Annual report for the period 1 January to 31 December 2015 of National Electric Vehicle Sweden Group 2015 and National Electric Vehicle Sweden AB NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 36

Contents 1. Corporate information...... 37

2.1 Basis of preparation...... 37

2.2 Basis of consolidation...... 38

2.3 Summary of significant accounting policies...... 39

2.4 S ignificant accounting judgements, estimates and assumptions...... 45

2.5 N ew and amended standards and interpretations 2015...... 46

2.6 Standards issued but not yet effective...... 47

3. Remunderation to auditors, EY...... 48

4. Other operating income ...... 50

5. F inance income & cost...... 51

6. D epreciation and amortization included in the financial statement...... 52

7. Employee benefits expense...... 54

8. Research and development costs...... 57

9. Other operation expences...... 58

10. Income tax...... 58

11. Property, plant and equipment...... 60 MANAGEMENT REPORT 12. Intangible assets...... 64

Comment from the President...... 4 13. Investments in subsidiaries (Parent only)...... 68

Brand Story...... 6 14. Inventories...... 69

Core values...... 10 15. Financial liabilities...... 70

Corporate strategy...... 12 16. Trade receivables and other assets...... 71

Management report...... 18 17. Cash and cash equivalents...... 72

Consolidated statement of comprehensive income...... 26 18. Issued capital and reserves...... 72

Consolidated statement of financial position...... 27 19. Trade and other payables (current)...... 73

Consolidated statement of changes in equity...... 29 20. Related party disclosures...... 74

Consolidated cash flow statement...... 30 21. Commitments and contingencies...... 76

Parents statement of comprehensive income...... 31 22. Risk management...... 78

Parents statement of financial position...... 32 23. Events after the end of the reporting period...... 79

Parents statement of changes in equity...... 34 24. Signatures...... 80

Parents cash flow statement...... 35 Auditor’s report...... 82 Comment from the President

DURING 2015 we went on a very exciting journey, starting LET ME GIVE YOU SOME EXAMPLES. Just before Christ­ specific field, while we will focus on the integration – to us The other thing that makes me proud is our choice of part­ off as company with a strained financial situation and under mas last year, we signed a strategic collaboration agreement cooperation is the most important part. ners. They all believe in our vision, which shows us we have reorganization to a promising organization with Panda New Energy. We will deliver chosen the right partners. 2015 WAS THE YEAR WHEN WE LAY OUR FOUNDATION. with a strong foundation to build the future 150 000 electric vehicles and another Now we will implement our business plan. During 2017 we Trollhättan, April 12, 2016 on. We set out our vision to shape mobili­ 100 000 electric transportations vehicles will have three productions facilities up and running – the ty for a more sustainable future at an early and minibuses until 2020. Now, Panda is plant in Trollhättan, Sweden and the productions facility stage. This vision has been key to attract a new energy ­vehicle leasing company currently under construction in Tianjin as well as the newly new partners and employees as well as providing low emission vehicles to the acquired plant in Fuijan – both in China. Additionally, we will holding on to the ones we already had. growing market of car service platforms, launch our 9-3 electric vehicle and continue to develop the such as Uber and DiDi Taxi in China. NOW WE CAN TAKE THE NEXT STEP. vehicle architecture to enable a broader and more compe­ Nevs will develop the 9-3 Sedan electric Mattias Bergman With new financial solutions and money in titive product portfolio. We have an order of over 270 000 PRESIDENT the bank, new owners and more import­ vehicle to fit the solution Panda is look­ electric vehicles and other electric vehicle products to deliv­ antly, a new and promising business plan, ing for and in the long run we believe this er and the latest framework agreement with New Long Ma I am confident we will be successful in collaboration will create opportunities will help us deliver that. implementing our vision. for people to share transportation. And that is what we call a mobility service. In other words – exciting times ahead! So, how do we see the future? We know FINALLY, I would like to share the answer of a question I was the world is facing several challenges. One Additionally, we signed a similar agree­ asked a few days ago. Someone asked me what achieve­ being the impact our way of living has on ment during the start of the year with ments during 2015 I am most proud of? For me that is an the climate. Our vision is to shape mobili­ Volant Industries Co Ltd, Volinco, about easy question. I am proud of the fact that we have been able ty for a more sustainable future, and what delivering 20 000 electric vehicles. to keep our staff during a difficult time of our journey.D ­ espite do we mean by that? Well, while the development of electric By combining our vehicle production with mobility services times of uncertainty, the employees have decided to stay vehicles will still be at the core of our business, we want to we will have a business plan that will take us in to the future with us and to me that is the best evidence of their belief in expand our offer to include mobility experiences. and reduce climate change. As we see it, we will continue what we do. to partner with companies that have expertise within their

5 Brand story National Electric Vehicle Sweden

To make life truly extraordinary, you can’t accept compromises. You must challenge them. Inspired by our history, nature and culture, we design mobility experiences that are not just simple, engaging and distinctive, but also shape a brighter, cleaner future. To those individuals who are curious and passionate about the world we give the chance to express themselves – and leave a positive mark. And prove that what’s best for one can be what’s best for all.

Best for One. Best for All.

6 7 Brand story National Electric Vehicle Sweden

We are all here for a reason – we have a purpose. Wouldn’t This means we need to be open to new innovations and solu­ it be great to have accomplished something really good? We tions – we need to be one step ahead. As a car company we believe our lives are filled with opportunities; we just have to will to continue to develop ground-breaking innovations but raise the courage to question and challenge the way things we will also design new mobility experiences that are simple, are done. In order to make life better, for others, and our­selves, engaging and distinctive. To us, that is a just a natural evolu­ Shaping we can’t accept compromises. tion of our heritage that combines the best of our engineering excellence with the The world we all live in is facing future need of urban living. several challenges – the c­limate change being one of the most By initiating connections So what do we mean by mobility experi­ crucial. While defining who we are ences? We know that future generations and what our purpose in this world between like-minded will move their individual focus to the is, we found that creating a clean people, we believe we community. By sharing products and ser­ the future and brighter future is one of the vices we will not only save money, we will most important reasons. We are can make a difference. also contribute to a better environment inspired by our heritage as a Scan­ and a better world. And with more know­ dinavian, innovative and uncom­ ledge about our neighbours we will have promising car-manufacturer, de­­­ the opportunity to share transport and livering premium quality products. The nature has always other services. As a provider of mobility experiences we will been an important part of our brand as well as the culture make it easier for people to find the perfect match, through of mobility we arise from. accessible solutions. Our customers are engaging individuals with a de­ This is what we believe in. By initiating connections between We believe people of the world have good intentions. They want to live sire to do their own thing. They don’t follow – they like-minded people, we believe we can make a difference. take the lead. With the willingness to always improve life and do good. We believe they have an individual mind-set – but at the In other words – what’s best for one is best for all. as an individual and as a part of the whole communi­ same time an urge to belong to something larger. Sharing is a natural part ty, they want to create a brighter and cleaner future. of their lives. And so do we! We want to make an impact. We want to give people a chance to express themselves – and more importantly – give them the opportunity to leave a positive mark.

8 9 Core values National Electric Vehicle Sweden

We are open-minded and welcoming because we know that real change involves a real movement. We don’t sell products to consumers, we cooperate with partners to create sustainable mobility experiences. We foster ­inspiring connections between like-minded people, and we believe they are at the very heart of our brand. Engaging

We are driven by our vision to create a more sustainable future. This is the foundation and the objective of everything we do. And this is what always obliges us to always challenge compromises. To us, visionary is the result of curiosity, creativity and determination – we are uncompromising and consequent and we let our actions Visionary speak louder than our words.

We are not one of the biggest and most estab­ lished players. We aren’t everywhere. Others are the obvious choice. We prefer to be the right one. The clean one. We address people who are self-confident and independent. We are the sensible instead, uniquely combining an exciting and individual experience with a higher purpose. Distinctive

10 11 Corporate strategy National Electric Vehicle Sweden

Evolution from strong heritage Corporate strategy – Horizontal integration With a strong heritage of being in the front seat and taking the lead, Nevs will continue on the journey Nevs’ main business intention is to continue to develop cars, however, the company’s focus will in the of providing innovative solutions to customers world-wide. We are creative, we like to think outside the future solely be on electric vehicles. The customers will initially be found in Europe and in China, and box and our customers are expecting more. Owning one of our cars is not something you just do – it is a moving on to the US after 2020. conscious choice. Nevs as OEM Nevs Industrial Services R&D centers and distribution Now it’s time to build on our heritage and provide simple and engaging mobility Nevs has the capacity to produce With a large capital of engineering channels 180 000 cars every year on the produc­ capabilities within the company, Nevs experience to connect people around the world. To support the business plan and the tion facility in Trollhättan, Sweden. This Industrial services, will offer e­ xcellence Nevs’ offer, we have established a is our head production plant and will and engineering services to other number of strategic centers and func­ remain so. In May 2017 a brand new actors on the market. This includes tions. With two R&D centers in place factory will be up and running in ­Tianjin design and development of ­complete – one in Trollhättan and one in Tianjin in China with the capacity to ­produce vehicles, contract manufacturing of – Nevs will continue to take the lead in 200 000 electric cars yearly. And complete vehicles carried out in Troll­ new innovations and solutions. Histori­ following the framework agreement hättan, Sweden and contract manu­ cally, Nevs has a global sales and dist­ signed with New Long Ma in February facturing of electric vehicles in Tianjin, ribution presence through its heritage 2016, we can add a third facility to its China. brand Saab Automobile and we also production plants. The facility is placed have a network for sales and distribu­ in the Fujian province and as a result tion in Europe and key cities in China. the company will cover both the north and the south parts of China.

Nevs founded THT, SRIT & Teamsun Launch of sustain­ enter as new owners able mobility lab in China & Europe Launch of 4 new models: SUV-D Strategic partner­ Production start Production of Saab D Fastback ship with DFM in TJ factory 9-3 MY14 started D Fastback XO SUV-C

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Roadmap

Strategic partnership with Turkey Launch of ”9-3” in China (Ph1.1) Construction of production plant in Tianjin started

12 13 Corporate strategy National Electric Vehicle Sweden

Market opportunity Responding to challenges

The end consumer choice of electric vehicles on today’s market is Urbanization Climate change growing, which naturally makes it even more important for Nevs More people are currently living in the cities than As we all know our way of living has an to stand out and build on its unique features. Through a thorough in rural areas. Out of the seven billion people impact on our environment. A human activity, market analysis, we have designed a highly competitive offering living on our planet, more than 50 percent live such as the release of pollution to p­ roduce portfolio to beat the exciting competition. in urban areas and that figure is expected to rise energy, is a huge contributor to global 1.rapidly over the coming years. This urbanization will naturally 2.warming and climate change. By reducing the use of tradi­ put a strain on our cities and our transport system. By provid­ tional cars and replace with electric vehicles – and provide ing sustainable cars and design mobility experiences, we mobility solutions to help people share their transport – we will be able to collect data for city planning, provide sharing believe we can shape a brighter, cleaner future. services for transportation and in the long run – reduce the negative environmental impact urbanization has on our The three main advantages for Nevs are: planet.

Green & Independent BEV with larger body style Reaching the BEV tipping point Nevs has identified a market niche Nevs’ targeted customer wants new The market for electric vehicles is within the premium segment called energy vehicles and he/she has a expected to grow rapidly over the SUV -D Green & Independent. The customer is preference to larger body style. The coming years with a number of indi­ Our Product portfolio educated and confident, a­t rendsetter, strategy for Nevs is to develop ­Battery cators for reaching the “BEV tipping freedom seeker and wants to live a Electric Vehicles (BEV) – using only point”. This means the infrastructure Nevs’ future product portfolio will be based on sustainable life. He/she is between 20 electric motors with chemical energy for BEV will be well developed and the and 60 years old, often self-employed stored in rechargeable battery packs. battery costs are significantly lower. On the developed architecture, which will evolve and sporty. The market opportunity for the other hand, subsidies and incen­ into an optimized platform for electric v­ ehicles the Green & Independent is expected tives will decreased gradually over time. as well as a tailored combination platform to be 12 percent of the population with D Fastback a driving license in China and 8 percent to meet both internal and external vehicles in Europe. demands.

Introducing four new models 12% The future Product portfolio includes four models China 8% Europe Green & independent featuring all-electric propulsion and distinctive design; 16% 9% 4% 16% Mature & active a distinctive family SUV (SUV-D), an active all-rounder (CAR-D fastback), an urban adventurer (Car-D fastback 5% Big city life 5% 30% XO) and the sporty urban SUV (SUV-C). These models D Fastback XO 1% 1% 23% Young & vibrant will meet the needs of urban living and city people long­ Demanding & powerful ing for an active life. By investing heavily in R&D, Nevs Other will offer a broad product portfolio around 2020 and 13% Taxi onwards. 14% Government 6% 2% Corporate 13% 22% SUV-C

Rapid growth for New Energy Vehicles The future market of New Energy Vehicles we will see a fast growth in volumes. According to a study of the European, Chinese and the US market, a possible scenario based on the Governments’ target goals, would be an increase in volume of New Energy Vehicles by 43.6 percent from 2015 to 2025. That corresponds to 9 million New Energy Vehicles sold in 2025. The more aggressive scenario shows an increase in volume for New Energy Vehicles by 51.3 percent during the same period – equivalent to a volume of 15 million NEV in 2025.

14 15 Corporate strategy National Electric Vehicle Sweden

Mobility experiences

The world will be facing several challenges over • Financial services – car leasing, loyalty schemes and the coming years. We will see more people living full-service contracts Car sharing in the cities and the need for digital solutions to • In-car mobility – gamification, navigation and virtual reality Fleet and ride sharing connect people will constantly increase. This will • Car-related mobility – community services, car sharing Person to person car rental give us an opportunity to extend our offer beyond • Integrated mobility – park & ride solutions Smart parking our traditional car portfolio. • Smart cities – supplier of data for smart cities. Personal travel planner As we combine our vehicle product portfolio with new mobi­ Crowdsourced logistics lity services to create a complete mobility experiences, we These services will promote Nevs’ vision of shaping mobi­ will strengthen our position on the market. The outlined Autonomous transport systems lity for a more sustainable future and drive sustainability roadmap for our mobility services will follow a journey from E-call within three main areas – Sustainable Cars, Transportation generating interest among our customers to becoming a full and City and Society. Smart payment system mobility and community service solution provider, including: Real time traffic management Connected traveller Connected vehicles Past Yesterday Today Tomorrow

Offline vehicles Integration of Vehicle as a service Mobility as a service services into vehicles • Private vehicles • Car specific services, e.g. car-sharing • Intermodal mobility including different vehicles and mobility schemes • No online support for drivers • Public • Integration of local services • Fleet • Mobility on-demand based on individual customer • New user interfaces in the car • Private preferences

Competitive advantages

Newcomer – and a comeback Partnerships enable open strategy Well-positioned in China No distraction Nevs is enjoying the position of being both a newcomer and Additionally, Nevs is not locked into rigid processes; on China is one of the most attractive New Energy Vehicle Nevs can solely focus on New Energy Vehicles, innovative a comeback. This position is a great advantage to us as our the contrary, the company can employ a highly open inno­ markets in the world and Beijing-Tianjin-Hebei is one of the mobility and connectivity solutions, while other OEMs, still heritages provides us with at worldwide reputation for being vation strategy, including close collaboration with external largest urbanized regions where sustainable mobility will producing traditional vehichles, see New Energy Vehicles as innovative, and producing high quality vehicles. And as a ­sources and partners. By partnering with others and use the make a major difference to build a functioning society. With a side project. newcomer we are free to shape our own destiny, meaning we advan­tage of flexibility and access to specific technologies its Chinese owners, Nevs is well positioned to drive change have the freedom to focus on true sustainability and uncom­ and capabilities, Nevs will become a leader in New Energy of city mobility and to take market shares. promised EV solutions. ­Vehicles and add-on services.

16 17 Management report National Electric Vehicle Sweden Annual report 2015

During 2015 Nevs went on an unstable journey, facing many challenges along the way. However, in hindsight the company came out the other side with a solid foundation for future growth and a new vision on how to create sustainable mobility services for people around us and generations to come.

The Board of Directors of National Electric Vehicle The creditors accepted the composition Sweden AB, 556889-7556, domiciled in Trollhättan In February 2015 the Board decided to propose a composi­ hereby presents the annual accounts and consolidated tion with the creditors in the District court of Vänersborg. In accounts for the financial year 1 January 2015 to 31 parallel the Board and the management worked intensively December 2015. to find a long-term financial solution with new owners, indus­ trial partners and bank loans. Difficult start to 2015 Following discussions with the creditors’ committee, 98,2 Nevs entered the reorganization on August 29, 2014, under percent of the creditors (representing 98,6 percent of the the supervision of Administrator Lars Eric Gustafsson from debt) accepted the proposed composition during a hearing Hamilton Law Firm and over the coming months the owners in the District Court of Vänersborg on March 23, 2015. and the management were busy finding solutions to keep the company alive. As Nevs needed short-term financing for the Leaving the reorganization Annual report 2015 on-going operations during the reorganization there was an On March 23, 2015, the court was satisfied with the pre­ urgent need for more sustainable financing for future opera­ sented business plan and decided Nevs could leave the re­­­ tions. organization. From now onward Nevs turned the focus on the Nevs’ main owner, Kai Johan Jiang, through his company future and to start executing on the business plan. National Modern Energy Holdings (NME), covered the majo­ rity of the operating costs during the reorganization. Additio­ New financial injection through share issues nal revenue came from spare part production for Orio AB and On May 27, 2015, an investment agreement on joint ownership from testing and laboratory services to external customers. was signed with Beijing State Research Information Tech­ nology Co Ltd (SRIT), owned by the Chinese government Tied hands while under reorganization through the State Council and the China Unicom; and the city of Tianjin through its national development area, Tianjin Whilst the company needed to be under reorganization to Binhai Hi-tech Industrial Development Area (THT). SRIT owns be protected from external creditors and avoid bankruptcy, it Strengthening 5 percent while THT owns 30 percent of the shares in Nevs. also had to show the potential future investors that it was fit enough to stand on its own. There was not only the difficulty This agreement was ground breaking for the future of Nevs to explain the conditions of the reorganization to the Asian and meant, not only that the establishment in Tianjin will partners Nevs were in negotiation with, but the reorganiza­ provide Nevs with a strong position in the emerging electric tion also created an uncertainty of the company’s future and vehicle market in China, but also that 200 million USD, equi­ the Asian partners found it too great a risk to sign the agree­ valent to 1.7 billion SEK, through new share issues, was injec­ our position ments. ted into the company. Tianjin has a long history of automotive industry, which means the cooperation will provide Nevs with During the first quarter of 2015 the majority shareholder, a solid supplier base in the region as well as access to deci­ National Modern Energy Holdings, decided that it would sion and policy makers on the important Chinese market. contribute financial resources in order to make Nevs debt- The managenent's comments on main events 2015-2016 Nevs is currently having discussions with creditors about free and exit the reorganization as soon as possible. converting the former framework agreements to binding loan commitments.

18 19 Management report National Electric Vehicle Sweden Annual report 2015

Strengthens the structure of partners Simultaneously, two joint venture companies were estab­ lished in Tianjin – one aimed at production for electric Owner State Research ­vehicles and the other at building a global research and Information development center in Tiajin. The development company, Teamsun Technology National Vehicle Technology Development, has Nevs as its structure Ltd majority owner with 90 percent of the shares. Additionally, 49% 51% Nevs owns 50 percent of the production company, National New Energy Vehicle.

Agreement about a Turkish national car On May 28, 2015, Nevs and the Turkish Scientific and Tech­ nical Research Council, Tübitak, signed an agreement to develop a Turkish national car. The cooperation includes IP and support during the development process and it aims to Tianjin Binhai New create future industrial synergies in development and manu­ Technology Industrial facturing. National Modern Energy Developement Zone Holdnings Ltd Finance Bureau Qingbo State Research A new facility in China Investment Information On June 28, 2015, the construction of a production site, a 30% Ltd Technology research and development center and an administrative Ltd ­office started in the city of Tianjin. With the production facili­ 22% 5% ty in Trollhättan that will remain as Nevs’ main plant, Nevs will 43% have two flexible and global sites. The new factory in Tianjin will have a capacity of producing 200 000 cars every year when fully completed. The produc­ tion will start in May 2017.

Strategic agreement with Dongfeng On August 17, 2015, after months of discussions, an impor­ tant industrial and strategic agreement was signed with the Chinese state-owned vehicle manufacturer, Dongfeng Motors, DFM. DFM is one of the world’s largest companies, ranked 109 on the Fortune Global 500, which means its ability to share development; purchasing and distribution gave Nevs a strong industrial partner. Nevs Paying the final debts On September 9, 2015, Nevs settled the second and final part of the composition with the creditors – a month before due date. The debt that was paid to 106 creditors, summed up to 231 million SEK. Since then, Nevs’ result has improved in comparison to previous year and the management is con­ tinuing its task to implement the business plan and generate sustainable profitability. National National Vehicle Automobile New Energy Technology Strategic agreement with Panda and Volinco Property AB On December 17, 2015, a strategic collaboration agreement Vehicle Co. Ltd Development Co. Ltd was signed with Panda New Energy Ltd. Until the end of 2020 Nevs will produce and deliver no less than 150 000 9-3 Sedan electric vehicles. In addition the agreement includes another 100 000 electric transportation vehicles and mini­ buses from companies associated to Nevs and its owners. The value of the investment is around 100 billion SEK.

20 21 May 27 SRIT and the city of Tianjin signs agreement Sep 9 Feb 17 2016 March 23 with Nevs and Creditors’ Nevs pays its Nevs signs frame­­- contributes 1.7 billion committee accepts final debts to work agreement with to the company. the composition 106 creditors New Long Ma Dec 17 Cooperation agree­ 2015 April 15 ment is signed with 2016 Nevs leaves June 28 Panda New Energy the reorgani­ Start of on producing zation construction of 250 000 EV Nevs’ new factory in Tianjin

Panda offers mobile services solutions. The agreement Attracting competences and capabilities Good start to 2016 Moreover, the production facility in Trollhättan is currently represents a strategic collaboration for Nevs to implement As a result of the reorganization, part of the company’s On February 17, 2016, Nevs signed a framework agreement being rebuilt to fit future production requirements. The body its vision about shaping mobility and deliver mobile services. competence left Nevs for other players on the market. on acquiring a stake in New Long Ma (NLM), a transport vehicle shop needs to be adjusted to allow for the production of a As Panda is cooperating with many car service platforms in However, as Nevs resumed its recruitment during 2015, manufacturing company, located in the Fujian province. The new floor for the electric vehicle as well as the preparation China, Nevs has taken a first step into the mobility service many of them have found their way back. Since the autumn production site will give Nevs a foothold in the southern parts for the production start-up of painted Body in white (BIW). market by providing electrical vehicles for sharing services. of 2015 the company has recruited around 50 people every of China, and complement Nevs production facility in Tianjin, Additionally, Nevs signed a strategic agreement with China month, mostly engineers working on the implementation of located in the northern parts of China. New Long Ma, owned On-going product development Volant Industries, Volinco, a subsidiary to China Aerospace the business plan. As of December 31, 2015, the number of by the Fuijan Motors Group, has over the past three years During 2016 the product development teams will focus on Industries. The agreement resembles the agreement with em­­­ployees in Trollhättan was 428. Additionally 105 consul­ invested around 4 billion SEK in the production facility that making the 9-3 electric vehicle ready for pre-production in Panda and includes the delivery of 20 000 9-3 sedan electric tants are working with the company and 41 employees are has a capacity of producing 150 000 vehicles per year. May 2017. This includes winter testing in Arjeplog, which was working in Tiajin, China. vehicle until 2020. Nevs’ main interest in New Long Ma:s portfolio is an electric carried out in February. commercial distribution minivan, which is currently the third Regarding the long-term product development, the engi­ Environmental information New members joining the Board most sold electric minivan in China. During its first produc­ neers are working developing our new vehicle architecture Nevs’ board expanded during 2015 with several new In accordance with Chapter 9 (Environmentally hazardous tion year, 2015, 12 000 units were sold. With another produc­ Nevs’ future electric vehicle portfolio. The new architecture members. Stefan Tilk, with a background from AB Volvo, was activities) in the Environmental Code Nevs has licensable tion line in place, Nevs will be able to fulfill its offer to Panda will be the foundation for a broader and more competitive appointed Vice-Chairman, and Finn Johnsson, former chair­ activities (SIC 34.30, automotive, A-establishment). Super­ New Energy of delivering 50 000 electric logistic vans and product portfolio. man of AB Volvo also joined the board. Additionally Limin visory authority is Länsstyrelsen of Västra Götaland. The 50 000 electric minibuses. license controls the operations of (mainly): the scope and The pre-studies for Dongfeng Motors and Tübitak will be Sun, representing Tianjin Hi-Tech zone, THT, and Ming Li, Following a due diligence of New Long Ma (NLM) the closing design (quantity produced cars), emissions to air and water, finalized during March and preparations for start-up projects SRIT, as well as two representatives from the unions, Ronnie date for the acquisition will be set before summer 2016. Nevs waste, noise and chemicals. Nevs is also covered by the "Act are on going. Hermansson and Stefan Larsson, became board members. will be the main owner with 50 percent of the shares, while (2004: 1199) trading of emission allowances" and holds a SRIT will own 15 percent and the remaining 35 percent will In both factories, Trollhättan and Tianjin, the implementation permit to emit greenhouse gases. stay with the current owners. of SAP has started during the Q1, 2016.

Agreement with the biggest power grid company in Approaching 550 employees Management team As of December 31, 2015, the management team consisted of: China – State Grid 503 employees are currently (March 1, 2016) working in Trollhättan and 41 in China. Additionally 171 consultants Stefan Tilk, Vice Chairman and Group Executive Director Jonas Hernqvist, Sales & Marketing In March 2016, Nevs signed yet another strategic agree­ ment regarding delivery of electric vehicles. The partner is are hired to support the operations. And with the ambition Mattias Bergman, President Mikael Östlund, Communications & Public Affairs State Grid, one of the largest companies in the world and to continue to grow, the company keeps searching for new Stig Nodin, Engineering & Product Development Lars Zetterberg, Legal the biggest power grid companies in China – responsible talents and excellences. The ambition is to continue to grow and as a result of the acquisition of New Long Ma in ­February Morgan Fransson, Manufacturing & Facilities Ove Eriksson, Finance for building the infrastructure for electric vehicle charging stations. Nevs will deliver electric vehicles to State Grid, both 2016, the workforce will increase with approximately 400 Kjell ac Bergström, Quality & Environment* Conny Janson, IT for State Grid’s own company car fleet and for leasing solu­ employees. Per Svantesson, Purchasing & PMO James Peng, China Operations tions. Anette Johansson, Human Resources * Maria Oinas from 2016-01-01 All the opportunities in the world The following members of the Board works full time for Nevs: Three production facilities 2017 To summarize the year of 2015, Nevs has been on a very During February 2016, the piling work for Nevs new factory excit­ing journey. With new partners and a new owner struc­ Karl -Johan Jiang, Stefan Tilk, in Tianjin was carried out. Provided the agreement with New ture the company have good opportunities to execute on the Chairman Vice Chairman and Group Executive Director Long Ma will be signed during 2016, Nevs will be running in business plan and generate sustainable profitability. total three production facilities by 2017.

22 23 Management report National Electric Vehicle Sweden Annual report 2015

Commentary on profit and loss statement of 2015 Comments on the balance sheet as per 31 of December 2015

Assets Continuity of the Group 2015 2014 2013 2012 The change in fixed assets are, except from write-downs The Financial Statements have been prepared based on the SEK (’000) SEK (’000) SEK (’000) SEK (’000) of certain immaterial assets (173 MSEK), due to planned assumption of a Going Concern. Executing the company’s depreciations and investments related to the business setup business plan will increase the operating costs, increase in Tianjin. Also current assets are effected by the startup in the need for working capital and investments in product de­ Net sales 78 528 75 377 47 428 13 537 Tianjin. The available funds amounts to 1 140 MSEK which velopment and equipment. This is covered by available funds makes up 36 % of the Groups total assets. and by current agreements with the new owner, both in the Result for the period -335 050 -1 235 410 -598 730 -121 367 parent company and in the daughter companies, regarding Total assets 3 180 531 2 301 276 2 312 130 1 820 789 Liabilities / financing continued funding. Total equity 3 054 471 1 569 147 1 518 621 203 633 The Group has received 1 831 MSEK in the form of equity from new investors. A part of these funds has been used to Average number of employees 394 525 220 26 pay of the liabilities the Group had at the beginning of the year and the Group has a very low debt with a solidity of 96 %. As per the date of the closing all liabilities are related to current supplier invoices and accrued items. Gross margin Administrative expenses The net sales has increased due to increased sales of Administrative expenses include costs for the IT structure ­services. The revenue from sales of vehicles has decreased 97 MSEK (141), to the structural costs of the product de­ by half. The gross margin of the company is negative due velopment 82 MSEK (137), and for the staffs 121 MSEK Proposed disposition of earnings (SEK) to costs to keep the capacity to manufacture vehicles. The (158). The lower costs is a result of cost decreases during gross margin of the sales of services is positive. the reconstruction of the company. The Board of Directors proposes that the company´s distributable earnings is treated as follows: Other operating income Other operating expenses Other operating income mainly consists of the revenue from Other operating expenses mainly consists of write-down Unrestricted Equity 2 873 796 868 selling a license to use certain parts of the company’s im­ of inventory (67 MSEK) and of certain immaterial assets Net income of the year - 278 107 249 material rights (370 MSEK) and revenue from composition (173 MSEK ). (254 MSEK for the Group and 294 MSEK for the parent Total balance to be allocated 2 595 689 619 company). Finance net The financial costs are mainly related to the liabilities the Group had in the beginning of 2015. Carried forward to next financial year 2 595 689 619

24 25 Management report National Electric Vehicle Sweden Annual report 2015

Consolidated statement of comprehensive income Consolidated statement of financial position for the period 1 January to 31 December 2015 at 31 December 2015

Period: Period: 1 January to 1 January to 31 December, 2015 31 December, 2014

Note SEK (’000) SEK (’000)

Net sales 78 528 75 377 Cost of sales -262 894 -417 397 Gross Margin -184 366 -342 020 Assets 15-12-31 14-12-31 Other operating income 4 633 200 - Note SEK (’000) SEK (’000) Administrative expenses 3 -520 416 -603 139 Other operating expenses 9 -251 806 -58 636 Land and buildnings 11 449 670 484 954 Operating Result 6, 7, 8 -323 389 -1 003 796 Plant and machinery 11 598 990 698 155 Licenses 12 26 748 193 333 Financial income 5 1 659 188 Technology 12 298 333 318 333 Financial expenses 5 -13 320 -231 801 Patents 12 3 333 5 333 Result before taxation -335 050 -1 235 410 Capitalized development expenditure 12 410 822 426 180 Other non-current assets 4 369 3 175 Taxation 10 - - Non-current assets 1 792 264 2 129 464 Result for the period -335 050 -1 235 410

Other comprehensive income to be re­classified Rawmaterial 19 819 91 423 to profit or loss in subsequent periods. Work in progress 1 500 2 000 Exchange differances on trans­lation of foreign operations -10 875 - Finished goods 1 068 19 320 Total comprehensive result for -345 925 -1 235 410 Inventory 14 22 388 112 743 the period

Result for the period attributable to Trade receivables 16 27 259 7 730 Owners of the parent -328 210 -1 235 410 Receivables from related companies 16 85 140 - Non-controlling interest -6 840 Prepayments 16 32 389 21 923 Result for the period -335 050 -1 235 410 Other receivables 16 81 221 16 998 Reserved cash 17 64 80 Comprehensive result attributable to: Cash and cash equivalents 17 1 139 806 12 337 Owners of the parent -339 290 -1 235 410 Current assets 1 365 879 171 812 Non-controlling interest -6 635 Comprehensive result for the period -345 925 -1 235 410 Total assets 3 180 531 2 301 276

26 27 Management report National Electric Vehicle Sweden Annual report 2015

Consolidated statement of changes in equity for the period 1 January to 31 December 2015

Attributable to the owners of the parent

Other Un­­- Non- Not registered contributed appropriat­­ed controlling Issued capital capital capital net result interest Total equity

SEK (’000) SEK (’000) SEK (’000) SEK (’000) SEK (’000)

Amount as per 1 January, 2015 256 410 - 3 268 245 -1 955 507 - 1 569 147

Result for the period 1 January to 31 December, 2015 - - -328 210 -6 839 -335 050 Equity and liabilities 15-12-31 14-12-31 Other comprehensive result - -11 375 295 205 -10 875 Note SEK (’000) SEK (’000) Total comprehensive result - - -11 375 -327 915 -6 635 -345 925

Issued capital 347 985 256 410 New share issue parent company 91 575 18 315 1 560 109 1 669 999 Contribution by non- Not registrered capital 18 315 - controlling parties - - - 161 250 161 250 Other contributed capital 4 816 979 3 268 245 91 575 18 315 1 560 109 - 161 250 1 831 249 Unappropriated net result -2 283 423 -1 955 507 Amount as per 347 985 18 315 4 816 979 -2 283 423 154 615 3 054 471 Equity attributable to the owners 2 899 856 1 569 147 31 December, 2015 of the parent

Non-controlling interest 154 615 Total equity 18 3 054 471 1 569 147 Attributable to the owners of the parent

Interest bearing borrowings 15 - 43 774 Other Non- Not registered contributed Un­appropriat­­- controlling Provisions 4 182 6 229 Issued capital capital capital ed net result interest Total equity Trade payables 19 35 326 472 871 SEK (’000) SEK (’000) SEK (’000) SEK (’000) SEK (’000) Payables to group companies 15, 19, 20 - 70 555 Amount as per 1 January, 2014 256 410 - 1 982 308 -720 097 - 1 518 621 Other payables 19 86 552 138 699 Current liabilities 126 060 732 128 Result for the period 1 January to 31 December, 2014 - - -1 235 410 -1 235 410 Other comprehensive result - - - - Total equity and liabilities 3 180 531 2 301 276 Total comprehensive result - - - -1 235 410 - -1 235 410

Memorandum items 21 460 181 566 478 Shareholders contribution - 1 285 937 - 1 285 937 Pledged assets 460 181 566 478 - - 1 285 937 - - 1 285 937 Contingent liabilities 0 0 Amount as per 31 December, 256 410 - 3 268 245 -1 955 507 - 1 569 147 2014

28 29 Management report National Electric Vehicle Sweden Annual report 2015

Consolidated cash flow statement Parents statement of comprehensive income for the period 1 January to 31 December 2015 (under the indirect method) for the period 1 January to 31 December 2015

2015 2014

Note SEK (’000) SEK (’000) Cash flows from operating activities Result for the period -334 550 -1 235 410

Adjustments for non cash items in the operating activities: Depreciation & write-down of assets 152 068 159 754 Amortization & write-down of intangible assets 268 788 100 475 Write-down of inventories 66 703 - Revenue from composition -254 255 - Net financing income and expenses 11 661 231 613 Gain/loss on sale of equipment -765 8 761 Other - 427 Movements in working capital: Change in inventories 23 652 27 750 Change in current assets - 179 483 60 639 Change in current liabilities -264 529 372 441 Cash generated from operations (excluding interest) -510 710 -273 550 Interest received 1 659 188 Period: Period: Interest paid -11 161 -116 1 January to 31 December, 2015 1 January to 31 December, 2014 Other financial costs -8 294 -1 163 Realized exchange rate differences -679 5 370 Note SEK (’000) SEK (’000) Net cash from operating activities (including interest) -529 185 -269 270 Investing activities Net sales 146 031 68 285 Proceeds from sale of plant and equipment 789 28 952 Acqusition of plant and equipment -17 643 -188 703 Cost of sales -337 500 -417 397 Acquisition of technology, licenses and patents -55 813 - Gross Margin -191 469 -349 112 Changes in other investments -1 194 -2 925 Development expenditure and licenses -9 030 -221 077 Net cash used in investing activities -82 891 -383 753 Other operating income 4 673 472 - Financing activities Administrative expences 3 -495 599 -593 461 Proceeds from issue of share capital 1 669 999 - Proceeds from establishment of subsidiary 161 250 - Other operating expenses 9 -251 806 -58 636 Amortization/Proceeds from borrowings from related parties -43 285 581 627 Operating result 6, 7, 8 -265 402 -1 001 210 Amortization/Proceeds from external borrowings -34 168 34 168 Proceeds from other financial items -2 792 - Net cash from financing activities 1 751 004 615 795 Financial income 5 615 145 Financial expenses 5 -13 320 -231 720 Net increase in cash and cash equivalents 1 138 928 -37 228 Cash and equivalents at 1 January 12 417 49 645 Result before taxation -278 107 -1 232 785 Net foreign exchange differance -11 475 - Cash and equivalents at 31 December 1 139 870 12 417 Taxation 10 - - Cash and cash equivalents comprise of the following at 31 December Result for the period -278 107 -1 232 785 Cash at bank and on hand 14 1 139 870 12 417 Cash and cash equivalents at 31 December 1 139 870 12 417 Total comprehensive result is equal to the result for the period.

30 31 Management report National Electric Vehicle Sweden Annual report 2015

Parents statement of financial position at 31 December 2015

Assets 15-12-31 14-12-31 Note SEK (’000) SEK (’000) Equity and liabilities 15-12-31 14-12-31 Plant and machinery 11 598 426 698 155 Note SEK (’000) SEK (’000) Licences 12 - 193 333 Technology 12 298 333 318 333 Issued capital 347 985 256 410 Patents 12 3 333 5 333 Non registered capital 18 315 Capitalized development expenditure 12 381 755 426 180 Total restricted equity 366 300 256 410 (3 663 004 shares) Investments in subsidiaries 13 869 525 600 050 Other non-current assets 4 369 3 175 Distributable equity 2 873 797 2 546 473 Non-current assets 2 155 742 2 244 560 Unappropriated net result -278 107 -1 232 785 Total unrestricted equity 2 595 690 1 313 688 Rawmaterials 19 819 91 423 Total equity 18 2 961 990 1 570 098 Work in progress 1 500 2 000 Finished goods 1 068 19 320 Interest bearing borrowings 15 - 43 774 Inventory 14 22 388 112 743 Provisions 4 182 6 228 Trade payables 19 35 178 472 727 Trade receivables 16 25 277 4 205 Payables to group companies 15, 19, 20 119 629 179 918 Receivables from group companies 16, 20 74 606 - Other payables 19 79 898 137 746 Prepayments 16 32 271 21 809 Current provisions and liabilities 238 887 840 394 Other receivables 16 31 390 16 958 Reserve cash 17 64 80 Total equity and liabilities 3 200 877 2 410 492 Cash and cash equivalents 17 859 139 10 136 Current assets 1 022 747 165 932 Memorandum items 21 621 000 676 780 Pledged assets 621 000 676 780 Total assets 3 200 877 2 410 492 Contingent liabilities 0 0

32 33 Management report National Electric Vehicle Sweden Annual report 2015

Parents statement of changes in equity Parents cash flow statement for the period 1 January to 31 December 2015 for the period 1 January to 31 December 2015 (under the indirect method)

2015 2014

Note SEK (’000) SEK (’000) Not Un- Cash flows from operating activities registered Shareholders appropriated Issued capital capital Premium fund contribution net result Total equity Result for the period -278 107 -1 232 785

SEK (’000) SEK (’000) SEK (’000) SEK (’000) SEK (’000) Adjustments for items that are not included in the operating activities: Depreciation & write-down of assets 105 365 109 115 Amortization & write-down of intangible assets 268 788 100 475 Amount as per 1 January, 2015 256 410 - 592 308 2 675 937 -1 954 557 1 570 098 Write-down of inventories 66 703 - Revenue from composition -294 527 - Result for the period 1 January Net financing income and expenses 12 705 231 575 to 31 December, 2015 - - - - -278 107 -278 107 Gain/loss on sale of equipment -765 8 761 - - - - -278 107 -278 107 Other 50 538 42 231 Movements in working capital: New share issue 91 575 18 315 1 560 109 - - 1 669 999 Change in inventories 23 652 27 750 Change in current assets -120 572 61 520 91 575 18 315 1 560 109 - - 1 669 999 Change in current liabilities -270 458 378 342 Cash generated from operations -436 678 -273 016 Amount as per 347 985 18 315 4 816 979 -2 283 423 154 615 3 054 471 31 December, 2015 Interest received 615 145 Interest paid -11 161 -38 Other financial costs -8 294 -1 159 Realized exchange rate differences -679 5 371 Net cash from operating activities -456 197 -267 697 Not Un- registered Shareholders appropriated Cash flow from Investing activities Issued capital capital Premium fund contribution net result Total equity Proceeds from sale of plant and equipment 789 28 952 SEK (’000) SEK (’000) SEK (’000) SEK (’000) SEK (’000) Acqusition of plant and equipment -5 660 -188 703 Acqusition of shares in subsidiary -269 475 -50 Changes in other investments -1 194 -2 925 Amount as per 1 January, 2014 256 410 - 592 308 1 390 000 -721 773 1 516 945 Development expenditure and licenses -9 030 -221 077 Net cash used in investing activities -284 570 -383 803 Result for the period 1 January Financing activities to 31 December, 2014 - - - - -1 232 785 -1 232 785 Proceeds from issue of share capital 1 669 999 ------1 232 785 -1 232 785 Amortization/Proceeds from borrowings from related parties -43 285 581 627 Amortization/Proceeds from external borrowings -34 168 34 168 Shareholders contribution - - 1 285 937 - 1 285 937 Proceeds from other financial items -2 792 - - - - 1 285 937 - 1 285 937 Net cash from financing activities 1 589 754 615 795 Net increase in cash and cash equivalents 848 987 -36 705 Amount as per 256 410 - 592 308 2 675 937 -1 954 557 1 570 098 Cash and equivalents at 1 January 10 216 46 921 31 December, 2014 Cash and equivalents at 31 December 859 203 10 216

Cash and cash equivalents comprise of the following at 31 December Cash at bank and on hand 14 859 203 10 216 Cash and cash equivalents at 31 December 859 203 10 216

34 35 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 Notes 1 2 .1 to the consolidated financial statements Corporate information Basis of preparation National Electric Vehicle Sweden AB (Nevs) was founded in Accounting principles for the Group April 2012. Nevs is a privately held limited company incor­ The consolidated financial statements of the Group have porated under Swedish law with register number 556889- been prepared in accordance with International Financial 7556. The registered office is located at Saabvägen 5, Troll­ Reporting Standards (IFRS) as issued by the International hättan, Sweden. Accounting Standards Board (IASB) as approved by the EU. The Consolidated Financial Statements comprise of Nevs AB, The consolidated financial statements have been prepared Automobile Property AB, Automobile Laboratory AB, Auto­ on a historical cost basis, except for investment properties, mobile Laboratory AB and National New Energy Vehicle Co. land and buildings classified as property, plant and equip­ Ltd, National Vehicle Technology Development Co. Ltd, Auto­ ment, derivative financial instruments and available-for-sale mobile i Trollhättan nr 1 AB and Automobile i Trollhättan nr financial assets that have been measured at fair value. The 2 AB founded during the year, together referred to as the carrying values of recognized assets and liabilities that are Group. designated as hedged items in fair value hedges that would The parents and the Groups main activities consists of de­- otherwise be carried at amortized cost are adjusted to record sign­ing, engineering, manufacturing, marketing and distribu­ changes in the fair values attributable to the risks that are tion of vehicles under own brands. The parent company also being hedged in effective hedge relationships. The conso­ provides technical services to other companies in the same lidated financial statements are presented in SEK and all area of business. values are rounded to the nearest thousands, except when otherwise indicated. The owners of the parent company are as follows: As nearly all activities of the Group derives from the parent National Modern Energy Holdings Ltd 43 % company, all information in the Consolidated Financial State­ TianJin GaoXin Bohua Investment Ltd 30 % ments, both text, numbers and tables are used to describe the activities in both the Group and NEVS unless otherwise Qingbo Investment Ltd 22 % indicated. Beijing GuoYan Hutong Cci Capital Limited 5 % Accounting principles for the parent company The Board of Directors authorized the Consolidated Finan­ The Swedish Financial Reporting Board’s Recommendation cial Statements at April 12 2016. 2 – Accounting for Legal Entities and the Swedish Annual Accounts Act have been applied when preparing the parent company’s annual accounts. In accordance with this recom­ mendation, the parent company shall prepare its reports in accordance with the IASB’s International Financial reporting standards (IFRS) and interpretations (IFRIC) adopted by the EU, to the extent that these are not contrary to the Swedish Annual Accounts Act. The accountancy principles have been applied consistently for all periods, unless otherwise stated.

36 37 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

b) Foreign currencies The Group’s consolidated financial statements are pre­ sented in SEK, which is also the parent company’s functional currency. For each entity the Group determines the functio­ nal currency and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation and has elected to recycle the gain or loss that arises from using this method.

Transactions and balances Transactions in foreign currencies are initially recorded by 2.2 2.3 the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recog­ nition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of mone­ Basis of consolidation tary items are recognized in profit or loss with the excep­ Summary of significant tion of monetary items that are designated as part of the accounting policies hedge of the Group’s net investment of a foreign operation. The consolidated financial statements comprise the finan­ A change in the ownership interest of a subsidiary, without These are recognized in other comprehensive income until cial statements of the Group and its subsidiaries as at 31 a loss of control, is accounted for as an equity transaction. If the net investment is disposed of, at which time, the cumula­ December 2014. Subsidiaries are consolidated from the the Group loses control over a subsidiary, it: tive amount is reclassified to profit or loss. Tax charges and date of acquisition, being the date on which the Group ob­ a) Business combinations • Derecognizes the assets (including goodwill) and credits attributable to exchange differences on those mone­ tains control, and continue to be consolidated until the date Business combinations are accounted for using the acqui­ ­liabilities of the subsidiary tary items are also recorded in other comprehensive income. when such control ceases. The financial statements of the sition method. The cost of an acquisition is measured as Non-monetary items that are measured in terms of historical subsidiaries are prepared for the same reporting period as • Derecognizes the carrying amount of any non-­ the aggregate of the consideration transferred measured at cost in a foreign currency are translated using the exchange the parent company, using consistent accounting policies. controlling interest acquisition date fair value and the amount of any non-controll­ rates at the dates of the initial transactions. Non-monetary All intra-group balances, transactions, unrealized gains and ing interest in the acquiree. For each business combination, • Derecognizes the cumulative translation differences items measured at fair value in a foreign currency are trans­ losses resulting from intra-group transactions and dividends the Group elects whether to measure the non-controlling recorded in equity lated using the exchange rates at the date when the fair are eliminated in full. interest in the acquiree at fair value or at the p­ roportionate • Recognizes the fair value of the consideration received share of the acquiree’s identifiable net assets. Acquisition-­ value is determined. The gain or loss arising on translation Total comprehensive income within a subsidiary is attributed of non-monetary items measured at fair value is treated in • Recognizes the fair value of any investment retained related costs are expensed as incurred and included in admi­ to the non-controlling interest even if it results in a deficit nistrative expenses. line with the recognition of gain or loss on change in fair balance. • Recognizes any surplus or deficit in profit or loss value of the item (i.e., translation differences on items whose When the Group acquires a business, it assesses the financial fair value gain or loss is recognized in other comprehensive • Reclassifies the parent’s share of components pre­ assets and liabilities assumed for appropriate classification viously recognized in other comprehensive income to income or profit or loss are also recognized in other compre­ and designation in accordance with the contractual terms, profit or loss or retained earnings, as appropriate hensive income or profit or loss, respectively. economic circumstances and pertinent conditions as at the

acquisition date. This includes the separation of embedded c) Revenue recognition derivatives in host contracts by the acquiree. Revenue is recognized to the extent that it is probable that If the business combination is achieved in stages, the pre­ the economic benefits will flow to the Group and the revenue viously held equity interest is remeasured at its acquisition can be reliably measured, regardless of when the payment date fair value and any resulting gain or loss is recognized in is being made. Revenue is measured at the fair value of the profit or loss. Any contingent consideration to be transferred consideration received or receivable, taking into account by the acquirer will be recognized at fair value at the acqui­ contractually defined terms of payment and excluding taxes sition date. Contingent consideration classified as an asset or duty. The Group assesses its revenue arrangements or liability that is a financial instrument and within the scope against specific criteria to determine if it is acting as prin­ of IAS 39 Financial Instruments: Recognition and Measure­ cipal or agent. The Group has concluded that it is acting as ment, is measured at fair value with changes in fair value a principal in all of its revenue arrangements. The specific recognized either in profit or loss or as a change to other recognition criteria described below must also be met before comprehensive income. If the contingent consideration is not revenue is recognized. within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classi­ Sale of goods fied as equity is not remeasured and subsequent settlement Revenue from the sale of goods is recognized when the is accounted for within equity. significant risks and rewards of ownership of the goods have

38 39 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

passed to the buyer, usually on delivery of the goods. • When the deferred tax liability arises from the i­nitial Tax benefits acquired as part of a business combination, An item of property, plant and equipment and any significant recognition of goodwill or an asset or liability in a but not satisfying the criteria for separate recognition at that part initially recognized is derecognized upon disposal or Rendering of services ­transaction that is not a business combination and, date, are recognized subsequently if new information about when no future economic benefits are expected from its use Revenue from services is recognized by reference to the at the time of the transaction, affects neither the facts and circumstances change. The adjustment is either or disposal. Any gain or loss arising on derecognition of the stage of completion. Stage of completion is measured by ­accounting profit nor taxable profit or loss treated as a reduction to goodwill (as long as it does not asset (calculated as the difference between the net disposal reference to labor hours incurred to date as a percentage • In respect of taxable temporary differences associated exceed goodwill) if it was incurred during the measurement proceeds and the carrying amount of the asset) is included period or recognized in profit or loss. of total estimated labor hours for each contract. Where the with investments in subsidiaries, associates and inte­ in the income statement when the asset is derecognized. The contract outcome cannot be measured reliably, revenue is residual values, useful lives and methods of depreciation of rests in joint ventures, when the timing of the reversal Sales tax recognized only to the extent that the expenses incurred are of the temporary differences can be controlled and it is property, plant and equipment are reviewed at each financial eligible to be recovered. probable that the temporary differences will not reverse Expenses and assets are recognized net of the amount of year end and adjusted prospectively, if appropriate. in the foreseeable future sales tax, except: Interest income Deferred tax assets are recognized for all deductible tempo­ • When the sales tax incurred on a purchase of assets or f) Leases For all financial instruments measured at amortized cost and services is not recoverable from the taxation authority, The determination of whether an arrangement is, or con­tains, interest bearing financial assets classified as available for rary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to in which case the sales tax is recognized as part of the a lease is based on the substance of the arrangement at the sale, interest income is recorded using the effective interest cost of acquisition of the asset or as part of the expense inception date. The arrangement is assessed for whether rate (EIR). EIR is the rate that exactly discounts the estimated the extent that it is probable that taxable profit will be avail­ able against which the deductible temporary differences, item, as applicable fulfillment of the arrangement is dependent on the use of a future cash payments or receipts over the expected life of specific asset or assets or the arrangement conveys a right the financial instrument or a shorter period, where appro­ and the carry forward of unused tax credits and unused tax • When receivables and payables are stated with the losses can be utilized, except: amount of sales tax included to use the asset or assets, even if that right is not explicitly priate, to the net carrying amount of the financial asset or specified in an arrangement. liability. Interest income is included in finance income in the • When the deferred tax asset relating to the deductible The net amount of sales tax recoverable from, or payable to, income statement. temporary difference arises from the initial recognition the taxation authority is included as part of receivables or Group as a lessee of an asset or liability in a transaction that is not a busi­ payables in the statement of financial position. Finance leases that transfer substantially all the risks and Dividends ness combination and, at the time of the transaction, benefits incidental to ownership of the leased item to the Revenue is recognized when the Group’s right to receive affects neither the accounting profit nor taxable profit e) Property, plant and equipment Group, are capitalized at the commencement of the lease at the payment is established, which is generally when share­ or loss Property, plant and equipment is stated at cost, net of the fair value of the leased property or, if lower, at the present holders approve the dividend. • In respect of deductible temporary differences asso­ accumulated depreciation and accumulated impairment value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the Rental income ciated with investments in subsidiaries, associates losses, if any. Such cost includes the cost of replacing part of and interests in joint ventures, deferred tax assets are the property, plant and equipment and borrowing costs for lease liability so as to achieve a constant rate of interest on Rental income arising from operating leases on investment recognized only to the extent that it is probable that the long-term construction projects if the recognition criteria are the remaining balance of the liability. Finance charges are properties is accounted for on a straight-line basis over the temporary differences will reverse in the foreseeable met. When significant parts of property, plant and equipment recognized in finance costs in the income statement. lease terms and is included in revenue due to its operating future and taxable profit will be available against which are required to be replaced at intervals, the Group recog­ nature. A leased asset is depreciated over the useful life of the asset. the temporary differences can be utilized nizes such parts as individual assets with specific useful lives However, if there is no reasonable certainty that the Group The carrying amount of deferred tax assets is reviewed at and depreciates them accordingly. Likewise, when a major will obtain ownership by the end of the lease term, the asset d) Taxes each reporting date and reduced to the extent that it is no inspection is performed, its cost is recognized in the carrying is depreciated over the shorter of the estimated useful life of amount of the plant and equipment as a replacement if the Current income tax longer probable that sufficient taxable profit will be available the asset and the lease term. Operating lease payments are to allow all or part of the deferred tax asset to be utilised. recognition criteria are satisfied. All other repair and mainte­ recognized as an operating expense in the income statement Current income tax assets and liabilities for the current period nance costs are recognized in profit or loss as incurred. The are measured at the amount expected to be recovered from Unrecognized deferred tax assets are reassessed at each on a straight-line basis over the lease term. reporting date and are recognized to the extent that it has present value of the expected cost for the decommissioning or paid to the taxation authorities. The tax rates and tax laws At the date of closing all leases where considered opera­ become probable that future taxable profits will allow the of an asset after its use is included in the cost of the respec­ used to compute the amount are those that are enacted or tional leases. deferred tax asset to be recovered. tive asset if the recognition criteria for a provision are met. substantively enacted, at the reporting date in the countries Refer to significant accounting judgements, estimates and where the Group operates and generates taxable income. Deferred tax assets and liabilities are measured at the tax assumptions (Note 2.4). Group as a lessor Current income tax relating to items recognized directly in rates that are expected to apply in the year when the asset is Leases in which the Group does not transfer substantially all realized or the liability is settled, based on tax rates (and tax A revaluation surplus is recorded in other ­comprehensive the risks and benefits of ownership of an asset are classified equity is recognized in equity and not in the income state­ income and credited to the asset revaluation reserve in ment. Management periodically evaluates positions taken in laws) that have been enacted or substantively enacted at the as operating leases. Initial direct costs incurred in negoti­ reporting date. ­equity. However, to the extent that it reverses a revaluation at_ing an operating lease are added to the carrying amount the tax returns with respect to situations in which applicable deficit of the same asset previously recognized in profit or of the leased asset and recognized over the lease term on tax regulations are subject to interpretation and establishes Deferred tax relating to items recognized outside profit or loss, the increase is recognized in profit and loss. A revalu­ the same basis as rental income. Contingent rents are recog­ provisions where appropriate. loss is recognized outside profit or loss. Deferred tax items ation deficit is recognized in the income statement, except nized as revenue in the period in which they are earned. are recognized in correlation to the underlying transaction to the extent that it offsets an existing surplus on the same Deferred tax either in other comprehensive income or directly in equity. asset recognized in the asset revaluation reserve. At the date of closing all leases in the Group are operational Deferred tax is provided using the liability method on tempo­ leases. Deferred tax assets and deferred tax liabilities are offset if a rary differences between the tax bases of assets and liabi­ No depreciation is accounted for on land. Depreciation is legally enforceable right exists to set off current tax assets lities and their carrying amounts for financial reporting calculated on a straight-line basis over the estimated useful against current income tax liabilities and the deferred taxes g) Borrowing costs purposes at the reporting date. Deferred tax liabilities are lives of the assets as follows: relate to the same taxable entity and the same taxation autho­ Borrowing costs directly attributable to the acquisition, recognized for all taxable temporary differences, except: rity, or different taxable entities where there is an intention to • Buildings 25 to 40 years construction or production of an asset that necessarily takes settle the amounts by net payments. • Plant and equipment 3 to 15 years a substantial period of time to get ready for its intended use

40 41 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

or sale are capitalized as part of the cost of the asset. All Research and development costs i) Financial liabilities other borrowing costs are expensed in the period in which Research costs are expensed as incurred. Development Initial recognition and measurement they occur. Borrowing costs consist of interest and other expenditures on an individual project are recognized as an Financial liabilities within the scope of IAS 39 are classified costs that an entity incurs in connection with the borrowing intangible asset when the Group can demonstrate: of funds. as financial liabilities at fair value through profit or loss, loans • The technical feasibility of completing the intangible and borrowings, or as derivatives designated as hedging asset so that the asset will be available for use or sale instruments in an effective hedging conjunction, as appro­ h) Intangible assets • Its intention to complete and its ability to use or sell priate. The Group determines the classification of its finan­ Intangible assets acquired separately are measured on initial the asset cial liabilities at initial recognition. All financial liabilities are recognition at cost. The cost of intangible assets acquired in a recognized initially at fair value and, in the case of loans and business combination is their fair value at the date of acquisi­ • How the asset will generate future economic benefits borrowings, net of directly attributable transaction costs. tion. Following initial recognition, intangible assets are carried • The availability of resources to complete the asset at cost less any accumulated amortization and accumulated The Group’s financial liabilities include trade and other pay­ impairment losses. Internally generated intangible assets, • The ability to measure reliably the expenditure during ables, and loans. excluding capitalized development costs, are not capitalized development Loans and borrowings and expenditure is reflected in profit and loss in the period in Following initial recognition of the development expenditure After initial recognition, interest bearing loans and borrowings which the expenditure is incurred. as an asset, the asset is carried at cost less any accumulated are subsequently measured at amortized cost using the EIR amortization and accumulated impairment losses. Amortiza­ The useful lives of intangible assets are assessed as either finite method. Gains and losses are recognized in profit or loss tion of the asset begins when development is complete and or indefinite. when the liabilities are derecognized as well as through the the asset is available for use. It is amortized over the period of EIR amortization process. Intangible assets with finite lives are amortized over the useful expected future benefit. Amortization is recorded in cost of economic life and assessed for impairment whenever there is sales. During the period of development, the asset is tested Amortized cost is calculated by taking into account any an indication that the intangible asset may be impaired. The for impairment annually. discount or premium on acquisition and fees or costs that are amortization period and the amortization method for an intang­ an integral part of the EIR. The EIR amortization is included ible asset with a finite useful life are reviewed at least at the Technology as finance costs in the income statement. end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic The Group has acquired technology significant for the manu­ Derecognition facturing and the future development of specific products. benefits embodied in the asset are considered to modify the A financial liability is derecognized when the obligation under Amortization of the asset will begin when the manufacturing amortization period or method, as appropriate, and are treated the liability is discharged or cancelled, or expires. When an of the product starts. The asset is amortized over the period as changes in accounting estimates. The amortization expense existing financial liability is replaced by another from the of the expected future benefit. The asset is tested for impair­ on intangible assets with finite lives is recognized in the income same lender on substantially different terms, or the terms ment annually. statement as the expense category that is consistent with the of an existing liability are substantially modified, such an function of the intangible assets. exchange or modification is treated as the derecognition of Patents and licences Intangible assets with indefinite useful lives are not amortized, the original liability and the recognition of a new liability. The but are tested for impairment annually, either individually or at The Group has acquired a number of patents. The main values difference in the respective carrying amounts is recognized the cash-generating unit level. The assessment of indefinite in these patents are related to present or future products and in the income statement life is reviewed annually to determine whether the indefinite will be amortized over the period of expected future benefits. life continues to be supportable. If not, the change in useful life The remaining useful life of these patents is estimated to 5 j) Inventories years. The Group has made payments to get a license with from indefinite to finite is made on a prospective basis. Inventories are valued at the lower of cost and net realizable the right to use certain trademarks. Gains or losses arising from derecognition of an intangible value. asset are measured as the difference between the net disposal Costs incurred in bringing each product to its present loca­ proceeds and the carrying amount of the asset and are recog­ tion and condition are accounted for as follows: nized in the income statement when the asset is derecognized. A summary of the policies applied to the Group’s intangible assets is as follows: • Raw materials: Purchase cost on a first in, first out basis • Finished goods and work in progress: Cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but Licenses Technology Patents Capitalized development excluding borrowing costs

Useful life Finite Finite Finite Finite Initial cost of inventories includes the transfer of gains and losses on qualifying cash flow hedges, recognized in other Straight line Straight line comprehensive income, in respect of the purchases of raw Straight line over the period of Straight line over the period of Amortisation method over the period over the period materials. Net realizable value is the estimated selling price expected future sales expected future sales of the license of the patent in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the Acquired/ sale. Internally generated or acquired internally Acquired Acquired Internally generated generated

42 43 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 2.4

k) Impairment of non-financial assets For assets excluding financial assets and goodwill, an assess­ The Group assesses, at each reporting date, whether there ment is made at each reporting date to determine whether is an indication that an asset may be impaired. If any indica­ there is an indication that previously recognized impairment Significant accounting judgements, estimates and assumptions tion exists, or when annual impairment testing for an asset losses no longer exist or have decreased. If such indication is required, the Group estimates the asset’s recoverable exists, the Group estimates the asset’s or CGU’s recover­ amount. An asset’s recoverable amount is the higher of an able amount. A previously recognized impairment loss is re­ asset’s or cash-generating unit’s (CGU) fair value less costs versed only if there has been a change in the assumptions to sell and its value in use. Recoverable amount is deter­ used to determine the asset’s recoverable amount since the mined for an individual asset, unless the asset does not last impairment loss was recognized. The reversal is limited Judgments Assumptions generate cash inflows that are largely independent of those so that the carrying amount of the asset does not exceed Tax assets The Financial Statements have been prepared based on the its recoverable amount, nor exceed the carrying amount that assumption of a Going Concern and the execution of the from other assets or groups of assets. When the carrying As the parent company historically has had several consecu­ would have been determined, net of depreciation, had no Groups business plan. Executing the company’s business amount of an asset or CGU exceeds its recoverable amount, tive years of tax deficits and the current business plan does impairment loss been recognized for the asset in prior years. plan will increase the operating costs, increase the need for the asset is considered impaired and is written down to its not show taxable profits in the next few years, for entities Such reversal is recognized in the income statement unless working capital and investments in product development recoverable­­ amount. against which the historical tax deficits can be offset, the the asset is carried at a revalued amount, in which case, the and equipment. company has decided not to recognize the existing tax de­ In assessing value in use, the estimated future cash flows reversal is treated as a revaluation increase. are discounted to their present value using a pre-tax dis­ ficit as a deferred tax asset. All assets recognized in the balance sheet are expected to count rate that reflects current market assessments of the have a function in the execution of the Groups business plan. l) Cash and short-term deposits time value of money and the risks specific to the asset. In Cash and short-term deposits in the statement of financial determin­ing fair value less costs to sell, recent market trans­ actions are taken into account. If no such transactions can position comprise cash at banks and on hand and short-term be identified, an appropriate valuation model is used. These deposits with a maturity of three months or less. calculations are corroborated by valuation multiples, quoted For the purpose of the consolidated statement of cash flows, share prices for publicly traded companies or other available cash and cash equivalents consist of cash and short-term fair value indicators. deposits as defined above, net of outstanding bank over­

The Group bases its impairment calculation on detailed drafts. budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the indi­ m) Pensions and other post employment benefits vidual assets are allocated. These budgets and forecast All pensions and other post employment benefits are pre­ calculations generally cover a period of five years. For longer mium based and accounted for in the income statement as ­periods, a long-term growth rate is calculated and applied to the cost arise. project future cash flows after the fifth year. Impairment losses of continuing operations, including im­- pairment on inventories, are recognized in the income state­ ment in expense categories consistent with the function of the impaired asset, except for a property previously re­-­ valued when the revaluation was taken to other comprehen­ sive income. In this case, the impairment is also recognized in other comprehensive income up to the amount of any pre­ vious revaluation.

44 45 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 2.5 2.6

New and amended standards and interpretations 2015 Standards issued but not yet effective

The Group and Parent company applied in its annual rapport A number of new and revised IFRSs have not yet entered 2015, but it is likely that the business will develop in such a for 2015, for the first time, the amendments to standards into effect and have not been applied during the prepara­ way that IFRS 9 will be applicable in the future. and interpretations statements to be applied for financial tion of the Group and Parent company´s financial rapports. years commencing January 1st, 2015 or later. Except for the Described below are the IFRSs that may affect the Group and IFRS 15 Revenue from Contracts with Customers amendments mentioned below, these amendments have not Parent Company financial statements. None of the other new IFRS 15 replaces all previously issued standards and inter­ had any significant impact on the Group or Parent's financial standards, revised standards or IFRIC interpretations publis­ pretations which manages revenue in an overall model for statements. hed December 31st, 2015 are expected to have an impact on revenue recognition. The standard is based on the principle the Group or Parent company's financial statements. that revenue must be recognized when the promised goods IFRIC 21 Fees or services are transferred to the customer, that is, when the The standard is applicable to the real estate tax included in IFRS 9 Financial Instruments customer has obtained control of these. This may occur over the Groups financial statements. The Group account for the IFRS 9 includes reporting of financial assets and liabilities time or at a specific point in time. cost of real state tax linearly over the year and the application and replaces IAS 39. As with IAS 39, financial assets are IFRS 15 will be effective as per January 1st, 2018. The EU of the standard do not affect the financial rapport for the full classified in different categories, some of which are measu­ has not yet approved the standard, and there is no decision year 2015. red at accumulated purchase value cost and other at real on when or how the standard will be applied. In the coming value. IFRS 9 introduces other categories other than those years a study will be initiated to investigate how IFRS 15 specified in IAS 39. IFRS 9 also introduces a new model for will affect the financial statements of the Group and Parent the impairment of financial assets. The purpose of the new company. model includes that credit losses should be reported earlier than under IAS 39. In regards to financial liabilities IFRS 9 is IFRS 16 Leases mainly consistent with IAS 39. However for liabilities carried IFRS 16 replaces IAS 17 from January 1st, 2019. So far there at fair value, the portion of fair value changes that is attribut­ is no information regarding when the EU will approve the able to own credit risk is recognized in other comprehen­ standard, why there is still no decision about when or how sive result rather than in the net result, unless this causes the standard will be applied. Evaluation of the impact of the inconsistencies in the accounting. Revised criteria for hedge standard has not yet started. accounting can lead to more economic hedging strategies qualifying for hedge accounting under IFRS 9 than under IAS 39. IFRS 9 will be effective as per January 1st, 2018. The EU, however, has not yet approved the standard. There is no decision on when the standard will be applied by the Group and the Parent company. Application of the standard is not expected to have any impact on the financial statements for

46 47 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 3

Remunderation to auditors, EY

2015 Group Parent SEK ('000) SEK ('000)

Fee for audit 696 696 Other services 393 393

2014 Group Parent SEK ('000) SEK ('000)

Fee for audit 690 690 Other services 279 279

48 49 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 4 5

Other operating income Finance income & cost Other operation income consists mainly of revenue from sale of license to use certain immaterial assets of 370 000 and of gain on composition of 254 255 (294 527 for the parent company).

Group 2015 2014 SEK ('000) SEK ('000)

Interest income on bank holdings 1 659 188 Interest costs on short term payables -8 388 -8 002 Realized exchange rate differences -4 085 -208 226 Unrealized exchange rate differences 862 -7 574 Other financial costs -1 709 -7 999 -11 661 -231 613

Parent 2015 2014 SEK ('000) SEK ('000)

Interest income on bank holdings 615 145 Interest costs on short term payables -8 388 -7 924 Realized exchange rate differences -4 085 -208 226 Unrealized exchange rate differences 862 -7 574 Other financial costs -1 709 -7 996 -12 705 -231 575

50 51 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 6

Group 2015 2014 SEK ('000) SEK ('000) Depreciation and amortization included in Depreciation of tangible assets included in: the financial statement Costs of sales 90 881 94 587 Administration costs 61 186 65 167 Other operating costs - -

Depreciation of intangible assets included in: Costs of sales 80 455 78 475 Administration costs 15 000 22 000 Other operating costs - -

Parent 2015 2014 SEK ('000) SEK ('000)

Depreciation of tangible assets included in: Costs of sales 90 881 94 587 Administration costs 14 484 14 528 Other operating costs - -

Depreciation of intangible assets included in: Costs of sales 80 455 78 475 Administration costs 15 000 22 000 Other operating costs - -

52 53 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Parent 2015 2014 SEK ('000) SEK ('000)

Included in costs of sales 7 Wages and salaries 62 849 114 808 Social security costs 20 821 30 298 Pension costs 8 060 6 320 Included in administration expences Employee benefits expense Wages and salaries 114 836 90 140 Social security costs 35 496 23 638 Pension costs 15 420 9 058 Included in capitalized development expenditure Group 2015 2014 Wages and salaries 4 316 23 178 SEK ('000) SEK ('000) Social security costs 1 368 6 477 Pension costs 570 2 028 Included in costs of sales Wages and salaries 62 849 114 808 Total Social security costs 20 821 30 298 Wages and salaries 182 001 228 126 Pension costs 8 060 6 320 Social security costs 57 685 60 412 Included in administration expences Pension costs 24 050 17 406 Wages and salaries 117 975 90 140 Total employee benefits expense 263 736 305 945 Social security costs 35 577 23 638 Pension costs 15 484 9 058 Included in capitalized development expenditure Average number of employees Wages and salaries 4 316 23 178 2015 Parent Sweden China Group Total Social security costs 1 368 6 477 Men 315 15 330 Pension costs 570 2 028 Women 57 7 64 Total 372 22 394 Total Wages and salaries 185 140 228 126 2014 Parent Sweden China Group Total Social security costs 57 766 60 412 Men 436 0 436 Pension costs 24 114 17 406 Women 89 0 89 Total employee benefits expense 267 020 305 945 Total 525 0 525

54 55 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Senior management and the Board of Directors

Members at 31 of December 2015 Members at 31 of December 2014

Men Men Senior management 11 Senior management 10 8 Board of Diretors 6 Board of Diretors 2

Women Women Senior management 1 Senior management 1 Board of Diretors 1 Board of Diretors - Research and development costs

No remuneration has been paid to the chairman of the board.

Cost for Managing Director 2015 2014

Total cost 5 550 5 071 Whereof social security costs 2 375 2 072 Group 2015 2014 Whereof pension costs 1 111 894 SEK ('000) SEK ('000)

The Managing Director is entitled to 6 months payment upon termination of the contract. Capitalized expenditure 64 843 221 077 Structural costs 81 805 93 149 Cost for working Vice Chairman 2015 2014 Extraordinary contract termination costs - 43 400 146 648 357 626 Total cost 2 844 - Whereof invoiced from company owned by Vice Chairman 1 800 - Whereof as employee 1 044 - Whereof social security cost 344 - Parent 2015 2014 Whereof pension costs 124 - SEK ('000) SEK ('000)

The Vice Chairman has the function of Group Executive Officer. The Vice Chairman initially received compensation fors ­ ervices Capitalized expenditure 9 030 221 077 performed thru a private company but is as of 1 November an employee of the company. The Vice Chairman is entitled to 12 months payment upon termination of the contract. Structural costs 79 314 93 149 No other special termination agreements exist between the company and any of the senior management or members of the Extraordinary contract termination costs - 43 400 Board of Directors. All agreements can be terminated without any extraordinary payments on the terms stipulated in the regular Swedish collective agreements. 88 344 357 626

56 57 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Group 2015 2014 SEK ('000) SEK ('000)

Accounting loss before income tax - 335 050 -1 235 410 At Swedens statutory income tax of 22% 73 711 271 790 Adjusted for non taxable items 95 9 Adjusted for non deductible items -323 -191 Unrecognized tax losses -73 483 -271 608 9 10 Effective income tax - - Income reported in the income statement -335 050 -1 235 410

Other operation expences Income tax Parent 2015 2014 SEK ('000) SEK ('000) Other operating costs mainly cosists of write- down of certain immaterial assets of 173 333 Accounting loss before income tax - 278 107 -1 232 785 and write-down of inventory of 66 703. At Swedens statutory income tax of 22% 61 184 271 213 Adjusted for non taxable items 94 8 Adjusted for non deductible items -322 -174 Unrecognized tax losses -60 956 -271 047 Effective income tax - - Income reported in the income statement -278 107 -1 232 785

The Group’s tax deficits not recognized in the balance sheet

2015 2014

SEK ('000) SEK ('000)

Sweden 1 279 954 1 006 242 China 16 691 - Taxable deficit 1 296 645 1 006 242

As the parent company historically has had several consecutive years of tax deficits and the current business plan does not show taxable profits for the next few years for entities against which the historical tax deficits can be offset, the company has decided not to recognize the existing tax deficit as a deferred tax asset. When however there is taxable income in the future the income tax on that income will be possible to offset against the unrecognized tax losses to the full amount presented above. Swedish tax losses do not have any limitation in time. Chinese tax losses do not have any limitations in time.

58 59 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 11

Property, plant and equipment

Freehold land Plant and Freehold land Plant and Group 31 December 2015 and buildings machinery Total Group 31 December 2014 and buildings machinery Total SEK (’000) SEK ('000) SEK ('000) SEK (’000) SEK ('000) SEK ('000)

Cost as at 1 January 2015, after deduction for accumulated 484 954 698 155 1 183 109 Cost as at 1 January 2014, after deduction for accumulated depreciation and impairment depreciation and impairment 535 593 656 280 1 191 873

Aquisitions - other 11 415 6 228 17 643 Aquisitions - other - 188 703 188 703 Depreciation charge for the year -46 698 -105 370 -152 068 Depreciation charge for the year -50 639 -109 115 -159 754 Disposal - -23 -23 Disposal - -37 713 -37 713 At 31 December 2015, net of accumulated depreciation 449 671 598 990 1 048 661 At 31 December 2014, net of accumulated depreciation 484 954 698 155 1 183 109 and impairment and impairment

At 1 January: At 1 January: Cost 615 884 824 964 1 440 848 Cost 615 884 682 088 1 297 972 Accumulated depreciation and impairment -130 930 -126 809 -257 739 Accumulated depreciation and impairment -80 291 -25 808 -106 099 Net carrying amount 484 954 698 155 1 183 109 Net carrying amount 535 593 656 280 1 191 873

At 31 December: At 31 December: Cost 627 299 831 160 1 458 459 Cost 615 884 824 964 1 440 848 Accumulated depreciation and impairment -177 628 -232 170 -409 798 Accumulated depreciation and impairment -130 930 -126 809 -257 739 Net carrying amount 449 671 598 990 1 048 661 Net carrying amount 484 954 698 155 1 183 109

60 61 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Property, plant and equipment

Freehold land Plant and Freehold land Plant and Parent 31 december 2015 and buildings machinery Total Parent 31 december 2014 and buildings machinery Total SEK (’000) SEK ('000) SEK ('000) SEK (’000) SEK ('000) SEK ('000)

Cost as at 1 January 2015, after deduction for accumulated - 698 155 698 155 Cost as at 1 January 2014, after deduction for accumulated depreciation and impairment depreciation and impairment - 656 280 656 280

Aquisitions - other - 5 660 5 660 Aquisitions - other - 188 703 188 703 Depreciation charge for the year - -105 366 -105 366 Depreciation charge for the year - -109 115 -109 115 Disposal - -23 -23 Disposal - -37 713 -37 713 At 31 December 2015, net of accumulated depreciation - 598 426 598 426 At 31 December 2014, net of accumulated depreciation - 698 155 698 155 and impairment and impairment

At 1 January: At 1 January: Cost - 824 964 824 964 Cost - 682 088 682 088 Accumulated depreciation and impairment - -126 809 -126 809 Accumulated depreciation and impairment - -25 808 -25 808 Net carrying amount - 698 155 698 155 Net carrying amount - 656 280 656 280

At 31 December: At 31 December: Cost - 830 592 830 592 Cost - 824 964 824 964 Accumulated depreciation and impairment - -232 166 -232 166 Accumulated depreciation and impairment - -126 809 -126 809 Net carrying amount - 598 426 598 426 Net carrying amount - 698 155 698 155

62 63 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 12

Intangible assets

Trademarks, Trademarks, Development- patents and Development- patents and Group 31 December 2015 costs Technology licences Total Group 31 December 2014 costs Technology licences Total SEK (’000) SEK (’000) SEK ('000) SEK ('000) SEK (’000) SEK (’000) SEK ('000) SEK ('000)

Cost as at 1 January 2015, after deduction Cost as at 1 January 2014, after deduction for accumulated depreciation and impairment 426 180 318 333 198 667 943 180 for accumulated depreciation and impairment 253 578 338 333 230 667 822 578

Additions 38 096 0 26 747 64 843 Additions 221 077 - - 221 077 Depreciation charge for the year -53 455 -20 000 -22 000 -95 455 Depreciation charge for the year -48 475 -20 000 -32 000 -100 475 Impairment charges - - -173 333 -173 333 As of 31 December 2014, after deduction 426 180 318 333 198 667 943 180 for accumulated depreciation and impairment Cost as at 31 December 2015, after deduction 410 821 298 333 30 080 739 235 for accumulated depreciation and impairment As of 1 January: As of 1 January: Cost 256 835 340 000 260 000 856 835 Cost 477 912 340 000 260 000 1 077 912 Accumulated depreciation and impairment -3 257 -1 667 -29 333 -34 257 Accumulated depreciation and impairment -51 732 -21 667 -61 333 -134 732 Net carrying amount 253 578 338 333 230 667 822 578 Net carrying amount 426 180 318 333 198 667 943 180 As of 31 December: As of 31 December: Cost 477 912 340 000 260 000 1 077 912 Cost 516 008 340 000 286 747 1 142 755 Accumulated depreciation and impairment -51 732 -21 667 -61 333 -134 732 Accumulated depreciation and impairment -105 186 -41 667 -256 667 -403 520 Net carrying amount 426 180 318 333 198 667 943 180 Net carrying amount 410 821 298 333 30 080 739 235

64 65 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Intangible assets

Trademarks, Trademarks, Development- patents and Development- patents and Parent 31 December 2015 costs Technology licences Total Parent 31 December 2014 costs Technology licences Total SEK (’000) SEK (’000) SEK ('000) SEK ('000) SEK (’000) SEK (’000) SEK ('000) SEK ('000)

Cost as at 1 January 2015, after deduction Cost as at 1 January 2014, after deduction for accumulated depreciation and impairment 426 180 318 333 198 667 943 180 for accumulated depreciation and impairment 253 578 338 333 230 667 822 578

Additions 9 030 - - 9 030 Additions 221 077 - - 221 077 Depreciation charge for the year -53 455 -20 000 -22 000 -95 455 Depreciation charge for the year -48 475 -20 000 -32 000 -100 475 Impairment charges - - -173 333 -173 333 As of 31 December 2014, after deduction 426 180 318 333 198 667 943 180 for accumulated depreciation and impairment Cost as at 31 December 2015, after deduction 381 755 298 333 3 333 683 422 for accumulated depreciation and impairment As of 1 January: As of 1 January: Cost 256 835 340 000 260 000 856 835 Cost 477 912 340 000 260 000 1 077 912 Accumulated depreciation and impairment -3 257 -1 667 -29 333 -34 257 Accumulated depreciation and impairment -51 732 -21 667 -61 333 -134 732 Net carrying amount 253 578 338 333 230 667 822 578 Net carrying amount 426 180 318 333 198 667 943 180 As of 31 December: As of 31 December: Cost 477 912 340 000 260 000 1 077 912 Cost 486 942 340 000 260 000 1 086 942 Accumulated depreciation and impairment -51 732 -21 667 -61 333 -134 732 Accumulated depreciation and impairment -105 186 -41 667 -256 667 -403 520 Net carrying amount 426 180 318 333 198 667 943 180 Net carrying amount 381 755 298 333 3 333 683 422

66 67 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 13 14

Investments in subsidiaries (Parent only) Inventories Due to uncertainty regarding the realizable value in the inventory of components, the company has made a reservation for the difference between the booked value and the net realizable value of 66 703.

Mother company´s Registration Registered Equity Booked share of Name no office interest value equity

Automobile Property AB 556790 -3314 Trollhättan 100% 600 000 523 220 Automobile Laboratory AB 556968-9671 Trollhättan 100% 50 39 Automobile i Trollhättan nr 1 AB 559038-6966 Trollhättan 100% 50 50 Automobile i Trollhättan nr 2 AB 559038-6990 Trollhättan 100% 50 50 National New Energy Vehicle Co. Ltd Tianjin 50% 269 375 245 461

National Vehicle Technology Development Co. Ltd Tianjin 90% 0 -3 287

869 525 765 533

68 69 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 15 16

Financial liabilities Trade receivables and other assets

Group 2015 2014 SEK ('000) SEK ('000)

Trade receivables 27 259 7 730 Receivables from related companies 85 140 - Reclaimable VAT 23 113 13 002 Other receivables 58 108 3 997 Prepaid expenses and accrued income 32 389 21 923 226 009 46 652

Parent 2015 2014 SEK ('000) SEK ('000)

Short term borrowing Interest 2015 2014 Trade receivables 25 277 4 205 Receivables from group companies 74 606 - National Modern Energy Holdings Ltd 0% - 69 707 Reclaimable VAT 23 113 13 002 Svea Finans AB 15% - 31 774 Other receivables 8 277 3 957 Solidum AB 12% - 12 000 Prepaid expenses and accrued income 32 271 21 809 0 113 481 163 544 42 973

During the year all financial debs has been paid in full including accrued interest with the exception of the loan from National The trade receivables and other assets are non-interest bearing and are generally on terms of 30 to 60 days. No provision for Modern Energy Holdiongs. On the loan from National Modern Energy Holdings no interest has been paid. 17 004 of the loan impairment has been made. The Groups receivables from related companies relates to a loan to State Group Holdings Co, Ltd has not been paid as it is a part of the Groups gain on composition. which is a subsidiary of National Modern Energy Holdings Ltd. The loan is short term and non-interest bearing.

70 71 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 17 18 19

Cash and cash equivalents Issued capital and reserves Trade and other payables (current) The amount comprise of bank holdings. The bank There are 3 663 004 shares issued. During the holdings earn interest at floating rates. Holdings year 1 098 904 new shares has been issued. Group 2015 2014 in foreign currencies have been re-evaluated to The emissions has increased the share capital by SEK ('000) SEK ('000) fair value using the exchange rate of the closing 109 890 400 SEK and the share premium fund date and the difference has been accounted for by 1 560 109 000 SEK. These shares has been Trade payables 35 326 472 871 in the income statement. Reserved cash is held in subscribed by TianJin GaoXin Bohua Investment Payable to Group companies - 70 555 a separate accounts. Certain conditions apply for Co Ltd. The shares has been paid in full but 183 Other payables 22 542 66 306 the use of these funds. 150 shares has, as per the date of closing, not yet been registered by the Commercial Registry. Prepaid income and accrued expenses 64 010 72 393 All shares has the same right to vote and the same 121 878 682 125 right to dividends. No dividend has been paid during the year. Parent 2015 2014 SEK ('000) SEK ('000)

Trade payables 35 178 472 727 Payable to Group companies 119 629 179 918 Other payables 16 591 65 934

Prepaid income and accrued expenses 63 307 71 812 234 705 790 391 Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and are normally settled on 30-day term • Other payables are non-interest bearing and are normally settled on 30 – 60-day term • For terms and conditions relating to related parties, reference is made to note 20 The parent company’s payable to Group companies consists of a current account with Automobile Property AB. The debts changes by settlement of current items. There is no set date for payment of the debt. No interest is calculated on the out­ standing amount.

72 73 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Entities with significant influence over the Group Remuneration of key management personnel of the National Modern Energy Holdings Ltd, registered in British Group Virgin Islands, is the owner of 43 % of all outstanding shares Managers in key positions with the Group comprise the of the Group. State Group Holdings Ltd is 100 % owned by members of the Board of Directors and the Manage­ National Modern Energy Holdings Ltd. See note 15 and 16. ment Board. Transactions with these individuals constitute ­related-party transactions. Outside of regular remunerations Terms and conditions of transactions with related for work performed, there have been no material transactions parties with members of this group. Refer to Note 7. The sales to and purchases from related parties are made at terms equivalent to those that prevail in arm’s length trans­ actions. Outstanding balances at the year-end are unsecu­ red and interest free and settlement occurs in cash. There 20 are no guarantees provided or received for any related party ­re­-­ceivables or payables. Purchases Sales to from Owed by Owed to related related related related 2015 parties parties parties parties Related party disclosures SEK ('000) SEK (’000) SEK ('000) SEK ('000) The consolidated financial statements of the Parent companys transactions with other Group companies Group include: Automobile Property AB 45 419 119 629 • Automobile Property AB (100 %) National New Energy Vehicle Co. Ltd 74 606 74 606 • Automobile Laboratory AB (100 %) NTI Co. Ltd - 859 - - • Automobile i Trollhättan nr 1 AB (100%) 74 606 46 278 74 606 119 629 • Automobile i Trollhättan nr 2 AB (100%)

• National New Energy Vehicle Co. Ltd (50%) Group companys transactions with - - 5 140 - State Holdings Group co., Ltd 8 • National Vehicle Technology Development Co. NTI Co. Ltd - 859 - - Ltd (90%) - 859 85 140 -

Purchases Sales to from Owed by Owed to The owners of the Group related related related related 2014 parties parties parties parties National Modern Energy Holdings Ltd 43 % SEK (’000) SEK (’000) SEK ('000) SEK ('000) TianJin GaoXin Bohua Investment Ltd 30 % Qingbo Investment Ltd 22 % Parent companys transactions with other Group Beijing GuoYan Hutong Cci Capital Limited 5 % ­companies (including the following transactions) 38 50 380 - 179 918

Group companys transactions with National Modern Energy Holdings Ltd. - - - 69 705 State Holdings Ltd 38 - - - Beijing National Battery Technology Ltd - 2 320 - 595 NTI Co. Ltd - 1 078 - 255 38 3 398 - 70 555

74 75 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015

Operating lease commitments – Group as lessee The Group has entered into commercial leases on certain manufacturing facilities, IT-systems etc. Depending on the nature of the asset some contracts will be automatically renewed if not actively terminated. Future minimum payments payable under non-cancellable operating leases as at 31 December 2015 are as follows:

Group Parent

SEK ('000) SEK ('000)

21 Within one year 110 818 110 818 After one year but no more than five years 159 489 159 489 More than five years - - 270 307 270 307 Commitments and contingencies Operating lease commitments – Group as lessor The Group has entered into commercial property leases on surplus office, manufacturing buildings and surplus equipment. These The Group has entered into commercial property leases on surplus office, manufacturing buildings and surplus equipment. These non-cancellable leases have remaining terms ranging from a few months up to 1 year. Depending on the terms in individual contract some contracts will be automatically renewed if not actively terminated. Future minimum payments receivable under non-cancellable operating leases as at 31 December 2015 are as follows:

Group Parent

SEK ('000) SEK ('000)

Within one year 6 248 1 502 After one year but no more than five years - More than five years - - 6 248 1 502

Legal claim contingency On the 29th of August Saab AB served Nevs with a termi­ purchase agreement between the Company and the Estates nation note of the license to use the Saab brand. Nevs has indemnifying the Estates should the Group’s activities cause disputed the grounds for this and has not accepted the a third party to take legal action against the Estates. termination. As of the date of this report the parties have not The net value of the pledged assets is 439 181 for the Group come to any settlement on this matter. No further legal action has yet been taken from any party. and 600 000 for the parent company. As per the date of the report the company is not aware of any claims based on this pledge. Pledged assets The company has pledged the shares held in Automobile The company has pledged a business mortgage of 21 000 Property AB in favor of the Saab Automobile Bankruptcy in favor of Hewlett Packard Sverige AB (HP) as security for Estates. The purpose of the pledge is to provide security for delivery of services. The pledged mortage exceed HP’s the Estates in relation to an indemnification clause in the claims.

76 77 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 22 23

Risk management Events after the end of the reporting period

Financing risk Currencies Demand • The Group is continuing to build its organization, both in The execution of the business plan of the Group require, The Group conducts business in Sweden and China. A signi­ It is hard to make reliable forecasts as the EV market is in Trollhättan and Tianjin, with about 50 new employees per apart from the funds already available in the Group, further ficant part of the Groups business and assets will in the an early stage. Thus, there are risks that predictions do not month. As per 2016-03-01 there were 520 employees in financing. If further financing can not be made available in future be in China. The Group will act to balance flows of come true. The Group has though been successful in signing Trollhättan and 41 employees in Tianjin. sufficient amounts, the business plan can not be executed. payments and assets/liabilities in a way to limit the net expo­ framework agreements for large customers for the period • The building of the Tianjin plant is proceeding according sure in each currency. 2017 – 2020. to plan. Financing • The manufacturing process in Trollhättan is being pre­ The Group has, as per the date of the financial statements, Delays Competition agreements with the partners in the partly owned subsidi­ pared to be able to supply the Tianjin plant with body’s. The time schedule of the first phase of the Groups business The automotive industry is dominated by actors with signifi­ aries in China for further owner financing, and framework plan is tight due to the need to quickly meet the demand cantly larger financial and industrial capacity than the Group. • SAP is being implemented in both the Swedish and the agreements with two Chinese banks of loan financing. The for the products of the Group. There is a risk of delays in The Group therefore monitors the development of new tech­ Chinese companies. total amount of financing in these agreements is sufficient some part of the engineering or industrialization process, but nology, models and trends and has a readiness and flexibility for the execution of the business plan. • The Group has signed a letter of intent to acquire 50 % this is handled based on long experience in the automotive in the organization to be able to act quickly in cooperation of the shares in New Long Ma and a due diligence-­ For the event that the financing above partly not will be industry and a close cooperation between the units of the with its industrial partners. process is ongoing. rea­lized in time or to the existing agreements full amount, company and its partners. ­Management and the Board of Directors are evaluating alter­ Political risks native sources of financing. Product liability, standstill There is always a risk that laws and policy’s change which Control The Group has an extensive insurance protection against might have an impact on subsidies, permits and other that liability, standstill, delay in start of production, property might have an impact on the Group. The company has thru its The Group has a financial plan for the coming 10 years. In damages, environmental responsibilities etc. organization and owners focus on these issues and a close order to follow the development of short term need of finan­ dialog mainly with authorities in China. cing compared to the long term plan, the Group frequently Regarding commitments to customers in the form of product compiles forecasts of the access to cash for up to two years. liability the company has a policy to have the right to in turn The Group has extra focus on not to make any commitments claim this from its suppliers. that will jeopardize 12 months going concern.

78 79 Notes to the consolidated financial statements National Electric Vehicle Sweden Annual report 2015 24

Signatures

The undersigned certify that the consolidated financial statements have been prepared in accordance with International Our auditor’s report was issued on April 14, 2016, Financial Reporting Standards (IFRS), as adopted by the EU, and generally accepted accounting standards and thus provide a true and fair view of the Group’s financial situation and results, and that the consolidated company report and company Ernst & Young report give a fair summary of the development of the Group’s and company’s operations, financial position and results, and describes significant risks and uncertainties facing the companies included in the Group. Trollhättan on the 12th of April 2016

Kai Johan Jiang Mattias Bergman Stefan Tilk Staffan Landén Chairman of the board President Vice Chairman and Authorized public accountant Group Executive Officer

Finn Johnsson Ming Li Limin Sun Member of the Board Member of the Board Member of the Board

Ronnie Hermansson Employee representative

80 81 Notes to the consolidated financial statements

TRANSLATION FROM THE SWEDISH ORIGINAL

Auditor’s report To the annual meeting of the shareholders of National Electric Vehicle Sweden AB, corporate identity number 556889 -­‐ 7556

Report on the annual accounts and consolidated Report on other legal and regulatory requirements accounts In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company’s profit or loss We have audited the annual accounts and consolidated accounts of National and the administration of the Board of Directors and the Managing Director of Electric Vehicle Sweden AB for the year 2015. National Electric Vehicle Sweden AB for the year 2015. Responsibilities of the Board of Directors and the Managing Director for the Responsibilities of the Board of Directors and the Managing Director annual accounts and consolidated accounts The Board of Directors is responsible for the proposal for appropriations of the The Board of Directors and the Managing Director are responsible for the company’s profit or loss, and the Board of Directors and the Managing Director preparation and fair presentation of these annual accounts in accordance with are responsible for administration under the Companies Act. the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and Auditor’s responsibility the Managing Director determine is necessary to enable the preparation of Our responsibility is to express an opinion with reasonable assurance on the annual accounts and consolidated accounts that are free from material proposed appropriations of the company’s profit or loss and on the misstatement, whether due to fraud or error. administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden. Auditor’s responsibility As a basis for our opinion on the Board of Directors’ proposed appropriations of Our responsibility is to express an opinion on these annual accounts and the company’s profit or loss, we examined whether the proposal is in consolidated accounts based on our audit. We conducted our audit in accordance with the Companies Act. accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with As a basis for our opinion concerning discharge from liability, in addition to our ethical requirements and plan and perform the audit to obtain reasonable audit of the annual accounts and consolidated accounts, we examined assurance about whether the annual accounts and consolidated accounts are significant decisions, actions taken and circumstances of the company in order free from material misstatement. to determine whether any member of the Board of Directors or the Managing Director is liable to the company. We also examined whether any member of An audit involves performing procedures to obtain audit evidence about the the Board of Directors or the Managing Director has, in any other way, acted in amounts and disclosures in the annual accounts and nts. consolidated accou The contravention of the Companies Act, the Annual Accounts Act or the Articles of procedures selected depend on the auditor’s judgement, including the Association. assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk We believe that the audit evidence we have obtained is sufficient and assessments, the auditor considers internal control relevant to the company’s appropriate to provide a basis for our opinions. preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the Opinions circumstances, but not for the purpose of expressing an opinion on the We recommend to the annual meeting of shareholders that the profit be effectiveness of the company’s internal control. An audit also includes appropriated in accordance with the proposal in the statutory administration evaluating the appropriateness of accounting policies used and the report and that the members of the Board of Directors and the Managing reasonableness of accounting estimates made by the Board of Directors and the Director be discharged from liability for the financial year. Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts. Göteborg, April 14, 2016 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for s. our audit opinion Ernst & Young AB

Opinions

In our opinion, the unts annual acco have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial Staffan Landén position of the parent company as of 31 December 2015 and of its financial Authorized Public Accountant performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2015 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.

82

National Electric Vehicle Sweden AB Saabvägen 5 SE-461 38 Trollhättan Sweden Tel +46 (0)520 850 00 [email protected] www.saabcars.com Registered Office: Trollhättan Reg number: 556889-7556 VAT: SE55688975 5601