Chongqing Changan Automobile Company Limited 2014 Annual Report April, 2014 Chapter 1 Important Notice, Contents, and Definitions The Board of Directors, the Board of Supervisors, Directors, Supervisors and Senior Executives of our company hereby guarantee that no false or misleading statement or major omission was made to the materials in this report and that they will assume all the responsibilities, individually and jointly, for the trueness, accuracy and completeness of the contents of this report. Other directors attended the board meeting for reviewing the annual report except for the following director: Name of the Director The position for the Reasons for the absence Name of the consignee absent director Peng Shaobing Independent Peng On Health Reasons N/A The preplan profit distribution of the Company deliberated and approved by the Board is: taking the total shares as of Dec. 31, 2014 as the radix, sending cash dividends of RMB 2.5Yuan (tax included) per every 10 shares to its all shareholders, and not converting capital reserve into share capital. Chairman of the Board Xu Liuping, the Chief Financial Officer Wang Kun and the responsible person of the accounting institution (Accountant in charge) Hua Zhanbiao hereby declare that the Financial Statements enclosed in this annual report are true, accurate and complete. The prospective description regarding future business plan and development strategy in this report does not constitute virtual commitment. The investors shall pay attention to the risk. The report shall be presented in both Chinese and English, and should there be any conflicting understanding of the text, the Chinese version shall prevail. 1 CONTENTS Chapter 1 Important Notice, Contents, and Definitions ............................................. 1 Chapter 2 Company Profile ........................................................................................ 5 Chapter 3 Summary of Accounting Data and Financial Indexes ............................... 8 Chapter 4 Report of the Board of Directors ............................................................. 10 Chapter 5 Important Matters .................................................................................... 29 Chapter 6 Changes in the shareholding of the company and shareholders .............. 34 Chapter7 Information about Directors, Supervisors, Senior Management and Employees ................................................................................................................... 40 Chapter 8 Corporate Governance ............................................................................. 52 Chapter 9 Internal Control ........................................................................................ 56 Chapter 10 Auditor’s Report ....................................................................................... 58 Chapter 11 Documents for Future Reference ............................................................ 203 2 Definitions Changan Auto., Refers to Chongqing Changan Automobile Company Limited the Company South Industries Refers to China South Industries Group Corp. Company’s actual controller China Changan Automobile Group Corporation, old name: China South China Changan Refers to Industries automobile Co., Ltd., a subsidiary company of South Industries Chongqing Changan Industry (Group) Co., Ltd., old name: Changan Automobile Co., Ltd., Changan Automobile (Group) Co., Ltd., a subsidiary company of Changan Industry Refers to South Industries, the controlling shareholder of the Company before December, 2005 Nanjing Changan Refers to Nanjing Changan Automobile Co., Ltd., a subsidiary company of the Company Hebei Changan Refers to Hebei Changan Automobile Co., Ltd., a subsidiary company of the Company Baoding Changan Refers to Baoding Changan Bus Co., Ltd., a subsidiary company of the Company Bus International Refers to Chongqing Changan Automobile International Sale Service Co., Ltd. Company CFMA Refers to Changan Ford Mazda Automobile Co.,，a JV of the Company CFME Refers to Changan Ford Mazda Engine Co., a JV of the Company Changan Suzuki Refers to Chognqing Changan Suzuki Auto. Co.Ltd., a JV of the Company CAPSA Refers to Changan PSA Automobiles Co., Ltd，a JV of the Company Jiangling holding Refers to Jiangling Holding Co., a JV of the Company Harbin Hafei Automobile Industry Group Co., Ltd., a subsidiary company of Hafei Group Refers to China Changan Chongqing Changan Minsheng APLL Logistics Co., Ltd, a subsidiary company CMAL Refers to of Changan Industry Financial Co. of Refers to Financial Co. of China South Industries Group Corporation CSGC United Prosperity (Hong Kong)Investment Co., Limited ,a subsidiary company UPI Refers to of China Changan Hefei Changan Refers to Hefei Changan Automobile Co., Ltd., a subsidiary company of the Company 3 Matrial Risk Notice In the fourth chapter of Report of Board of Directors, the company describes the competition pattern and development trend of the automobile industry, the company’s business plan in 2015, the possible risks. Please refer to the relevant part. The prospective description regarding future business plan and development strategy in this report does not constitute virtual commitment. The investors shall pay attention to the risk. 4 Chapter 2 Company Profile I. Basic Information Stock abbreviation Changan Automobile Changan B Stock Code 000625、200625 Listed on Shenzhen Stock Exchange Company name in 重庆长安汽车股份有限公司 Chinese Company abbreviation in 长安汽车 Chinese Company name in Chongqing Changan Automobile Company Limited English Legal representative Xu LiuPing Registered address No. 260, East Jianxin Road Jiangbei District, Chongqing Post code of the registered 400023 address Office address No. 260, East Jianxin Road, Jiangbei District, Chongqing Post code of the office 400023 address Website http://www.changan.com.cn E-mail address [email protected] II. Contact Information Secretary of the Board of Directors Securities affairs representative Name Wangkun( On behalf),Lijun No. 260, East Jianxin Road, Jiangbei Contact address District, Chongqing TEL: 023-67594008，67594009 FAX: 023-67866055 E-mail address [email protected] 5 II. Information Disclosure and Filing Site Newspaper selected by the Company for China Securities Journal, Securities Daily and Hong Kong Commercial Daily information disclosure Website selected by CSRC for publishing www.cninfo.com.cn this annual report The place where this annual report is Secretary's Office of Board of Directors prepared and kept IV. Changes of Registration Information Registered number Registered of the corporation Tax registration Organization Registration date address legal person’s No. code business license No.309,Nanchengda Guoshuichongzi Yujing First registration Oct. 31,1996 dao,Nan’an District, 5000001805570 51021120286320X 28546236-3 Chongqing No. 260, East Yuguoshuizi Registration at the Jianxin Road Yuzhi 50010520286320XY end of reporting Aug. 24, 2012 20286320-X Jiangbei District, 500000000005061 udishuizi period Chongqing 50010520286320X 1.In Oct. 2005, according to the restructuring program on automobile business, the Company’s actual controller, China South Industries Group Corporation made transferring of all state-owned shares of the Company as part of funding for China South Industries Automobile Company Limited. In March 2006, all shares held by Changan Group have been transferred to China South Industries Automobile Company All previous changes of dominant Limited. China South Industries Automobile Company Limited became the majority stockholders shareholder of the Company, and Changan Group holds zero share since then. 2. In July 2009, with the approval of State Administration for Industry and Commerce, “China South Industries Automobile Company Limited”, changed its name to “China Changan Automobile Group Co., Ltd.”. After change of its name, its property, ownership and control relation are without change. 6 V. Other Relevant Information The accounting firm employed by the Company: Name of the accounting firm ERNST&YOUNG Hua Ming LLP Level 16, Ernst & Young Tower, Oriental Plaza, No. 1 East Address of the accounting firm Chang An Avenue, Dong Cheng District, Beijing, China Name of the certified public accountant for signature Qiao Chun，Ai Wei The recommendation agency engaged by the Company executing the persistant supervision responsibilities in the report period □ Applicable √ Not applicable The financial consultant engaged by the Company performs the duties of persistant supervision and guidance in the report period □ Applicable √ Not applicable 7 Chapter 3 Summary of Accounting Data and Financial Indexes I. Major Accounting Data and Financial Indexes Unit: Yuan Increase/decreas 2013 e on a 2012 2014 year-on-year basis Before adjustment Adjusted Before adjustment Adjusted (%)Adjusted Operating revenue (Yuan) 52,913,332,100.83 38,481,862,261.90 39,141,703,050.19 35.18% 29,462,588,753.56 29,462,588,753.56 Net profit belonging to shareholders of the listed 7,561,081,585.81 3,505,640,520.04 3,368,591,105.89 124.46% 1,446,409,591.28 1,446,409,591.28 company (Yuan) Net profit belonging to shareholders of the listed company after deduction of 7,279,008,679.47 3,323,415,945.67 3,120,551,968.04 133.26% 1,071,948,748.07 1,071,948,748.07 non-recurring profit and loss (Yuan) Net cash flow arising from 3,779,921,774.57 1,832,646,224.37 1,537,154,348.43 145.90% 511,885,673.38 511,885,673.38 operating activities (Yuan) Basic earnings per share 1.62 0.75 0.72 125.00% 0.31 0.31 (Yuan/Share) Diluted