, a year-on-year decline of56.20%. 2. Revenue and cost
(1)Component of Business Income
In RMB
|||||||
|-|-|-|-|-|-|
||2016||2015|||
||||||Increase /decrease|
||Amount|Proportion|Amount|Proportion||
|Total operating|873,286,486.75||1,341,331,910.93|||
|||100%||100%|-34.89%|
|revenue||||||
|Industry||||||
|Main operating|853,753,015.06|97.76%|1,273,920,141.82|94.97%|8.28%|
|Other operating|19,533,471.69|2.24%|67,411,769.11|5.03%|-23.77%|
|On products||||||
|Motorcycle and parts|8,335,299.07|0.95%|522,989,115.46|38.99%|-98.41%|
|Vehicle air||||||
||845,417,715.99|96.81%|750,931,026.36|55.98%|12.58%|
|conditioner||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Other|19,533,471.69|2.24%|67,411,769.11|5.03%|-71.02%|
|On Area||||||
|Domestic|818,118,204.80|93.68%|1,231,140,033.05|91.78%|-33.55%|
|Overseas|55,168,281.95|6.32%|110,191,877.88|8.22%|-49.93%|

 (2)Situation of Industry, Product and District Occupying theCompany’s Business Income and Operating Profit with Profit over10%
√ Applicable□Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|Increase/decrease|Increase/decrease|
|||||of revenue in the|of business cost|of gross profit|
||||Gross profit||||
||Turnover|Operation cost||same period of|over the same|rate over the same|
||||rate(%)||||
|||||the previous|period of|period of the|
|||||year(%)|previous year (%)|previous year (%)|
|On Industries|||||||
|Industry|873,286,486.75|712,724,948.38|18.39%|-34.89%|-43.07%|53.28%|
|On products|||||||
|Motorcycle and|||||||
||8,335,299.07|8,800,544.94|-5.58%|-98.41%|-98.47%|4.28%|
|parts|||||||
|Vehicle air|||||||
||845,417,715.99|695,073,042.85|17.78%|12.58%|17.02%|-3.12%|
|conditioner|||||||
|On Area|||||||
|Domestic|818,118,204.80|665,285,408.43|18.68%|-33.55%|-41.94%|11.75%|
|Overseas|55,168,281.95|47,439,539.95|14.01%|-49.93%|-55.31%|10.34%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest onyear’s scope of period-end.
□ Applicable√Not applicable
(3)Whether theCompany’s Physical Sales Income Exceeded Service Income
√ Yes □ No
|||||||
|-|-|-|-|-|-|
|Classification|Items|Unit|2016|2015|Changes|
||Sales|piece|0|677,504|-100.00%|
|Motorcycle|Production|piece|0|675,968|-100.00%|
||Stock|piece|0|20,340|-100.00%|
|Vehicle air|Sales|Piece|2.1568 million|1.8584 million|16.06%|
|conditioner|Production|Piece|2.3687 million|1.8038 million|31.32%|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
|Stock|Piece|472,700|252,600|87.13%|

 Explanation for a year-on–year change of over30%
√ Applicable□Not applicable
1. In Each item of motorcycle products decreased by100%, which was due to the company carried out the major asset restructuring in 2015 leading to stripping the motorcycle assets and liabilities and thecompany’s main business structure was adjusted to be production and sales of automotive air conditioning compressor.
2. Every item of automotive air conditioning compressor products gained year on year growth, which was due to the further development of the company's main business of automotive air con ditioning compressor.
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
√ Applicable□Not applicable
No
In 2016, the Company entered into the basic contract for the sales of finished products and parts respectively with Chang'an and its affiliated enterprises in China. The Company organized the production of the products according to its orders and completed the sales of RMB 264.49 million for China's Changan and its affiliated enterprises. Ha s been organized by order and production and sales.
(5)Component of business cost
Industry and product classification
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
||||Proportion in the||Proportion in the|Increase/Decrease|
|Industry|Items||||||
|||Amount|operating costs|Amount|operating costs|(%)|
||||(%)||(%)||
|Industry|direct material|560,491,734.98|79.63%|788,007,390.07|62.94%|-28.87%|
|Industry|Fuel and energy|13,086,910.37|1.86%|23,169,559.06|1.85%|-43.52%|
|Industry|Staff salary|29,736,236.87|4.17%|32,899,024.64|2.63%|-9.61%|
||Manufacturing||||||
|Industry||73,962,682.45|10.51%|89,256,277.65|7.13%|-17.13%|
||cost||||||

In RMB
||||||||
|-|-|-|-|-|-|-|
|||2016||2015|||
|Classification of|||||||
||||Proportion in the||Proportion in the|Increase/Decrease|
|products|Items||||||
|||Amount|operating costs|Amount|operating costs|(%)|
||||(%)||(%)||
|Vehicle air|||||||
|||703,873,587.79|100.00%|582,452,510.72|47.00%|20.85%|
|conditioner|||||||
|Motorcycle|JYM125-8|0.00|0.00%|95,528,389.14|8.00%|-100.00%|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|Motorcycle|JYM110-A|0.00|0.00%|32,244,371.76|3.00%|-100.00%|

 Notes
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
□ Yes√No
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
□ Applicable√Not applicable
(8)Situation of Main Customers and Main Supplier
Information of theCompany’s top 5 customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|520,978,417.01|
|Proportion of sales to top 5 customers in the annual||
||59.66%|
|sales(%)||
|Proportion of the sales volume to the top five customers||
||26.43%|
|in the total sales to the related parties in the year||

Information of theCompany’s top 5 customers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|
||Great wall Automobile Co., Ltd. Tianjing|||
|1||184,922,355.26|21.18%|
||Hafu Office|||
|2|Chongqing Changan Automobile Co., Ltd.|115,635,653.38|13.24%|
|3|Shenlong Automobile Co.,ltd.|105,264,618.68|12.05%|
||Chongqing Chang’an SUZUKI Automobile|||
|4||70,035,928.75|8.02%|
||Co., Ltd.|||
|5|Nanjing Changan Automobile Co., Ltd.|45,119,860.94|5.17%|
|Total|--|520,978,417.01|59.66%|

 Other explanation :
√ Applicable□Not applicable
Among the above customers, Chongqing Changan Automobile Co., Ltd, Chongqing Changan Suzuki Automobile Co.,Ltd, Nanjing Changan Automobile Co., Ltd, which have relations with the company, are the subsidiary of thecompany’s actually controller- Military Equipment Group or the joint venture companies of the subsidiaries of thecompany’s actual controller. Thecompany’s directors, supervisors, senior management personnel and key technical personnel and the shareholders with more than5% shares of the company have no direct or indirect
interests in the major customers of the above-said customers.
Principal suppliers
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|Total purchase of top 5 Suppliers（RMB）|435,611,002.40|
|Percentage of total purchase of top 5 suppliers In total||
||49.52%|
|annual purchase(%)||
|Proportion of purchase amount from the top 5 suppliers in||
|the total purchase amount from the related parties in the|8.66%|
|year||

Information about the top 5 suppliers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|
||Anhui Haofang Mechanical and Electric|||
|1||191,086,469.03|21.72%|
||Co., Ltd.|||
||Chongqing North Jianshe Import & export|||
|2||76,196,004.25|8.66%|
||Trade Co., Ltd.|||
||Chongqing Jinchen Machinery|||
|3||61,574,137.86|7.00%|
||Manufacturing Co., Ltd.|||
||Chongqing Mingxin Machinery|||
|4||58,284,353.82|6.63%|
||Manufacturing Co., Ltd.|||
|5|Chongqing Yujiang Casting Co., Ltd.|48,470,037.44|5.51%|
|Total|--|435,611,002.40|49.52%|

 Other explanation :
√ Applicable□ Not applicable
Among the above-said suppliers, Chongqing North Construction Import& Export Trading Co., Ltd, which has relations with the company, is the subsidiary of thecompany’s controlling shareholder. Thecompany’s directors, supervisors, senior management personnel and key technical personnel have no direct or indirect interests in the major suppliers of the above-said suppliers.
3.Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/Decrea||
||2016|2015||Notes|
||||se(%)||
|Sale expenses|27,429,578.93|76,054,125.60||Recombination stripping motorcycle|
||||-63.93%||
|||||business|
|Administration expenses|77,041,000.34|171,145,874.26||Recombination stripping motorcycle|
||||-54.99%||
|||||business|
|Financial expenses|36,595,522.33|83,560,026.12|-56.20%|Financing scale decline|

4.R& D Expenses
√Applicable □Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 In 2016, thecompany’s projects of "380cc swashplate compressor", "120cc general rotary vane compressor", "low speed electric compressor and pure electric compressor," 140cc iron compressor" and " 120cc aluminum compressor” realized small batch production; the projects of “electric compressor for passenger bus” and “Vortex electric” completed the trial-manufacture of prototype; and the project of “Nissan 341 project” has finalized the design. The R& D investment of the year was RMB 13.1494 million, which accounts for1.51% of the operating revenue.
Situation of Research and Development Input by the Company
|||||
|-|-|-|-|
||2016|2015|Increase/Decrease(%)|
|Number of Research and||||
||55|30|83.33%|
|Development persons (persons)||||
|Proportion of Research and||||
||6.23%|5.25%|0.98%|
|Development persons||||
|Amount of Research and||||
|Development Investment (In|13,149,362.02|63,248,003.92|-79.21%|
|RMB)||||
|Proportion of Research and||||
|Development Investment of|1.51%|4.72%|-3.21%|
|Operation Revenue||||
|Amount of Research and||||
|Development Investment|0.00|33,342,603.05|-100.00%|
|Capitalization (In RMB)||||
|Proportion of Capitalization||||
|Research and Development||||
||0.00%|52.72%|-52.72%|
|Investment of Research and||||
|Development Investment||||

Notes to the year-on-year change of the relevant data
√Applicable□ Not applicable
Notes to the big difference between cash flow from operating activities and net profit in the reporting year□Applicable√ Not applicable
5.Cash Flow
In RMB
|||||
|-|-|-|-|
|Items|2016|2015|Increase/Decrease(%)|
|Subtotal of cash inflow received|511,396,166.41|945,396,153.37||
||||-45.91%|
|from operation activities||||
|Subtotal of cash outflow|402,777,047.39|863,090,142.76||
||||-53.33%|
|received from operation||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|activities||||
|Net cash flow arising from|108,619,119.02|82,306,010.61||
||||31.97%|
|operating activities||||
|Subtotal of cash inflow received|3,332,000.00|36,205,492.45||
||||-90.80%|
|from investing activities||||
|Subtotal of cash outflow for|19,363,354.60|85,019,024.57||
||||-77.22%|
|investment activities||||
|Net cash flow arising from|-16,031,354.60|-48,813,532.12||
||||-67.16%|
|investment activities||||
|Subtotal cash inflow received|1,864,082,041.12|2,966,982,830.44||
||||-37.17%|
|from financing activities||||
|Subtotal cash outflow for|1,706,544,798.97|3,013,073,639.22||
||||-43.36%|
|financing activities||||
|Net cash flow arising from|157,537,242.15|-46,090,808.78||
||||441.80%|
|financing activities||||
|Net increase in cash and cash|250,125,242.65|-11,912,069.25||
||||-2,199.76%|
|equivalents||||

Notes to the year-on-year change of the relevant data
√Applicable□ Not applicable
1. The inflow and outflow of operating cash declined from the previous year, which was due to the major asset restructuring leading to stripping motorcycle business and the sales scale of the company declined from the previous year.
2. The inflow and outflow of cash of investing activities declined, which was due to the major asset restructuring leading to stripping motorcycle business thus reduced the long term equity investment to Chongqing Jianya and Zhuzhou Jianya.
3. The net cash flow from financing activities increased, which was due to that thecompany’s controlling shareholder of Construction Electromechanical returned the funds of RMB 213.99 million occupied by the financial liabilities formed by the uncompleted transfer procedure in the process of the major asset restructuring. Notes to the big difference between cash flow from operating activities and net profit in the reporting year□Applicable√ Not applicable
III. Analysis of Non-core Business
√ Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|||Proportion in total|||
||Amount||Explanation of cause|Sustainable (yes or no)|
|||profit|||
||||On the joint venture||
|Investment incme|3,128,796.18|20.43%||Yes|
||||Pingshan Taikai investment||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||||income||
|Impairment of|||Provision for bad debts of||
||341,283.56|2.23%||No|
|assets|||accounts receivable||
|Non-operating|||||
||1,259,915.28|8.23%|Received government grants|No|
|income|||||
|Non-operating|||||
||1,959,872.08|12.80%||No|
|expenses|||||

Ⅳ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2016||End of 2015||Proportio||
|||Proportion in||Proportion in|n||
|||||||Notes to the significant change|
||Amount|the total|Amount|the total|increase/d||
|||assets(%)||assets(%)|ecrease||
||514,414,822.57||302,660,758.76||||
|Monetary fund||32.99%||19.52%|13.47%|Notes margin increase|
|Accounts|255,587,439.92||217,759,208.43||||
|||16.39%||14.04%|2.35%||
|receivable|||||||
||201,207,030.54||146,350,934.34||||
|Inventories||12.90%||9.44%|3.46%||
|Investment real|115,326,025.61|||||Rental housing divestiture from fixed|
|||7.40%|||7.40%||
|estate||||||assets, separate accounting|
|Long-term equity|83,178,112.31||83,381,316.13||||
|||5.33%||5.38%|-0.05%||
|investment|||||||
||325,843,861.71||395,975,005.27|||Rental housing divestiture from fixed|
|Fixed assets||20.90%||25.54%|-4.64%||
|||||||assets, separate accounting|
|Construction|2,438,832.43||40,435,429.90||||
|||0.16%||2.61%|-2.45%||
|inprocess|||||||
||224,500,000.00||217,000,000.00||||
|Short-term loans||14.40%||13.99%|0.41%||
||48,590,000.00||128,490,000.00|||Converted to non-current liabilities due|
|Long-term loans||3.12%||8.29%|-5.17%||
|||||||within one year|

2.Asset and Liabilities Measured by Fair Value
□Applicable√Not applicable
3. Restricted asset rights as of the end of this Reporting Period
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Not applicable
Ⅴ.Investment situation
1. General
√ Applicable□Not applicable
||||
|-|-|-|
|Investments made in the Reporting Period|||
||Investments made in the prior year (RMB)|Increase/Decrease(%)|
|（RMB）|||
|6,090,000.00|95,410,000.00|-93.62%|

 2.Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable√Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
√ Applicable□Not applicable
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Cumulati|||||Reasons|||
||||||ve||||Cumulat|of the|||
|||||Inveswt|||||||||
||||||amount||||ive|unreach|||
|||Fixed||ment|||||||||
||||||of||||income|ed|||
|Project|Invest|assets|Project|during||Source|Project|expected|||Disclosu|Disclosu|
||||||investme||||by the|project|||
|name|method|investme|industry|the||of funds|schedule|income|||re date|re Index|
||||||nt by the||||end of|progress|||
|||nt||reporting|||||||||
||||||end of||||reportin|and|||
|||||period|||||||||
||||||reporting||||g period|expecte|||
||||||period|||||d profit|||
|Technica||||||||||The|||
|l||||||||||project||See on|
|Renovati||||||||||has been||www.cni|
|on||||||||||fully put||nfo.com.|
|Project|||Automot|||||||into||cn|
|of|||ive Air|||||||operation||company|
|Automot|||Conditio|||Self-rais||||, is||announc|
||Self-cons|||6,090,00|90,900,0|||14,666,6|14,666,6||August||
|ive||Yes|n|||ed, Bank|100.00%|||expected||ement on|
||truction|||0.00|00.00|||00.00|00.00||5,2014||
|Rotary-v|||Compres|||Loan||||to put||August|
|ane Air|||sor|||||||into||4.2014,|
|Conditio|||Industry|||||||producti||Announc|
|n||||||||||on after||ement|
|Compres||||||||||the first||No.|
|sor||||||||||year of||2014-06|
|（New||||||||||producti|||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|500,000||||||||||on rate|||
|of||||||||||of 50%,|||
|Expendi||||||||||the|||
|ng||||||||||actual|||
|Capacity||||||||||yield of|||
|）||||||||||64.22%,|||
|||||||||||has|||
|||||||||||achieved|||
|||||||||||investme|||
|||||||||||nt|||
|||||||||||expectati|||
|||||||||||ons.|||
|||||6,090,00|90,900,0|||14,666,6|14,666,6||||
|Total|--|--|--|||--|--|||--|--|--|
|||||0.00|00.00|||00.00|00.00||||

4.Investment of Financial Asset
（1）Securities investment
□ Applicable√ Not applicable
No such cases in the Reporting Period
（2）Investment in Derivatives
□ Applicable√ Not applicable
No such cases in the Reporting Period
5.Application of the raised capital
□ Applicable√ Not applicable
No such cases in the Reporting Period
Ⅵ.Significant Asset and Right Offering
1.Situation of Significant Asset Sale
□ Applicable√ Not applicable
No such cases in the Reporting Period
2.Situation of Substantial Stake Sale
√ Applicable□ Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Proporti||||||||
|||||||on on of||||||||
|||||Net||||||||||
|||||||the net||||||||
|||||profits|||||||Whether|||
|||||||profits||||||||
|||||contribu|||||||execute|||
|||||||of the||||||||
|||||ted by||||||Whether|as|||
|||||||contribu||||||||
|||||the||||||the|schedul|||
|||||||ted||||||||
|||||equities||||||involve|ed and|||
||||||Influenc|amount||||||||
||||Transact|to the|||Pricing|Whether|Relation|d|if failed,|||
||||||e of the|of the||||||||
||||ion|listed|||princial|was the|ship|equities|should||Disclos|
|Counter|Sold|Sold|||selling|equities||||||Disclos||
||||price(R|compani|||es of the|related|with the|all|state the||ure|
|party|equities|date|||of the|selling||||||ure date||
||||MB’000|es from|||equities|transacti|conter|complet|reasons||Index|
||||||Compan|to the||||||||
||||0)|the|||selling|on|party|ed the|and the|||
||||||y|listed||||||||
|||||period-b||||||ownersh|adopted|||
|||||||compani||||||||
|||||egin to||||||ip|measure|||
|||||||es to the||||||||
|||||the sold||||||transfer|ments of|||
|||||||total||||||||
|||||date|||||||the|||
|||||||amo9un||||||||
|||||(RMB’0|||||||cmpany|||
|||||||t of the||||||||
|||||000)||||||||||
|||||||net||||||||
|||||||profits||||||||
||||||See||Accordi||||As of|||
||||||details||ng to||||Decemb|||
||||||in the||Zhuoxin||||er 31,|||
||||||“Revise||huada||||2016,||See|
||||||d Draft||Comme||||the||details|
||||||of the||nt||||compan||in|
||||||Report||(2015)||||y has||Section|
||||||(Draft)||NO.108||||well||5 Index|
||100%||||of||0||||fulfilled||of Other|
||share||||Signific||“Assess||||the||Signific|
|Military|rights of||||ant||ment||Controll||Agreem||ant|
|||||||||||||October||
|Equipm|Jianshe|August|||Asset||Report||ing||ent of||Related|
||||29.58|||||Yes||Yes||29,201||
|ent|Mechan|31,2015|||Sales||of||sharehol||Asset||Transact|
|||||||||||||5||
|Group|ical and||||and||Chongqi||der||and||ion of|
||Electric||||Related||ng||||Liability||16.Signi|
||||||Transact||Jianshe||||Injectio||ficant|
||||||ion ”pub||Motorcy||||n||Related|
||||||lished||cle Co.,||||Arrange||Transact|
||||||by the||Ltd’s||||ment||ion in|
||||||Compan||Planned||||that’s||Chapter|
||||||y||Transfer||||signed||5|
||||||Novemb||of||||by the|||
||||||er 11,||Chongqi||||compan|||
||||||2015.||ng||||y and|||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Jianshe|i|Jianshe|
|Mechan||Machin|
|ical and||ery.|
|Electric|||
|Co.,|||
|Ltd.’s|||
|Share|||
|Right|||
|Assess|||
|ment|||
|Items ”|||
|ssued by|||
|Zhuoxin|||
|huada,|||
|August|||
|31,|||
|2015 is|||
|taken as|||
|the|||
|assessm|||
|ent|||
|value of|||
|the|||
|assessm|||
|ent’s|||
|base|||
|date|||

Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable□ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over10% net profit influencing to the Company In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Sectors|Registered||||Operating||
||Company type|||Total assets|Net assets|Turnover||Net Profit|
|Name||engaged in|capital||||profit||
|Air||Manufacturin|||||||
|||g and sales of||1,189,557,67|250,941,169.|849,219,953.|12,516,222.1|10,527,761.2|
|Conditioner|Subsidiaries|auto|160,000,000||||||
|||||6.55|07|28|4|9|
|Co.||air-condition|||||||
|||ers|||||||
|||Domestic|||||||
|Shanghai||||13,426,170.3||14,652,907.3|||
|||sales of|16,000,000||2,490,379.07||1,657,499.32|895,210.15|
||Subsidiaries||||||||
|Jianshe||motorcycles||9||9|||
|||and parts|||||||
|Pingshan||Production|158758676|195,592,867.|169,751,249.|121,504,742.|7,946,444.23|6,613,730.25|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Taikai|Shareholding|and sales of|81|57|74|
||company|motorcycles||||
|||and parts||||

Acquirement and disposal of subsidiaries in the Reporting period
□ Applicable√ Not applicable
Notes
Ⅷ.Special purpose vehicle controlled by the Company
□ Applicable√ Not applicable
Ⅸ.Prospect for future development of the Company
1. The Development Trend of the Industry
In recent years,China’s automobile industry has been fast developed, and it has become an important pillar industry of the national economy. According to statistics and analysis by China Automobile Industry Association, the automobile industry continued to maintain the growth in 2106, and the production and sales respectively were 28.119 million and 28.028 million, a year-on-year increase of14.5% and13.7% respectively. Viewing from the law of industrial development stage of mature automobile market,China’s automobile market is entering the transition period from the fast growing period to saturation period, and the market will have a more flat growth. While, China's auto parts industry developed steadily in the same period, which not only brings opportunities for the automobile parts manufacturing enterprises, but also pushes the competition, thus making the enterprises face pressure ofR&D investment, product quality and competitiveness of core products and face the challenges of small space in reducing manufacturing costs and decline of product price.
The development of thecompany’s automobile air-conditioning compressor business has been closely following the pace of the automotive industry development, and since 2010, the sales of the product has got an average annual growth of11.85%, ranking top three in the industry. Upon the reliable technology sources, sophisticated manufacturing capabilities and many advantages such as high performance-price ratio, the company has established competitive advantages in the domestic independent brand automobile market.
2.Problems that the company is facing or potential risks
1. The policy impact on the automotive industry. In 2016, due to the main reasons of stimulus policies for the automobile industry, it realized a relatively high year-on-year growth of13.7%. However, in 2017, with the preferential car purchase tax rate narrowed to gradually fade out,it’s expected that the growth rate of the industry will slowly return to the normal level.
2. Pressure from the competition. With the flat growth of the automobile sales and the capacity release of the newly-completed plants of the main engine plants, the price competition of the main engine manufactures will transfer the costs pressure to the matching components companies, thus the competition in automotive industry chain will be further intensified.
3. The company once again faces the capacity bottleneck. In recent years, thecompany’s vehicle
air-conditioning compressor business has gained continuous annual growth as the automobile industry has been
well developed. In order to closely follow the market demand, the company has made twice capacity expansion
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 during that period, and thecompany’s capacity reached 2.36 million units by 2016, which already is the saturation capacity.
4. Risk of relying on single customer. Thecompany’s sales to thecompany’s top five customers accounted for59.7% of thecompany’s annual sales, so there was a large extent of relying on larger customers.
5. The uncertainties of overseas development environment will bring challenges for the overseas business breakthrough.
6, Competition risk brought by single product. The company's main product is rotary vane compressor, which is a small-type compressor, thus it does not have advantages in terms of B-class or above type vehicle.
3.
TheCompany’s development strategy
Facing the difficulties or problems brought by the above-said policies and factors of the industry and the company itself, the company will actively adapt to the demand of the automobile industry development and greatly promote the development in the automotive air conditioning industry to continue lead the market. Firstly, introduce new technology and new system, and establish the complete automotive thermal management system industry chain; secondly, explore new business filed, continuously optimize and improve rotary vane compressor and snatch the market share of new-energy automotive air conditioning market; thirdly, increase high-quality customers and expand overseas market, increase the sales scale and maintain the leading position in the industry; fourthly, build future-oriented technologies and product reserves.
4.The key work in 2017
For 2017, the company planned to realize the sales of 2.3 million air conditioning compressors and sales revenue of RMB 880 million. In order to achieve the business goal, the company will focus on the following works:
(1) Speed up the introduction of technology. The company will shape future-oriented advanced compressors (fixed/variable/electric), air conditioning systems, engine cooling systems and other product series, thus to establish a complete automotive thermal management system industry chain.
(2) Strengthen the strategic customer development and expand overseas market. Firstly, promote the realization of sales to potential large customers and realize the supply for the newly expanded market; secondly, soundly expand the electric market, ensure making breakthroughs in the electric passenger bus and get certain market share in the low-speed electric market.
(3) Strengthen the product development and the construction of core competence. Speed up the new projects development for Nissan, Geely, Great Wall and Changan etc; accelerate the engineering, industrialization and mass supply for electric compressors used for passenger bus and passenger automobile; focus on promoting the engineering of blade and rotor of aluminum compressor, realize the100% china-made of 96 aluminum compressor and form small batch production capacity; realize the low speed performance optimization of iron machine, carry out the market promotion of NVH optimized technology and strength the competitiveness of products.
(4)Strengthen the manufacturing capability and improve the management. Accelerate the use of social resources, implement the 0.3million capacity expansion and technical innovation, promote the end-product type supply for components and improve the operation quality of the assets. Comprehensively promote the advanced management methods and VA/VE activities, improve the product quality, and promote the enhancement of whole
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 industrial chain manufacturing capacity and improve the efficiency.
5. Financial demand and application plan for year 2017
To achieve the annual sales goal of the company, that the estimated funds demanded in the year of 2017 are RMB 870 million, of which the capital expenditures are RMB 10
million.
Mainly are small technical-improvement projects. The funds demand, which will combine the company's operating and financing environment, mainly relies on self-owned funds and bank loans etc to solve.
Ⅹ.Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Reception time|Way of reception|Types of visitors|Basic index|
||||Q: When will the Company issue the|
||||earnings pre-announcement? A: The|
|January 12,2016|By phone|Individual||
||||earnings pre-announcement of 2015 will|
||||be completed by the end of this month.|
||||Q:Has the implementation of the|
||||Company’s significant asset|
||||reorganization completed? A:Up to now,|
||||the Company has completed the changes|
||||procedure in registration of Jianshe|
|January 29,2016|By phone|Individual|Mechanical and Electrical and has|
||||received the deal payment from Military|
||||Equipment Group. The asset transfer and|
||||the transfer of creditor’s rights and|
||||liability related with this reorganization|
||||are being orderly promoted.|
||||Q: What’s the progress of CRSC’s|
||||application for exempting the tender|
||||offer obligation of Jianshe Mechanical|
||||and Electrical? A: On January 26, 2016,|
||||Jianshe Mechanical and Electrical|
||||received “Reply on Approving|
|February 1,2016|By phone|Individual|Exempting Chongqing Jianshe|
||||Mechanical and Electrical Co., Ltd.’s|
||||tender offer obligation of Chongqing|
||||Jianshe Motorcycle Co., Ltd.”from|
||||CSRC, see details at the announcement|
||||published by the Company on January|
||||29, 2016.|
|February 16,2016|By phone|Individual|Q: At this sales of significant asset, all|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||||motorcycle capital was offered for sales,||
||||but why Shangjian Jianshe was kept?||
||||A:At present, Shanghai Jianshe has||
||||engaged in the production and sales of||
||||moped, moreover, the Company has a||
||||plan of disposing the holding share rights||
||||of Shanghai Jianshe, thus which has not||
||||been included in the reorganization||
||||scope.||
||||Q:Is the company in the first quarter||
|April 11,2016|By phone|Individual|profitable? A: The company recently||
||||released results notice, so stay tuned||
||||Q: Why does the company did not||
||||disclose the sales announcement? A: The||
|May 5,2016|By phone|Individual|company production and sales||
||||information will be disclosed in the||
||||periodic reports.||
||||Q: What is the company's main||
||||business? A: After the company||
|July 28,2016|By phone|Individual|restructuring, the main business for the||
||||automotive air conditioning compressor||
||||production and sales..||
||||Q: Since many of the subordinate||
||||companies of Military Equipment Group||
||||are listed companies, so what’s the||
||||company’s mission in the future||
||||development strategy of Military||
||||Equipment Group||
||||? A: Military Equipment Group’s||
||||mission is to service the army and the||
|December 22,2016|Other|Individual|||
||||country, as well as to be a stronger||
||||enterprise to benefit the people. Our||
||||company has paid close attention the||
||||market and the industry development,||
||||and always strives to do a good job in||
||||operation, protecting the interests of||
||||shareholders and staff and improving the||
||||value of the company.||
||||Q: On November 18, 2016, Jianshe||
|||||, 2016, Jianshe|
||||Motorcycle B’ s Announcement on||
|November 22,2016|Other|Individual|Adjustment of Organizational Structure||
||||stated the newly established special||
||||machine workshop, and it said “it’s||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
|||||responsible for production of||
|||||swash-plate large displacement type||
|||||compressor and electric compressor”. A:||
|||||The swash-plate large displacement is a||
|||||kind of|automotive air conditioning|
|||||compressor. The oil pan assembly is a||
|||||component of automobile engine.||
|||||Q: What technology is led by the||
|||||company in the industry? A: automotive||
|||||air-conditioning compressor products.||
|||||After more than 20 years of introduction,||
|||||digestion, absorption and independent||
|||||innovation, the product is mature,||
|||||cost-effective and having||
|||||high-performance, and the rotary vane||
|||||compressor has a stable market share.||
|||||The advanced equipment which||
|||||introduced from countries including the||
|||||United States, Germany, Switzerland and||
|November 22,2016|Other||Individual|||
|||||Japan accounts for more than 80%,||
|||||enabling the company to have||
|||||sophisticated manufacturing capacity. In||
|||||the last two years, the company||
|||||increased the investment in technological||
|||||transformation, so the company has||
|||||realized the production and sales scale of||
|||||2.0 million per year, and the company||
|||||has made a comprehensive improvement||
|||||on on-line testing ability, quality testing||
|||||ability and R&D capability and||
|||||experimental capability.||
|||||Q: how about the salary and welfare of||
|||||the staff? A: The company strictly||
|||||conforms to the relevant provision of the||
|November 22,2016|Other||Individual|national labor employment system and||
|||||the company combined the industry||
|||||standards to set up the salary and welfare||
|||||level.||
|Reception times||29||||
|Reception agency amount||2||||
|Reception personal number||27||||
|Others||0||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|Whether to disclose, reveal or disclose non-public||
||Undisclosed and unacknowledged significant information.|
|material information||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policy during the reporting period
√ Applicable□ Not applicable
According to " notice of related matters about further implementation of the listed company's cash dividend ([2012] No. 37)"issued by China Securities Regulatory Commission.On July 26th, 2012,thecompany’s the sixth board of directors made some supplements and revisions about profit distribution policy stipulated in articles of association its seventh meeting,which confirms the specific policies in terms of profit allocation forms, specific conditions and proportion of dividend distributions and using principles of undistributed profits,and commits deliberation and permission of first extraordinary general meeting in 2012,convened on August 30, 2012. Board of directors maps out the annual per-arranged planning about distribution of profits,which conforms to the regulations of articles of association under the consent issued by independent director.Per-arranged planning about distribution of profits that has been examined and approved by thecompany’s general meeting of shareholders has been already completed by board of directors.
|||
|-|-|
|Special cash dividend policy description||
|Whether meets the requirements of the provisions of the articles||
||Yes|
|of association or shareholders' meeting resolutions:||
|Whether dividends standard and proportion are clear|Yes|
|Whether decision making and supervision mechanism for profit||
||Yes|
|distribution are completed||
|Whether independent directors perform their duties responsibly||
||Yes|
|and play its due role:||
|Whether the Minority shareholders have adequate opportunity to||
|express their views and aspirations and Their legitimate rights|Yes|
|and interests have been fully protected||
|Whether the Cash dividend policy to adjust or change the||
||Yes|
|conditions and procedures are compliant and transparent||

The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the past three years(with the reporting period inclusive):
As the accumulated undistributed profits are under the standard during the year of 2014 and 2016, the company has never carried out the policies of increasing capital stock by profit allocation and capital accumulation funds.
Dividend distribution of the latest three years
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit||||
||||Ratio in net profit|||
|||attributable to the||Amount of cash|Proportion of cash|
||||attributable to the|||
||Cash dividend|over of the parent||dividends from cash|dividends from cash|
|Year|||parent company in|||
||(Including Tax)|company in the||offer to repurchase|offer to repurchase|
||||the consolidated|||
|||consolidated||shares of the funds|shares of the funds|
||||financial statements|||
|||financial statements||||
|2016|0.00|12,267,006.14|0.00%|0.00|0.00%|
|2015|0.00|240,735,112.20|0.00%|0.00|0.00%|
|2014|0.00|-133,593,949.98|0.00%|0.00|0.00%|

 In the reporting period, both theCompany’s profit and the parentcompany’s retained earnings were positive however not cash dividend distribution proposal has been put forward.
√ Applicable□ Not applicable
|||
|-|-|
|In the reporting period, it was profitable and the profits||
|distributed among common shareholders were positive, but the|Purpose of and plans to use undistributed profits.|
|reason for the profit-sharing scheme by cash was not proposed.||
||Net operating profits after tax are used to less prior year|
|Accumulated undistributed profits are all under the standard||
||deficiency this current year.|

II.Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. III.Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities.
√ Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||||Time of|||
||Commitment||||Peiod of||
|Commitment||Type|Contents|making||Fulfillment|
||maker||||commitment||
|||||commitment|||
|Commitment on share reform|||||||
|Commitment in the acquisition report|||||||
|or the report on equity changes|||||||
||Jianshe|Commitments|The reason|||As of|
|Commitment made upon the assets|Mechanical|on horizontal|why listed|October 20,|To July|December 31,|
|replacement|and Electric,|competition,|companies|2015|24,2017|2016, the|
||Air-conditione|related|offer external|||above-mentio|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|r Co|transaction|guarantee is|ned|
||and capital|that the|borrowings|
||occupation|conditioning|have been|
|||company,as|actually|
|||the subsidiary|repaid by|
|||corporation of|Jianshe|
|||Jianshe stock ,|Machinery|
|||provided|thus the|
|||credit|corresponding|
|||guarantee 186|guarantee|
|||million yuan|liability has|
|||for its parent|been lifted.|
|||company’|For undue|
|||bank loan.|bank loans,|
|||And as the|the repayment|
|||relevant|has also been|
|||liabilities of|made in|
|||Jianshe|advance by|
|||stock’s|Jianshe|
|||motorbike|Mechanical|
|||business has|and Electric|
|||been|and at this|
|||transferred|point, the|
|||into Jianshe|borrowings|
|||Mechanical|under the|
|||and|guarantee|
|||Electrical ,|have been|
|||corresponding|repaid and the|
|||secured party|corresponding|
|||should be|guarantee|
|||Jianshe|liability has|
|||Mechanical|been|
|||and|eliminated.|
|||Electrical .Mo|The Sales|
|||reover,Jianshe|Company’s|
|||Stock|loans from|
|||provided|Shanghai|
|||credit|Pudong|
|||guarantee 30|Development|
|||million yuan|Bank loan|
|||for the|have been|
|||wholly-owned|paid off, thus|
|||subsidiary,the|he|
|||sales|corresponding|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|company,after|guarantee has|
|this|been lifted.|
|transaction,||
|Jianshe||
|Mechanical||
|and||
|Electrical ,wh||
|ose’ sales||
|company is||
|subsidiary||
|corporation of||
|Construction||
|and||
|Mechanical||
|and||
|Electrical ,||
|will be||
|wholly-owned||
|subsidiaries||
|under Military||
|Equipment||
|Group||
|control.Above||
|-mentioned||
|the guarantees||
|formed the||
|external||
|guarantees of||
|the||
|conditioning||
|company,||
|which has||
|gained the||
|permission||
|from the||
|company’s||
|general||
|meeting of||
|stockholders.||
|Jianshe stock||
|and the||
|conditioning||
|company has||
|made promise||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||
|-|
|respectively|
|on October|
|20, 2015,after|
|guarantee|
|expires in the|
|guarantee|
|period, above|
|financing|
|guarantee will|
|be lifted . For|
|the Jianshe|
|stock’s|
|guarantee for|
|the sales|
|company,|
|Mechanical|
|and Electrical|
|has promised|
|that it will|
|ensure the|
|debtor to|
|repay its|
|creditors to|
|protect listed|
|company’s|
|legal interests,|
|and if there|
|are any loss|
|for the listed|
|company,Jians|
|hed|
|Mechanical|
|and Electrical|
|will give first|
|dollar|
|coverage for|
|Jianshe stock.|
|And Jianshe|
|Mechanical|
|and Electrical|
|has presented|
|Commitment|
|to provide|
|counter|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
||guarantee|
||after the|
||reorganization|
||about above|
||related-party|
||guarantee.1,|
||after the sales|
||of substantial|
||assets and the|
||relevant|
||matters of|
||related-party|
||guarantee|
||provided by|
||Jianshe stock,|
||which has|
||been approved|
||by general|
||meeting of|
||stockholders|
||of Jianshe|
||stock the|
||company will|
||provide the|
||equal counter|
||guarantee for|
||Jianshe stock|
||2.If the|
||company|
||violates the|
||above pledge|
||and caused|
||any damages|
||or negative|
||effects for|
||Jianshe|
||stock,the|
||Company will|
||assume full|
||financial|
||responsibility|
||and liability.|
|Equity incentive commitment||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|Other commitments made to minority||
|shareholders||
|Executed timely or not?||
|If the commitments failed to complete||
|the execution when expired, should||
|specifically explain the reasons of|Yes|
|unfulfillment and the net stage of the||
|working plan||

2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still in the forecast period, the company has assets or projects meet the original profit forecast made and the reasons explained
□Applicable√ Not applicable
IV.Particulars about the non-operating occupation of funds by the controlling shareholder
√ Applicable□ Not applicable
InRMB’0000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||The total|||||
|||||The newly|amount of|||||
|Shareholder|||Amount at|||Amount at|Expected|Expected|Expected|
||Time|||increased|reimbursem|||||
|sorassociate||Reasons|the|||the end of|repayment|amountof|payback|
||occupied|||occupancy|ent in the|||||
|sname|||beginning|||period|method|payment|time(month)|
|||||amount|reimbursem|||||
||||||ent|||||
|Import andExport Co.|2015.12.31|Businessandfinancialdealings|62.17|0|62.17|0||||
|||||||||0||
|Jianshemechanicalandelectrical|2015.12.31|Financialdealings|3,461.67|0|3,461.67|0||||
|||||||||0||
|Jianshemechanicalandelectrical|2015.12.31|Financialdebtrestructuring process isnot yetcompletedtheproceduresfor|21,399.2|0|24,544.16|-3,144.96||||
|||||||||0||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||transferringformed||||||||||
|Total||24,923.04|0|28,068|-3,144.96|--|0||--||
|The end of the latest issue of the total|||||||||||
|value of accounts audited net assets||-11.72%|||||||||
|ratio|||||||||||
|Relevant decision-making procedures||Not applicable|||||||||
|||The company implemented the major asset restructuring in 2015, that is, the company|||||||||
|||stripped the main assets and liabilities involved by motorcycle business to Jianshe|||||||||
|||Mechanical and Electric. Because the work amount for the transfer of assets and liabilities|||||||||
|||involved in the major asset restructuring was relatively huge, as of the disclosure date of the|||||||||
|||company’s "2015 annual report", the total assets and liabilities have not been transferred|||||||||
|||were RMB 214 million, which was temporarily accounted as other receivables account.|||||||||
|Add the current major shareholder and|||||||||||
|||According to the stipulation of Agreement of Asset and Liability Injection Arrangement|||||||||
|its affiliated non-operating capital|||||||||||
|||signed by the company and Jianshe Mechanical and Electric (for details, pleases see the|||||||||
|occupation reasons, the case be held|||||||||||
|||relevant announcement about the major asset restructuring disclosed on||||||Cninfo||), both|
|responsible and the Board has|||||||||||
|||parties shall complete the transfer of the assets and liabilities no later than December 31,|||||||||
|developed a description of measures|||||||||||
|||2016, and the afore-said liabilities are undue liabilities, the company does not need to make|||||||||
|taken.|||||||||||
|||repayment and the financial institutions have not pressed for repayment, thus not formed the|||||||||
|||fund flow, and there is no situation that the company acting on behalf of Jianshe|||||||||
|||Mechanical and Electric to pay for the liabilities, so the accounting treatment does not|||||||||
|||constitute a substantial non-operating funds occupation to Jianshe Mechanical and Electric.|||||||||
|||As of December 31, 2016, the company has completed the transfer of liabilities, thus the|||||||||
|||above-said funds occupation has been lifted.|||||||||
|Failed to explain measures planned|||||||||||
|liquidation of non-operating capital|||||||||||
|occupation reasons, conditions and||Not applicable|||||||||
|accountability of the Board of|||||||||||
|Directors proposed action|||||||||||
|Disclosure date for specific approval|||||||||||
|||April 28,2017|||||||||
|opinion on fund occupation from CPA|||||||||||
|||Refer to www.cninfo.com.cn on April 28, 2017, Announcement No. 2017-031 ,Chongqing|||||||||
|Disclosure index for specific approval|||||||||||
|||Jianshe Motorcycle Co., Ltd. the Statement of Special Auditing on Capital Appropriation by|||||||||
|opinion on fund occupation from CPA|||||||||||
|||Holding Shareholder or Related Parties|||||||||

V.Explanation of the Supervisory Committee and Independent Directors (If applicable)on the QualifiedAuditor’s Report Issued by the CPAs.
□ Applicable√ Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 VI.Explain change of the accounting policy, accounting estimate and measurement methods as compared with the financial reporting of last year.
√Applicable□ Not applicable
1. Changes in significant accounting policy
Implementation of VAT Accounting Treatment
On December 3, 2016, Ministry of Finance issued the "VAT Accounting Treatment" (No.22-[2016] Accounting), which is applicable to the relevant transactions occurred from May 1, 2016. The main impact of thecompany’s implementation of the provision is as follows:
|||
|-|-|
|The contents and reasons of accounting policychanges|Approval procedure|
|(1) The “Business taxes and surcharges” in theprofit statement is adjusted to be “Taxes andsurcharges” item.|National uniformaccounting systemchanges|
|2) The property tax, land use tax, vehicle andvessel usage tax and tamp tax incurred from thebusiness activities since May 1, 2016 arereclassified into “Taxes and surcharges” item fromthe previous “management fees" item, but suchtaxes occurred before May 1, 2016 will not beadjusted. And The comparative data will not beadjusted.|National uniformaccounting systemchanges|

2. Changes in significant accounting estimates
There are no changes in significant accounting estimates for the company in the current year.
VII.Explain retrospective restatement due to correction of significant accounting errors in the reporting period
□Applicable√ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII.Explain change of the consolidation scope as compared with the financial reporting of last year.□Applicable√ Not applicable
Nil
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
|Domestic CPA|BDO China Shu Lun Pan Certified Public Accountants LLP|
|Reward for domestic CPA (RMB0’000)|40|
|Successive years the domestic CPA has been|5 years|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|providing service to the Company||
|Name of CPAs from the domestic CPA firm|Li Shunli ,Chen Jia|

Has the CPAs been changed in the current period
□ Yes√ No
Description of the CPAs, financial adiver or sponsor engaged for intemal control auditing
√Applicable□Not applicable
1.The Company paid RMB200 thousand to BDO China Shu Lun Pan Certified Public Accountants LLP for its internal auditing service of oneyear.’
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report□Applicable√ Not applicable
XI.Bankruptcy reorganization
□Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII.Significant lawsuits and arbitrations of the Company
□Applicable√ Not applicable
Nil
XIII.Situation of Punishment and Rectification
□Applicable√ Not applicable
Nil
XIV.Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□Applicable√ Not applicable
XV.Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or Other Employee Incentive Measures
□Applicable√ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives that have not been implemented.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 XVI.Material related transactions
1. Related transactions in connection with daily operation
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whethe|||||
|||||||||Trading|r over|||||
|||||Principl||||limit|the|||||
||||||||||||Market||Index|
||||Subjects|e of||||||||||
|||||||Amount||approve|approve||price of||of|
||||of the|pricing|||Ratio in|||Way of||Date of||
|Related|Relation|Type of|||Price of|of trade|||||similar||informa|
||||related|the|||similar|||paymen||disclosu||
|parties|ship|trade|||trade|RMB0’||d|d||trade||tion|
||||transacti|related|||trades|||t||re||
|||||||000|||||availabl||disclos|
||||ons|transacti||||||||||
|||||||||（RMB|limited||e||ure|
|||||ons||||||||||
|||||||||’0000）|or not|||||
||||||||||(Y/N)|||||
||||||||||||||See|
||||||||||||||details|
||||||||||||||in the|
||||||||||||||compan|
||||||||||||||y’s|
||||||||||||||announ|
||||||||||||||cement|
||||||||||||||publish|
||||||||||||||ed on|
||||||||||||||securiti|
||||||||||||||es|
||||||||||||||times,|
||||||||||||||Hongko|
||Controll|||||||||||||
|Jianxing||Purchas||Fair||||||||October|ng|
||ing|||||||||||||
|Machiner||e of|Spare|Market|3,106|3,106|6.23%|4,000|No|Cash|3,106|31,201|Comme|
||sharehol||parts|||||||||||
|y||goods||Price||||||||6|rcial|
||der|||||||||||||
||||||||||||||daily|
||||||||||||||and|
||||||||||||||http//w|
||||||||||||||ww.cni|
||||||||||||||nfo.co|
||||||||||||||m.cn|
||||||||||||||on|
||||||||||||||April|
||||||||||||||30,2016|
||||||||||||||and|
||||||||||||||October|
||||||||||||||31,2016|
||||||||||||||(Annou|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||ncemen|
||||||||||||||t|
||||||||||||||No.:201|
||||||||||||||6-027a|
||||||||||||||nd|
||||||||||||||2016-0|
||||||||||||||71).|
||Subsidia|||||||||||||
||ry of the||||||||||||The|
|North||Purchas||Fair||||||||October||
||controlli||Spare||||||||||same as|
|Import &||e of||Market|5,759|5,759|11.54%|7,300|No|Cash|5,759|31,201||
||ng||parts||||||||||above|
|export||goods||Pric||||||||6||
||sharehol|||||||||||||
||der|||||||||||||
||Controll||||||||||||The|
|Jianxing||Purchas|Lease|Fair||||||||October||
||ing||||||100.00||||||same as|
|Machiner||e of|producti|Market|226|226||250|No|Cash|226|31,201||
||sharehol||||||%||||||above|
|y||goods|on site|Pric||||||||6||
||der|||||||||||||
|China||||||||||||||
||||||||||||||The|
|Changan|Under||Sales of|Fair||||||||October||
|||Sales of|||||||||||same as|
|and|same||finished|Market|26,449|26,449|30.29%|31,747|No|Cash|26,449|31,201||
|||goods|||||||||||above|
|subsidiari|control||parts|Pric||||||||6||
|es||||||||||||||
||Controll||||||||||||The|
|Jianxing||||Fair||||||||||
||ing|Sales of|Warehou||||100.00|||||October|same as|
|Machiner||||Market|929|929||1,000|No|Cash|929|||
||sharehol|goods|se rental||||%|||||31,2016|above|
|y||||Pric||||||||||
||der|||||||||||||
||||||||||||||The|
||Under|||Fair||||||||||
|Jianshe|||Spare|||||||||October|same as|
||same|Services||Market|190|190|0.38%|200|No|Cash|190|||
|Industry|||parts|||||||||31,2016|above|
||control|||Pric||||||||||
||Joint|||||||||||||
||venture|||||||||||||
||||||||||||||The|
||of|||Fair||||||||||
|Chongqin|||Spare|||||||||October|same as|
||controlli|Services||Market|0.4|0.4|0.00%|5|No|Cash|0.4|||
|g Jianya|||parts|||||||||31,2016|above|
||ng|||Pric||||||||||
||sharehol|||||||||||||
||der|||||||||||||
||Joint|||||||||||||
||||||||||||||The|
|||||Fair||||||||October||
||venture|||||||||||||
||||Transpor||||||||||same as|
|Fuyeda|of|Services||Market|49|49|0.10%|0|Yes|Cash|49|30,201||
||||tion||||||||||above|
||controlli|||Pric||||||||6||
||ng|||||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||sharehol|||||||||||||
||der|||||||||||||
|China||||||||||||||
||||Accepta||||||||||The|
|Changan|Under|||Fair||||||||October||
||||nce of||||||||||same as|
|and|same|Services||Market|366|366|0.73%|450|No|Cash|366|31,201||
||||repairin||||||||||above|
|subsidiari|control|||Pric||||||||6||
||||g service|||||||||||
|es||||||||||||||
|||||||37,074.||||||||
|Total||||--|--||--|44,952|--|--|--|--|--|
|||||||4||||||||
|Details of any sales return of a large||||||||||||||
|||||Nil||||||||||
|amount||||||||||||||
|||||Upon the approval by the company's 2015 annual shareholders' meeting, the estimated total||||||||||
|||||amount of the daily related transactions for 2016 is RMB 388.12 million(For details, please||||||||||
|Give the actual situation in the report||||||||||||||
|||||see the announcement on April 30, 2016, with Announcement No.: 2016-027). According||||||||||
|period where a forecast had been||||||||||||||
|||||to the operation situation in 2016, upon the approval by the fourteenth meeting of the||||||||||
|made for the total amounts of routine||||||||||||||
|||||seventh session board of directors, the increase of the estimated amount of the daily related||||||||||
|related-party transactions by type to||||||||||||||
|||||transactions for 2016 is RMB 77.5 million. After the increase, the total amount of the daily||||||||||
|occur in the current period(if any)||||||||||||||
|||||related transactions for 2016 is expected not to exceed RMB 465.62 million. As of||||||||||
|||||December 31, 2017, the actual amount occurred was RMB 370.744 million.||||||||||
|Reason for any significant difference||||||||||||||
|between the transaction price and the||||Not applicable||||||||||
|market refernce price (if applicable)||||||||||||||

2. Related-party transactions arising from asset acquisition or sold
□Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable√ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4.Contact ofrelated credit and debt
√ Applicable□Not applicable
Whether there is non operating related debt and debt
√ Yes□No
Claim eceivable from related party
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Whether|Balance at|Current|Current||Current|Balance at|
|Related|Relationshi|||||||||
|||Causes|hasnon-busi|period-begi|newly|recovery|Interest rate|interest|period-end|
|party|p|||||||||
||||ness capital|n|added|RMB’0000||RMB’0000|RMB’0000|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
||||occupying|RMB’0000|RMB’0000|||
||||or not|||||
||Subsidiary|Business||||||
|Import||||||||
||of the|and||||||
|&export|||Yes|62.17|0|62.17|0|
||controlling|financial||||||
|Company||||||||
||shareholder|dealings||||||
|Jianshe||||||||
|Mechanical||||||||
||controlling|Financial||||||
|and|||Yes|3,461.67|0|3,461.67|0|
||shareholder|dealings||||||
|electrical||||||||
|Co.||||||||
|||Financial||||||
|||debt||||||
|||restructurin||||||
|Jianshe||g process is||||||
|Mechanical||not yet||||||
||controlling|||||||
|and||completed|Yes|21,399.2|0|24,544.16|-3,144.96|
||shareholder|||||||
|electrical||the||||||
|Co.||procedures||||||
|||for||||||
|||transferring||||||
|||formed.||||||
|||Jianshe Mechanical and Electric and import and export companies Other receivables, the total is RMB||||||
|||35.238 million business and financial dealings is established after the Jianshe Mechanical and Electric to||||||
|Influence on business||equity settlement date between December 31, 2015 the Company and Jianshe Mechanical and Electric,||||||
|performance and||import and export companies occurred, which by the construction was repaid in full in cash||||||
|financial status of the||electromechanical April 26, 2016; the Jianshe Mechanical and Electric and Mechanical company's other||||||
|Company from related||receivables RMB213.992 million original controlling shareholder of the company's current military||||||
|liabilities||equipment group to sell major assets motorcycle business 100% stake in the Jianshe Mechanical and||||||
|||Electric the major asset restructuring, the financial debt is not yet completed procedures for the transfer of||||||
|||accounts under the process for the formation of capital transactions.||||||

Debts payable to related party
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Balance|Current|Current|||Balance at|
|||||||Interest|Current interest||
|Related party|Relationship|Causes|atperiod-begi|newly added|recovery|||period-end|
|||||||rate|RMB’0000||
||||n RMB’0000|RMB’0000|RMB’0000|||RMB’0000|

 5. Other significant related-party transactions
√Applicable□Not applicable
The company implemented a momentous asset restructuring this year, not only to improve assets quality and
profitability, but also safeguard the interests of shareholders, especially the minority shareholders. Under the sale
agreement with the Bingzhuang Group Corporation, the company took August 31, 2015 as the base date to sell the
100% stock equity of Jianshe Mechanical and Electric Corporation.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 According to Agreement of Asset and Liability Injection Arrangement which was signed by the company and Jianshe Mechanical and Electric
and based on the resolution of seventh meeting of the seventh session board of directors to contribute funds to set up Jianshe Mechanical and Electric
(namely the company uses the assets and liabilities related to the motorcycle business to fund and set up the wholly-owned subsidiary- Jianshe Mechanical and
Electric), as of December 31, 2016, the company has properly fulfilled the Agreement of Asset and Liability Injection Arrangement, thus the transaction of the major asset has been completed. The independent financial adviser CITIC has issued CITIC Independent FinancialAdvisor’s Reviewing Opinion on the Implementation Status of Chongqing Jianshe MotorcycleCo.,Ltd’s Major Asset Sales and the Related Transaction, and Chongqing Suotong Law firm issued the Chongqing Suotong LawFirm’s Legal Opinion (Two) on the Implementation Status of Chongqing Jianshe MotorcycleCo.,Ltd’s Major Asset Sales and the Related Transaction.
For details, please refer to the company announcements published on Securities Times, Hong Kong Commercial Daily, and the Cninfo Network (cninfo.com.cn).
Website for temporary disclosure of the connected transaction
||||
|-|-|-|
|Announcement|Date of disclosure|Website for disclosure|
|Announcement of 7th meeting of the seventhboard of directors||http//www.cninfo.com.cn. Announcement|
||August 29,2015||
|||2015-0054|
|Announcement on the establishment of thewholly-owned subsidiary||http//www.cninfo.com.cn. Announcement|
||August 29,2015||
|||2015-059|
|nnouncement of 8th meeting of the seventhboard of directors||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-080|
|Plan on the Company’s Significant Asset Salesand Related Transaction||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-082|
|Announcement on the “Asset SalesAgreement” with Valid Condition Signed bythe Company|||
|||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-083|
|The Report of Significant Asset Sales andRelated Transaction(Draft)||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-084|
|Summary (Draft) of the Report of SignificantAsset Sales and Related Transaction||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-085|
|Independent Financial Adviser Report ofChina Securities Co, Ltd. on ChongqingJianshe Motorcycle Co., Ltd.’s SignificantAsset Sales and Related Transaction|||
|||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-086|
|Commitment on the Relevant Issues ofSignificant Asset Sales||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-089|
|Audit Report and Proforma FinancialStatement of Chongqing Jianshe MotorcycleCo., Ltd.|||
|||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-092|
|Assessment Report of Chongqing Jianshe|October 29,2015|http//www.cninfo.com.cn. Announcement|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Motorcycle Co., Ltd’s Planned Transfer ofChongqing Jianshe Mechanical and ElectricCo., Ltd.’s Share Right Assessment Items||2015-094|
|Legal Opinion of Chongqing Solton & ParentsLaw Office on Chongqing Jianshe MotorcycleCo., Ltd.’s Significant Asset Sales and RelatedTransaction|||
|||http//www.cninfo.com.cn. Announcement|
||October 29,2015||
|||2015-098|
|Announcement on the Significant Asset Salesrelated with the Changes from InternalGuarantee to External Guarantee|||
|||http//www.cninfo.com.cn. Announcement|
||November 7,2015||
|||2015-104|
|Announcement on Disclosing the SignificantAsset Sales Report’s Revised Draft and theResumption of the Company’s Share|||
|||http//www.cninfo.com.cn. Announcement|
||November 11,2015||
|||2015-106|
|Written Reply on the Inquiry Letter ofReorganization||http//www.cninfo.com.cn. Announcement|
||November 11,2015||
|||2015-108|
|Revised Draft of the Significant Asset Salesand Related Transaction Report (Draft)||http//www.cninfo.com.cn. Announcement|
||November 11,2015||
|||2015-109|
|Summary’s Revised Draft of the SignificantAsset Sales and Related Transaction Report(Draft)|||
|||http//www.cninfo.com.cn. Announcement|
||November 11,2015||
|||2015-110|
|Announcement of Resolutions of the firstprovisional shareholders’ general meeeting||http//www.cninfo.com.cn. Announcement|
||November 18,2015||
|||2015-114|
|Announcement about the progress in theimplementation of the major assetrestructuring (Completed the change ofbusiness registration)|||
|||http//www.cninfo.com.cn. Announcement|
||December 9,2015||
|||2015-117|
|Announcement about the progress in theimplementation of the major assetrestructuring( Received transaction payment)|||
|||http//www.cninfo.com.cn. Announcement|
||December 11,2015||
|||2015-118|
|CITIC’s continuous supervision report of 2015for the Implementation Status of ChongqingJianshe Motorcycle Co.,Ltd’s Major AssetSales and the Related Transaction|||
|||http//www.cninfo.com.cn. Announcement|
||May 4,2016||
|||2016-048|
|Announcement about the progress in theimplementation of the major assetrestructuring( completion status of the transferof assets and liabilities and the placement ofworkers)|||
|||http//www.cninfo.com.cn. Announcement|
||December 31,2016||
|||2016-083|
|Announcement on commitments related to themajor asset restructuring||http//www.cninfo.com.cn. Announcement|
||January 10,2017||
|||2017-001|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
|Suggestive Announcement on theimplementation of the Major Asset Sales andthe Related Transaction|||
|||http//www.cninfo.com.cn. Announcement|
||January 10,2017||
|||2017-002|
|Report on the implementation of the majorasset sales and the related transaction||http//www.cninfo.com.cn. Announcement|
||January 10,2017||
|||2017-003|
|CITIC Independent Financial Advisor’sReviewing Opinion on the ImplementationStatus of Chongqing Jianshe MotorcycleCo.,Ltd’s Major Asset Sales and the RelatedTransaction|||
|||http//www.cninfo.com.cn. Announcement|
||January 10,2017||
|||2017-004|
|Chongqing Suotong Law Firm’s LegalOpinion on the Implementation Status ofChongqing Jianshe Motorcycle Co.,Ltd’sMajor Asset Sales and the Related Transaction|||
|||http//www.cninfo.com.cn. Announcement|
||January 10,2017||
|||2017-005|

XVII.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable√ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable√ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
□Applicable√ Not applicable
No any lease for the Company in the reporting period..
2.Guarantees
√Applicable□Not applicable
（1）Guarantees
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)|||||||||
|Guarantee provided to|Amount of|Amount of|Actual date of|Actual|Type of|Term|Complete|Related|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||guarantee|the|occurring|amount of|guarantee||d or not|guarantee|
||and date of|guarantee|(signing date of|guarantee|||||
||disclosure||agreements||||||
||November||||Joint||||
|Sales Co.||3,000|July 1,2015|3,000||9 months|Yes|Yes|
||7,2015||||liabilities||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||2,000|March 31,2014|2,000||30 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||2,000|April 13,2014|2,000||29 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||200|July 25,2014|200||31 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||2,100|March 31,2014|2,100||37 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||2,100|April 14,2014|2,100||36 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|Jianshe Mechanical|||||||||
|and Electric(The|November||||Joint||||
|||300|July 25,2014|300||37 months|Yes|Yes|
|original Jianmo B of|7,2015||||liabilities||||
|the transfer of loans ）|||||||||
|||||Total of external guarantee|||||
|Total of external guarantee||43,600||||0|||
|||||actually occurred in the|||||
|approved in the report term (A1)|||||||||
|||||report term (A2)|||||
|Total of external guarantee||||Total of external guarantee|||||
|||43,600||||0|||
|approved as of end of report term||||actually occurred as of end|||||
|(A3)||||of report term (A4)|||||
|Guarantee of the company for its subsidiaries|||||||||
||Amount of||Actual date of||||||
|||Amount of||Actual|||||
||guarantee||occurring||Type of||Complete|Related|
|Guarantee provided to||the||amount of||Term|||
||and date of||(signing date of||guarantee||d or not|guarantee|
|||guarantee||guarantee|||||
||disclosure||agreements||||||
||April||||Joint||||
|||7,000|February 4,2015|7,000||12 montss|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||4,000|June 1,2015|4,000||9 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April|2,000|August 31,2015|2,000|Joint|6 months|Yes|No|
|Vehicle air conditioner|||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||30,2016||||liabilities||||
||April||||Joint||||
|Jianmo B||100|April 12,2014|100||23 months|Yes|No|
||30,2016||||liabilities||||
||April||||Joint||||
|Jianmo B||100|March 31,2014|100||23 months|Yes|No|
||30,2016||||liabilities||||
||April||September||Joint||||
|Jianmo B||2,500||2,500||6 months|Yes|No|
||30,2016||24,2015||liabilities||||
||April||September||Joint||||
|Jianmo B||2,500||2,500||6 months|Yes|No|
||30,2016||29,2015||liabilities||||
||April||||Joint||||
|||2,450|October 8,2015|2,450||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,849|October 10,2015|2,849||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,000|October 19,2015|2,000||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||November||Joint||||
|||2,800||2,800||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||12,2015||liabilities||||
||April||November||Joint||||
|||2,550||2,550||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||17,2015||liabilities||||
||April||||Joint||||
|Jianmo B||2,400|May 22,2013|2,400||37 months|Yes|No|
||30,2016||||liabilities||||
||April||December||Joint||||
|||2,500||2,500||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||24,2015||liabilities||||
||April||December||Joint||||
|||2,500||2,500||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||25,2015||liabilities||||
||April||||Joint||||
|||1,701|January 4,2016|1,701||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,450|January 13,2016|2,450||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|Jianmo B||50|July 25,2014|50||24 months|Yes|No|
||30,2016||||liabilities||||
||April||February||Joint||||
|||2,000||2,000||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||22,2016||liabilities||||
||April||September||Joint||||
|||3,000||3,000||12 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||25,2015||liabilities||||
||April||||Joint||||
|||2,450|April 8,2016|2,450||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,849|April 12,2016|2,849||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||April||||Joint||||
|||1,200|October 30,2015|1,200||12 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||November||Joint||||
|||3,000||3,000||12 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||4,2015||liabilities||||
||April||November||Joint||||
|||3,000||3,000||12 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||6,2015||liabilities||||
||April||||Joint||||
|||1,120|May 16,2016|1,120||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||1,430|May 18,2016|1,430||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,500|June 3,2016|2,500||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,500|June 8,2016|2,500||6 months|Yes|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||3,500|February 3,2016|3,500||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||3,500|February 4,2016|3,500||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||February||Joint||||
|||3,500||3,500||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||16,2016||liabilities||||
||April||February||Joint||||
|||3,500||3,500||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||18,2016||liabilities||||
||April||||Joint||||
|||2,800|May 12,2016|2,800||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||1,700|July 4,2016|1,700||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||September||Joint||||
|||3,000||3,000||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||21,2016||liabilities||||
||April||||Joint||||
|||3,000|October 8,2016|3,000||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,450|October 10,2016|2,450||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||2,850|October 13,2016|2,850||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||||Joint||||
|||4,200|October 17,2016|4,200||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||||liabilities||||
||April||December||Joint||||
|||5,000||5,000||12 months|No|No|
|Vehicle air conditioner|||||||||
||30,2016||5,2016||liabilities||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Total of guarantee to|||||
|Total of guarantee to subsidiaries||92,000||subsidiaries actually||58,000|||
|approved in the report term (B1)||||occurred in the report term|||||
|||||(B2)|||||
|||||Total of balance of|||||
|Total of guarantee to subsidiaries||92,000||guarantee actually provided||39,000|||
|approved as of the report term (B3)||||to the subsidiaries as of end|||||
|||||of report term (B4)|||||
|Guarantee of the subsidiaries for the controlling subsidiaries|||||||||
||Amount of||Actual date of||||||
|||Amount of||Actual|||||
||guarantee||occurring||Type of||Complete|Related|
|Guarantee provided to||the||amount of||Term|||
||and date of||(signing date of||guarantee||d or not|guarantee|
|||guarantee||guarantee|||||
||disclosure||agreements||||||
|||||Total amount of guarantee|||||
|Total guarantee quota to the|||||||||
|||||to the subsidiaries actually|||||
|subsidiaries approved in the||0||||0|||
|||||incurred in the reporting|||||
|reporting period (C1)|||||||||
|||||period (C2)|||||
|||||）otal balance of actual|||||
|Total guarantee quota to the|||||||||
|||||guarantee to the|||||
|subsidiaries approved at the end of||0||||0|||
|||||subsidiaries at the end of|||||
|the reporting period (C3)|||||||||
|||||the reporting period (C4)|||||
|The Company’s total guarantee(i.e.total of the first three main items)|||||||||
|||||Total amount of guarantee|||||
|Total guarantee quota approved in||||actually incurred in the|||||
|||135,600||||58,000|||
|the reportingperiod（A1+B1+C1）||||reporting period|||||
|||||（A2+B2+C2）|||||
|||||Total balance of the actual|||||
|Total guarantee quota already|||||||||
|||||guarantee at the end of the|||||
|approved at theendof the||135,600||||39,000|||
|||||reporting period|||||
|reporting period（A3+B3+C3）|||||||||
|||||（A4+B4+C4）|||||
|The proportion of the total amount of actually guarantee in the|||||||||
|||||145.31%|||||
|netassetsof the Company (that is A4+B4+C4）%|||||||||
|Including：|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|associated parties（D）|||||||||
|The debts guarantee amount provided for the|||||||||
|Guaranteed parties whose assets-liability ratio exceed||||39,000|||||
|70% directly or indirectly（E）|||||||||
|Proportion of total amount of guarantee in net assets of the|||||||||
|||||25,580.85|||||
|company exceed 50%（F）|||||||||
|Total guarantee Amount of the abovementioned guarantees|||||||||
|||||39,000|||||
|（D+E+F）|||||||||
|Explanations about joint and several liability for repayment in||||Nil|||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|respect of undue guarantee(if any)||
|Explanation about external guarantee violating established||
||Nil|
|procedure if any）||

Description of the guarantee with complex method
(2) Illegal providing of external guarantees
□ Applicable√ Not applicable
No illegal providing of external guarantees in the report period.
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
□ Applicable√ Not applicable
Nil
(2)Situation of Entrusted Loans
□ Applicable√ Not applicable
Nil
4. Other significant contract
□ Applicable√ Not applicable
Nil
XVIII.Social responsibilities
1.Overview of the annual targeted poverty alleviation
（1）Overview of the annual targeted poverty alleviation
Nil
（2）Information of the listedcompany’s annual work in targeted poverty alleviation
||||
|-|-|-|
|Index|Measurement unit|Quantity / Status|
|I. General situation|——|——|
|II.Itemized investment|——|——|
|1.Industrial development for getting rid of|||
||——|——|
|poverty|||
|2.Transferred to employment to get rid of|||
||——|——|
|poverty|||
|3.Relocation to get rid of poverty|——|——|
|4.Education to get rid of poverty|——|——|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
|5.Improving Health to get rid of poverty|——|——|
|6.Ecological protection to poverty alleviation|——|——|
|7.Bottom-line Safeguard|——|——|
|8.Social poverty alleviation|——|——|
|9.Other items|——|——|
|III.Awards (content, level)|——|——|

（3）Subsequent targeted poverty alleviation program
2. Information of performance of other social responsibilities
(I) Protection of Investors' Interests
1．The company had formed the decision-making, supervision and management system with the main structure composed of a shareholders meeting, board of directors, board of supervisors and management level since the listing, through constantly perfecting the governance structure abiding by the laws, regulations and rules, regulating corporate operation, and strengthening on internal control since . Meanwhile, company create conditions to attract the small and medium shareholders participating in the company's major decisions. During the reporting period, it provided investors with a combination of on-site voting and online voting to convene the 2015 Annual General Meeting, the shareholders attending the shareholders' meeting accounted for76.34% ofcompany’s valid voting shares. This fully protected all shareholders, enjoying equal status and exercising their rights, especially the small and medium shareholders.
2．The company is committed to building an active and healthy governance culture, focusing on investor relations. During the reporting period, the company has complied with the disclosure of information eighty-three times, provided investors with consulting twenty-one passengers in Chongqing jurisdiction listed company investor online collective reception day activities one time, responded to the eight-one questions from investors and the recovery rate of98.8%.
(II) Protection of Workers' Rights and Interests
1. Protect theEmployees’ Legitimate Rights and Interests According to Law
According to the Labor Law and Labor Contract Law and other laws and regulations, the Company has established a sound human resources management system including Labor Contract Management Measures, Salary Management System and Staff Training and Management Measures. In addition, the Company also has established and improved the compensation system, the appraisal system, the incentive mechanism and the employment mechanism. The company is based on the management system to ensure that employees enjoy the right to work and fulfill their obligations according to the law. The company adheres to the principle of legality, fairness, equality and voluntariness, to sign labor contracts with employees.
2. Strengthen the Intrinsic Safety, and Effectively Protect the Safety and Health of Employees
Setting up a safety technology system, laying the foundation for security and stability; Establish a two-level security fire problem database, further enhance the ability to troubleshoot; Improving the fire safety of performance evaluation system, and further enrich the fight against "three violations" means; Carrying out special security checks of oil and gas pipelines and dust explosion, electrical wiring, hazardous work safety and so on, so
that the security risks are managed; Carrying out safety education trainings for 10 times, training technical safety
personnel for 150 passengers. Through the efforts, the company achieved results : no death, serious injuries, minor
injuries in a whole year.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 3. Refine Training Management, Strengthen Training and Supervision
The company emphasized on employee skills training and completed 325 production operations staff / transfer training and evaluation, and grant them posts operating certificate (2 Technician , 13 Senior engineer); A total of 9 pairs of technical personnel mentoring is clearly decided, and then established mentoring contract to enhance the skills of training employees; In line with the company to rectify the improvement activities, a total of 412 staffs including training machine installation, assembly and testing, the training hours are up to 248 hours and the pass rate reached96%.
Further improve the basic training system. The company built skills training platform, formulated Using and Temporary Management Method for Skills Room, Completed the composition of Training Manual for Skill Room and it was used for eight times in a whole year; which provided a comprehensive training skills support for new employees; The company issued the Operational Guidance for Operator Operations, Organized and suppled the identification of assessment standards of the motor workers, adjust workers and maintenance jobs; The company modified and implemented the Training Procedures Documents and Management Approach of the Internal Trainer, improved the basic training system.
Continue to standardize and train daily management .The company organized and carried out the No.14 new staff training, job evaluation were carried out on 71 functional staffs ; Standardizing the company's external training, in accordance with the method of external training strictly to strengthen the management of external training , and signed an agreement on external training wih 9 foreign training personnel in the year. The effectiveness evaluation of the company's internal training was carried out in the form of on-site communication, examination and questionnaire, and the pass rate exceed90% ; The new staff training are carried out three level training and post assessment tracking management, training pass rate is up to94%, 667 employees received quality assessment totally, 22 new recruits (4 quit).
(III) Environmental Protection and Sustainable Development
The vehicle air-conditioning compressor production base has been strictly abiding by the national environmental laws and regulations since the relocation to the Jiulongpo Industrial Park in Jiulongpo District of Chongqing in 2007, it has been adhered to legitimate sewage and paid the sewage charges according to the law. The establishment of environmental management agencies ,enterprise environmental management system and on-site environmental management practices, no dripping water, running water, water leakage phenomenon, complete environmental protection archives, and strive to make contribution to environmental protection and ecological civilization work to Chongqing. The company was selected as "Environmental Protection Demonstration Enterprises" by Chongqing Jiulongpo.
1. Environmental Protection Facilities Investment Construction and Operation
(1)In 2007, the company invested 2.63 million yuan and built a sewage treatment station, which uses physical biochemical process technology and its processing capacity is 33 cubic meters / hour. The treated sewage is discharged to the municipal pipe network after reaching the first grade standard of GB8978-1996. The company has carried out a standardized rectification of the discharge of waste water, with environmentally friendly graphic signs, and installed with automatic online monitoring device.
(2)In 2008, the company invested 300,000 yuan in the new phosphate production line and built a set of acid mist exhaust gas purification facilities, which uses acid-base neutralization process to neutralize the hydrochloric acid mist, and the treated flue gas is discharged through the standardized sewage outlet discharge.
(3)In 2009, the company invested 200,000 yuan in the new spraying production line and built a set of sand gas purification facilities, which uses water washing and filtration treatment, and the treated flue gas emissions is discharged through the standardized sewage outlet discharge.
(4)In 2009, the company invested 500,000 yuan in the PTFE coating production line and built two sets of
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 purification facilities, which uses activated carbon adsorption treatment and the treated flue gas emissions is discharged through the standardized sewage outlet discharge.
(5)In 2009, the company invested 500,000 yuan in the chemical tinning line production line and built two sets of purification facilities, which uses acid-alkali neutralization process to treat the waste gas, and the treated flue gas emissions is discharged through the standardized sewage outlet discharge.
(6)In 2012, the company invested 300,000 yuan in the expansion phosphating production line and built a set of acid waste gas purification facilities, which uses neutralization process of hydrochloric acid mist neutralization treatment, and the treated flue gas emissions is discharged through the standardized sewage outlet discharge. (7)In 2016, according to the requirements of organic waste treatment Chongqing Environmental Protection Bureau, the company invested 200,000 yuan in the Teflon coating production line of the existing purification process, adding new purification process facilities to ensure organic waste gas treatment up to90% of the standard.
In the production process of hazardous waste, the company commissioned a special collection and disposal of qualified units responsible for recycling. The transfer was performed during the transfer of hazardous waste manifest, established the hazardous waste management ledger, built a temporary capacity of 30 cubic meters of hazardous waste, and take “Three Measures” to prevent the loss of hazardous waste.
2. Enterprise Internal Environmental Management
The company passed the ISO14001 environmental management system, OHSAS18001 occupational health and safety management system in 2009. Strictly in accordance with the system requirements to carry out various activities, focusing on process control. In particular, after the implementation of the new environmental law, the company carried out a series of special activities, and strive to environmental protection work in line with the provisions of the new environmental law.
3. Cleaner Production, Pollution Control
In 2012, the company passed the clean production audit work of the Chongqing Municipal Environmental Protection Bureau, and has been in accordance with the idea of sustainable development, the selection of low energy consumption and pollution of small products, technology, equipment, raw materials, and always adhere to the "low carbon, environmental protection, energy saving, recycling, green development concept.
4. Comprehensive Utilization of Waste Classification
The workshop is equipped with recyclable, non-recyclable general industrial solid waste collection tanks and hazardous waste collection tanks. The company separately constructed the hazardous waste dumping site and carried out "three prevention" measures. Hazardous waste of the company were all commissioned by a qualified unit for safe transfer and disposal. a total of 56.56 tons of hazardous waste disposa in 2016.
5. Factory Environment and Office System
The factory area is neat, the workshop and the office .functional area are clearly distinguished, the 6S management is strictly enforced, and the plant green area is up to 587.26 million square meters. It has standardized the discharge of waste gas and water, the pollution and the factory noise discharge are also standardized, and the air quality is good.
In order to advocate "green office" and "paperless office", the company introduced the OA office system and bought a complete set of office software, the paperless office is achieved. All of the tools which are equipped withCompany’s production workshop take environmental friendly, green as prerequisite. For example,staff’s hand sanitizer and logistics supplies are non-phosphorus, green, natural and does not cause secondary pollution to the environment. At the same time energy-saving wind is the prevalence of the entire factory, by breaking the office cost indicators, from office lighting, office supplies and so on, strictly limit the energy consumption every year. Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Protection
Whether released Social Responsibility Report
□ Yes√ No
XIX.Major issues of subsidiary
√ Applicable□ Not applicable
1. Military Equipment Group , the controlling shareholder of the company, signed the agreement of free share transfer with Jianshe Mechanical and Electric Corporation on December 10th, 2015. According to the agreement, Military Equipment Group gratuitously transferred 84,906,250 state-owned corporateshares，which occupied71.13% ofcompany’s generalcapital， to Jianshe Mechanical and Electric Corporation. The share transfer registers and formalities were successfully completed at China Securities Depository and Clearing Limited Liability Company, Shenzhen subsidiary on March 2, 2016. After the completion of equity transfer, the Military Equipment Group no long held share of the company, instead Jianshe Mechanical and Electric Corporation became the controlling shareholder which held 84,906,250 share with71.13% stock-keeping ratio, and the property of stock system was state-own initiator. The actual controller of the company was not changed, and the state-owned Assets Supervision and Administration Commission was still in power. Detailed information was posted in Securities Times, Hong Kong Commercial Daily, and Cninfo Network (cninfo.com.cn) from December 15th,
2015 to March
8th,
2016, where the Construction of Chongqing Motorcycle co., Ltd. Purchase Report and other company announcements were also published.
2. April 13, 2017,the company received the shares frozen data of the Chinese Securities Registration Limited Company and Shenzhen branch ,and found that 5,000,000 shares held by the Jianshe Mechanical and Electric Company were frozen Chongqing District People's Court of justice, Specific details are as follows:
Verified by the Jianshe Mechanical and Electric Company, the frozen shares were contract dispute between Chongqing Yong Xing Industrial Co. Ltd. (hereinafter referred to as "Xing Yong") and the Jianshe Mechanical and Electric Company. The applicant, Xing Yong Company, proposed the request of property preservation before litigation Chongqing District of Banan City People's Court issued 2017 Chongqing 0113 persistent protection No. 258 Document of Ruling, the applicant decided to freeze RMB5.1 million or seizure other corresponding value of the property of Jianshe Mechanical and Electric Company and carry out in April 12, 2017.
As of this announcement, the Jianshe Mechanical and Electric Company holds 84,906,250 shares of the Company, accounting for71.13% of the total share capital of the Company. Its holdings of the Company's shares were frozen up to 5,000,000 shares, accounting for4.19% of the total share capital of the Company.
Shares held by the Jianshe Mechanical and Electric Company is subject to judicial freeze, which will not affect the production and operation of the company. If its frozen shares was judicial disposal, which will not have an impact on the company's control. At present, Jianshe Mechanical and Electric Company actively consult with XingYong company to resolve the litigation as soon as possible.
XX. Material issues of the subsidiaries
□ Applicable√ Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 VI. Change of share capital and shareholding of Principal ShareholdersⅠ.Changes in share capital
1. Changes in share capital
In Shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportio|||Capitaliza|||||
|||n|Share|Bonus|tion of||||Proportio|
||||||common|Other|Subtotal|Quantity||
||||allotment|shares|||||n|
||||||reserve|||||
||||||fund|||||
||89,375,00|||||||89,375,00||
|I. Shares with trade||74.87%|0|0|0|0|0||74.87%|
|restriction conditions|0|||||||0||
|1. State-owned shares|0|0.00%|0|0|0|0|0|0|0.00%|
||84,906,25|||||||84,906,25||
|2. State-owned legal person||71.13%|0|0|0|0|0||71.13%|
|shares|0|||||||0||
|3. Other domestic shares|4,468,750|3.74%|0|0|0|0|0|4,468,750|3.74%|
|Incl. Shares held by domestic|1,750,000|1.46%|0|0|0|0|0|1,750,000|1.46%|
|legal persons||||||||||
|Domestic natural|2,718,750|2.28%|0|0|0|0|0|2,718,750|2.28%|
|person shares||||||||||
|4. Share held by foreign|0|0.00%|0|0|0|0|0|0|0.00%|
|investors||||||||||
|Incl. Shares held by foreign|0|0.00%|0|0|0|0|0|0|0.00%|
|legal persons||||||||||
|Foreign natural person|0|0.00%|0|0|0|0|0|0|0.00%|
|shares||||||||||
||30,000,00|||||||30,000,00||
|II. Shares without trading||25.13%|0|0|0|0|0||25.13%|
|limited conditions|0|||||||0||
|1. Common shares in RMB|0|0.00%|0|0|0|0|0|0|0.00%|
||30,000,00|||||||30,000,00||
|2. Foreign shares in domestic||25.13%|0|0|0|0|0||25.13%|
|market|0|||||||0||
|3. Foreign shares in overseas|0|0.00%|0|0|0|0|0|0|0.00%|
|market||||||||||
|4. Others|0|0.00%|0|0|0|0|0|0|0.00%|
|III. Total of capital shares|119,375,0|100.00%|0|0|0|0|0|119,375,0|100.00%|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|00|00|

Reasons for share changed
□Applicable√Not applicable
Approval of Change of Shares
□Applicable√Not applicable
Ownership transfer of share changes
□Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□Applicable√Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security regulators
□Applicable√Not applicable
Ⅱ.Issuing and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□Applicable√Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□Applicable√Not applicable
3.About the existingemployees’ shares
□Applicable√Not applicable
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Total||
|||||||preferred shareh||
|Total number||Total||The total number o||||
|||||||olders at the end||
|of common||shareholders at||f preferred shareho||||
|||||||of the month||
|shareholders at||the end of the||lders voting rights||||
||8,350||8,371||0|from the date of|0|
|the end of the||month from the||restored at period-e||||
|||||||disclosing the||
|reporting||date of disclosing||nd(if any)(See||||
|||||||annual report(if||
|period||the annual report||Notes 8)||||
|||||||any)(See Notes||
|||||||8)||
|Particulars about shares held above 5% by shareholders or top ten shareholders||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Number||Amount|Amount|Number of share pledged/frozen||
|||Proportio||Changes|||||
|Shareholders|Nature of|n of|of shares|in|of|of|||
||||held at||restricted|un-restrict|||
||shareholder|shares||reporting|||State of share|Amount|
||||period||shares|ed shares|||
|||held（%）||period|||||
||||-end||held|held|||
|Chongqing JiansheMechanical andElectric Co., Ltd.|State-owned legalperson|71.13%|84,906,250|84,906,250|84,906,250|0|||
|Gu Zuocheng|Domestic naturalperson|1.89%|2,261,000|0|2,218,750|42,250|||
|Anhui HengshengEconomicDevelopmentGroup Co., Ltd.|Domesticnon-state-ownedlegal person|1.47%|1,750,000|0|1,750,000|0|||
|Liu Dan|Domestic naturalperson|0.88%|1,054,001|-222000|0|1,054,001|||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Overseas legalperson|0.60%|716,920|562945|0|716,920|||
|Yu Lingfeng|Domestic naturalperson|0.52%|623,621|273096|0|623,621|||
|Chen Xinqiang|Domestic naturalperson|0.51%|612,400|-50852|0|612,400|||
|Xu Yuanhui|Domestic naturalperson|0.51%|610,789|70800|0|610,789|||
|Zhang Meilan|Domestic naturalperson|0.43%|513,560|6300|0|513,560|||
|Feng Yonghui|Domestic naturalperson|0.42%|500,000|0|500,000|0|||
|||There isn’t any associated relationship between the sponsoring shareholder and the other|||||||
|||shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in|||||||
|Explanation on associated relationship|||||||||
|||accordance with ‘The rules of information disclosure on change of shareholding.’ Foreign|||||||
|among the aforesaid shareholders|||||||||
|||shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in|||||||
|||concert’.|||||||
|Top 10 holders of unconditional shares|||||||||
||||||||Category of shares||
|Name of the shareholder||Amount of unconditional shares held at end of period|||||Category of||
|||||||||Amount|
||||||||shares||
|Liu Dan||1,054,001|||||Foreign shares||
||||||||placed in||
|||||||||1,054,001|
||||||||domestic||
||||||||exchange||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||1,054,001|||||Foreign shares||
||||||||placed in||
|||||||||1,054,001|
||||||||domestic||
||||||||exchange||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
|Yu Lingfeng|623,621|Foreign shares||
|||placed in||
||||623,621|
|||domestic||
|||exchange||
|Chen Xinqiang|612,400|Foreign shares||
|||placed in||
||||612,400|
|||domestic||
|||exchange||
|Xu Yuanhui|610,789|Foreign shares||
|||placed in||
||||610,789|
|||domestic||
|||exchange||
|Zhang Meilan|513,560|Foreign shares||
|||placed in||
||||513,560|
|||domestic||
|||exchange||
|CREDIT SUISSE (HONG KONG)LIMITED|489,160|Foreign shares||
|||placed in||
||||489,160|
|||domestic||
|||exchange||
|Chen Houping|344,000|Foreign shares||
|||placed in||
||||344,000|
|||domestic||
|||exchange||
|Liu Guosheng|280,000|Foreign shares||
|||placed in||
||||280,000|
|||domestic||
|||exchange||
|Liang Qinhuan|262,700|Foreign shares||
|||placed in||
||||262,700|
|||domestic||
|||exchange||
||There isn’t any associated relationship between the sponsoring shareholder and the other|||
|Action-in-concert among top 10||||
||shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in|||
|non-restricted current share holders,||||
||accordance with ‘The rules of information disclosure on change of shareholding.’ Foreign|||
|top 10 non-restricted current share||||
||shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in|||
|holders and top 10 shareholders||||
||concert’.|||

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period.
□ Yes√ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 have no buy–back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Central state owned holding
Type of Controlling Shareholders:Legal person
||||||
|-|-|-|-|-|
||Legal||||
|Name of the Controlling|||||
||representative/Leade|Date of incorporation|Organization code|Principal business activities|
|shareholder|||||
||r||||
|||||R & D, manufacturing and|
|Chongqing Jianshe|||||
|||||sales of motorcycles,|
|Mechanical and Electric Co.,|Li Huaguang|August 28,2015|915001133556474283||
|||||automobiles and machinery|
|Ltd.|||||
|||||products|
|Equity of other|||||
|domestic/foreign listed|||||
|company with share|||||
|controlling and share|Nil||||
|participation by|||||
|controlling shareholder in|||||
|reporting period|||||

Change of holding shareholder
√ Applicable□Not applicable
|||
|-|-|
|Name of new controlling shareholder|Chongqing Jianshe Mechanical and Electric Co., Ltd.|
|Change date|Marh 2,2016|
|Web index|www.cninfo.com.cn,Announcement No.:2016-011|
|Date of disclosure|March 8,2016|

3．Information about the controlling shareholder of the Company
Actual controllernature：Central state owned Assets Management t
Actual controllertype：Legal person
||||||
|-|-|-|-|-|
||Legalrepresentative/person in charge||||
|Name of the controlling||Date of|||
||||Organization code|Principal business activities|
|shareholder||establishment|||
|State-owned Assets|||||
|Supervisionand administration|||||
||Not appicable||Not appicable|Not appicable|
|Commission of the State|||||
|Council|||||
|Situation of domestic and|||||
||Not appicable||||
|abroad holding listed companies|||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Changes of the actual controller in the reporting period
□Applicable√Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable√Not applicable
4.Particulars about other legal person shareholders with over10% shareheld
□Applicable√Not applicable
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party and Other Commitment Subjects
□Applicable√Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 VII. Situation of the Preferred Shares
□ Applicable√Not applicable
The Company had no preferred shares in the reporting period.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 VIII. Information about Directors, Supervisors and Senior Executives I. Change ein shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares|of shares|of shares||Shares|
|||||||||||Other||
||||||Starting|Expiry|held at|increased|decreased||held at|
|||Office||||||||changes||
|Name|Positions||Sex|Age|date of|date of|the|at the|at the||the|
|||status||||||||increase/d||
||||||tenure|tenure|year-begi|reporting|reporting||year-gegi|
|||||||||||ecrease||
||||||||n(share)|period(sh|period(sh||n(share)|
|||||||||are)|are)|||
|Lv|||||Marh|||||||
||Chairman|In office|Male|47|||0|0|0|0|0|
|Hongxian|||||18,2016|||||||
|Zhou||||||||||||
||||||May|||||||
|Yongqian|Director|In office|Male|44|||0|0|0|0|0|
||||||25,2016|||||||
|g||||||||||||
||||||May|||||||
|Ye Yuxin|Director|In office|Male|49|||0|0|0|0|0|
||||||25,2016|||||||
|Yu|||||May|||||||
||Director|In office|Male|50|||0|0|0|0|0|
|Wenbiao|||||25,2016|||||||
||Director,||||May|||||||
|Fan Aijun||In office|Male|45|||0|0|0|0|0|
||GM||||25,2016|||||||
||||||April|||||||
|Hao Lin|Director|In office|Male|54|||0|0|0|0|0|
||||||29,2008|||||||
||Employee|||||||||||
|Deng|||||Marh|||||||
||supervis|In office|Male|39|||0|0|0|0|0|
|Gang|||||10,2016|||||||
||or|||||||||||
||Independ|||||||||||
|Li|||||May|||||||
||ent|In office|Male|53|||0|0|0|0|0|
|Dingqing|||||23,2014|||||||
||Director|||||||||||
||Independ|||||||||||
||||||May|||||||
|Wang Jun|ent|In office|Male|54|||0|0|0|0|0|
||||||25,2016|||||||
||director|||||||||||
||Independ||||May|||||||
|Peng Jue||In office|Female|62|||0|0|0|0|0|
||Director||||23,2014|||||||
||Independ|||||||||||
|Liu|||||May|||||||
||ent|In office|Male|36|||0|0|0|0|0|
|Zhiqiang|||||23,2014|||||||
||director|||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Chairman|||||||||||
||of the|||||||||||
|Lv|superviso||||May|||||||
|||In office|Female|48|||0|0|0|0|0|
|Cuiwei|ry||||25,2016|||||||
||committe|||||||||||
||e|||||||||||
|Tao|Superviso||||May|||||||
|||In office|Male|51|||0|0|0|0|0|
|Xuqian|r||||25,2016|||||||
|Wu|Superviso||||May|||||||
|||In office|Male|40|||0|0|0|0|0|
|Haiwen|r||||25,2016|||||||
||Employee|||||||||||
|Xu|||||March|||||||
||Superviso|In office|Female|43|||0|0|0|0|0|
|Dongxia|||||10,2016|||||||
||r|||||||||||
||Employee|||||||||||
|Wang|||||Marh|||||||
||Supervis|In office|Male|39|||2,700|0|0|0|2,700|
|Mao|||||10,2016|||||||
||or|||||||||||
|Zhang||||||||||||
||Deputy||||March|||||||
|Xiangdon||In office|Male|42|||0|0|0|0|0|
||GM||||18,2016|||||||
|g||||||||||||
||Deputy|||||||||||
||GM,|||||||||||
|Xue|CFO,||||March|||||||
|||In office|Male|35|||0|0|0|0|0|
|Gangyi|secretary||||18,2016|||||||
||of the|||||||||||
||Board|||||||||||
|Zhang|Deputy||||March|||||||
|||In office|Male|51|||0|0|0|0|0|
|Guofeng|GM||||18,2016|||||||
|Deng|Deputy||||March|||||||
|||In office|Male|51|||0|0|0|0|0|
|Xianming|GM||||18,2016|||||||
||Deputy||||Marh|||||||
|Cao Bing||In office|Male|45|||0|0|0|0|0|
||GM||||18,2016|||||||
|Li|||||Novembe|May||||||
||Chairman|Resigned|Male|51|||0|0|0|0|0|
|Huaguang|||||r 27,2009|25,2016||||||
||Director,|||||||||||
||secretary|||||||||||
||general of|||||||||||
||||||Novembe|||||||
|Yan|CCP|||||May||||||
|||Resigned|Male|53|r||0|0|0|0|0|
|Xuechuan|committe|||||25,2016||||||
||||||27,2009|||||||
||e,|||||||||||
||chairman|||||||||||
||of trade|||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||union|||||||||||
||||||May|May||||||
|Ni Erke|Director|Resigned|Male|43|||0|0|0|0|0|
||||||25,2012|25,2016||||||
||Director,|||||||||||
||vice|||||||||||
||general|||||||||||
|Teng|manager,||||April|May||||||
|||Resigned|Male|45|||0|0|0|0|0|
|Feng|CFO,||||29,2008|25,2016||||||
||secretary|||||||||||
||of the|||||||||||
||Board|||||||||||
|Tang|Employee||||May|March||||||
|||Resigned|Male|47|||0|0|0|0|0|
|Wenquan|Director||||30,2011|10,2016||||||
||Independ|||||||||||
||||||May|May||||||
|Liu Yulin|ent|Resigned|Female|50|||0|0|0|0|0|
||||||22,2015|25,2016||||||
||Diretor|||||||||||
||Chairman|||||||||||
||of the|||||||||||
|Cha|superviso||||May|May||||||
|||Resigned|Male|51|||0|0|0|0|0|
|Changli|ry||||25,2012|25,2016||||||
||committe|||||||||||
||e|||||||||||
|Tan|Superviso||||May|May||||||
|||Resigned|Male|42|||0|0|0|0|0|
|Mingxian|r||||25,2012|25,2016||||||
||Superviso||||Novembe|May||||||
|Mou Jun||Resigned|Female|51|||0|0|0|0|0|
||r||||r 17,2015|25,2016||||||
|Wen|Deputy||||April|Marh||||||
|||Resigned|Male|50|||0|0|0|0|0|
|Hong|GM||||29,2008|18,2016||||||
||Deputy||||April|Marh||||||
|Yu Jiang||Resigned|Male|45|||0|0|0|0|0|
||GM||||29,2008|18,2016||||||
|Total|--|--|--|--|--|--|2,700|0|0|0|2,700|

 II. Change in shares held by directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Positions|Types|Date|Reason|
||Chairman,||||
||Director ,||||
|Li Huaguang|Director and|Resigned|May 25,2016|Because of job changes, apply for resignation|
||member of the||||
||strategy||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||committee,||||
||member of the||||
||audit||||
||committee,Mem||||
||ber of||||
||Nomination||||
||committee and||||
||Member of||||
||Remuneration||||
||and assessment||||
||committee.||||
|Yan Xue Chuan|Director|Resigned|May 25,2016|Because of job changes, apply for resignation|
|Ni Erke|Director|Resigned|May 25,2016|Because of job changes, apply for resignation|
||Director,||||
||Member of the||||
||audit committee,||||
|Teng Feng|Deputy General|Resigned|May 25,2016|Because of job changes, apply for resignation|
||Manager ,CFO||||
||and secretary of||||
||the Board||||
||Employee||||
|Tang Wenquan||Resigned|March 10,2016|Because of job changes, apply for resignation|
||Director||||
||Chairman of the||||
||superviso ry||||
|Cha Changli||Resigned|May 25,2016|Because of job changes, apply for resignation|
||committee,||||
||Supervisor||||
|Tan Mingxian|Supervisor|Resigned|May 25,2016|Because of job changes, apply for resignation|
|Mou Jun|Supervisor|Resigned|May 25,2016|Because of job changes, apply for resignation|
||Employee||||
|Lv Cuiwei||Resigned|March 10,2016|Because of job changes, apply for resignation|
||Supervisor||||
||Employee||||
|Tao Xuqian||Resigned|March 10,2016|Because of job changes, apply for resignation|
||Supervisor||||
||||September||
|Lv Hongxian|GM|Dismiss||Because of job changes, apply for resignation|
||||18,2016||
|Wen Hong|Deputy GM|Dismiss|March 18,2016|Because of job changes, apply for resignation|
|Yu Jiang|Deputy GM|Dismiss|March 18,2016|Because of job changes, apply for resignation|
|Yu Wenbiao|Deputy GM|Dismiss|March 18,2016|Because of job changes, apply for resignation|
|Fan Qijun|Deputy GM|Dismiss|March 18,2016|Because of job changes, apply for resignation|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 III. Status of service
Working experiences of current directors, supervisors, and executives in the past five years
The situation by the end of2016：
Lv Hongxian: Male, Born in 1969 April, MBA, senior engineer, senior economist. Once worked for Jianshe Industrial (Group) Co., Ltd. (Jianshe Group) as vice head of promotion dept., head of CCP office, head of HR division of CCP committee, assistant to the general manager, vice chief secretary of CCP committee, director, chief secretary of CCP committee, and chairman of the union; for the Company as chief secretary of the CCP committee, chairman of the Supervisory Committee, and director; for Jinan Qinqi as general manager and Chairman. At presenthe’s the general manager and director of Jianshe Mechanical and Electric, He served as Chairman of the Company.
Mr. Zhou Yongqiang, male, was born in December 1972, bachelor degree in engineering management, senior economist. He had served in China Jialing Group in posts of section chief of investment management section, section chief of Investment Planning Section, deputy director of investment management department, Assistant Minister of planning department and Assistant Minister of development department; he had served as Vice Minister (executive) of enterprise development department of China Jialing Group, deputy general manager of Chongqing Jiufang Foundry Co.,Ltd and general manager of Chongqing Jiufang Foundry Co.,Ltd; he had served as general manager assistant with concurrent post of minister of development planning, and deputy general manager of China Jialing Group, and minister of capital operation of Military Motorcycle. Currently, he serves as director of corporate development department of motorcycle division of Military Equipment Group, deputy chief economist and minister of development operation department of Military Motorcycle, director of Luoyang North Enterprise Group, director of Ji'nan Qingqi Co., Ltd, director of Jianshe Mechanical and Electric Company and director of the company.
Mr. Ye Yuxin, male, was born in May 1967, master degree of Business Administration, senior accountant. He had served as accountant in financial department of Sichuan Tianxing Instrument Factory, deputy director in financial department of Chengdu Tianxing Instrument (Group) Co., Ltd, deputy finance minister and section chief of finance department, assistant general manager in Chengdu Tianxing Instrument (Group) Co., Ltd, vice president, financial controller and finance minister, director of Chengdu Tianxing Instrument Co., Ltd, delegated chief accountant of Tianxing (Group), CFO of Shenzhen Yan Xing Investment Co., Ltd, deputy general manager, chief accountant, director, and secretary of the board of directors of China Jialing Group. Currently, he serves as chief accountant and director of Jianshe Mechanical and Electric Company, and the director of the company.
Mr. Yu Wenbiao, male, was born in November 1966, bachelor degree in mechanical engineering automation, senior engineer. He had served as deputy superintendent of 61 workshop, section chief of quality assurance section of firearms company, deputy director of Institute of Firearms, deputy minister of development planning department, director of the Beijing Office, section chief of economic operation section of development planning department, vice minister(executive) of development planning department, minister of development planning department, minister of joint venture management department, general manager assistant, minister of assets operation department of Jianshe Group; he had served as secretary of the board of the company, vice general manager of Zhuzhou Jianya, and vice general manager of the company; currently, he serves as vice general manager of Jianshe Mechanical and Electric Company, and he is a director of the company.
Mr. FanAi’jun, male, was born in July 1971, postgraduate degree of business management, engineer. He had served as workshop technician, office secretary, deputy director of general administration, and deputy chief of
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 staff of Construction Group; he had served as vice general manager of Pan India Construction Co., Ltd, section chief of overseas business section of Chongqing Jianya, deputy chief, and section chief of matching section, and section chief of matching section of automobile division of the company; he had served as vice general manager, and general manager of automotive air-conditioner compressor division, and he had served as vice general manager of the company; currently, he serves as deputy party secretary of Jianshe Mechanical and Electric Company, and he is the general manager and director of the company.
Hao Lin: Male, born in 1963, Master. At presenthe’s Chairman of Chongqing Tongkang Technologies Co., Ltd., and Director of the Company. He served as Director of the Company.
Mr. Deng Gang, male, was born in September 1977, bachelor degree of mechanical design and manufacture, political engineer, economist, certified quality engineer, senior administrator of human resources management. He had served as deputy leader of technical team of the eighth workshop of Jianshe Group, and minister of technical quality of Spring Company; he had served as minister of technical quality of thecompany’s Components Manufacturing Company, director of committee cadre management office, and deputy minister of technical quality assurance department of Jianshe Group; he had served as minister of personnel administration of Automotive Conditioning, senior manager of Southern Motorcycle, and minister of comprehensive management department of Automotive Conditioning; currently, he is the minister of business planning department and employee director of the company.
Li Dingqing: Male, born in 1963 May, Master, Professor of Accounting once vice head of financial office of Chongqing Business School; vice chief of Accounting Dept. of Chongqing Business School; vice dean of Accounting Dept.; dean of Technical Dept. At presenthe’s the dean of Accounting Dept. of Chongqing University of Business; independent director of the Company, Yushanxia A, and Gaojin Food.
Mr. Wang Jun, male, was born in August 1962, bachelor degree. He had served as technical head of the fifth workshop, and deputy head of supply and marketing section of Chongqing TongJunGe Pharmaceutical Co.,Ltd; he had served as manager of Shanghai Wanguo Securities Co., Ltd Chongqing Sales Office, manager of Shenyin Wanguo Securities Co., Ltd Chongqing Sales Office, general manager of Chongqing investment banking of Investment Banking Division of Shenyin Wanguo Securities Co., Ltd and Shenyin Wanguo Securities Co., Ltd Chongqing Sales Office; he had served as independent director of the company, independent director of China Jialing, independent director of Chongqing Water, secretary general of Chongqing Securities Association, consultant of Chongqing capital operation and asset restructuring leading group, and expert advisor for Mayor of Chongqing Municipal People's Government. Currently, he serves as general manager of Chongqing Branch Shenwan Hongyuan Securities Co., Ltd, council member of Chongqing securities and Futures Industry Association, independent director of Chongqing Yuxin Group Co., Ltd, outside director of Chongqing Yu Fu Asset Management Group Co., Ltd, and independent director of the company.
Peng Jue: female, born in 1954, Doctor of Management, Professor of Accounting Once he was accountant of Supply& Sales Dept of Chengdu Coal Industry Administration; assistant professor of History School of Chongqing Normal University; lecturer of Southwestern University of Agriculture. At presenthe’s the head of Business& Management School of Southwestern University; independent director of the Company, Tongjunge, and Southwestern Pharmacy. She served as independent Director of the Company.
Liu Zhiqiang: Male, born in 1981 September, JD, finance postdoctoral. Once he was the clerk of Shanghai Bureau of Finance and Chongqing International Trade Commission; assistant of the head of Chongqing Beibei Tiansheng Community Office. Currentlyhe’s associated professor of Southwestern University Politics and Law; partner of Taihetai Law Firm, and independent director of the Company and Taihe Health and the Company.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Lv Cuiwei: Female, born in 1968 July, Bachelor degree, senior economist. once secretary of Youth Party of Jianshe Group, office manager of CCP office, PR director of CCP party of Jianshe Industry, vice dean of party school, director of PR office of CCP committee. At presentshe’s the director of Auditing and Legal department,employees’ supervisor of the Company.She served as secretary of Jianshe Mechanical and Electric Company, Chairman of the board of supervisors of the Company.
Tao Xuqian: Male, born in 1965 May, Bachelor degree, senior economist. Once worked for Jianshe Group as vice director of discipline office, vice head of supervisory division; for Jianshe Industry as vice director of discipline office, and vice head of supervisory division; for the Company as vice head of CCP public relationship division, head of supervisory division. At presenthe’s the vice chief secretary of discipline division of Jianshe Mehanical and Electric Company, office manager of discipline division and head of supervisory division, supervisor of the Company.
Mr.Wu Haiwen, male, was born in September 1976, master degree of human resource development and management, political engineer, senior administrator of human resources management. He had served as director of party committee cadre management Office, deputy director of Components Factory, and deputy head of the fifth workshop of Firearms division of Construction Group; he had served as deputy section chief of material supply section, vice minister of material purchasing department, and minister of human resources of the company; he had served as minister of human resources of Jianshe Machinery. Currently, he serves as minister of business planning department of Jianshe Mechanical and Electric Company, and he is a supervisor of the company. Ms. Xu Dongxia, female, was born in August 1973, Bachelor of information technology, engineer, political engineer title. She had served as technician of Sichuan Jindu Photoelectric Instrument Factory, section chief of office information management of Construction Group, served in Construction Industry Development Planning Department for responsible of statistics and operation management; she had served as practice section chief of warehouse center of Chongqing Jianya, deputy director of logistic center, deputy minister of marketing department of sales company, deputy minister of marketing department, and deputy minister of business planning department of the company, and she served as deputy minister of business planning department of Jianshe Mechanical and Electric Company. Currently, she serves as minister of party supervision department and employee-supervisor of the company.
Mr. Wang Mao, male, was born in June 1977, college degree of economic management, technician, certified assistant safety engineer. He had served in the twentieth workshop of Construction Group, and worked in processing section of automotive air-conditioning; he had served as technical safety officer of the manufacturing department of automotive air-conditioning. Currently, he is the chief of the third section of processing line of workshop of automotive air-conditioning manufacturing, and he is an employee-supervisor of the company. Mr. Zhang Xiangdong, male, was born in May 1974, master degree of ideological education, with title of economist. He had served as technician of the 34th workshop, head of technical room of technical department of Foundry Factory, and chief of third section of processing line of casting department of Foundry Factory of Construction Group; he had served as officer of company union, salesman of sales company, head of company union office, and deputy minister of democratic management department of company union of the company; he had served as deputy leader of the preparatory group of Construction Industry Union, and served as the vice chairman of the union, and vice chairman (executive) of company union; he had served as party general branch secretary of Automotive Air-conditioning, and vice general manager of Automotive Air-conditioning; currently, he serves as secretary of the party committee, secretary of the Commission for Inspecting Discipline, and vice general manager of the company.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Mr. Xue Gangyi, male, was born in April 1981, Master of Business Administration , assistant accountant title. He had served as director of budget office of financial department, and office secretary of Jianshe Group; he had served as deputy minister of finance department of the company, minister of finance department of Automotive Air-conditioning, and deputy minister of finance department of Jianshe Mechanical and Electric Company. Currently, he serves as vice general manger, chief financial officer, and secretary of the board in the company. Mr. Zhang Guofeng, male, was born in August 1965, bachelor degree in mechanical engineering, senior engineer. He had served as associate supervisor of the
44th
workshop, supervisor of the
45th
workshop, deputy director of the fifth factory, and assistant manager of Tool Manufacturing Company in Construction Group; he had served as vice general manager of sales company, section chief of sales section of automotive air-conditioning, minister of customer management department and vice general manager. Currently, he serves as thecompany’s vice general manager.
Mr. Deng Xianming, male, was born in August 1965, bachelor of business management, engineer title. He had served as chief of the eighth factory room, assistant manager of automotive air-conditioning, technical chief of technical section, minister of manufacturing department, and deputy minister of production guarantee department in Construction Group; he had served as chief of the office of safety and environmental protection committee of the company, minister of environmental security department of the company, and vice general manager of automotive air-conditioning. Currently, he serves as thecompany’s vice general manager.
Mr. Cao Bing, male, was born in March 1971, bachelor degree in refrigeration and air conditioning, engineer title. He had served as technician of the eighth factory of Construction Group, salesman of the sales company, salesman of automotive air-conditioning, deputy section chief of the sales section, minister of customer management department and vice general manager. Currently, he serves as thecompany’s vice general manager. Office taking in shareholder companies
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Does he /she|
|||Titles||||
|Names of the|||||receive|
|||engaged in|Sharting date of|Expiry date of||
|persons in|Names of the shareholders||||remuneration or|
|||the|office term|office term||
|office|||||allowance from the|
|||shareholders||||
||||||shareholder|
||Jianshe Mechanical and||December|||
|Lv Hongxian||GM, Director|||Yes|
||Electric(Controlling shareholder）||30,2015|||
|||Deputy chief||||
|||economist||||
|||and Minister||||
|Zhou|Southern Motorcycle (subsidiary of the|||||
|||of|July 1,2013||Yes|
|Yongqiang|holding shareholder)|||||
|||development||||
|||and||||
|||operations||||
||Jianshe Mechanical and|Chief||||
|Ye Yuxin|||January 4,2016||Yes|
||Electric(Controlling shareholder）|acountant||||
|Yu Wenbiao|Jianshe Mechanical and|Deputy GM|January 4,2016||Yes|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||
|-|-|-|-|-|
||Electric(Controlling shareholder）||||
||Jianshe Mechanical and|Director of|September1,2015||
|Lv Cuiwei||||Yes|
||Electric(Controlling shareholder）|audit Dept|||
|||DeputySecretary oftheCommission|September1,2015||
||Jianshe Mechanical and|for Discipline|||
|Tao Xuqian||||Yes|
||Electric(Controlling shareholder）|Inspection,|||
|||director of theoffice of theDirector ofsupervision|||
|||Director ofoperationsDept|February1,2016||
||Jianshe Mechanical andElectric(Controlling shareholder）||||
|Wu Haiwen||||Yes|

Offices taken in other organizations
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Take|
|Names|Name of the parties|Positions|Job started|Job ended|remunerations|
||||||from the party|
|Hao Lin|Chongqing Tongke Technology Co., Ltd.|Chairman|January 1,2001||Yes|
||Chongqing Technology and Business||December 31,2012|||
|Li Dingqing||DEAN|||Yes|
||University School of Accountancy|||||
||Shenwan Hongyuan Securities Co., Ltd.|General||||
|Wang Jun|||August 1,2015||Yes|
||Chongqing Office|manager||||
||Southwest University School of Economics|Department||||
|Peng Jue|||May 7,2014||Yes|
||and Management|head||||
|Liu Zhiqiang|Tahota Law firm|Partner|May 31,2012||Yes|

Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securities regulators in the recent three years
□ Applicable√Not applicable
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and senior executives
The Company gives rewards to executives on annual basis which consist of basic annual rewards and performance rewards. Basic annual rewards are paid on monthly basis and performance rewards are distributed basing on the
annual assessment on their performances and duties as well as democratic assessment.
Remuneration of directors, supervisors, and executives in the report period
InRMB’0000
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||||||Total|Remuneration|
||||||remuneration|actually receivect|
|Name|Positions|Sex|Age|Office status|||
||||||received from the|at the end of the|
||||||shareholder|reporting period|
|Lv Hongxian|Board chairman|Male|47|In office|10.2|Yes|
|Zhou Yongqiang|Director|Male|44|In office|0|Yes|
|Ye Yuxin|Director|Male|49|In office|0|Yes|
|Yu Wenbiao|Director|Male|50|In office|7.3|Yes|
||Diretor, General||||||
|Fan Aijun||Male|45|In office|29.6|No|
||manager||||||
|Hao lin|Director|Male|54|In office|0|Yes|
||Employee||||||
|Deng Gang||Male|39|In office|21.2|No|
||Director||||||
||Independent||||||
|Li Dingqing||Male|53|In office|3|No|
||diretor||||||
||Independent||||||
|Wang Jun||Male|54|In office|1.5|No|
||diretor||||||
||Independent||||||
|Peng Jue||Female|62|In office|3|No|
||diretor||||||
||Independent||||||
|Liu Zhiqiang||Male|36|In office|3|No|
||diretor||||||
||Chairman of the||||||
|Lv Cuiwei|supervisory|Female|48|In office|3.6|Yes|
||committee||||||
|Tao Xuqian|Supervisor|Male|51|In office|4.8|Yes|
|Wu Haiwen|n Supervisor|Male|40|In office|4.6|Yes|
||Employee||||||
|Xu Dongxia||Female|43|In office|16.7|No|
||Supervisor||||||
||Employee||||||
|Wang Mao||Male|39|In office|8.5|No|
||Supervisor||||||
|Zhang Xiangdong|Deputy GM|Male|42|In office|25.2|No|
||Deputy GM,||||||
|Xue Gangyi|CFO, secretary of|Male|35|In office|14.5|No|
||the Board||||||
|Zhang Guofeng|Deputy GM|Male|51|In office|20.7|No|
|Deng Xianming|Deputy GM|Male|51|In office|20.8|No|
|Cao Bing|Deputy GM|Male|45|In office|20.7|No|
|Li Huaguang|Chairman|Male|51|Retired|0|Yes|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||Director,||||||
||secretary general||||||
||of CCP||||||
|Yan Xuechuan||Male|53|Retired|9.9|Yes|
||committee,||||||
||chairman of trade||||||
||union||||||
|Ni Erke|Director|Male|43|Retired|0|Yes|
||Director, vice||||||
||general manager,||||||
|Teng Feng||Male|45|Retired|0|Yes|
||CFO, secretary of||||||
||the Board||||||
||Employee||||||
|Tang Wenquan||Male|47|Retired|5|Yes|
||Director||||||
||Independent||||||
|Liu Yulin||Female|50|Retired|1.5|No|
||Director||||||
||Chairman of the||||||
|Cha Changli|supervisory|Male|51|Retired|9.4|Yes|
||committee||||||
|Tan Mingxian|Supervisor|Male|42|Retired|0|Yes|
|Mou Jun|Supervisor|Female|51|Retired|0|Yes|
|Wen Hong|Deputy GM|Male|50|Retired|7.3|Yes|
|Yu Jiang|Deputy GM|Male|45|Retired|7.3|Yes|
|Total|--|--|--|--|259.3|--|

 Incentive equity to directors, supervisors or/and senior executives in the reporting period
□Applicable√Not applicable
V. Particulars about employees.
1. Staff jobs, education, job title number and proportion refer to the following pie chart:
|||
|-|-|
|Number of in-service staff of the parent company（person）|509|
|Number of in-service staff of the main subsidiaries（person）|378|
|Total number of the in-service staff（person）|887|
|Total number of staff receiving remuneration in the current||
||887|
|period（person）||
|The number of the parent company and the main subsidiary’s||
||1|
|retired staffs who need to bear the cost（person）||
|Professional||
|Classified according by Professions|Number of persons（person）|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||
|-|-|
|Production|539|
|Sales|28|
|Technical|190|
|Financial|13|
|Administrative|117|
|Total|887|
|Education||
|Classified according by education background|Number of persons（person）|
|Mid-school or below|449|
|Colleges or above|200|
|Universities or above|224|
|Postgraduate or above|14|
|Total|887|

 2. Remuneration policies
The mode of piecework wage for production personnel was carried out. Sales commissions are employed to sales personnel. Other employees will enjoy the basic broadband salary.
3.Training plan
In 2016, there were totally 24 projects of internal training with 69 training programs according to the annual training plan. However, there were total 31 projects of internal training with 89 training programs being finished actually with totally 2758 employees being trained within 2187 training hours. The per capita training hour was 3.3 hours averagely which promoted the full completion ofcompany’s annual training plan.
4. Outsourcing situation
□ Applicable√ Not applicable
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 IX. Administrative structure
I.Basic state of corporate governance
In 2015, our company has finished major assets restructuring. Our company had built a sound structure of corporate governance, strengthenedcompany’s operation and enhanced the information disclosure on the basis of Corporation Law, Securities Law, Corporate Governance Standards For Listed Companies and following regulations of Articles of Associations before the restructuring. Rules of procedures were fully followed by the general meeting of shareholders, board of directors and board of supervisors.
After the implementation of the major assets reorganization which is in accordance with the requirements of the normative documents, the company held The first session of the thirty-two representatives of workers, the seventh meeting of the board of directors of the tenth , the seventh meeting of the board of supervisors of the tenth and 2015 annual general meeting and completed the change of directors, supervisors and senior members in March and May 2016. In the future company will continue to maintain effective operation and in line with the Articles of Association provisions of the governance structure, continue to improve corporate governance and information disclosure quality, protect the interests of shareholders, especially small and medium shareholders.
The specific management structure is as follows:
Ⅰ Shareholders andShareholders’ Meeting
In strict accordance with the Articles of Associations, shareholders will enjoy their equal status on the basis of theirs shares and undertake corresponding obligations. Strictly following the regulations and requirements of the Rules for the General Assemblies of Shareholders of Listed Companies, the Rule of Procedure of Shareholders Meeting, our company calls for shareholders to attend theshareholders’ meeting in an attempt to protect the legal rights and interests of all shareholders, especially of the minority shareholders. Our company will always treat all shareholders equally.
Ⅱ Controlling Shareholders and Listed Company
Our controlling shareholder is Military Equipment Group , and the actual controller is the State-owned Assets Supervision and Administration Commission. Neither the controlling shareholder nor the actual controller, beyond theshareholders’ meeting, has directly or indirectly intervene in decisions or operation activities of company. Our company has independent and complete business with capacity of independent operation. Our business, employees, assets, organizations and finance are all independent from the controlling shareholder. Our board of directors, board of supervisors and internal organizations all enjoy their independent operations.
Ⅲ Directors and Border of Directors
Board composition, director qualifications and selection process are all in accordance with relevant laws, regulations and the rules of the Articles of Associations. All directors could carry out their work, attend the meetings of board and shareholders and diligently undertake their duties and obligations on the basis of the Rules of Procedures for Board of Directors and the Independent Director System. Meanwhile, they also actively participate in relevant trainings and are familiar with relevant laws and regulations.
Ⅳ Supervisors and Board of Supervisors
Composition of board of supervisors, supervisor qualifications and selection process are all in accordance with relevant laws, regulations and the rules of the Articles of Associations. All supervisors could seriously undertake their duties according to the requirements of the Rules of Procedures for Board of Supervisors. Effective supervisions for major issues, related transactions, financial status and the performance of duties of directors as well as managers have been undertaken by supervisors.
Ⅴ Information Disclosure and Transparency
The secretary to the board of directors appointed by our company is responsible for the information disclosure,
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 coordinating relations between company and investors and receiving shareholders and their consultations. The secretary should disclose real, accurate, complete and real-time information in strict accordance with some relevant laws and regulations and rules of Information Disclosure Management Method, and make sure that all shareholders are capable of acquiring information with equal chance. During the report period, information of financial data and production-sales-stock statement related to motorcycles and air condition compressors was sent to the Chongqing Economic and Information Commission, the Statistical Bureau of Banan District and the controlling shareholder. According to the Regulation System of External Information Submission and Utility and the Registration and Regulation System of Internal Information Insiders, external personnel in relevant external organizations will be registered as insiders for further reference by our company. Those external personnel will be reminded to undertake the responsibility of keeping secret. At the same time, our company tries to persist in the equal principle of information disclosure to ensure that all investors have equal access to the same information. Our company always appoints specific media to voluntarily disclose the information of production and sales of main products when we report relevant information monthly. In the report period, no case of undisclosed information leaked which caused the abnormal price and volume movement occurred.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC,
√Yes□No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The Company is completely separate from the holding shareholder in aspects of business, asset, finance, and organization. It has its independent business operation.
1. Business: The Company has independent and complete development, purchase, production and marketing system. The Company is capable to perform business operation independently.
2. Personnel: The Company established independent functional department responsible for labor, personnel and wage management and formed labor, personnel and wage management system.
3. Asset: TheCompany’s assets are independent and complete. The assets are registered, booked, accounted, and administrated independently.
4. Organization: The Company has established an organizational structure that is independent of its controlling shareholder. The organs of the Company are able to exercise their functions independently.
5. Finance: The Company has set up independent finance department, formed independent financial accounting system, established and perfected financial control system and internal control measures, opened independent bank accounts and paid taxes independently.
III. Competition situations of the industry
□ Applicable√ Not Applicable
IV. Annual General Meeting and ExtraordinaryShareholders’ Meetings in the Reporting Period
1.Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Investor||||
|Sessions|Type||Meeting Date|Disclosure date|Disclosure index|
|||participation ratio||||
||||||For details please|
||||||find the Resolutions|
|Annual Genral|Annual General||||of Shareholders’|
|||1.89%|May 25,2016|May 26,2016|Meeting 2015,|
|Meeting of 2015|Meeting|||||
||||||Announcement|
||||||2016-050 at|
||||||http://www.cninfo.co|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||
|-|
|m.cn dated May 23,|
|2015|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings andshareholders’ general meeting
||||||||
|-|-|-|-|-|-|-|
|The attending of independent directors|||||||
||Number of|||||Failure to|
||||Number of||||
||Board meetings|||Number of||personally attend|
|Independent||Number of spot|meetings||Number of||
||necessary to be|||attendances by||board meetings|
|Directors||attendances|attended by||absence||
||attended in the|||representative||successively|
||||Communication||||
||reporting period|||||twice (Yes/No)|
|Li Dingqing|6|4|2|0|0|No|
|Peng Jue|6|3|2|1|0|No|
|Wang Jun|4|3|1|0|0|No|
|Liu Zhiqiang|6|4|2|0|0|No|
|Liu Yulin|2|1|1|0|0|No|
|Number of general meetings attended|||||||
|by independent directors as non-voting||1|||||
|delegates|||||||

Notes to failure to personally attend Board Meetings Successively Twice
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes√No
Independent directors proposed no objection against the relevant matters in the reporting period.
3. Other notes to duty performance of independent directors
Has an independentdirector’s advice to the Company been accepted
√Yes□No
Explanation on acceptance of or failure to accept an independentdirector’s advice to the Company.
In 2016, the independent directors of our company paid attend to the credit and debt, performance of commitments, corporate governance as well as construction of internal control which are related to the major assets restructuring and provided professional advices and management suggestions from their respective professional fields after their field visits, consultation ofcompany’s documents, listening to reports and acquaintance ofcompany’s operation. Their suggestions and advices are, for example, the updating and upgrading of products, financial expense reduction and improvement of the rate of assets. Seriously adopting their advices and suggestions, our company increasingly improves and enhances its management capacity.
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period
Fulfilling of duties of the committees from the date of previous annual report to the date before this report:
(I) The Auditing Committee held two meetings according to the Auditing Committee Working Criteria and
Auditing Committee Annual Report Working Procedures. They were:
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 1. The Auditing Committee held its 1st meeting of 2017 on January 19, 2017. The financial statements of 2016 provided by the accounting department was examined at the meeting. The Auditing Committee deems the financial statements were complying with the Enterprise Accounting Standard, the accounting policies and estimations were reasonable, and they were reflecting the situations regarding assets, business performance, and cash flow in the report term. It is approved to submit to the CPA.
2. The Auditing Committee conducted communication with the CPAs in the auditing process. On April 15, 2017, the CPA provided initial opinions to the Company. April 15, 2017, the Auditing Committee convened the 2nd meeting of 2017, and examined again on the financial statements, and deemed: Preparing of the financial statements were complying with the Enterprise Accounting Standard, expenses were reasonable, recognition of gains, expenses and profit were complying with the laws, regulations and relative rules, and frankly, completely reflecting the financial situation, business performance and cash flow of the Company. It was approved to be submitted to the Board of Directors.
|||
|-|-|
||The meeting also summed up the audit work conducted by the accounting firm in 2016. It believed that Lixin|
|Certified Public Accountants was diligent and responsible for the financial and internal control auditing of the||
|Company in 2016, and could comply with the requirements of the China Certified Public Accountant's Auditing||
|Standards and abide by the accounting firm Of the professional ethics, objective and impartial comments on the||
|company's financial statements.||

(II)The company's strategic committee held its first meeting on April 15, 2017. The meeting analyzed the overall economic environment, industry trends, their own advantages and problems, in addition, the meeting discussed and put forward the development trend of the air conditioner compressor industry in the next three years and the work focus of 2017.
(II) According to the rules and regulation requirements from Working Instruction of The Strategic Committee, the strategic committee of the board of directors held three meetings in total. The Content of these meetings were as follows:
1. The strategic committee of the company held the second session of 2015 annual meeting on August 20,2015. Combining the management and development requirements, the meeting agreed to take the prime assets involved in motorcycle business (including the right of land use, building construction, current assets, other intangible assets and receivable account.etc.) and
(III)The Company's Remuneration and Appraisal Committee held its first meeting in 2017 on April 15, 2017. The meeting formed the following opinion:
1. In accordance with thecompany’s provisions Evaluation and Reward Incentive System of Senior Management , according to the company's production and operation and work assessment of senior management. The Company believes that the remuneration level of directors and senior executives in the year 2016 conforms to the relevant regulations and actual conditions of the company.
2. According to the document provision of China Securities Regulatory Commission on Guidance on the establishment of an independent director system in listed companies ( SFCissued[2001]NO.102), the company agree to the allowance for independent directors is RMB 30,000 per person per year.
(IV)According to the Requirements of the Working Rules of the Nominating Committee, Company Board Nomination Committee Held Two Meetings Specifically:
1. The company nomination committee held its second meeting in November 10, 2016 and examined the proposed appointment of Xue Gangyi the secretary of the board of directors. The meeting decided that Xue Gangyi served as the secretary of the board of directors meet the relevant provisions and agreed to submit to the board of directors for consideration.
2. The company nomination committee held its first meeting in April 15th, 2017 and examined the candidates for the 8th board directors. The meeting decided that the candidates Lv Hongxian, Zhou Yongqiang, Ye Yuxin, Yu Wenbiao, Fan Aijun, Hao Lin and independent directors candidates Li Dingqing, Wang Jun, Peng Jue, Liu Zhiqiang does not exist Company Law Article 147 of the provisions of the situation and there is no situation that be punished administrative lastly, being less than three years, by the China Securities Regulatory Commission ; What's more, there is no someone who was publicly condemned in the last three years by the stock exchange or the situation that was criticized more than three times. The above candidates who shall be the directors or independent directors of the Company are in accordance with the Rules for the Listing of Stocks of Shenzhen Stock Exchange, the Guidance on the Establishment of Independent Director System in Listed Companies and the
Articles of Association of the Company. The meeting agree to submit to the board of directors for consideration.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting period
□Yes√No
The supervisory Committee has no objection aginst any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The Company gives rewards to executives on annual basis which consist of basic annual rewards and performance rewards. Basic annual rewards are paid on monthly basis and performance rewards are distributed basing on the annual assessment on their performances and duties as well as democratic assessment.
IX. Internal control situations
1.Specific situations on major defects of internal control discovered during report period
□ Yes√ No
2.Self-evaluation report on internal control
□ Yes√No
||||
|-|-|-|
|Disclosure date of appraisal report on|||
||April 28,2017||
|internal control|||
|Disclosure index of appraisal report on|||
||Juchao Website:（http://www.cninfo.com.cn），Announcement No.2017-014||
|internal control|||
|Proportion of total unit assets covered by|||
|appraisal in the total assets of the|||
||76.00%||
|consolidated financial statements of the|||
|company|||
|Proportion of total unit incomes covered|||
|by appraisal in the total business incomes|||
||97.00%||
|of the consolidated financial statements of|||
|the company|||
|Standards of Defects Evaluation|||
|Category|Financial Report|Non-financial Report|
||General defects: ① Minor financial loss;|Indicator 1: General defects in|
|||company’s daily operation. It’s almost|
||② Minor misstatement or omission of|impossible that some specific business|
||statement in terms of financial statement; ③|fails to operate normally. Other business|
|||activities and achievement of business|
||Minor damage of reputation caused by its|goals will not be affected. Serious|
||negative influence in some regions. Serious|defects: It’s reasonably possible that|
||defects: ① Bring some financial loss to|normal operations of some business may|
||company; ② Cause moderate misstatement|be influenced but it will not affect the|
|||sustainable operation of our company.|
|Qualitative criteria|or omission of statement in terms of|Significant defects: it’s reasonably|
||financial statement; ③ Serious damage of|possible that operation capacity of some|
||reputation caused by its comparatively|business may be lost and it will endanger|
||large-scale influence in some regions.|the company’s sustainable operation.|
||Significant defects: ① Bring significant|Indicator 2: Financial loss. General|
|||defects: It’s almost impossible that minor|
||financial loss to company; ② Significant|financial losses may be led to company.|
||misstatement or omission of statement in|Serious defects: It’s reasonably possible|
||terms of financial statement; ③ The|that moderate financial losses may be led|
|||to company. Significant defects: It’s|
||significantly negative influence has attracted|possible that significant financial losses|
||large-scale attention by the public and|may be led to company. Indicator 3:|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||
|-|-|-|
||unrecoverable losses have been brought to|Reputation of company. General defects:|
||company.|It’s almost impossible that the negative|
|||information popular in some regions will|
|||be caused, which may further affect|
|||company’s reputation. Serious defects:|
|||It’s reasonably possible that the negative|
|||information popular in some regions will|
|||be caused, which may lead moderate|
|||influence to company’s reputation.|
|||Significant defects: It’s reasonably|
|||possible that the negative information|
|||popular in some regions will be caused,|
|||which may lead significant influence to|
|||company’s reputation.|
||Indicator: The proportion of misstatement in|Indicator: The proportion of financial|
||the overall assets. General defects: It’s|losses in the overall assets. General|
||almost impossible that the amount of|defects: It’s almost impossible that the|
||misstatement accounting for 0.05% of the|amount of financial losses accounting for|
||overall assets or less will occur. Serious|0.05% of overall assets or less will occur.|
||defects: It’s reasonably impossible that the|Serious defects: It’s reasonably possible|
|Qualitative criteria|amount of misstatement accounting 0.05% to|that the amount of financial losses|
||1% of the overall assets will occur.|accounting for 0.05% to 1% of the|
||Significant defects: It’s reasonably possible|overall assets will occur. Significant|
||that the amount of misstatement accounting|defects: It’s reasonably possible that the|
||for 1% of the overall assets or more will|amount of financial losses accounting for|
||occur.|1% of the overall assets or more will|
|||occur.|
|Number of major defects in financial|||
||0||
|reporting（a）|||
|Number of major defects in non financial|||
||0||
|reporting (a)|||
|Number of important defects in financial|||
||0||
|reporting（a）|||
|Number of important defects in non|||
||0||
|financial reporting（a）|||

X. Internal Control audit report
√ Applicable□Not applicable
|||
|-|-|
|Review opinions in the internal control audit report||
|We acknowledge that Chongqing Jianshe Motorcycle Co., Ltd. has been conducting effective internal control in all material aspects||
|complying with “Fundamental Rules of Enterprise Internal Control” up to December 31, 2016.||
|Disclosure date of audit report||
||Disclosure|
|of internal control (full-text)||
|Index of audit report of||
||April 28,2017|
|internal control (full-text)||
|Internal audit report’s opinion|Juchao Website: （http://www.cninfo.com.cn），Announcement No.2017-030|
|Type of audit report on internal||
||Unqualified auditor’s report|
|control||
|Whether there is significant||
||No|
|defectin non-financial report||

Has the CPAs issued a qualifiedauditor’s report of internal control .
□ Yes√No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes□No
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at maturity on the approval date for annual report disclosed
No
XI．AUDITORS’ REPORT
AUDITORS’ REPORT
PCPAR[2017] No. ZE10382 To all shareholders of Chongqing Jianshe Motorcycle Co., Ltd.:
We have audited the accompanying financial statements of Chongqing Jianshe Motorcycle Co., Ltd. (hereinafter referred to as “the Company”), which comprise the consolidated balance sheet and the Company's balance sheet as at December 31, 2016, the consolidated income statement and the Company's income statement, the consolidated statement of cash flows and the Company's statement of cash flows, and the consolidated statement of changes in owner's equity and the Company's statement of changes in owner's equity for the year then ended, and notes to the financial statements.
Management’s Responsibilities for the Financial Statements
Management of the Company is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises to achieve a fair presentation; (2) designing, implementing and maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.
Auditor’s Responsibilities
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Auditing Standards for Certified Public Accountants in China. Those standards require that we observe professional and ethical requirements of Chinese certified public accountants, and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements.
Our audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements of the Company are prepared, in all material respects, in accordance with Accounting Standards for Business Enterprises and present fairly the consolidated and the Company's financial position as at December 31, 2016 and the consolidated and the Company's operating results and cash flows for the year then ended.
BDO CHINA ShuLun Pan Certified Public Accountant of China:
Certified Public Accountants LLP
Shanghai, China Certified Public Accountant of China:
April 25, 2017
Thisauditors’ report and the accompanying notes to the financial statements are English translation of the Chineseauditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall prevail.
||
|-|
|Chongqing Jianshe Motorcycle Co., Ltd.|
|Consolidated Balance Sheet|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
||December 31, 2016|||||||
||(Expressed in Renminbi unless otherwise stated)|||||||
||||||Balance as at December 31,||Balance as at January 1,|
||Assets||Note 5|||||
||||||2016||2016|
||Current assets:|||||||
|Cash and cash equivalents||5.1||514,414,822.57||302,660,758.76||
|Deposit reservation for balance||||||||
|Lending funds||||||||
|Financial assets measured at fairvalue through current profit andloss||||||||
|Derivative financial assets||||||||
|Notes receivable||5.2||14,907,890.35||47,008,704.63||
|Accounts receivable||5.3||255,587,439.92||217,759,208.43||
|Advances to suppliers||5.4||10,891,933.02||9,309,626.86||
|Premiums receivable||||||||
|Reinsurance accounts receivable||||||||
|Provision of cession receivable||||||||
|Interest receivable||||||||
|Dividends receivable||||||||
|Other receivables||5.5||8,579,890.08||257,809,644.42||
|Redemptory monetary capital forsale||||||||
|Inventories||5.6||201,207,030.54||146,350,934.34||
|Classified as assets held for sale||||||||
|Non-current assets maturing withinone year||||||||
|Other current assets||5.7||1,734,063.70||5,430,548.06||
||Total current assets||||1,007,323,070.18||986,329,425.50|
||Non-current assets:|||||||
|Loans and payments on behalf||||||||
|Available-for-sale financial assets||5.8||||||
|Held-to-maturity investments||||||||
|Long-term receivables||||||||
|Long-term equity investments||5.9||83,178,112.31||83,381,316.13||
|Investment properties||5.10||115,326,025.61||||
|Fixed assets||5.11||325,843,861.71||395,975,005.27||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Construction in progress 5.12 2,438,832.43 40,435,429.90
||||||||
|-|-|-|-|-|-|-|
|Project materials|||||||
|Disposal of fixed assets|||||||
|Productive biological assets|||||||
|Oil and gas assets|||||||
|Intangible assets||5.13|11,696,305.26||28,270,393.63||
|Development expenses|||||||
|Goodwill|||||||
|Long-term deferred expenses||5.14|2,471,588.65||3,926,091.85||
|Deferred income tax assets||5.15|1,816,875.69||1,819,643.46||
|Other non-current assets||5.16|9,240,209.19||10,478,525.70||
||Total non-current assets|||552,011,810.85||564,286,405.94|
||Total assets|||1,559,334,881.03||1,550,615,831.44|

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
|||||||||
|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.|||||||
||Consolidated Balance Sheet (Continued)|||||||
||December 31, 2016|||||||
||(Expressed in Renminbi unless otherwise stated)|||||||
||||||Balance as at December 31,||Balance as at January 1,|
||Liabilities and Shareholder's Equity||Note 5|||||
||||||2016||2016|
||Current liabilities:|||||||
|Short-term borrowings||5.17||224,500,000.00||217,000,000.00||
|Borrowings from central bank||||||||
|Deposits from customers and interbank||||||||
|Borrowings from banks and otherfinancial institutions||||||||
|Financial liabilities measured at fairvalue through current profit and loss||||||||
|Derivative financial liabilities||||||||
|Notes payable||5.18||718,560,000.00||760,555,000.00||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Accounts payable 5.19 193,368,485.45 75,885,325.83
||||||||
|-|-|-|-|-|-|-|
|Advances from customers||5.20|9,126,126.31||1,401,319.97||
|Financial assets sold for repurchase|||||||
|Handling charges and commissionspayable|||||||
|Employee remuneration payable||5.21|2,629,812.54||1,654,497.94||
|Taxes and surcharges payable||5.22|16,163,190.70||16,857,642.89||
|Interest payable|||||||
|Dividends payable|||||||
|Other payables||5.23|40,693,888.64||16,874,326.53||
|Reinsurance accounts payable|||||||
|Provision for insurance contracts|||||||
|Acting trading securities|||||||
|Acting underwriting securities|||||||
|Classified as liabilities held for sale|||||||
|Non-current liabilities maturing withinone year||5.24|36,100,000.00||75,000,000.00||
|Other current liabilities|||||||
||Total current liabilities|||1,241,141,503.64||1,165,228,113.16|
||Non-current liabilities:||||||
|Long-term borrowings||5.25|48,590,000.00||128,490,000.00||
|Bonds payable|||||||
|Including: Preferred shares|||||||
|Perpetual bond|||||||
|Long-term payables|||||||
|Long-term employee remunerationpayable|||||||
|Special payables|||||||
|Estimated liabilities|||||||
|Deferred income|||||||
|Deferred income tax liabilities|||||||
|Other non-current liabilities|||||||
||Total non-current liabilities|||48,590,000.00||128,490,000.00|
||Total liabilities|||1,289,731,503.64||1,293,718,113.16|
||Owners' equity||||||
|Share capital||5.26|119,375,000.00||119,375,000.00||
|Other equity instruments|||||||
|Including: Preferred shares|||||||
|Perpetual bond|||||||
|Capital reserves||5.27|958,565,294.29||958,565,294.29||
|Less: treasury stock|||||||
|Other comprehensive income||5.28|9,800.00||9,800.00||
|Special reserves|||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Surplus reserves 5.29 125,686,000.00 125,686,000.00
||||||||
|-|-|-|-|-|-|-|
|General risk reserves|||||||
|Undistributed profits||5.30|-935,253,002.64||-947,520,008.78||
||Total equity attributable to owners of||||||
|||||268,383,091.65||256,116,085.51|
||the parent company||||||
|Minority equity|||1,220,285.74||781,632.77||
||Total owners' equity|||269,603,377.39||256,897,718.28|
||Total liabilities and owners' equity|||1,559,334,881.03||1,550,615,831.44|

 Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
|||||||||
|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.|||||||
||Balance Sheet|||||||
||December 31, 2016|||||||
||(Expressed in Renminbi unless otherwise stated)|||||||
||||||Balance as at December 31,|||
||Assets||Note 13||||Balance as at January 1, 2016|
||||||2016|||
||Current assets:|||||||
|Cash and cash equivalents||||290,491,337.89||47,345,832.30||
|Financial assets measured at fairvalue through current profit and loss||||||||
|Derivative financial assets||||||||
|Notes receivable||||||2,000,000.00||
|Accounts receivable||13.1||4,307.10||527,570.36||
|Advances to suppliers||||1,182,599.45||||
|Interest receivable||||||||
|Dividends receivable||||||||
|Other receivables||13.2||5,021,347.04||253,605,619.11||
|Inventories||||||||
|Classified as assets held for sale||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Non-current assets maturing within
one year
||||||||
|-|-|-|-|-|-|-|
|Other current assets|||131,046.64||||
||Total current assets|||296,830,638.12||303,479,021.77|
||Non-current assets:||||||
|Available-for-sale financial assets|||||||
|Held-to-maturity investments|||||||
|Long-term receivables|||||||
|Long-term equity investments||13.3|251,338,112.31||251,541,316.13||
|Investment properties|||115,326,025.61||||
|Fixed assets|||70,991,009.78||183,278,272.00||
|Construction in progress|||||||
|Project materials|||||||
|Disposal of fixed assets|||||||
|Productive biological assets|||||||
|Oil and gas assets|||||||
|Intangible assets|||||16,261,765.57||
|Development expenses|||||||
|Goodwill|||||||
|Long-term deferred expenses|||||||
|Deferred income tax assets|||||||
|Other non-current assets|||||||
||Total non-current assets|||437,655,147.70||451,081,353.70|
||Total assets|||734,485,785.82||754,560,375.47|

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.||||||
||Balance Sheet (Continued)||||||
||December 31, 2016||||||
||(Expressed in Renminbi unless otherwise stated)||||||
|||||Balance as at December 31,|||
||Liabilities and Shareholder's Equity|Note 13||||Balance as at January 1, 2016|
|||||2016|||
||Current liabilities:||||||
|Short-term borrowings|||||25,000,000.00||
|Financial liabilities measured at fair valuethrough current profit and loss|||||||
|Derivative financial liabilities|||||||
|Notes payable|||142,850,000.00||152,850,000.00||
|Accounts payable|||147,819,149.98||42,646,214.18||
|Advances from customers|||180,083.38||220,124.53||
|Employee remuneration payable|||14,467.08||58,886.32||
|Taxes and surcharges payable|||15,945,044.76||15,268,307.65||
|Interest payable|||||||
|Dividends payable|||||||
|Other payables|||240,371,017.71||216,034,017.49||
|Classified as liabilities held for sale|||||||
|Non-current liabilities maturing within oneyear|||||67,000,000.00||
|Other current liabilities|||||||
||Total current liabilities|||547,179,762.91||519,077,550.17|
||Non-current liabilities:||||||
|Long-term borrowings|||||47,000,000.00||
|Bonds payable|||||||
|Including: Preferred shares|||||||
|Perpetual bond|||||||
|Long-term payables|||||||
|Long-term employee remunerationpayable|||||||
|Special payables|||||||
|Estimated liabilities|||||||
|Deferred income|||||||
|Deferred income tax liabilities|||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Other non-current liabilities
|||||||
|-|-|-|-|-|-|
||Total non-current liabilities||||47,000,000.00|
||Total liabilities||547,179,762.91||566,077,550.17|
||Owners' equity|||||
|Share capital||119,375,000.00||119,375,000.00||
|Other equity instruments||||||
|Including: Preferred shares||||||
|Perpetual bond||||||
|Capital reserves||958,565,294.29||958,565,294.29||
|Less: treasury stock||||||
|Other comprehensive income||9,800.00||9,800.00||
|Special reserves||||||
|Surplus reserves||125,686,000.00||125,686,000.00||
|Undistributed profits||-1,016,330,071.38||-1,015,153,268.99||
||Total owners' equity||187,306,022.91||188,482,825.30|
||Total liabilities and owners' equity||734,485,785.82||754,560,375.47|

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
|||||||||
|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.|||||||
||Consolidated Income Statement|||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016|||||||
||(Expressed in Renminbi unless otherwise stated)|||||||
||Item||Note 5||Year 2016||Year 2015|
||Ⅰ. Total operating income|||||||
||||||873,286,486.75||1,341,331,910.93|
|Including: operating income||5.31||873,286,486.75||1,341,331,910.93||
|Interest income||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Premiums earned
||||||||
|-|-|-|-|-|-|-|
|Income from handling charges and commissions|||||||
||Ⅱ. Total operating costs||||||
|||||860,400,775.55||1,605,453,382.35|
|Including: Operating costs||5.31|712,724,948.38||1,251,939,003.07||
|Interest expenses|||||||
|Handling charges and commissions expenses|||||||
|Surrender value|||||||
|Net amount of compensation payout|||||||
|Net amount withdrawn for insurance contract reserves|||||||
|Policy dividend payment|||||||
|Reinsurance costs|||||||
|Taxes and surcharges||5.32|6,268,442.01||15,487,280.18||
|Selling expenses||5.33|27,429,578.93||76,054,125.60||
|General and administrative expenses||5.34|77,041,000.34||171,145,874.26||
|Financial expenses||5.35|36,595,522.33||83,560,026.12||
|Losses from asset impairment||5.36|341,283.56||7,267,073.12||
|Plus: gains from changes in fair value ("-" for losses)|||||||
|Investment income ("-" for losses)||5.37|3,128,796.18||498,750,796.47||
|Including: income from investment in associates and jointventures||5.37|3,128,796.18||12,442,935.76||
|Foreign exchange gains ("-" for losses)|||||||
||Ⅲ.Operating profits ("-" for losses)||||||
|||||16,014,507.38||234,629,325.05|
|Plus: Non-operating income||5.38|1,259,915.28||11,418,743.79||
|Including: gains from disposal of non-current assets||5.38|||3,426,624.42||
|Less: Non-operating expenses||5.39|1,959,872.08||705,323.13||
|Including: Losses on disposal of non-current assets||5.39|3,646.70||434,139.22||
||Ⅳ. Total profits ("-" for total losses)||||||
|||||15,314,550.58||245,342,745.71|
|Less: income tax expenses||5.40|2,608,891.47||4,412,314.65||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||Ⅴ. Net profit ("-" for net loss)|||||
||||12,705,659.11||240,930,431.06|
|Net profit attributable to owners of the parent company||12,267,006.14||240,735,112.20||
|Non-controlling interests||438,652.97||195,318.86||
||Ⅵ. Net of tax of other comprehensive income|||||
||Net of tax of other comprehensive income attributable to|||||
||owners of the parent company|||||
||1. Other comprehensive income that cannot be reclassified|||||
||into gains and losses subsequently|||||
|(1)Changes in net liabilities or net assets arising fromre-measurement of defined benefit plan||||||
|(2)Share in other comprehensive income of the investeecannot be reclassified into gains and losses under theequity method||||||
||2.Other comprehensive income to be reclassified into gains|||||
||and losses subsequently|||||
|(1)Share in other comprehensive income of the investee tobe reclassified into gains and losses under the equitymethod||||||
|(2)Gains and losses on changes in fair value of financialassets available for sale||||||
|(3)Gains and losses arising from reclassification ofheld-to-maturity investments as financial assets availablefor sale||||||
|(4)Effective portion of cash flow hedging gains and losses||||||
|(5)Translation differences of financial statementsdenominated in foreign currency||||||
|(6)Others||||||
|Net of tax of other comprehensive income attributable tonon-controlling shareholders||||||
||Ⅶ.Total comprehensive incomes|||||
||||12,705,659.11||240,930,431.06|
|Total comprehensive income attributable to owners of theparent company||12,267,006.14||240,735,112.20||
|Total comprehensive income attributable to minorityshareholders||438,652.97||195,318.86||
|Ⅷ. Earnings per share:||||||
|1.Basic earnings per share (RMB/Share)||0.103||2.017||
|2.Diluted earnings per share (RMB/Share)||0.103||2.017||

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's rincipal:
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.|||||||
||Income Statement|||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016|||||||
||(Expressed in Renminbi unless otherwise stated)|||||||
||Item||Note 13||Year 2016||Year 2015|
|Ⅰ. Operating income||13.4||610,825,517.52||916,524,874.05||
|Less: Operating costs||13.4||577,514,305.99||951,519,134.10||
|Taxes and surcharges||||3,048,149.21||7,097,726.80||
|Selling expenses||||||7,875,528.62||
|General and administrative expenses||||22,093,139.50||83,455,935.38||
|Financial expenses||||11,788,734.18||35,443,970.39||
|Losses from asset impairment||||128,688.96||239,241,816.94||
|Plus: gains from changes in fair value ("-" for losses)||||||||
|Investment income ("-" for losses)||13.5||3,128,796.18||9,857,041.01||
|Including: income from investment in associates and jointventures||13.5||3,128,796.18||16,907,175.88||
||Ⅱ. Operating profits ("-" for losses)||||-618,704.14||-398,252,197.17|
|Plus: Non-operating income||||410,000.00||400,327,288.14||
|Including: gains from disposal of non-current assets||||||||
|Less: Non-operating expenses||||968,098.25||255,016.79||
|Including: Losses on disposal of non-current assets||||3,646.70||147,576.58||
||Ⅲ.Total profits ("-" for total losses)||||-1,176,802.39||1,820,074.18|
|Less: income tax expenses||||||||
||Ⅳ. Net profit ("-" for net loss)||||-1,176,802.39||1,820,074.18|
||Ⅴ. Net of tax of other comprehensive income|||||||
||1.Other comprehensive income that cannot be reclassified|||||||
||into gains and losses subsequently|||||||
|(1)Changes in net liabilities or net assets arising fromre-measurement of defined benefit plan||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||
|-|-|-|-|
||2.Other comprehensive income to be reclassified into gains|||
||and losses subsequently|||
|(1)Share in other comprehensive income of the investee tobe reclassified into gains and losses under the equitymethod||||
|(2)Gains and losses on changes in fair value of financialassets available for sale||||
|(3)Gains and losses arising from reclassification ofheld-to-maturity investments as financial assets availablefor sale||||
|(4)Effective portion of cash flow hedging gains and losses||||
|(5)Translation differences of financial statementsdenominated in foreign currency||||
|(6)Others||||
||||1,820,074.18|
||Ⅵ. Total comprehensive incomes|||
|||-1,176,802.39||
||Ⅶ. Earnings per share:|||
|1.Basic earnings per share (RMB/Share)||||
|2.Diluted earnings per share (RMB/Share)||||

Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
||||||||
|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.||||||
||Consolidated Statement of Cash Flows||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016||||||
||(Expressed in Renminbi unless otherwise stated)||||||
||Item|Note 5||Year 2016||Year 2015|
||Ⅰ.Cash flows from operating activities:||||||
|Cash received from sale of goods and rendering of services|||503,501,706.64||924,895,630.63||
|Net increase in customer bank deposits and placement from banks andother financial institutions|||||||
|Net increase in borrowings from central bank|||||||
|Net increase in loans from other financial institutions|||||||
|Premiums received from original insurance contracts|||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Net cash received from reinsurance business
||||||||
|-|-|-|-|-|-|-|
|Net increase in deposits and investments from policyholders|||||||
|Net increase from disposal of financial assets at fair value whosefluctuation is attributed to profit or loss for current period|||||||
|Cash received from interest, handling charges and commissions|||||||
|Net increase in loans from banks and other financial institutions|||||||
|Net capital increase in repurchase business|||||||
|Refunds of taxes and surcharges|||4,493,153.97||5,449,365.90||
|Cash received from other operating activities||5.41|3,401,305.80||15,051,156.84||
||Sub-total of cash inflows from operating activities|||511,396,166.41||945,396,153.37|
|Cash paid for goods purchased and services received|||294,912,075.87||585,375,677.51||
|Net increase in loans and advances to customers|||||||
|Net increase in deposits in central bank and other banks and financialinstitutions|||||||
|Cash paid for original insurance contract claims|||||||
|Cash paid for interests, handling charges and commissions|||||||
|Cash paid for policy dividends|||||||
|Cash paid to and on behalf of employees|||59,900,452.77||173,153,899.42||
|Cash paid for taxes and surcharges|||23,191,284.40||46,733,869.09||
|Cash paid for other operating activities||5.41|24,773,234.35||57,826,696.74||
||Sub-total of cash outflows from operating activities|||402,777,047.39||863,090,142.76|
|Net cash flows from operating activities|||108,619,119.02||82,306,010.61||
||Ⅱ. Cash flows from investing activities:||||||
|Cash received from disposal of investments|||||||
|Cash received from returns on investments|||3,332,000.00||34,460,000.00||
|Net cash received from disposal of fixed assets, intangible assets andother long-term assets|||||1,745,492.45||
|Cash inflow from disposal of subsidiaries and other operating units|||||||
|Cash received from other investing activities|||||||
||Sub-total of cash inflows from investing activities|||3,332,000.00||36,205,492.45|
|Cash paid to acquire and construct fixed assets, intangible assets andother long-term assets|||19,363,354.60||81,268,875.00||
|Cash paid for investments|||||||
|Net increase in pledge loans|||||||
|Net cash paid to acquire subsidiaries and other business units|||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Cash paid for other investing activities 5.41 3,750,149.57
||||||||
|-|-|-|-|-|-|-|
|Sub-total of cash outflows from investing activities|||19,363,354.60||85,019,024.57||
|Net cash flows from investing activities|||-16,031,354.60||-48,813,532.12||
||Ⅲ.Cash flows from financing activities||||||
|Cash received from investors|||||||
|Including: cash received by subsidiaries from investments by minorityshareholders|||||||
|Cash received from borrowings|||228,000,000.00||1,166,290,000.00||
|Cash received from bonds issuance|||||||
|Cash received from other financing activities||5.41|1,636,082,041.12||1,800,692,830.44||
||Sub-total of cash inflows from financing activities|||1,864,082,041.12||2,966,982,830.44|
|Cash paid for debt repayments|||339,300,000.00||1,305,000,000.00||
|Cash paid for distribution of dividends and profits or payment ofinterest|||14,017,249.00||87,034,032.49||
|Including: dividends and profits paid to minority shareholders bysubsidiaries|||||||
|Cash paid for other financing activities||5.41|1,353,227,549.97||1,621,039,606.73||
||Sub-total of cash outflows from financing activities|||1,706,544,798.97||3,013,073,639.22|
|Net cash flows from financing activities|||157,537,242.15||-46,090,808.78||
|Ⅳ. Effect of fluctuation in exchange rate on cash and cashequivalents|||236.08||686,261.04||
||Ⅴ. Net increase in cash and cash equivalents|||250,125,242.65||-11,912,069.25|
|Plus: balance of cash and cash equivalents at the beginning of theperiod|||23,643,515.81||35,555,585.06||
||Ⅵ. Balance of cash and cash equivalents at the end of the period|||273,768,758.46||23,643,515.81|

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
||
|-|
|Chongqing Jianshe Motorcycle Co., Ltd.|
|Statement of Cash Flows|
|FOR THE YEAR ENDED DECEMBER 31, 2016|
|(Expressed in Renminbi unless otherwise stated)|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||
|-|-|-|-|-|-|
||Item||Year 2016||Year 2015|
||Ⅰ.Cash flows from operating activities:|||||
|Cash received from sale of goods and rendering of services||330,670,982.08||490,046,185.33||
|Refunds of taxes and surcharges||||1,827,925.86||
|Cash received from other operating activities||1,009,636.06||3,275,718.69||
||Sub-total of cash inflows from operating activities||331,680,618.14||495,149,829.88|
|Cash paid for goods purchased and services received||179,291,662.89||435,189,154.01||
|Cash paid to and on behalf of employees||29,387,896.21||118,533,275.30||
|Cash paid for taxes and surcharges||12,571,673.19||7,864,311.20||
|Cash paid for other operating activities||1,445,414.31||18,487,200.13||
||Sub-total of cash outflows from operating activities||222,696,646.60||580,073,940.64|
|Net cash flows from operating activities||108,983,971.54||-84,924,110.76||
||Ⅱ. Cash flows from investing activities:|||||
|Cash received from disposal of investments||||295,800.00||
|Cash received from returns on investments||3,332,000.00||34,460,000.00||
|Net cash received from disposal of fixed assets, intangible assets and otherlong-term assets||||98,316.45||
|Cash inflow from disposal of subsidiaries and other operating units||||||
|Cash received from other investing activities||||||
||Sub-total of cash inflows from investing activities||3,332,000.00||34,854,116.45|
|Cash paid to acquire and construct fixed assets, intangible assets and otherlong-term assets||482,967.78||2,937,344.55||
|Cash paid for investments||||300.00||
|Net cash paid to acquire subsidiaries and other business units||||||
|Cash paid for other investing activities||||||
|Sub-total of cash outflows from investing activities||482,967.78||2,937,644.55||
||Net cash flows from investing activities||2,849,032.22||31,916,471.90|
||Ⅲ.Cash flows from financing activities|||||
|Cash received from investors||||||
|Cash received from borrowings||||854,300,000.00||
|Cash received from bonds issuance||||||
|Cash received from other financing activities||2,646,586,755.28||2,392,099,963.32||
||Sub-total of cash inflows from financing activities||2,646,586,755.28||3,246,399,963.32|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Cash paid for debt repayments 139,000,000.00 927,000,000.00
|||||||
|-|-|-|-|-|-|
|Cash paid for distribution of dividends and profits or payment of interest||||61,178,570.38||
|Cash paid for other financing activities||2,376,323,703.90||2,223,020,195.22||
||Sub-total of cash outflows from financing activities||2,515,323,703.90||3,211,198,765.60|
||Ⅳ. Net cash flows from financing activities|131,263,051.38||35,201,197.72||
|Effect of fluctuation in exchange rate on cash and cash equivalents||||||
||Ⅴ. Net increase in cash and cash equivalents||243,096,055.14||-17,806,441.14|
|Plus: balance of cash and cash equivalents at the beginning of the period||4,486,524.01||22,292,965.15||
||Ⅵ. Balance of cash and cash equivalents at the end of the period||247,582,579.15||4,486,524.01|

 Accompanying notes to financial statements are an integral part of the financial statements.
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.||||||||||||||||
||Consolidated Statement of Changes in Owners' EquityChongqing Jianshe Motorycle Co., Ltd. Annual Report 2016||||||||||||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016||||||||||||||||
||(Expressed in Renminbi unless otherwise stated)||||||||||||||||
||||Year 2016||||||||||||||
|||Equity attributable to owners of the parent company|||||||||||||||
||Item|||||||||||||Minorityequity||Total|
|||||Other equity instruments||||Less:|Other|||||||owners'|
|||||||||||Special||General risk|Undistributed||||
||||Share capital||||Capital reserves|treasury|comprehensi||Surplus reserves|||||equity|
|||||Preferred|Perpetual|Others||stock|ve income|reserves||reserves|profits||||
|||||shares|bond||||||||||||
|||||||||||||||||256,897,718|
||Ⅰ.Balance as at December 31 of last year||119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00||-947,520,008.78||781,632.77||
|||||||||||||||||.28|
|Plus: adjustments for changes in accountingpolicies|||||||||||||||||
|Adjustments for correction of accounting errorsin prior year|||||||||||||||||
|Business combination involving entities undercommon control|||||||||||||||||
|Others|||||||||||||||||
|||||||||||||||||256,897,718|
||Ⅱ. Balance as at January 1 of the current year||119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00||-947,520,008.78||781,632.77||
|||||||||||||||||.28|
||Ⅲ.Increase/(decrease) for the current year ("-"|||||||||||||||12,705,659.|
||||||||||||||12,267,006.14||438,652.97||
||for losses)|||||||||||||||11|
|1.Total comprehensive incomes||||||||||||||||12,705,659.|
||||||||||||||12,267,006.14||438,652.97||
|||||||||||||||||11|
||2.Capital contributed or reduced by owners||||||||||||||||
|(1)Common shares from shareholders|||||||||||||||||
|(2)Investment capital from the holders of otherequity instruments|||||||||||||||||
|(3)Amount of the share-based paymentincluded in the owners' equity|||||||||||||||||
|(4)Others|||||||||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
||3.Distribution of profits||||||||
|(1)Withdrawal of surplus reserves|||||||||
|(2)Withdrawal of general risk reserve|||||||||
|(3)Distribution to owners or shareholders|||||||||
|(4)Others|||||||||
||4.Internal carry-forward of owners' equity||||||||
|(1)Conversion of capital reserves into paid-incapital|||||||||
|(2)Conversion of surplus reserves into paid-incapital|||||||||
|(3)Surplus reserves offsetting losses|||||||||
|(4)Others|||||||||
||5.Special reserves||||||||
|(1)Amount withdrawn in the current year|||||||||
|(2)Amount used in the current year|||||||||
|6.Others|||||||||
||||||||1,220,285.7|269,603,377|
||Ⅳ. Ending balance of the current year|119,375,000.00|958,565,294.29|9,800.00|125,686,000.00|-935,253,002.64|||
||||||||4|.39|

|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.|||||||||||||||
||Consolidated Statement of Changes in Owners' Equity (Continued)Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016|||||||||||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016|||||||||||||||
||(Expressed in Renminbi unless otherwise stated)|||||||||||||||
|||Year 2015||||||||||||||
|||Equity attributable to owners of the parent company||||||||||||||
||Item|||||||||||||||
||||Other equity instruments|||||Less:treasurystock|Other|||Generalriskreserves||Minority|Total owners'|
|||Share capital|||||Capital reserves||comprehe|Special|Surplus reserves||Undistributed|equity|equity|
|||||Preferred|Perpetu||||nsive|reserves|||profits|||
|||||shares|al bond|Others|||income|||||||
||Ⅰ.Balance as at December 31 of last|||||||||||||||
|||119,375,000.00|||||960,505,517.59||9,800.00||125,686,000.00||-1,188,255,120.98|586,313.91|17,907,510.52|
||year|||||||||||||||
|Plus: adjustments for changes inaccounting policies||||||||||||||||
|Adjustments for correction ofaccounting errors in prior year||||||||||||||||
|Business combination involvingentities under common control||||||||||||||||
|Others||||||||||||||||
||Ⅱ. Balance as at January 1 of the|||||||||||||||
|||119,375,000.00|||||960,505,517.59||9,800.00||125,686,000.00||-1,188,255,120.98|586,313.91|17,907,510.52|
||current year|||||||||||||||
||Ⅲ.Increase/(decrease) for the current|||||||||||||||
||||||||-1,940,223.30||||||240,735,112.20|195,318.86|238,990,207.76|
||year ("-" for losses)|||||||||||||||
|1.Total comprehensive incomes||||||||||||||||
||||||||||||||240,735,112.20|195,318.86|240,930,431.06|
||2.Capital contributed or reduced by|||||||||||||||
||owners|||||||||||||||
|(1)Common shares from shareholders||||||||||||||||
|(2)Investment capital from the holdersof other equity instruments||||||||||||||||
|(3)Amount of the share-basedpayment included in the owners'equity||||||||||||||||
|(4)Others||||||||||||||||
||3.Distribution of profits|||||||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|(2)Withdrawal of general risk reserve||||||||||
|(3)Distribution to owners orshareholders||||||||||
|(4)Others||||||||||
||4.Internal carry-forward of owners'|||||||||
||equity|||||||||
|(1)Conversion of capital reserves intopaid-in capital||||||||||
|(2)Conversion of surplus reserves intopaid-in capital||||||||||
|(3)Surplus reserves offsetting losses||||||||||
|(4)Others||||||||||
||5.Special reserves|||||||||
|(1)Amount withdrawn in the currentyear||||||||||
|(2)Amount used in the current year||||||||||
|6.Others|||-1,940,223.30|||||||
||||||||||-1,940,223.30|
||Ⅳ. Ending balance of the current year|119,375,000.00||958,565,294.29|9,800.00|125,686,000.00|-947,520,008.78|781,632.77|256,897,718.28|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.||||||||||||
||Statement of Changes in Owners' Equity||||||||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016||||||||||||
||(Expressed in Renminbi unless otherwise stated)||||||||||||
|||Year 2016|||||||||||
||Item||Other equity instruments||||Less:|Other|||||
|||||||Capital|||Special|Surplus|Undistributed||
|||Share capital|||||treasury|comprehensive||||Total owners' equity|
||||Preferred|Perpetual||reserves|||reserves|reserves|profits||
||||||Others||stock|income|||||
||||shares|bond|||||||||
||Ⅰ.Balance as at December 31 of last year|119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00|-1,015,153,268.99|188,482,825.30|
|Plus: adjustments for changes inaccounting policies|||||||||||||
|Adjustments for correction of accountingerrors in prior year|||||||||||||
|Others|||||||||||||
||Ⅱ. Balance as at January 1 of the current||||||||||||
|||119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00|-1,015,153,268.99|188,482,825.30|
||year||||||||||||
||Ⅲ.Increase/(decrease) for the current year||||||||||||
||||||||||||-1,176,802.39|-1,176,802.39|
||("-" for losses)||||||||||||
|1.Total comprehensive incomes|||||||||||||
||||||||||||-1,176,802.39|-1,176,802.39|
||2.Capital contributed or reduced by owners||||||||||||
|(1)Common shares from shareholders|||||||||||||
|(2)Investment capital from the holders ofother equity instruments|||||||||||||
|(3)Amount of the share-based paymentincluded in the owners' equity|||||||||||||
|(4)Others|||||||||||||
||3.Distribution of profits||||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
|(2)Distribution to owners or shareholders||||||||
|(3)Others||||||||
||4.Internal carry-forward of owners' equity|||||||
|(1)Conversion of capital reserves intopaid-in capital||||||||
|(2)Conversion of surplus reserves intopaid-in capital||||||||
|(3)Surplus reserves offsetting losses||||||||
|(4)Others||||||||
||5.Special reserves|||||||
|(1)Amount withdrawn in the current year||||||||
|(2)Amount used in the current year||||||||
|6.Others||||||||
||Ⅳ. Ending balance of the current year|119,375,000.00|958,565,294.29|9,800.00|125,686,000.00|-1,016,330,071.38|187,306,022.91|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Chongqing Jianshe Motorcycle Co., Ltd.||||||||||||
||Statement of Changes in Owners' Equity (Continued)||||||||||||
||FOR THE YEAR ENDED DECEMBER 31, 2016||||||||||||
||(Expressed in Renminbi unless otherwise stated)||||||||||||
|||Year 2015|||||||||||
||Item||Other equity instruments||||Less:|Other|||||
||||||||||Special|Surplus|Undistributed||
|||Share capital||||Capital reserves|treasury|comprehensive||||Total owners' equity|
||||Preferred|Perpetual|||||reserves|reserves|profits||
||||||Others||stock|income|||||
||||shares|bond|||||||||
||Ⅰ.Balance as at December 31 of last year|119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00|-1,016,973,343.17|186,662,751.12|
|Plus: adjustments for changes inaccounting policies|||||||||||||
|Adjustments for correction of accountingerrors in prior year|||||||||||||
|Others|||||||||||||
||Ⅱ. Balance as at January 1 of the current||||||||||||
|||119,375,000.00||||958,565,294.29||9,800.00||125,686,000.00|-1,016,973,343.17|186,662,751.12|
||year||||||||||||
||Ⅲ.Increase/(decrease) for the current year||||||||||||
||||||||||||1,820,074.18|1,820,074.18|
||("-" for losses)||||||||||||
|1.Total comprehensive incomes|||||||||||||
||||||||||||1,820,074.18|1,820,074.18|
||2.Capital contributed or reduced by||||||||||||
||owners||||||||||||
|(1)Common shares from shareholders|||||||||||||
|(2)Investment capital from the holders ofother equity instruments|||||||||||||
|(3)Amount of the share-based paymentincluded in the owners' equity|||||||||||||
|(4)Others|||||||||||||
||3.Distribution of profits||||||||||||
|(1)Withdrawal of surplus reserves|||||||||||||

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
|||||||||
|-|-|-|-|-|-|-|-|
|(3)Others||||||||
||4.Internal carry-forward of owners' equity|||||||
|(1)Conversion of capital reserves intopaid-in capital||||||||
|(2)Conversion of surplus reserves intopaid-in capital||||||||
|(3)Surplus reserves offsetting losses||||||||
|(4)Others||||||||
||5.Special reserves|||||||
|(1)Amount withdrawn in the current year||||||||
|(2)Amount used in the current year||||||||
|6.Others||||||||
||Ⅳ. Ending balance of the current year|119,375,000.00|958,565,294.29|9,800.00|125,686,000.00|-1,015,153,268.99|188,482,825.30|

Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2016
(Amounts are expressed in RMB unless otherwise stated)
1 Corporate information
1.1 Company profile
Chongqing Jianshe Motorcycle Co., Ltd. (hereinafter referred to as the "Company", "Company" or "Chongqing Jianshe Motorcycle ") was jointly set up in July 1995 by the Construction Industry (Group) Co., Ltd. and China North Industries Shenzhen Corporation. The 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.
As at December 31, 2016, the Company issued 119,375,000 shares in total and had the registered capital of 119,375,000. The registration place: NO.1, JIANSHE ROAD HUAXI INDUSTRY PARK, BANAN DISTRICT, CHONGQING; the headquarters address: Banan District, Chongqing Municipality. Legal representative: Lv Hongxian. The main business activities: research and development, processing, manufacturing and related technical services of Motorcycles, auto parts, accessories, machinery products, design , manufacturing and related technical services of tooling (except for those subject to national special provisions) ; R& D, production and sales of motorcycle engines; research , development and processing of mechanical and electrical products, home appliances, bicycles, environmental protection product; imports, wholesale, retail, commission agency (except auction) of similar products of these products. The parent company is Chongqing Jianshe mechanical and electrical co., LTD.. The actual controller of the Company is China South Industries Group Corporation(CSGS), and the ultimate controller of the Company is the State-owned Assets Supervision and Administration Commission (SASAC).
The disclosure of the financial statements was approved by the Board of Directors on April 25,2017.
1.2 Scope of the consolidated financial statements
As at December 31, 2016, the subsidiaries included in the scope of consolidated financial
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 statements of the Company are presented as set out below:
Name of the subsidiary
Chongqing Jianshe Automobile A/C Co., Ltd.
Shanghai Jianshe Motorcycle Co., Ltd.
See "Note 6 Change in the scope of business combinations "and "Note 7 Equity in other entities " for details of scope consolidated financial statements and the change therein.
2 Basis of preparation for financial statements
2.1 Basis of 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.
2.2 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.
3 Principal accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
The disclosure as set out below cover the specific accounting policies and accounting estimates developed by the Company in accordance with the actual production and management features. See "Note 3.11 Provision for bad debts of accounts receivables, "Note 3.12 Inventories", "Note 3.16 Fixed assets", "Note 3.19 Intangible assets" and "3.25 Revenues" for details.
3.1 Statements on Compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Standards for Business Enterprises and truly and completely reflect theCompany’s financial position, operating results and cash flows, etc. for the reporting period.
3.2 Accounting period
The accounting year is from January 1 to December 31.
3.3 Operating cycle
The Company has an operating cycle of 12 months.
3.4 Functional currency
The functional currency is Renminbi.
3.5 Accounting treatments of the combination of enterprises under common control and the combination of enterprises not under the common control
Business combination under common control: The assets and liabilities acquired by the Company in a business combination are stated at the book value of the assets and liabilities (including the goodwill arising from the acquisition of the acquiree by the ultimate controller) of the acquiree on the combination date. The stock premium in the capital reserve is adjusted according to the difference between the book value of net assets acquired through combination and the book value of consideration paid for the combination (or total par value of shares issued). If the stock premium in the capital reserves is insufficient to cover the difference, the remaining amount shall be charged against retained earnings.
Combination of enterprises not under the common control: The assets paid and liabilities incurred or assumed by the Company on the acquisition date for the business combination are measured at their fair values, and the difference between the fair value and book value is charged to the current profit or loss. The Company shall recognize the difference of the combination costs in excess of the fair value of the identifiable net assets acquired from the acquiree as goodwill. The difference of the combination costs in short of the fair value of the identifiable net assets acquired from the acquiree is charged to the current profit and loss after review.
The intermediary service charges incurred for audit, legal service, consulting services and other direct relevant expenses are charged to the current profit and loss; the transaction costs incurred for issuance of equity securities for business combination offest the equities.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 3.6 Preparation of consolidated financial statements
3.6.1 Scope of consolidation
The scope of consolidated financial statements is determined on the basis of control, and all subsidiaries (including the divisable portion of the investee under the control of the Company) are included in the consolidated financial statements.
3.6.2 Combination procedures
The Company prepares the consolidated financial statements on the basis of the financial statements of itself and its subsidiaries, according to other relevant information. When preparing the consolidated financial statements, the Company regards the whole group as an accounting entity to reflect the overall financial position, operating results and cash flow of the Group, in accordance with requirements of relevant accounting standards for the recognition, measurement and presentation, on the basis of the uniform accounting policies. The accounting polidies and accounting period adopted by the subsidiaries included in the scope of consolidated financial statements are in line with those adopted by the Company. In case any disrepancy between the accounting policies and accounting period adopted by the subsidiary and those adopted by the Company, the adjustment will be made in light of the accounting policies and accounting period adopted by the Company, when the consolidated financial statements are prepared.The financial statements of the subsidiary acquired through the combination of enterprises not under common control are adjusted on the basis of the fair value of the identifiable net assts on the acquisition date. The financial assets of the subsidiary acquired through the combination of enterprises under the common control are adjusted on the basis of the book value of the assets and liabilities (including the goodwill arising from the acquisition of such subsidiary by the ultimate controller) as stated in the financial statements of the ultimate controller.
The owners' equities, current net profit or loss and current comprehensive income attributable to minority shareholders are separately presented under the owners' equities item of the consolidated balance sheet, net profit item and total comprehensive income item of the consolidated income statement, respectively. Where the current losses attributable to minority shareholders of the subsidiary exceed the owners' equities attributable to the same
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 at the period beginning, the difference between them will offset the minority equity. (1) Increase of the subsidiary or business
In case of increase of subsidiary or business as a result of combination of enterprises under common control during the reporting period, the beginning amount stated in the consolidated balance sheet will be adjusted; the income, expense and profit generated from the subsidiary or business from the beginning of the period of combination to the end of reporting period will be included in the consolidated statement of cash flows, with the adjustment made to the relevant items of the comparative statement, as if the reporting entity after the combination still existed from the beginning of control of the ultimate controller.
Where the additional investment or other reason leads to the control over the investee under the common control, all entities considered to take a part in the combination will be adjusted to the extent that they are in the current status as they come to be under the control of the ultimate controller. The retained earnings or the current profit or loss at the period beginning during the statement period are offset by equity investment held before the control over the mergee is obtained, and the equity investments held before the control over the acquiree is obtained, and the related profit or loss, other comprehensive income and change in other net assets that are recognized during the period which starts on the later of the date when the original equities are obtained and the date when both merger and mergee are under the common control and ends on the combination date, respectively.
In case of increase of subsidiary or business during the reporting period as a result of combination of enterprises not under the common control, the beginning amount stated in the consolidated balance sheet will not be adjusted; the income, expense and profit generated from such subsidiary or business from the acquisition date to the end of reporting period will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the acquisition date to the end of reporting period will be incldued in the consolidated statement of cash flows.
Where the additional investment or other reason leads to the control over the investee not under the common control, the equities of the mergee held before the acquisition date will be remeasured at the fair value of such equities on the acquisition date, and
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 the difference between the fair value and book value thereof will be charged to the current investment income. Where the equities of the acquiree held before the acquisition date involves the change in other comprehensive income or in other owners' equities other than the net profit or loss, other comprehensive income and profit distribution, the change in other comprehensive income or other owners' equities will be converted into tthe investment income for the period covering the acquisition date, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee.
(2) Disposal of the subsidiary or business
a. General method of treatment
In case of treatment of subsidiary or business during the reporting, the the income, expense and profit generated from such subsidiary or business from the period beginning to the disposal date will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the period beginning to the disposal date will be incldued in the consolidated statement of cash flows.
Where the control over the investee is lost due to the disposal of some of equity investments or other reasons, the remaining equity investment after disposal will be re-measured at fair value on the day when the control is lost.The sum of the consideration received for disposal of equities and the fair value of the remaining equities, less the difference between the net assets of the former subsidiary of which the continuous calculation starts from the acquisition date or combination date and the goodwill, should be charged to the investment income for the period during which the control is lost.Changes in other comprehensive income related to the equity investment in the former subsidiary or in owners' equities other than the net profit or loss, other comprehensive income and profit distribution are converted into the current investment income upon the loss of control, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee.
In the event that the proportion of the Company's shares is reduced due to the capital increase of the other investors, the accounting treatment shall be carried out
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 in accordance with the above principles.
b. Disposal of subsidiary by stages
In case of disposal of investment in the equity of subsidiary by stages through a number of transactions, such transactions will be treated as a package deal, provided that the terms and conditions on and the economic effect of the equity investment in the subsidiary meet one of more of the following conditions:
ⅰ. These transactions are entered into considering their effects are considered;ⅱ. These transactions can lead to a complete business result as a whole;
ⅲ. The occurrence of a transaction depends on the occurrence of at least one of others; and
ⅳ. A single transaction is deemed uneconomical, but the economical efficiency can be seen when it is put together with other transactions;
Where the transctions involved in the disposal of the equity investment in the subsidiary are package deals, the Company will treat each transaction as the one involved in the disposal of the subsidiary with loss of control; however, the difference between the consideration for each disposal before the loss of control and the net assets of such subsidiary corresponding to the disposal of investment will be recognized as other comprehensive income in the consolidated financial statements, and will be transferred to the loss or profit for the period during which the control is lost, upon the loss of control.
Where the transctions involved in the disposal of the equity investment in the subsidiary are not package deals, these transactions will be treated according to the policies on the disposal of part of the equity investments in the subsidiary without loss of control, before the loss of control; or treated in the general treatment method of disposa of subsidiary, upon the loss of control.
(3) Acquisition of minority equity of subsidiary
The stock premium under the capital reserve in the consolidated balance sheet is adjusted at the difference between the long-term equity investment newly acquired as a
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 result of acquisition of minority equity and the net assets of the subsidiary attributable to the Company, of which the continuous calculation starts from the acquisition date (or combination date); and the retained earnings will be adjusted if the stock premium under the capital reserve is insufficient as to the offset.
(4) Disposal of part of the equity investments in the subsidiary without loss of control The stock premium under the capital reserve in the consolidated balance sheet is adjusted at the difference between the consideration received for the disposal of part of the long-term equity investments in the subsidiary without loss of control and the net assets of the subsidiary attributable to the Company, of which the continuous calculation starts from the acquisition date (or combination date); and the retained earnings will be adjusted if the stock premium under the capital reserve is insufficient as to the offset.
3.7 Classification and accounting treatment of joint venture arrangement
Joint venture arrangement is classified into joint operation and joint ventures.
In terms of the joint operation, the Company is the joint venturer under the joint venture arrangement and is entitled to the assets and bear the liabilities under such arrangement.
The Company recognizes the following items in relation with the share of interest in the joint operation, and conducts the accounting treatment of the the said items according to the provisions of Accounting Standards for Enterprises:
(1) Recognition of the assets held separately by the Company and of the assets held by the Company jointly others in proportion;
(2) Recognition of the liabilities separately borne by the Company and of the liabilities borne by the Company jointly others in proportion;
(3) Recognition of proportioned income generated attributable to the Company as one of the co-operators;
(4) Recognition of income generated fattributible to the Company as one of the co-sellers; (5) Recognition of the expenses incurred separately and the proportioned expenses incurred by the Company as one of the co-opeartors.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 See "Note 3.14 Long-term equity investments" for detailed of accounting policies on the investment of the Company in joint ventures.
3.8 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.
3.9 Foreign currency business and foreign currency translation
3.9.1 Foreign currency business:
Transactions denominated in foreign currency are translated into RMB for accounting purpose at the spot exchange rate on the day when the transaction occurs.
The balances of foreign currency monetary items are converted at the spot exchange rate prevailing on the balance sheet date. The exchange differences arising from the conversion, other than those arising from specific-purpose borrowings in foreign currencies related to acquisition and construction of assets eligible for capitalization, which shall be measured in accordance with principle of capitalization of the borrowing costs, shall be charged to the current profit or loss.
3.9.2 Translation of financial statement denominated in foreign currency
The asset and liability items in the balance sheet shall be converted at the spot exchange rates prevailing on the balance sheet date. Except retained profit, theowners’ equity items shall be converted at the spot exchange rates on the occurrence date.The income and expense items in the income statement shall be converted at the spot exchange rates which are determined by systematic and reasonable methods and similar to the spot exchange rate on the date of occurrence of transaction.
On disposal of a foreign operation, the difference arising from the converstion of financial statements denominated in foreign currency and related to such foreign operation should be transferred to the current gain or loss on disposal, from the owners' equities.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 3.10 Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
3.10.1 Classification of financial instruments
Upon the initial recognition, fFinancial assets and liabilities are classified into the following categories according to the purpose of acquisition: the financial assets or financial liabilities measured at fair value through current profit and loss, including financial assets or financial liabilities held for trading (and those financial assets or financial liabilities directly designated under this category), held-to-maturity investments, receivables, financial assets available for sale and other financial liabilities, etc.
3.10.2 Recognition and measurement of financial instruments
(1) Financial assets (financial liabilities) measured at fair value through current profit and loss
Financial assets (financial liabilities) are initially stated at fair values when acquired (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn), and relevant transaction expenses are included in the current profit and loss.
The interests or cash dividends to be received during the holding period are recognized as investment income. Change in fair values is included in the current profit and loss at the end of the period.
Upon the disposal, the difference between the fair value and initial book-entry value is recognized as investment income upon disposal; meanwhile, adjustment is made to gains or losses from changes in fair values.
(2) Held-to-maturity investments
Held-to-maturity investments are initially recorded at fair values when acquired (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn).
The interest income is calculated and recognized at amortized cost and effective interest rates (or the nominal interest rate, if there is small difference between the
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 effective interest rate and the nominal interest rate) and is charged to the investment income. The effective interest rates are determined upon acquisition and remain unchanged during the expected remaining period, or a shorter period if applicable. Difference between the proceeds and the book value of the investment is recognized as investment income upon disposal.
(3) Accounts receivable
Forcreditor’s rights receivable arising from external selling commodities or providing service by the Company and other creditor's rights in respect of liability instruments of other enterprises (excluding those quoted in an active market) held by the Company, including accounts receivable, other receivables, notes receivables, prepayments, long-term receivables etc., the initial recognition amount shall be the contract price or agreed price receivable due from purchasing party. The initial amount of the accounts receivable with financing nature are recognized based on the present value.
The difference between the amount obtained and the book value of the accounts receivable is included in current profit and loss upon recovery or disposal.
(4) Available-for-sale financial assets
Available-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn) and transaction costs when acquired. The interests or cash dividends to be received during the holding period are recognized as investment income. Available-for-sale financial assets are measured at fair value at the end of the period, and changes in fair value are included in the capital reserves (other capital reserves). those equity instrument investments not quoted in an active market and whose fair value cannot be reliably measured, and the derivative financial assets linked to and settled by way of delivery of such equity investments are measured at the cost.
Difference between the proceeds and the book value of the financial assets is recognized as gain or loss on investment upon disposal; meanwhile, amount of disposal
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 corresponding to the accumulated change in fair value which is originally and directly included in theowners’ equity shall be transferred out and charged to the current gains or losses.
(5) Other financial liabilities
Other financial liabilities are initially recognized at the sum of fair value and transaction expenses. The subsequent measurement is based on amortized costs. They are subsequently measured at amortized cost.
3.10.3 Recognition and measurement for transfer of financial assets
If the Company has transferred nearly all of the risks and rewards relating to the ownership of the financial assets to the transferee, they shall be derecognized. If it retains nearly all of the risks and rewards relating to the ownership of the financial assets, they shall not be derecognized.
In judging whether the transfer of a financial asset meets the above requirements of derecognizing financial assets, the principle of substance over form is adopted. The Company divides the transfer of a financial asset into entire financial asset transfer and partial transfer. As for the entire financial asset transfer which is qualified for derecognition, the difference between the following two amounts is recognized in the current profit and loss: The Company divides the transfer of a financial asset into entire financial asset transfer and partial transfer. As for the entire financial asset transfer which is eligible for derecognition, the difference between the following two amounts is recognized in the current profit and loss:
i) Book value of the transferred financial assets;
ii) Sum of the price received from the transfer with the cumulative change in the amount of fair value directly recorded in the originalowners’ equity (involving the case when the transferred financial assets are those available for sale).
As for the partial financial assets transfer which are eligible for derecognition, the whole book value of the transferred financial assets should be apportioned in accordance with their respective relative fair value between the derecognized parts and the recognized parts; and the difference between the following two amounts is recognized in the current profit
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 and loss:
(i) book value of the derecognized parts;
ii) sum of the consideration received from the derecognized parts with the amount of the derecognized parts corresponding to the cumulative changes in the amount of fair value directly included in the originalowners’ equity (involving the case when the transferred financial assets are those available for sale).
If the transfer of financial assets does not satisfy requirements for derecognition, the financial assets shall continue to be recognized, and the consideration received will be recognized as financial liabilities.
3.10.4 Conditions for derecognition of financial liabilities
Financial liabilities shall be entirely or partially derecognized if the present obligations derived from them are entirely or partially discharged. Where the Company enters into an agreement with a creditor so as to substitute the current financial liabilities with new ones, and the contract clauses of which are substantially different from those of the current ones, it shall recognize the new financial liabilities in place of the current ones.
If material amendments have been made to all or part of contract terms of current financial liabilities, all or part of current financial liabilities are derecognized, and the financial liabilities with amended terms are recognized as new financial liabilities.
Upon entire or partial derecognition of financial liabilities, differences between the carrying amounts of the derecognized financial liabilities and the consideration paid (including non-monetary assets surrendered or new financial liabilities assumed) are charged to profit or loss for the current period.
If the Company repurchases part of financial liabilities, it shall distribute, on the repurchase day, the whole book value of the financial liabilities in accordance with the relatively fair value between the part to be recognized continuously and the part to be derecognized. The balance between the book value distributed to the part which has been derecognized and the consideration paid to it (including non-cash assets which have been transferred out or the
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 new financial liabilities it assumed), shall be included in current profit and loss.
3.10.5 Recognition of fair values of financial assets and financial liabilities
The fair value of the financial instrument with an active market is determined based on the quotation in the active market. The fair value of the financial instrument without an active market is determined using valuation techniques. In terms of the estimation, the estimation technology which is applicable in the current circumstance and supported by enough available data and other information is adopted and the input value which is similar to the features of assets and liabilities and taken into account of by the market participants in the transaction of relevant assets or liabilities are selected by the Company, which give priority in use of the relevant observable value. The unobservable value is used only when the relevant observable value cannot be obtained or is impracticable.
3.10.6 Testing and accounting treatment of financial assets (excluding accounts receivable) Except for the financial assets measured at fair values through current profit and loss, the book value of financial assets on the balance sheet date should be checked. If there is objective evidence that a financial asset is impaired, provision for impairment shall be made.
(1) Provision for impairment of available-for-sale financial assets:
If the fair values of available-for-sale financial assets have significantly declined at the period end, or it is expected that the trend of decreases in values is non-temporary after consideration of all the relevant factors, impairment shall be recognized, and the accmulated loss on decreases in fair values previously charged directly to capital reserves are reversed and recognized as impairment loss.
For available-for-sale debt instruments whose impairment losses have been recognized, if their fair values rise in the subsequent accounting period and such rise is objectively related to the matters occurring after the recognition of impairment loss, the previously recognized impairment loss shall be reversed and recorded into the current profit and loss.
Impairment losses on available-for-sale equity instruments shall not be reversed through profit or loss.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 (2) Provision for impairment of held-to- maturity investments:
Measurement of provisions for impairment loss on held-to-maturity investments is similar to that applicable to provisions for impairment loss on receivables.
3.11 Provision for bad debt of accounts receivable
3.11.1 Significant accounts receivable with individual provision for bad debt:
Assessment basis or standard of individually significant amount: Accounts receivable have an individual amount of more than RMB5 million, and other receivables have an individual amount of RMB3 million.
Individual provision for bad debt of significant accounts receivable:
The seprate impairment tests are carried out for the accounts receivable. Provision for bad debts shall be made at the difference of present values of estimated future cash flows in short of their book values and included in current profit and loss, if any objective evidence indicates the impairment. The unimpaired accounts receivable as shown by the separate test result are put into the relevant portfolio for provision for bad debt.
3.11.2 Accounts receivable with provision for bad debts accrued by credit risk features portfolio:
Method of bad-debt provision made in terms of the credit risk features portfolio Accounts receivable without provision for
bad debt Aging analysis method
Bad-debt provision made under the aging analysis method in the portfolio:
Provision for bad debt Proportion of provision for
Aging of other receivables accounts receivable(%)
(% )
1-6 months (including 6 months ) 0 0 6-12 months 5 5 1-2 years (including 1 year) 10 10 2-3 years (including 2 years) 30 30 3-4 years (including 3 years) 50 50 4-5 years (including 4 years) 80 80
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Over 5 years (including 5 years) 100 100 3.11.3 Insignificant accounts receivable with individual provision for bad debt
Reasons for individual provision for bad debts: If there is any clear evidence indicating that the receivables cannot or are unlikely to be recovered, for example, the bankruptcy, insolvency, insufficient cash flow of the debtor, or the insolvency in a short time due to the production halt resulting from the severe natural disaster, or the accounts receivable may be exposed to risk as indicated by other evidence, the individual provision for bad debt will be made.
Method of provision for bad debt: The provision for bad debt is individually recognized at the difference between the book value and the present value of estimated future cash flow. Note: No provision is made for the bad debts of the current account of transactions with related parties.
3.12 Inventories
3.12.1 Classification of inventories
Inventories are classified into: raw materials, consigned processing materials, low-cost consumables, packaging materials, stock commodities, goods in progress, semi-finished goods, finished goods, etc.
3.12.2 Valuation of dispatched inventories
The inventories dispatched are measured by weighted average method.
3.12.3 Basis for determination of net realizable value of different categories of inventories Net realizable values of merchandise inventories held directly for sale, such as finished goods, merchandise inventories, and available-for-sale materials, are measured at the estimated selling prices less estimated sales expenses and relevant taxes and surcharges in the normal production process. Net realizable values of material inventories which need further processing are measured at the estimated selling prices less the estimated costs of completion, estimated sales expenses and relevant taxes and surcharges in the normal production process. Net realizable values of inventories held for the purpose of fulfillment of sales contracts or service contracts should be calculated on the basis of the contract
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 prices; if the quantity of inventories held exceeds that stated in the contract, the net realizable values of the excessive part should be calculated on the basis of normal selling prices.
The Company shall make provisions for impairment loss on diminution in value of inventories on an individual basis at the year end. For inventories with large quantities and relatively low unit prices, the provisions for loss on diminution in value of inventories shall be made on a category basis. For the inventories related to the product portfolios manufactured and sold in the same area, and of which the final usage or purpose is identical or similar thereto, and which is difficult to separate from other items for measurement purposes, the provisions for impairment loss on diminution in value of inventories may be made on a portfolio basis.
The net realizable value of inventory items is determined based on the market price on the balance sheet date, unless there is clear evidence that the market price is abnormal on the balance sheet date.
The net realizable value of inventory items as at the end of the period is determined based on the market price on the balance sheet date.
3.12.4 Inventory system
The perpetual inventory system is adopted.
3.12.5 Amortization of low-cost consumables and packaging materials
(1) Low-cost consumables are amortized under the lump-sum method;
(2) Packing materials are amortized under the lump-sum method.
3.13 Assets classified as held-for-sale assets
The component (or non-current asset) will be recognized as the thing held for sale, if all the following conditions are met at the same time:
(1) Such component can be sold as it is, in accordance with the usual terms on its sales;
(2) The Company has been an integral part of the disposal of the (non-current assets) made a
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 resolution, such as the need to obtain the required shareholder approval, has the approval of the shareholders' meeting or the appropriate authority;
(3) The Company has signed an irrevocable transfer agreement with the transferee;
(4) Such transfer will be completed within one year.
3.14 Long-term equity investment
3.14.1 Judgment criteria of joint control or effect of material impact
Common control refers to the control shared over an arrangement in accordance with the relevant stipulations, and the decision-making of related activities of the arrangement should not be made before the party sharing the control right agrees the same. Where the Company exercises common control over the investee together with other parties to the joint venture and enjoys the right on the investee's net assets, the investee is a joint venture of the Company.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those polices. Where the Company has significant influences on an investee, the investee shall be an associate of the Company.
3.14.2 Determination of initial investment cost
(1) Long-term equity investment acquired from business combination
For business combination under common control: If the Company makes payment in cash, transfers non-cash assets or bears debts and issues equity securities as the consideration for the business combination, the share of owners' equity of the acquiree obtained on the combination date in the book value of the ultimate controller's consolidated financial statement is recognized as the initial cost of the long-term equity investment. Where additional investment or other reasons make the control over the investee under the same control possible, the initial investment cost of the long-term equity investments is measured at the share of net assets of the acquiree on the combination date in the book value of the ultimate controller's consolidated financial statements. The stock premium is adjusted according to the difference between the initial cost of long-term equity investments on the combination date and the sum of the
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 book value of long-term equity investments before combination and the book value of the consideration further paid for obtaining shares; if there is no sufficient share premium for write-downs, the retained earnings are offset.
For business combination not under common control: the Company recognizes the combination cost determined on the combination date as the initial cost of long-term equity investment. Where additional investment, or other reasons make the control over the investee not under the same control possible, the initial investment cost under the cost method will be the sum of the book value of the equity investments previously held and the newly increased investment costs.
(2) Long-term equity investment acquired by other means
The initial costs of a long-term equity investments obtained by payments of cash shall be the purchase prices actually paid.
The initial costs of long-term equity investments in equity securities shall be stated at their fair values.
If the exchange of non-monetary assets has commercial substance and the fair values of assets traded out and traded in can be measured reliably, the initial cost of long-term equity investment traded in with non-monetary assets are determined based on the fair values of the assets traded out unless there is any conclusive evidence that the fair values of the assets traded in are more reliable; if the exchange of non-monetary assets does not meet the above criteria, the book value of the assets traded out and the relevant taxes and surcharges payable are recognized as the initial cost of long-term equity investment traded in.
The initial costs of long-term equity investments arising from debt restructuring shall be stated at their fair values.
3.14.3 Subsequent measurement and recognition of profit or loss
(1) Long-term equity investment calculated under the cost method
The Company applies cost method to account for the long-term equity investments of subsidiaries. Except for the price actually paid upon acquisition or the cash dividends
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 or profit included in the price that are declared but not yet paid, the Company recognizes investment income for the current period at the share of the cash dividends or profits declared and released by the investee.
(2) Long-term equity investment calculated under the equity method
Long-term equity investments in associates and in joint ventures are accounted for under the equity method. If the cost of initial investment is in excess of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will not be adjusted to the initial cost of long-term equity investment; if the cost of initial investment is in short of the proportion of the fair value of the net identifiable assets in the investee when the investment is made, the difference will be included in the current profit and loss.
The Company recognizes the investment income and other comprehensive income according to the net gain or loss and other comprehensive income of the investee attributable to the Company, and adjusts the book value of long-term equity investment; reduces the book value of long-term equity investments according to the profit or cash dividends declared by the investee and attributable to the Company; and adjusts the book value of the long-term equity investments in the investee, as to the change in owners' equities other than the net gain or loss, other comprehensive income and profit distribution of the investee, and charges the same to the owners' equities.
When the share in net profit and loss of the investee is recognized, the fair value of the identifiable net assets of the investee when the investment is obtained shall be taken as a basis and the share will be determined after the net profit is adjusted in accordance with the Company's accounting policies and accounting periods. During the period of holding the investment, if the investee is capable of providing consolidated financial statements, the profit or loss shall be measured based on the net profit and other changes in equity recorded in the consolidated financial statements.
The profit and loss of the internal transactions that are not realized arising among the Company, affiliated enterprises, and joint ventures will be offset at the part attributable to the Company and the investment income will be recognized on that basis. For internal trading losses that have not occurred with the investee, they will be fully recognized if they belong to the asset impairment losses. The trading of assets between
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 the Company and its associates or joint ventures, which constitutes business, are treated according to the policies disclosed in "Note 3.5 Accounting Treatment of Combination of enterprises under common control and enterprises not under common control" and "Note 3.6 Preparation of consolidated financial statements".
When the Company confirms that it should share losses of the investee, treatment shall be done in following sequence: Firstly, the book value of the long-term equity investment shall be reduced. Secondly, where the book value is insufficient to cover the share of losses, investment losses are recognized to the extent of book value of other long-term equity which form net investment in the investee in substance and the book value of long term receivables shall be reduced. finally, after all the above treatments, if the Company is still responsible for any additional liabilities in accordance with the provisions stipulated in the investment contracts or agreements, estimated liabilities are recognized and included into current investment loss according to the obligations estimated to undertake.
(3) Disposal of long-term equity investment
Upon disposal, the difference between the book value and the price obtained is recognized in current profit and loss.
Disposal of long-term equity investments accounted for under the equity method, which is previously charged to other comprehensive income is treated in proportion on the same basis for direct disposal of relevant assets of liabilities by the investee. Owner's equities recognized arising from change in other owners' equities other than net gain or loss, other comprehensive income and profit distribution of the investee are carried forward to the current profit or loss in proportion, except for the other comprehensive income arising from the change on re-measurement of the net liabilities or net assets under the defined benefit plan by the investee.
In case of loss of common control over or material impact on the investee due to the disposal of part of the equity investments, the remaining equity after the disposal are computed according to the principles for recognition and measurement of financial instruments, and the difference between the fair value and book value on the day of loss of common control or material impact is charged to the current profit or loss. For other comprehensive income that is recognized from original equity investment by
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 using the equity method, the accounting treatment will be made on the basis the same as that for the direct disposal of related assets and liabilities with the investee when the equity method is terminated for accounting purpose. Owner's equities recognized arising from change in other owners' equities other than net gain or loss, other comprehensive income and profit distribution of the investee are entirely transferred to the current profit or loss when the accounting under the equity method is ended. In case of loss of common control over or material impact on the investee due to the disposal of part of the equity investments, the remaining equity after the disposal are computed under the equity method, with the adjustment made as if such remaining equities are calculated under the equity method after they are obtained, when the separate financial statement is prepared; the remaining equities after disposal leading to the incapable exercise of common control over or material impact on the investee shall be treated according to the principles for recognition and measurement of financial instruments, and the difference between the fair value and book value on the day of loss of common control or material impact is charged to the current profit or loss. If the equities disposed were obtained from the business merger by reason of additional investment or others, and the remaining equities after disposal are calculated under the cost method or equity method when the individual financial statement is prepared, other comprehensive income and other owners' equities recognized and arising from the calculation of the equity investment held before the acquisition date under the equity method will be carried forward in proportion; if the remaining equities after disposal are treated according to the principles for recognition and measurement of financial instruments, both of other comprehensive income and other owners' equities are entirely carried forward.
3.15 Investment property
Investment properties are properties to earn rentals or for capital appreciation or both. Examples include land leased out under operating leases, land held for long-term capital appreciation, buildings leased out under operating leases, (including buildings that have been constructed or developed for future lease out under operating leases, and buildings that are being constructed or developed for future lease out under operating leases).
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 The Company adopts cost model to measure all current investment properties. The Company adopts the same depreciation policy for the investment property measured at cost model building for renting as that for theCompany’s fixed assets and the same amortization policy of land use right for renting as that for theCompany’s intangible assets.
3.16 Fixed assets
3.16.1 Criteria for recognition of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing commodities, providing services, renting or business management with useful lives exceeding one accounting year. Fixed assets will only be recognized when all the following criteria are satisfied: Fixed assets will only be recognized when all the following criteria are satisfied: (1) It is probable that the economic benefits relating to the fixed assets will flow into the Company; and
(2) the costs of the fixed asset can be measured reliably.
3.16.2 Depreciation method
Depreciation of fixed assets is provided on a category basis using the straight-line method. The depreciation rates are determined according to the categories, estimated useful lives and estimated net residual rates of fixed assets. If the components of a fixed asset have different useful lives or cause economic benefit for the Company in different ways, different depreciation rate or method shall be adopted for depreciation on an individual component basis.
For fixed assets acquired under finance leases, if it is reasonably certain that the ownership of the leased assets will be transferred to the lessee by the end of the lease term, they shall be depreciated over their remaining useful lives; otherwise, the leased assets shall be depreciated over the shorter of the lease terms or their remaining useful lives.
Depreciation of fixed assets, depreciation period, residual rate and annual depreciation rates are as follows:
Depreciation Residual Annual depreciation Category
periods (years) rates(%) rates(%) Buildings and constructions 25-35 3 2.77-3.88
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Machinery equipment 7-15 3 6.47-13.86 Transportation equipment 8-10 3 9.70-12.13 Other equipment 5-10 3 9.70-19.40 3.16.3 Basis for recognition and measurement of fixed assets acquired under the finance lease
The fixed assets acquired under financing lease are recognized if one of the following conditions is specified by the Company and the leaser in their lease agreement:
(1) The ownership of the leased assets is transferred to the Company by the end of the lease terms;
(2) The Company has the option to purchase the assets at prices which are expected to be sufficiently lower than fair values at the date the option becomes exercisable that, at the inception of the leases, it is reasonably certain that the option will be exercised; (3) The lease terms cover the major part of the economic lives of the assets, even if titles are not transferred;
(4) At the inception of the leases, the present values of the minimum lease payments amount to at least substantially all of the fair values of the leased assets.
On the lease commencement date, the book-entry value of a fixed asset acquired under financing lease is measured at theasset’s fair value or the present value of the minimum lease payment, whichever is the lower. The minimum lease payment is recorded as the book-entry value of the long-term payables, and the difference between them is deemed as the unrecognized financing expenses.
3.17 Construction in progress
The book values of the construction in progress are stated at total expenditures incurred before reaching working condition for their intended use. For construction in progress that has reached working condition for intended use but relevant budgets for the completion of projects have not been completed, the estimated values of project budgets, prices, or actual costs should be included in the costs of relevant fixed assets, and depreciation should be provided according to relevant policies of the Company when working condition is reached. After the completion of budgets
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 needed for the completion of projects, the estimated values should be substituted by actual costs, but depreciation already provided is not adjusted.
3.18 Borrowing costs
3.18.1 Principles for recognition of capitalization of borrowing costs
Borrowing costs include the interest on borrowings, the amortization of discount or premium, auxiliary expenses, exchange differences incurred by foreign currency borrowings, etc.
The borrowing costs incurred to the Company and directly attributable to the acquisition and construction or production of assets eligible for capitalization should be capitalized and recorded into asset costs; other borrowing costs should be recognized as costs according to the amount incurred and be included into current profit and loss.
Assets eligible for capitalization refer to fixed assets, investment property, inventories and other assets which may reach their intended use or sale status only after long-time acquisition and construction or production activities.
Borrowing costs may be capitalized only when all the following conditions are met at the same time:
(1) the asset disbursements have already incurred, which shall include the cash paid, non-cash assets transferred or interest bearing debts undertaken for the acquisition and construction or production activities for preparing assets eligible for capitalization; (2) the borrowing costs has already incurred; and
(3) the acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started.
3.18.2 Capitalization period of borrowing costs
Capitalization period refers to the period from commencement of capitalization of borrowing costs to its cessation; period of suspension for capitalization is excluded. When the qualified asset under acquisition and construction or production is ready for the
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 intended use or sale, the capitalization of the borrowing costs shall be ceased.
Where construction for assets purchased, constructed or manufactured eligible for capitalization is completed in stages, which can be used while construction of the other parts continues, capitalization of attributable borrowing costs should cease when substantially all of the activities necessary to prepare that part for its intended use or sale are complete.
Where construction for each part of assets purchased, constructed or manufactured has been completed separately but can be used or sold only after the entire assets have been completed, capitalization of attributable borrowing costs should cease at the completion of the entire assets.
3.18.3 Period of capitalization suspension
If the acquisition and construction or production activities of assets eligible for capitalization are interrupted abnormally and this condition lasts for more than three months, the capitalization of borrowing costs should be suspended; if the interruption is necessary for the acquisition and construction or production to prepare the assets for their intended use or sale, the capitalization of borrowing costs should continue. The borrowing costs incurred during interruption are recognized in the current profit and loss, and the capitalization of borrowing costs continues after the restart of the acquisition and construction or production activities of the assets.
3.18.4 Capitalization rate and measurement of capitalized amount of borrowing costs As for special borrowings borrowed for acquiring and constructing or producing assets eligible for capitalization, the to-be-capitalized amount shall be determined at interest expense of special borrowing actually incurred in the current period less the interest income of the borrowings unused and deposited in bank or return on temporary investment. As for general borrowings used for acquiring and constructing or producing assets eligible for capitalization, the to-be-capitalized amount should be calculated by multiplying the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special borrowings by the capitalization rate of used general borrowings. The capitalization rate is calculated by using the weighted average interest rate of general
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 borrowings.
3.19 Intangible assets
3.19.1 Measurement of intangible assets
(1) The Company initially measures intangible assets at cost on acquisition;
The costs of external purchase of intangible assets comprise their purchase prices, related taxes and surcharges and any other directly attributable expenditure incurred to prepare the asset for its intended use. If payments for the purchase of intangible assets are extended beyond the normal credit terms with financing nature, the costs of intangible assets are determined on the basis of present values of the purchase prices. For intangible assets obtained from debtors in settlement of his liabilities in case of debt restructuring, they should be initially stated at their fair values. Differences between the book values and the fair values of the intangible assets are charged to profit or loss for the current period.
If the exchange of non-monetary assets has commercial substance, and the fair values of these assets can be measured reliably, the book-entry values of intangible assets traded in are based on the fair values of the intangible assets traded out unless there is any conclusive evidence that the fair values of the assets traded in are more reliable. If the exchange of non-monetary assets does not meet the above criteria, the costs of the intangible assets traded in should be the book values of the assets traded out and relevant taxes and surcharges paid, and no profit or loss shall be recognized.
(2) Subsequent measurement
The useful lives of the intangible assets are analyzed and determined on their acquisition.
As for intangible assets with limited useful life, straight-line amortization method is adopted in the period when the intangible assets generate economic benefit for enterprise; if the period when the intangible assets generate economic benefit for enterprise cannot be forecasted, the intangible assets shall be deemed as those with indefinite useful life and shall not be amortized.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 3.19.2 Estimate of the useful life of the Intangible assets with finite useful lives:
The useful lives and amortization methods of intangible assets with limited useful lives are reviewed at each year end.
Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not different from those estimated before.
3.19.3 Basis for judgment of intangible assets with indefinite useful life and procedures for review of the life thereof
The useful lives and amortization method of intangible assets with limited useful lives are reviewed at the end of each period.
Upon review, the useful lives and amortization method of the intangible assets as at the end of the year were not different from those estimated before.
3.19.4 Specific criteria of classification into the research phase and the development phase Expenditures on an internal research and development project shall be classified into expenditures on the research phase and expenditures on the development phase.
Research phase: Research is original and planned investigation, undertaken with the prospect of gaining new scientific or technical knowledge and understanding.
Development phase: Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, or products before the start of commercial production or use.
3.19.5 Criteria for capitalization of qualifying expenditures during the development phase Expenditures arising from development phase on internal research and development projects must be capitalized if the Company can satisfy all of the following criteria: (1) It is technically feasible to finish intangible assets for use or sale;
(2) It is intended to finish and use or sell the intangible assets;
(3) the method that the intangible assets generate economic benefits, including existence
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 of a market for products produced by the intangible assets or for the intangible assets themselves, shall be proved. Or, if to be used internally, the usefulness of the assets shall be proved;
(4) adequate technical, financial, and other resources are available to complete the assets, and the Company has the ability to use or sell the assets; and
(5) The expenditures attributable to the intangible assets during their development phase can be reliably measured.
If the above conditions are not satisfied, expenditures on the development phase shall be included in current profit and loss when they occur. Expenditures on the research phase shall be included in current profit and loss when they occur.
According to the Accounting Standards for Enterprises in combination with the actual situation of the Company, the period between the report on pre-study of project to the issuance of project assessment and examination report is defined as the research state, in which the expenditures incurred are expensed when incurred and charged to the current profit or loss.
In the development stage, research findings or other knowledge is applied to a plan or design for the production of new or substantially improved materials, devices, or products before the start of commercial production or use. This phase is equipped with the basic conditions for the formation of a new product or technology to a greater extent.
According to the actual situation of the Company, the period between the adoption of project assessment and examination with the assessment and examination report issued to the batched production is defined as the development stage. The project development expenditures will be capitalized, if the conditions for capitalization of development expenditures are met.
All expenditures incurred on research of application of basic techniques are classified as research stage expenditures and charged to the current profit or loss when incurred.
3.20 Impairment of long-term assets
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 The Company will conduct the impairment test if any evidence suggests that the long assets, such as the long-term equity investment and the investment property, fixed assets, construction in progress and intangible assets, are impaired on the balance sheet date. If impairment test results indicate that the recoverable amounts of the assets are lower than their carrying amounts, the provision for impairment is made based on the differences which are recognized as impairment losses. The recoverable amounts of intangible assets are the higher of their fair values less costs to sell and the present values of the future cash flows expected to be derived from the assets. The provision for assets impairment is calculated and recognized by the individual asset. If it is difficult to estimate the intangible amount of an individual asset, the Company shall estimate the recoverable amount of the asset portfolio that the individual asset belongs to. The asset portfolio is the minimum asset group that can independently generate the cash inflow.
At least the goodwill and indefinite-life intangible assets impairment test is conducted at the year-end.
The Company conducts an impairment test for the goodwill. The book value of goodwill arising from business combinations is amortized to relevant asset groups with a reasonable method since the date of acquisition; or amortized to relevant combination of asset groups if it is difficult to be amortized to relevant asset groups. The book value of goodwill is amortized to relevant asset groups or combinations of asset groups according to the proportion of the fair value of such asset groups or combinations of asset groups in the total fair value of relevant asset groups or combinations of asset groups. Where the fair value cannot be reliably measured, it should be amortized according to proportion of the book value of each asset group or combination of asset group in the total book value of relevant asset groups or combinations of asset groups.
When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any indication shows that the asset groups or combinations of asset groups related to the goodwill may be impaired, the Company shall first conduct an impairment test on the asset groups or combinations of asset groups not containing goodwill, calculate the recoverable amount and compare it with the relevant book value to recognize the corresponding impairment loss. Then the Company shall conduct an impairment test on the asset groups or combinations of asset groups containing goodwill, and compare the book value of these asset groups or combinations of asset groups (including the book value of the goodwill apportioned thereto) with the recoverable amount. Where the recoverable amount of the relevant asset groups
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 or combinations of asset groups is lower than the book value thereof, the Company shall recognize the impairment loss of the goodwill.
The above impairment loss is not reversed in the future accounting period once recognized. 3.21 Long-term deferred expenses
Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are evenly amortized over the benefit period.
3.22 Employee compensation
3.22.1 Accounting treatment of short-term remuneration
During the accounting period in which employees provide service to the Company, the short-term remuneration actually incurred is recognized as liabilities and charged to the current profit or loss or the relevant assets cost.
The medical insurance premium, work-related injury insurance premium and the housing provident fund paid by the Company for its employees, together with the labor union expenditures and employee education are used to calculate and determine the relevant employee compensation amount based on the prescribed accrual basis and accrual proportion.
The non-monetary benefits for employees that can be measured reliably are measured at fair value.
3.22.2 Accounting treatment of benefits paid after departure
The basic endowment insurance premium and unemployment insurance premium paid by the Company for its employees in accordance with relevant provisions of the local government are recognized as liabilities and charged to the current profit or loss or the relevant assets cost, with the payable amount calculated based on the local prescribed payment base and percentage, during the accounting period in which the employees provide services to the Company.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 The Company pays a certain percentage of the total employee compensation to the local social institution for the payment/payment under annuity plan, and record the relevant expenditures into the current profit or loss or the relevant assets cost.
3.22.3 Accounting treatment of dismissal welfare
Where the Company cannot unilaterally withdraw when termination benefits due to termination of employment or layoff proposal offered, or confirm the reorganization involves the payment of termination benefits when associated costs or expenses (both what early), confirm termination benefits employees pay liabilities, and profit or loss.
3.23 Estimated liabilities
3.23.1 Recognition criteria for estimated liabilities
The Company recognizes the estimated liabilities when the obligations relating to litigation, debt-guarantee, loss contract, restructuring and other contingencies satisfy the following conditions simultaneously:
(1) That obligation is a present obligation of the Company;
(2) The performance of such obligation is likely to result in outflow of economic benefits from the Company; and
(3) The amount of the obligation can be measured reliably.
3.23.2 Measurement of a variety of estimated liabilities
The estimated liabilities of the Company are initially measured as the best estimate of expenses required for the performance of relevant present obligations.
When determining the best estimate, the Company shall comprehensively consider the risks, uncertainties, time value of money, and other factors relating to the contingencies. If the time value of money is significant, the best estimates shall be determined after discount of relevant future cash outflows.
The best estimates shall be treated as follows in different circumstances:
If there is continuous range (or interval) for the necessary expenses, and probabilities of
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 occurrence of all the outcomes within this range are equal, the best estimate shall be determined at the average amount of upper and lower limits within the range.
Given the fact that there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of all the outcomes within this range are unequal despite such a range exists, in case that the contingency involves a single item, the best estimate shall be determined at the most likely outcome; if the contingency involves two or more items, the best estimate should be determined according to all the possible outcomes with their relevant probabilities.
When all or part of the expenses necessary for the settlement of an estimated liabilities are expected to be compensated by a third party or other parties, the compensation shall be separately recognized as an asset only when it is virtually certain that the compensation will be received. The amount recognized for the compensation shall not exceed the book value of the estimated liabilities.
See the Note 5.28 Estimated Liabilities for details.
3.24 Share-based payment
The share-based payment is the transaction the Company has to grant the equity instrument to employees or assume the liability determined based on the equity instrument, for the service provided by the employees[or otherparties]. The share-based payments of the Company can be divided into the equity-settled share-based payments and the cash-settled share-based payments. 3.24.1 Equity-settled share-based payments and equity instruments
In case of the equity-settled share-based payment for the service provided by employees, the measurement is based on the fair value of the equity instruments granted to employees. Where the Company carries out a restricted share-based payment, the employees subscribe shares by contributing capital, and the shares cannot be traded or transferred in the market until they satisfy the conditions for removing the freeze; if the conditions for removing the freeze as prescribed by the ultimate stock stimulating plan fail to be satisfied, the Company shall repurchase the shares as previously agreed. When the Company receives the payments for subscription of restricted shares from the employees, it shall recognize the share capital and capital reserves (share capital premiums) according to the payments for subscription received, and recognize a liability and treasury shares with respect to the repurchase
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 obligation. On every balance sheet date during the waiting period, the Company estimates the quantity of the exercisable equity instruments in light of the latest subsequent information, such as the change in the number of employees obtaining the exercisable equity instrument or whether the specified performance requirements are met, based on which the services obtained in the current period are charge to the relevant costs or expenses at the fair value on the grant date, with the capital reserves added correspondingly. Those payments which are exercisable immediately after the grant are charged to the relevant costs or expenses, with the capital reserves added correspondingly. After the vesting date, the recognized relevant costs or expenses or total amount of owners' equity shall not be adjusted any more.
No cost or expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified. In addition, an expense is recognized for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.
Where an equity-settled share-based payment is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during the pending period, equity-settled share-based payments are deemed cancelled. However, if a new equity instrument is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the new equity instrument are treated as if they were a modification of the original award.
3.24.2 Cash-settled share-based payments and equity instruments
The cash-settled share-based payment is measured in accordance with the fair value of liability calculated and confirmed based on the shares or other equity instruments
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 undertaken by the Company. The cash-settled share-based payment is initially measured in accordance with the fair value on the vesting date, in consideration of the terms and conditions for granting the equity instruments. If the right may be exercised immediately after the grant, the fair value of the liabilities shall, on the vesting date, be included in the costs or expenses, together with a corresponding increase in the liabilities; if the right cannot be exercised until the vesting period comes to an end or until the prescribed performance conditions are met, then within the vesting period, the services obtained in the current period shall, based on the best estimate of the number of vested equity instruments, be included in the relevant costs or expenses at the fair value of the liabilities on the vesting date, together with a corresponding increase in the liabilities. On each balance sheet date and on each account date prior to the settlement of the relevant liabilities, the fair values of the liabilities are re-measured and the changes in the fair values thereof are included in the current profits and losses.
3.25 Revenues
3.25.1 General principles for recognition of revenues from sales of goods:
(1) The Company has transferred to the buyer the significant risks and rewards of ownership relevant to the goods in question;
(2) The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
(3) The relevant amount of revenue can be measured reliably;
(4) It is probable that the economic benefits related to the transaction will flow into the Company; and
(5) The relevant costs incurred or to be incurred can be measured reliably.
3.25.2 Concrete principles for revenues from primary businesses
Sales of automobile air-conditioner: the Air-conditioner Company deliveries goods according to the customers' production plans and safty stock; after the customers use the products, the salesmen issue a notification of making out an invoice according to the customers' monthly usage amounts and contracted prices, the finance department
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 issues an invoice and the revenues from sales shall be recognized.
3.26 Government grants
3.26.1 Types
Government grants refer to the monetary or non-monetary assets obtained by the Company from the government for free. Government subsidies are classified into government subsidies related to assets and government subsidies related to income.
Government subsidies related to assets refer to the subsidies obtained by the Company from the government and used to form long-term assets through acquisition and construction or otherwise, including the financial appropriation for purchase of fixed assets or intangible assets and the finance discounts for special borrowings of fixed assets. Government subsidies related to income refer to those other than the government subsidies related to assets.
3.26.2 Recognition of time-point and accounting treatment
Government grants related to assets are recognized as deferred income and included in non-operating income over the useful lives of the assets constructed or purchased by stages; If government subsidies related to income are used to compensate theCompany’s relevant expenses or losses in future periods, such government subsidies should be recognized as deferred income on acquisition and be included into the current non-operating income in the period of recognizing relevant expenses; if government subsidies related to income are used to compensate theenterprise’s relevant expenses or losses incurred, such government subsidies are directly included into the current non-operating income on acquisition. 3.27 Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets shall be recognized for deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. As for any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax assets shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Taxable temporary differences are recognized as deferred income tax liabilities except in special circumstances.
Special circumstances in which deferred income tax assets or deferred income tax liabilities shall not be recognized include: the initial recognition of goodwill; other transactions or events excluding business combinations, which affect neither accounting profits nor the taxable income (or deductible losses) when occurred.
If the Company has the legal right of netting and intends to settle in net amount or to obtain assets and discharge liabilities simultaneously, the income tax assets and income tax liabilities of the Company for the current period shall be presented based on the net amount after offset.
When the Company has the legal rights to balance income tax assets and income tax liabilities for the current period with net settlement, and deferred income tax assets and deferred income tax liabilities are related to the income tax which are imposed on the same taxpaying subject by the same tax collection authority or on different taxpaying subjects, but, in each important future period in connection with the reverse of deferred income tax assets and liabilities, the involved taxpaying subject intends to balance income tax assets and liabilities for the current period with net settlement at the time of obtaining assets and discharging liabilities, deferred income tax assets and deferred income tax liabilities shall be presented based on the net amount after offset.
3.28 Leases
3.28.1 Accounting treatment of operating lease
(1) Lease fees paid by the Company for leased asset shall be amortized at straight-line method over the whole lease period (including rent-free period) and shall be included in the current expenses. Initial direct costs relating to lease transactions incurred by the Company shall be recognized as the current expenses.
If the expense related to the lease which shall be paid by the Company is assumed by the lessor of the asset, then such expenses shall be deducted from total lease fees, and the balances shall be amortized over the lease term s and charged to the current expenses.
(2) Lease fees received by the Company from leasing assets shall be amortized at straight-line method over the whole lease period (including rent-free period), and shall be recognized as lease income. Initial direct costs relating to lease transactions
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 incurred by the Company shall be recognized as the current expenses; if the amounts are material, they shall be capitalized and included in the current income on the same basis as the recognition of lease income.
If expenses relating to leases which should be borne by the lessee of the assets are paid by the Company, they shall be deducted from the total lease income and the balances shall be amortized over the lease terms by the Company.
3.28.2 Accounting treatment of financing lease
(1) Assets acquired under financing leases: At the commencement of the lease terms, assets acquired under financing leases shall be recorded at the lower of their fair values and the present values of the minimum lease payments, and the Company shall recognize the long-term payables at amounts equal to the minimum lease payments, and shall record the differences between book value of the leased assets and the long-term payables as unrecognized finance charges. The Company adopts the effective interest rate method for unrecognized financing charges, which shall be amortized over the lease terms and included in financial expenses. Initial direct costs incurred by the Company shall be included in the value of leased assets.
(2) Assets rented out under financing leases: At the commencement of the lease terms, the Company shall recognize the differences between the undiscounted rents receivable plus unguaranteed residual values and their present values as unrealized financing income, and shall recognize them as lease income during each period when rents are received. Initial direct costs associated with the lease transactions and incurred by the Company shall be included in the initial measurement of the financing lease receivable and lease income recognized over the lease terms shall be reduced accordingly. 3.29 Termination of operation
Termination of operation refers to any integral part that satisfies any of the following conditions, has been disposed or classified into assets held for sale by the Company and that is able to be separately distinguished upon operation and preparation of the financial statements:
(1) the integral part represents an independent primary business or a key operation region; (2) the integral part is an element of the plan of proposing to dispose an independent primary business or a key operation region; or
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 (3) the integral part is a subsidiary acquired only for the resale purpose.
3.30 Significant adjustments for changes in accounting policies and accounting estimates 3.30.1 Significant adjustments for changes in accounting policies
Enforce Value - added Tax Accounting Regulations.
The Ministry of Finance released Value - added Tax Accounting Regulations (Financial Accounting[2016] No:22 ) on December 3, 2016, which is appropriate for related transacrions form May 1, 2016. The main impact of the implementation of this provision is as follows:
The content and reasons of accounting policy changes Affected report item name and amount（1）The " Business tax and surcharges " item in the income statement
Taxes and surcharges
is adjusted to " Taxes and surcharges ".
（2）House property tax, Land use tax, Vehicle and vessel use tax and
Stamp duty incurred from the business activities on May 1, 2016 will Increase Business taxes and surcharges this be reclassified from the "General and administrative expenses" item to year RMB2,217,753.53；Reduce the general the "Business taxes and surcharges" project. But tex which occurred and administrative expenses this year RMB before May 1, 2016will not be adjusted .The comparative data can not 2,217,753.53.
be adjusted.
3.30.2 Major changes in accounting estimates
There is no major change in accounting estimates in the Company for the current year. 4. Taxation
4.1 Major tax types and tax rates applicable to the Company
Tax type Basis of tax assessment Tax rate The output tax is calculated based on the revenue
from sales of goods and the provision of taxable
labor services according to tax law, and value
17%、11%、6% added tax payable should be the balance of the
output tax for the period after deducting the
Value-added tax (VAT) deductible input tax for the period.
Consumption tax Levied based on the taxable sales revenues 3% Business tax Levied based on the taxable income (Since May 1, 5%
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 2016, the Business tax changes to Value-added
tax)
Urban maintenance and Levied based on the actual payment of business
7% construction tax tax, VAT and consumption tax
Enterprise income tax Levied based on the taxable income 25%、15% If there are subjects of tax payment subject to different enterprise income tax rates, the information notes shall be disclosed
Name of subject of tax payment Income tax rate Chongqing Jianshe Motorcycle Co., Ltd. 15% Shanghai Jianshe Motorcycle Co., Ltd. 25% Chongqing Jianshe Automobile A/C Co., Ltd. 15% 4.2 Preferential tax treatment
The company is subject to the enterprise income tax rate of15% in 2016, as a result of the preferential enterprise income tax policies to promote the large-scale development of the western region in accordance with the Announcement on Issues of Enterprise Income Tax concerning In-depth Implementation of Western Region Large-scale Development Strategy (Announcement of the State Administration of Taxation[2012] No.12).
Chongqing Jianshe Automobile A/C Co., Ltd. by high and new technology enterprise qualification on November 8, 2013, acquire the qualification of new high-tech enterprises, Certificate No. GR201351100081, valid for three years. Chongqing Jianshe Automobile A/C Co., Ltd. calculates and pay enterprise income tax shall be levied at the reduced tax rate15% from 2014 to 2016. The Company and other subsidiaries pay the enterprise income tax at a tax rate of25%.
5. Notes to the items of consolidated financial statements
Chongqing Jianshe Motorcycle Co., Ltd. completed the reorganization on December 31, 2015. The scope of consolidated financial statements about income statements and cash flow statement are consistent with it before reorganization, including the results of the reorganization of the motorcycle business and the cash flow. The income statement and cash flows statements of 2016 only include the results of the business after the reorganization (the scope of consolidation for the year is set out in Note 1.2 Scope of the consolidated financial statements), resulting in great change about the income statement and cash flow statement compared with the previous year.
5.1 Cash and cash equivalents
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Balance as at Balance as at Item
December 31, 2016 January 1, 2016 Cash on hand 31,205.34 70,909.87 Bank deposits 273,737,553.12 23,572,605.94 Other cash and cash equivalents 240,646,064.11 279,017,242.95 Total 514,414,822.57 302,660,758.76Remark：The monetary funds at the end of the year increased by69.96% compared with the previous year, mainly because of the receipt of Chongqing construction mechanical and electrical Co. LTD.
Including: The details about restricted monetary funds are as follows:
Balance as at Balance as at Item
December 31, 2016 January 1, 2016 Bank acceptance bills margin 240,646,064.11 189,017,242.95 guarantee deposit and notice deposit 90,000,000.00 Total 240,646,064.11 279,017,242.95 5.2 Notes receivable
5.2.1 Presentation of notes receivable by category
Balance as at Balance as at January Item
December 31, 2016 1, 2016 Bank acceptance bill 14,907,890.35 47,008,704.63 5.2.2 Notes receivable endorsed or discounted by the Company as at December 31, 2016 and not yet due on the balance sheet date
Amount derecognized as Amount not derecognized Item
at December 31, 2016 as at December 31, 2016 Bank acceptance bill 626,847,318.00
Commercial acceptance bill 13,835,000.00
Total 640,682,318.00
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.3 Accounts receivable
5.3.1 Disclosure of accounts receivable by category
Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for bad Provision for bad
Book balance Book balance
debts debts
Category
Proport
Book
Propor Book Propor Propor
ion of
value
tion of value Amount tion Amount Amount tion Amount
provisi provisi(%) (%)
on(%) on(%) Accounts receivable with
significant single amount
and provision for bad debt
made on an individual
basis
Accounts receivable with
provision for bad debt
270,302,66 100.0 14,715,2 255,587, 232,282, 100.0 14,522,9 217,759, made on a portfolio with 5.44 6.25
6.49 0 26.57 439.92 147.28 0 38.85 208.43 similar risk credit
characteristics basis
Accounts receivables with
insignificant single
amount and provision for
bad debt made on an
individual basis
270,302,66 100.0 14,715,2 5.44 255,587, 232,282, 100.0 14,522,9 6.25 217,759, Total 6.49 0 26.57 439.92 147.28 0 38.85 208.43 Accounts receivable with provision for bad debts made using the aging analysis method among those portfolios:
Balance as at December 31, 2016
Aging
Provision for bad Proportion of provision Accounts receivable
debts (%) 1-6 months (including 6 months) 238,246,426.46
6-12 months 4,788,616.59 239,430.83 5.00 1-2 years (including 1 year) 9,877,311.07 987,731.10 10.00 2-3 years (including 2 years) 5,362,705.72 1,608,811.71 30.00
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 3-4 years (including 3 years) 130,160.18 65,080.09 50.00 4 - 5 years (including 4 years) 416,368.14 333,094.51 80.00 Over 5 years (including 5 years) 11,481,078.33 11,481,078.33 100.00 Total 270,302,666.49 14,715,226.57
5.3.2 Provision for bad debts provided in the current year
The provision for bad debts provided in the current year amounts to RMB 192,287.72. 5.3.3 Information on the top five accounts receivable by the debit balance as at December 31, 2016
The top five accounts receivable by the credit balance as at December 31, 2016 total RMB 153,546,008.17, accounting for56.81% of total amount of balance as at December 31, 2016 of accounts receivable, and the balance as at December 31, 2016 of provision for bad debts provided correspondingly totals RMB 23,469.05.
5.4 Advances to suppliers
5.4.1 Presentation of advances to suppliers by aging
Balance as at December 31, 2016 Balance as at January 1, 2016 Aging
Proportion Proportion Book balance Book balance
(%) (%) Within 1 year 10,729,869.21 98.51 8,251,935.87 88.64 1-2 years 73,792.01 0.68 1,041,281.19 11.18 2-3 years 71,862.00 0.66 8,039.80 0.09 Over 3 years 16,409.80 0.15 8,370.00 0.09 Total 10,891,933.02 100.00 9,309,626.86 100.00 5.4.2 Information on the top five advances to suppliers by the credit balance as at December 31, 2016
The top five advances to suppliers by the debit balance as at December 31, 2016 total RMB 8,402,776.37, accounting for 77.15% of total amount of balance as at December 31, 2016 of advances to suppliers.
5.5 Other receivables
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.5.1 Disclosure of other receivables by category
Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for bad
Book balance Provision for bad debts Book balance
debts
Category
Proportion Proportio
Book value Book value Proportion of Proportio n of
Amount Amount Amount Amount
(%) provision n(%) provision
(%) (%)
Other
receivables
with
significant
single
amount and
provision for
bad debt
made on an
individual
basis
Other
receivables
with
provision for
bad debt
8,579,890.0 262,146,013.2 4,336,368.8 257,809,644.4 made on a 97.32 34.55 99.85 1.65
13,109,254.76 4,529,364.68 8 6 4 2 portfolio
with similar
risk credit
characteristi
cs basis
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Other
receivables
with
insignificant
single
100.0
amount and 361,125.35 2.68 361,125.35 405,125.35 0.15 405,125.35
100.00 0
provision for
bad debt
made on an
individual
basis
8,579,890.0 262,551,138.6 100.0 4,741,494.1 257,809,644.4 13,470,380.11 36.31 1.81
Total 100.00 4,890,490.03 8 1 0 9 2 Other receivables with no significant amount of individual at the end of year and provision for bad debt
Balance as at December 31, 2016
Otherreceivables（Byunit）
Other receivables Provision for bad debts Proportion To reason Is expected to be no Chongqing Customs 78,825.35 78,825.35 100%
recoverable Chongqing Huicai Steel Is expected to be no 209,000.00 209,000.00 100%
Structure Co., Ltd recoverable Yangzhou Qionghua Is expected to be no Painting Engineering 56,500.00 56,500.00 100% recoverable Equipment Co., Ltd
Chongqing Jinxiang lifting Is expected to be no equipment Manufacturing 16,800.00 16,800.00 100% recoverable Co., Ltd
Total 361,125.35 361,125.35
Other receivables with provision for bad debts made using the aging analysis method among those portfolios:
Balance as at December 31, 2016
Aging
Proportion of provision Other receivables Provision for bad debts
(%) 1-6 months (including 6 months) 5,156,110.44
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 6-12 months 1,534,749.60 76,737.48 5.00 1-2 years (including 1 year) 2,184,186.13 218,418.61 10.00 2-3 years (including 2 years)
3-4 years (including 3 years)
4 - 5 years (including 4 years)
Over 5 years (including 5 years) 4,234,208.59 4,234,208.59 100.00 Total 13,109,254.76 4,529,364.68
5.5.2 Provision for bad debts provided in the current year
RMB 148,995.84 is provided for bad debts in the current year.
5.5.3 Other receivables classified by payment properties
Book balance as at December Book balance as at January 1, Property of account receivable
31, 2016 2016
Petty cash and borrowings with small amount 8,875,046.17 8,697,629.28 Margins and others 326,300.00 Fully provided provision for bad debts regarding
4,595,333.94 4,218,034.74 long-term receivables and payables
Export rebates receivable 78,825.35 Other receivables from the related parties 249,230,349.24 Total 13,470,380.11 262,551,138.61 Remark: Compared with the previous year, there is substantial reduction of balance this year, mainly due to the repayment of the parent company Chongqing Jianshe mechanical and electrical co., LTD.
5.5.4 Information on the top five other receivables by the debit balance as at December 31, 2016
The top five other receivables by the credit balance as at December 31, 2016 total RMB 8,174,577.65, accounting for 60.69% of total amount of balance as at December 31, 2016 of other receivables, and the balance as at December 31, 2016 of provision for bad debts provided correspondingly totals RMB 3,869,813.34.
5.6 Inventories
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.6.1 Classification of inventories
Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for Provision for
Item
Book
inventory Book value Book balance inventory Book value balance
impairment impairment
47,168,260
4,618,914.59 42,549,345.86 59,287,827.35 4,618,914.59 54,668,912.76 Raw materials .45
Goods in
1,931,391. 1,931,391.64 1,766,745.42 1,766,745.42 progress 64
Finished 156,900,50
174,210.57 90,089,486.73 174,210.57 89,915,276.16 goods 3.61 156,726,293.04
206,000,15
4,793,125.16 151,144,059.50 4,793,125.16 146,350,934.34 Total 5.70 201,207,030.54
5.6.2 Inventory provision
Increase in 2016 Decrease in 2016
Balance as at January Balance as at Item Reversal or
1, 2016
Provision Others Others
December 31, 2016 write-off
Raw
material 4,618,914.59 4,618,914.59 s
Finishe
174,210.57 174,210.57 d goods
Total 4,793,125.16 4,793,125.16 5.7 Other current assets
Balance as at December Balance as at January 1, Item
31, 2016 2016
Overpaid tax for offsetting the future tax payable 1,734,063.70 5,430,548.06 5.8 Available-for-sale financial assets
5.8.1 Information on available-for-sale financial assets
Balance as at December 31, 2016 Balance as at January 1, 2016 Item
Book balance Provision for Book value Book Provision Boo
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 impairment balance for k impairment value Available-for-sal
e debt
instruments
Available-for-sal
1,140,915.0 1,140,915.0 e equity 1,140,915.04 1,140,915.04
4 4 instruments
Including:
measured at fair
value
Measur 1,140,915.0 1,140,915.0 1,140,915.04 1,140,915.04
ed at cost 4 4 1,140,915.0 1,140,915.0 1,140,915.04 1,140,915.04
Total 4 4 5.8.2 Available-for-sale financial assets measured at cost as at December 31, 2016
Book balance Provision for impairment Proportion
of Cash As at As at As at
Investee
Decrease Increase Decrease
shareholding dividends As at January 1, 2016 Increase in 2016 December January 1, December
in 2016 in 2016 in 2016
in investee in 2016 31, 2016 2016 31, 2016
(%)
Ningbo
Jianshe
Motorcycle 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 51.00 Manufacturing
Co., Ltd.
5.9 Long-term equity investments
Increase/decrease in 2016(+/-)
Balance as Profits and
at Addi
Provisio
Balance as
losses on
Balance December tiona Decrease Other Chang Declarati
n for
at January
investment
as at 31, 2016 Investee
l in comprehe es in on of cash Othe
impairm
1,
s
December of inves investmen nsive other dividends rs
ent in
2016
recognized
31, 2016 provision tmen t income equity or profits
2016
under the
for t
equity
impairmen
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 method t Joint ventures
Chongqing Pingshan
83,381,316 3,128,796. -3,332,00 83,178,11
TK Carburettor Co.,
.13 18 0.00 2.31
Ltd.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.10 Investment properties
Item House,Buildings Land use rights Total1．Original book value
（1）Balance as at January 1, 2016
（2）Increase in 2016 131,695,310.84 20,902,264.96 152,597,575.80—Fixed assets, intangible assets transferred 131,695,310.84 20,902,264.96 152,597,575.80（3）Decrease in 2016
—Disposal
（4）Balance as at December 31, 2016 131,695,310.84 20,902,264.96 152,597,575.80 2.Accumulated depreciation and
accumulated amortization
（1）Balance as at January 1, 2016
（2）Increase in 2016 32,213,005.48 5,058,544.71 37,271,550.19—Fixed assets, intangible assets transferred 27,951,379.64 4,640,499.39 32,591,879.03—Provision or Amortization 4,261,625.84 418,045.32 4,679,671.16（3）Decrease in 2016
（4）Balance at the end of the year 32,213,005.48 5,058,544.71 37,271,550.193．Provision for impairment
（1）Balance as at January 1, 2016
（2）Increase in 2016
—Provision
（3）Decrease in 2016
—Disposal
（4）Balance at the end of the year
4．Original book value
（1）Book value as at December 31, 2016 99,482,305.36 15,843,720.25 115,326,025.61（2）Book value as at January 1, 2016
Remark：This year the company rent part of the real estate to Chongqing Jianshe mechanical and electrical Co. Ltd.
5.11 Fixed assets
5.11.1 Information on fixed assets
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Buildings and Machinery Electronic and
Item Vehicles Total constructions equipment office equipment
1．Original book value
(1)Balance as at January 1, 2016 220,860,967.06 570,104,727.83 8,924,256.63 14,390,721.93 814,280,673.45 (2)Increase in 2016 63,316,079.64 1,387,132.46 64,703,212.10 - Acquisition 29,317,530.29 1,387,132.46 30,704,662.75 - Transfer-in from
33,998,549.35 33,998,549.35 construction in progress
(3)Decrease in 2016 131,695,310.84 121,560.10 131,816,870.94—Disposal or write-off 121,560.10 121,560.10 -Into the investment
131,695,310.84 131,695,310.84 properties
(4)Balance as at December 31,
89,165,656.22 633,299,247.37 8,924,256.63 15,777,854.39 747,167,014.61 2016
2．Accumulated depreciation
(1)Balance as at January 1, 2016 51,221,590.06 350,255,332.76 6,988,970.66 9,839,774.70 418,305,668.18 (2)Increase in 2016 2,703,874.88 26,740,152.11 170,162.40 1,472,588.37 31,086,777.76—Provision 2,703,874.88 26,740,152.11 170,162.40 1,472,588.37 31,086,777.76 (3)Decrease in 2016 27,951,379.64 117,913.40 28,069,293.04 - Disposal or write-off 117,913.40 117,913.40 - Into the investment
27,951,379.64 27,951,379.64 properties
(4)Balance as at December 31,
25,974,085.30 376,877,571.47 7,159,133.06 11,312,363.07 421,323,152.90 2016
3．Provision for impairment
(1)Balance as at January 1, 2016
(2)Increase in 2016
(3)Decrease in 2016
(4)Balance as at December 31,
2016
4．Book value
(1)Book value as at December 31,
63,191,570.92 256,421,675.90 1,765,123.57 4,465,491.32 325,843,861.71 2016
(2)Book value as at January 1, 169,639,377.00 219,849,395.07 1,935,285.97 4,550,947.23 395,975,005.27
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 2016
5.11.2 The fixed assets which are rented out through operating lease
Items Book value as at December 31, 2016 Machinery equipment 41,913,560.74 5.11.3 Information on the fixed assets without certificate of title
Item Book value Reasons for absence of certificate of title Buildings and constructions 42,288,815.25 Waiting for final acceptance 5.12 Construction in progress
5.12.1 Information on the construction in progress
Balance as at December 31, 2016 Balance as at January 1, 2016
Item
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Replacement of
2,252,455.05 2,252,455.05 40,366,114.52 40,366,114.52 equipment
Others 186,377.38 186,377.38 69,315.38 69,315.38 Total 2,438,832.43 2,438,832.43 40,435,429.90 40,435,429.90 5.12.2 Major changes in construction in progress for the current year
Transferred into Other Balance as at
Balance as at Increase in Source of Item fixed assets for decreases in December 31,
January 1, 2016 2016 fund the current year 2016 2016
Capacity expansion of
40,366,114.52 25,202,420.17 63,316,079.64 2,252,455.05 Self-financed air-conditioner
Others 69,315.38 117,062.00 186,377.38 Self-financed Total 40,435,429.90 25,319,482.17 63,316,079.64 2,438,832.43
5.13 Intangible assets
Item Land use right Total
1. Original book value
(1)Balance as at January 1, 2016 36,670,885.45 36,670,885.45
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 (2)Increase in 2016
- Internal R& D
(3)Decrease in 2016 20,902,264.96 20,902,264.96—Into the investment properties 20,902,264.96 20,902,264.96 (4)Balance as at December 31, 2016 15,768,620.49 15,768,620.492．Accumulated amortization
(1)Balance as at January 1, 2016 8,400,491.82 8,400,491.82 (2)Increase in 2016 312,322.80 312,322.80—Provision 312,322.80 312,322.80 (3)Decrease in 2016 4,640,499.39 4,640,499.39—Into the investment properties 4,640,499.39 4,640,499.39 (4)Balance as at December 31, 2016 4,072,315.23 4,072,315.233．Provision for impairment
(1)Balance as at January 1, 2016
(2)Increase in 2016
(3)Decrease in 2016
-Restructuring transfer
(4)Balance as at December 31, 2016
4．Book value
(1)Book value as at December 31, 2016 11,696,305.26 11,696,305.26 (2)Book value as at January 1, 2016 28,270,393.63 28,270,393.63 5.14 Long-term deferred expenses
Balance as at Balance as at Increase in Amortization
Item December 31, January 1, 2016 2016 in 2016
2016 Initial payment for aluminum machine of
3,345,497.21 1,383,409.99 1,962,087.22 model No. 83
Initial payment for aluminum machine of
580,594.64 71,093.21 509,501.43 model No. 96
Total 3,926,091.85 1,454,503.20 2,471,588.65
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.15 Deferred income tax assets
5.15.1 Deferred income tax assets before offset
Balance as at December 31, 2016 Balance as at January 1, 2016 Item
Deductible temporary Deferred income Deductible temporary Deferred income differences tax assets differences tax assets Provision for assets
12,112,504.63 1,816,875.69 12,130,956.41 1,819,643.46 impairment
5.15.2 Details of unrecognized deferred income tax assets
Item Balance as at December 31, 2016 Balance as at January 1, 2016 Deductible temporary
13,427,252.17 13,067,516.83 differences
Deductible losses 329,995,380.72 521,367,078.98 Total 343,422,632.89 534,434,595.81 5.15.3 Deductible losses of unrecognized deferred income tax assets shall be due in the following years:
Year Balance as at December 31, 2016 Balance as at January 1, 2016 2016 192,548,500.65 2017 197,428,928.73 197,428,928.73 2018 25,332,418.05 25,332,418.05 2019 98,496,222.54 98,496,222.54 2020 7,561,009.01 7,561,009.01 2021 1,176,802.39
Total 329,995,380.72 521,367,078.98 5.16 Other non-current assets
Balance as at December 31, Balance as at January 1, Item
2016 2016
Prepayment of long - term assets 9,240,209.19 10,478,525.70 5.17 Short-term borrowings
5.17.1 Classification of short-term borrowings:
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Item Balance as at December 31, 2016 Balance as at January 1, 2016 Mortgaged borrowings 2,500,000.00 5 , 0 0 0 ,0 0 0 . 0 0 Guaranteed borrowings 202,000,000.00 187,000,000.00 Credit borrowings 20,000,000.00 25,000,000.00 Total 224,500,000.00 217,000,000.00 5.17.2 Guaranteed borrowings
Loaner Borrowing balance Guarantor
Chongqing Jianshe mechanical and Chongqing Jianshe Automobile A/C Co., Ltd 50,000,000.00
electrical co., LTD
Chongqing Jianshe Automobile A/C Co., Ltd 152,000,000.00 Chongqing Jianshe Motorcycle Co., Ltd. Total 202,000,000.00
5.17.3 Mortgaged borrowings
Loaner Borrowing balance Collateral
Shanghai Jianshe Motorcycle
2,500,000.00 Building houses and land in Shanghai Co., Ltd
5.18 Notes payable
Type Balance as at December 31, 2016 Balance as at January 1, 2016 Bank acceptance bill 718,560,000.00 760,555,000.00 Remark: The notes payable of bank acceptance bills issued by the company in the current year are guaranteed by the bank acceptance bills margins with fixed quotas deposited by the Company with banks; at the same time, as for RMB171.41 million among the balance of notes payable, Chongqing Jianshe mechanical and electrical co., LTD. bears the joint and several liability; as for RMB10 million, Chongqing Jianshe Sales Co., Ltd. bears the joint and several liability.
5.19 Accounts payable
Aging Balance as at December 31, 2016 Balance as at January 1, 2016 Within 1 year 185,057,014.26 58,162,616.22 1-2 years 550,471.95 10,752,626.36 2-3 years 2,527,491.73 3,048,897.69 Over 3 years 5,233,507.51 3,921,185.56
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Total 193,368,485.45 75,885,325.83 5.20 Advances from customers
Aging Balance as at December 31, 2016 Balance as at January 1, 2016 Within 1 year 8,453,280.37 1,178,699.81 1-2 years 492,125.78 76,766.60 2-3 years 34,866.60 20,950.10 Over 3 years 145,853.56 124,903.46 Total 9,126,126.31 1,401,319.97 5.21 Employee compensation payable
5.21.1 Presentation of employee compensation payable
Balance as at Increase in Balance as at Item Decrease in 2016
January 1, 2016 2016 December 31, 2016 Short-term compensation 1,512,042.07 43,468,658.98 43,391,687.03 1,589,014.02 Post-employment benefits -
142,455.87 8,305,143.61 7,406,800.96 1,040,798.52 defined contribution plans
Dismissal welfare 7,464,852.40 7,464,852.40
Others 145,308.40 145,308.40
Total 1,654,497.94 59,383,963.39 58,408,648.79 2,629,812.54 5.21.2 Presentation of short-term compensation
Balance as at Increase in Decrease in Balance as at Item
January 1, 2016 2016 2016 December 31, 2016 (1)Salary, bonus, allowance and
573,666.05 28,967,292.32 28,736,747.89 804,210.48 subsidy
(2)Employee benefits 5,251,140.14 5,251,140.14
(3) Social insurance expenses 641,203.70 2,782,419.17 3,327,368.03 96,254.84 Including: medical insurance
638,649.12 2,339,445.03 2,906,955.94 71,138.21 premium
Work-related injury insurance
1,759.24 295,331.79 288,925.19 8,165.84 premium
Maternity insurance premium 795.34 147,642.35 131,486.90 16,950.79
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 (4) Housing fund 238,286.00 5,305,014.00 5,187,198.00 356,102.00 (5) Labor union expenditures and
42,766.32 1,162,793.35 873,112.97 332,446.70 employee education expenses
(6) Short-term paid absences
(7) short-term profit-sharing plan 16,120.00 16,120.00
Total 1,512,042.07 43,468,658.98 43,391,687.03 1,589,014.02 5.21.3 Presentation of defined contribution plans
Balance as at Increase in Decrease in Balance as at Item
January 1, 2016 2016 2016 December 31, 2016 Basic endowment insurance
82,937.51 7,899,726.01 7,093,060.87 889,602.65 premium
Unemployment insurance
59,518.36 405,417.60 313,740.09 151,195.87 premium
Total 142,455.87 8,305,143.61 7,406,800.96 1,040,798.52 5.22 Taxes and surcharges payable
Balance as at December 31, Balance as at January 1, Tax and surcharge items
2016 2016 Value-added tax (VAT) 73,009.55 86,828.08 Business tax 393,030.84 444,503.71 Corporate income tax 134,270.95
Individual income tax 1,005,278.13 1,150,666.94 Urban maintenance and construction tax 3,119,147.99 3,297,977.21 Educational surtax 1,988,736.03 2,107,282.74 property tax 3,727,900.64 4,327,900.64 Land royalities 1,808,215.20 1,808,215.20 Other taxes and surcharges 3,913,601.37 3,634,268.37 Total 16,163,190.70 16,857,642.89 5.23 Other payables
5.23.1 Presentation of other payables by aging
Aging Balance as at December 31, Balance as at January 1,
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 2016 2016
Within one year 36,135,896.36 13,157,054.05 1-2 years 1,238,802.40 557,016.70 2-3 years 480,300.00 1,500,583.22 Over 3 years 2,838,889.88 1,659,672.56 Total 40,693,888.64 16,874,326.53 5.23.2 Other payables are classified by nature
Property of account receivable Book balance as at December 31, 2016 Margin and so on 1,365,000.00 Other temporary payments/Other to be paid 6,641,963.26 Other receivables from the related parties 32,686,925.38 Total 40,693,888.64 5.24 Non-current liabilities maturing within one year
Balance as at December Balance as at January 1, Item
31, 2016 2016 Long-term borrowings maturing within one year 36,100,000.00 75,000,000.00 5.25 Long-term borrowings
Item Balance as at December 31, 2016 Balance as at January 1, 2016 Credit borrowings 48,590,000.00 128,490,000.00 5.26 Share capital
Increase("+") /decrease ("-") for the current year
Balance as at Balance as at Issuance Share converted
Item January 1,
Share
December 31, of new from public reserve Others Sub-total
2016
donation
2016 shares funds
Total shares
119,375,000.00 119,375,000.00 5.27 Capital reserve
Item Balance as at Increase in Decrease in Balance as at
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 January 1, 2016 2016 December 31, 2016 2016
Capital (or equity) premium 344,407,741.07 344,407,741.07 Other capital reserves 614,157,553.22 614,157,553.22 Total 958,565,294.29 958,565,294.29 5.28 Other comprehensive income
Year 2016
Less: recognized
as other
comprehensive
Balance as
Accrual before Attributable to
Balance as at income for Less: Attributable to
Item at January
income tax for owners of the
December 31, previous years income tax minority
1, 2016
the current parent
2016 and transferred in expenses shareholders
year company
the profit or loss
for the current
year
1. Other comprehensive
income that cannot be
9,800.00 9,800.00 reclassified in the loss and gain
in the future
Including: change in
re-measurement of the net
liabilities and net assets under
defined benefit plan
A share in other
comprehensive income of
investee that cannot be 9,800.00 9,800.00 reclassified in the loss and
gain under the equity method
Total other comprehensive
9,800.00 9,800.00 income
5.29 Surplus reserves
Balance as at Increase in Decrease in Balance as at Item
January 1, 2016 2016 2016 December 31, 2016 Statutory surplus reserves 56,724,000.00 56,724,000.00 Discretionary surplus reserves 68,962,000.00 68,962,000.00
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Balance as at Increase in Decrease in Balance as at Item
January 1, 2016 2016 2016 December 31, 2016 Total 125,686,000.00 125,686,000.00 5.30 Retained earnings
Item Year 2016 Year 2015 Adjustments to retained earnings as at December 31, 2015 -947,520,008.78 -1,188,255,120.98 Adjustments to total retained earnings as at January 1, 2016
("+" for increases; "-" for decreases)
Adjusted retained earnings as at January 1, 2016 -947,520,008.78 -1,188,255,120.98 Plus: net profit attributable to owners of parent company in
12,267,006.14 240,735,112.20 2016
Less: withdrawal of statutory surplus reserves
Withdrawal of discretionary surplus reserve
Adjustments to long-term equity investments due to the
change from under the cost method to under the equity
method
Retained earnings as at December 31, 2016 -935,253,002.64 -947,520,008.78 5.31 Operating income and operating costs
Year 2016 Year 2015
Item
Income Cost Income Cost Primary businesses 853,753,015.06 703,873,587.79 1,273,920,141.82 1,168,501,413.52 Other businesses 19,533,471.69 8,851,360.59 67,411,769.11 83,437,589.55 Total 873,286,486.75 712,724,948.38 1,341,331,910.93 1,251,939,003.07 Primary businesses (by product)
Year 2016 Year 2015
Name of product
Operating income Operating cost Operating income Operating cost Motorcycle and parts 8,335,299.07 8,800,544.94 522,989,115.46 574,538,540.53 Automobile air-conditioner 845,417,715.99 695,073,042.85 750,931,026.36 593,962,872.99 Total 853,753,015.06 703,873,587.79 1,273,920,141.82 1,168,501,413.52
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.32 Taxes and surcharges
Item Year 2016 Year 2015 Consumption tax 8,028.92 Business tax 163,611.07 4,197,270.01 Urban maintenance and construction tax 2,253,598.66 6,677,167.18 Educational surtax 1,633,478.75 4,604,814.07 Property tax 994,771.11
Land royalities 563,868.60
Stamp duty 656,593.82
Vehicle usage tax 2,520.00
Total 6,268,442.01 15,487,280.18 5.33 Selling expenses
Item Year 2016 Year 2015 Employee compensation payable 4,565,759.91 17,946,373.91 Depreciation costs 65,732.14 1,684,482.42 Office costs 105,404.38 1,701,144.22 Loading and unloading expenses 13,646.99 353,736.28 Transportation cost 7,875,372.79 13,192,516.11 Insurance premium 45,357.70 121,411.87 Operating funds 19,384.30 240,150.02 Exhibition fees 33,545.57 857,257.50 Advertising expenses 64,335.85 493,735.47 Travel expenses 1,269,801.20 4,566,355.74 Sale service fees 1,305,765.64 14,600,261.23 Repair charges 7,936,456.81 10,880,643.84 Warehousing custodian fees 3,586,861.32 4,992,270.10 Market expansion expenses and Other expenditures 542,154.33 4,423,786.89 Total 27,429,578.93 76,054,125.60 Remark: This year's sales expenses have changed significantly compared with the previous year, mainly because of the restructuring of the Company in the previous year and the changes about the
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 scope of consolidation this year.
5.34 General and administrative expenses
Item Year 2016 Year 2015 Employee compensation payable 41,022,640.62 62,103,576.22 Depreciation costs 5,437,380.56 7,982,145.20 Officecosts、Utility bills 964,276.57 2,338,398.28 Travel expenses 554,416.10 1,332,833.52 Transportation cost 125,855.84 1,002,553.43 Insurance premium 203,181.50 537,200.27 Repair charges 1,509,234.54 9,361,906.96 Consumption of goods and materials 634,754.60 941,833.91 Technological development expenses 10,987,649.08 29,905,400.87 Technological transfer fees 2,716,609.67 2,609,667.99 Taxes 1,148,608.26 21,911,166.47 Amortization of intangible assets 730,368.12 18,202,783.79 Entertainment expenses 342,255.28 1,952,980.80 Conference fees 191,657.98 192,391.30 Intermediary service expenses 853,600.60 1,242,433.09 Board meeting fees 472,903.57 287,603.18 Others 9,145,607.45 9,240,998.98 Total 77,041,000.34 171,145,874.26 Remark: This year's General and administrative expenses have changed significantly compared with the previous year, mainly because of the restructuring of the Company in the previous year and the changes about the scope of consolidation this year.
5.35 Financial expenses
Category Year 2016 Year 2015 Interest expenses 40,654,224.57 94,573,248.51 Less: Interest income 4,743,121.77 8,748,357.43 Gains or losses on exchange -204,402.48 -1,684,122.34 Others 888,822.01 -580,742.62
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Total 36,595,522.33 83,560,026.12 5.36 Losses from asset impairment
Item Year 2016 Year 2015 Losses on bad debt 341,283.56 4,330,902.58 Losses on intangible asset impairment 2,936,170.54 Total 341,283.56 7,267,073.12 5.37 Investment income
Item Year 2016 Year 2015 Long-term equity investment income calculated by equity method 3,128,796.18 12,442,935.76 Disposal of a long-term equity investment of investment returns 486,307,860.71 Others 3,128,796.18 498,750,796.47 Total 3,128,796.18 12,442,935.76 5.38 Non-operating income
Amounts included in Amounts included in the non-recurrent profit the non-recurrent profit Item Year 2016 Year 2015
and loss for the current and loss for the last year year
Total gains on disposal of
3,426,624.42 3,426,624.42 non-current assets
Including: gains from
3,426,624.42 3,426,624.42 disposal of fixed assets
gains on disposal of
intangible assets
Gain on debt restructuring
Gains on exchange of
non-monetary assets
Donation received
Government subsidies 1,223,200.00 3,643,800.00 1,223,200.00 3,643,800.00 Others 36,715.28 4,348,319.37 36,715.28 4,348,319.37 Total 1,259,915.28 11,418,743.79 1,259,915.28 11,418,743.79
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Government subsidies included in current profit and loss
Subsidy item Year 2016 Year 2015 Funds for supporting the technical innovation, research and
10,000.00 14,600.00 development of export enterprises
Other various subsidies with small amount 266,000.00 225,000.00 The funds for international market development 328,800.00 Credit insurance premium subsidies 279,000.00 Industrial supporting funds 328,200.00 616,400.00 Rewards for the high and new technology products 219,000.00 500,000.00 Industrial revitalization fund 400,000.00 1,680,000.00 Total 1,223,200.00 3,643,800.00 5.39 Non-operating expenses
Amounts included in Amounts included in the non-recurrent profit the non-recurrent profit Item Year 2016 Year 2015
and loss for the current and loss for the last year year Total losses on disposal
3,646.70 434,139.22 3,646.70 434,139.22 of non-current assets
Including: loss on
3,646.70 434,139.22 3,646.70 434,139.22 disposal of fixed assets
Loss on disposal of
intangible assets
Loss on debt
restructuring
Loss on exchange of
non-monetary assets
Donation made
Others 1,956,225.38 271,183.91 1,956,225.38 271,183.91 Total 1,959,872.08 705,323.13 1,959,872.08 705,323.13 5.40 Income tax expenses
Item Year 2016 Year 2015
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Income tax expenses for the current year 2,606,123.70 2,475,828.99 Deferred income tax expenses 2,767.77 1,936,485.66 Total 2,608,891.47 4,412,314.65 5.41 Items of the statement of cash flows
5.41.1 Cash received from other operating activities
Item Year 2016 Year 2015 Government subsidies received 1,223,200.00 3,643,800.00 Spare cash, income from interests on bank deposits , scrap
2,178,105.80 11,407,356.84 revenues and margins, etc.
Total 3,401,305.80 15,051,156.84 5.41.2 Cash paid for other operating activities
Item Year 2016 Year 2015 Pay other operating expenses 24,773,234.35 57,826,696.74 5.41.3 Cash paid from other financing activities
Item Year 2016 Year 2015 restructuring 3,750,149.57 5.41.4 Cash received from other financing activities
Item Year 2016 Year 2015 Proceeds from discounting of financing notes received 1,601,195,893.08 1,795,171,475.72 Collection of financing 31,449,622.92
Interest income from note margins 3,436,525.12 5,521,354.72 Total 1,636,082,041.12 1,800,692,830.44 5.41.5 cash paid for other financing activities
Item Year 2016 Year 2015 Payments for matured financing notes 478,625,549.97 1,421,579,381.02 Increase on notes, loans and other finaning margin 874,602,000.00 199,460,225.71 Total 1,353,227,549.97 1,621,039,606.73
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 5.42 Supplementary information to the statement of cash flows
5.42.1 Supplementary information to the statement of cash flows
Supplementary information Year 2016 Year 2015 1. Net profit adjusted to cash flows from operating activities
Net profits 12,705,659.11 240,930,431.06 Plus: provision for assets impairment 341,283.56 7,267,073.12 Depreciation of fixed assets and others 35,348,403.60 61,444,878.25 Amortization of intangible assets 730,368.12 18,202,783.79 Amortization of long-term deferred expenses 1,454,503.20 5,795,825.13 Losses on disposal of fixed assets, intangible assets and other
3,646.70 -2,992,485.20 long-term assets ("-" for gains)
Losses on write-off of fixed assets ("-" for gains)
Losses from changes in fair value ("-" for gains)
Financial expenses ("-" for income) 37,217,699.45 89,051,893.79 Investments losses ("-" for gains) -3,128,796.18 -498,750,796.47 Decreases in the deferred income tax assets ("-" for increases) 2,767.77 1,936,485.66 Increases in the deferred income tax liabilities ("-" for
decreases)
Decreases in inventories ("-" for increases) -54,856,096.20 54,371,021.87 Decreases in operating payables ("-" for increases) 49,283,231.77 47,889,881.04 Increases in operating payables ("-" for decreases) 29,516,448.12 57,159,018.57 Others
Net cash flows from operating activities 108,619,119.02 82,306,010.61 2. Significant investment and financing activities involving no
cash receipts and payments
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Fixed assets acquired under financial lease
3. Net change in cash and cash equivalents:
Balance as at December 31, 2016 of cash 273,768,758.46 23,643,515.81 Less: balance as at January 1, 2016 of cash 23,643,515.81 35,555,585.06 Plus: balance as at December 31, 2016 of cash equivalents
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Supplementary information Year 2016 Year 2015 Less: balance as at January 1, 2016 of cash equivalents
Net increase in cash and cash equivalents 250,125,242.65 -11,912,069.25 5.42.2 Breakdowns of cash and cash equivalents:
Balance as at December Balance as at January 1, Item
31, 2016 2016
1. Cash 273,768,758.46 23,643,515.81 Including: cash on hand 31,205.34 70,909.87 Unrestricted bank deposit 273,737,553.12 23,572,605.94 Other unrestricted monetary funds
Unrestricted deposits with central bank
Deposits with banks and other financial institutions
Loans to or from banks and other financial institutions
2. Cash equivalents
Including: bond investments maturing within three
months
3. Balance of cash and cash equivalents as at December
273,768,758.46 23,643,515.81 31, 2016
Including: cash and cash equivalents restricted for use by
the parent company or subsidiaries within the group
5.43 Assets with restrictions on their ownership or use right
Book value as at December
Item Reason for restriction
31, 2016
Cash and cash equivalents 240,646,064.11 Margin
Fixed assets 4,503,797.79 Borrowing mortgage
Intangible assets 2,743,046.64 Borrowing mortgage
6. Change in the scope of business combinations
The consolidation scope of the current period has not changed.
7. Equity in other entities
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 7.1 Equity in subsidiaries
7.1.1 Constitution of enterprise group
Domicile of primary Registered
Shareholding ratio(%)
Acquisition Name of subsidiary Business nature
operation place
Directly Indirectly
method Chongqing Jianshe Automobile A/C Domestic sales of
Establishment by Co., Ltd.(" The Air-conditioner Chongqing Chongqing motorcycles and the 100.00
investment Company ") relevant accessories
Business Shanghai Jianshe Motorcycle Co., Domestic sales of combination not Shanghai Shanghai 51.00
Ltd.("Shanghai Jianshe") motorcycles and the under common relevant accessories control 7.1.2 Significant non-wholly-owned subsidiaries
Dividends
Profits or losses
declared to be Balance of Shareholding attributable to
distributed to minority equity Name of subsidiary ratio of minority minority
minority as at December shareholder(%) shareholders for
shareholders for 31, 2016 the current year
the current year
Shanghai Jianshe Motorcycle Co.,
49.00% 438,652.97 1,220,285.74 Ltd.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 7.1.3 Major financial information on significant non-wholly-owned subsidiaries
Balance as at December 31, 2016
Name of subsidiary
Non-current Current Non-current
Current assets Total assets Total liabilities assets liabilities liabilities
Shanghai Jianshe
5,982,241.44 7,443,928.95 13,426,170.39 10,935,791.32 10,935,791.32 Motorcycle Co., Ltd.
Balance as at December 31, 2016
Name of subsidiary
Non-current Current Non-current
Current assets Total assets Total liabilities assets liabilities liabilities
Shanghai Jianshe
8,774,355.60 7,988,928.55 16,763,284.15 15,168,115.23 15,168,115.23 Motorcycle Co., Ltd.
Year 2016 Year 2015
Net cash flow Net cash flow Total Total
Name of subsidiary
from Operating from Operating income Net profit comprehensive Net profit comprehensive
operating income operating income income
activities activities Shanghai Jianshe
14,652,907.39 895,210.15 895,210.15 3,715,490.00 15,815,170.11 398,609.91 398,609.91 2,185,674.64 Motorcycle Co., Ltd.
7.2 Transactions through which the Company's shares of owner's equity in subsidiaries are changed but it still has control over the subsidiaries.
The shares held by the Company in its subsidiaries' owners' equity have not been changed in the current year.
7.3 Equity in joint ventures and associates
7.3.1 Major joint ventures and associates
Shareholding ratio Accounting Domicile of (%) treatment methods Name of joint Registered
primary Business nature for the investments venture or associate place
Indirectl
operation
Directly
in joint ventures or y
associates Production and
Chongqing Pingshan
sales of
TK Carburettor Co., Chongqing Chongqing 49.00 Equity method motorcycles and
Ltd.
the relevant
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Name of joint Domicile of Registered Shareholding ratio Accounting Business nature
venture or associate primary place (%) treatment methods operation
accessories
for the investments in joint ventures or associates
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 7.3.2 Major financial information on significant joint ventures
Balance as at December 31, Balance as at January 1, 2016/ 2016/ Year 2016 Year 2015
Item
Chongqing Pingshan TK Chongqing Pingshan TK Carburettor Co., Ltd. Carburettor Co., Ltd. Current assets 171,159,279.38 164,628,842.24 Including: cash and cash equivalents 98,235,139.01 97,262,431.46 Non-current assets 24,433,588.43 27,061,331.37 Total assets 195,592,867.81 191,690,173.61 Current liabilities 25,841,618.24 21,524,222.37 Non-current liabilities
Total liabilities 25,841,618.24 21,524,222.37 Minority equity
Equity attributable to the
169,751,249.57 170,165,951.24 shareholders of parent company
Shares in net assets calculated
83,178,112.31 83,381,316.13 according to the shareholding ratios
Adjustment events
- Goodwill
- Unrealized profits of internal
transactions
- Others
The book values of equity
83,178,112.31 83,381,316.13 investments in joint ventures
The fair values of equity investments
in joint ventures with a public offer
Operating income 121,504,742.74 130,781,558.70 Financial expenses -3,157,249.24 -3,678,111.60 Income tax expenses 1,472,946.94 351,645.96 Net profit 6,613,730.25 7,425,862.89 Other comprehensive income
Total comprehensive income 6,613,730.25 7,425,862.89 Dividends received from joint
3,332,000.00 1,960,000.00 ventures for the current year
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 7.3.3 There are no significant restrictions on the joint ventures or associates' ability to transfer funds to the Company.
8. Risks relating to the financial instruments
Liquidity risk
The liquidity risk refers to the risk of capital shortage in the case that an enterprise performs its obligation to settle in cash or with other financial assets. The Company's policy is to ensure sufficient cash for repayment of due debts. The liquidity risk is under the centralized control of the finance department of the Company. The department of finance, on the strength of supervision of balance of cash, negotiable securities that can be converted into cash at anytime and rolling forecast of cash flows in the future 12 months, makes sure that the Company has sufficient cash to repay debts under all circumstances that can be predicted in a reasonable manner.
The financial liabilities of the Company are presented by undiscounted contracted cash flow on the maturity date as follows:
Balance as at December 31, 2016
Item
3 months - 1
Within 1 month 1 to 3 months 1-5 years Total year
Short-term borrowings 20,000,000.00 204,500,000.00 224,500,000.00 Notes payable 142,140,000.00 314,280,000.00 262,140,000.00 718,560,000.00 Accounts payable 185,057,014.26 8,311,471.19 193,368,485.45 Non-current liabilities maturing within one
1,000,000.00 1,000,000.00 34,100,000.00 36,100,000.00 year
Long-term borrowings 48,590,000.00 48,590,000.00 Total 163,140,000.00 500,337,014.26 509,051,471.19 48,590,000.00 1,221,118,485.45 Balance as at December 31, 2015
Item
3 months - 1
Within 1 month 1 to 3 months 1-5 years Total year
Short-term borrowings 217,000,000.00 217,000,000.00 Notes payable 109,885,000.00 358,560,000.00 292,110,000.00 760,555,000.00 Accounts payable 24,764,163.49 22,486,045.02 28,635,117.32 75,885,325.83 Non-current liabilities maturing within one 1,500,000.00 3,000,000.00 70,500,000.00 75,000,000.00
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 year
Long-term borrowings 128,490,000.00 128,490,000.00 Total 136,149,163.49 384,046,045.02 608,245,117.32 128,490,000.00 1,256,930,325.83 9. Related parties and related party transactions
9.1 The parent company of the Company
Shareholding Voting ratio Name of the parent Registered Registered
Business nature ratio in the in the company place capital
Company(%) Company(%) Chongqing Jianshe
mechanical and
Design and sales of
electrical Co. RMB180.30
Chongqing Motorcycles and 71.13 71.13 Ltd(Jianshe billion
accessories
mechanical and
electrical co.)
Remark: after the restructuring, the shareholder changes to Jianshe mechanical and electrical co, CSGS is still the actual controllers which has not be changed, and the ultimate controller of the Company is The State-owned Assets Supervision and Administration Commission of the State Council.
9.2 Subsidiaries of the Company
See the Note 7 Equity in Other Entities for the details of subsidiaries of the Company
9.3 The joint ventures and associates of the Company
See the Note 7 Equity in Other Entities for the details of major joint ventures or associates of the Company.
The related party transactions with the Company for the current year:
Name of joint venture or associate Relationship with the company Chongqing Pingshan TK Carburettor Co., Ltd.("Pingshan TK") Joint venture
Chongqing Tongsheng Machinery Co., Ltd.("Tongsheng Original associates venture, now associates of Jianshe") parent company
Original associates venture, now associates of Chongqing Fuyeda Property Management Co., Ltd.("Fuyeda") parent company
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 9.4 Other related parties of the Company
Name of other related parties Relationship with the Company
Chongqing Jianshe Industrial (Group) Co., Ltd. ("Jianshe
industry ") Under the common control of the same party South Finance Co., Ltd. ("Finance Company ") Under the common control of the same party Chongqing Changan Motor Joint Stock Limited Company
("Changan Motor ") Under the common control of the same party Chongqing Changan Automobile Co., Ltd. Beijing
Under the common control of the same party Changan Automobile Company (“Beijing Changan“)
Chongqing Changan Suzuki Motor Co., Ltd. ("Changan An Joint venture a subsidiary of a controlling Suzuki ") shareholder
Hebei Changan Motor Co., Ltd. ("Hebei Changan ") Under the common control of the same party Nanjing Changan Motor Co., Ltd. ("Nanjing Changan ") Under the common control of the same party Baoding Changan Bus Manufacturing Co., Ltd (“Baoding
Under the common control of the same party Changan“)
Hefei Changan Motor Co.Ltd (“HefeiChangan’) Under the common control of the same party Chongqing Changan Motor Customer Service Co., Ltd.
("Changan Motor Customer Service ") Under the common control of the same party Chongqing Changan Automobile International Sales&
Under the common control of the same party Service Co.,Ltd（“Changan Automobile sales“）
Chongqing North Construction import and export trade
co.ltd (“import and export company”) Under the common control of the same party Chongqing jianshe sales co. Ltd(“the sales company”) Under the common control of the same party Hafei Motor share company(“Hafei motor”) Under the common control of the same party Changan Ford Motor Co.Ltd Harbin branch (“Changan An Joint venture a subsidiary of a controlling Ford Harbin branch”) shareholder
Harbin dongan Motor Power shares Co. Ltd(“Harbin
dongan power”) Under the common control of the same party 9.5 Related party transactions
9.5.1 Purchase of goods, rendering and receipt of labor services
Table of purchase of goods / receipt of services
Related party Content of related party Year 2016 Year 2015
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 transactions
Fuyeda Service 487,290.25 340,807.62 Energy, service and equipment die
1,900,438.50 19,328,694.76 Jianshe Industry and mould
Changan Motor Receipt of maintenance 3,131,523.69 3,719,229.93 Receipt of maintenance and
457,762.65 886,649.95 Changan Suzuki purchase of accessories
Hefei Changan Receipt of maintenance 8,335.94
Nanjing Changan Receipt of maintenance 64,634.97
Beijing Changan Receipt of maintenance 605.38
Import and export company Acting import service fee 542,669.46
Purchasing materials and
Import and export company 57,055,082.38
equipment
Construction of the mechanical Purchasing parts and others 31,055,689.00
Table of sales of goods/rendering of services
Related party Content of related party transactions Year 2016 Year 2015 Changan Motor Finished products 115,634,903.45 166,966,920.24 Hebei Changan Finished products 980,930.76 196,674.37 Nanjing Changan Finished products 45,118,330.18 1,670,858.13 Hefei Changan Finished products 26,127,058.88 16,912,496.94 Changan Suzuki Finished products 67,851,049.78 69,871,632.02 Changan Ford Harbin branch Finished products 8,318,694.42 14,596,119.51 Baoding Changan Finished products 242,580.34
Changan Automobile sales Finished products 212,820.51
Beijing Changan Finished products 3,568.38
2、 The situation of related-party lease
The Company as a lessor:
Rental income of Rental income of The name of lessee The kind of leased assets
2016 2015 Jianshe mechanical and electrical co Fixed assets 9,287,626.08
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 The Company as alessee：
Leasing asset of Leasing asset of The name of lessor The kind of leased assets
2016 2015 Jianshe mechanical and electrical co Fixed assets 2,262,810.82
9.5.3 Related Guarantee
(Unit: RMB'0,000) Guarantor Guaranteed Starting date Maturity date Obligation Guarantee
amount of guaranty of guaranty discharged Jianshe mechanical
The Air-conditioner Company 5,000 2016-8-25 2017-8-24 No and electrical co
Jianshe mechanical
The Air-conditioner Company 3,500 2016-7-25 2017-1-25 No and electrical co
Jianshe mechanical
The Air-conditioner Company 2,857 2016-8-24 2017-2-24 No and electrical co
Jianshe mechanical
The Air-conditioner Company 2,075 2016-10-18 2017-4-18 No and electrical co
Jianshe mechanical
The Air-conditioner Company 1,567 2016-10-18 2017-4-18 No and electrical co
Jianshe mechanical
The Air-conditioner Company 3,571 2016-11-29 2017-5-28 No and electrical co
Jianshe mechanical
The Air-conditioner Company 3,571 2016-12-6 2017-6-6 No and electrical co
The Sale Company The Air-conditioner Company 1,000 2016-7-12 2017-1-12 No 9.5.4 Key executive compensation
Item Year 2016 Year 2015 Key executive compensation 1,778,863.70 2,260,719.10 9.5.5 Other related transactions
The financial businesses with Finance Company
Details of transaction category Trading unit Amount Chongqing Jianshe Motorcycle 146,053,654.70 Balances of deposits
The Air-conditioner Company 37,107.06
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Details of transaction category Trading unit Amount Sub-total 146,090,761.76 Balances of bank acceptance bills discounted
Chongqing Jianshe Motorcycle 60,400,000.00 and before the maturity
The total amount of the discount Chongqing Jianshe Motorcycle 100,060,000.00 Loan balance The Air-conditioner Company 20,000,000.00 Total borrowings The Air-conditioner Company 20,000,000.00 Total reimbursement amount Chongqing Jianshe Motorcycle 25,000,000.00 Chongqing Jianshe Motorcycle 2,189,237.50 Loans and discount interest expenditures The Air-conditioner Company 898,666.66 Sub-total 3,087,904.16 9.6 Accounts due from/to the related parties
9.6.1 Accounts receivable
Balance as at December 31, 2016 Balance as at January 1, 2016 Provision Item Related party
Provision for
Book balance Book balance for bad bad debts
debts Accounts receivable
Changan Motor 18,330,476.86 24,772,382.35
Harbin Changan Ford 502,331.41 9,675,399.65
Changan Suzuki 8,414,220.51 5,526,035.47
Nanjing Changan 14,225,651.46 327,320.00
Hebei Changan 22,387.00 31,562.00
Hefei Changan 17,250,797.26 5,801,891.42
Hafei Motor 3,999,944.43 1,350,812.50 3,999,944.43 821,293.28 Harbin dongan Power 3,508.41 350.84 42,017.99
Baoding Changan 12,150.01
Other accounts
receivable
Jianshe mechanical
248,608,670.53
and electrical co.
Import Company 621,678.71
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 9.6.2 Accounts payable
Book balance as at Book balance as at Item Related party
December 31, 2016 January 1, 2016 Accounts payable
Tongsheng Jianshe 2,510,396.87
Jianshe Industry 165,560.97 77,720.44 Other payables
Jianshe Industry 1,138,825.73 4,648,674.19 Jianshe mechanical and
31,449,622.92
electrical co.
Fuyeda 282,533.47 42,136.54 10. Commitments or contingencies
10.1 Significant commitment events
As of December 31, 2016, the Company did not need to disclose important commitments. 10.2 Contingencies
As of December 31, 2016, there was a commercial acceptance bill with endorsement and not yet due at the balance sheet date, amounting to RMB13,835,000.00.
11. Post balance sheet events
The company received the China Securities Depository Co., Ltd. Shenzhen Branch shares frozen data on April 13, 2017, the company's controlling shareholder of Jianshe mechanical and electrical co holdings of the Company 5,000,000 shares, due to debt disputes by the Chongqing Banan District People's Court in 2017 April 12 Judicial freeze. Jianshe mechanical and electrical co holds 84,906,250 shares of the Company, accounting for71.13% of the total share capital of the Company. The Company's shares were frozen by 5,000,000 shares, accounting for4.19% of the total share capital of the Company.
12. Other significant events
As of December 31, 2016, the Company did not need to disclose other important matters.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 13 Notes to the main items of financial statements of parent company
13.1 Accounts receivable
13.1.1 Disclosure of accounts receivable by category
Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for bad Provision for bad
Book balance Book balance
Category debts
Book
debts
Book Proportio Proportio
value
Proporti Proporti
value Amount Amount Amount Amount
n(%) n(%) on(%) on(%)
Accounts
receivable
with
significant
single
amount and
provision
for bad debt
made on an
individual
basis
Accounts
receivable
with
provision
for bad debt
4,307. 2,255,130. 1,727,559. 527,570. made on a 1,733,097.5 1,728,790.4 100.00 76.61
100.00 99.75 10 24 88 36 portfolio 8 8
with similar
risk credit
characterist
ics basis
Accounts
receivables
with
insignifican
t single
amount and
provision
for bad debt
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for bad Provision for bad
Book balance Book balance
Category debts
Book
debts
Book Proportio Proportio
value
Proporti Proporti
value Amount Amount Amount Amount
n(%) n(%) on(%) on(%)
made on an
individual
basis
4,307. 2,255,130. 1,727,559. 527,570. 1,733,097.5 1,728,790.4 100.00 76.61
100.00 99.75 10 24 88 36 Total 8 8
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Accounts receivable with provision for bad debts made using the aging analysis method among those portfolios:
Balance as at December 31, 2016
Aging
Provision for bad Proportion of Accounts receivable
debts provision(%) 1-6 months (including 6 months)
6-12 months
1-2 years (including 1 year)
2-3 years (including 2 years) 6,153.00 1,845.90 30.00 3-4 years (including 3 years)
4 - 5 years (including 4 years)
Over 5 years (including 5 years) 1,726,944.58 1,726,944.58 100.00 Total 1,733,097.58 1,728,790.48
13.1.2 Accounts receivables provided, reversed or recovered in the report year.
The provision for bad debts is RMB 1,230.60 for the current year.
13.1.3 Top five accounts receivable by the credit balance as at December 31, 2016
The top five accounts receivable by the credit balance as at December 31, 2016 total RMB 1,327,813.35, accounting for76.62% of total amount of balance as at December 31, 2016 of accounts receivable, and the balance as at December 31, 2016 of provision for bad debts provided correspondingly totals RMB 1,327,813.35.
13.2 Other receivables
13.2.1 Disclosure of other receivables by category
Balance as at December 31, 2016 Balance as at January 1, 2016
Provision for bad Provision for bad
Book balance Book balance
Category debts
Book
debts
Book value Proporti Proporti
value
Proporti Proporti
Amount Amount Amount Amount
on(%) on(%) on(%) on(%)
Other
receivable
s with
significant
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 single
amount
and
provision
for bad
debt made
on an
individual
basis
Other
receivable
s with
provision
for bad
debt made
9,425,174 4,403,827 5,021,347 257,837,98 4,232,368 253,605,61 on a 96.31 46.72 99.84 1.64
.24 .20 .04 7.95 .84 9.11 portfolio
with
similar
risk credit
characteris
tics basis
Other
receivable
s with
insignifica
nt single
amount
361,125.3 361,125.3 100.0 405,125.3 100.0
and 3.69 405,125.35 0.16
5 5 0 5 0
provision
for bad
debt made
on an
individual
basis
9,786,299 100.0 4,764,952 5,021,347 258,243,11 100.0 4,637,494 253,605,61 48.69 1.80
Total .59 0 .55 .04 3.30 0 .19 9.11
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Other receivables with provision for bad debts made using the aging analysis method among those portfolios:
Balance as at December 31, 2016
Aging
Provision for bad Proportion of Other receivables
debts provision(%) 1-6 months (including 6 months) 3,494,779.52
6-12 months
1-2 years (including 1 year) 1,696,186.13 169,618.61 10.00 2-3 years (including 2 years)
3-4 years (including 3 years)
4 - 5 years (including 4 years)
Over 5 years (including 5 years) 4,234,208.59 4,234,208.59 100.00 Total 9,425,174.24 4,403,827.20
13.2.2 Provision for bad debts provided, reversed or recovered in the current year.
The provision for bad debts is decreased by RMB 127,458.36 in the current year.
13.2.3 Other receivables classified by payment properties
Book balance as at Book balance as at January Property of account receivable
December 31, 2016 1, 2016 Other receivables from the related parties 667,041.51 249,230,349.24 Petty cash and borrowings with small amount 4,523,924.14 4,565,415.08 Fully provided provision for bad debts regarding
4,595,333.94 4,218,034.74 long-term receivables and payables
Margins and others 229,314.24 Total 9,786,299.59 258,243,113.30 13.2.4 Top five other receivables by credit balance as at December 31, 2016
The top five other recievables by the credit balance as at December 31, 2016 total RMB 8,207,661.96, accounting for 83.87% of total amount of balance as at December 31, 2016 of other receivable, and the balance as at December 31, 2016 of provision for bad debts provided correspondingly totals RMB 3,857,499.33.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 13.3 Long-term equity investments
Balance as at December 31, 2016 Balance as at January 1, 2016
Item
Provision for Provision for
Book balance Book value Book balance Book value impairment impairment
Investments in
168,160,000.00 168,160,000.00 168,160,000.00 168,160,000.00 subsidiaries
Investments in
associates and 83,178,112.31 83,178,112.31 83,381,316.13 83,381,316.13 joint ventures
Total 251,338,112.31 251,338,112.31 251,541,316.13 251,541,316.13 13.3.1 Investments in subsidiaries
Balance as at Provision
Balance as at Balance as at December Increase in Decrease for
Investee January 1, December 31, 31, 2016 of 2016 in 2016 impairment
2016 2016 provision for in 2016
impairment Shanghai Jianshe
8,160,000.00 8,160,000.00
Motorcycle Co., Ltd.
Chongqing Jianshe
Automobile A/C Co., 160,000,000.00 160,000,000.00
Ltd.
Total 168,160,000.00 168,160,000.00
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 13.3.2 Investments in associates and joint ventures
Increases/decreases in the current year Balan ce as at Dece profits and
Provisi Chan
mber Balance
losses on Other
Balance as on for Additi Decrea ges Declaratio
31, as at
investments compr
at impair Investee
onal se in in n of cash Oth
2016 January 1,
recognized ehensi
December ment invest invest other dividends ers
of 2016
under the ve
31, 2016 in
ment ment equit or profits
provis equity income
2016 y
ion method
for impair ment Joint ventures
Chongqing
Pingshan TK 83,381,3 3,128,796 -3,332,0 83,178,11
Carburettor 16.13 .18 00.00 2.31
Co., Ltd.
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 13.4 Operating income and operating costs
Year 2016 Year 2015
Item
Income Cost Income Cost Primary businesses 373,805,672.47 425,189,860.34 Other businesses 610,825,517.52 577,514,305.99 542,719,201.58 526,329,273.76 Total 610,825,517.52 577,514,305.99 916,524,874.05 951,519,134.10 13.5 Investment income
Item Year 2016 Year 2015 Long-term equity investment income calculated by cost method
Long-term equity investment income calculated by equity method 3,128,796.18 16,907,175.88 Investment income from disposal of long-term equity investment -4,200.00 Investment income from financial assets measured at fair value
through current profit and loss during the
Investment income from disposal of financial assets measured at fair
value through current profit and loss
Investment income from holding of held-to-maturity investments
Investment income from holding of available-for-sale financial assets
Investment income from disposal of available-for-sale financial assets
Others -7,045,934.87 Total 3,128,796.18 9,857,041.01 14. Supplementary information
14.1 Detailed statement of current non-recurring profit and loss
Item Amount Remark Profits or losses from disposal of non-current assets -3,646.70
Tax returns, deduction and exemption approved beyond the authority or
without official approval documents
Government grants included in current profits and losses (except for
government grants closely related to the enterprise business, obtained by 1,223,200.00
quota or quantity at unified state standards)
Payment for use of state funds received from non-financial institutions
recorded in current profits and losses
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Item Amount Remark Gains from the difference between the investment costs of acquisition of
subsidiaries, associates and joint ventures and share in the net fair value of
the identifiable assets of the investee when investing
Gains or losses from non-monetary asset exchange
Gains or losses from entrusting the investments or management of asset
Impairment provision for force majeure such as natural calamities
Profits or losses from debt restructuring
Restructure expenses, such as the compensation for employee relocation
and integration costs
Gains or losses from transactions with obvious unfair transaction price
Year-to-date net profits or losses of subsidiaries arising from business
combination under common control
Profits or losses arising from contingencies not related to thecompany’s
normal business
Except for effective hedging business related to the normal business of the
company, profits or losses from fair value changes in held-for-trading
financial assets and held-for-trading financial liabilities, and investment
income from disposal of held-for-trading financial assets, held-for-trading
financial liabilities and available-for-sale financial assets
Reversal of the impairment provision for receivables subject to separate
impairment test
Profits or losses from entrusted loans
Profits or losses from fair value changes in investment property
subsequently calculated with the fair value mode
Impacts of one-time adjusting the current profits or losses in accordance
with requirements of tax and accounting laws and regulations on the current
profits and losses
Custodian income from entrusted management
Other non-operating income and expenditure except for the above items -1,919,510.10
Other profits or losses which can be deemed as non-recurring profits or
losses
Income tax effects 29,247.81
Minority interest effects 29,286.15
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016 Item Amount Remark Total -641,422.84
14.2 Rate of return on net assets and earnings per share:
Weighted average
Earnings per share (Yuan) Profit during the reporting period rate of return on net
Basic earnings Diluted earnings assets(%)
per share per share Net profit attributable to ordinary shareholders of
4.68 0.103 0.103 the Company
Net profit attributable to ordinary shareholders of
the Company after deducting the non-recurring 4.92 0.108 0.108 profit and loss
Chongqing Jianshe Motorycle Co., Ltd. Annual Report 2016XII．Documents Available for Inspection
I. Annual Report carrying personal signature and seal of the Chairman of the Board;
II. Financial Statements with signatures of the legal representative, the financial officer, and accounting manager. III. Original copy of theAuditors’ Report with the seal of the CPA and signed by the certified（XKSBZDNo.[2017]ZE10382）.
IV. All of the originals of theCompany’s documents and public notices publicized by the presses designated by China Securities Regulatory Commission in the report period;
V. Statement on special audition on appropriation of capital by controlling shareholder and related parties of Chongqing Jianshe Motorcycle Co.,Ltd.（XKSBZDNo.[2017]ZE10379）
VI. Auditing Report on Internal Control of Year 2016 for Chongqing Jianshe Motorcycle Co., Ltd.（XKSBZDNo.[2017]ZE10381）
VII. Special statement on financial transactions such as related loans involving with financial institutions（XKSBZDNo.[2017]ZE10380）