Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Chongqing Jianshe Motorcycle Co., Ltd.
Annual Report 2015
2016-025
April 2016
1
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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 the company’s future
development. The company’s business plan and business goal of the year do not represent the 2016-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.
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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. Financial Report
XI. Documents available for inspection
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Definition
Terms to be defined Define Definition
d as
Define
Company, the Company, Jianmo Stock Chongqing Jianshe Motorcycle Co., Ltd.
d as
Shenjianmo Define Shenzhen North Jianshe Motorcycle Co., Ltd. (predecessor of the
d as Company)
Military Equipment Group Define China Military Equipment Group Co., Ltd. (China Southern Industry
d as Group Co., Ltd.)
Southern Group Define China Southern Industry Group Co., Ltd.
d as
Military Finance Co. Define Military Equipment Group Finance Co., Ltd.
d as
Southern Motorcycle Define Chongqing Southern Motorcycle Co., Ltd.
d as
Southern Motorcycle R&D Co., Ltd. Define Chongqing Southern Motorcycle Technologies Development Co., Ltd.
d as
Jianshe Industry Define Chongqing Jianshe Industry Co., Ltd. – former State-owned Jianshe
d as Machinery Factory, Jianshe Industry (Group) Co., Ltd.
Jianshe Group Define Jianshe Industrial (Group) Co., Ltd.
d as
Jianshe Machinery Define Chongqing Jianshe Machinery Co., Ltd.
d as
Define
Jianshe Mechanical and Electric Chongqing Jianshe Mechanical and Electric Co., Ltd.
d as
China Jialin Define China Jialin Industry Co., Ltd. (Group)
d as
Jinan Qingqi Define Jinan Qingqi Motorcycle Co., Ltd.
d as
Changan Auto Define Chongqing Changan Automobile Co., Ltd.
d as
Luoyang Northern Define Luoyang Northern Enterprise Group Co., Ltd.
d as
Sales Co. Define Chongqing Jianshe Sales Co., Ltd.
d as
Vehicle air conditioner Define Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
d as
Import & Export Co. Define Chongqing Northern Jianshe Import & Export Co., Ltd.
d as
Shanghai Jianshe Define Shanghai Jianshe Motorcycle Co., Ltd.
d as
Slaes Company Define Chongqing Jianshe Motorcycle Sales Co., Ltd.
d as
Chongqing Yamaha Define Chongqing Jianshe YAMAHA Motorcycle Co., Ltd.
d as
Zhuzhou Jianya Define Zhuzhou Jianshe YAMAHA Motorcycle Co., Ltd.
d as
Pingshan Taikai Define Chongqing Pingshan Taikai Carburetor Co., Ltd.
d as
Jianxing Machinery Define Chongqing Jianxing Machinery Co., Ltd.
d as
Tongsheng Construction Define Chongqing Tongsheng Jianshe Industry Co., Ltd.
d as
Jianshe Industry & Trading Define Chongqing Jianshe Industry & Trade Co., Ltd.
d as
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Fuyeda Define Chongqing Fuda Property Management Co., Ltd.
d as
Jiangmen Qingqi Define Jiangmen Qingqi South China Motorcycle Co., Ltd.
d as
Changan SUZUKI Define Chongqing Chang’an SUZUKI Automobile Co., Ltd.
d as
Changhe SUZUKI Define Jiangxi Changhe SUZUKI Automobile Co., Ltd.
d as
Hebei Changan Define Hebei Changan Automobile Co., Ltd.
d as
Nanjing Changan Define Nanjing Changan Auto Co., Ltd.
d as
The company has made an agreement to sale the 100% stake of Jianshe
Define Mechanical and Electric Company-the company’s subsidiary funded by
Major asset restructuring
d as the liabilities and the motorcycle business related assets held by the
company to Military Equipment Group.
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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 in Chinese 建设摩托
Company Name in English CHONGQING JIANSHE MOTORCYCLE CO.,LTD.
Short form of Company Name in English JSMC-B
Legal representative: Li Huaguang
Registered address No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan District, Chongqing
Postal code of the Registered Address 400054
Office Address No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan District, Chongqing
Postal code of the office address 400054
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 Lv Hongxian（Interim） Liu Hongyu
No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan No.1 Jianshe Road, Huaxi Industrial Zone, Ba’nan
Address
District, Chongqing District, Chongqing
Tel. 023-66295333 023-66295333
Fax. 023-66295333 023-66295333
Email. cqjsmc@jianshe.com.cn cqjsmc@jianshe.com.cn
Ⅲ. Information disclosure and placed
Newspapers selected by the Company for information
Securities Times and Hongkong Commercial Daily.
disclosure
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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 74748242-3
Changes in principal In 2015, the company implemented the major asset restructuring, stripped the main assets and liabilities
business activities since involved in the motorcycle business, completed the structural adjustment of the main business and the
listing (if any) 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%
Changes is the controlling stake of the company. (b) On August 31, 2005, the 71.13% stake of the company held by Jianshe Group
shareholder in the past (is was transferred to Military Equipment Group in an agreement, thus the Military Equipment Group. has
any) become the company’s controlling shareholder. (c)On March 3, 2016, Military Equipment Group. freely
transferred its 71.13% stake of the company to Jianshe Mechanical and Electric Company, thus the
Jianshe Mechanical and Electric Company has 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
Liu Jinjin, Wan Ping
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
No.4 Building, No.66 Anli
China Sectutities 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
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Changed over last year
2015 2014 2013
（％）
Operating Gross income（RMB） 1,341,331,910.93 1,763,619,804.97 -23.94% 1,885,831,544.85
Net profit attributable to the
shareholders of the listed company 240,735,112.20 -133,593,949.98 280.20% 11,589,364.53
（RMB）
Net profit after deducting of
non-recurring gain/loss attributable
-255,598,353.81 -153,898,341.02 -66.09% -99,416,477.62
to the shareholders of listed
company（RMB）
Cash flow generated by business
82,306,010.61 94,598,651.91 -12.99% 162,848,662.04
operation, net（RMB）
Basic earning per
2.017 -1.119 280.25% 0.097
share(RMB/Share)
Diluted gains per
2.017 -1.119 280.25% 0.097
share(RMB/Share)(RMB/Share)
Net asset earning ratio（%） 174.84% -158.82% 210.09% 7.83%
End of Changed over last year
End of 2015 End of 2013
2014 （％）
Gross assets（RMB） 1,550,615,831.44 2,389,211,010.43 -35.10% 2,761,080,427.99
Net assets attributable to
shareholders of the listed company 256,116,085.51 17,321,196.61 1,378.63% 150,915,146.59
（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
(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.
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Ⅷ.Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 355,351,388.28 364,304,314.19 303,960,771.84 317,715,436.62
Net profit attributable to the
-16,904,008.56 -53,984,680.11 -64,918,870.00 376,542,670.87
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
-17,459,103.30 -54,303,443.79 -72,484,859.14 111,255,147.57
to the shareholders of listed
company
Net Cash flow generated by
5,981,111.44 26,480,631.62 -33,188,489.57 83,032,757.12
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
Amount
Items Amount (2015) Amount (2013) Notes
(2014)
Non-current asset disposal
gain/loss(including the write-off part for 2,992,485.20 -328,218.08 59,607,568.30
which assets impairment provision is made)
Govemment subsidy recognized in
currentgain and loss(excluding those closely
3,643,800.00 2,875,800.00 49,942,210.00
related to the Company’s business and
granted under the state’s policies)
Notes:Other gains and losses in
line with the non-recurring gains
and losses" is the major asset
reorganization income assets
Other non-business income and expenditures
4,077,135.46 17,756,677.38 1,450,995.27 mainly original controlling
other than the above
shareholder of the period of
Military Equipment Group
transferred the motorcycle
business and liabilities.
Less: Influenced amount of income tax 486,307,860.71
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Influence on minority shareholders’ equity
694,349.75 -2,052.06
(after tax)
Total -6,534.39 -131.74 -3,016.52 --
496,333,466.01 20,304,391.04 111,005,842.15
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable √ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/itesm as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
III. Outline of Company Business
Ⅰ.Main Business the Company is Engaged in During the Report Period
The company's main business is divided into two sections of the motorcycle and vehicle air-conditioning. In
recent years, the whole motorcycle industry continued to decline, which greatly impacted the company’s
motorcycle business year by year. Due to the large proportion of resources allocated to the motorcycle business,
the growth in the air-conditioning business still unable to compensate for the impact of the decline in the
motorcycle business, thus the main business of the company recorded a loss. To improve the company's asset
quality and profitability and enhance the capacity for sustainable development, the company implemented the
major asset restructuring in 2015, stripped the main assets and liabilities involved in the motorcycle business and
completed the structural adjustment of the main business. The company will further explore and diversify the
development space based on the air-conditioning business to lay a solid foundation for the sustainable and stable
development of the company.
Ⅱ.Major Changes in Main Assets
1.Major Changes in Main Assets
Main assets Major changes
Due to the company’s major asset restructuring in 2015 stripped the assets and liabilities of
Fixed assets motorcycle business, the company’s fixed assets reduced from RMB 715,930,693.00 to RMB
395,975,005.27.
Due to the company’s major asset restructuring in 2015 stripped the assets and liabilities of
Intangible assets motorcycle business, the company’s Intangible assets reduced from RMB 92,488,110.55 to RMB
28,270,393.63.
As the guarantee money in the notes increased, the company’s monetary funds increased from
Monetary Fund
RMB 192,918,049.28 to RMB259,802,758.76.
Due to the reduction of inventory, the company's inventory decreased 47.28% compared to the
Inventories
end of 2014.
Due to the company’s major asset restructuring in 2015 stripped the assets and liabilities of
Long-term equity investment motorcycle business, the company's long-term equity investment accounted for total assets fell by
22.36%.
2. Main Conditions of Overseas Assets
□ Applicable √Not applicable
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Ⅲ.Analysis On core Competitiveness
Automobile air-conditioner compressor business: Through over 20 years of technical research and digestion, as
well as independent innovation, the Company has been able to produce compressors with high performance and
competition. Rotating compressor products were taking steady market share in the whole industry. Over 80% of
production equipment were imported from multiple countries including the US, Germany, Swiss, and Japan. In the
report period, the Company has been reinforce investment on fixed assets, and has achieved productivity of 2
million units per year. Online testing, quality control, and researching were fully upgraded.
IV. Management’s Discussion and Analysis
Ⅰ.General
The year of 2015 was a year for the major reform and adjustment of the company’s main business.
In recent years, the company’s motorcycle business was impacted by the active adjustment in the industrial
structure and the inputs. The company actively adopted technological innovation, product restructuring, reducing
the costs by improving the efficiency, expanding the auto parts and other measures to improve the operating
conditions, but due to the large proportion of resources allocated to the motorcycle business and the further
adjustment in the industry, the scale of the company’s motorcycle business continued to shrink. The sales on
motorcycle of the company and its subordinate companies and its jointly-run companies cumulatively decreased
36.35%. Facing the difficulties in the development of the main business, in the year, the company implemented
the major asset restructuring, stripped the main assets and liabilities involved in the motorcycle business,
completed the structural adjustment of the main business and the vehicle air-conditioning business has become the
company's main business.
In 2015, the vehicle air-conditioning business continued to maintain a stable development. Through the
previous two rounds of investment on technology transformation and the continuous market development, the
sales increased to 1.85 million units from 1.35million units of year 2012, an average annual growth of 12.52%.
The production and sales continued to rank in top3 in the air-conditioning compressor industry in China, and the
market share kept in 10 %.( data source: China Automobile Industry Association)
In terms of improving the manufacturing capacity, the company implemented a new round of product
quality strategy, thus the manufacturing consistency and stability have been improved. The previous technology
transformation project was about to be completed and the manufacturing automation level, online monitoring
capability, automatic error prevention capacity and the production capacity would be further improved to provide
support for the on-scale of the vehicle air-conditioning business.
In terms of technology and the product upgrading, the company insisted on the combination of independent
developing and the introduction of cooperation, the product platform has been continuously optimized. The rotary
vane platform newly increased the development project of 140-iron machine and 120-aluminum machine. The
electric product platform carried out a variety of developments for low speed electric vehicles, electric passenger
cars and electric buses, maintained the development synchronized with the market development. On the basis of
the 320cc, the piston product platform realized the sales of 480cc and 380cc. In terms of the basis technology
research and development, the company established and perfected the CAE and fluid analysis methods,
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
implemented the design and verification of the optimization of the performance of the iron machine. NVH
analysis and improvement achieved good results.
In the aspect of market structure optimization, the company maintained the stability of the market for large
clients, the market share of the joint venture brand achieved substantial growth and the market share in large
clients continued to improve. Implemented the differentiated management and speeded up the development of
potential strategic customers. The sales in foreign trade achieved substantial growth, thus the annual sales in
foreign trade increased 96.7% year on year.
In the year, the company's business segments were respectively adjusted and developed, but due to the large
proportion of resources allocated to the motorcycle business and the impact from the declined market demand, the
scale of the company’s motorcycle business continued to shrink. However, the growth in the air-conditioning
business still unable to compensate for the impact of the decline in the motorcycle business, the company's main
business revenue continued to decline in the year, thus the operating profits was negative, but because the sales of
the major asset generated proceeds, thus the net profits of the year was positive.
The company implemented the major asset restructuring in the year--after stripping the major assets and
liabilities involved in the motorcycle business, the proportion of the current assets accounted for the total assets
increased to 56.98% from 34.74%, the proportion of non-current assets accounted for the total assets decreased to
43.02% from 65.26%, thus the company's asset structure has been optimized. Compared to the state before the
major asset restructuring, the company’s current ratio increased to 0.77 from 0.37, the quick ratio increased to
0.62 from 0.25 and the asset liability ratio decreased to 80.42% from 99.25%, thus the debt paying ability
improved and the financial risk further lowed. After the major asset restructuring, the business structure has been
optimized and the vehicle air-conditioning compressor business has become the company's main business, along
with the healthy development of the air-conditioning compressor business, the company’s profitability will
gradually be improved in the future.
Ⅱ.Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1)Component of Business Income
In RMB
2015 2014
Increase /decrease
Amount Proportion Amount Proportion
Total operating
1,341,331,910.93 100% 1,763,619,804.97 100% -23.94%
revenue
On Industries
Main operating 1,273,920,141.82 94.97% 1,695,959,258.99 96.16% -24.88%
Other operating 67,411,769.11 5.03% 67,660,545.98 3.84% -0.37%
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
On products
Motorcycle and parts 522,989,115.46 38.99% 968,500,508.27 54.92% -46.00%
Vehicle air
750,931,026.36 55.98% 727,458,750.72 41.25% 3.23%
conditioner
Other 67,411,769.11 5.03% 67,660,545.98 3.84% -0.37%
On Area
Domestic 1,231,140,033.05 91.78% 1,538,650,161.21 87.24% -19.99%
Overseas 110,191,877.88 8.22% 224,969,643.76 12.76% -51.02%
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □Not applicable
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 1,341,331,910.93 1,251,939,003.07 6.66% -23.94% -19.24% -6.00%
On products
Motorcycle and
522,989,115.46 574,538,540.53 -9.86% -46.00% -36.37% -16.63%
parts
Vehicle air
750,931,026.36 593,962,872.99 20.90% 3.23% -0.84% 3.24%
conditioner
On Area
Domestic 1,231,140,033.05 1,145,791,695.56 6.93% -19.99% -14.77% -5.69%
Overseas 110,191,877.88 106,147,307.51 3.67% -51.02% -48.40% -4.89%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
√ Applicable □Not applicable
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 1,273,920,141.82 1,168,501,413.52 8.28% -24.88% -22.20% -3.17%
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
On products
Motorcycle and
522,989,115.46 574,538,540.53 -9.86% -46.00% -36.37% -16.63%
parts
Vehicle air
750,931,026.36 593,962,872.99 20.90% 3.23% -0.84% 3.24%
conditioner
On Area
Reasons for change
(3)Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Classification Items Unit 2015 2014 Changes
Sales Piece 677,504 923,315 -26.62%
Motorcycle Production Piece 675,968 915,462 -26.16%
Stock Piece 20,340 25,627 -20.63%
Sales Piece 1,858,426 1,810,588 2.64%
Vehicle air
Production Piece 1,803,770 1,860,020 -3.02%
conditioner
Stock Piece 252,618 307,274 -17.79%
Explanation for a year-on –year change of over 30%
□ Applicable √Not applicable
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□ Applicable √Not applicable
In 2015, the company respectively signed the contracts with Chongqing Jianya Company and China Chang’an
Company and its affiliated enterprises in sales of the finished products and components. The company organized
the production with in accordance with the orders, completed the amount of RMB 211.67 million of sales of
finished products and components to Chongqing Jianya Motorcycle, completed the amount of RMB 270.21
million of sales of vehicle air-conditioning compressor to China Chang’an Company and its affiliated enterprises,
and the company has organized the production according to the orders and realized the sales.
(5)Component of business cost
Industry and product classification
In RMB
2015 2014
Proportion in the Proportion in the Increase/Decrease
Industry Items
Amount operating costs Amount operating costs (%)
(%) (%)
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Industry direct material 788,007,390.07 62.94% 1,214,814,793.16 78.37% -35.13%
Industry Fuel and energy 23,169,559.06 1.85% 32,604,649.74 2.10% -28.94%
Industry Staff salary 32,899,024.64 2.63% 40,363,741.87 2.60% -18.49%
Manufacturing
Industry 89,256,277.65 7.13% 123,551,826.10 7.97% -27.76%
cost
In RMB
2015 2014
Classification of
Proportion in the Proportion in the Increase/Decrease
products Items
Amount operating costs Amount operating costs (%)
(%) (%)
Vehicle air
582,452,510.72 47.00% 606,303,926.20 39.11% -3.93%
conditioner
Motorcycle JYM125-8 95,528,389.14 8.00% 146,398,368.61 9.44% -34.75%
Motorcycle JYM110-A 32,244,371.76 3.00% 87,596,250.00 5.65% -63.19%
Notes
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □No
In 2015, the Company implemented the significant asset reorganization, which turned out divestiture in the
main asset and debt involved with motorcycle business, where changes occurred in the consolidation scope
(1)As of December 31, 2014, the subsidiaries of the Company’s consolidated financial statements scope are as
follows:
Name of the Subsidiaries
Chongqing Jianshe Sales Co., Ltd.
Chongqing Northern Jianshe Import & Export Co., Ltd.
Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
Shanghai Jianshe Motorcycle Co., Ltd.
Chongqing Jianshe Motorcycle Sales Co., Ltd.
(2)Consolidated Financial Statement’s Scope and its Change Situation in the report period
Name of Subsidiary Proportio Way of Time Point Determination Basis of Time
n of Equity of Control Point of Control Right Loss
Equity Disposal Right Loss
Disposal
（%）
Chongqing Northern Jianshe 100% Whole 2015.12.31
Import & Export Co., Ltd. transfer of Significant asset sales has obtained
Chongqing Jianshe Motorcycle 100% asset and
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Sales Co., Ltd. debt all the necessary authorization and
Chongqing Jianshe Motorcycle 100% involved approval, where main subject asset
Sales Co., Ltd. with the and debt involved have completed
Chongqing Jianshe Mechanical 100% Share Right the delivery and transfer.
and Electric Co., Ltd. of Jianshe
Mechanical
and Electric
(3)As of December 31, 2015, the subsidiaries of the Company’s consolidated financial statements scope are as
follows:
Name of the Subsidiaries
Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
Shanghai Jianshe Motorcycle Co., Ltd.
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
√ Applicable □Not applicable
In the report period, the Company implemented the significant asset reorganization, which turned out
divestiture in the main asset and debt involved with motorcycle business and completed the structural adjustment
in main business, making automotive air condition compressor business the main business of the Company. See
details in the Report of Significant Asset Sales and Related Transaction disclosed at http://www.cninfo.com.cn/ on
November 11, 2015（Announcement No：2015-109）.
(8)Situation of Main Customers and Main Supplier
Information of the Company’s top 5 customers
Total sales amount to top 5 customers (RMB) 689,818,470.47
Proportion of sales to top 5 customers in the
51.43%
annual sales(%)
Information of the Company’s top 5 customers
No Name Amount(RMB) Proportion %
1 Chongqing Jianshe YAMAHA Motorcycle Co., Ltd. 211,670,674.24 15.78%
2 Chongqing Changan Automobile Co., Ltd. 166,966,920.24 12.45%
3 Great wall Automobile Co., Ltd. Tianjing Hafu Office 130,862,031.61 9.76%
4 Dongfeng Peugeot Cirone Automobile Co., Ltd. 110,447,212.36 8.23%
5 Chongqing Chang’an SUZUKI Automobile Co., Ltd. 69,871,632.02 5.21%
Total -- 689,818,470.47 51.43%
Other explanation :
□ Applicable √Not applicable
17
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Principal suppliers
Total purchase of top 5 Suppliers（RMB） 322,739,272.89
Percentage of total purchase of top 5 suppliers In total
32.49%
annual purchase(%)
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Anhui Haofang Mechanical and Electric Co., Ltd. 133,014,115.42 13.39%
2 Chongqing Mingxin Machinery Manufacturing Co., Ltd. 52,261,607.18 5.26%
3 Chongqing Chang’an SUZUKI Automobile Co., Ltd. 50,647,534.13 5.10%
4 Chongqing Jinchen Machinery Manufacturing Co., Ltd. 44,220,181.82 4.45%
5 Chongqing Jianxing Rubber product factory 42,595,834.34 4.29%
Total -- 322,739,272.89 32.49%
Other explanation :
□ Applicable √Not applicable
3.Expenses
In RMB
2015 2014 Increase/Decrease(%) Notes
Sale expenses 76,054,125.60 96,296,220.34 -21.02% Motorcycle sales decline
Administration
171,145,874.26 164,666,573.99 3.93% Tax increase
expenses
Financial expenses 83,560,026.12 91,458,200.98 -8.64% Financinbg decline
4.R& D Expenses
√Applicable □Not applicable
For the platform of rotary vane machine, the new development project of irony machine 140 and
aluminous machine 120 are newly added.
For the platform of electric product, in allusion to low-speed electric car, electric passenger car and electric coach
car, of which multi-variety has been developed by the Company, which has simultaneously maintained the
promotion with the market development.
For the platform of piston product , the sales of 480cc and 380cc are realized. at the original base of 320cc.
For basic technology research and development, CAE and fluid analysis are established and perfected, the irony
machine’s performance optimization design and verification are implemented. NVH analysis and improvement
has got a great result.
Situation of Research and Development Input by the Company
2015 2014 Increase/Decrea
18
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
se(%)
Number of Research and Development persons (persons) 30 461 -93.49%
Proportion of Research and Development persons 5.25% 19.18% -13.93%
Amount of Research and Development Investment (In RMB) 63,248,003.92 75,583,087.51 -16.32%
Proportion of Research and Development Investment of Operation
4.72% 4.29% 0.43%
Revenue
Amount of Research and Development Investment Capitalization (In
33,342,603.05 44,947,440.42 -25.82%
RMB)
Proportion of Capitalization Research and Development Investment of
52.72% 59.47% -6.75%
Research and Development Investment
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √ Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate
and Its Reasonableness
□ Applicable √ Not applicable
5.Cash Flow
In RMB
Increase/Decreas
Items 2015 2014
e(%)
Subtotal of cash inflow received from operation activities 945,396,153.37 1,123,076,117.78 -15.82%
Subtotal of cash outflow received from operation activities 863,090,142.76 1,028,477,465.87 -16.08%
Net cash flow arising from operating activities 82,306,010.61 94,598,651.91 -12.99%
Subtotal of cash inflow received from investing activities 36,205,492.45 36,257,626.79 -0.14%
Subtotal of cash outflow for investment activities 85,019,024.57 8,308,530.07 923.27%
Net cash flow arising from investment activities -48,813,532.12 27,949,096.72 -274.65%
Subtotal cash inflow received from financing activities 2,966,982,830.44 3,204,819,808.99 -7.42%
Subtotal cash outflow for financing activities 3,013,073,639.22 3,462,507,504.63 -12.98%
Net cash flow arising from financing activities -46,090,808.78 -257,687,695.64 -55.40%
Net increase in cash and cash equivalents -11,912,069.25 -134,666,762.70 -91.15%
Notes to the year-on-year change of the relevant data
√Applicable □ Not applicable
In the process of reorganization, the asset was stripped from investment activity, where activity cash outflow
increased, financing scales declined and the net outflow of financial activity decreased
Notes to the big difference between cash flow from operating activities and net profit in the reporting year
√Applicable □ Not applicable
19
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
The net profit of this year mainly is the gains of non-monetary capital exchange, which has not been
reflected in the cash flow statement
Ⅲ.Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Proportion in total Sustainable (yes or
Amount Explanation of cause
profit no)
Investment Income to Joint oint venture
Investment incme 498,750,796.47 203.29% No
and Associated Corporation
Impairment of Bad-debt Provision of Receivables,
7,267,073.12 2.96%
assets Impair Provision of Intangible Asset
Non-operating
11,418,743.79 4.65% Earning of Asset Reorganization No
income
Non-operating
705,323.13 0.29% Disposal of Non-current Asset No
expenses
Ⅳ.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
End of 2015 End of 2014 Proportio
Proportion in n
Notes to the significant change
Amount the total increase/d
assets(%) ecrease
302,660,758.7
Monetary fund 19.52% 192,918,049.28 8.07% 11.45% Increase in Bill Cash Deposit
6
Accounts 217,759,208.4
14.04% 255,013,689.72 10.67% 3.37% Amount Recovery
receivable 3
146,350,934.3 Implementation of Significant Asset
Inventories 9.44% 277,612,004.04 11.62% -2.18%
4 Sales of This Year
Investment real
0.00% 0.00%
estate
Long-term equity Implementation of Significant Asset
83,381,316.13 5.38% 686,110,128.77 28.72% -23.34%
investment Sales of This Year
395,975,005.2 Implementation of Significant Asset
Fixed assets 25.54% 715,930,693.00 29.97% -4.43%
7 Sales of This Year
Construction 40,435,429.90 2.61% 16,315,153.10 0.68% 1.93%
20
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
inprocess
217,000,000.0 Implementation of Significant Asset
Short-term loans 13.99% 803,500,000.00 33.63% -19.64%
0 Sales of This Year
128,490,000.0 Implementation of Significant Asset
Long-term loans 8.29% 121,000,000.00 5.06% 3.23%
0 Sales of This Year
2.Asset and Liabilities Measured by Fair Value
□Applicable √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）
9,541.00 4,300,000.00 2,218.00%
2.Condition of Acquiring Significant Share Right Investment during the Report Period
√ Applicable □Not applicable
In RMB
Investm
Progres ent Whethe
s up to gains r
Disclos Disclos
Major Investm Investm Shareh Funds Investm the date Estimat and involve
Parther Product ure ure
Name busines ent ent olding resourc ent of the ed losses d with
s s type date(If index(if
s method amount ratio es period assets profits of the the
any) any)
liabiliti Reporti lawsuit
es ng s
period
Asset The See the
and Compa Securiti
Jianshe Motorc debt ny es
Mecha ycle Newly involve takes August Times",
300,00 100.00 Motorc
nical product establis d with No 0.5 August No 29,20 "Hong
0.00 % ycle
and ion and hed Motorc 31, 15 Kong
Electric sales ycle 2015 as Comme
Busines the rcial
s are base Daily"
21
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
taken date and
as and www.c
packag offers ninfo.c
e 100% om.cn
assets, share compan
of rights y
which of announ
the net Jianshe cement,
assessm Mechan announ
ent ical and cement
value is Electric No.
taken to 2015-0
as the Militar 59
wholly- y
owned Equipm
subsidi ent
ary’s Group
contrib for
ution of sales in
capital. the
agreem
ent.
300,00
Total -- -- -- -- -- -- -- -- 0.00 0.00 -- -- --
0.00
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 Automot Generall See on
Self-rais
l Self-cons ive Air 94,850,0 25,700,0 57,120,0 y April 22, www.cni
Yes 0.00 ed, Bank 100.00%
Renovati truction Conditio 00.00 00.00 00.00 achieve 2011 nfo.com.
Loan
on n the cn
22
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Project Compres design company
of sor goal announc
Automot Industry ement,
ive Announc
Rotary-v ement
ane Air No.
Conditio 2011-01
n 0
Compres
sor
（1.5
Million
of
Expendi
ng
Capacity
）
Investme
nt
Experim
ent
Equipme
nt has
been
installed
Impleme See on
in the
ntation www.cni
plant,
of nfo.com.
Automot where
Experim cn
ive Air experime
ental company
Conditio Self-rais nt
Testing Self-cons 10,300,0 14,600,0 August announc
Yes n ed, Bank 100.00% condition
Capabilit truction 00.00 00.00 5, 2014 ement,
Compres Loan are
y Announc
sor offered
Construc ement
Industry to the
tion No.
Compan
Project 2014-06
y’s
3
develop
ment in
high-emi
ssion and
electric
compress
or by
this
23
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
project
Technica
l
Renovati
on
Project
See on
of
www.cni
Automot
nfo.com.
ive Automot
Predict cn
Rotary-v ive Air
to put company
ane Air Conditio Self-rais
Self-cons 84,810,0 84,810,0 15,000,0 into full August announc
Conditio Yes n ed, Bank 82.01%
truction 00.00 00.00 00.00 producti 5,2014 ement,
n Compres Loan
on this Announc
Compres sor
year ement
sor Industry
No.
（New
2014-06
500,000
4
of
Expendi
ng
Capacity
）
95,110,0 194,260, 40,700,0 57,120,0
Total -- -- -- -- -- -- -- --
00.00 000.00 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
24
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
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 See
details ng to details
in the Zhuoxin in
100% “Revise huada Section
share d Draft Comme 5 Index
Military rights of of the nt Controll of Other
Equipm Jianshe August Report (2015) ing October Signific
29.58 Yes Yes Yes
ent Mechan 31,2015 (Draft) NO.108 sharehol 29,2015 ant
Group ical and of 0 der Related
Electric Signific “Assess Transact
ant ment ion of
Asset Report 16.Signi
Sales of ficant
and Chongqi Related
25
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Related ng Transact
Transact Jianshe ion in
ion ”pub Motorcy Chapter
lished cle Co., 5
by the Ltd’s
Compan Planned
y Transfer
Novemb of
er 11, Chongqi
2015. ng
Jianshe
Mechan
ical and
Electric
Co.,
Ltd.’s
Share
Right
Assess
ment
Items ”i
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 over 10% net profit influencing to the Company
In RMB
26
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Company Sectors Registered Operating
Company type Total assets Net assets Turnover Net Profit
Name engaged in capital profit
Manufacturin
Air
g and sales of 1,157,700,31 240,166,233. 756,951,964.
Conditioner Subsidiaries auto 160,000,000 5,023,016.86 8,043,368.80
air-condition 3.51 23 91
Co.
ers
Domestic
Shanghai sales of 16,763,284.1 15,815,170.1
Subsidiaries 16,000,000 1,595,168.92 800,876.65 398,609.91
Jianshe motorcycles 5 1
and parts
Production
Pingshan and sales of 191,690,173. 170,165,951. 130,781,558.
Shareholding 158758676 7,865,402.58 7,425,862.89
Taikai motorcycles 61 24 70
company
and parts
Acquirement and disposal of subsidiaries in the Reporting period
√ Applicable □ Not applicable
Impact on overall
Name How subsidiary was obtained or disposed in the Reporting Period
operation and results
Transferred by the fair value which combines the share right of
Foreign trade company
Jianshe Mechanical and Electric with the entire asset and debt
Transferred by the fair value which combines the share right of
Sales company
Jianshe Mechanical and Electric with the entire asset and debt
Transferred by the fair value which combines the share right of
Distribution Company
Jianshe Mechanical and Electric with the entire asset and debt
Jianshe Mechanical and Transferred by the fair value which combines the share right of
Electric Jianshe Mechanical and Electric with the entire asset and debt
Notes
At present, Shanghai Jianshe’s main businesses has been constituted by mopes production and sales as well as
storage service business. For avoiding horizontal competition, the Company has made a plan that offers the share
right of Shanghai Jianshe for sales.
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
China’s auto industry has entered from the era of high-speed growth to the era of minimal growth, where
new energy, intelligentization, Internet as well as other new technologies and new concepts have begun to
influence and change the whole industry, which aggravates the competition in the industry.
The automotive air condition compressor industry closely follows the development of auto industry, the
Company’s product is facing with the cost pressure of main engine plants, which is passing on upstream, where
27
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
the product’s profit margin is compressed. Therefore, the Company will promote the upgrade in product and
technology to realize the development in scale.
2.The company's development strategy
Complying with the demand of auto industry, the Company is to take the development path of high standard,
large scale and efficiency. First, enlarge the development in new clients, continuously increase the existing
clients’ product variety and supply share to extend the market scale. Second, enlarge the extension in overseas
market and increase the proportion in the overseas markets to realize the simultaneous development in domestic
and overseas. Third, take electric auto air condition as the development key and speed up the extension in electric
auto market. Fourth, enlarge R&D investment, perfect R&D design, experiment, assessment method and introduce
talents to accelerate the improvement in R&D level and strength. Fifth, greatly intensify the management
improvement, enhance the quality management level and the manufacturing efficiency to reduce the cost, expense
as well as improve the operation quality.
3.The key work in 2016
For 2016, the company planned to realize the sales of 2 million air conditioning compressors and sales
revenue of RMB 790 million. In order to achieve the business goal, the company will focus on the following
works:
1. Adhere to the management and development of large customers, enhance the customer satisfaction with
raising the overall value, maintain and consolidate major customer resources, continue to increase new customers
and ensure the smooth implementation of the projects. Continuously intensify the effort in developing new large
customers and new models, focus on exploring the potential new customers having a demand more than 100
thousand units, further improve and optimize the structure of the existing large customers and enhance the
anti-risk ability. Continuously intensify the effort in developing its market in Southeast Asia, South America, Iran
and other oversea countries, thus to raise the proportion of export. Speed up the industry layout of electric vehicle
air-conditioning, build up the special team of electrical compressor responsible for the R&D, manufacturing, sales
and so on businesses, speed up the market promotion on the electrical compressor and snatch the new-energy
market.
2. Strengthen the product development and build up the core competence. Continue to promote the
development of 140-iron machine and 120-aluminum machine to further enrich the product range. Speed up the
implementation of engineered and industrialized process for the electric compressor of passenger cars, thus to
realize the supplying of the goods. Continue to promote the technology research on aluminum machine vane and
swivel, so as to realize the production as soon as possible and reduce the costs. Promote the use of P2/P3
generation technology and continuously enhance the basis research ability and level.
3. Promote raising the ability of the whole chain manufacturing. Draw in and adopt advanced management
mode, promote raising the ability and the efficiency of the whole chain manufacturing; realize the production of
technology transformation of 500 thousand-capacity expansion, raise the ability on manufacturing automation,
online monitoring, automatic error proofing, improve production capacity and manufacturing level; continue to
implement the Nissan GK site management and further improve the consistency and stability of manufacturing;
further strength the management function construction and functional integration and optimization on quality
management, through system reconstruction, strict standards, optimized management, consolidation of the
foundation and so on works to ensure the absolute stability of product quality.
28
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
4. Financial demand and application plan for year 2016
To achieve the annual sales goal of the company, that the estimated funds demanded in the year of 2016 are
RMB 860 million, of which the capital expenditures are RMB 35 million that mainly used for the
500,000-capacity expansion project of air-conditioning and the small-type technology transformation project. The
demand for funds, combined the company's operating and financing circumstances, will mainly rely on self-funds
and bank loans and so forth for the solution.
5. Possible risks
1. The intensified competition in the automobile industry in China, the master-machine manufactures will
have increasing pressure on costs.
2. The uncertainties of the overseas development environment bring challenges for the overseas business
breakthrough. While exploring and expanding the overseas market, the company will strengthen the pre-judgment
of the trade environment, establish the company’s internal emergency plans to prevent or reduce the risk of
occurrence.
3. The product singleness brings competitive risks, thus the company needs to accelerate the upgrading of
technology and products to improve the product range.
In the face of these changes, the company will follow the trend of industry development, actively reform,
consolidate the foundation, speed up the transformation and upgrading and the structural adjustment to gain
advantages in the competition.
The above-said financial budget, business plan and business goal do not represent the 2016-annual earnings
forecast made by the company, hence whether those can be realized depending on many factors such as the
market circumstance, and there is a large extent of uncertainty, please be aware of the investment risks.
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
Way of Types of
Reception time Basic index
reception visitors
Q: The company has recorded a loss in the first three quarters, then, will the
company record a loss for the full year? When will the company release the
annual performance forecast?
January 26,2015 By phone Individual
A: The company will release the business performance forecast before the end
of January, please pay attention to the company’s information disclosure on
business performance.
Q: Except the assets sales in the major asset restructuring, whether the
controlling shareholder has a plan for injecting high-quality assets into
August 7,2015 By phone Individual B-share or A-share?
A: The major asset restructuring of the company only involved the main assets
and liabilities of the motorcycle business that transferred to the controlling
29
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
shareholder. Currently, the company doesn’t know whether the controlling
shareholder has any other relevant arrangement or plan in the future.
Q：How’s everything going with the major asset restructuring? When will
the share-trading be resumed?
A: Currently, the independent financial adviser, the legal adviser, the audit
agency and the assessment agency engaged by the company still have been in
the process of due diligence, audit and assessment and other works pertaining
September
By phone Individual to the company’s major asset restructuring. The company continues to
11,2015
actively negotiate with related parties for the major asset restructuring and
fulfills the necessary approval and review procedures. As to the time for
resuming the share-trading, please note the company’s information
disclosure.
Q: Will the company gain in this year?
A: In this year, as the company completed the major asset restructuring and
December
By phone Individual sold out the motorcycle business and its assets, which will reduce the burden
21,2015
for the company’s operating, thus it will improve the company’s asset quality
and profitability.
Q: The company is a pure B-stock company, whether the company has a plan
December for transferring from B to A in the future?
Other Individual
22,2015 A: The B-stock transfer issue is not only the issue concerned by many B-stock
investors, but is the issue closely concerned by the company.
Q: What are other steps not completed in the major asset restructuring?
Whether it means successful when the free transfer of the state-owned stake
gets approval?
December
Other Individual A: Currently, the company has been promoting the woks related to the transfer
24,2015
of assets and liabilities step by step, for detailed information, please pay
attention to the announcement of the implementation status of the company’s
major asset restructuring.
Reception times 25
Reception agency amount 0
Reception personal number 25
Others 0
Whether to disclose, reveal or disclose non-public Undisclosed and unacknowledged significant information.
material information
30
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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,the company’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 the company’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 of association or shareholders' meeting
Yes
resolutions:
Whether dividends standard and proportion are clear Yes
Whether decision making and supervision mechanism for profit distribution are completed Yes
Whether independent directors perform their duties responsibly and play its due role: Yes
Whether the Minority shareholders have adequate opportunity to express their views and aspirations and
Yes
Their legitimate rights and interests have been fully protected
Whether the Cash dividend policy to adjust or change the conditions and procedures are compliant and
Yes
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 2013 and 2015, 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
In RMB
Net profit Ratio in net profit Amount of cash Proportion of cash
Cash dividend
Year attributable to the attributable to the dividends from cash dividends from cash
(Including Tax)
over of the parent parent company in offer to repurchase offer to repurchase
31
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
company in the the consolidated shares of the funds shares of the funds
consolidated financial statements
financial statements
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%
2013 0.00 11,589,364.53 0.00% 0.00 0.00%
In the reporting period, both the Company’s profit and the parent company’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
By August 31, On December
Commitments
2015,the total 31, 2015, the
on horizontal
accounts company
Jianshe competition,
Commitment made upon the assets receivable of November 10, Before the end signed a
Mechanical related
replacement the 2015 of 2015 agreement of
and Electrical transaction
Construction assignment of
and capital
and debt with
occupation
Mechanical sales
32
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
and Electrical company,whic
for h transfers the
Construction creditor's
Co., Ltd is rights worth
2.978 million of 50490 yuan
yuan,which is of Shanghai
the Construction
motorcycle Co., Ltd to
sales balance sales
payment of company to
Shanghai offset the debt
Construction 50490 yuan
Co., Ltd form the company
the sales owed. The
company and sales
the import and company
export agreed to
corporation. accepting the
creditor's
rights.After
the agreement
came into
force, the
sales
company
achieved
creditor's
rights 50,490
yuan from the
Shanghai
Construction
Co., Ltd. On
December 31,
2015, the
Company
signed a
agreement of
assignment of
debt with the
import and
export
corporation,w
hich transfers
the creditor's
33
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
rights worth
of 967841.4
yuan to offset
the debt the
company
owed. The
import and
export
corporation
agreed to
accepting the
creditor's
rights.After
the agreement
came into
force,the
import and
export
corporation
achieved
creditor's
rights
967841.4
yuan.
The reason
why listed
companies
offer external
guarantee is
that the After the
conditioning guarantee
Commitments
company,as period
Jianshe on horizontal
the subsidiary stipulated in
Mechanical competition,
corporation of October 20, the contract
and Electric, related
Jianshe stock , 2015 expires, the
Air-conditione transaction
provided above
r Co and capital
credit financing
occupation
guarantee 186 assurance will
million yuan be lifted
for its parent
company’
bank loan.
And as the
relevant
34
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
liabilities of
Jianshe
stock’s
motorbike
business has
been
transferred
into Jianshe
Mechanical
and
Electrical ,
corresponding
secured party
should be
Jianshe
Mechanical
and
Electrical .Mo
reover,Jianshe
Stock
provided
credit
guarantee 30
million yuan
for the
wholly-owned
subsidiary,the
sales
company,after
this
transaction,
Jianshe
Mechanical
and
Electrical ,wh
ose’ sales
company is
subsidiary
corporation of
Construction
and
Mechanical
and
Electrical ,
35
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
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
36
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
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
37
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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.
As the
company’s
major assets By November
restructuring 16, 2015, the
would lead to sales
changes in company has
Prior to the
scope of settled
first
consolidated above-mentio
Jianshe extraordinary
Other statements.Th October ned funds
Mechanical general
Commitment e company 27,2015 with the
and Electric meeting
should receive company,subs
convened in
10.2985 idiary
2015
million from corporations
subsidiary and the air
corporations conditioning
and sales company
company,whic
h is internal
38
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
intercourse
funds between
the company
and subsidiary
corporations
and sales
company.By
the signing
day of
reorganizing
report, the
Construction
and
Mechanical
and Electrical
for
Construction
Co., Ltd made
a promise to
arrange the
sales company
to repay the
debt for the air
conditioning
company,befo
re general
meeting of
stockholders
about
reorganization
was convened.
On April 23,
According to 2015, the
“The Official Board of
Order for Directors
Chongqing adopted
Prior to the
Jianshe proposal to
Other disclosure of
The Company Motorcycle provide asset
Commitment the annual
Co., Ltd. to impairment
report 2014
Rectify provision and
Inappropriate neutralizing
Operations” of related
[2014]No.4 debts. It was
(referred as decided to
39
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
“The Order”), provide
the Company provisions on
announced its the receivable
rectification accounts and
plans on other
September 12, receivable
and accoutns
committed to under Sales
implement the Co., the
following fully-owned
measurements subsidiary,
within given and its branch
times: shops.( Specif
A number of ic details of
unsettled the company's
receivable announcement
accounts, in April 28,
other 2015)
receivable
accounts, and
prepayment
accounts
amongst the
10 affiliated
sales
companies
and over 200
direct-operate
d sales shops
have been
existed for a
long period of
time. The
Company
commits to
clarify those
unrecoverable
accounts by
providing of
bad debt
provisions in
full amounts
before
disclosing of
40
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
the Annual
Report 2014.
As for those
receivable
accounts with
long ages, the
Company will
be performing
accounting
treatments
under the
verification of
legal
departments.
Equity incentive commitment
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
In RMB’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 and December Business Cash Repaid on
0 9,354.21 9,292.04 62.17 62.17
Export Co. 31,2015 and Settlement April 26,
41
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
financial 2016
dealings
Jianshe
Repaid on
mechanical December Financial Cash
0 14,755 11,293.33 3,461.67 3,461.67 April 26,
and 31,2015 dealings Settlement
2016
electrical
Financial
debt
restructurin
g process is
Jianshe
not yet
mechanical December December
completed 21,399.2 21,399.2 Other 21,399.2
and 31,2015 31,2016
the
electricalD
procedures
for
transferring
formed
Total 0 45,508.41 20,585.37 24,923.04 -- 24,923.04 --
The end of the latest issue of the total
value of accounts audited net assets 97.31%
ratio
The company has obtained the eleventh meeting of the seventh Board of Directors April 27,
Relevant decision-making procedures
2016, held by the consideration, 2015 will be submitted to the Annual General Meeting.
Add the current major shareholder and
its affiliated non-operating capital
Refer to www.cninfo.com.cn on April 30, 2016, Announcement No. 2016-032 ,Chongqing
occupation reasons, the case be held
Jianshe Motorcycle Co., Ltd. subsequent treatment plans and measures on controlling
responsible and the Board has
shareholders of the company's non-operating capital occupied.
developed a description of measures
taken.
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 30,2016
opinion on fund occupation from CPA
Refer to www.cninfo.com.cn on April 30, 2016, Announcement No. 2016-041 ,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
42
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
V.Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified
Auditor’s Report Issued by the CPAs.
□ Applicable √ Not applicable
VI.Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
□ Applicable √ Not applicable
No particulars about the changes in aspect of accounting polcy, estimates or calculation method in the period.
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
In 2015, the Company implemented the significant asset reorganization, which turned out divestiture in the main
asset and debt involved with motorcycle business, where changes occurred in the consolidation scope
(1)As of December 31, 2014, the subsidiaries of the Company’s consolidated financial statements scope are as
follows:
Name of the Subsidiaries
Chongqing Jianshe Sales Co., Ltd.
Chongqing Northern Jianshe Import & Export Co., Ltd.
Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
Shanghai Jianshe Motorcycle Co., Ltd.
Chongqing Jianshe Motorcycle Sales Co., Ltd.
(2)Consolidated Financial Statement’s Scope and its Change Situation in the report period
Name of Subsidiary Proportio Way of Time Point Determination Basis of Time
n of Equity of Control Point of Control Right Loss
Equity Disposal Right Loss
Disposal
（%）
Chongqing Northern 100% Whole 2015.12.31
Jianshe Import & Export transfer of
Significant asset sales has
Co., Ltd. asset and
obtained all the necessary
Chongqing Jianshe Motorcycle 100% debt
43
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Sales Co., Ltd. involved authorization and approval,
Chongqing Jianshe Motorcycle 100% with the where main subject asset and
Sales Co., Ltd. Share Right debt involved have completed
Chongqing Jianshe Mechanical 100% of Jianshe the delivery and transfer.
and Electric Co., Ltd. Mechanical
and Electric
(3)As of December 31, 2015, the subsidiaries of the Company’s consolidated financial statements scope are as
follows:
Name of the Subsidiaries
Chognqing Jianshe Automobile Air-conditioner Co., Ltd.
Shanghai Jianshe Motorcycle Co., Ltd.
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) 65
Successive years the domestic CPA has been
4 years
providing service to the Company
Name of CPAs from the domestic CPA firm Li Shunli, Wan Ping
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 Shu Lun Pan CPA Co., Ltd for its internal auditing service of one
year.’
2. As the company has experienced major assets restructuring, the company hired CITIC Securities Co., Ltd. as
financial advisor, which has been paid financial advisers fees 1.5 million yuan, Chongqing Cable Law Firm as
legal adviser,which has been paid advisory and legal expenses 200,000 yuan, and Beijing Zhuoxin and Dahua
Appraisal Co., Ltd,which has been paid 650,000 yuan for valuation fee,and BDO China Shu Lun Pan Certified
Public Accountants LLP,which has been paid 600,000 yuan for audit fee.
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report
□Applicable √ Not applicable
44
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
Amount Index of
If constitute Progress of Progress of Date of
Profile of the claim involved Results and influence information
expected liabilities the lawsuit execution disclosure
(RMB0’000) disclosure
The
Chongqing
No.5
Intermediat
e Court For details
provided please find
trial of first Announceme
instance nt of
that the Judgment
company No.2014-056
On July 17, 2013,
and Sun According to the and
Ningbo Zhenhai
weibao civil judgment of Announceme
Yongzheng
should bear Chongqing High nt of the
Investment Co., Ltd.
elated People's Court, Important
sued to the No.5
discharge No.00323 [2014], Lawsuit’s
Middle Court of
duty 3.1943 final civil Progress
Chongqing claiming
million division of Yu The case was No.2015-067
for compensation of 319.43 Yes July 12,2014
yuan and Supreme People winded up. released by
RMB3.1943 million
court Court, the Securities
from the Company
acceptance company released Times, Hong
for failing of
fee 3.24 the prior period of Kong
receivership of
yuan in accrued liabilities Commercial
Ningbo Jianshe
April in the third Daily and
Motorcycle Co.,
2014,which quarter of 2015. www.cinfo.c
Ltd.
totally is om.cn dated
322.67yuan July 12, 2014
.As Sun and
weibao’s September 9,
present 2015
whereabout
s is
unknown,
the
company
45
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
has totally
withdrawn
liabilities.T
he company
defied the
first-instanc
e judgment
and
instituted
an appeal to
the higher
people's
court in
Chongqing,
while the
court’s
judgment of
second
instance
ignored the
appeal from
the Yong
Zheng
Investing
Company
in
September,
2015,thus
the
company
won the
lawsuit.Yon
g Zheng
Investing
Company
instituted a
retrial to
Supreme
People's
Court in
December
2015,and
Supreme
People's
46
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Court
rejected the
apply for a
retrial from
Yong
Zheng
Investing
Company
in
January,201
6.
XIII.Situation of Punishment and Rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
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.
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 price of of
of the pricing Ratio in approve approve Way of Date of
Related Relation Type of Price of of trade similar informa
related the similar paymen disclosu
parties ship trade trade RMB0’ trade tion
transacti related trades d d t re
000 availabl disclos
ons transacti
e ure
ons （RMB limited
’0000） or not
(Y/N)
47
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
http//w
ww.cni
Purchas
nfo.co
Original e of Fair
Labour 34.08/y April m.cn.
Fuyeda affiliate goods Market 34.08 0.03% 80 No Cash 34.08
service ears 28,2015 Announ
s and Price
cement
services
No.201
5-012
http//w
ww.cni
Purchas
nfo.co
e of Energy, Fair
Under 1,932.8 1,932.8 1,932.8 April m.cn.
Jianshe
same goods labor, Market 1.54% 2,400 No Cash
Industry 7/ years 7 7 28,2015 Announ
control
and moulds Price
cement
services
No.201
5-012
http//w
ww.cni
Purchas
nfo.co
e of Fair
Pingshan Joint Spare 598.94/ April m.cn.
goods Market 598.94 0.48% 960 No Cash 598.94
Taikai ventures parts years 28,2015 Announ
and Price
cement
services
No.201
5-012
http//w
ww.cni
Purchas
Original nfo.co
e of Fair
Chongqin Joint Spare 5,064.7 5,064.7 5,064.7 April m.cn.
goods Market 4.05% 4,576 Yes Cash
g Jianya ventures parts 5/ years 5 5 28,2015 Announ
and Price
cement
services
No.201
5-012
http//w
Affiliate ww.cni
Purchas
of the nfo.co
subsidia e of Fair
Jianxing 3,274.4 3,274.4 3,274.4 April m.cn.
ry of the Spare
Machiner goods Market 2.62% 3,600 No Cash
controlli parts 5/ years 5 5 28,2015 Announ
y
ng and Price
sharehol cement
services
der No.201
5-012
Under Purchas Fair April
http//w
Jialin Spare
same e of 0/ year 0 0.00% 5 No Cash 5 ww.cni
Industry parts Market 28,2015
control
goods nfo.co
48
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
and Price m.cn.
services Announ
cement
No.201
5-012
http//w
ww.cni
Purchas
nfo.co
Tongshen e of Fair
Original 401.55/ April m.cn.
g Spare
Affiliate goods Market 401.55 0.32% 840 No Cash 401.55
Construct parts years 28,2015 Announ
s
ion and Price
cement
services
No.201
5-012
http//w
ww.cni
Purchas
China Accepta nfo.co
e of Fair
Changan Under nce of 460.59/ April m.cn.
and same goods Market 460.59 0.37% 540 No Cash 460.59
subsidiari control repairin years 28,2015 Announ
and Price
es g service cement
services
No.201
5-012
http//w
ww.cni
Purchas
nfo.co
Southern Under e of Fair
Guarant April m.cn.
Motorcyc same goods Market 0/ year 0 0.00% 105 No Cash 105
ee 28,2015 Announ
le control and Price
cement
services
No.201
5-012
http//w
ww.cni
Parts nfo.co
Original Sales of Fair 21,167.
Chongqin goods and 21,167. 21,167. April m.cn.
Joint Market 07/ 15.78% 42,555 No Cash
g Jianya and finished 07 07 28,2015 Announ
ventures services Price years
goods cement
No.201
5-012
http//w
ww.cni
Original Sales of Fair
Zhuzhou goods Spare 816.56/ April nfo.co
Joint Market 816.56 0.61% 780 Yes Cash 816.56
Jianya and parts years 28,2015 m.cn.
ventures services Price
Announ
cement
49
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
No.201
5-012
http//w
ww.cni
Controll Parts nfo.co
Sales of Fair
Jialin ed by goods and April m.cn.
Market 0/ year 0 0.00% 20 No Cash 20
Industry one and finished 28,2015 Announ
services Price
party goods cement
No.201
5-012
http//w
ww.cni
Controll Parts nfo.co
Sales of Fair
Jiangmen ed by goods and 1,787.5 1,787.5 1,787.5 April m.cn.
Market 1.33% 1,670 No Cash
Qingqi one and finished 8/ years 8 8 28,2015 Announ
services Price
party goods cement
No.201
5-012
http//w
ww.cni
nfo.co
Original Sales of Fair
goods Spare 121.1/y April m.cn.
Tongshen Affiliate and Market 121.1 0.09% 364 No Cash 121.1
parts ears 28,2015 Announ
g s services Price
cement
No.201
5-012
http//w
ww.cni
nfo.co
Sales of
Under Fair 27,021.
China goods finished 27,021. Cash,N 27,021. April m.cn.
same Market 47/ 20.15% 36,582 No
Changan and goods 47 ote 47 28,2015 Announ
control services Price years
cement
No.201
5-012
Hafei Under Sales of Fair
goods finished 247.87/
Automobi same Market 247.87 0.18% 0 Yes Note 247.87
and goods years
le control services Price
Harbin Under Sales of Fair
goods finished 3.28/
Dongan same Market 3.28 0.00% 0 Yes Note 3.28
and goods years
Power control services Price
Sales of
The goods finished Fair 14.4/
AIGL 14.4 0.01% 0 Yes Note 14.4
Military and goods Market years
services
50
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Equipm Price
ent
Group
subsidia
ry joint
venture
compan
y
62,946.
Total -- -- -- 95,077 -- -- -- -- --
56
Details of any sales return of a large
Nome
amount
In 2015, the estimated amount of daily connected transaction was 950.77million in total and
Give the actual situation in the report the actual transaction volume was 629.4656million. The predicted cost of commodities
period where a forecast had been purchased/labor services received among them was about 131.06million, while the actual
made for the total amounts of routine cost was 117.6724million. The estimated amount of commodity sales/ render service was
related-party transactions by type to about 819.71million, while the actual amount was 511.7932million.
occur in the current period(if any)
Reason for any significant difference
between the transaction price and the Not applicable
market refernce price (if applicable)
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No 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
51
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
occupying RMB’0000 RMB’0000
or not
Former
wholly
owned Business
Foreign subsidiary, and
Yes 0 9,354.21 9,292.04 62.17
trade Co. is now financial
controlled dealings
by the same
party
Former
Jianshe wholly
Mechanical owned
Financial
and subsidiary, Yes 0 14,755 11,293.33 3,461.67
dealings
electrical is the
Co. controlling
shareholder
Financial
debt
Former restructurin
Jianshe wholly g process is
Mechanical owned not yet
and subsidiary, completed No 0 21,399.2 21,399.2
electrical is the the
Co. controlling procedures
shareholder for
transferring
formed.
Jianshe Mechanical and electrical and import and export companies Other receivables, the total is RMB
35,238,349.24 business and financial dealings is established after the mechanical and electrical
Influence on business construction to equity settlement date between December 31, 2015 the Company and mechanical and
performance and electrical construction, import and export companies occurred, which by the construction was repaid in
financial status of the full in cash electromechanical April 26, 2016; the construction of the Electrical and Mechanical
Company from related company's other receivables 213,992,000.00 yuan original controlling shareholder of the company's
liabilities current military equipment group to sell major assets motorcycle business 100% stake in the construction
of electrical and mechanical 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 Current Balance at
Related party Relationship Causes atperiod-begi newly added recovery Interest rate interest period-end
n RMB’0000 RMB’0000 RMB’0000 RMB’0000 RMB’0000
52
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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, the wholly-owned subsidiary which was
founded by motorcycle business-related assets and liabilities of the company. The transaction price of the
underlying asset was assessed by asset evaluation agencies which possessed securities practice qualifications.
After the completion of this transaction, the main business of the company will transform from the production and
sales of motorcycle and car air-conditioning compressor to the production and sales of automotive
air-conditioning compressor. 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 8th meeting of the seventh board of http//www.cninfo.com.cn. Announcement
October 29,2015
directors No.2015-080
Plan on the Company’s Significant Asset Sales and Related http//www.cninfo.com.cn. Announcement
October 29,2015
Transaction No.2015-082
Announcement on the “Asset Sales Agreement” with Valid http//www.cninfo.com.cn. Announcement
October 29,2015
Condition Signed by the Company No.2015-083
The Report of Significant Asset Sales and Related http//www.cninfo.com.cn. Announcement
October 29,2015
Transaction(Draft) No.2015-084
Summary (Draft) of the Report of Significant Asset Sales and http//www.cninfo.com.cn. Announcement
October 29,2015
Related Transaction No.2015-085
Independent Financial Adviser Report of China Securities Co,
http//www.cninfo.com.cn. Announcement
Ltd. on Chongqing Jianshe Motorcycle Co., Ltd.’s Significant October 29,2015
No.2015-086
Asset Sales and Related Transaction
Commitment on the Relevant Issues of Significant Asset http//www.cninfo.com.cn. Announcement
October 29,2015
Sales No.2015-089
Audit Report and Proforma Financial Statement of http//www.cninfo.com.cn. Announcement
October 29,2015
Chongqing Jianshe Motorcycle Co., Ltd. No.2015-092
Assessment Report of Chongqing Jianshe Motorcycle Co.,
http//www.cninfo.com.cn. Announcement
Ltd’s Planned Transfer of Chongqing Jianshe Mechanical and October 29,2015
No.2015-094
Electric Co., Ltd.’s Share Right Assessment Items
Legal Opinion of Chongqing Solton & Parents Law Office on
http//www.cninfo.com.cn. Announcement
Chongqing Jianshe Motorcycle Co., Ltd.’s Significant Asset October 29,2015
No.2015-098
Sales and Related Transaction
Announcement on the Significant Asset Sales related with the November 7,2015 http//www.cninfo.com.cn. Announcement
53
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Changes from Internal Guarantee to External Guarantee No.2015-104
Announcement on Disclosing the Significant Asset Sales
http//www.cninfo.com.cn. Announcement
Report’s Revised Draft and the Resumption of the Company’s November 11,2015
No.2015-106
Share
http//www.cninfo.com.cn. Announcement
Written Reply on the Inquiry Letter of Reorganization November 11,2015
No.2015-108
Revised Draft of the Significant Asset Sales and Related http//www.cninfo.com.cn. Announcement
November 11,2015
Transaction Report (Draft) No.2015-109
Summary’s Revised Draft of the Significant Asset Sales and http//www.cninfo.com.cn. Announcement
November 11,2015
Related Transaction Report (Draft) No.2015-110
Announcement of Resolutions of the first provisional http//www.cninfo.com.cn. Announcement
November 18,2015
shareholders’ general meeeting No.2015-114
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
External Guarantee (Exclude controlled 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
54
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Jianshe Mechanical November Joint
2,500 0 6 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,500 0 6 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,200 0 30 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
50 0 18 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
100 0 23 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
100 0 23 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,400 0 37 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
50 0 24 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,000 0 30 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,000 0 29 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
200 0 31 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,100 0 37 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
2,100 0 36 months No Yes
and Electric 7,2015 liabilities
Jianshe Mechanical November Joint
300 0 37 months No Yes
and Electric 7,2015 liabilities
November Joint
Sales Co. 3,000 0 9 months No Yes
7,2015 liabilities
Total of external guarantee
Total of external guarantee
21,600 actually occurred in the 0
approved in the report term (A1)
report term (A2)
Total of external guarantee Total of external guarantee
approved as of end of report term 21,600 actually occurred as of end 0
(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
Jianmo B 100 April 10,2014 100 11 months Yes No
28,2015 liabilities
55
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
April Joint
Jianmo B 100 March 31,2014 100 11months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,500 October 15,2014 2,500 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,500 October 16,2014 2,500 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,800 October 28,2014 2,800 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,100 October 30,2014 2,100 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 100 May 22, 2013 100 24 months Yes No
28,2015 liabilities
April Joint
Jianmo B 4,900 May 12,2014 4,900 12 months Yes No
28,2015 liabilities
April Joint
Jianmo B 50 July 25,2014 50 12 months Yes No
28,2015 liabilities
April Joint
Jianmo B 100 April 11, 2014 100 17 months Yes No
28,2015 liabilities
April Joint
Jianmo B 100 March 31,2014 100 17 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,200 May 22,2013 2,200 30 months Yes No
28,2015 liabilities
April Joint
Jianmo B 50 June 25,2014 50 18 months No No
28,2015 liabilities
April Joint
Jianmo B 100 April 12,2014 100 23 months No No
28,2015 liabilities
April Joint
Jianmo B 100 March 31,2014 100 23 months No No
28,2015 liabilities
April Joint
Jianmo B 2,400 May 22, 2013 2,400 37 months No No
28,2015 liabilities
April Joint
Jianmo B 50 July 25,2014 50 24 months No No
28,2015 liabilities
April Joint
Jianmo B 2,000 March 31,2014 2,000 30 months No No
28,2015 liabilities
April Joint
Jianmo B 2,000 April 13,2014 2,000 29 months No No
28,2015 liabilities
April Joint
Jianmo B 200 July 25,2014 200 31 months No No
28,2015 liabilities
56
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
April Joint
Jianmo B 2,100 March 31,2014 2,100 37 months No No
28,2015 liabilities
April Joint
Jianmo B 2,100 April 14,2014 2,100 36 months No No
28,2015 liabilities
April Joint
Jianmo B 300 July 25,2014 300 37 months No No
28,2015 liabilities
April Joint
Jianmo B 2,500 April 3,2015 2,500 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,500 April 14,2015 2,500 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 1,820 April 23,2015 1,820 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,100 April 28,2015 2,100 6 months Yes No
28,2015 liabilities
April Joint
Jianmo B 2,430 May 7,2015 2,430 12 months No No
28,2015 liabilities
April Joint
Jianmo B 2,400 May 8,2015 2,400 12 months No No
28,2015 liabilities
April September Joint
Jianmo B 2,500 2,500 6 months No No
28,2015 24,2015 liabilities
April September Joint
Jianmo B 2,500 2,500 6 months No No
28,2015 29,2015 liabilities
April Joint
Jianmo B 1,820 October 20,2015 1,820 6 months No No
28,2015 liabilities
April Joint
Jianmo B 2,100 October 23,2015 2,100 6 months No No
28,2015 liabilities
April Joint
Sales Co. 3,150 3,150 6 months Yes No
28,2015 liabilities
April Joint
Sales Co. 2,800 2,800 6 months Yes No
28,2015 liabilities
April Joint
Sales Co. 2,800 2,800 12 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,550 2,550 12 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 5,000 5,000 12 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,450 2,450 6 months Yes No
28,2015 liabilities
57
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
April Joint
Vehicle air conditioner 2,000 2,000 6 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 7,000 7,000 12 months No No
28,2015 liabilities
April Joint
Sales Co. 3,150 3,150 6 months Yes No
28,2015 liabilities
April Joint
Sales Co. 2,800 2,800 6 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,550 2,550 6 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,500 2,500 6 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 4,000 4,000 9 months No No
28,2015 liabilities
April Joint
Sales Co. 3,000 3,000 9 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,000 2,000 3 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,500 2,500 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,450 2,450 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,000 2,000 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 3,000 3,000 12 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,450 2,450 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,849 2,849 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,000 2,000 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,800 2,800 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,550 2,550 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 1,200 1,200 12 months No No
28,2015 liabilities
58
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
April Joint
Vehicle air conditioner 3,000 3,000 12 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 3,000 3,000 12 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,500 2,500 6 months No No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,500 2,500 6 months No No
28,2015 liabilities
Total of guarantee to
Total of guarantee to subsidiaries subsidiaries actually
124,500 134,170
approved in the report term (B1) occurred in the report term
(B2)
Total of balance of
Total of guarantee to subsidiaries guarantee actually provided
124,500 74,949
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
April September Joint
Vehicle air conditioner 3,000 3,000 6 months Yes No
28,2015 16,2014 liabilities
April September Joint
Vehicle air conditioner 2,500 2,500 12 months Yes No
28,2015 11,2014 liabilities
April September Joint
Vehicle air conditioner 2,500 2,500 12 months Yes No
28,2015 15,2014 liabilities
April Joint
Vehicle air conditioner 3,000 March 6,2015 3,000 6 months Yes No
28,2015 liabilities
April Joint
Vehicle air conditioner 2,500 August 26,2015 2,500 12 months No No
28,2015 liabilities
April September Joint
Vehicle air conditioner 3,000 3,000 6 months No No
28,2015 17,2015 liabilities
April September Joint
Vehicle air conditioner 2,500 2,500 12 months No No
28,2015 1,2015 liabilities
Total amount of guarantee
Total guarantee quota to the
to the subsidiaries actually
subsidiaries approved in the 11,000 19,000
incurred in the reporting
reporting period (C1)
period (C2)
Total balance of actual
Total guarantee quota to the
guarantee to the
subsidiaries approved at the end of 11,000 8,000
subsidiaries at the end of
the reporting period (C3)
the reporting period (C4)
59
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
157,100 153,170
the reporting period（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 the end of the 157,100 82,949
reporting period
reporting period（A3+B3+C3）
（A4+B4+C4）
The Company’s total guarantee(i.e.total of the first three main
323.87%
items)（A4+B4+C4）
Incluidng：
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 82,949
70% directly or indirectly（E）
Proportion of total amount of guarantee in net assets of the
70,143
company exceed 50%（F）
Total guarantee Amount of the abovementioned guarantees
82,949
（D+E+F）
Explanations about joint and several liability for repayment in
None
respect of undue guarantee(if any)
Explanation about external guarantee violating established
None
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. Other material contracts
No other material contract in the report period.
4. Other material trades
No other material trade in the report period.
60
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
□ Applicable √ Not applicable
No any Entrusted Finance for the Company in the reporting period..
（2）Situation of Entrusted Loans
□ Applicable √ Not applicable
No any Entrusted loans for the Company in the reporting period..
4. Other significant contract
□ Applicable √ Not applicable
No other significant contracts for the Company in reporting period.
XVIII.Explanation about other significant matters
√Applicable□Not applicable
1.The fifth meeting of the seventh board of directors held on April 23, 2015, and the 2014 annual meeting of
stockholders held on May 22, 2015, both deliberated and passed the 2014 Annual Assets Depreciation Reserves
Provision and write-off debt- related Bill. Due to the wholly-owned subsidiaries sales company (former
momentous asset reorganization) and its sales branch companies and chain stores established between 2007 and
2008 still existed some current problems such as receivables, other receivables and multilateral deposit received
open account, the company in 2013 and the year before net amount 7.58million bad debt reserve according to the
offset of credit and debt under the risk judgment. In order to be more objective and fair to reflect the financial
situation and the asset value of the company, and in accordance with the relevant provisions of ASBE(Accounting
Standards for Business Enterprises), we based on the principle of objective and prudence to take disposal costs
and current benefit into consideration, so the 2014 annual account was handled separately with accrual total
amount of bad debts reserve and carry down non-operating income. After completing the accounting treatment of
credit and debt, the 2014 annual influence of profit and loss net amount was 570,000RMB which occupied 0.43%
of current audit net profit. For details, please refer to the company announcements published on Securities Times,
Hong Kong Commercial Daily, and the Cninfo Network (cninfo.com.cn) on April 28, 2015 and the announcement
number was 2015-034.
2. 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 corporate shares，which occupied
71.13% of company’s general capital， 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 with 71.13% stock-keeping ratio, and the
property of stock system was state-own initiator. The actual controller of the company was not changed, and the
61
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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.
XIX.Major issues of subsidiary
√Applicable□Not applicable
On August 26th, 2015, the seventh meeting of the seventh board of directors deliberated and passed The motion of
purchasing the stock from air conditioning company held by wholly-owned subsidiaries. Under the consolidated
statements, the company not only purchased 37.5% stock from air conditioning company held by wholly-owned
subsidiaries, but also acquired 18.75% stock from air conditioning company held by foreign trade company. When
the acquisition was completed, both sales company and foreign trade company no longer held shares of air
conditioning company, instead our company direct held 100% stock equity of air conditioning company. For
details, please refer to the company announcements published on Securities Times, Hong Kong Commercial Daily,
and the Cninfo Network (cninfo.com.cn) on August 29th, 2015.
XX.Social responsibility
√Applicable□Not applicable
（1）The situation of energy-saving and emission reduction and cleaner production.
In 2005，the company was continuously promoting the work of energy-saving and emission reduction and
cleaner production, and implementing some effective measures which had achieved good effect. Compared with a
year earlier, the comprehensive energy consumption of industrial added value in 2015 went down 2%, the sulfur
dioxide emissions was decreased 47%, the wastewater discharge fall to 7% and the chemical oxygen demand went
down 11%.
The company passed the supervisory audit from ISO14001OHSAS18001 Environment and Occupational
Safety and Health Management System in 2005. The company revised and perfected 27 program files and 24 job
files to prevent potential accidents and reduce accident risk.
(2)Employee Care
Holding the principle of “put people first”, our company actively carries out various activities to care for our
employees, which has been praised by all our staffs. This year, recreational and sports activities as well as talent
and skill cultivation activities have been launched. Some special lectures given by experts who were invited by
our company have also been appreciated so as to popularize health knowledge among employees and to improve
their health awareness and self-care awareness. Physical examinations have also been carried out regularly.
Heart-warming projects, poor employee assistance projects, activities to assist the impoverished students in
autumn and some other humanistic-care activities have also been carried out to care for employees’ life and solve
their financial problems. The company’s system to help and assist impoverished employees has been promoted
and condolence payment in 2015 was totally 277,000 yuan.
(3)Safeguard the Investors’ Interests
1.Our company constantly improves the corporate management framework, abides by relevant laws, rules
and regulations for the listed companies, standardizes its operation and increasingly improves its internal control.
Hence, the system of decision-making, supervision and operation mainly dominated by general meeting of
62
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
shareholders, board of directors, board of supervisors and managers was formed. At the same time, our company
has created conditions to attract minority shareholders to participate in the decision-making policies for major
issues. During the report period, two general meetings of shareholders have been held in which investors could
vote at the scene and vote on the Internet. Shareholders attending two shareholders meetings respectively account
for 75.85% and 76.75% of the company’s valid voting power in terms of the sum of shares, which fully protected
the equal status and right exercising of all shareholders, especially the minority ones.
2. Our company has been committed to building the active and healthy management culture and focuses on
coordinating relations between investors. In the report period, 125 information disclosures have been implemented
and 24 consultations have been provided to investors. Meanwhile, during the theme activity launched by
Chongqing jurisdiction for welcoming investors of listed companies online, our company has totally answered 88
questions and the response rate was 100%.
3. Faced with the problems of increasing decreased motorcycle industry and difficult operation, our company has
reorganized the major assets by adjusting the structure of main business, improving earning capacities so as to
enhance the value our company and to safeguard minority shareholders’ interests.
Whether the listed company and its subsidiaries belong to the heavy polluting industries regulated by the state
environmental protection department.
□ Yes □ No √ Not applicable
XXI.Information about the corporate bonds
Whether the listed company failed to honor the corporate bonds public issued and listed on the Stock Exchange in
due or undue at the approval date of the annual report
No
63
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
VI. Change of share capital and shareholding of Principal
Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
In Shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportio Capitaliza
n tion of
Share Bonus Proportio
common Other Subtotal Quantity
allotment shares n
reserve
fund
I. Shares with trade 89,375,00 89,375,00
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%
2. State-owned legal person 84,906,25 84,906,25
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
II. Shares without trading 30,000,00 30,000,00
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%
2. Foreign shares in domestic 30,000,00 30,000,00
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%
64
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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
2. Change of shares with limited sales condition
□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 existing employees’ shares
□Applicable√Not applicable
Ⅲ.Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
In Share
Total number Total The total number o Total
of common shareholders at f preferred shareho preferred shareh
shareholders at the end of the lders voting rights olders at the end
8,675 8,475 0 0
the end of the month from the restored at period-e of the month
reporting date of disclosing nd(if any)(See from the date of
period the annual report Notes 8) disclosing the
65
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
annual report(if
any)(See Notes
8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Number Amount Amount Number of share pledged/frozen
Proportio Changes
of shares of of
Shareholders Nature of n of in
held at restricted un-restrict
shareholder shares reporting State of share Amount
period shares ed shares
held（%） period
-end held held
China Military
State-owned legal 84,906,25 84,906,25
Equipment Group 71.13% 0 0
person 0 0
Co., Ltd.
Domestic natural
Gu Zuocheng 1.86% 2,218,750 0 2,218,750 0
person
Anhui Hengsheng
Domestic
Economic
non-state-owned 1.47% 1,750,000 0 1,750,000 0
Development
legal person
Group Co., Ltd.
Domestic natural
Feng Yonghui 0.42% 500,000 0 500,000 0
person
Domestic natural
Liu Dan 1.07% 1,276,001 206700 0 1,276,001
person
Shenwan
Overseas legal
Hongyuan 0.63% 756,125 -500675 0 756,125
person
(HK)Limited)
Domestic natural
Chen Xinqiang 0.56% 663,252 663,252 0 663,252
person
Domestic natural
Xu Yuanhui 0.45% 539,989 394114 0 539,989
person
Domestic natural
Zhang Meilan 0.42% 507,260 507,260 0 507,260
person
Domestic natural
Feng Yongxia 0.33% 398,575 398,575 0 398,575
person
There isn’t any associated relationship between the sponsoring shareholder and the other
Notes to relationship or “action in shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in
concert” among the top ten accordance with ‘The rules of information disclosure on change of shareholding.’ Foreign
shareholders. shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in
concert’.
Top 10 holders of unconditional shares
Amount of Category of shares
Name of the shareholder unconditional shares
held at end of period Category of shares Amount
Liu Dan 1,276,001 Foreign shares placed in domestic exchange 1,276,001
Shenwan Hongyuan (HK)Limited) 756,125 Foreign shares placed in domestic exchange 756,125
Chen Xinqiang 663,252 Foreign shares placed in domestic exchange 663,252
Xu Yuanhui 539,989 Foreign shares placed in domestic exchange 539,989
Zhang Meilan 507,260 Foreign shares placed in domestic exchange 507,260
66
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Feng Yongxia 398,575 Foreign shares placed in domestic exchange 398,575
Yu Lingfeng 350,525 Foreign shares placed in domestic exchange 350,525
Zhang Huaian 330,000 Foreign shares placed in domestic exchange 330,000
China Everbright（HK）Co., LTD. 319,188 Foreign shares placed in domestic exchange 319,188
Chen Houping 304,750 Foreign shares placed in domestic exchange 304,750
Explanation on associated relationship
or consistent action among the top 10 There isn’t any associated relationship between the sponsoring shareholder and the other
shareholders of non-restricted shareholders among the top-10 list. None of them are regarded as ‘Acting in concert’ in
negotiable shares and that between the accordance with ‘The rules of information disclosure on change of shareholding.’ Foreign
top 10 shareholders of non-restricted shareholders are unknown for their condition of ‘Associated relationship’ and ‘Acting in
negotiable shares and top 10 concert’.
shareholders
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
2.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
China Military Equipment Investment and operation of
Tang Dengjie June 29,1999 710924929
Group Co., Ltd. state-owned assets
Holding of other PLC’s shares, directly or indirectly
Equity of other 1. Chongqing Changan Automobile Co., Ltd. 40.08%；
2. Jiangling Automobile Co., Ltd. 41.03%；
domestic/foreign listed
3. Baoding Tianwei Baobian Electronics Ltd. 56.43%;
company with share 4. China Jialing Industry Co., Ltd. 22.34%；
controlling and share 5. Huhan Tianyan Machinery Co., Ltd. 31.43%；
6. Haerbin Dongan Automobile Power Co., Ltd. 54.51%；
participation by
7. Yunnan Xiyi Industry Co., Ltd. 65.92%；
controlling shareholder in 8. Zhongyuan Special Steel Co., Ltd. 78.15%；
9. Chongqing Changan Minsheng Logistics Co., Ltd. 25.44%;
reporting period
10. Lida Optical-electronic Co., Ltd. 43.23%.
Change of holding shareholder
□Applicable √Not applicable
No change of holding shareholder in the report period.
67
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
3．Information about the controlling shareholder of the Company
Actual controller nature：Central state owned Assets Management t
Actual controller type：Legal person
Legal
Name of the controlling Date of
representative/per Organization code Principal business activities
shareholder establishment
son in charge
State-owned Assets
Supervisionand administration
Commission of the State
Council
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 over 10% shareheld
□Applicable √Not applicable
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring
Party and Other Commitment Subjects
□Applicable √Not applicable
68
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
VII. Situation of the Preferred Shares
□ Applicable √Not applicable
The Company had no preferred shares in the reporting period.
69
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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)
Li Novembe May 30,
Chairman In office Male 50 0 0 0 0 0
Huaguang r 27,2009 2017
Lu Director, Novembe May 30,
In office Male 46 0 0 0 0 0
Hongxian GM r 27,2009 2017
Director,
secretary
general of
CCP Novembe May 30,
Yan
committe In office Male 52 0 0 0 0 0
Xuechuan r 27,2009 2017
e,
chairman
of trade
union
May 25, May 30,
Ni Erke Director In office M,ale 42 0 0 0 0 0
2012 2017
Director,
vice
general
Teng manager, April 29, May 30,
In office Male 44 0 0 0 0 0
Feng CFO, 2008 2017
secretary
of the
Board
Tang Employee May 30, May 30,
In office Male 47 0 0 0 0 0
Wenquan Director 2011 2017
April 29, May 30,
Hao Lin Director In office Male 53 0 0 0 0 0
2008 2017
Independ May 23, May 30,
Li
ent In office Male 52 0 0 0 0 0
Dingqing 2014 2017
Director
Independ May 23, May 30,
Peng Jue ent In office Female 61 0 0 0 0 0
Director 2014 2017
Independ May 23, May 22,
Li
ent Resigned Male 50 0 0 0 0 0
Jiaming 2014 2015
Director
70
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Independ May 23, May 30,
Liu
ent In office Male 35 0 0 0 0 0
Zhiqiang 2014 2017
Director
Independ
May 22, May 30,
Liu Yulin ent In office Female 50 0 0 0 0 0
2015 2017
Director
Chairman
of the
Zha superviso May 25, May 30,
In office Male 51 0 0 0 0 0
Changli ry 2012 2017
committe
e
Tan Superviso May 25, May
In office Male 42 0 0 0 0 0
Mingxian r 2012 30,2017
Superviso May 25, August
Liu Li Resigned Male 47 0 0 0 0 0
r 2012 26,2015
Novembe
Superviso May 30,
Mou Jun In office Female 51 r 17, 0 0 0 0 0
r 2017
2015
Employee March 20, May 30,
Tao
Superviso In office Male 50 0 0 0 0 0
Xuqian 2010 2017
r
Employee May 30, May 30,
Lv
Superviso In office Female 46 0 0 0 0 0
Cuiwei 2011 2017
r
Vice April 29, May 30,
Wen
General In office Male 49 0 0 0 0 0
Hong 2008 2017
Manager
Vice April 29, May 30,
Yu Jiang General In office Male 44 0 0 0 0 0
Manager 2008 2017
Vice July 26, May 30,
Yu
General In office Male 49 0 0 0 0 0
Wenbiao 2012 2017
Manager
October
Vice May 30,
Fan Aijun General In office Male 44 17, 0 0 0 0 0
Manager 2017
2014
Total -- -- -- -- -- -- 0 0 0 0 0
II. Change in shares held by directors, supervisors and senior executives
Name Positions Types Date Reason
According to strengthening the opinion of anti-corruption
and uphold integrity in higher education institutions, the
Independent
Li Jiaming Resigned May 22, 2015 CPC Central Commission for Discipline Inspection,
director
Ministry of Education and Ministry of Supervision
expressed part-time job provision for members of college
71
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
leading group, and Mr. Li Jiaming applied to resign the
independent director position of the company.
In 2014, the annual general meeting of stockholders
Independent
Liu Yulin appoint May 22, 2015 elected Ms. Liu Yulin as the seventh board of independent
director
directors of the company.
Mr. Liu Li applied to resign from the board of supervisors
Liu Li Supervisor Resigned August 26,2015
of the company due to job change.
In 2015, the first annual extraordinary general meeting
November
Mou Jun Supervisor appoint elected Ms. Mou Jun as the seventh supervisor of
17,2015
company’s board of supervisors.
III. Status of service
Working experiences of current directors, supervisors, and executives in the past five years
The situation by the end of 2015：
Li Huaguang: Male, Born in 1965, October, Bachelor. Senior economist, senior engineer. Once worked for Jialing
Group as head of QC dept., and head of personnel dept.; for Jialing Industrial Co., Ltd. as standing commissioner
of CCP committee, head of HR dept., vice headmaster of CCP school, vice chief secretary of CCP division, and
chairman of union; for China Jianling Industrial Co., Ltd. (Group) Co., Ltd. as the general manager, chief
secretary of CCP committee, chairman of union; and for Chongqing Jialing Special Equipment Co., Ltd. as chief
secretary of CCP committee, and chairman of union. At present he’s the chairman and general manager of
Southern Motorcycle, chairman of the Company and China Jilin.
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. At present
he’s the general manager and director of the Company.
Yan Xuechuan: Male, born in 1963 November, MBA, senior engineer . Once he worked for Southern Group as
technician of factory 5618, vice director of HR dept., vice chief accountant, director of planning dept., vice
factory manager and vice chief secretary of CCP committee, chief secretary of discipline committee, and chief
secretary of CCP committee; for Hunan Southern China Electro-optical (Group) Co., Ltd. as director, chief
secretary of CCP committee; standing commissioner of CCP Dandong city committee, vice mayor, and
commissioner of CCP committee. At present he’s the director, chief secretary of CCP committee, and chairman of
the union.
Ni Erke: Male, born in 1973 October, Postgraduate and senior accountant. once the head of financial dept. of
Chang’an Auto, assistant to general manager and head of auditing dept. of Nanfang Motorcycle, vcie general
manager of sales co. of Nanfang Motorcycle. At present he’s the chief accountant, director assigned by Nanfang
Motorcycle, and director of the Company.
Teng Feng: Male, born in 1972 April, Graduate, senior accountant. Once was head of Accounting Division;
Assistant to General Manager of Jianshe Group; Assistant to General Manager of Jianshe Industry; Vice General
Manager of Motorcycle Business Division of the Company. At present he’s director of Jianshe Industry; At
present he’s the Director, Vice General Manager, Head of Accounting, and secretary of Board of the Company.
Hao Lin: Male, born in 1963, Master. At present he’s Chairman of Chongqing Tongkang Technologies Co., Ltd.,
and Director of the Company.
Tang Wenquan: Male, born in 1968 December, University culture, engineer. once the vice chief and CCP secretary
of workshop 52 of Jianshe Group, CCP vice secretary, vice general manager, and general manager of Jianshe
Nanhai, chief of workshop 51 and 52 of the engine factory, director of technical department of engine division,
72
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
quality control department, vice general manager of engine division, vice director of business planning department.
At present he’s the chief of business planning department and employee director.
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 present he’s the dean of Accounting Dept. of Chongqing University
of Business; independent director of the Company, Yushanxia A, and Gaojin Food.
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 present he’s the head of
Business & Management School of Southwestern University; independent director of the Company, Tongjunge,
and Southwestern Pharmacy.
Liu Yu Lin: female, born in March 1966, Doctor of Management, Professor, doctoral tutor, the State Council
special allowance, the Ministry of Education for New Century Excellent Talents Scheme winner, Chongqing
outstanding contributions of experts. She was former Chongqing University lecturer, associate professor
independent trade and Law, Chongqing University, Professor Trade and Public Administration, Chongqing
University, Chongqing Weighing limited liability company consultant, Professor of Public Administration, the
incumbent Chongqing University, Chongqing City, State Advisory Group consultant firm director.
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. Currently he’s associated professor of Southwestern University Politics and Law; partner of
Taihetai Law Firm, and independent director of the Company and Huashen Group.
Zha Changli: Male, born in 1964, Bachelor's degree, senior economist. once chief of workshop 909 of Jialing
Machinery Factory; manager of oil tank factory of China Jialing; general manager of Chongqing Yiji Co.; general
manager of Chongqing Haiyuan Co.; vice general manager, director, CCP secretary, chairman of trade union of
China Jialing. Currently chairman of supervisory committee of the Company.
Tan Mingxian: Male, born in 1973 May, Bachelor degree, deputy chief accountant, senior economist. once head of
accounting dept. of Chongqing Wangjiang Industry Co., Ltd.; chief accountant of Sichuan Xiguang Industry
(Group) Co., Ltd.; vice head of financial dept. of Chongqing Chang’an Industry (Group) Co., Ltd.; vice chief
accountant of Chongqing Wangjiang Industry Co., Ltd. Currently manager of supervisory office of Nanfang
Motorcycle; chief financial officer of Southern Motorcycle R&D Co., supervisor of the Company, China Jialing,
Jinan Qingqi, and Luoyang Northern Group.
Mou Jun, female, born in December 1965, MBA, senior engineer titles. Former Vice Minister of China Jialing
Group cadres Officer, Chief Minister of the General Department of Jialing Honda Engine Co., Ltd., deputy party
secretary, union president, vice minister of the Organization Department of China Jialing, Deputy Minister of
Human Resources, Director, Human Capital Department, group cadres, Deputy Minister, Minister motorcycle
group integrated management Division, Ministry of soldiers loaded motorcycle Southern Party audit and
supervision Deputy Minister of United Front Work Department Minister SCHOOL vice president group cadres.
Southern Motor Commission for Discipline Inspection Office, Minister of Supervision Party, Minister of
Comprehensive Management Department, the company, China Jialing, Jianshe Mechanical and Electric
supervisor.
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 present he’s the vice chief secretary of discipline division, office manager of
discipline division and head of supervisory division, employee supervisor of the Company.
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 present she’s the director of Auditing and Legal department,
employees’ supervisor of the Company.
Wen Hong: Male, born in 1966 August, MBA, senior engineer. Once he was the Manager of Tools Co., Vice
Office Manager of Jianshe Industry (Group) Co., Ltd.; Vice General Manager of Sales Co. of the Company. He is
currently the General Manager of Sales Co., and Vice General Manager of the Company.
73
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Yu Jiang: Male, born in 1971 April, graduates, senior engineer. Once he’s the Vice Chief of Factory No.3 of
Jianshe Industry (Group) Co., Ltd.; Manager of Engine Co. of Shenzhen Jianshe Motorcycle Co.; Director of
Quality Division of the Company; Vice Office Manager of Jianshe Group; Director of Technical Center of the
Company. At present he’s the Vice General Manager of the Company.
Yu Wenbiao: Male, born in 1966 November, bachelor, senior engineer, once technician of Jianshe Machinery
Factory; vice manager of workshop 61, vice head of development planning dept., manager of Beijing office, vice
head of business operation dept., vice head and head of development planning dept., head of cooperation dept. of
Jianshe Group; assistant to general manager, head of capital operation dept. of Jianshe Industry; secretary of board
of the Company; vice general manager and CCP secretary of Zhuzhou Jianya. Currently vice general manager of
the Company.
Fan Aijun, Male, born in 1971 July, Master, engineer, once technician of workshop 53, office secretary, vice head
of general office, vice head of administration office; vice general manager of Fanying-Jianshe; head of overseas
sales division of Chongqing Jianya; vice head and head of assembling office; head of assembling department of
the Company, vice general manager of Air-conditioner Co. At present he’s general manager of Air-conditioner Co.,
and 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
Southern Motorcycle (subsidiary of the Chairman,
Li Huaguang Oct 1 2013 Yes
holding shareholder) GM
China Jialin(subsidiary of the holding January
Li Huaguang Chairman, Yes
shareholder) 11,2016
Jianshe Mechanical and Electric(subsidiary December
Lv Hongxian GM, Director No
of the holding shareholder) 30,2015
Secretary
general of CCP,
Jianshe Mechanical and Electric(subsidiary Chairman of the December
Yan Xuechuan No
of the holding shareholder) supervisory 30,2015
committee,
Director
Chief
Southern Motorcycle (subsidiary of the Accountant,
Ni Erke March 1,2011 Yes
holding shareholder) director,
Director
Minister of
Jianshe Mechanical and Electric(subsidiary November
Tang Wenquan operations No
of the holding shareholder) 17,2015
Dept
Chairman of the
Jianshe Mechanical and Electric(subsidiary December 30,
Zha Changli supervisory No
of the holding shareholder) 2015
committee
Tan Mingxian Jianshe Mechanical and Electric(subsidiary Supervisor December 30, No
74
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
of the holding shareholder) 2015
Supervisory
Southern Motorcycle (subsidiary of the
Tan Mingxian office January 1,2012 No
holding shareholder)
manager
Southern Motorcycle R&D Co. (Subsidiary Supervisor,
Tan Mingxian January 1, 2012 Yes
of the holding shareholder) CFO
China Jialin (Subsidiary of the controlling
Tan Mingxian Supervisor January 1,2012 No
shareholder)
Jinan Qinqi (Subsidiary of the controlling
Tan Mingxian Supervisor January 1,2012 No
shareholder)
Luoyang Northern (Subsidiary of the
Tan Mingxian Supervisor January 1, 2012 No
controlling shareholder)
Commission
for Discipline
Inspection
Office
Minister,
Southern Motorcycle (subsidiary of the Minister of
Mou Jun January 4,2011 Yes
holding shareholder) Supervision
party, the
Integrated
Management
Department
Jianshe Mechanical and Electric(subsidiary December 30,
Mou Jun Supervisor No
of the holding shareholder) 2015
China Jialin (Subsidiary of the controlling
Mou Jun Supervisor April 12,2016 No
shareholder)
Vice Chairman
of the
supervisory
committee,
Jianshe Mechanical and Electric(subsidiary Supervisory November
Tao Xuqian No
of the holding shareholder) office 17,2015
Director,Dire
ctor of
supervision
Dept
Jianshe Mechanical and Electric(subsidiary Minister of November 17,
Lv Cuiwei No
of the holding shareholder) audit 2015
Notes of Office On August 26th, 2015, the seventh meeting of the seventh board of directors deliberated and passed the Bill on
75
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
taking in Investing to Establish a Wholly-Owned Subsidiary. It indicated that the company invested its motorcycle
shareholder business-related assets and liabilities to establish Jianshe Mechanical and Electric Corporation as the
companies wholly-owned subsidiary, and signed the Aggrement of Assets and Liabilities Injection with Jianshe Mechanical
and Electric Corporation. According to the main principle of “staff mobility along with the asset transformation”
and the Staff Resettlement Program passed by congress of workers and staffs, the motorcycle business-related
labor relation of the company was transferred to Jianshe Mechanical and Electric Corporation. On November
17th,2015, the first annual extraordinary general meeting of the company deliberated and approved The Project of
Selling Substantial Assets and Connected Transaction (hereinafter referred to as major assets restructuring ), and
sold the 100% stock equity of Jianshe Mechanical and Electric Corporation to the controlling shareholder, Military
Equipment Group, under the sale agreement. After the implementation of major assets restructuring, the
individuals above the table (partially including members in board of directors, board of supervisors and colleges)
served in the wholly-owned subsidiary of controlling shareholder. In order to normalize the corporate governance,
the company had already separately held the first session of the thirty-second congress of workers and staff, the
seventh session of the tenth board meeting, the seventh session of the tenth board of supervisors meeting in March,
2016 , and changed members in board of directors, board of supervisors and colleges. (Detailed information was
posted on company announcements on March 22th, 2016).
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,
Li Dingqing DEAN Yes
University School of Accountancy 2012
Southwest University School of Economics Department
Peng Jue May 7,2014 Yes
and Management head
September 1,
Liu Yulin Chongqing University Professor Yes
2004
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
In RMB10 thousand
76
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
Total Remuneration
remuneration actually receivect
Name Positions Sex Age Office status
received from the at the end of the
shareholder reporting period
Li Huaguang Chairman Male 50 In Office 0 Yes
Lu Hongxian Director, GM Male 46 In office 34.8 No
Director,
secretary general
of CCP
Yan Xuechuan Male 52 In office 33.3 No
committee,
chairman of trade
union
Ni Erke Director Male 42 In Office 0 Yes
Director, vice
general manager,
Teng Feng Male 44 In office 12.7 No
CFO, secretary of
the Board
Employee
Tang Wenquan Male 47 In Office 18.7 No
Director
Hao Lin Director Male 53 In office 0 No
Independent
Li Dingqing Male 52 In Office 3 No
Director
Independent
Peng Jue Female 61 In office 3 No
Director
Independent
Li Jiaming Male 50 Resigned 1.5 No
Director
Independent
Liu Zhiqiang Male 35 In Office 3 No
Director
Independent
Liu Yulin Female 50 In office 1.5 No
Director
Chairman of the
Zha Changli supervisory Male 51 In Office 32 No
committee
Tan Mingxian Supervisor Male 42 In office 0 Yes
Liu Li Supervisor Male 47 Resigned 0 Yes
Mou Jun Supervisor Female 51 In Office 0 Yes
Employee
Tao Xuqian Male 50 In office 13.1 No
Supervisor
Employee
Lv Cuiwei Female 46 In office 12.9 No
Supervisor
Wen Hong Vice GM Male 49 In Office 25.9 No
Yu Jiang Vice GM Male 44 In Office 23.4 No
Yu Wenbiao Vice GM Male 49 In office 25.9 No
Fan Aijun Vice GM Male 44 In Office 26.7 No
Total -- -- -- -- 271.4 --
77
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
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） 562
Number of in-service staff of the main subsidiaries（person） 382
Total number of the in-service staff（person） 944
Total number of staff receiving remuneration in the current
944
period（person）
The number of the parent company and the main subsidiary’s
6
retired staffs who need to bear the cost（person）
Professional
Classified according by Professions Number of persons（person）
Production 605
Sales 28
Technical 182
Financial 16
Administrative 113
Total 944
Education
Classified according by education background Number of persons（person）
Mid-school or below 529
Colleges or above 190
Universities or above 211
Postgraduate or above 14
Total 944
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 2015, there were totally 20 projects of internal training with 59 training programs according to the annual
training plan. However, there were total 20 projects of internal training with 78 training programs being finished
78
Chongqing Jianshe Motorcycle Co., Ltd. Anuual Report 2015
actually with totally 1796 employees being trained within 2179 training hours. The per capita training hour was
2.8 hours averagely which promoted the full completion of company’s annual training plan.
4. Outsourcing situation
□ Applicable √ Not applicable
79
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
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, strengthened company’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.
Our company will continue to persist in the effective operation of governance structure described
in the Articles of Associations, to improve the management level and quality of information
disclosure after the restructuring so as to protect interests of shareholders, especially of the
minority shareholders. The specific management structure is as follows:
Ⅰ Shareholders and Shareholders’ 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 the shareholders’ 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 the shareholders’ 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
80
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
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, 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: The Company’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.
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual
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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 Extraordinary Shareholders’ 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
of Shareholders’
Meeting 2014,
Annual Genral Annual General
0.07% May 22,2015 May 23,2015 Announcement
Meeting of 2014 Meeting
2015-041 at
http://www.cninfo.co
m.cn dated May 23,
2015
For details please
find the Resolutions
of the 1st Provisional
The first provisional Shareholders’
Provisional
shareholders’ Meeting 2015,
shareholders’ 0.13% November 17,2015 November 18,2015
General meeting in Announcement
General Meeting
2015 2015-114 at
http://www.cninfo.co
m.cn dated
November 18, 2015
2. Request for extraordinary general meeting by preferred stockholders whose voting rights
restore
□ Applicable √Not applicable
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V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ 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 5 5 0 0 0 No
Peng Jue 5 5 0 0 0 No
Li Jiaming 2 2 0 0 0 No
Liu Zhiqiang 5 5 0 0 0 No
Liu Yulin 3 3 0 0 0 No
Number of general meetings attended
by independent directors as non-voting 2
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 independent director’s advice to the Company been accepted
√Yes □No
Explanation on acceptance of or failure to accept an independent director’s advice to the
Company.
In 2015, 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 of
company’s documents, listening to reports and acquaintance of company’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.
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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:
1. The Auditing Committee held its 1st meeting of 2016 on January 19, 2016. The financial
statements of 20165provided 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 13, 2016, the CPA provided initial opinions to the Company. April 15, 2016, the Auditing
Committee convened the 2nd meeting of 2016, 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 summarized the auditing works of 2015 done by the CPA: Shu Lun Pan
Certified Public Accountants conducted the auditing works responsibly and diligently according to
the China CPA Standard, and issued opinions on the accounting statements objectively and fairly.
The Committee suggested to extend the services of Shu Lun Pan Certified Public Accountants as
the auditor of 2015. With reference to the payment to the CPA in previous years and the wildly
accepted level in this territory, the Committee suggested RMB 400 thousand and RMB200
thousand of auditing fee for financial reports and internal control system respectively to the CPA.
(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 20th,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
liabilities (including account payable, tax payable, advances on sales and loans from financial
institutions )as asset packaging, and at the same time applied net asset packaging evaluation
value(the result was subject to final confirmation of assessment agencies ) to subsidize the
construction of Chongqing Jianshe Mechanical and Electric Co., Ltd. (preparation). Under the
consolidated statements, the meeting agreed to purchase 37.5% and 18.75% from air conditioning
company which was separately held by the sale company and foreign trade company.
2.The strategic committee of the company held the third session of 2015 annual meeting on
October 23rd,2015. The meeting enabled the company to take August 31, 2015 as the base date to
sell the 100% stock equity of Jianshe Mechanical and Electric Co., Ltd., the wholly-owned
subsidiary which was subsidized and founded by motorcycle business-related assets and liabilities
of the company, and submitted report to the board of directors.
3.The strategic committee of the company held the first session of 2016 annual meeting on April
84
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
15th,2016. The meeting analyzed macro-economic environment, industry trends and its own
superiority and inferiority. Combining the readjustment of industrial structure after corporate
reorganization, the meeting discussed and put forward some new development suggestions of the
automotive air conditioning compressor industry over the next three years, and the working focus
in
(III) The Remuneration and Assessment Committee held its 1st meeting of 2016 on April 15, 2016.
The Committee performed assessment on the executives’ performance according to the
Assessment and Incentive Scheme, and came out with the resolution that the reward scheme of
year 2014 was complying with the regulations and practical situation.
(IV) The nominations committee of the company held the first session of 2016 annual meeting on
March 14th,2016. The meeting nominated Zhou Yongqiang, Ye Yuxin, Yu Wenbiao, Fan Aijun as
director candidates, nominated Wang Jun as candidates for independent directors, appointed Fan
Aijun as general manager, intended to hire Zhang Xiangdong, Xue Gangyi, Zhang Guofeng, Deng
Xianming, Caobing as deputy general manager, and intended to hire Xue Gangyi as finance
manager. Those aforementioned members were all successfully passed the qualification
examinations, in compliance with relevant position provisions and suitable for submitting to the
Board of Directors.
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
Disclosure date of appraisal report on internal control April 30,2016
Juchao Website:（http://www.cninfo.com.cn），Announcement
Disclosure index of appraisal report on internal control
No.2016-028
85
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
Proportion of total unit assets covered by appraisal in the
total assets of the consolidated financial statements of the 90.00%
company
Proportion of total unit incomes covered by appraisal in the
total business incomes of the consolidated financial 90.00%
statements of the company
Standards of Defects Evaluation
Category Financial Report Non-financial Report
Indicator 1: General defects in company’s daily operation.
It’s almost impossible that some specific business fails to
operate normally. Other business activities and achievement
General defects: ① Minor financial loss; ② of business goals will not be affected. Serious defects: It’s
Minor misstatement or omission of statement reasonably possible that normal operations of some business
in terms of financial statement; ③ Minor may be influenced but it will not affect the sustainable
damage of reputation caused by its negative operation of our company. Significant defects: it’s
influence in some regions. Serious defects: reasonably possible that operation capacity of some business
① Bring some financial loss to company; ② may be lost and it will endanger the company’s sustainable
Cause moderate misstatement or omission of operation. Indicator 2: Financial loss. General defects: It’s
statement in terms of financial statement; ③ almost impossible that minor financial losses may be led to
Serious damage of reputation caused by its company. Serious defects: It’s reasonably possible that
Qualitative criteria comparatively large-scale influence in some moderate financial losses may be led to company.
regions. Significant defects: ① Bring Significant defects: It’s possible that significant financial
significant financial loss to company; ② losses may be led to company. Indicator 3: Reputation of
Significant misstatement or omission of company. General defects: It’s almost impossible that the
statement in terms of financial statement; ③ negative information popular in some regions will be caused,
The significantly negative influence has which may further affect company’s reputation. Serious
attracted large-scale attention by the public defects: It’s reasonably possible that the negative
and unrecoverable losses have been brought information popular in some regions will be caused, which
to company. 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 losses in the overall
the overall assets. General defects: It’s almost assets. General defects: It’s almost impossible that the
impossible that the amount of misstatement amount of financial losses accounting for 0.05% of overall
accounting for 0.05% of the overall assets or assets or less will occur. Serious defects: It’s reasonably
Qualitative criteria less will occur. Serious defects: It’s possible that the amount of financial losses accounting for
reasonably impossible that the amount of 0.05% to 1% of the overall assets will occur. Significant
misstatement accounting 0.05% to 1% of the defects: It’s reasonably possible that the amount of financial
overall assets will occur. Significant defects: losses accounting for 1% of the overall assets or more will
It’s reasonably possible that the amount of occur.
86
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
misstatement accounting for 1% of the overall
assets or more will occur.
Number of major
defects in financial 0
reporting（a）
Number of major
defects in non 0
financial 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, 2015.
Disclosure date of audit report
Disclosure
of internal control (full-text)
Index of audit report of
April 30,2016
internal control (full-text)
Internal audit report’s opinion Juchao Website: （http://www.cninfo.com.cn），Announcement No.2016-042
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 qualified auditor’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
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Chongqing Jianshe Motorcycle Co., Ltd. Anuual
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XI．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 the Auditors’ Report with the seal of the CPA and signed by the certified
IV. All of the originals of the Company’s documents and public notices publicized by the presses
designated by China Securities Regulatory Commission in the report period;
V. Statement on special audition on appropriation of capital by controlling shareholder and related
parties of Chongqing Jianshe Motorcycle Co., Ltd.
VI. Auditing Report on Internal Control of Year 2015 for Chongqing Jianshe Motorcycle Co., Ltd.
VII. Special statement on financial transactions such as related loans involving with financial
institutions
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
AUDITORS’ REPORT
FOR THE YEAR ENDED DECEMBER 31, 2015
PCPAR [2016] No. 711495
88
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
AUDITORS’ REPORT AND FINANCIAL STATEMENTS
(For the Year Ended December 31, 2015)
Contents Page
1. Auditors' Report 1-2
2. Financial Statements
89
Chongqing Jianshe Motorcycle Co., Ltd. Anuual
Report 2015
Consolidated Balance Sheet and the Company's Balance 1-4
Sheet
Consolidated Income Statement and the Company's 5-6
Income Statement
Consolidated Statement of Cash Flows and the 7-8
Company's Statement of Cash Flows
Consolidated Statement of Changes in Owners' Equity 9-12
and the Company's Statement of Changes in Owners'
Equity
Notes to the Financial Statements 1-93
90
AUDITORS’ REPORT
PCPAR [2016] No. 711495
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, 2015, 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 the auditor’s
judgment, including the assessment of 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 the entity’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.
Auditors’ Report Page 1
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, 2015 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 27, 2016
This auditors’ report and the accompanying notes to the financial statements are English translation of the
Chinese auditors’ report. In case of doubt as to the presentation of these documents, the Chinese version shall
prevail.
Auditors’ Report Page 2
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Balance Sheet
December 31, 2015
(Expressed in Renminbi unless otherwise stated)
Balance as at
Balance as at
Assets Note 5 December 31,
January 1, 2015
2015
Current assets:
Cash and cash equivalents 5.1 302,660,758.76 192,918,049.28
Deposit reservation for balance
Lending funds
Financial assets measured at fair value
through current profit and loss
Derivative financial assets
Notes receivable 5.2 47,008,704.63 45,673,753.36
Accounts receivable 5.3 217,759,208.43 255,013,689.72
Advances to suppliers 5.4 9,309,626.86 23,181,893.00
Premiums receivable
Reinsurance accounts receivable
Provision of cession receivable
Interest receivable
Dividends receivable 5.5
Other receivables 5.6 257,809,644.42 15,618,940.96
Redemptory monetary capital for sale
Inventories 5.7 146,350,934.34 277,612,004.04
Classified as assets held for sale
Non-current assets maturing within one year
Other current assets 5.8 5,430,548.06 20,102,069.93
Total current assets 986,329,425.50 830,120,400.29
Non-current assets:
Loans and payments on behalf
Available-for-sale financial assets 5.9
Held-to-maturity investments
Long-term receivables
Long-term equity investments 5.10 83,381,316.13 686,110,128.77
Investment properties
Fixed assets 5.11 395,975,005.27 715,930,693.00
Construction in progress 5.12 40,435,429.90 16,315,153.10
Project materials
Disposal of fixed assets
Productive biological assets
Financial Statements Page 1
Oil and gas assets
Intangible assets 5.13 28,270,393.63 92,488,110.55
Development expenses 5.14 36,689,261.07
Goodwill
Long-term deferred expenses 5.15 3,926,091.85 7,801,134.53
Deferred income tax assets 5.16 1,819,643.46 3,756,129.12
Other non-current assets 5.17 10,478,525.70
Total non-current assets 564,286,405.94 1,559,090,610.14
Total assets 1,550,615,831.44 2,389,211,010.43
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Balance Sheet (Continued)
December 31, 2015
(Expressed in Renminbi unless otherwise stated)
Balance as at Balance as at January
Liabilities and Shareholder's Equity Note 5
December 31, 2015 1, 2015
Current liabilities:
Short-term borrowings 5.18 217,000,000.00 803,500,000.00
Borrowings from central bank
Deposits from customers and interbank
Borrowings from banks and other financial institutions
Financial liabilities measured at fair value through current
profit and loss
Derivative financial liabilities
Notes payable 5.19 760,555,000.00 560,011,000.00
Accounts payable 5.20 75,885,325.83 588,221,381.72
Advances from customers 5.21 1,401,319.97 19,883,635.95
Financial assets sold for repurchase
Handling charges and commissions payable
Employee remuneration payable 5.22 1,654,497.94 3,068,735.80
Taxes and surcharges payable 5.23 16,857,642.89 136,504,668.13
Interest payable
Dividends payable
Other payables 5.24 16,874,326.53 24,887,424.31
Reinsurance accounts payable
Provision for insurance contracts
Acting trading securities
Acting underwriting securities
Classified as liabilities held for sale
Financial Statements Page 2
Non-current liabilities maturing within one year 5.25 75,000,000.00 111,000,000.00
其他流动负债 Other current liabilities
Total current liabilities 1,165,228,113.16 2,247,076,845.91
Non-current liabilities:
Long-term borrowings 5.26 128,490,000.00 121,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bond
Long-term payables
Long-term employee remuneration payable
Special payables
Estimated liabilities 5.27 3,226,654.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 128,490,000.00 124,226,654.00
Total liabilities 1,293,718,113.16 2,371,303,499.91
Owners' equity
Share capital 5.28 119,375,000.00 119,375,000.00
Other equity instruments
Including: Preferred shares
Perpetual bond
Capital reserves 5.29 958,565,294.29 960,505,517.59
Less: treasury stock
Other comprehensive income 5.30 9,800.00 9,800.00
Special reserves
Surplus reserves 5.31 125,686,000.00 125,686,000.00
General risk reserves
Undistributed profits 5.32 -947,520,008.78 -1,188,255,120.98
Total equity attributable to owners of the parent company 256,116,085.51 17,321,196.61
Minority equity 781,632.77 586,313.91
Total owners' equity 256,897,718.28 17,907,510.52
Total liabilities and owners' equity 1,550,615,831.44 2,389,211,010.43
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Balance Sheet
December 31, 2015
(Expressed in Renminbi unless otherwise stated)
Note Balance as at December Balance as at
Assets
13 31, 2015 January 1, 2015
Current assets:
Financial Statements Page 3
Cash and cash equivalents 47,345,832.30 91,357,585.62
Financial assets measured at fair value
through current profit and loss
Derivative financial assets
Notes receivable 2,000,000.00 29,995,643.90
Accounts receivable 13.1 527,570.36 26,337,349.85
Advances to suppliers 9,953,627.54
Interest receivable
Dividends receivable
Other receivables 13.2 253,605,619.11 242,329,759.01
Inventories 63,334,869.40
Classified as assets held for sale
Non-current assets maturing within one year
Other current assets 12,315,142.81
Total current assets 303,479,021.77 475,623,978.13
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investments 13.3 833,881,665.35
251,541,316.13
Investment properties
Fixed assets 183,278,272.00 580,792,688.69
Construction in progress 15,962,346.19
Project materials
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 16,261,765.57 80,167,159.69
Development expenses 36,689,261.07
Goodwill
Long-term deferred expenses 2,420,539.48
Deferred income tax assets
Other non-current assets
Total non-current assets 451,081,353.70 1,549,913,660.47
Total assets 754,560,375.47 2,025,537,638.60
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Financial Statements Page 4
Chongqing Jianshe Motorcycle Co., Ltd.
Balance Sheet (Continued)
December 31, 2015
(Expressed in Renminbi unless otherwise stated)
Note Balance as at Balance as at
Liabilities and Shareholder's Equity
13 December 31, 2015 January 1, 2015
Current liabilities:
Short-term borrowings 25,000,000.00 546,000,000.00
Financial liabilities measured at fair value
through current profit and loss
Derivative financial liabilities
Notes payable 152,850,000.00 240,011,000.00
Accounts payable 42,646,214.18 562,631,216.39
Advances from customers 220,124.53 3,927,911.39
Employee remuneration payable 58,886.32 1,844,709.68
Taxes and surcharges payable 15,268,307.65 135,863,482.56
Interest payable
Dividends payable
Other payables 216,034,017.49 203,369,913.46
Classified as liabilities held for sale
Non-current liabilities maturing within one year 67,000,000.00 28,000,000.00
Other current liabilities
Total current liabilities 519,077,550.17 1,721,648,233.48
Non-current liabilities:
Long-term borrowings 47,000,000.00 114,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bond
Long-term payables
Long-term employee remuneration payable
Special payables
Estimated liabilities 3,226,654.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 47,000,000.00 117,226,654.00
Total liabilities 566,077,550.17 1,838,874,887.48
Owners' equity
Share capital 119,375,000.00 119,375,000.00
Other equity instruments
Financial Statements Page 5
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 -1,015,153,268.99 -1,016,973,343.17
Total owners' equity 188,482,825.30 186,662,751.12
Total liabilities and owners' equity 754,560,375.47 2,025,537,638.60
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Income Statement
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Item Note 5 Year 2015 Year 2014
Ⅰ. Total operating income 1,341,331,910.93 1,763,619,804.97
Including: operating income 5.33 1,341,331,910.93 1,763,619,804.97
Interest income
Premiums earned
Income from handling charges and commissions
Ⅱ. Total operating costs 1,605,453,382.35 1,949,369,526.73
Including: Operating costs 5.33 1,251,939,003.07 1,550,142,872.56
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
Business taxes and surcharges 5.34 15,487,280.18 20,839,304.58
Selling expenses 5.35 76,054,125.60 96,296,220.34
General and administrative expenses 5.36 171,145,874.26 164,666,573.99
Financial expenses 5.37 83,560,026.12 91,458,200.98
Losses from asset impairment 5.38 7,267,073.12 25,966,354.28
Plus: gains from changes in fair value ("-" for losses)
Investment income ("-" for losses) 5.39 498,750,796.47 31,930,338.58
Including: income from investment in associates and joint ventures 5.39 12,442,935.76 32,338,338.58
Foreign exchange gains ("-" for losses)
Financial Statements Page 6
Ⅲ.Operating profits ("-" for losses) 234,629,325.05 -153,819,383.18
Plus: Non-operating income 5.40 11,418,743.79 24,035,612.05
Including: gains from disposal of non-current assets 5.40 3,426,624.42 12,172.94
Less: Non-operating expenses 5.41 705,323.13 3,731,352.75
Including: Losses on disposal of non-current assets 5.41 434,139.22 340,391.02
Ⅳ. Total profits ("-" for total losses) 245,342,745.71 -133,515,123.88
Less: income tax expenses 5.42 4,412,314.65 26,711.86
Ⅴ. Net profit ("-" for net loss) 240,930,431.06 -133,541,835.74
Net profit attributable to owners of the parent company 240,735,112.20 -133,593,949.98
Non-controlling interests 195,318.86 52,114.24
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 from
re-measurement of defined benefit plan
(2)Share in other comprehensive income of the investee cannot be
reclassified into gains and losses under the equity method
2.Other comprehensive income to be reclassified into gains and
losses subsequently
(1)Share in other comprehensive income of the investee to be
reclassified into gains and losses under the equity method
(2)Gains and losses on changes in fair value of financial assets
available for sale
(3)Gains and losses arising from reclassification of
held-to-maturity investments as financial assets available for sale
(4)Effective portion of cash flow hedging gains and losses
(5)Translation differences of financial statements denominated in
foreign currency
(6)Others
Net of tax of other comprehensive income attributable to
non-controlling shareholders
Ⅶ.Total comprehensive incomes 240,930,431.06 -133,541,835.74
Total comprehensive income attributable to owners of the parent
240,735,112.20 -133,593,949.98
company
Total comprehensive income attributable to minority shareholders 195,318.86 52,114.24
Ⅷ. Earnings per share:
1.Basic earnings per share (RMB/Share) 2.017 -1.119
2.Diluted earnings per share (RMB/Share) 2.017 -1.119
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Income Statement
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Item Note 13 Year 2015 Year 2014
Ⅰ. Operating income 13.4 916,524,874.05 1,432,632,633.68
Financial Statements Page 7
Less: Operating costs 13.4 951,519,134.10 1,365,849,508.93
Business taxes and surcharges 7,097,726.80 15,271,115.75
Selling expenses 7,875,528.62 17,737,143.76
General and administrative expenses 83,455,935.38 118,014,569.75
Financial expenses 35,443,970.39 48,208,583.12
Losses from asset impairment 239,241,816.94 22,066.35
Plus: gains from changes in fair value ("-" for losses)
Investment income ("-" for losses) 13.5 9,857,041.01 31,873,347.28
Including: income from investment in associates and joint
16,907,175.88 32,281,347.28
ventures
Ⅱ. Operating profits ("-" for losses) -398,252,197.17 -100,597,006.70
Plus: Non-operating income 400,327,288.14 2,169,745.02
Including: gains from disposal of non-current assets
Less: Non-operating expenses 255,016.79 3,556,531.82
Including: Losses on disposal of non-current assets 147,576.58 197,219.65
Ⅲ.Total profits ("-" for total losses) 1,820,074.18 -101,983,793.50
Less: income tax expenses
Ⅳ. Net profit ("-" for net loss) 1,820,074.18 -101,983,793.50
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 from
re-measurement of defined benefit plan
(2)Share in other comprehensive income of the investee
cannot be reclassified into gains and losses under the equity
method
2.Other comprehensive income to be reclassified into gains
and losses subsequently
(1)Share in other comprehensive income of the investee to be
reclassified into gains and losses under the equity method
(2)Gains and losses on changes in fair value of financial
assets available for sale
(3)Gains and losses arising from reclassification of
held-to-maturity investments as financial assets available for
sale
(4)Effective portion of cash flow hedging gains and losses
(5)Translation differences of financial statements
denominated in foreign currency
(6)Others
Ⅵ. Total comprehensive incomes 1,820,074.18 -101,983,793.50
Ⅶ. Earnings per share:
1.Basic earnings per share (RMB/Share)
2.Diluted earnings per share (RMB/Share)
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Financial Statements Page 8
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Item Note 5 Year 2015 Year 2014
Ⅰ.Cash flows from operating activities:
Cash received from sale of goods and rendering of services 924,895,630.63 1,088,282,407.88
Net increase in customer bank deposits and placement from banks and other
financial institutions
Net increase in borrowings from central bank
Net increase in loans from other financial institutions
Premiums received from original insurance contracts
Net cash received from reinsurance business
Net increase in deposits and investments from policyholders
Net increase from disposal of financial assets at fair value whose fluctuation
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 5,449,365.90 21,919,746.52
Cash received from other operating activities 5.43 15,051,156.84 12,873,963.38
Sub-total of cash inflows from operating activities 945,396,153.37 1,123,076,117.78
Cash paid for goods purchased and services received 585,375,677.51 715,173,308.79
Net increase in loans and advances to customers
Net increase in deposits in central bank and other banks and financial
institutions
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 173,153,899.42 185,235,196.17
Cash paid for taxes and surcharges 46,733,869.09 62,995,579.11
Cash paid for other operating activities 5.43 57,826,696.74 65,073,381.80
Sub-total of cash outflows from operating activities 863,090,142.76 1,028,477,465.87
Net cash flows from operating activities 82,306,010.61 94,598,651.91
Ⅱ. Cash flows from investing activities:
Cash received from disposal of investments
Cash received from returns on investments 34,460,000.00 35,470,000.00
Net cash received from disposal of fixed assets, intangible assets and other
1,745,492.45 787,626.79
long-term assets
Cash inflow from disposal of subsidiaries and other operating units
Cash received from other investing activities
Sub-total of cash inflows from investing activities 36,205,492.45 36,257,626.79
Cash paid to acquire and construct fixed assets, intangible assets and other
81,268,875.00 8,308,530.07
long-term assets
Cash paid for investments
Net increase in pledge loans
Net cash paid to acquire subsidiaries and other business units
Cash paid for other investing activities 5.43 3,750,149.57
Sub-total of cash outflows from investing activities 85,019,024.57 8,308,530.07
Financial Statements Page 9
Net cash flows from investing activities -48,813,532.12 27,949,096.72
Ⅲ.Cash flows from financing activities
Cash received from investors
Including: cash received by subsidiaries from investments by minority
shareholders
Cash received from borrowings 1,166,290,000.00 1,536,816,336.53
Cash received from bonds issuance
Cash received from other financing activities 5.43 1,800,692,830.44 1,668,003,472.46
Sub-total of cash inflows from financing activities 2,966,982,830.44 3,204,819,808.99
Cash paid for debt repayments 1,305,000,000.00 1,626,684,717.71
Cash paid for distribution of dividends and profits or payment of interest 87,034,032.49 97,604,880.79
Including: dividends and profits paid to minority shareholders by
subsidiaries
Cash paid for other financing activities 5.43 1,621,039,606.73 1,738,217,906.13
Sub-total of cash outflows from financing activities 3,013,073,639.22 3,462,507,504.63
Net cash flows from financing activities -46,090,808.78 -257,687,695.64
Ⅳ. Effect of fluctuation in exchange rate on cash and cash equivalents 686,261.04 473,184.31
Ⅴ. Net increase in cash and cash equivalents -11,912,069.25 -134,666,762.70
Plus: balance of cash and cash equivalents at the beginning of the period 35,555,585.06 170,222,347.76
Ⅵ. Balance of cash and cash equivalents at the end of the period 23,643,515.81 35,555,585.06
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, 2015
(Expressed in Renminbi unless otherwise stated)
Item Year 2015 Year 2014
Ⅰ.Cash flows from operating activities:
Cash received from sale of goods and rendering of services 490,046,185.33 790,157,926.32
Refunds of taxes and surcharges 1,827,925.86 9,748,785.28
Cash received from other operating activities 3,275,718.69 3,276,367.42
Sub-total of cash inflows from operating activities 495,149,829.88 803,183,079.02
Cash paid for goods purchased and services received 435,189,154.01 648,795,328.71
Cash paid to and on behalf of employees 118,533,275.30 142,893,843.11
Cash paid for taxes and surcharges 7,864,311.20 22,992,587.97
Cash paid for other operating activities 18,487,200.13 20,153,490.60
Sub-total of cash outflows from operating activities 580,073,940.64 834,835,250.39
Net cash flows from operating activities -84,924,110.76 -31,652,171.37
Ⅱ. Cash flows from investing activities:
Cash received from disposal of investments 295,800.00
Cash received from returns on investments 34,460,000.00 35,470,000.00
Net cash received from disposal of fixed assets, intangible assets and other
98,316.45 763,942.20
long-term assets
Cash inflow from disposal of subsidiaries and other operating units
Cash received from other investing activities
Sub-total of cash inflows from investing activities 34,854,116.45 36,233,942.20
Cash paid to acquire and construct fixed assets, intangible assets and other
2,937,344.55 6,716,583.27
long-term assets
Financial Statements Page 10
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 2,937,644.55 6,716,583.27
Net cash flows from investing activities 31,916,471.90 29,517,358.93
Ⅲ.Cash flows from financing activities
Cash received from investors
Cash received from borrowings 854,300,000.00 1,108,000,000.00
Cash received from bonds issuance
Cash received from other financing activities 2,392,099,963.32 2,842,482,896.62
Sub-total of cash inflows from financing activities 3,246,399,963.32 3,950,482,896.62
Cash paid for debt repayments 927,000,000.00 981,000,000.00
Cash paid for distribution of dividends and profits or payment of interest 61,178,570.38 48,073,502.78
Cash paid for other financing activities 2,223,020,195.22 3,045,213,908.94
Sub-total of cash outflows from financing activities 3,211,198,765.60 4,074,287,411.72
Ⅳ. Net cash flows from financing activities 35,201,197.72 -123,804,515.10
Effect of fluctuation in exchange rate on cash and cash equivalents
Ⅴ. Net increase in cash and cash equivalents -17,806,441.14 -125,939,327.54
Plus: balance of cash and cash equivalents at the beginning of the period 22,292,965.15 148,232,292.69
Ⅵ. Balance of cash and cash equivalents at the end of the period 4,486,524.01 22,292,965.15
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Financial Statements Page 11
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Statement of Changes in Owners' Equity
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Year 2015
Equity attributable to owners of the parent company
Other equity instruments Gen
Item Minority Total owners'
Less: Other eral
Perpet Special Undistributed equity equity
Share capital Preferred Capital reserves treasury comprehens Surplus reserves risk
ual Others reserves profits
shares stock ive income rese
bond rves
Ⅰ.Balance as at December 31 of 119,375,000.0
960,505,517.59 9,800.00 125,686,000.00 -1,188,255,120.98 586,313.91 17,907,510.52
last year 0
Plus: adjustments for changes in
accounting policies
Adjustments for correction of
accounting errors in prior year
Business combination involving
entities under common control
Others
Ⅱ. Balance as at January 1 of the 119,375,000.0
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 0
Ⅲ .Increase/(decrease) for the
-1,940,223.30 240,735,112.20 195,318.86 238,990,207.76
current 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
holders of other equity instruments
(3)Amount of the share-based
payment included in the owners'
equity
Financial Statements Page 12
(4)Others
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-in capital
(2)Conversion of surplus reserves
into paid-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 -1,940,223.30 -1,940,223.30
Ⅳ. Ending balance of the current 119,375,000.0
958,565,294.29 9,800.00 125,686,000.00 -947,520,008.78 781,632.77 256,897,718.28
year 0
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Consolidated Statement of Changes in Owners' Equity (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Financial Statements Page 13
Year 2014
Equity attributable to owners of the parent company
Item Other equity instruments Less: Surplu Total
Other Minority
Share Capital treasu s General risk Undistributed owners'
Preferre comprehensiv Special reserves equity
capital Perpetual reserves ry reserv reserves profits equity
d Others e income
bond stock es
shares
125,6
Ⅰ.Balance as at December 119,375,00 960,505,51 -1,054,661,1 151,449,
9,800.00 86,00 534,199.67
31 of last year 0.00 7.59 71.00 346.26
0.00
Plus: adjustments for changes
in accounting policies
Adjustments for correction of
accounting errors in prior
year
Business combination
involving entities under
common control
Others
125,6
Ⅱ. Balance as at January 1 119,375,00 960,505,51 -1,054,661,1 151,449,
9,800.00 86,00 534,199.67
of the current year 0.00 7.59 71.00 346.26
0.00
Ⅲ.Increase/(decrease) for the -133,593,949 -133,541,
52,114.24
current year ("-" for losses) .98 835.74
1.Total comprehensive -133,593,949 -133,541,
52,114.24
incomes .98 835.74
2.Capital contributed or
reduced by owners
(1)Common shares from
shareholders
(2)Investment capital from
the holders of other equity
instruments
(3)Amount of the
share-based payment
included in the owners'
equity
Financial Statements Page 14
(4)Others
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-in capital
(2)Conversion of surplus
reserves into paid-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
125,6
Ⅳ . Ending balance of the 119,375,00 960,505,51 -1,188,255,1 17,907,5
9,800.00 86,00 586,313.91
current year 0.00 7.59 20.98 10.52
0.00
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Financial Statements Page 15
Chongqing Jianshe Motorcycle Co., Ltd.
Statement of Changes in Owners' Equity
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Year 2015
Other equity instruments Spe
项 目 Other cial Total
Capital Less: treasury Surplus Undistribu
Share capital Preferre Perpetual Other comprehensive res owners'
reserves stock reserves ted profits
d shares bond s income erv equity
es
-1,016,973,3 186,662,751.
Ⅰ.Balance as at December 31 of last year 119,375,000.00 958,565,294.29 9,800.00 125,686,000.00
43.17 12
Plus: adjustments for changes in accounting
policies
Adjustments for correction of accounting
errors in prior year
Others
Ⅱ. Balance as at January 1 of the current -1,016,973,3 186,662,751.
119,375,000.00 958,565,294.29 9,800.00 125,686,000.00
year 43.17 12
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 of
other equity instruments
Financial Statements Page 16
(3)Amount of the share-based payment
included in the owners' equity
(4)Others
3.Distribution of profits
(1)Withdrawal of surplus reserves
(2)Distribution to owners or shareholders
(3)Others
4.Internal carry-forward of owners' equity
(1)Conversion of capital reserves into
paid-in capital
(2)Conversion of surplus reserves into
paid-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
-1,015,153,2 188,482,825.
Ⅳ. Ending balance of the current year 119,375,000.00 958,565,294.29 9,800.00 125,686,000.00
68.99 30
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Chongqing Jianshe Motorcycle Co., Ltd.
Statement of Changes in Owners' Equity (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2015
(Expressed in Renminbi unless otherwise stated)
Year 2014
Item
Share Other equity instruments Capital Less: Other Special Surplus Undistributed Total owners'
Financial Statements Page 17
capital reserves treasury comprehensive reserves reserves profits equity
stock income
Preferred Perpetual Oth
shares bond ers
119,375,0 958,565,294. 125,686,000.
Ⅰ.Balance as at December 31 of last year 9,800.00 -914,989,549.67 288,646,544.62
00.00 29 00
Plus: adjustments for changes in accounting
policies
Adjustments for correction of accounting
errors in prior year
Others
119,375,0 958,565,294. 125,686,000.
Ⅱ. Balance as at January 1 of the current year 9,800.00 -914,989,549.67 288,636,744.62
00.00 29 00
Ⅲ.Increase/(decrease) for the current year ("-"
-101,983,793.50 -101,983,793.50
for losses)
1.Total comprehensive incomes -101,983,793.50 -101,983,793.50
2.Capital contributed or reduced by owners
(1)Common shares from shareholders
(2)Investment capital from the holders of other
equity instruments
(3)Amount of the share-based payment
included in the owners' equity
(4)Others
3.Distribution of profits
(1)Withdrawal of surplus reserves
(2)Distribution to owners or shareholders
(3)Others
4.Internal carry-forward of owners' equity
(1)Conversion of capital reserves into paid-in
capital
(2)Conversion of surplus reserves into paid-in
capital
(3)Surplus reserves offsetting losses
(4)Others
Financial Statements Page 18
5.Special reserves
(1)Amount withdrawn in the current year
(2)Amount used in the current year
6.Others
119,375,0 958,565,294. 125,686,000. -1,016,973,343.1
Ⅳ. Ending balance of the current year 9,800.00 186,662,751.12
00.00 29 00 7
Legal Representative of Enterprise: Accounting Principal: Accounting Firm's Principal:
Financial Statements Page 19
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2015
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2015
(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 Legal Person of the Company: No. 500000400001350. The Company was listed in July
1995 at the Shenzhen Stock Exchange. The Company is engaged in the manufacturing industry.
As at December 31, 2015, the Company issued 119,375,000 shares in total and had the registered
capital of 119,375,000. The registration place: NO.1, JIANSHE ROAD HUAXI INDUSTRY
PARK, BANAN DISTRICT, CHONGQING; the headquarters address: Banan District,
Chongqing Municipality. Legal representative: Li Huaguang. The main business activities:
research and development, processing, manufacturing and related technical services of
Motorcycles, auto parts, accessories, machinery products, design , manufacturing and related
technical services of tooling (except for those subject to national special provisions) ; R & D,
production and sales of motorcycle engines; research , development and processing of
mechanical and electrical products, home appliances, bicycles, environmental protection product;
imports, wholesale, retail, commission agency (except auction) of similar products of these
products. The parent company and the actual controller of the Company is China South Industries
Group Corporation, and the ultimate controller of the Company is the State-owned Assets
Supervision and Administration Commission (SASAC).
The Company which is formerly known as "Shenzhen North Jianshe Motorcycle Co., Ltd." and
set up jointly by Construction Industry (Group ) Co., Ltd. (hereinafter referred to as the
"Construction Group") and China North Industries Shenzhen Co., Ltd. was renamed "Chongqing
Jianshe Motorcycle Co., Ltd.", according to the resolution adopted at the extraordinary
shareholders' meeting on March 30, 2002, which was registered with the industrial and
commercial administration on March 11, 2003, with the business license for enterprise legal
person of which the registration No. 5000001805583 obtained from Chongqing Industrial and
Notes to the Financial Statements Page 1
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2015
Commercial Administration.
Construction Group and China South Industries Group Corporation (hereinafter referred to as the
"South Group" ) signed the "Equity Transfer Agreement" on December 3, 2004 and the
"supplementary agreement on Equity Transfer" on January 22, 2005, for transfer of 339,625,000
shares of state-owned legal person to the South Group, as approved by SASAC under the State
Council on March 9, 2005 and by China Securities Regulatory Commission exempting the tender
offer obligation of South Group in May 2005.
In September 2005, the Company was changed to foreign-invested joint stock company from the
domestic joint stock company, according to the approval of WZSZ [2005] No. 0628 of the
Ministry of Commerce of the People's Republic of China; the Company went through the
alternation formalities with the industrial and commercial administration and obtained the
business license for enterprise legal person of which the registration No. is 500000400001350 in
August 2007; the registration place is Chongqing Municipality and the registered capital is
RMB477,500,000.
In April 2007, according to the (2006) SZFMEZ No. 21-4 civil ruling by Shenzhen Intermediate
People's Court of Guangdong Province, 17,875,000 shares of state-owned legal person of the
Company, which had been held by China North Industries Shenzhen Corporation, should be
owned by the buyers Yangpu Xinyufeng investment Co., Ltd. Feng Yonghui and Gu Zuocheng, of
which 7 million shares should be held by Yangpu Xinyufeng investment Co., Ltd. 2 million shares
by Feng Yonghui and 8,875,000 shares by Gu Zuocheng.
In 2012, Yangpu Xinyufeng Investment Co., Ltd. transferred 7 million shares of the Company it
had then to Anhui Hengsheng Economic Development Group Co., Ltd.
In September 2013, according to the resolutions of the shareholders' meeting and the revised
Articles of Association and under the Reply of Foreign Trade and Economic Commission of
Chongqing Municipality on Approval for the Reduction of Registered Capital of Chongqing
Jianshen Motorcycle Co., Ltd. (YWJMH [2013] No. 219) and Reply of China South Industrial
Group Co., Ltd. on Issues Concerning the Stock Shrinkage by Chongqing Jianshen Motorcycle
Co., Ltd. (BZZ[2013] No. 60), the Company carried out the stock shrinkage at a ratio of 4: 1 to
reduce the total share capital to 119,375,000 shares from 477,500,000 shares and to reduce the
Notes to the Financial Statements Page 2
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2015
registered capital to RMB119,375,000 from RMB477,500,000, which alternation was registered
with the industrial and commercial administration, with the business license for enterprise legal
person of which the registration No. is 500000400001350 obtained from the Industrial and
Commercial Administration of Chongqing Municipality.
In July 2015, the company started to transfer the motorcycle business to the original controlling
shareholder CSGS, restructuring plan is as follows:
1, August 26, 2015, approved by the 7th meeting of 7th board of dirctors, the company involved in
motorcycle business assets and liabilities as of June 30, 2015 net assessment set up wholly owned
subsidiary of chongqing construction mechanical and electrical co., LTD. (hereinafter referred to
as the "construction of mechanical and electrical), as a set of assets operation main body;
2 after establishing the construction mechanical and electrical, chongqin construction motorcycle
based onAugust 31, 2015, revaluated 100% equity of chongqing construction mechanical and
electrical (refered as construction mechanic and electrical), and transfer to the CSGS, to complete
the set out of the motorcycle business;
3, China South Industries Group Corporation will hold 71.13% equity of company, corresponding
to 84,906,250 state-owned legal person shares free transfer to chongqin construction machinical
and electrical co.
after the restructuring, the shareholder changes to 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.
After the reconstruction, the main business of company changes, gradually withdraw from the
motorcycle and accessories business, and shift to automotive air conditioning compressor and
other auto accessories business;
Company mainly buy assets: chongqing construction motor spin off the motorcycle business
related major assets, liabilities, personnel, technology, etc.; wholly owned subsidiary of
chongqing north construction import and export trade co., LTD., chongqing motorcycle sales co.,
LTD., chongqing construction distribution co., LTD. 100% stake in; The joint venture company of
Notes to the Financial Statements Page 3
CHONGQING JIANSHE MOTORCYCLE CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2015
chongqing construction, yamaha motorcycle co., LTD of 50% stake, zhuzhou construction
yamaha motorcycle co., LTD. 50% stake in; Associated companies in chongqing construction of
tong sheng industrial co., LTD. 30% stake, chongqing south vehicle technology co., LTD.
23.5294% stake.
The main reserve asset: subsidiary of chongqing construction vehicle air conditioner co., LTD.
100% stake in the motorcycle co., LTD. 51% stake in Shanghai construction; The joint venture
company chongqing hirayama Thai kay carburetor co., LTD. 49% stake.
As of December 31, 2015, the significant sale of assets has been authorized and approvaled. the
mainly underlying assets involved the delivery has been completed. The company needs to
continue to cooperate to complete finance transfer of follow-up matters.
On December 10, 2015, the company controlling shareholder., China South Industries Group
Corporation and chongqing construction mechanical and electrical co.(hereinafter referred to
"construction of mechanical and electrical") signed the shares transfer agreement and free of
charge, CSGC transfer its 71.13% of state-owned legal person share, which corresponding
84,906,250 shares for construction of mechanical and electrical for free. The transction was
approved by the state council, transfer of Chongqing construction mechanical and electrical co’s stake> (PRA[2015] No.1324) on December 25, 2015. On January 26, 2016, the China securities regulatory commission < approval exemption from chongqing construction mechanical and electrical co., LTD offer the acquisition for chongqing motorcycle co., LTD. >(regulatory permission [2016] no.160.), to Approval the exemption the obligation of making a takeover bid for construction mechanical and electrical with the state-owned assets administrative transfer shares held by the company On March 4, 2016, the company received the securities transfer registration confirmation, which issued by the China securities depository and clearing co., LTD. Shenzhen branch. The procedures have been completed on March 2, 2016 in China securities registration and clearing co., LTD. Shenzhen branch. The disclosure of the financial statements was approved by the Board of Directors on April 27,2016. 1.2 Scope of the consolidated financial statements Notes to the Financial Statements Page 4 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 As at December 31, 2015, the subsidiaries included in the scope of consolidated financial statements of the Company are presented as set out below: Name of the subsidiary Shanghai Jianshe Motorcycle Co., Ltd. CHONGQING JIANSHE MOTORCYCLE DISTRIBUTION CO.,LTD. See "Note 6 Change in the scope of consolidation" and "Note 7 Interests 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 (as amended in 2010) 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 3.31 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 Notes to the Financial Statements Page 5 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the Company’s financial position, operating results and cash flows, etc. for the reporting period. 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 Notes to the Financial Statements Page 6 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 for issuance of equity securities for business combination offest the equities. 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 Notes to the Financial Statements Page 7 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 minority shareholders of the subsidiary exceed the owners' equities attributable to the same at the period beginning, the difference between them will offset the minority equity. (1) Increase of the subsidiary or business In case of increase of subsidiary or business as a result of combination of enterprises under common control during the reporting period, the beginning amount stated in the consolidated balance sheet will be adjusted; the income, expense and profit generated from the subsidiary or business from the beginning of the period of combination to the end of reporting period will be included in the consolidated statement of cash flows, with the adjustment made to the relevant items of the comparative statement, as if the reporting entity after the combination still existed from the beginning of control of the ultimate controller. Where the additional investment or other reason leads to the control over the investee under the common control, all entities considered to take a part in the combination will be adjusted to the extent that they are in the current status as they come to be under the control of the ultimate controller. The retained earnings or the current profit or loss at the period beginning during the statement period are offset by equity investment held before the control over the mergee is obtained, and the equity investments held before the control over the acquiree is obtained, and the related profit or loss, other comprehensive income and change in other net assets that are recognized during the period which starts on the later of the date when the original equities are obtained and the date when both merger and mergee are under the common control and ends on the combination date, respectively. In case of increase of subsidiary or business during the reporting period as a result of combination of enterprises not under the common control, the beginning amount stated in the consolidated balance sheet will not be adjusted; the income, expense and profit generated from such subsidiary or business from the acquisition date to the end of reporting period will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the acquisition date to the end of reporting period will be incldued in the consolidated statement of cash flows. Where the additional investment or other reason leads to the control over the investee not under the common control, the equities of the mergee held before the acquisition Notes to the Financial Statements Page 8 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 date will be remeasured at the fair value of such equities on the acquisition date, and the difference between the fair value and book value thereof will be charged to the current investment income. Where the equities of the acquiree held before the acquisition date involves the change in other comprehensive income or in other owners' equities other than the net profit or loss, other comprehensive income and profit distribution, the change in other comprehensive income or other owners' equities will be converted into tthe investment income for the period covering the acquisition date, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee. (2) Disposal of the subsidiary or business a. General method of treatment In case of treatment of subsidiary or business during the reporting, the the income, expense and profit generated from such subsidiary or business from the period beginning to the disposal date will be included in the consolidated income statement; and the cash flow generated from such subsidiary or business from the period beginning to the disposal date will be incldued in the consolidated statement of cash flows. Where the control over the investee is lost due to the disposal of some of equity investments or other reasons, the remaining equity investment after disposal will be re-measured at fair value on the day when the control is lost.The sum of the consideration received for disposal of equities and the fair value of the remaining equities, less the difference between the net assets of the former subsidiary of which the continuous calculation starts from the acquisition date or combination date and the goodwill, should be charged to the investment income for the period during which the control is lost.Changes in other comprehensive income related to the equity investment in the former subsidiary or in owners' equities other than the net profit or loss, other comprehensive income and profit distribution are converted into the current investment income upon the loss of control, except for the other comprehensive income arising from the change on remeasurement of the net liabilities or net assets under the defined benefit plan by the investee. b. Disposal of subsidiary by stages Notes to the Financial Statements Page 9 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 In case of disposal of investment in the equity of subsidiary by stages through a number of transactions, such transactions will be treated as a package deal, provided that the terms and conditions on and the economic effect of the equity investment in the subsidiary meet one of more of the following conditions: ⅰ. These transactions are entered into considering their effects are considered; ⅱ. These transactions can lead to a complete business result as a whole; ⅲ. The occurrence of a transaction depends on the occurrence of at least one of others; and ⅳ. A single transaction is deemed uneconomical, but the economical efficiency can be seen when it is put together with other transactions; Where the transctions involved in the disposal of the equity investment in the subsidiary are package deals, the Company will treat each transaction as the one involved in the disposal of the subsidiary with loss of control; however, the difference between the consideration for each disposal before the loss of control and the net assets of such subsidiary corresponding to the disposal of investment will be recognized as other comprehensive income in the consolidated financial statements, and will be transferred to the loss or profit for the period during which the control is lost, upon the loss of control. Where the transctions involved in the disposal of the equity investment in the subsidiary are not package deals, these transactions will be treated according to the policies on the disposal of part of the equity investments in the subsidiary without loss of control, before the loss of control; or treated in the general treatment method of disposa of subsidiary, upon the loss of control. (3) Acquisition of minority equity of subsidiary The stock premium under the capital reserve in the consolidated balance sheet is adjusted at the difference between the long-term equity investment newly acquired as a result of acquisition of minority equity and the net assets of the subsidiary attributable to the Company, of which the continuous calculation starts from the acquisition date (or Notes to the Financial Statements Page 10 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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. See "Note 3.14 Long-term equity investments" for detailed of accounting policies on the Notes to the Financial Statements Page 11 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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, the owners’ equity items shall be converted at the spot exchange rates on the occurrence date.The income and expense items in the income statement shall be converted at the spot exchange rates which are determined by systematic and reasonable methods and similar to the spot exchange rate on the date of occurrence of transaction. On disposal of a foreign operation, the difference arising from the converstion of financial statements denominated in foreign currency and related to such foreign operation should be transferred to the current gain or loss on disposal, from the owners' equities. 3.10 Financial instruments Notes to the Financial Statements Page 12 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 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 Notes to the Financial Statements Page 13 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 unchanged during the expected remaining period, or a shorter period if applicable. Difference between the proceeds and the book value of the investment is recognized as investment income upon disposal. (3) Accounts receivable For creditor’s rights receivable arising from external selling commodities or providing service by the Company and other creditor's rights in respect of liability instruments of other enterprises (excluding those quoted in an active market) held by the Company, including accounts receivable, other receivables, notes receivables, prepayments, long-term receivables etc., the initial recognition amount shall be the contract price or agreed price receivable due from purchasing party. The initial amount of the accounts receivable with financing nature are recognized based on the present value. The difference between the amount obtained and the book value of the accounts receivable is included in current profit and loss upon recovery or disposal. (4) Available-for-sale financial assets Available-for-sale financial assets are initially recorded at the sum of fair values (deducting cash dividends that have been declared but not distributed and bond interests that have matured but not been drawn) and transaction costs when acquired. The interests or cash dividends to be received during the holding period are recognized as investment income. Available-for-sale financial assets are measured at fair value at the end of the period, and changes in fair value are included in the capital reserves (other capital reserves). those equity instrument investments not quoted in an active market and whose fair value cannot be reliably measured, and the derivative financial assets linked to and settled by way of delivery of such equity investments are measured at the cost. Difference between the proceeds and the book value of the financial assets is recognized as gain or loss on investment upon disposal; meanwhile, amount of disposal corresponding to the accumulated change in fair value which is originally and directly included in the owners’ equity shall be transferred out and charged to the current gains Notes to the Financial Statements Page 14 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 original owners’ equity (involving the case when the transferred financial assets are those available for sale). As for the partial financial assets transfer which are eligible for derecognition, the whole book value of the transferred financial assets should be apportioned in accordance with their respective relative fair value between the derecognized parts and the recognized parts; and the difference between the following two amounts is recognized in the current profit and loss: (i) book value of the derecognized parts; Notes to the Financial Statements Page 15 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 ii) sum of the consideration received from the derecognized parts with the amount of the derecognized parts corresponding to the cumulative changes in the amount of fair value directly included in the original owners’ equity (involving the case when the transferred financial assets are those available for sale). If the transfer of financial assets does not satisfy requirements for derecognition, the financial assets shall continue to be recognized, and the consideration received will be recognized as financial liabilities. 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 new financial liabilities it assumed), shall be included in current profit and loss. Notes to the Financial Statements Page 16 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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. (2) Provision for impairment of held-to- maturity investments: Measurement of provisions for impairment loss on held-to-maturity investments is Notes to the Financial Statements Page 17 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 Over 5 years (including 5 years) 100 100 Notes to the Financial Statements Page 18 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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, revolving 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 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 Notes to the Financial Statements Page 19 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 resolution, such as the need to obtain the required shareholder approval, has the approval of the shareholders' meeting or the appropriate authority; Notes to the Financial Statements Page 20 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 (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 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 Notes to the Financial Statements Page 21 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 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 Notes to the Financial Statements Page 22 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 the Company and its associates or joint ventures, which constitutes business, are treated Notes to the Financial Statements Page 23 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 according to the policies disclosed in "Note 3.5 Accounting Treatment of Combination of enterprises under common control and enterprises not under common control" and "Note 3.6 Preparation of consolidated financial statements". When the Company confirms that it should share losses of the investee, treatment shall be done in following sequence: Firstly, the book value of the long-term equity investment shall be reduced. Secondly, where the book value is insufficient to cover the share of losses, investment losses are recognized to the extent of book value of other long-term equity which form net investment in the investee in substance and the book value of long term receivables shall be reduced. finally, after all the above treatments, if the Company is still responsible for any additional liabilities in accordance with the provisions stipulated in the investment contracts or agreements, estimated liabilities are recognized and included into current investment loss according to the obligations estimated to undertake. (3) Disposal of long-term equity investment Upon disposal, the difference between the book value and the price obtained is recognized in current profit and loss. Disposal of long-term equity investments accounted for under the equity method, which is previously charged to other comprehensive income is treated in proportion on the same basis for direct disposal of relevant assets of liabilities by the investee. Owner's equities recognized arising from change in other owners' equities other than net gain or loss, other comprehensive income and profit distribution of the investee are carried forward to the current profit or loss in proportion, except for the other comprehensive income arising from the change on re-measurement of the net liabilities or net assets under the defined benefit plan by the investee. In case of loss of common control over or material impact on the investee due to the disposal of part of the equity investments, the remaining equity after the disposal are computed according to the principles for recognition and measurement of financial instruments, and the difference between the fair value and book value on the day of loss of common control or material impact is charged to the current profit or loss. For other comprehensive income that is recognized from original equity investment by using the equity method, the accounting treatment will be made on the basis the same as that for Notes to the Financial Statements Page 24 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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). The Company adopts cost model to measure all current investment properties. The Company Notes to the Financial Statements Page 25 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 adopts the same depreciation policy for the investment property measured at cost model building for renting as that for the Company’s fixed assets and the same amortization policy of land use right for renting as that for the Company’s intangible assets. 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 Machinery equipment 7-15 3 6.47-13.86 Notes to the Financial Statements Page 26 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 the asset’s fair value or the present value of the minimum lease payment, whichever is the lower. The minimum lease payment is recorded as the book-entry value of the long-term payables, and the difference between them is deemed as the unrecognized financing expenses. 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 needed for the completion of projects, the estimated values should be substituted by actual costs, Notes to the Financial Statements Page 27 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 intended use or sale, the capitalization of the borrowing costs shall be ceased. Notes to the Financial Statements Page 28 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 borrowings. Notes to the Financial Statements Page 29 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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. 3.19.2 Estimate of the useful life of the Intangible assets with finite useful lives: Notes to the Financial Statements Page 30 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 of a market for products produced by the intangible assets or for the intangible assets Notes to the Financial Statements Page 31 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 The Company will conduct the impairment test if any evidence suggests that the long assets, such Notes to the Financial Statements Page 32 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 impairment test is conducted at the year-end. The Company conducts an impairment test for the goodwill. The book value of goodwill arising from business combinations is amortized to relevant asset groups with a reasonable method since the date of acquisition; or amortized to relevant combination of asset groups if it is difficult to be amortized to relevant asset groups. The book value of goodwill is amortized to relevant asset groups or combinations of asset groups according to the proportion of the fair value of such asset groups or combinations of asset groups in the total fair value of relevant asset groups or combinations of asset groups. Where the fair value cannot be reliably measured, it should be amortized according to proportion of the book value of each asset group or combination of asset group in the total book value of relevant asset groups or combinations of asset groups. When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if any indication shows that the asset groups or combinations of asset groups related to the goodwill may be impaired, the Company shall first conduct an impairment test on the asset groups or combinations of asset groups not containing goodwill, calculate the recoverable amount and compare it with the relevant book value to recognize the corresponding impairment loss. Then the Company shall conduct an impairment test on the asset groups or combinations of asset groups containing goodwill, and compare the book value of these asset groups or combinations of asset groups (including the book value of the goodwill apportioned thereto) with the recoverable amount. Where the recoverable amount of the relevant asset groups or combinations of asset groups is lower than the book value thereof, the Company shall recognize the impairment loss of the goodwill. Notes to the Financial Statements Page 33 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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. In addition to the basic endowment insurance, the Company also build the enterprise annuity payment system (supplementary pension insurance) in accordance with relevant Notes to the Financial Statements Page 34 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 national policies established a pension payment system / corporate pension plans. 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. See "Note 5.22 Employee compensation payable" for details. 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. Notes to the Financial Statements Page 35 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 The best estimates shall be treated as follows in different circumstances: If there is continuous range (or interval) for the necessary expenses, and probabilities of occurrence of all the outcomes within this range are equal, the best estimate shall be determined at the average amount of upper and lower limits within the range. Given the fact that there is no continuous range (or interval) for the necessary expenses, or probabilities of occurrence of all the outcomes within this range are unequal despite such a range exists, in case that the contingency involves a single item, the best estimate shall be determined at the most likely outcome; if the contingency involves two or more items, the best estimate should be determined according to all the possible outcomes with their relevant probabilities. When all or part of the expenses necessary for the settlement of an estimated liabilities are expected to be compensated by a third party or other parties, the compensation shall be separately recognized as an asset only when it is virtually certain that the compensation will be received. The amount recognized for the compensation shall not exceed the book value of the estimated liabilities. 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 other parties]. 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 Notes to the Financial Statements Page 36 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 for subscription of restricted shares from the employees, it shall recognize the share capital and capital reserves (share capital premiums) according to the payments for subscription received, and recognize a liability and treasury shares with respect to the repurchase obligation. On every balance sheet date during the waiting period, the Company estimates the quantity of the exercisable equity instruments in light of the latest subsequent information, such as the change in the number of employees obtaining the exercisable equity instrument or whether the specified performance requirements are met, based on which the services obtained in the current period are charge to the relevant costs or expenses at the fair value on the grant date, with the capital reserves added correspondingly. Those payments which are exercisable immediately after the grant are charged to the relevant costs or expenses, with the capital reserves added correspondingly. After the vesting date, the recognized relevant costs or expenses or total amount of owners' equity shall not be adjusted any more. No cost or expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is recognized as if the terms had not been modified. In addition, an expense is recognized for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled share-based payment is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during the pending period, equity-settled share-based payments are deemed cancelled. However, if a new equity instrument is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the new equity instrument are treated as if they were a modification of the original award. Notes to the Financial Statements Page 37 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 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 (1) Sales of complete vehicles: the operation management department of the Sale Notes to the Financial Statements Page 38 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Company shall research and review the "saved" orders submitted by the dealers; after an approval upon review, the finance department shall, in accordance with the lines of credit of customers, check the situation regarding collection of payments and conduct a financial audit on these orders; the warehousing department shall issue an ex-warehouse list according to the recognized orders, which will be marked with the words "Delivered"; then, a delivery people of the third party, i.e. a transport company shall sign the ex-warehouse list, upload the goods and transport them; After the acceptance by the customers upon check, the ex-warehousing list shall be signed for confirmation. According to the information relating to the sales orders indicating that the relevant goods "have been delivered", the finance department shall check the ex-warehouse list signed by the delivery person on behalf of his or her transport company with the corresponding sales contract that no error has been committed; subsequently, it shall recognize that the major risks and rewards relating to the goods' properties have been transferred to the buyer and then issue a sales invoice as well as recognize the sales revenues; (2) Sales of engines: at the beginning of every year, the Company enters into a sales contract including the terms relating to basic unit price with the customers; the method of delivery after payment is adopted for the sales of engines; the goods shall be arranged to be delivered after the payments for goods are paid up as stipulated by the orders, a sales invoice shall be issued when the goods are delivered and the revenues from sales are recognized. (3) Sales of automobile air-conditioner: the Air-conditioner Company deliveries goods according to the customers' production plans and safty stock; after the customers use the products, the salesmen issue a notification of making out an invoice according to the customers' monthly usage amounts and contracted prices, the finance department issues an invoice and the revenues from sales shall be recognized. 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. Notes to the Financial Statements Page 39 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 the Company’s relevant expenses or losses in future periods, such government subsidies should be recognized as deferred income on acquisition and be included into the current non-operating income in the period of recognizing relevant expenses; if government subsidies related to income are used to compensate the enterprise’s relevant expenses or losses incurred, such government subsidies are directly included into the current non-operating income on acquisition. 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. 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. Notes to the Financial Statements Page 40 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 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. Notes to the Financial Statements Page 41 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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 (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 There is no major change in accounting policies in the Company for the current year Notes to the Financial Statements Page 42 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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% 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 5% 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% Chongqing Jianshe Sales Co., Ltd. 25% Chongqing Jianshe Motorcycle Sales Co., Ltd. 25% Chongqing Beifang Jianshe Import and Export T 25% Shanghai Jianshe Motorcycle Co., Ltd. 15% Chongqing Jianshe Automobile A/C Co., Ltd. 15% 4.2 Preferential tax treatment Chongqing Jianshe Automobile A/C Co., Ltd., a subsidiary of the Company, is subject to the enterprise income tax rate of 15% in 2015, 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 Notes to the Financial Statements Page 43 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Taxation [2012] No.12). The Company and other subsidiaries pay the enterprise income tax at a tax rate of 25%. 5. Notes to the items of consolidated financial statements 5.1 Cash and cash equivalents Balance as at Balance as at Item December 31, 2015 January 1, 2015 Cash on hand 70,909.87 116,629.79 Bank deposits 2,352,605.94 35,438,955.27 Other cash and cash equivalents 279,017,242.95 157,362,464.22 Total 302,660,758.76 192,918,049.28 Including: the details on restricted cash and cash equivalents due to mortgage, pledge or freezing are as follows: Balance as at Balance as at Item December 31, 2015 January 1, 2015 Bank acceptance bills margin 189,017,242.95 157,344,806.52 L/C deposit 17,657.70 guarantee deposit and notice deposit 90,000,000.00 Total 279,017,242.95 157,362,464.22 5.2 Notes receivable 5.2.1 Presentation of notes receivable by category Balance as at Balance as at January Item December 31, 2015 1, 2015 Bank acceptance bill 47,008,704.63 45,673,753.36 Commercial acceptance bill Total 47,008,704.63 45,673,753.36 5.2.2 Notes receivable endorsed or discounted by the Company as at December 31, 2015 and not yet due on the balance sheet date Item Amount derecognized Amount not Notes to the Financial Statements Page 44 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 as at December 31, derecognized as at 2015 December 31, 2015 Bank acceptance bill 479,771,276.52 Commercial acceptance bill 11,072,000.00 Total 490,843,276.52 Notes to the Financial Statements Page 45 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Notes to the Financial Statements Page 46 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 5.3 Accounts receivable 5.3.1 Disclosure of accounts receivable by category Balance as at December 31, 2015 Balance as at January 1, 201 Book balance Provision for bad debts Book balance Provision for bad debts Category Proportion Proportion Proportion of Book value Proportion Book value Amount Amount Amount Amount of provision (%) provision (%) (%) (%) Accounts receivable with significant single amount and provision for bad debt made on an individual basis Accounts receivable with provision for bad debt made on a portfolio with similar risk 232,282,147.28 100 14,522,938.85 6.25 217,759,208.43 274,568,553.53 99.94 19,554,863.81 7.12 255,013,689.72 credit characteristics basis Accounts receivables with insignificant single amount and provision for bad debt 152,490.30 0.06 152,490.30 100.00 made on an individual basis Total 232,282,147.28 100.00 14,522,938.85 6.25 217,759,208.43 274,721,043.83 100.00 19,707,354.11 7.17 255,013,689.72 Accounts receivable with provision for bad debts made using the aging analysis method among those portfolios: Balance as at December 31, 2015 Aging Accounts receivable Provision for bad debts Proportion of provision (%) 1-6 months (including 6 months) 198,382,033.71 Notes to the Financial Statements Page 47 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 6-12 months 11,571,273.11 578,563.66 5.00 1-2 years (including 1 year) 6,337,257.09 633,725.71 10.00 2-3 years (including 2 years) 131,483.50 39,445.05 30.00 3-4 years (including 3 years) 419,467.54 209,733.77 50.00 4 - 5 years (including 4 years) 11,895,808.36 9,516,646.69 80.00 Over 5 years (including 5 years) 3,544,823.97 3,544,823.97 100.00 Total 232,282,147.28 14,522,938.85 5.3.2 Provision for bad debts provided in the current year The provision for bad debts provided in the current year amounts to RMB4,208,805.49. 5.3.3 Information on the top five accounts receivable by the debit balance as at December 31, 2015 The top five accounts receivable by the credit balance as at December 31, 2015 total RMB131,731,537.15, accounting for 56.71% of total amount of balance as at December 31, 2015 of accounts receivable, and the balance as at December 31, 2015 of provision for bad debts provided correspondingly totals RMB9,001,920.40.. 5.4 Advances to suppliers 5.4.1 Presentation of advances to suppliers by aging Balance as at December 31, 2015 Balance as at January 1, 2015 Aging Book balance Proportion (%) Book balance Proportion (%) Notes to the Financial Statements Page 48 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Within 1 year 8,251,935.87 88.64 19,066,002.02 82.25 1-2 years 1,041,281.19 11.18 1,950,850.06 8.42 2-3 years 8,039.80 0.09 283,268.49 1.22 Over 3 years 8,370.00 0.09 1,881,772.43 8.11 Total 9,309,626.86 100.00 23,181,893.00 100.00 5.4.2 Information on the top five advances to suppliers by the credit balance as at December 31, 2015 The top five advances to suppliers by the debit balance as at December 31, 2015 total RMB7,800,788.83, accounting for 83.79% of total amount of balance as at December 31, 2015 of advances to suppliers. 5.5 Dividends receivable Balance as at January Balance as at December Investee Increase in 2015 Decrease in 2015 1, 2015 31, 2015 Chongqing Jianshe Yamaha Motor Co., Ltd. 15,000,000.00 15,000,000.00 Zhuzhou Jianshe Yamaha Motor., Ltd. 17,500,000.00 17,500,000.00 Chongqing Pingshan TK Carburettor Co., Ltd. 1,960,000.00 1,960,000.00 Total 34,460,000.00 34,460,000.00 5.6 Other receivables 5.6.1 Disclosure of other receivables by category Category Balance as at December 31, 2015 Balance as at January 1, 2015 Notes to the Financial Statements Page 49 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Book balance Provision for bad debts Book balance Provision for bad debts Proportion Proportion of Book value Proportion Proportion of Book value Amount Amount Amount Amount (%) provision (%) (%) provision (%) Other receivables with significant single amount and provision for bad debt made on an individual basis Other receivables with provision for bad debt made on a portfolio with similar risk credit 262,146,013.26 99.85 4,336,368.84 1.65 257,809,644.42 20,645,642.63 46.08 5,026,701.67 24.35 15,618,940.96 characteristics basis Other receivables with insignificant single amount and provision for bad debt made on an 405,125.35 0.15 405,125.35 100.00 24,155,643.73 53.92 24,155,643.73 100.00 individual basis Total 262,551,138.61 100.00 4,741,494.19 1.81 257,809,644.42 44,801,286.36 100.00 29,182,345.40 65.14 15,618,940.96 Other receivables with provision for bad debts made using the aging analysis method among those portfolios: Balance as at December 31, 2015 Aging Other receivables Provision for bad debts Proportion of provision (%) 1-6 months (including 6 months) 256,197,854.43 6-12 months 1,680,000.00 84,000.00 5.00 1-2 years (including 1 year) 13,950.24 1,395.02 10.00 2-3 years (including 2 years) 3-4 years (including 3 years) Notes to the Financial Statements Page 50 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 4 - 5 years (including 4 years) 16,173.85 12,939.08 80.00 Over 5 years (including 5 years) 4,238,034.74 4,238,034.74 100.00 Total 262,146,013.26 4,336,368.84 5.6.2 Provision for bad debts provided in the current year RMB122,097.09 is provided for bad debts in the current year. 5.6.3 Other receivables classified by payment properties Property of account receivable Book balance as at December 31, 2015 Book balance as at January 1, 2015 Petty cash and borrowings with small amount 8,697,629.28 12,446,056.31 Margins and others 326,300.00 1,998,166.63 Fully provided provision for bad debts regarding long-term receivables and 4,218,034.74 28,805,277.94 payables Export rebates receivable 78,825.35 1,551,785.48 Other receivables from the related parties 249,230,349.24 Total 262,551,138.61 44,801,286.36 5.6.4 Information on the top five other receivables by the debit balance as at December 31, 2015 The top five other receivables by the credit balance as at December 31, 2015 total RMB253,265,677.28, accounting for 96.46% of total amount of balance as at December 31, 2015 of other receivables, and the balance as at December 31, 2015 of provision for bad debts provided correspondingly totals RMB4,035,328.04. Notes to the Financial Statements Page 51 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 5.7 Inventories 5.7.1 Classification of inventories Balance as at December 31, 2015 Balance as at January 1, 2015 Item Provision for inventory Provision for inventory Book balance Book value Book balance Book value impairment impairment Raw materials 59,287,827.35 4,618,914.59 54,668,912.76 79,968,561.48 4,618,914.59 75,349,646.89 Goods in progress 1,766,745.42 1,766,745.42 17,923,385.49 17,923,385.49 Finished goods 90,089,486.73 174,210.57 89,915,276.16 189,926,511.61 5,587,539.95 184,338,971.66 Total 151,144,059.50 4,793,125.16 146,350,934.34 287,818,458.58 10,206,454.54 277,612,004.04 5.7.2 Inventory provision Increase in 2015 Decrease in 2015 Balance as at January Balance as at Item Reversal or 1, 2015 Provision Others Others December 31, 2015 write-off Raw materials 4,618,914.59 4,618,914.59 Finished goods 5,587,539.95 5,413,329.38 174,210.57 Total 10,206,454.54 5,413,329.38 4,793,125.16 5.8 Other current assets Notes to the Financial Statements Page 52 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Item Balance as at December 31, 2015 Balance as at January 1, 2015 Overpaid tax for offsetting the future tax payable 5,430,548.06 20,102,069.93 Total 5,430,548.06 20,102,069.93 5.9 Available-for-sale financial assets 5.9.1 Information on available-for-sale financial assets Balance as at December 31, 2015 Balance as at January 1, 2015 Item Provision for Provision for Book balance Book value Book balance Book value impairment impairment Available-for-sale debt instruments Available-for-sale equity instruments 1,140,915.04 1,140,915.04 4,340,915.04 4,340,915.04 Including: measured at fair value Measured at cost 1,140,915.04 1,140,915.04 4,340,915.04 4,340,915.04 Total 1,140,915.04 1,140,915.04 4,340,915.04 4,340,915.04 5.9.2 Available-for-sale financial assets measured at cost as at December 31, 2015 Book balance Provision for impairment Proportion of shareholding Cash dividends Investee Decrease in As at December As at January 1, Increase in Decrease in As at December As at January 1, 2015 Increase in 2015 in investee (%) in 2015 2015 31, 2015 2015 2015 2015 31, 2015 Ningbo Jianshe Motorcycle 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 51.00 Manufacturing Co., Ltd. Notes to the Financial Statements Page 53 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Total 1,140,915.04 1,140,915.04 1,140,915.04 1,140,915.04 5.10 Long-term equity investments Increase/decrease in 2015 (+/-) Balance as at Balance as at Addition Profits and losses Balance as at Provision for Other Declaration of December 31, Investee January 1, al Decrease in on investments Changes in December 31, impairment in comprehensive cash dividends or Others 2015 of provision 2015 investme investment recognized under other equity 2015 2015 income profits for impairment nt the equity method 1．Joint ventures Chongqing Jianshe Yamaha Motor., 309,977,710.14 -303,646,553.38 8,668,843.24 -15,000,000.00 Ltd. Zhuzhou Jianshe Yamaha Motor., 277,971,720.74 -262,113,642.64 1,641,921.90 -17,500,000.00 Ltd. Chongqing Pingshan TK 81,789,317.45 3,551,998.68 -1,960,000.00 83,381,316.13 Carburettor Co., Ltd. Sub-total 669,738,748.33 -565,760,196.02 13,862,763.82 -34,460,000.00 83,381,316.13 2．Associates Chongqing Tongsheng Machinery 404,439.97 -404,439.97 Co., Ltd. Chongqing Nanfang Motorcycle Technology Research and 15,909,949.17 -14,888,739.63 -1,021,209.54 Development Co., Ltd. Notes to the Financial Statements Page 54 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Investee Balance as at Increase/decrease in 2015 (+/-) Balance as at Provision for Balance as at January 1, December 31, impairment in December 31, Chongqing Fuyeda Property 56,991.30 -62,812.75 5,821.45 2015 2015 2015 2015 of provision Management Co., Ltd. for impairment Sub-total 16,371,380.44 -14,951,552.38 -1,419,828.06 Total 686,110,128.77 -580,711,748.40 12,442,935.76 -34,460,000.00 83,381,316.13 Remark: reduced investment of RMB580,711,748.40, is caused by the reorganization of setting out he motorcycle business‘s related shares Notes to the Financial Statements Page 55 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 5.11 Fixed assets 5.11.1 Information on fixed assets Buildings and Machinery Electronic and Item Vehicles Total constructions equipment office equipment 1．Original book value (1)Balance as at January 1, 2015 398,999,164.21 1,077,296,593.11 20,032,347.11 64,830,296.19 1,561,158,400.62 (2)Increase in 2015 8,673,232.62 35,153,096.35 227,822.48 3,518,183.66 47,572,335.11 - Acquisition 25,162,679.28 227,822.48 3,518,183.66 28,908,685.42 - Transfer-in from 8,673,232.62 9,990,417.07 18,663,649.69 construction in progress (3)Decrease in 2015 186,811,429.77 542,344,961.63 11,335,912.96 53,957,757.92 794,450,062.28 - Disposal or write-off 2,216,022.31 20,452,310.46 2,735,322.29 28,561,685.68 53,965,340.74 (4)Balance as at December 31, 184,595,407.46 521,892,651.17 8,600,590.67 25,396,072.24 740,484,721.54 2015 2．Accumulated depreciation (1)Balance as at January 1, 2015 76,146,821.40 704,759,248.67 13,767,433.01 50,554,204.54 845,227,707.62 (2)Increase in 2015 13,707,978.01 40,079,643.00 1,759,602.71 5,897,654.53 61,444,878.25 —Provision 13,707,978.01 40,079,643.00 1,759,602.71 5,897,654.53 61,444,878.25 (3)Decrease in 2015 38,633,209.35 394,583,558.91 8,538,065.06 46,612,084.37 488,366,917.69 - Disposal or write-off 112,284.31 19,472,381.39 2,846,223.94 23,928,621.13 46,359,510.77 (4)Balance as at December 31, 38,520,925.04 375,111,177.52 5,691,841.12 22,683,463.24 442,007,406.92 2015 3．Provision for impairment (1)Balance as at January 1, 2015 (2)Increase in 2015 (3)Decrease in 2015 (4)Balance as at December 31, 2015 4．Book value (1)Book value as at December 169,639,377.00 219,849,395.07 1,935,285.97 4,550,947.23 395,975,005.27 31, 2015 (2)Book value as at January 1, 322,852,342.81 372,537,344.44 6,264,914.10 14,276,091.65 715,930,693.00 2015 Notes to the Financial Statements Page 56 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 5.11.2 Information on the fixed assets without certificate of title Item Book value Reasons for absence of certificate of title The formalities are handled with the relevant Buildings and constructions 37,956,314.77 authorities 5.12 Construction in progress 5.12.1 Information on the construction in progress Balance as at December 31, 2015 Balance as at January 1, 2015 Item Provision for Provision for Book balance Book value Book balance Book value impairment impairment Replacement of 40,366,114.52 40,366,114.52 12,525,502.99 12,525,502.99 equipment Civil engineering 69,315.38 69,315.38 3,789,650.11 3,789,650.11 Total 40,435,429.90 40,435,429.90 16,315,153.10 16,315,153.10 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, 2015 2015 fund the current year 2015 2015 Capacity expansion of 12,525,502.99 40,385,005.72 12,544,394.19 40,366,114.52 Self-financed air-conditioner Anechoic chamber 3,222,650.11 2,188,913.07 5,411,563.18 Self-financed Decorative renovation engineering of office 866,153.86 707,692.32 158,461.54 Self-financed building Replacement of technical transformation of a small 567,000.00 567,000.00 Self-financed amount of equipment Others 69,315.38 69,315.38 Self-financed Total 16,315,153.10 43,509,388.03 18,663,649.69 725,461.54 40,435,429.90 5.13 Intangible assets 5.13.1 Information on intangible assets Item Land use right Non-patented Total Notes to the Financial Statements Page 57 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 technology 1. Original book value (1)Balance as at January 1, 2015 69,813,182.12 82,501,686.28 152,314,868.40 (2)Increase in 2015 - Internal R & D (3)Decrease in 2015 33,142,296.67 82,501,686.28 115,643,982.95 -Restructuring transfer 33,142,296.67 82,501,686.28 115,643,982.95 (4)Balance as at December 31, 2015 36,670,885.45 36,670,885.45 2．Accumulated amortization (1)Balance as at January 1, 2015 14,365,179.31 45,461,578.54 59,826,757.85 (2)Increase in 2015 2,003,792.92 16,198,990.87 18,202,783.79 —Provision 2,003,792.92 16,198,990.87 18,202,783.79 (3)Decrease in 2015 7,968,480.41 61,660,569.41 69,629,049.82 -Restructuring transfer 7,968,480.41 61,660,569.41 69,629,049.82 (4)Balance as at December 31, 2015 8,400,491.82 8,400,491.82 3．Provision for impairment (1)Balance as at January 1, 2015 (2)Increase in 2015 2,936,170.54 2,936,170.54 (3)Decrease in 2015 2,936,170.54 2,936,170.54 -Restructuring transfer 2,936,170.54 2,936,170.54 (4)Balance as at December 31, 2015 4．Book value (1)Book value as at December 31, 2015 28,270,393.63 28,270,393.63 (2)Book value as at January 1, 2015 55,448,002.81 37,040,107.74 92,488,110.55 5.14 Development expenditures Increase in 2015 Decrease in 2015 Balance as at Balance as at Internal Included in the Item Restructuring December 31, January 1, 2015 development current profit transfer 2015 expenditures and loss Development of motorcycle and engine 36,689,261.07 24,047,812.65 42,106,485.21 18,630,588.51 Expenditures at the research phase of 11,274,812.36 11,274,812.36 automobile air-condition Notes to the Financial Statements Page 58 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Total 36,689,261.07 33,342,603.05 42,106,485.21 29,905,400.87 5.15 Long-term deferred expenses Balance as at Balance as at Increase in Amortization Other decreases Item December 31, January 1, 2015 2015 in 2015 in 2015 2015 Grinding apparatus of 2,420,539.48 5,508,569.77 4,275,171.93 3,653,937.32 foundry Initial payment for aluminum machine of 4,728,907.20 1,383,409.99 3,345,497.21 model No. 83 Repair of fixed assets 567,000.00 66,150.00 500,850.00 Initial payment for aluminum machine of 651,687.85 71,093.21 580,594.64 model No. 96 Total 7,801,134.53 6,075,569.77 5,795,825.13 4,154,787.32 3,926,091.85 5.16 Deferred income tax assets 5.16.1 Deferred income tax assets before offset Balance as at December 31, 2015 Balance as at January 1, 2015 Item Deductible temporary Deferred income Deductible temporary Deferred income differences tax assets differences tax assets Provision for assets 12,130,956.41 1,819,643.46 18,601,562.30 3,756,129.12 impairment 5.16.2 Details of unrecognized deferred income tax assets Item Balance as at December 31, 2015 Balance as at January 1, 2015 Deductible temporary 44,835,506.79 13,067,516.83 differences Deductible losses 521,367,078.98 728,856,742.29 Total 534,434,595.81 773,692,249.08 5.16.3 Deductible losses of unrecognized deferred income tax assets shall be due in the following years: Notes to the Financial Statements Page 59 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Year Balance as at December 31, 2015 Balance as at January 1, 2015 2015 75,337,093.67 2016 192,548,500.65 238,350,758.67 2017 197,428,928.73 228,864,550.40 2018 25,332,418.05 41,946,481.17 2019 98,496,222.54 144,357,858.38 2020 7,561,009.01 Total 521,367,078.98 728,856,742.29 5.17 Other non-current assets Balance as at December 31, Balance as at January 1, Item 2015 2015 Debit balance of equity investment calculated under the original system of Shanghai Jianshe Motorcycle 10,478,525.70 Co., Ltd. Total 10,478,525.70 5.18 Short-term borrowings 5.18.1 Classification of short-term borrowings: Item Balance as at December 31, 2015 Balance as at January 1, 2015 Pledged borrowings Mortgaged borrowings 5,000,000.00 7,000,000.00 Guaranteed borrowings 187,000,000.00 202,500,000.00 Credit borrowings 25,000,000.00 594,000,000.00 Total 217,000,000.00 803,500,000.00 5.18.2 Mortgaged borrowings Loaner Borrowing balance Collateral Bank of The buildings and lands of Shanghai Jianshe 5,000,000.00 Communications Motorcycle Co., Ltd. Total 5,000,000.00 5.18.3 Guaranteed borrowings Notes to the Financial Statements Page 60 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Loaner Borrowing balance Guarantor Bank of Chongqing Jiulong Plaza Sub-branch 102,000,000.00 Chongqing Jianshe Motorcycle Co., Ltd. Bank of China Jiulongpo Sub-branch 50,000,000.00 Chongqing Jianshe Sales Co., Ltd. Chongqing Nanfang Motorcycle Co., Bank of Chongqing Jiulong Plaza Sub-branch 35,000,000.00 Ltd. Total 187,000,000.00 5.19 Notes payable Type Balance as at December 31, 2015 Balance as at January 1, 2015 Bank acceptance bill 760,555,000.00 560,011,000.00 Remark: The 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 RMB472.82 million among the balance of notes payable, Chongqing Jianshe Motorcycle Co., Ltd. bears the joint and several liability; as for RMB30 million, Chongqing Jianshe Sales Co., Ltd. bears the joint and several liability; RMB90.585 million was deposited in the bank by the company equal margin collateral on a regular basis. 5.20 Accounts payable 5.20.1 Presentation of accounts payable by aging Aging Balance as at December 31, 2015 Balance as at January 1, 2015 Within 1 year 58,162,616.22 563,631,342.79 1-2 years 10,752,626.36 14,034,496.75 2-3 years 3,048,897.69 2,111,843.11 Over 3 years 3,921,185.56 8,443,699.07 Total 75,885,325.83 588,221,381.72 5.21 Advances from customers 5.21.1 Presentation of advances from customers by aging Aging Balance as at December 31, 2015 Balance as at January 1, 2015 Within 1 year 1,178,699.81 11,368,226.96 1-2 years 76,766.60 7,839,586.41 2-3 years 20,950.10 253,066.67 Notes to the Financial Statements Page 61 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Over 3 years 124,903.46 422,755.91 Total 1,401,319.97 19,883,635.95 5.22 Employee compensation payable 5.22.1 Presentation of employee compensation payable Balance as at Increase in Balance as at Item Decrease in 2015 January 1, 2015 2015 December 31, 2015 Short-term compensation 2,973,757.01 142,692,041.26 144,153,756.20 1,512,042.07 Post-employment benefits - 94,978.79 20,723,048.49 20,675,571.41 142,455.87 defined contribution plans Dismissal welfare 10,435,989.70 10,435,989.70 Total 3,068,735.80 173,851,079.45 175,265,317.31 1,654,497.94 5.22.2 Presentation of short-term compensation Balance as at Increase in Decrease in Balance as at Item January 1, 2015 2015 2015 December 31, 2015 (1)Salary, bonus, allowance and 1,232,957.88 100,093,258.50 100,752,550.33 573,666.05 subsidy (2)Employee benefits 11,374,649.90 11,374,649.90 (3) Social insurance expenses 12,279,547.96 11,638,344.26 641,203.70 Including: medical insurance 10,842,591.48 10,203,942.36 638,649.12 premium Work-related injury insurance 880,036.48 878,277.24 1,759.24 premium Maternity insurance premium 556,920.00 556,124.66 795.34 (4) Housing fund 610,366.00 11,418,977.00 11,791,057.00 238,286.00 (5) Labor union expenditures and 1,130,433.13 5,488,933.50 6,576,600.31 42,766.32 employee education expenses (6) Short-term paid absences (7) short-term profit-sharing plan 2,036,674.40 2,020,554.40 16,120.00 Total 2,973,757.01 142,692,041.26 144,153,756.20 1,512,042.07 5.22.3 Presentation of defined contribution plans Notes to the Financial Statements Page 62 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Balance as at Increase in Decrease in Balance as at Item January 1, 2015 2015 2015 December 31, 2015 Basic endowment insurance 94,978.79 19,355,427.35 19,367,468.63 82,937.51 premium Unemployment insurance 1,367,621.14 1,308,102.78 59,518.36 premium Total 94,978.79 20,723,048.49 20,675,571.41 142,455.87 5.23 Taxes and surcharges payable Balance as at December 31, Balance as at January 1, Tax and surcharge items 2015 2015 Value-added tax (VAT) 86,828.08 620,026.67 Consumption tax 135,774,979.14 Business tax 444,503.71 69,450.72 Individual income tax 1,150,666.94 17,104.06 Urban maintenance and construction tax 3,297,977.21 12,961.77 Educational surtax 2,107,282.74 1,183.38 property tax 4,327,900.64 Land royalities 1,808,215.20 Other taxes and surcharges 3,634,268.37 8,962.39 Total 16,857,642.89 136,504,668.13 5.24 Other payables 5.24.1 Presentation of other payables by aging Balance as at December 31, Balance as at January 1, Aging 2015 2015 Within one year 13,157,054.05 11,701,119.07 1-2 years 557,016.70 2,889,698.32 2-3 years 1,500,583.22 5,859,335.86 Over 3 years 1,659,672.56 4,437,271.06 Total 16,874,326.53 24,887,424.31 5.24.2 Major other payables with aging of more than one year Notes to the Financial Statements Page 63 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Reasons for unsettlement or Item Balance as at December 31, 2015 carrying forward Ningbo Shenjiang Technology Joint Stock 1,000,000.00 Borrowing Limited Company 5.25 Non-current liabilities maturing within one year Balance as at December Balance as at January 1, Item 31, 2015 2015 Long-term borrowings maturing within one year 75,000,000.00 111,000,000.00 5.26 Long-term borrowings Item Balance as at December 31, 2015 Balance as at January 1, 2015 Pledged borrowings Mortgaged borrowings Guaranteed borrowings 114,000,000.00 Credit borrowings 128,490,000.00 7,000,000.00 Total 128,490,000.00 121,000,000.00 5.27 Estimated liabilities Balance as at December Balance as at Item Cause of formation 31, 2015 January 1, 2015 Pending litigation 3,226,654.00 Total 3,226,654.00 5.28 Share capital Increase ("+") /decrease ("-") for the current year Balance as at Balance as at Issuance Share Share converted Item January 1, December 31, of new donatio from public reserve Others Sub-total 2015 2015 shares n funds Total shares 119,375,000.00 119,375,000.00 Remark:on December 10, 2015, the company the original controlling shareholder China South Industries Group Corporation and chongqing construction mechanical and electrical Co. Let. Notes to the Financial Statements Page 64 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 (hereinafter referred to as the "construction of mechanical and electrical") signed the free transfer of shares agreement , CSGC transfers 71.13% equity, which is 84,906,250 state-owned legal-person shareholder shares, to construction of mechanical and electrical for free. These transfer was approved on December 25, 2015 by the state-owned assets supervision and administration commission of the state council, the reply of CSGC transfer the stake of construction of mechanical and electrical for free, ( APR [2015] no.1324). January 26, 2016, the China securities regulatory commission for approval exemption from the obligation of construction mechanical and electrical offer the acquisition of chongqing motorcycle co., LTD. "(regulatory permission [2016] no. 2016), the approval exemption construction mechanical and electrical for the state-owned assets administrative transfer shares held the company should be to perform its obligation of making a takeover bid. On March 4, 2016, the company received and clearing co., LTD. The transformation was completed on March 2, 2016 by Shenzhen branch of China securities registration and clearing co., LTD. The Construction of mechanical and electrical become the controlling shareholder of the company. 5.29 Capital reserve Balance as at Balance as at Decrease in Item January 1, Increase in 2015 December 31, 2015 2015 2015 Capital (or equity) premium 344,407,741.07 344,407,741.07 Other capital reserves 616,097,776.52 1,940,223.30 614,157,553.22 Total 960,505,517.59 1,940,223.30 958,565,294.29 remark: the current capital reserves reduced by RMB 1,940,223.30, which is caused by the company sales the mainly assets of related motorcyles business to CSGC ,then reduces the scope of the merger. 5.30 Other comprehensive income Item Balance as Year 2015 Balance as at Notes to the Financial Statements Page 65 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 at January Less: recognized December 31, 1, 2015 as other 2015 comprehensive Accrual before Attributable to income for Less: Attributable to income tax for owners of the previous years income tax minority the current parent 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 5.31 Surplus reserves Balance as at Increase in Decrease in Balance as at Item January 1, 2015 2015 2015 December 31, 2015 Statutory surplus reserves 56,724,000.00 56,724,000.00 Discretionary surplus reserves 68,962,000.00 68,962,000.00 Total 125,686,000.00 125,686,000.00 5.32 Retained earnings Item Year 2015 Year 2014 Adjustments to retained earnings as at December 31, 2014 -1,188,255,120.98 -1,054,661,171.00 Adjustments to total retained earnings as at January 1, 2015 ("+" for increases; "-" for decreases) Adjusted retained earnings as at January 1, 2015 -1,188,255,120.98 -1,054,661,171.00 Plus: net profit attributable to owners of parent company in -133,593,949.98 240,735,112.20 2013 Notes to the Financial Statements Page 66 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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, 2015 -947,520,008.78 -1,188,255,120.98 5.33 Operating income and operating costs Year 2015 Year 2014 Item Income Cost Income Cost Primary businesses 1,273,920,141.82 1,168,501,413.52 1,695,959,258.99 1,501,878,617.61 Other businesses 67,411,769.11 83,437,589.55 67,660,545.98 48,264,254.95 Total 1,341,331,910.93 1,251,939,003.07 1,763,619,804.97 1,550,142,872.56 Primary businesses (by product) Year 2015 Year 2014 Name of product Operating income Operating cost Operating income Operating cost Motorcycle and parts 522,989,115.46 574,538,540.53 968,500,508.27 902,888,238.86 Automobile air-conditioner 750,931,026.36 593,962,872.99 727,458,750.72 598,990,378.75 Total 1,273,920,141.82 1,168,501,413.52 1,695,959,258.99 1,501,878,617.61 5.34 Business taxes and surcharges Item Year 2015 Year 2014 Consumption tax 8,028.92 15,131,984.08 Business tax 4,197,270.01 306,641.40 Urban maintenance and construction tax 6,677,167.18 3,080,701.33 Educational surtax 4,604,814.07 2,319,977.77 Total 15,487,280.18 20,839,304.58 5.35 Selling expenses Item Year 2015 Year 2014 Notes to the Financial Statements Page 67 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Employee compensation payable 17,946,373.91 23,261,841.57 Depreciation costs 1,684,482.42 1,828,057.08 Office costs 1,701,144.22 2,408,412.10 Loading and unloading expenses 353,736.28 411,329.71 Transportation cost 13,192,516.11 17,613,734.43 Insurance premium 121,411.87 460,850.62 Operating funds 240,150.02 293,575.81 Exhibition fees 857,257.50 846,532.38 Advertising expenses 493,735.47 576,123.21 Travel expenses 4,566,355.74 5,352,908.59 Sale service fees 14,600,261.23 15,563,788.56 Repair charges 10,880,643.84 14,948,766.80 Warehousing custodian fees 4,992,270.10 8,136,312.79 Market expansion expenses and Other expenditures 4,423,786.89 4,593,986.69 Total 76,054,125.60 96,296,220.34 5.36 General and administrative expenses Item Year 2015 Year 2014 Employee compensation payable 62,103,576.22 66,486,735.11 Depreciation costs 7,982,145.20 8,060,609.84 Office costs 1,680,861.22 1,565,514.31 Utility bills 657,537.06 826,968.27 Travel expenses 1,332,833.52 1,593,930.47 Transportation cost 1,002,553.43 1,367,078.94 Insurance premium 537,200.27 627,016.57 Repair charges 9,361,906.96 12,271,930.34 Consumption of goods and materials 941,833.91 1,098,703.00 Technological development expenses 29,905,400.87 30,635,647.09 Technological transfer fees 2,609,667.99 2,380,460.55 Taxes 21,911,166.47 5,346,001.55 Amortization of intangible assets 18,202,783.79 16,155,537.54 Entertainment expenses 1,952,980.80 3,037,860.49 Notes to the Financial Statements Page 68 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Conference fees 192,391.30 294,554.40 Intermediary service expenses 1,242,433.09 1,514,888.95 Board meeting fees 287,603.18 656,316.97 Others 9,240,998.98 10,746,819.60 Total 171,145,874.26 164,666,573.99 5.37 Financial expenses Category Year 2015 Year 2014 Interest expenses 94,573,248.51 99,168,214.12 Less: Interest income 8,748,357.43 9,877,597.55 Gains or losses on exchange -1,684,122.34 -420,513.14 Others -580,742.62 2,588,097.55 Total 83,560,026.12 91,458,200.98 5.38 Losses from asset impairment Item Year 2015 Year 2014 Losses on bad debt 4,330,902.58 20,553,024.90 Losses on inventory depreciation 5,413,329.38 Losses on intangible asset impairment 2,936,170.54 Total 7,267,073.12 25,966,354.28 5.39 Investment income Item Year 2015 Year 2014 Long-term equity investment income calculated by equity method 12,442,935.76 32,338,338.58 Disposal of a long-term equity investment of investment returns 486,307,860.71 Others -408,000.00 Total 498,750,796.47 31,930,338.58 Remark: The term ‘Disposing long-term equity investment’ stands for the company transfers the profits in reorganization of motorcycle business to the original controller stakeholder, China South Industries Group Corporation. 5.40 Non-operating income Notes to the Financial Statements Page 69 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Amounts included in the Item Year 2015 Year 2014 non-recurrent profit and loss for the current year Total gains on disposal of non-current 3,426,624.42 12,172.94 3,426,624.42 assets Including: gains from disposal of 3,426,624.42 12,172.94 3,426,624.42 fixed assets gains on disposal of intangible assets Gain on debt restructuring Gains on exchange of non-monetary assets Donation received Government subsidies 3,643,800.00 2,875,800.00 3,643,800.00 Others 4,348,319.37 21,147,639.11 490,660,380.08 Total 11,418,743.79 24,035,612.05 497,730,804.50 Government subsidies included in current profit and loss Subsidy item Year 2015 Year 2014 Funds for supporting the technical innovation, research and 14,600.00 200,000.00 development of export enterprises Special funds for stable yields, promotion and increasing of 720,000.00 efficiency Other various subsidies with small amount 225,000.00 105,600.00 The funds for international market development 328,800.00 230,000.00 Credit insurance premium subsidies 279,000.00 696,000.00 Special funds of foreign trade and economic development 308,700.00 Industrial supporting funds 616,400.00 365,500.00 Rewards for the high and new technology products 500,000.00 100,000.00 Postdoctoral fellowship 150,000.00 Industrial revitalization fund 1,680,000.00 Total 3,643,800.00 2,875,800.00 5.41 Non-operating expenses Notes to the Financial Statements Page 70 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Amounts included in the Item Year 2015 Year 2014 non-recurrent profit and loss for the current year Total losses on disposal of non-current 434,139.22 340,391.02 434,139.22 assets Including: loss on disposal of fixed assets 434,139.22 340,391.02 434,139.22 Loss on disposal of intangible assets Loss on debt restructuring Loss on exchange of non-monetary assets Donation made Others 271,183.91 3,390,961.73 271,183.91 Total 705,323.13 3,731,352.75 705,323.13 5.42 Income tax expenses Item Year 2015 Year 2014 Income tax expenses for the current year 2,475,828.99 218,486.34 Deferred income tax expenses 1,936,485.66 -191,774.48 Total 4,412,314.65 26,711.86 5.43 Items of the statement of cash flows 5.43.1 Cash received from other operating activities Item Year 2015 Year 2014 Government subsidies received 3,643,800.00 2,875,800.00 Spare cash, income from interests on bank deposits , scrap 11,407,356.84 9,998,163.38 revenues and margins, etc. Total 15,051,156.84 12,873,963.38 5.43.2 Cash paid for other operating activities Item Year 2015 Year 2014 Office fees, travel expenses and others 9,281,194.70 10,920,765.47 Warehousing, market expansion and other payments in cash and 11,089,210.66 14,894,475.66 selling expenses Expenses for administration of payments in cash, petty cash, etc. 37,456,291.38 39,258,140.67 Notes to the Financial Statements Page 71 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Total 57,826,696.74 65,073,381.80 5.43.3 Cash paid from other financing activities Item Year 2015 Year 2014 restructuring 3,750,149.57 5.43.4 Cash received from other financing activities Item Year 2015 Year 2014 Proceeds from discounting of financing notes received 1,795,171,475.72 1,599,782,125.41 Interest income from note margins 5,521,354.72 7,491,556.75 Decreases in the note margins 60,729,790.30 Total 1,800,692,830.44 1,668,003,472.46 5.43.5 cash paid for other financing activities Item Year 2015 Year 2014 Payments for matured financing notes 1,421,579,381.02 1,738,217,906.13 Increase on notes, loans and other finaning margin 199,460,225.71 Total 1,621,039,606.73 1,738,217,906.13 5.44 Supplementary information to the statement of cash flows 5.44.1 Supplementary information to the statement of cash flows Supplementary information Year 2015 Year 2014 1. Net profit adjusted to cash flows from operating activities Net profits 240,930,431.06 -133,541,835.74 Plus: provision for assets impairment 7,267,073.12 25,966,354.28 Depreciation of fixed assets and others 61,444,878.25 63,825,290.87 Amortization of intangible assets 18,202,783.79 16,155,537.54 Amortization of long-term deferred expenses 5,795,825.13 3,769,610.82 Losses on disposal of fixed assets, intangible assets and other -2,992,485.20 328,218.08 long-term assets ("-" for gains) Losses on write-off of fixed assets ("-" for gains) Losses from changes in fair value ("-" for gains) Notes to the Financial Statements Page 72 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Supplementary information Year 2015 Year 2014 Financial expenses ("-" for income) 89,051,893.79 91,676,657.37 Investments losses ("-" for gains) -498,750,796.47 -31,930,338.58 Decreases in the deferred income tax assets ("-" for increases) 1,936,485.66 -191,774.48 Increases in the deferred income tax liabilities ("-" for decreases) Decreases in inventories ("-" for increases) 54,371,021.87 16,166,478.32 Decreases in operating payables ("-" for increases) 47,889,881.04 89,796,203.48 Increases in operating payables ("-" for decreases) 57,159,018.57 -47,421,750.05 Others Net cash flows from operating activities 82,306,010.61 94,598,651.91 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, 2015 of cash 23,643,515.81 35,555,585.06 Less: balance as at January 1, 2015 of cash 35,555,585.06 170,222,347.76 Plus: balance as at December 31, 2015 of cash equivalents Less: balance as at January 1, 2015 of cash equivalents Net increase in cash and cash equivalents -11,912,069.25 -134,666,762.70 5.44.2 Breakdowns of cash and cash equivalents: Balance as at December Balance as at January 1, Item 31, 2015 2015 1. Cash 23,643,515.81 35,555,585.06 Including: cash on hand 70,909.87 116,629.79 Unrestricted bank deposit 23,572,605.94 35,438,955.27 Other unrestricted monetary funds Unrestricted deposits with central bank Deposits with banks and other financial institutions Notes to the Financial Statements Page 73 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Balance as at December Balance as at January 1, Item 31, 2015 2015 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 23,643,515.81 35,555,585.06 31, 2015 Including: cash and cash equivalents restricted for use by the parent company or subsidiaries within the group 5.45 Assets with restrictions on their ownership or use right Book value as at December Item Reason for restriction 31, 2015 Provide a guarantee for issuance of bank 279,017,242.95 Cash and cash equivalents acceptance bills Fixed assets 4,935,698.67 Provide a guarantee for short-term borrowings Intangible assets 2,815,550.04 Provide a guarantee for short-term borrowings Total 286,768,491.66 6. Change in the scope of business combinations The disposal of subsidiary Equity disposal ratio(%) Equity disposal Disposal Confirmation of Name of subsidiary method date disposal Chongqing Northe Import and Significant asset sales 100 Export Trade Co., Ltd. have made all Chongqing Jianshe Sales Co., Ltd. 100 necessary overall transfer of Chongqing Jianshe Automobile authorization and 100 the related assets A/C Co., Ltd. approval, the main and liabilities 2015.12.31 underlying assets and liabilities involved the Chongqing construction 100 delivery or transfer mechanical and electrical co., LTD has been completed Notes to the Financial Statements Page 74 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 7. Equity in other entities 7.1 Equity in subsidiaries 7.1.1 Constitution of enterprise group Domicile of Registered Shareholding ratio (%) Acquisition Name of subsidiary Business nature primary operation place Directly Indirectly method Domestic sales of Chongqing Jianshe Motorcycle Sales Establishment by Chongqing Chongqing motorcycles and the 100.00 Co., Ltd.("The Sales Company") investment 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, 2015 the current year the current year Shanghai Jianshe Motorcycle Co., 49.00% 195,318.86 781,632.77 Ltd. Notes to the Financial Statements Page 75 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 7.1.3 Major financial information on significant non-wholly-owned subsidiaries Balance as at December 31, 2015 Balance as at January 1, 2015 Name of subsidiary Non-current Current Non-current Non-current Current Non-current Current assets Total assets Total liabilities Current assets Total assets Total liabilities assets liabilities 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 11,203,466.47 8,578,050.11 19,781,516.58 18,584,957.57 18,584,957.57 Motorcycle Co., Ltd. Year 2015 Year 2014 Total Name of subsidiary Net cash flow from Total comprehensive Net cash flow from Operating income Net profit comprehensive Operating income Net profit operating activities income operating activities income Shanghai Jianshe Motorcycle Co., Ltd. 15,815,170.11 398,609.91 398,609.91 2,185,674.64 16,403,587.24 106,355.59 106,355.59 1,242,940.04 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 treatment methods Domicile of primary Name of joint venture or associate Registered place Business nature for the investments in joint operation Directly Indirectly ventures or associates Chongqing Pingshan TK Production and sales of Carburettor Co., Ltd. Chongqing Chongqing motorcycles and the relevant 49.00 Equity method Notes to the Financial Statements Page 76 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Name of joint venture or associate Domicile of primary Registered place Business nature Shareholding ratio (%) Accounting treatment methods operation accessories for the investments in joint ventures or associates Notes to the Financial Statements Page 77 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 7.3.2 Major financial information on significant joint ventures Balance as at December 31, 2015/ Year 2015 Balance as at January 1, 2014/ Year 2014 Chongqing Chongqing Zhuzhou Jianshe Zhuzhou Jianshe Item Chongqing Jianshe Pingshan TK Chongqing Jianshe Pingshan TK Yamaha Motorcycle Yamaha Motorcycle Yamaha Motor., Ltd. Carburettor Co., Yamaha Motor., Ltd. Carburettor Co., Co., Ltd. Co., Ltd. Ltd. Ltd. Current assets 164,628,842.24 632,108,475.39 659,937,994.80 157,922,266.98 Including: cash and cash equivalents 97,262,431.46 221,922,023.97 178,527,703.37 100,205,280.67 Non-current assets 27,061,331.37 317,876,109.24 145,845,485.68 30,105,156.34 Total assets 191,690,173.61 949,984,584.63 805,783,480.48 188,027,423.32 Current liabilities 21,524,222.37 317,158,777.19 241,678,007.65 21,110,448.97 Non-current liabilities Total liabilities 21,524,222.37 317,158,777.19 241,678,007.65 21,110,448.97 Minority equity Equity attributable to the shareholders of parent company 170,165,951.24 632,825,807.44 564,105,472.83 166,916,974.35 Shares in net assets calculated according to the shareholding ratios 83,381,316.13 316,412,903.73 282,052,736.42 81,789,317.45 Adjustment events 6,435,193.59 4,081,015.68 - Goodwill - Unrealized profits of internal transactions - Others 6,435,193.59 4,081,015.68 The book values of equity investments in joint ventures 83,381,316.13 309,977,710.14 277,971,720.74 81,789,317.45 The fair values of equity investments in joint ventures with a public offer Operating income 1,561,494,304.78 667,264,297.90 130,781,558.70 1,821,512,908.06 948,997,903.96 128,704,656.34 Notes to the Financial Statements Page 78 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Financial expenses -1,475,647.08 -2,769,458.63 -3,678,111.60 -434,171.25 -3,665,352.15 -2,491,139.44 Income tax expenses 2,138,006.47 1,235,101.86 351,645.96 5,438,798.83 7,095,996.80 1,121,706.75 Net profit 17,337,686.48 4,522,523.09 7,425,862.89 24,094,938.03 40,508,852.24 5,882,284.09 Other comprehensive income Total comprehensive income 17,337,686.48 4,522,523.09 7,425,862.89 24,094,938.03 40,508,852.24 5,882,284.09 Dividends received from joint ventures for the current year 15,000,000.00 17,500,000.00 1,960,000.00 15,000,000.00 19,000,000.00 1,470,000.00 Notes to the Financial Statements Page 79 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 7.3.3 Major financial information on significant associates Balance as at December 31, 2015/ Year 2015 Balance as at January 1, 2014/ Year 2014 Chongqing Nanfang Chongqing Fuyeda Chongqing Chongqing Nanfang Chongqing Fuyeda Chongqing Item Motorcycle Technology Property Tongsheng Motorcycle Technology Property Tongsheng Research and Development Management Co., Machinery Co., Research and Development Management Co., Machinery Co., Ltd. Co., Ltd. Ltd. Ltd. Co., Ltd. Ltd. Current assets 106,020,876.82 59,852,254.15 4,833,931.48 Non-current assets 6,008,707.69 7,896,826.11 93,413.34 Total assets 112,029,584.51 67,749,080.26 4,927,344.82 Current liabilities 110,681,451.27 131,762.45 4,642,388.31 Non-current liabilities - Total liabilities 110,681,451.27 131,762.45 4,642,388.31 Minority equity 1,348,133.24 67,617,317.81 284,956.51 Equity attributable to the shareholders of parent company 404,439.97 15,909,949.17 56,991.30 Shares in net assets calculated according to the shareholding ratios Adjustment events - Goodwill - Unrealized profits of internal transactions - Others The book values of equity investments in associates 404,439.97 15,909,949.17 56,991.30 The fair values of equity investments in associates with a public offer Operating income 79,689,671.96 2,733.13 6,808,549.71 121,765,768.76 204.31 6,204,959.95 Net profit -11,182,128.65 -4,340,142.72 29,107.27 -5,583,827.52 -2,209,070.26 943,502.39 Notes to the Financial Statements Page 80 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Net profits from discontinued operations Other comprehensive income Total comprehensive income -11,182,128.65 -4,340,142.72 29,107.27 -5,583,827.52 -2,209,070.26 943,502.39 Dividends received from associates for the current year - Notes to the Financial Statements Page 81 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 7.3.4 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, 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 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 (%) China South Industries Design and sales of RMB180.30 Chongqin 71.13 71.13 Group Corporation Motorcycles and billion Notes to the Financial Statements Page 82 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 accessories Remark: after the restructuring, the shareholder changes to 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 Jianshe Yamaha Motor., Ltd.("Chongqing Jianshe Original Joint venture, now Joint venture of Yamaha ") parent company Zhuzhou Jianshe Yamaha Motor., Ltd.("Zhuzhou Jianshe Original Joint venture, now Joint venture of Yamaha") parent 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 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 China South Industries Group Finance Co., Ltd. ("South Finance Company ") Under the common control of the same party Chongqing Jianxing Machinery Manufacturing Co., Ltd. An associate of a subsidiary of a controlling ("Jianxing Machinery ") shareholder Chongqing Changan Motor Joint Stock Limited Company Under the common control of the same party Notes to the Financial Statements Page 83 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Name of other related parties Relationship with the Company ("Changan Motor ") 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 Hefei Changan Motor Co.Ltd (“Hefei Changan’) Under the common control of the same party Chongqing Nanfang Motorcycle Co., Ltd. ("Nanfang Motorcycle ") Under the common control of the same party Chongqing Jianshe Construction Engineering Co., Ltd. ("Construction Company ") Under the common control of the same party Jiangmen Qingqi Huanan Motorcycle Co., Ltd. ("Jiangmen Qingqi ") 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 China Jialing Industrial Joint Stock Limited Company (Group) ("Jialing Industry ") Under the common control of the same party 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(“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 North Inter Airconditioner Co.Ltd (North Inter) 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 transactions Year 2015 Year 2014 Fuyeda Service 340,807.62 667,645.18 Energy, service and equipment die and 19,328,694.76 28,814,551.78 Jianshe Industry mould Notes to the Financial Statements Page 84 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Pingshan TK Parts and components 5,989,417.95 7,333,110.36 Chongqing Jianshe Yamaha Parts and components 50,647,534.13 73,544,581.59 Jianxing Machinery Parts and components 32,744,531.68 35,908,069.97 Jialing Industry Parts and components 8,990.31 Tongsheng Jianshe Parts and components 4,015,514.23 10,397,121.21 Changan Motor Receipt of maintenance 3,719,229.93 2,640,270.18 Receipt of maintenance and purchase of 886,649.95 858,539.00 Changan Suzuki accessories Hebei Changan Receipt of maintenance 31,583.76 Nanjing Changan Receipt of maintenance 3,935.15 Table of sales of goods/rendering of services Related party Content of related party transactions Year 2015 Year 2014 Parts and components and finished 211,670,674.24 343,643,530.80 Chongqing Jianshe Yamaha products Zhuzhou Jianshe Yamaha Parts and components 8,165,649.72 9,422,314.66 Parts and components and finished 7,964.00 Jialing Industry products Parts and components and finished 17,875,795.04 11,374,648.82 Jiangmen Qingqi products Tongsheng Jianshe Parts and components 1,210,958.65 2,782,950.61 Changan Motor Finished products 166,966,920.24 173,852,043.45 Hebei Changan Finished products 196,674.37 1,273,881.20 Nanjing Changan Finished products 1,670,858.13 207,700.00 Hefei Changan Finished products 16,912,496.94 Changan Suzuki Finished products 69,871,632.02 78,010,474.93 Ford Changan Finished products 14,596,119.51 Changan Motor Customer 289,145.30 Finished products Service Jianshe industry Import agency 178,131.68 Hafei automobile Finished products 2,478,687.85 Harbin dongan power Finished products 32,750.42 Notes to the Financial Statements Page 85 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 South Internet Finished products 144,000.00 9.5.2 Related Guarantee The Company acts as guarantee: (Unit: RMB'0,000) Guarantor Guaranteed Starting date Maturity date Obligation Guarantee amount of guaranty of guaranty discharged Chongqing Jianshe The Air-conditioner Company 3,500 2015-7-13 2016-1-13 No Motorcycle Chongqing Jianshe The Air-conditioner Company 10,000 2015-2-4 2016-2-4 No Motorcycle Chongqing Jianshe The Air-conditioner Company 5,714 2015-6-1 2016-2-21 No Motorcycle Chongqing Jianshe The Air-conditioner Company 2,857 2015-8-31 2016-2-29 No Motorcycle The Sale Company The Air-conditioner Company 3,000 2015-9-17 2016-3-17 No Chongqing Jianshe The Air-conditioner Company 3,500 2015-10-8 2016-4-8 No Motorcycle Chongqing Jianshe The Air-conditioner Company 4,070 2015-10-10 2016-4-10 No Motorcycle Chongqing Jianshe The Air-conditioner Company 2,857 2015-10-19 2016-4-19 No Motorcycle Chongqing Jianshe The Air-conditioner Company 4,000 2015-11-12 2016-5-12 No Motorcycle Chongqing Jianshe The Air-conditioner Company 3,642 2015-11-17 2016-5-17 No Motorcycle Chongqing Jianshe The Air-conditioner Company 3,571 2015-12-24 2016-6-24 No Motorcycle Chongqing Jianshe The Air-conditioner Company 3,571 2015-12-25 2016-6-25 No Motorcycle The Sale Company The Air-conditioner Company 2,500 2015-8-26 2016-8-25 No The Sale Company The Air-conditioner Company 2,500 2015-9-1 2016-8-31 No Chongqing Jianshe The Air-conditioner Company 3,000 2015-9-25 2016-9-24 No Motorcycle South Motorcycle The Air-conditioner Company 3,500 2015-12-14 2016-10-21 No Notes to the Financial Statements Page 86 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Chongqing Jianshe The Air-conditioner Company 1,200 2015-10-30 2016-10-29 No Motorcycle Chongqing Jianshe The Air-conditioner Company 3,000 2015-11-4 2016-11-3 No Motorcycle Chongqing Jianshe The Air-conditioner Company 3,000 2015-11-6 2016-11-5 No Motorcycle The Air-conditioner Chongqing Jianshe Motorcycle 50 2014-7-25 2016-1-25 No Company Chongqing Jianshe The Sale Company 4,285 2015-6-1 2016-2-21 No Motorcycle The Air-conditioner Chongqing Jianshe Motorcycle 100 2014-4-12 2016-3-1 No Company The Air-conditioner Chongqing Jianshe Motorcycle 100 2014-3-31 2016-3-1 No Company The Air-conditioner construction of the mechanical 3,572 2015-9-24 2016-3-24 No Company and electrical The Air-conditioner construction of the mechanical 3,572 2015-9-29 2016-3-29 No Company and electrical The Air-conditioner Chongqing Jianshe Motorcycle 2,400 2013-5-22 2016-5-21 No Company The Air-conditioner Chongqing Jianshe Motorcycle 50 2014-7-25 2016-7-25 No Company The Air-conditioner Chongqing Jianshe Motorcycle 2,000 2014-3-31 2016-9-1 No Company The Air-conditioner Chongqing Jianshe Motorcycle 2,000 2014-4-13 2016-9-10 No Company The Air-conditioner Chongqing Jianshe Motorcycle 200 2014-7-25 2017-1-25 No Company The Air-conditioner Chongqing Jianshe Motorcycle 2,100 2014-3-31 2017-3-30 No Company The Air-conditioner Chongqing Jianshe Motorcycle 2,100 2014-4-14 2017-4-8 No Company The Air-conditioner Chongqing Jianshe Motorcycle 300 2014-7-25 2017-7-24 No Company 9.5.3 Other related transactions Notes to the Financial Statements Page 87 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 (1)The financial businesses with South Finance Company Details of transaction category Trading unit Amount Chongqing Jianshe Motorcycle 197,445.14 Balances of deposits The Air-conditioner Company 5,474.98 Sub-total 202,920.12 Chongqing Jianshe Motorcycle 30,000,000.00 Balances of bank acceptance bills discounted The Air-conditioner Company 17,000,000.00 and before the maturity Sub-total 47,000,000.00 Chongqing Jianshe Motorcycle 396,490,000.00 The total amount of the discount The Air-conditioner Company 370,907,000.00 Sub-total 767,397,000.00 Loan balance Chongqing Jianshe Motorcycle 25,000,000.00 Total borrowings Chongqing Jianshe Motorcycle 410,000,000.00 Total reimbursement amount Chongqing Jianshe Motorcycle 535,000,000.00 Chongqing Jianshe Motorcycle 16,637,888.51 The Air-conditioner Company 5,539,395.17 Loans and discount interest expenditures Sub-total 22,177,283.68 (2) Transfer assets to affiliated party The company sales the mainly assets of constrction mechanical and electrical co.’s 100% equity to CSGS (the actural controller), which is orginal controller. Based on August 31, 2015, construction mechanical and electrical ’s net assets evaluation, and the company identife the profits on transfer the assets and liabilities of motocycle is 486.3079 million. 9.6 Accounts due from/to the related parties 9.6.1 Accounts receivable Balance as at December 31, 2015 Balance as at January 1, 2015 Item Related party Provision for Provision for Book balance Book balance bad debts bad debts Prepaid Import company 2,441,434.87 Accounts receivable Changan Motor 24,772,382.35 37,962,584.68 Changan Ford 9,675,399.65 Notes to the Financial Statements Page 88 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Chongqin Jianya 23,000,000.00 Changan Suzuki 5,526,035.47 Nanjing Changan 327,320.00 95,395.88 Hebei Changan 31,562.00 344,647.00 Hefei Changan 5,801,891.42 Hafei Motor 3,999,944.43 1,115,879.65 Harbin dongan Power 42,017.99 142,865.60 Zhuzhou Jianya 1,402,763.68 Other accounts receivable construction of the mechanical and 248,608,670.53 electrical Import Company 621,678.71 Remarks: other receivables of Construction of Mechanical and Electrical Co. and Import and Export Company, totally RMB 35,238,349.24 was the business and financial transactions from the established date of Construction of Mechanical and Electrical Co. to the settlement day, December 31, 2015, with Construction of Mechanical and Electrical Co. and Import and Export Company. It was paid by cash on April 26, 2016 by Mechanical and Electrical Co.; RMB 213.992 million other receivables of Mechanical and Electrical Co. is the raised by the uncompleted transaction of selling the 100% equity of motorcycle business in the reorganization to the original controlling stakeholder, China South Industries Group Corporation. 9.6.2 Accounts payable Book balance as at Book balance as at Item Related party December 31, 2015 January 1, 2015 Accounts payable Jianxing Machinery 1,325,956.51 Pingshan TK 5,046,449.68 Chongqing Jianshe Yamaha 74,430,714.95 Tongsheng Jianshe 5,649,437.16 Jianshe Industry 77,720.44 166,329.45 Advances from customers Notes to the Financial Statements Page 89 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Book balance as at Book balance as at Item Related party December 31, 2015 January 1, 2015 Changan Suzuki 423,154.66 Other payables Jianshe Industry 4,648,674.19 1,457,371.38 Fuyeda 42,136.54 96,818.38 The Construction Company 45,143.99 10. Commitments or contingencies 10.1 Significant commitment events 10.1.1 Commitment for reorganization and transfer the assets As of December 31, 2015, the reorganization of the company transfer the material assets and liability to the original controlling shareholder China South Group of assignment of the motorcycle business is mainly the material assets reorganization of assets and liabilities, has not yet been involved the transfer formalities of assets and liabilities. Chongqing construction motor made a commitment in electromechanical subscribed deadline, which stipulated in the articles of association, no later than December 31, 2016, company will be in accordance with the relevant laws and regulations together with the construction of mechanical and electrical package to complete the transaction assets equity, land, property, within the scope of the delivery of all machinery and equipment, vehicles and other assets’ transfer, registration change under the name of construction of electromechanical company through related legal procedures; In the above prior to the expiration of the period, all the creditors in the debt transfer agreement letter, company will complete the work transfer formalities of all the relevant liabilities. CHONGQING CONSTRUCTION MOTOR should coordinate with and CONSTRUCTION AND MACHINERY to extend the period of capital funding or compensate the capital funding at the expense of an equivalent asses for CONSTRUCTION AND MACHINERY , if CHONGQING CONSTRUCTION MOTOR and CONSTRUCTION AND MACHINERY will not able to fulfill the requirement of capital funding in accordance with the Liability Funding Agreement> signed with CONSTRUCTION AND MACHINERY ; CHONGQING CONSTRUCTION MOTOR and CONSTRUCTION AND MACHINERY will bear the corresponding responsibilities agreed in Agreement> if the abovementioned two parties cannot undertake the liability transfer as stipulated. Notes to the Financial Statements Page 90 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 The company has proposed a solution in terms of debt without creditors’ permission. According to CHONGQING CONSTRUCTION MOTOR and CONSTRUCTION AND MACHINERY, CHONGQING CONSTRUCTION MOTOR will notify CONSTRUCTION AND MACHINERY to liquidate the debt directly if creditors ask CHONGQING CONSTRUCTION MOTOR to liquidate the debt as promised. Otherwise, JDJS will deal with the credits’ debt through CHONGQING CONSTRUCTION MOTOR. The aforesaid debt must be undertaken by CHONGQING CONSTRUCTION MOTOR, and CONSTRUCTION AND MACHINERY should bear the risk of losses arising from paying off the debt by CHONGQING CONSTRUCTION MOTOR (including but not limited to the principal and interest of loans, default interest and penalty due to outside parties, and tax). 10.1.2 About the specification of related party transactions After the completion of the reorganization, enterprise will be as much as possible to avoid and decrease related party transactions with listed companies. As for some related party transactions that cannot be avoided or have reasonable grounds, enterprise and its control will sign the agreement with those listed companies to fulfill the legitimate procedures and in accordance with the provisions of the relevant laws, regulations and other normative documents to perform the related internal decision-making procedures for approval and in a timely manner to fulfill the obligation of information disclosure in order to ensure the pricing of related party transactions is fair and reasonable and no illegal transfer of listing corporation's funds, profits, or the use of such transactions that is harmful to the legitimate rights and interests of the listing corporation and its shareholders. If CSGC is in violation of the above commitments that cause damage to the listing corporation, CSGC will compensate the losses suffered by the listing corporation. 10.1.3 The dissociated guarantee matters and provide counter-guaranty In the view of the major asset sale, air conditioning Company provided guarantee for mechanical and electricial construction company of 1.64 billion yuan for net financing and Construction of Chongqing motorcycle provided financial guarantee of 3000 million yuan for sales company, a wholly owned subsidiary of mechanical and electrical construction company. The company promises that after the expiration of the guarantee period, which stipulated in the contract of guarantee, company will relieve of all warranties from mechanical and electrical construction company including its subsidiary. Moreover, the company made commitments are Notes to the Financial Statements Page 91 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 as follows: (1) After the major asset sale, the construction of Chongqing motorcycle (air conditioning company) provides guarantee on the above, if approved by the general meeting of shareholders, mechanical and electrical construction company provides an equal amount of counter guarantee. (2) If the construction of electrical and mechanical company violates of the above commitments to the construction of Chongqing motorcycle that results in damages or adverse consequences, the construction of electrical and mechanical company will bear all the economic and legal responsibilities. 10.2 Contingencies By Dec 31, 2015 the company does not need to discourse 11. Post balance sheet events On December 10, 2015, China South Industries Group Corporation which is an original controlling shareholder And ChongQing Construction Machinery CO., LTD. (hereinafter referred to as the "construction of mechanical and electrical") signed [Unpaid shares transfer agreement], CSGC transferred the holding 71.13% of stakes(corresponding to 84906250 shares of state-owned legal person shares to the chongqing construction machinery co., LTD., for free of charge. State-owned Assets Supervision and Administration Commission of the State Council approved that equity transfer by [written reply to an issue which is CSGC transferred the holding shares of ChongQing Construction Machinery CO., LTD for free of charge] (assets property rights [2015] no. 2015) on December 25, 2015, and China Securities Regulatory Commission [written reply to examined and approved exemption from the obligation about chongqing construction mechanical and electrical co., LTD offered to takeover chongqing motorcycle co., LTD.] (Regulatory permission [2016] 2016) The obligation of shares approved and remit offer acquisition obligation which is caused by the state-owned assets institutional transferred the holding shares of company on 26 January, 2016. ChongQing Construction Machinery CO., LTD accepted [Securities transfer registration confirmation] which is provided by China Securities Depository and Clearing Company Limited, CSDCC Shenzhen branch on 4 March,2016, and Equity transfer registration procedures has been completed at China Securities Depository and Clearing Company Limited, CSDCC Shenzhen branch on 2 March, 2016. 12. Other significant events 12.1 Corrections of significant accounting errors in prior period Notes to the Financial Statements Page 92 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 12.1.1 The retroactive restatement method During the current reporting period, no correction of accounting errors in previous period is subject to the retroactive restatement method. 12.1.2 The prospective application method During the current reporting period, no correction of accounting errors in previous period is subject to the prospective application method. Notes to the Financial Statements Page 93 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Notes to the Financial Statements Page 94 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 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, 2015 Balance as at January 1, 2015 Book balance Provision for bad debts Book balance Provision for bad debts Category Proportion Proportion Book value Proportion Proportion Book value Amount Amount Amount Amount (%) (%) (%) (%) Accounts receivable with significant single amount and provision for bad debt made on an individual basis Accounts receivable with provision for bad debt made on a portfolio with 2,255,130.24 100.00 1,727,559.88 76.61 527,570.36 28,063,808.14 100.00 1,726,458.29 6.15 26,337,349.85 similar risk credit characteristics basis Accounts receivables with insignificant single amount and provision for bad debt made on an individual basis Total 2,255,130.24 100.00 1,727,559.88 76.61 527,570.36 28,063,808.14 100.00 1,726,458.29 6.15 26,337,349.85 Notes to the Financial Statements Page 95 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Notes to the Financial Statements Page 96 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Accounts receivable with provision for bad debts made using the aging analysis method among those portfolios: Balance as at December 31, 2015 Aging Accounts receivable Provision for bad debts Proportion of provision (%) 1-6 months (including 6 months) 522,032.66 6-12 months 1-2 years (including 1 year) 6,153.00 615.30 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) 1,726,944.58 1,726,944.58 100.00 Total 2,255,130.24 1,727,559.88 76.61 13.1.2 Accounts receivables provided, reversed or recovered in the report year. The provision for bad debts is RMB28,140.41 for the current year. Investment transfer is RMB27,038.82 13.1.3 Top five accounts receivable by the credit balance as at December 31, 2015 The top five accounts receivable by the credit balance as at December 31, 2015 total RMB1,720,346.01, accounting for 76.29% of total amount of balance as at December 31, 2015 of accounts receivable, and the balance as at December 31, 2015 of provision for bad debts provided correspondingly totals RMB1,198,313.35. 13.2 Other receivables Notes to the Financial Statements Page 97 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 13.2.1 Disclosure of other receivables by category Balance as at December 31, 2015 Balance as at January 1, 2015 Book balance Provision for bad debts Book balance Provision for bad debts Category Proportion Proportion Book value Proportion Proportion Book value Amount Amount Amount Amount (%) (%) (%) (%) Other receivables with significant single amount and provision for bad debt made on an individual basis Other receivables with provision for bad debt made on a portfolio with 257,837,987.95 99.84 4,232,368.84 1.64 253,605,619.11 246,681,877.86 100.00 4,352,118.85 1.76 242,329,759.01 similar risk credit characteristics basis Other receivables with insignificant single amount and 405,125.35 0.16 405,125.35 100.00 provision for bad debt made on an individual basis Notes to the Financial Statements Page 98 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Total 258,243,113.30 100.00 4,637,494.19 1.80 253,605,619.11 246,681,877.86 100.00 4,352,118.85 1.76 242,329,759.01 Notes to the Financial Statements Page 99 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Other receivables with provision for bad debts made using the aging analysis method among those portfolios: Balance as at December 31, 2015 Aging Provision for bad Proportion of Other receivables debts provision (%) 1-6 months (including 6 months) 253,589,829.12 6-12 months 1-2 years (including 1 year) 13,950.24 1,395.02 10.00 2-3 years (including 2 years) 3-4 years (including 3 years) 4 - 5 years (including 4 years) 16,173.85 12,939.08 80.00 Over 5 years (including 5 years) 4,218,034.74 4,218,034.74 100.00 Total 257,837,987.95 4,232,368.84 1.64 13.2.2 Provision for bad debts provided, reversed or recovered in the current year. The provision for bad debts is decreased by RMB 198,977,330.69 in the current year. The investment transfer is RMB 198,977,330.69 13.2.3 Other receivables classified by payment properties Book balance as at Book balance as at January Property of account receivable December 31, 2015 1, 2015 Other receivables from the related parties 249,230,349.24 234,802,410.46 Petty cash and borrowings with small amount 4,565,415.08 6,715,381.02 Fully provided provision for bad debts regarding 4,218,034.74 4,218,034.74 long-term receivables and payables Margins and others 229,314.24 946,051.64 Total 258,243,113.30 246,681,877.86 13.2.4 Top five other receivables by credit balance as at December 31, 2015 The top five other recievables by the credit balance as at December 31, 2015 total RMB252,852,998.57, accounting for97.91% of total amount of balance as at December 31, 2015 of other receivable, and the balance as at December 31, 2015 of provision for bad debts provided correspondingly totals RMB4,035,328.04. Notes to the Financial Statements Page 100 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 13.3 Long-term equity investments Balance as at December 31, 2015 Balance as at January 1, 2015 Item Provision for Provision for Book balance Book value Book balance Book value impairment impairment Investments in 168,160,000.00 168,160,000.00 147,828,527.88 147,828,527.88 subsidiaries Investments in associates and 83,381,316.13 83,381,316.13 686,053,137.47 686,053,137.47 joint ventures Total 251,541,316.13 251,541,316.13 833,881,665.35 833,881,665.35 13.3.1 Investments in subsidiaries Balance as Balance as at Balance as at Provision for at December Increase in Decrease Investee January 1, December 31, impairment in 31, 2015 of 2015 in 2015 2015 2015 2015 provision for impairment Chongqing Jianshe Motorcycle Sales Co., 225,000.00 225,000.00 139,882.36 Ltd. Chongqing Jianshe 12,000,000.00 12,000,000.00 12,000,000.00 Sales Co., Ltd. Chongqing Beifang Jianshe Import and 57,443,527.88 57,443,527.88 2,708,535.19 Export Trade Co., Ltd. Shanghai Jianshe 8,160,000.00 8,160,000.00 Motorcycle Co., Ltd. Chongqing Jianshe Automobile A/C Co., 70,000,000.00 90,000,000.00 160,000,000.00 Ltd. Total 147,828,527.88 90,000,000.00 69,668,527.88 168,160,000.00 14,848,417.55 Remarks: Subsidiary in current investment decreased mainly due to the Chongqing established by the investment of motorcycle caused by mechanical and electrical co., LTD., provision for impairment loss this year is $14,848,417.55, and provision for impairment loss on investment Notes to the Financial Statements Page 101 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 transfer is RMB 14,848,417.55. Notes to the Financial Statements Page 102 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Notes to the Financial Statements Page 103 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 13.3.2 Investments in associates and joint ventures Increases/decreases in the current year Balance as at Provision Balance as at Additiona profits and losses Balance as at December Other Changes Declaration of for Investee January 1, l Decrease in on investments December 31, 31, 2015 of comprehensiv in other cash dividends Others impairment 2015 investmen investment recognized under 2015 provision e income equity or profits in 2015 t the equity method for impairment 1．Joint ventures Chongqing Jianshe Yamaha 309,977,710.14 -303,646,553.38 8,668,843.24 -15,000,000.00 Motor., Ltd. Zhuzhou Jianshe Yamaha 277,971,720.74 -262,113,642.64 1,641,921.90 -17,500,000.00 Motor., Ltd. Chongqing Pingshan TK 81,789,317.45 3,551,998.68 -1,960,000.00 83,381,316.13 Carburettor Co., Ltd. Sub-total 669,738,748.33 -565,760,196.02 13,862,763.82 -34,460,000.00 83,381,316.13 2．Associates Chongqing Tongsheng 404,439.97 -404,439.97 Machinery Co., Ltd. Chongqing Nanfang Motorcycle Technology 15,909,949.17 -14,888,739.63 -1,021,209.54 Research and Development Co., Ltd. Notes to the Financial Statements Page 104 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Investee Balance as at Increases/decreases in the current year Balance as at Provision Balance as January 1, December 31, for at 小计 16,314,389.14 -14,888,739.63 -1,425,649.51 2015 2015 impairment December Total 686,053,137.47 -580,648,935.65 12,437,114.31 -34,460,000.00 83,381,316.13 in 2015 31, 2015 of provision for impairment Notes to the Financial Statements Page 105 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 13.4 Operating income and operating costs Year 2015 Year 2014 Item Income Cost Income Cost Primary businesses 373,805,672.47 425,189,860.34 870,781,498.40 852,658,397.72 Other businesses 542,719,201.58 526,329,273.76 561,851,135.28 513,191,111.21 Total 916,524,874.05 951,519,134.10 1,432,632,633.68 1,365,849,508.93 13.5 Investment income Item Year 2015 Year 2014 Long-term equity investment income calculated by cost method Long-term equity investment income calculated by equity method 16,907,175.88 32,281,347.28 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 -408,000.00 Total 9,857,041.01 31,873,347.28 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 2,992,485.20 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 3,643,800.00 quota or quantity at unified state standards) Payment for use of state funds received from non-financial institutions Notes to the Financial Statements Page 106 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Item Amount Remark recorded in current profits and losses 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 the company’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 4,077,135.46 Other profits or losses which can be deemed as non-recurring profits or 486,307,860.71 losses Notes to the Financial Statements Page 107 CHONGQING JIANSHE MOTORCYCLE CO., LTD. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015 Item Amount Remark Income tax effects -694,349.75 Minority interest effects 6,534.39 Total 496,337,666.01 Remark: “Other profits or losses which can be deemed as non-recurring profits or losses " stands for the company transfers the profits in reorganization of motorcycle business to the original controller stakeholder, China South Industries Group Corporation. 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 174.84 2.017 2.017 the Company Net profit attributable to ordinary shareholders of the Company after deducting the non-recurring -185.64 -2.141 -2.141 profit and loss Chongqing Jianshe Motorcycle Co., Ltd. April 27, 2016 Notes to the Financial Statements Page 108
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